Landlord can't sue city of Zion over 'discriminatory' fees that target minority housing, judge says

By Scott Holland | Jan 26, 2017

A Zion city ordinance does not violate the federal Fair Housing Act, despite the assertions of a landlord the ordinance effectively targets apartment buildings with large numbers of black and Hispanic residents, a federal judge has ruled. 

Judge John W. Darrah filed a memorandum opinion and order on Jan. 23 in Chicago, rejecting a complaint brought by TBS Group, LLC, based in Round Lake Beach, to challenge a residential rental inspection permit fee schedule ordinance the Zion City Council adopted on July 7, 2015. The ordinance requires landlords to pay a fee, obtain a rental certificate and make homes available for inspection. Fees for buildings with more than 132 units are $75 per unit, but not to exceed $10,000 per year.

TBS said the fee structure is discriminatory in nature and also is enforced selectively against landlords whose tenants are African-American or Latino, noting that while the city’s population is 31 percent black, 27 percent Latino and 48.9 percent white, the rental population is 39.3 percent black, 14.p percent Latino and 39 percent white. 

The complaint also targeted the city’s comprehensive plan, which places multi-family residential property “almost exclusively in a specific area,” per Darrah’s opinion. “This area is next to industrial areas and remote from green space,” which TBS argued would contribute to racial discrimination by limiting housing options. 

The city moved to dismiss the complaint, in part arguing TBS was not an aggrieved party under FHA rules.

In his analysis, Darrah wrote the ordinance is neutral on its face, and although TBS alleged city “officials, at some point in the past, indicated that they did not want to increase the number of rental units that would be rented by African-Americans … the complaint does not indicate when plaintiff was told this or what connection it may have to the change in the ordinance.”

 Darrah also said TBS does not claim it is the only landlord with a Zion property that falls under the ordinance, which he noted “equally applies to any rental properties and is targeted at ensuring compliance with health and safety codes.”

He further wrote TBS failed to allege facts supporting its belief the city only enforces the ordinance selectively, as well as to support the claim the comprehensive plan “was created and/or is being carried out with a discriminatory intent or purpose.”

In considering the racial demographics cited in the complaint, Darrah said TBS neither explained how the ordinance disproportionately affects a certain race nor offered information about the demographics of its own tenant base. He further noted TBS “has not alleged that any of its properties will be moved or that it will be required to stop renting to any person on the basis of origin, race, or color because of the Comprehensive Plan.”

TBS also argued the ordinance violates its rights to help potential African-American and Latino tenants exercise their FHA rights, but Darrah said the complaint does not specify if that allegation refers to the ordinance or the comprehensive plan, and further failed to allege actual interference by the city; neither did it allege the city knew “almost all of plaintiff’s tenants are Latino or African-American.”

Darrah granted the city’s motion to dismiss without prejudice and allowed TBS 30 days to file an amended complaint.

TBS was represented in the action by attorney Kelli A. Dudley, of Chicago.

The city of Zion was defended by the firm of Ancel Glink Diamond Bush DiCianni & Krafthefer, of Chicago.

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Organizations in this Story

Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer, P.C. City of Zion Law Office of Kelli Dudley

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