San Marcos Mercury | Local News from San Marcos and Hays County, Texas

April 2nd, 2009
Kyle wins homebuilder lawsuit

Kyle City Hall. Photo by City of Kyle.


KYLE – More than a year after trial, a United States District Court Judge has ruled for the City of Kyle, which has defended itself for more than three years against a lawsuit filed by the Home Builders Associations (HBA) and the National Association for the Advancement of Colored People (NAACP).

The lawsuit alleged that a subdivision ordinance adopted by the city in November 2003 had the effect of discriminating against minorities by forcing the average price of a home in Kyle beyond their means.

In his ruling, District Court Judge Lee Yeakel declared that the “Plaintiffs take nothing by their action against the City of Kyle, Texas,” while also denying all other relief.

Kyle contended that the HBA lawsuit would have the effect of denying cities their rights to zone as they see fit.

“This is a clear and decisive victory, not only for the City of Kyle, but for all cities everywhere,” said Kyle City Manager Tom Mattis. “We believe that is was a thinly veiled attempt by the Home Builders Association to thwart a city’s right to decide how to best plan and direct growth. It is also clear to me that the Austin HBA thought they could intimidate the City of Kyle with this lawsuit. I guess they know better now.”

The 2003 zoning changes required new single-family residences to be a minimum of 1,600 square feet on minimum lot sizes of 8,190 square feet. The previous minimums allowed lots to be 20 percent smaller and houses to be 200 square feet smaller.

During public meetings in Kyle leading up to the new ordinance, city officials expressed concern that the Kyle housing stock didn’t provide the next move up from a starter home for growing and prospering families who wished to remain in the city.

The HBA and NAACP held a press conference in February 2005 to announce the findings of their study about the impact of the new ordinance on home affordability for minorities.

In October 2005, the Kyle City Council passed an ordinance increasing the residential building impact fee by 25 percent. The next month, the HBA and NAACP sued the city, saying the new ordinance priced minorities out of the Kyle housing market while also contending that the impact fee increase was retaliation for the plaintiffs aiding or encouraging persons to exercise their rights under the Fair Housing Act (FHA).

Yeakel said in his ruling that the plaintiffs could use statistical evidence to prove disproportionate harm to protected groups under the Kyle ordinance, then asserted that the plaintiffs not only relied solely on statistical evidence, but on incomplete statistical evidence.

The plaintiffs argued that the ordinance would raise the price of an entry-level home from $100,000 to $133,000. The argument, according to Yeakel’s Findings of Fact and Conclusion of Law, consisted in applying the projected cost increases in four geographically defined areas – Kyle, Hays County, the Austin-San Marcos MSA and the State of Texas – to “illustrate” that minorities would be disproportionately impacted.

Quoting the Findings of Fact and Conclusion of Law, “The Court finds this to be an incomplete analysis and hold that comparing affordability pools alone is insufficient to establish a prima facie disparate-impact or discriminatory-effects case. To hold otherwise would restrict municipalities’ ability to engage in zoning changes in an inflationary economy, as any change to an ordinance that resulted in a price increase would arguably impact minorities more than the ethnic majority in the area examined. To be persuasive, the statistical data must reflect or predict that there will be an actual shortage of housing available to the area’s minorities.”

The Findings went on to note that even under the assumption that the ordinance would raise the entry-level home price by approximately $33,000, such a dollar impact on construction costs does not establish a prima facie case of discriminatory effect under the FHA. Or, as the Findings later put it, “Affordability is but one part of availability.”

Further, the increased impact fees were found to not be retaliatory because the increases aren’t born by the homebuilders, but by the homebuyers, and the increased fees apply equally to minorities and nonminorities.

“The contention that we were trying to prevent minorities from being able to afford a home in Kyle is preposterous,” said Kyle Mayor Mike Gonzalez. “At the time this ordinance was passed, we had an African-American mayor presiding over a council that held a majority of Hispanics and African-Americans. We are very proud of the diversity in our city and recognize the strength of character that diversity brings us.”

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0 thoughts on “Kyle wins homebuilder lawsuit

  1. Kudos to the KYLE CITY COUNCIL for making the hard decision to go to court and the TAXPAYERS of Kyle for footing the bill. They deserve the credit. The attorneys did their job. And they did it well.

  2. Where does it stop, though? What happens when a city decides that all homes in the city have to be 100% masonry? Wait, Kyle already did that. What happens when a city says you have to have a garage? Oops, yet again, Kyle did that too.

    My home is a high quality custom home this is EXTREMELY enegry efficient and super green. I do not have a gargae. I would not be able to build it in Kyle even though it’s value is higher and certainly more enviromentally friendly than most in Kyle.

    Just more government intervention in our lives. What they need to do is leave it up to individual subdivision deed restrictions. That way, if some one wants to build a subdivision with small, low cost homes, all of the homes in that subdivision would be comparable.

    Oh, btw, it is the Home Builders Association of Greater Austin, not the Home Builders Association. Just wanted to make that clear since there is a San Marcos Area Builders Association that is not affiliated with Austin.

  3. The people should get to decide how to govern themselves. Before this ordinance was passed, there were many workshops where the people of Kyle gathered around tables and discussed the details of the ordinance. Oh, and developers were there too. Including representatives of the “Home Builders Association of Greater Austin.” Ultimately, this is what the people wanted, not some big bad government. If you don’t want to live in Kyle, we’re good with that. I think we have too many people anyway. By the way, you should bother to read the whole thing instead of just mimicking the talking points of a particular side. It’s a bit more complicated than what you laid out. The really nice thing is, now that this ridiculous lawsuit is over, we can make some much needed changes to the ordinance.

  4. Yeah. I was too. Until I got a glimpse of the “Home Builders Association” brochure on their agenda for doing away with unnecessary regulation, including protection of endangered species among the long list. The Kyle lawsuit was proudly displayed as well. Guess we now know where deregulation got us…. Maybe they will shut up now. Or at best, maybe they won’t have as much money for so many lawsuits.

  5. You really have to love the internet. So much information. So little time. And once it’s out there….

  6. Ms. Knight, I don’t live in Kyle. I don’t live in any city as a matter of fact. I prefer my space!

    Just remember that every time a government of any kind increases requirements for new homes, the cost of homes go up. People are constantly griping because houses cost too much. Did you know that in 2011, every home built in the US will have to have a fire sprinkler installed? Did you also know that many parts of San Marcos proper do not have the 30 gpm required to feed those sprinklers? Then you get to the folks with wells that are only alowed to pump a max of 18 gpm. What good will that extra $10k or so do them in a fire?

    I know I got a little off topic but where and when does it stop? It is getting to the point where only the wealthy can afford to buy a home.

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