Familystyle of St. Paul, Inc. v. City of St. Paul

United States Court of Appeals for the Eighth Circuit · 1991 · Property

923 F.2d 91 (1991)

Updated July 23, 2026

PropertyFair Housing ActZoningGroup homesDisability housingFair Housing Amendments Act of 1988reasonable accommodationsdisparate impact

Facts

Familystyle provides rehabilitative services to mentally ill persons and operates residential group homes in St. Paul. It sought special use permits to add three houses to its existing campus, which would have expanded capacity from 119 to 130 persons; twenty-one of its houses, including the proposed additions, were clustered within a one-and-one-half-block area. The city issued temporary permits on the condition that Familystyle work to disperse its facilities, but Familystyle did not satisfy the conditions, the permits expired, renewal was denied, and it exchanged its license for one excluding the three houses. Familystyle then challenged Minnesota's and St. Paul's quarter-mile dispersal requirements under the Fair Housing Amendments Act of 1988.

Issue

Do Minnesota's and St. Paul's quarter-mile dispersal requirements for licensed residential group homes for mentally ill persons violate the Fair Housing Amendments Act of 1988 by limiting housing choices for the mentally handicapped or by having a discriminatory effect or treatment?

Rule

In a Title VIII case against a public defendant, the plaintiff must first make a prima facie showing of discriminatory effect. If that showing is made, the governmental defendant must demonstrate that its conduct was necessary to promote a governmental interest measured by the level of scrutiny applicable under equal protection principles; where the classification concerns mentally impaired persons, the proper inquiry is whether the legislation is rationally related to a legitimate governmental purpose. Dispersal requirements that are part of the licensing process are permissible when they rationally further deinstitutionalization and community integration rather than segregation.

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Lakeshore Support Services applies in Milwaukee for a permit to open a licensed residence for adults with serious mental illness two houses away from another licensed residence it already operates. Wisconsin law and a Milwaukee ordinance require such licensed facilities to be at least one-quarter mile apart unless a special permit is granted. Lakeshore sues the city under the Fair Housing Act, claiming the spacing rule has a discriminatory effect on persons with mental illness.

Under the majority's approach, what is the proper sequence for analyzing Lakeshore's disparate-impact claim against the city?

Explanation. In a Title VIII case against a public defendant, the plaintiff first bears the burden of making a prima facie showing of discriminatory effect. If that showing is made, the burden shifts to the government to justify the challenged rule by reference to a governmental interest measured by the equal-protection scrutiny applicable to the affected class. For mentally impaired persons, the majority used rational-basis review, not strict scrutiny.