The Inclusive Communities Project challenged Texas’s allocation of low-income housing tax credits, alleging that the practice perpetuated racial segregation without proof of discriminatory intent. After a bench trial, the district court found disparate-impact liability and entered judgment for the Project. The Fifth Circuit held that disparate-impact claims are cognizable under the Fair Housing Act, but reversed and remanded because the district court had improperly placed on the Department the burden to prove that no less discriminatory alternative existed. The Supreme Court affirmed the Fifth Circuit’s recognition of disparate-impact claims and remanded for further proceedings under the proper burden framework. Justice Kennedy’s opinion held that the FHA permits claims based on policies that are neutral on their face but disproportionately harm protected groups. A plaintiff must identify a specific policy and plead robust causality; statistical disparity alone is insufficient. A defendant may establish that the challenged practice is necessary to serve a substantial, legitimate, nondiscriminatory interest, after which a plaintiff may show that the interest could be served by a less discriminatory practice. The Court cautioned that courts must avoid quotas and challenges to legitimate governmental or private choices. Justice Thomas dissented. Justice Alito, joined by the Chief Justice and Justices Scalia and Thomas, also dissented, arguing that the FHA does not authorize disparate-impact liability.