Arlington Heights v. Metropolitan Housing Corp.

Arlington Heights, a suburb of Chicago, is located approximately 25 miles northwest of the city's downtown area. Most land in the community was zoned for detached single family homes. During the 1960s, the community saw substantial growth while the population of racial minorities remained low, similar to other communities in northwest Cook County. Near the center of Arlington Heights, a religious order owned an 80-acre parcel. In 1970, the order of St. Viator decided to allocate some of its land for low and moderate income housing. St. Viator chose Metropolitan Housing Development Corporation, a nonprofit developer experienced in using federal housing assistance programs, to organize the project and develop 190 clustered town house units. Metropolitan was also close to completing another project near Arlington Heights at the time.

Metropolitan and St. Viator signed a 99-year lease agreement for a 15-acre parcel in the southeast corner of the order's property. The agreement was dependent upon Metropolitan obtaining a zoning clearance from Arlington Heights and federal housing assistance. The proposed high density residential development clearly did not conform to Arlington Heights' low density zoning ordinance. Therefore, the project could not be built unless the community rezoned the parcel for multiple family housing. If Metropolitan was unsuccessful in securing either the clearance or the funding, the lease would terminate.

Metropolitan filed a petition for rezoning with the community's planning commission. It became the subject of a series of three public meetings in the spring of 1971. Though a number of community groups supported the rezoning, a majority opposed the project. Opponents stressed that many neighboring residents had built or purchased property there relying on the single-family zone classification. Such a rezoning could potentially cause property values for neighboring homes to substantially decline. By the close of the third meeting, the planning commission adopted a motion to recommend denial of the rezoning request to Arlington Heights' board of trustees.

In June of 1972, Metropolitan and three African American Illinois citizens filed a lawsuit in the U.S. District Court for the Northern District of Illinois against Arlington Heights to block the rezoning denial. They claimed the denial violated the Fair Housing Act and the Fourteenth Amendment's equal protection of the law guarantee. The district court ruled in favor of the community by finding they were not motivated by racial discrimination or discrimination against low income groups when they denied rezoning. Their primary concern was to protect existing property values. Metropolitan appealed the decision to the Court of Appeals for the Seventh Circuit. The appeals court reversed the ruling by finding that the "ultimate effect" of the rezoning denial was a racial bias.