State Housing Loan Agency Will Change Unconstitutional Quota Mandate

The Michigan State Housing Development Authority is changing its policy requiring race and gender quotas on development projects it backs, in response to an attorney general’s opinion that the requirements violate the state constitution. The opinion was issued by former Attorney General Bill Schuette on Dec. 21, or 10 days before his last day in office on Dec. 31.

“MSHDA is reviewing its documents and policies to ensure they comply with the Attorney General opinion,” Katie Bach, communications director for the MSHDA, said. “We will work with the Office of Attorney General to ensure that the letter and spirit of the opinion is followed.”

The policies Schuette judged to violate the constitution require contractors on building projects financed by the housing agency to ensure that a certain percentage of the work be done by minority groups and by women.

Bach said that this ruling only affects developments that receive all of their funds from the agency, and not those that are only partially financed by its loans (which are ultimately guaranteed by state taxpayers). About five percent of MSHDA-backed projects receive all their funding from the agency, according to Bach. In total, Bach said, approximately three projects would be affected, which is around $42 million of the total $630 million amount of its state-financed housing projects.

MSHDA-backed projects that also receive federal funds are not affected by the opinion, because the state constitution’s anti-discrimination provision explicitly exempts state actions “necessary to remain eligible for federal funding,” according to the attorney general’s opinion.

Affirmative action policies and requirements, such as the ones imposed by the housing agency, were prohibited by the Michigan Civil Rights Initiative, which was adopted by a 58 to 42 percent vote of the people in 2006. The measure added language to the constitution that applies to state or local agencies or instrumentalities of the state, such as the housing agency. It makes it unlawful for them to “discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.”

Leon Drolet, a Macomb County commissioner and former state representative, helped lead the 2006 Michigan Civil Rights Initiative campaign, and he was also involved in the discussions that led to the outgoing attorney general’s opinion.

“MSHDA’s illegal use of race/gender quotas undermines efforts to achieve a society where a person's ethnicity and gender is not held against them,” Drolet said in a press release. “How can we make progress toward ending race and gender discrimination when our own government embeds race and gender criteria in awarding contracts and benefits? No person should have to worry that their ethnicity or gender will be used against them by their own government.”

Drolet said it is unfortunate that the agencies need someone else to tell them what’s in the state constitution, which is a document they are meant to abide by. He also expressed skepticism that the violation is accidental, saying “they know what they are doing” and “they just hope they don’t get caught.”

Many who push for these quotas are well-intentioned people trying to right a past wrong, Drolet said. But discriminating based on ethnicity and gender does more harm than good, he added.