When is a zoning change discriminatory? The city of Kyle, Texas, 20 miles south of Austin, is about to find out. The National Association for the Advancement of Colored People (NAACP), along with the HBA of Greater Austin and the NAHB, filed suit in U.S. District Court in Austin against Kyle, claiming ordinances it adopted in late 2003 violate the Fair Housing Act of 1968.

The plaintiffs' Nov. 22, 2005, complaint alleges that zoning revisions,which by HBA estimates would raise the price of a starter home to $138,500 from $100,000, would push lower-income residents—particularly Hispanics, who make up more than half of Kyle's population—out of the housing market. Among other things, the ordinances require that exterior walls of houses be built entirely with brick, stone, or fiber-cement siding.

City manager Tom Mattis insists that Kyle was attempting to slow its population growth, which has ballooned from 2,500 in 1997 to more than 18,000. Kyle has become a refuge for buyers fleeing skyrocketing Austin home prices. The city issued 4,000 residential permits between January 2002 and December 2005, and 10,000 lots had reached the plat stage.

Those lots were exempted from the new rules, so the revisions' impact won't be felt for years. But a trial could start in late 2006. Craig Douglas and Robert Notzon, attorneys for the HBA and the NAACP, respectively, say they aren't trying to tell Kyle how to manage growth. “But they can't violate the law,” says Notzon.

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