Jackson County homeowners sue Missouri alleging COVID aid discriminated against white people

Two Jackson County residents allege in a lawsuit that Missouri racially discriminated against white homeowners by relying on federal guidance in distributing pandemic aid.

The Missouri Housing Development Commission — an agency led by Gov. Mike Parson and other top state officials — favored minority homeowners over white homeowners in the State Assistance for Housing Relief, or SAFHR, for Homeowners program, the complaint alleges. The lawsuit was filed Monday in U.S. District Court for the Eastern District of Missouri.

Paul Bumpas, who works at the Lake City Army Ammunition Plant, and Fred Van Noy, who works at a car dealership, both had their hours cut during the COVID-19 pandemic. Bumpas and Van Noy, who are both white, allege in the complaint they applied but weren’t accepted for the SAFHR for Homeowners program, which awarded about $126 million to nearly 10,000 applicants.

The lawsuit, which was filed as a class action, says the Missouri Housing Development Commission, or MHDC, prioritized “socially disadvantaged individuals” and that the commission impermissibly identified those individuals based on their race.

“As a result of MHDC’s racial discrimination, white homeowners who struggled with the economic consequences of the Covid-19 pandemic — including Plaintiffs — lost out on financial assistance they needed to pay their mortgages,” the complaint says.

The lawsuit comes even as Black Missourians are far less likely to own a home than white residents. In Missouri, 41% of housing units occupied by Black residents are owned by the occupant, compared to 72% for white residents, according to data compiled by America’s Health Rankings.

The American Rescue Plan Act created the Homeowner Assistance Fund, with states largely responsible for distributing dollars in the fund. The law required at least 60% of funds to be used to assist low-income homeowners, with the rest prioritized for “socially disadvantaged individuals,” a term not defined in the law.

The lawsuit says MHDC relied on guidance from the U.S. Treasury Department that defined the term, in part, as “those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.” The lawsuit says the guidance wasn’t mandatory.

MHDC didn’t respond to a request for comment about the lawsuit.

The defendants named in the lawsuit include the MHDC, as well as several top elected officials who are MHDC commissioners, including Lt. Gov. Mike Kehoe, Attorney General Andrew Bailey and Treasurer Vivek Malek, who are sued in their official capacity. MHDC’s plan for the homeowners program was approved in January 2022, a year before Bailey and Malek took office; the program closed earlier this year.

Of the applications approved by MHDC, 55% of homeowners were white and 43% were Black, according to U.S. Treasury data cited in the lawsuit. At the same time, the lawsuit notes that just under 12% of Missouri residents are Black, according to Census data, and 82% are white.

“This dramatic difference cannot be explained by income disparities or other race-independent reasons,” the lawsuit says, pointing to KFF data showing that of the roughly 769,000 Missouri residents in poverty in 2022, about 21% were Black and 64% were white.

Some attorneys have previously suggested Treasury’s guidance could lead to a discriminatory distribution of funds. In a 2022 opinion column in The Hill, Glenn Roper, an attorney for the libertarian-leaning Pacific Legal Foundation, wrote that Georgia and Oklahoma had applied racial distinctions in an unconstitutional way.

Bumpas and Van Noy are represented by the Missouri-based firm GM Law and the national firm Lehotsky Keller Cohn LLP.