Judgment of the Court of Justice of the European Union on urban planning, ghettos and housing

The Court of Justice of the European Union (CJEU) has recently issued a judgment concerning Denmark’s social housing legislation, colloquially known as the «ghetto law». The decision addresses the compatibility of this regulation with Directive 2000/43/EC, suggesting that the Danish policies could constitute direct or indirect discrimination.

The dispute originated from a lawsuit filed by residents of the Mjolnerparken housing complex in Copenhagen. The plaintiffs argued before the Danish courts that the criterion used to reduce public housing in their areas, specifically that defined in Article 619(a) of the Social Housing Act, contravened Union law. This article classifies zones based on socioeconomic factors such as unemployment, education and criminality, but adds as a determining factor whether the proportion of immigrants from non-Western countries and their descendants exceeds 50%.

The referring court raised a preliminary question to the CJEU to clarify the interpretation of the concepts of direct and indirect discrimination. With the guidance provided by the CJEU, it will now be for the Danish judicial body to assess the evidence and determine as a matter of fact whether the current legislation requires amendments to comply with European standards.

The Court’s analysis focused on the disparity of treatment generated by the law, which imposes urban development plans that force the termination of tenancy contracts only for residents of areas classified as «transformation zones». The CJEU reasoned that, if the national courts find that the legislation is based on preparatory documents indicating an intention grounded in prejudice or stereotypes against immigrants of non-Western origin and their descendants, this would amount to a case of direct discrimination under Article 2(2)(a) of the aforementioned Directive.

Furthermore, the judgment delved into the notion of indirect discrimination, regulated in Article 2(2)(b). The Court warned that a criterion formulated in an apparently neutral manner can be unlawful if it causes a particular disadvantage to a specific ethnic group. For such a measure to be valid, the authorities must demonstrate that it pursues a legitimate aim and that the means employed are necessary. While the discretion of the Member States in social policy was acknowledged, the obligation to respect the prohibition of discrimination on grounds of racial or ethnic origin was reiterated.