A Divisional Court has held that a Jewish housing association might legitimately refuse to rent houses to those who are not Orthodox Jews.
A non-Jewish woman, Z, had four children, including a son with autism. She was at the top of Hackney Council’s list for a four-bedroom home in the area. The co-defendant, the Agudas Israel Housing Association (AIHA), was founded in 1986 to provide social housing for Orthodox Jews in north London: it does not accept applications from anyone outside the Orthodox community. Six four-bedroom properties owned by AIHA became available but Ms Z was not allowed to apply for one of them. She sought judicial review of that refusal, arguing that it was unlawful and discriminatory for the AIHA to refuse her a home.
In R (Z & Ors) v Hackney London Borough Council & Anor  EWHC 139 (Admin), it was common ground that AIHA’s relevant arrangements involved direct discrimination as defined by s.13(1) of the Equality Act 2010. AIHA’s conduct in “primarily” allocating social housing properties to the Orthodox Jewish community, because of the protected characteristic of religion, treated less favourably those who sought social housing who were not members of the Orthodox Jewish community . AIHA contended that its discriminatory conduct was rendered lawful by s.158 and s.193 of the 2010 Act.
The claimants accepted that members of the Orthodox Jewish community shared a “protected characteristic” – religion – under s.4 of the 2010 Act. However, they argued that the Orthodox Jewish community in Hackney did not suffer any disadvantage connected to the characteristic and did not have needs that were different from the needs of the non-Orthodox Jewish community. They also argued that AIHA’s allocation arrangements were not in any event “proportionate” . Moreover, AIHA’s policy was disproportiionate because it restricted allocation of available properties to members of the Orthodox Jewish community and excluded non-Orthodox Jews absolutely .
As to Hackney LBC, it was submitted that the fact that It operated its allocation scheme in such a way that only members of the Orthodox Jewish community were offered accommodation by AIHA was directly discriminatory on the grounds of both race and religion, contrary to s.13(1) of the 2010 Act. As to race, the cliamants relied on R (E) v Governing Body of JFS  2 AC 728, in which the Supreme Court had held that the test of matrilineal descent applied by Orthodox Judaism was a test of ethnic origin and that the policy of the Jewish Free School of admitting only students who met that ethnic test constituted unlawful direct discrimination on racial grounds . In its nomination arrangements, Hackney LBC treated people such as the claimants, who were not members of the Orthodox Jewish community, less favourably than those who were .
The Court took the view that it was self-evident why, in practice, AIHA pursued the policy that it did:
“Given the limited availability to, and pressing demand from, that community, if AIHA were to allocate any of its properties to non-members, it would seriously dilute the number of properties available to Orthodox Jews, and would fundamentally undermine its charitable objective of giving “primary” position, in a meaningful, as distinct from formalistic, sense to Orthodox Jews” 
The Court also concluded that AIHA’s arrangements were proportionate under s.158:
“… the disadvantages and needs of the Orthodox Jewish community are many and compelling. They are also in many instances very closely related to the matter of housing accommodation. We recognise the needs of other applicants for social housing, but, in the particular market conditions to which we have referred, AIHA’s arrangements are proportionate in addressing the needs and disadvantages of the Orthodox Jewish Community, notwithstanding the fact that in those market conditions, a non-member cannot realistically expect AIHA to allocate to him or her any property that becomes available” 
The Court also noted “the particular need of Orthodox Jews for larger accommodation”  because they had large families. Moreover, AIHA was recognised by the Regulator of Social Housing as a “small provider”: its 470 properties in Hackney were only 1 per cent of the 47,000 units of general needs housing potentially available for letting in the area, and i less than 1 per cent of annual social housing lettings .
Having concluded that AIHA’s arrangements were lawful under s.158 of the 2010 Act, it was not strictly necesssary to consider the application of s.193 ; however, the Court concluded that AIHA had met the criteria under s.193 [85-104].
As to the claim against Hackney LBC, the Court held that, always provided that AIHA was acting lawfully, Hackney had no legal right or power, “even if it were so minded”, to insist that AIHA jettison its lawful arrangements and make allocation decisions without regard to those arrangements . It was impossible to identify what steps Hackney should and could lawfully take in line with the remedy sought ; and the claim must fail .
The Court also rejected claims that Hackney had failed to comply with relevant principles of public law and, further, rejected the claimants’ challenge under s.11 of the Children Act 2004. in doing so, it had in mind:
“… Hackney’s evidence that AIHA’s allocation arrangements are valuable for the purpose of alleviating high levels of child poverty in the Orthodox Jewish community, and also more general evidence showing that the Orthodox Jewish community has households very substantially larger than average, and that young children form a relatively large proportion of the community. On this evidence we could not conclude that AIHA’s arrangements in general were likely to have a significantly negative effect on the welfare of children” .
Claim dismissed .