                            In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 04-1966
WISCONSIN COMMUNITY SERVICES, INC., and WISCONSIN
CORRECTIONAL SERVICE FOUNDATION, INC.,

                                           Plaintiffs-Appellees,
                               v.

CITY OF MILWAUKEE, WISCONSIN,
                                          Defendant-Appellant.
                         ____________
           Appeal from the United States District Court
              for the Eastern District of Wisconsin.
             No. 01-C-575—Lynn Adelman, Judge.
                         ____________
     ARGUED JANUARY 3, 2005—DECIDED JUNE 29, 2005
                    ____________


  Before BAUER, EASTERBROOK, and WOOD, Circuit Judges.
  EASTERBROOK, Circuit Judge. Wisconsin Community
Services (WCS), a nonprofit corporation, provides services
for the benefit of former prisoners and persons with mental-
health or drug-abuse problems. Its web site at
www.wiscs.org describes the organization’s background and
current operations, such as half-way houses, alcohol and
drug-abuse treatment programs, and employment counsel-
ing. Its outpatient mental-health clinic in central Milwau-
kee is overcrowded; WCS deems the 7,500-square-foot
facility inadequate to serve the 400 clients who frequent it.
After a search, WCS purchased a building about one mile
2                                               No. 04-1966

west of the existing facility. (Technically Wisconsin Correc-
tional Service Foundation bought and leased it to WCS; we
refer to both affiliates as “WCS.”) It wants to use 20,000
square feet of this building as a mental-health clinic.
Because the structure is in a business zone, operation of a
mental-health clinic depends on a special-use permit under
Milwaukee’s zoning code. See Milwaukee Code of Ordi-
nances §295-603-1.
  Milwaukee’s Board of Zoning Appeals held a hearing and
denied WCS’s request for a special-use permit. Its decision
refused to take account of federal statutes, such as Title II
of the Americans with Disabilities Act and the Rehabilita-
tion Act, that may require governmental bodies to make
exceptions for the benefit of disabled persons. After the
district court reminded the Board (and the City) that the
Constitution’s supremacy clause requires all state and local
actors to comply with federal law, see 173 F. Supp. 2d 842
(E.D. Wis. 2001), a new hearing was held. The outcome was
the same, because the Board concluded that WCS could
have purchased or leased space elsewhere. More than 785
acres of land within WCS’s preferred area for operating the
mental-health clinic are zoned for medical clinics; no
deviation from Milwaukee’s normal rules would have been
required to use any of these sites. And under the normal
rules, the Board stated, a special-use permit was inappro-
priate because a medical clinic at the site could undermine
a redevelopment plan that called for a commercial enter-
prise to be situated there. WCS returned to the federal
court, which granted summary judgment in its favor and
directed the City to issue the requested special-use permit.
309 F. Supp. 2d 1096 (E.D. Wis. 2004). Federal law requires
the City to accommodate the foundation’s clients, the court
held, whether or not the Board engaged in discrimination
and whether or not the zoning code has a disparate impact
on disabled persons.
No. 04-1966                                                3

  Neither Title II of the ADA nor the Rehabilitation Act, 29
U.S.C. §794, contains a general accommodation provision.
There are lots of specific ones, such as the wheelchair-
accessibility requirement for public transit, see 42 U.S.C.
§12162, but nothing general. There is a general accommoda-
tion rule in Title III, which deals with public accommoda-
tions and services operated by private entities, see 42
U.S.C. §12182(b)(2)(A)(ii)-(iv), but Title II, which covers
public services in the governmental realm, lacks the sort of
accommodation requirement to be found in Title III (or for
that matter Title I, which we discuss below). An accommo-
dation requirement has been added to Title II by regulation,
28 C.F.R. §35.130(b)(7), and to the Rehabilitation Act by
judicial gloss plus another regulation, 28 C.F.R. §41.53.
Milwaukee does not question the propriety of either the
regulations or the gloss. But see Southeastern Community
College v. Davis, 442 U.S. 397, 410-11 (1979) (doubting the
validity of both the gloss and the regulation); Olmstead v.
L.C., 527 U.S. 581, 592 (1999) (reserving these subjects for
future decision).
   The Fair Housing Amendments Act, 42 U.S.C.
§3604(f)(3)(B), which covers related ground, contains an
express accommodation requirement, and the district court
understood the regulation and the gloss under Title IV and
the Rehabilitation Act to track the FHAA. See Washington
v. Indiana High School Athletic Ass’n, 181 F.3d 840, 845 n.6
(7th Cir. 1999). Again the parties do not ask us to do
otherwise. We shall assume, given the lack of argument to
the contrary, that the legal rules are identical, which leads
us to Hemisphere Building Co. v. Richton Park, 171 F.3d
437 (7th Cir. 1999), and Good Shepherd Manor Foundation,
Inc. v. Momence, 323 F.3d 557, 561-64 (7th Cir. 2003), both
of which arose under the FHAA.
  The district court concluded that Milwaukee had to
accommodate WCS by permitting it to open a clinic at its
new location because (a) its disabled clients need more
4                                               No. 04-1966

space, and (b) the building WCS purchased was its least-
cost option. Then it found that WCS’s proposal would be a
“reasonable” accommodation of its financial situation. 309
F. Supp. 2d at 1104-08. Like other charitable organizations,
WCS is strapped for cash and can do more for its clients if
it can situate facilities where the benefit/cost ratio is
highest.
  Getting from that proposition to a legal rule that Milwau-
kee must permit WCS its preferred location is, however, a
major problem—for Hemisphere Building (a decision that
the district judge did not cite) held that the FHAA does not
require municipalities to depart from their zoning codes to
reduce the cost at which disabled persons can acquire
housing (or, here, mental-health services). We explained
that the reasonable-accommodation requirement applies to
“rules, policies, etc. that hurt handicapped people by reason
of their handicap, rather than that hurt them solely by
virtue of what they have in common with other people, such
as a limited amount of money”. 171 F.3d at 440 (emphasis
in original). See also United States v. Palatine, 37 F.3d
1230, 1234 (7th Cir. 1994).
  The district court got off on the wrong foot by assuming
that “WCS may [prevail] by showing intentional discrimina-
tion, disparate impact, or failure to make a reasonable
accommodation.” 309 F. Supp. 2d at 1104 (emphasis added).
As we explained in Hemisphere Building, the FHAA’s
accommodation requirement is not free standing. See also
Brandt v. Chebanse, 82 F.3d 172 (7th Cir. 1996). Accommo-
dation in the FHAA’s parlance is the means by which
disparate impact is alleviated. If a zoning or building-code
rule bears more heavily on disabled than on other persons,
the city must change the rules to the extent necessary to
redress the adverse effect. In the absence of disparate
impact, however, there is no need for accommodation under
the FHAA.
No. 04-1966                                                   5

  A requirement that imposes equal cost on all persons does
not have such a disparate impact. Just as everyone (dis-
abled or not) needs housing and would prefer to pay less, so
everyone (disabled or not) needs medical care and would
prefer to pay less. If Milwaukee applies the same rules to
mental-health clinics and dental-health clinics, there is
neither discrimination nor disparate impact. The statutes
do not require a city to be more forgiving when mental-
health clinics want to bend the rules than when dental-
health clinics make the same request.
  Some language in Good Shepherd Manor might be
understood to support the district judge’s approach. We
wrote: “ ‘Failure to reasonably accommodate’ is an alterna-
tive theory of liability. The theory would be entirely redun-
dant if it required proof that the defendants’ actions were
motivated by animus toward the handicapped. Indeed for
the reasonable accommodation theory to be meaningful, it
must be a theory of liability for cases where we assume
there is a valid reason behind the actions of the city, but the
city is liable nonetheless if it failed to reasonably accommo-
date the handicap of the plaintiff.” 323 F.3d at 562. To say
that reasonable accommodation is an “alternative theory of
liability” is not, however, to say that it is a theory independ-
ent of both intentional discrimination and disparate impact;
that would contradict Hemisphere Building, which the
panel in Good Shepherd Manor did not purport to do. We
understand this passage of Good Shepherd Manor as a
restatement of the point made in Hemisphere Building:
reasonable accommodation is a theory independent of
intentional discrimination because it is the means by which
disparate impact is alleviated. The panel in Good Shepherd
Manor did not suggest that there is a duty to accommodate
when laws and regulations neither discriminate nor cause
disparate effects. Proof of one or the other is essential.
  According to WCS, the Supreme Court disapproved this
court’s approach in US Airways, Inc. v. Barnett, 535 U.S.
6                                                No. 04-1966

391 (2002). That decision considered how seniority systems
interact with 42 U.S.C. §12112(b)(5)(A), the accommodation
requirement in Title I of the ADA, which covers employ-
ment. This section defines as a form of discrimination “not
making reasonable accommodations to the known physical
or mental limitations of an otherwise qualified individual
with a disability who is an applicant or employee, unless
such covered entity can demonstrate that the accommoda-
tion would impose an undue hardship on the operation of
the business of such covered entity”. Barnett held that an
obligation to depart from a seniority system almost always
would “impose an undue hardship” on the business, though
the Court did not rule out the possibility that some modifi-
cations would not do so.
  Title II of the ADA, which governs WCS’s claim, lacks any
language comparable to §12112(b)(5)(A). The accommoda-
tion requirement of the FHAA, from which the rule of
decision has been borrowed, has a different structure.
Instead of directing the employer to treat disabled persons
with special solicitude, as Title I does, the FHAA defines as
discrimination “a refusal to make reasonable accommoda-
tions in rules, policies, practices, or services, when such
accommodations may be necessary to afford such person
equal opportunity to use and enjoy a dwelling” (emphasis
added). The point of this clause is to assure “equal opportu-
nity”—which, we concluded in Hemisphere Building, means
freedom from the adverse effects of local laws and rules that
affect disabled persons because of that disability, yet do not
pose problems for equivalent but non-disabled persons. The
Title II regulation is similar to this clause in the FHAA,
requiring accommodations that “are necessary to avoid
discrimination”. 28 C.F.R. §35.130(b)(7). Nothing in Barnett
undermines the way we read “equal opportunity” language
in Hemisphere Building. The problem that WCS encoun-
tered is financial, and Milwaukee’s rules pose the same
financial considerations to all would-be users of the prop-
erty.
No. 04-1966                                                 7

  The district court did not find that Milwaukee’s zoning
rules bear more heavily on the kind of medical services that
the disabled need especially frequently than on the kinds of
medical services that all members of the populace require.
Milwaukee’s zoning rules, and its stated criteria for special-
use permits, treat mental-health and dental-health clinics
identically. Both are “health clinics” under its zoning
scheme. See Milwaukee Code of Ordinances §295-7-31
(definition), §295-59-5.5 (special-use criteria). The parties
agree that more than 785 acres zoned for use by “health
clinics” lie within WCS’s preferred area for its new clinic,
and that WCS could have purchased or leased space on any
of this land—and would have done so but for the cost, which
it deemed excessive. The parties debate whether WCS
carried out a thorough search; Milwaukee says that with
more diligence WCS could have acquired a properly zoned
building within its budget. WCS acknowledges this but says
that its search was reasonable. On our view of the law,
however, this debate is irrelevant: Searching for bargains
is no harder for WCS than for any other entity in the real-
estate market, so the need to search is not a source of
disparate impact.
  WCS would experience extra costs in going back on the
market, as it would need to pay another brokerage commis-
sion and might need to absorb a capital loss (though, if real
estate prices have dropped, it could expect to gain as a
buyer of a new site what it loses as a seller of the old), but
the appropriate perspective is ex ante. WCS did not obtain
any extra rights under federal law by buying a building
while the special-use issue was up in the air. Otherwise
anyone could strong-arm a city by the expedient of making
a commitment and then pointing to the sunk costs. More-
over, WCS has experienced success in requesting special-
use permits and zoning variances for its other facilities.
Over the years WCS has requested special treatment of
seven parcels, and six of these requests have been
8                                                No. 04-1966

granted—all but the one involved in this suit. Disparate
impact is difficult to see. We don’t say that it is impossible,
however; WCS may have more evidence to offer.
  The best hope for WCS may lie in showing actual discrim-
ination, a subject that the district court did not reach. Much
of the testimony before the Board of Zoning Appeals evinced
antipathy to a mental-health clinic that would include
many released convicts among its clientele. That some
witnesses exemplified the “not in my back yard” approach
does not necessarily mean that the Board took that (forbid-
den) view, but it did refer to community opposition as one
reason for its decision. This implies that if WCS or some
other organization had proposed to use the same building
to perform checkups for a HMO or provide outpatient
kidney dialysis, the Board might well have said yes. Such
a difference in treatment would be discriminatory, and
WCS would be entitled to relief under federal law. Whether
the Board acted with discriminatory intent is a question of
fact whose resolution belongs in the first instance to the
district court. See Pullman-Standard v. Swint, 456 U.S. 273
(1982). The court may need to take additional evidence on
this subject, rather than limit consideration to the record
made before the Board, as it has done so far.
   One final remark. The parties have devoted considerable
energy to debating whether the proposed accommodation is
reasonable, if one is required in order to overcome inten-
tional discrimination or disparate impact. It is. See
Oconomowoc Residential Programs, Inc. v. Milwaukee, 300
F.3d 775 (7th Cir. 2002). Milwaukee is barking up the
wrong tree in arguing that federal judges must “defer” to
local zoning codes when deciding what accommodations are
reasonable. Federal statutes supersede state and local
rules; the question whether an accommodation is required
is one of federal law, though the extent to which a proposed
accommodation would disrupt state policy must weigh in
the balance, as Barnett and its predecessors show. See also,
No. 04-1966                                                9

e.g., Ansonia Board of Education v. Philbrook, 479 U.S. 60,
67-69 (1986) (discussing accommodation under Title VII of
the Civil Rights Act of 1964); Trans World Airlines, Inc. v.
Hardison, 432 U.S. 63, 84 (1977) (same). Our difficulty with
the district court’s resolution concerns the initial question
whether WCS is entitled to any accommodation, and that is
the issue on which the parties now should concentrate their
attention.
  The judgment is vacated, and the case is remanded for
further proceedings consistent with this opinion.




  WOOD, Circuit Judge, dissenting. This case raises the
question whether the City of Milwaukee was required under
Title II of the Americans with Disabilities Act (ADA), 42
U.S.C. §12131 et seq., and the Rehabilitation Act, 29 U.S.C.
§794 et seq., to issue a special-use permit for the new
outpatient mental health clinic that the plaintiffs (WCS)
were trying to establish. The Milwaukee zoning code did not
flatly prohibit this use, but it did require a special-use
permit for properties located in the area where WCS
wanted to locate. Concluding that the City was required as
a matter of law to make reasonable accommodations to
WCS’s disabled clients (and hence to WCS), and that WCS
had shown that the special-use permit was such a reason-
able accommodation, the district court granted summary
judgment in WCS’s favor and ordered the City to issue the
permit. The majority has vacated that order and remanded
the case for further consideration of the question whether
WCS can show that the City’s refusal to grant the permit
stemmed from actual discrimination against mentally
disabled users of WCS’s facility. I have no quarrel with the
proposition that such a showing would entitle WCS to relief.
In my view, however, further proceedings are unnecessary,
10                                               No. 04-1966

because WCS has already successfully shown that it is
entitled to the permit under the “reasonable accommoda-
tion” theory recognized in Title II of the ADA and the
Rehabilitation Act. I would therefore affirm.
  As the majority acknowledges, Title II of the ADA and the
Rehabilitation Act prohibit intentional discrimination
against qualified persons with disabilities, as well as
measures that have a disparate impact on the disabled.
(Henceforth I refer only to the ADA, because it is identical
for all material purposes in this case to the Rehabilitation
Act.) Where we disagree is over the extent to which Title II
of the ADA also independently obliges covered persons to
make reasonable accommodations for the disabled. The
agency responsible for administering the ADA, the U.S.
Department of Justice, has issued a regulation that unam-
biguously imposes such an obligation:
     A public entity shall make reasonable modifications
     in policies, practices or procedures when the modifi-
     cations are necessary to avoid discrimination on the
     basis of disability, unless the public entity can
     demonstrate that making the modifications would
     fundamentally alter the nature of the service,
     program or activity.
28 C.F.R. §35.130(b)(7) (ADA). See also 28 C.F.R. §41.53
(containing a similar provision implementing the Rehabili-
tation Act). That regulation says nothing about an anteced-
ent need to prove pre-existing intentional discrimination or
disparate impact. Instead, it authorizes prophylactic
measures that are “necessary to avoid discrimination on the
basis of disability,” unless the entity can satisfy the regula-
tory justification.
  The most straightforward way to view this is as an
affirmative obligation to take the steps that are necessary
to bring the services available to the disabled up to the level
that the nondisabled enjoy, which in one sense will require
giving some benefits to the disabled that are unnecessary
No. 04-1966                                                11

for their more fortunate fellow citizens. A person with no
mobility problem would never miss a wheelchair ramp; a
person with 20/20 vision has no need for an audible signal
in an elevator that the desired floor has been reached. But
those accommodations are essential for the disabled person
to enjoy equal access to public services. The Supreme Court
recognized this concept when, in US Airways, Inc. v.
Barnett, 535 U.S. 391 (2002), it acknowledged that reason-
able accommodations “will sometimes require affirmative
conduct to promote entry of disabled people into the work
force.” Id. at 401. Although Barnett held that in the normal
run of cases an employer would not be required to override
a bona fide seniority system in order to accommodate a
disabled employee’s needs, it also held that the employee
would be entitled to show that “special circumstances
warrant a finding that, despite the presence of a seniority
system . . ., the requested ‘accommodation’ is <reasonable’ on
the particular facts.” Id. at 405. At least for purposes of
Title I of the ADA, therefore, the accommodation require-
ment imposes special responsibilities on employers that
could not be derived from either the intentional discrimina-
tion theory or the disparate impact theory.
  True, the majority says, but we are dealing with Title II
of the statute, and it does not contain the same accommoda-
tion language as Title I. Literally speaking, that is true, but
I do not understand the majority to be holding that the
Department of Justice exceeded its authority when it issued
the implementing regulations interpreting the require-
ments of Title II. To the contrary, it states that it is not
taking issue with the regulation, 28 C.F.R. §35.130(b)(7), in
this case. If not, then Barnett’s approach to reasonable
accommodation is binding on us here: the language of
§35.130(b)(7) is substantively identical to the language the
Court was construing in Title I, 42 U.S.C. §12112(b)(5)(A).
  The majority avoids this outcome by looking to two cases
this court has decided under the closely analogous Fair
12                                              No. 04-1966

Housing Amendments Act (FHAA), 42 U.S.C. §3601 et seq.;
namely, Hemisphere Bldg. Co. v. Richton Park, 171 F.3d
437 (7th Cir. 1999), and Good Shepherd Manor Foundation,
Inc. v. Momence, 323 F.3d 557 (7th Cir. 2003). Those cases,
it argues, demonstrate that there is actually no independ-
ent accommodation requirement under any of these stat-
utes. Instead, the accommodation requirement has no
independent force at all; it is merely a remedy for practices
that have a disparate impact on the disabled. As the
majority sees the world, “[i]n the absence of disparate
impact . . . there is no need for accommodation under the
FHAA,” or by extension, under Title II of the ADA. Ante at
4. (It does not explain why the same logic would not apply
to Title I of the ADA, except to acknowledge that Barnett
forecloses this argument.)
  The majority concedes that its position is inconsistent
with language that appears in Good Shepherd, where the
court wrote unequivocally that “ ‘[f]ailure to reasonably
accommodate’ is an alternative theory of liability.” Ante at
5; quoting 323 F.3d at 562. In an effort to squeeze Good
Shepherd into its own theory of the FHAA and hence the
ADA, it suggests that reasonable accommodation is an
independent theory only insofar as it is “the means by
which disparate impact is alleviated.” Ante at 5. But that is
not what Good Shepherd said. There is a difference between
a theory of liability and a remedy for a proven violation.
The problem with the majority’s reasoning is reflected in its
assumption that the disabled can suffer a deprivation of
access to public services and programs only if (a) laws and
regulations actively discriminate against them, or (b) laws
and regulations produce disparate effects. Both of these
theories, however, require a comparison between the effect
of the practice on the favored group and the effect of the
practice on the disfavored group— here, the disabled.
  The problem is that there are many services and facilities
that are of interest only to disabled people, such as the
No. 04-1966                                              13

ramps and the audible elevator announcements mentioned
earlier. In those situations, there would never be a way to
prove either individual animus or disparate impact, unless
the latter theory were applied far more broadly than it
normally is. Recall that disparate impact theory was born
in Griggs v. Duke Power Co., 401 U.S. 424 (1971), where the
Court considered the question whether a high school
diploma or GED requirement for hiring or transfer was
having a disparate impact on minority candidates. Here,
only the disabled would have any interest in the particular
service or facility at issue; because the nondisabled are
indifferent to it, there would never be a way to prove the
disproportionate impact required by that theory. Moreover,
the statistics needed to show disparate impact will often be
unavailable to the disabled.
  The approach I favor does not, contrary to the majority’s
implication, require one to conclude that Good Shepherd
silently overruled our earlier decision in Hemisphere
Building. In Hemisphere Building, another FHAA case, a
developer argued that he was entitled to both re-zoning and
a special-use permit so that he could build two four-unit
residences for wheelchair-bound persons. Without the re-
zoning, he would have been free to build identical resi-
dences suitable for the same population, but only six homes
instead of eight, and he would have had to charge a higher
price for them. On these facts, we held that the Village was
under no duty to change its zoning practices. The duty of
reasonable accommodation had to be confined to rules,
policies, practices or services that hurt the disabled “by
reason of their handicap, rather than that hurt them solely
by virtue of what they have in common with other people,
such as a limited amount of money to spend on housing.”
171 F.3d at 440 (emphasis in original).
  The district court’s decision here fits comfortably within
the rule announced in Hemisphere Building and is equally
consistent with the elaboration found in Good Shepherd. It
14                                               No. 04-1966

focused on the rules, practices, etc., that hurt WCS and its
clients because of their mental disabilities, as opposed to
their lack of money, their physical appearance, or other
characteristics that they share with many members of the
general public. The desire for cheaper housing, which was
what Hemisphere Building was all about in the end, is not
limited to the disabled, and thus a limitation in the supply
of cheap housing does not hurt the disabled by reason of
their handicap. Mental health services, in contrast, are
uniquely important for people with mental disabilities. If a
city were to zone them entirely out of its territory, on the
theory that mentally disabled people are unpleasant
neighbors or visitors to commercial establishments, its
action would be taken by reason of the disability and it
would violate the ADA. What has happened here is some-
thing less than total exclusion, but that just means that
there is a factual question to be explored. Here, the district
court reasonably concluded that the exclusion was enough
to trigger the duty to accommodate. Moreover, it is worth
noting that the court also found that “the clinic would not
conflict with City zoning” (309 F. Supp. 2d 1096, 1106 (E.D.
Wis. 2004)); that special uses like the clinic are recognized
as not inherently incompatible with the area (id.); and that
not only did the zoning board have the power to make this
accommodation, but that this was a power that “the
Milwaukee BOZA [Board of Zoning Appeals] has exercised
willingly on previous analogous occasions” (173 F. Supp. 2d
842, 853 (E.D. Wis. 2001)).
  In summary, this court had it right in Good Shepherd
when it identified three separate ways of proving a claim
under the FHAA, and there is no reason to shrink that
number down to two for a claim brought under Title II of
the ADA and the Rehabilitation Act. The majority’s ap-
proach is inconsistent with the implementing regulations
under Title II, and it risks having the unfortunate effect of
barring the disabled from relief just when they need it
most: when a public entity is failing to provide a service
No. 04-1966                                              15

that only the disabled would need, under circumstances
where intentional discrimination and disparate impact
would be impossible to prove as a practical matter. The only
way to avoid such a result would be to expand the under-
standing of disparate impact well beyond its historical
boundaries. Perhaps that is what the majority contemplates
for its remand. In my view, the district court’s understand-
ing of the law was correct, and its findings of fact are
supported by the record. I would affirm, and I therefore
respectfully dissent.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit




                   USCA-02-C-0072—6-29-05
