That’s the question before the Supreme Court. Amelia Thomson-DeVeaux describes the issue for Fivethirtyeight.com:

In the aftermath of the housing crisis of 2008, big banks such as Wells Fargo shelled out hundreds of millions of dollars to black and Latino borrowers who claimed they were steered into higher-risk, higher-fee loans than were white borrowers who presented the same credit risk. But these individual homeowners weren’t the only ones affected by the foreclosures that left entire neighborhoods full of empty, boarded-up houses. City governments were also suddenly faced with maintaining these crumbling swaths of real estate. While property values and tax revenues fell, they dispatched police and firefighters to protect the homes from vandalism and criminal activity. Should they also be able to go after the banks for financial damages?

That’s the question facing the Supreme Court on Tuesday. Cities such as Miami, Los Angeles, Providence, Birmingham, Memphis and Baltimore have all sued the banks, using the Fair Housing Act to argue that they were financially injured by the racially discriminatory lending practices. A few of these lawsuits have already settled, but the Supreme Court will hear arguments in Miami’s case, which two banks — Wells Fargo and Bank of America — have asked the courts to dismiss, claiming that cities are abusing a law designed to protect against segregation, not guarantee municipal tax revenues.