Student Corner: HUD Releases New Proposed Rule On Affirmatively Furthering Fair Housing

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Student Corner: HUD Releases New Proposed Rule On Affirmatively Furthering Fair Housing

By CED Program Interns & Students

Published July 24, 2014

In July 2013, HUD released a new proposed rule designed to address problems in program progress reporting and to provide program participants with a clearer understanding of their responsibilities to affirmatively further fair housing in their jurisdictions [1]. This rule was a response to a 2010 report of the Government Accountability Office (GAO) that found inefficiency and inadequate reporting from program participants largely due to a lack of guidance and oversight from HUD [2]. HUD has since examined its reporting procedure and its level of guidance to program participants regarding the mandate to affirmatively further fair housing (AFFH) and has found specific areas in need of improvement. This rule is designed to address those areas. 

Background. Congress passed the Fair Housing Act (FHA) in 1968 to address housing discrimination and to create “truly integrated and balanced living patterns” [3]. This Act prohibits discrimination in housing-related transactions based on race, color, religion, sex, familial status, national origin, or handicap [4]. However, the FHA goes further than just prohibiting discrimination. It mandates HUD and other federal agencies to administer their programs in a manner that affirmatively furthers fair housing [5]. Unfortunately, the original legislation failed to define ‘fair housing’ or what it means to ‘affirmatively further’ it, leading to confusion and litigation. Nonetheless, it is well established case law that this mandate means something more than simply addressing segregation [6]. In order to comply with this mandate, HUD had previously required its program participants (grantees) to complete an Analysis of Impediments (AI) to fair housing choice for their jurisdiction as well as to certify to HUD that they will take steps to affirmatively further fair housing in their area. However, the GAO and HUD have found that this process has not been as effective as it could be and needs to be revised.

The Rule. The new rule seeks to clarify key terms such as what it means to “affirmatively further fair housing” and when “disproportionate housing needs” or “racially/ethnically concentrated areas of poverty” exist [7]. It is also designed to make reporting and local planning efforts more efficient through five primary changes to fair housing requirements that will modify 24 CFR Parts 5 (General HUD requirements), 91 (Consolidated Submission for Community Planning and Development Programs), 92 (HOME), 570 (CDBG), 574 (HOPWA), 576 (ESGs), and 903 (PHA plans). The changes include: (1) replacing the AI with a new reporting document and planning tool, the Assessment of Fair Housing (AFH); (2) providing HUD-supplied spatial data on race and poverty concentration to serve as a baseline for local planning actions; (3) providing clearer standards of what is required in the AFH and how it will be evaluated; (4) creating a more direct link between the AFH and required consolidated 5-year plans; (5) modifying the HUD review process to provide clearer standards and better technical assistance [8].

Essentially the AFH is the pivotal piece to the new changes. HUD will require program participants to submit an AFH for approval at least 270 calendar days prior to the start of the program year and prior to submitting the required 5-year consolidated plans (or PHA plans) as is required in 24 CFR Part 91. An AFH will be required of PHAs that receive assistance under Sect. 8 & 9 of the US Housing Act of 1937 (42 U.S.C. 1437f & g); all jurisdictions and insular areas that are required to submit consolidated plans for the following programs: Community Development Block Grants (CBDG), the Emergency Solutions Grants (ESG), the HOME Investment Partnership (HOME) program and the Housing Opportunities for Persons with AIDS (HOPWA) program; and any other program participants that are subject to fair housing regulations [9]. The AFH must include the following information: (1) a summary of fair housing issues and the ability of the jurisdiction to address them; (2) an analysis of HUD provided data that includes the identification of segregation trends across protected classes, any racially or ethnically concentrated areas of poverty, what disparities exists in access to community assets, and any disproportionate housing need exists among protected classes; (3) an assessment of determinates that influence the fair housing issues identified in part 2; (4) general goals to address the fair housing issues listed in order of priority; and (5) a summary of the community participation process that the jurisdiction has or will undertake, including public hearings, public comments, and efforts taken to increase community participation especially among historically underserved communities [10]. HUD states that it will automatically fail any AFH that does not include an analysis of the HUD-provided data or a summary of community participation. In addition, any and all records must be kept for HUD review as to what contributed to the AFH, what actions were taken as part of the AFFH plan, and records concerning community participation.

The data that is to be provided to the states, local governments, and PHAs will be drawn from nationally uniform sources and will provide local and regional spatial information on patterns of integration and segregation, racial and ethnic concentrations of poverty, disproportionate housing need among protected classes, outstanding discrimination findings, as well as other national data that relates to education, poverty, transit access, employment, exposure to environmental health hazards and community assets [11]. The analysis of this data is to be used in the AFH as a baseline for local and/or regional planning actions, although HUD has stated it does not require specific strategies or actions. Under the new rule, HUD will allow jurisdictions to choose to strategically enhance neighborhood assets or to promote mobility to areas of opportunity in order to meet its AFFH goals [12].

HUD is expected to release its final rule sometime in October 2014. For more information on this rule, see the Federal Register Vol. 78, No. 139, Part IV (Friday, July 19, 2013) available at http://www.gpo.gov/fdsys/pkg/FR-2013-07-19/pdf/2013-16751.pdf .

Holly Safi is a recent graduate of the School of Law and the Master of City of Regional Planning program at UNC-Chapel Hill.

References:

[1] Affirmatively Furthering Fair Housing, 78 Fed. Reg. 43710 (July 19, 2013) (to be codified in 24 CFR Parts 5, 91, 92, et al.).

[2] U.S. Gov’t Accountability Office, GAO-10-905, HUD Needs to Enhance Its Requirements and Oversight of Jurisdictions’ Fair Housing Plans (Sept. 14, 2010).

[3] 114 Cong. Rec. 3422 (1968) (comments of Senator Mondale).

[4] 42 U.S.C. 3601 et. seq.

[5] 42 U.S.C. 3608(d).

[6] See Otero v. N.Y. Hous. Auth., 484 F.2d 1122, 1124 (2^nd Cir. 1973) (stating that duties under the FHA “require affirmative steps to promote racial integration”); Shannon v. HUD, 436 F.2d 809 (3^rd Cir. 1970) (stating that HUD must consider the effects of racial concentration before placing low-income housing in order to comply with the FHA requirements); NAACP v. Sec’y of Hous. & Urban Dev., 817 F.2d 149 (1^st Cir. 1987) (rejecting HUD’s claim that it only had a duty not to discriminate under § 3608).

[7] Id. at 43729 – 43730.

[8] AFFH, 78 Fed. Reg. at 43714.

[9] Id. at 43730 – 43731.

[10] Id. at 43731.

[11] Id. at 43715.

[12] Id. at 43716.