HUD Issues Notice to Amend Controversial Fair Housing Policy

Mike Sorohan msorohan@mba.org

August 14, 2018

HUD yesterday published a notice announcing its intent to amend its Affirmatively Furthering Fair Housing regulations, saying it wants to provide "more helpful guidance" to states and local communities in promoting fair housing choice with federal funds.

The rule, published in 2015, was ostensibly designed to provide HUD program participants with a revised planning approach to assist them in meeting their legal obligation to assess fair housing and provide remedies to battle housing discrimination. However, last year HUD said in contrast to its stated goals, the AFFH rule "proved ineffective, highly prescriptive, and effectively discouraged the production of affordable housing."

In January, HUD suspended the obligation of local governments to file plans under the regulation and, in May, withdrew a computer assessment tool required to be used by local governments in preparing those plans. HUD said rather than assisting local governments in formulating acceptable fair housing assessments, the Local Government Assessment Tool was "confusing, difficult to use, contained errors, and frequently produced unacceptable assessments, and otherwise required an unsustainable level of technical assistance."

Suspension of the rule drew sharp criticism from legal, housing and civil rights groups, which said the action disrupted efforts by communities nationwide to engage in compliance with federal housing discriminations laws and reflected a heavy-handed approach to deregulation by the Trump Administration.

The National Fair Housing Alliance, a housing advocacy group, said by suspending the program, HUD effectively delayed program participants' submission of the fair housing plans (known as Assessments of Fair Housing or AFHs) until after October 31, 2020. Submission of these fair housing plans is tied to the five-year cycle under which program participants must submit their spending plans, (known as Consolidated Plans), most of which must be submitted before October 31, 2020. "HUD's action means that most program participants will not be required to submit a fair housing plan for HUD review until 2024 or 2025," NFHA said.

In May NFHA, the NAACP, the American Civil Liberties Union and several other organizations filed a lawsuit in federal court alleging that HUD had violated the Administrative Procedure Act and the Fair Housing Act.

In a 2015 Washington Times op-ed, HUD Secretary Ben Carson--then a candidate for the Republican nomination for president--described the AFFH rule as "social engineering," noting, "These government-engineered attempts to legislate racial equality create consequences that often make matters worse."

In a statement yesterday, Carson said HUD "believes very deeply in the purposes of the Fair Housing Act and that states, local governments, and public housing authorities further fair housing choice. HUD's 2015 rule often dictated unworkable requirements and actually impeded the development and rehabilitation of affordable housing It's ironic that the current AFFH rule, which was designed to expand affordable housing choices, is actually suffocating investment in some of our most distressed neighborhoods that need our investment the most. We do not have to abandon communities in need. Instead we believe we can craft a new, fairer rule that creates choices for quality housing across all communities."

HUD said (https://www.hud.gov/sites/dfiles/FHEO/documents/AFFH-ANPR.pdf) it is soliciting public comment on changes that will: (1) minimize regulatory burden while more effectively aiding program participants to meet their statutory obligations, (2) create a process focused primarily on accomplishing positive results, rather than on analysis, (3) provide for greater local control and innovation, (4) seek to encourage actions that increase housing choice, including through greater housing supply, and (5) more efficiently use HUD resources.

The 60-day comment period will begin following the notice's publication in the Federal Register.

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