New HUD Rule Eliminates Fair Housing Act Requirement to Affirmatively Further Fair Housing

On Friday, August 7, 2020, HUD announced its new “Preserving Community and Neighborhood Choice” rule (85 Federal Register 47899) – (the “Choice Rule”), repealing the Affirmatively Furthering Fair Housing (AFFH) rule announced by the Obama Administration in 2015, and circumventing one of the primary requirements of the 1968 Fair Housing Act. The 2015 rule imposed rigorous obligations on state and local recipients of HUD funds to identify obstacles to fair housing in their jurisdictions and take active (affirmative) steps to eliminate them. This new HUD rule eliminates those obligations, making it easy for states and localities to turn a blind eye to housing discrimination while continuing to benefit from HUD funding. While all regulations reflect some political bias, the new Choice Rule is a clear attempt to use the Fair Housing Act (FHA) to draw political lines in a way that has never been seen at the national level.

The subject of affirmatively furthering fair housing has been one of the most politically charged issues addressed by HUD in recent decades. Beginning in the mid-1990s, when the duty to affirmatively further fair housing was first imposed on HUD grantees, including state and local governments and agencies, HUD has insisted that grantees provide an “analysis of impediments” to fair housing in their jurisdictions and then certify that they were taking steps to eliminate those impediments and affirmatively further fair housing. In truth, even these requirements were weak-kneed and included no specific duty to take action to halt discriminatory practices, such as exclusionary zoning. Because of this, litigation ensued, including False Claims Act litigation against Westchester County in New York State, charging that grantees were making their certifications – and receiving HUD funds – without actually doing anything to further fair housing goals.

During the Obama administration, HUD took a more aggressive stance, publishing it AFFH rule in 2015. This rule required HUD grantees to seriously examine the legal, demographic, and socio-economic issues in their localities that made achieving fair housing difficult (if not impossible) and to propose steps that they would take – including measures of their success for failure – to overcome those obstacles. HUD offered “assessment tools” and deep databases of socio-economic and demographic data to assist jurisdictions in the preparation of the “assessments of fair housing.” If a grantee did not take effective measures to eliminate impediments to fair housing, HUD would restrict or eliminate funding to the locality.

The major problem with the AFFH rule was the difficulty in implementation due to its complexity and the volume of information needed to complete the assessments. While some jurisdictions were able to submit their assessments of fair housing, delays by the Office of Management & Budget in approving the many versions of the assessment tool developed by HUD for different types of grantees meant that few jurisdictions were even able to begin the process. In truth, the AFFH rule, while laudable in its intent, was awful in its design. If was far too complex for all but the most sophisticated localities, and left many towns and cities struggling to figure out how to implement it. Criticisms were leveled that, in addition to the time and cost involved in preparing the assessments, the rule required grantees to assess issues – such as the availability of education and health care resources – that were outside their jurisdictional authority and professional ability. This was an “ivory tower” rule created for real-world circumstances.

The Trump administration has, from day one, looked for ways to slow down or stop the requirement to affirmatively integrate the nation’s communities, and the complexity of the 2015 rule provided the opening. In 2018, the current administration suspended the duty to file assessments for most grantees until 2020 or later. Then, in early 2020, HUD announced an overhaul of the AFFH rule. This proposed rule retained the idea of state and local assessment of fair housing issues, but it identified a list of 16 obstacles to fair housing and directed grantees to identify three goals to overcome those obstacles. Some of the obstacles identified by HUD- such as source of income laws, rent control, and energy and water efficiency standards – were themselves politically charged. HUD retained the right to review submissions and to take action regarding grantees depending on their success. This was basically a scaled-back version of the 2015 AFFH rule and was created by HUD professionals within the political parameters given to them by current HUD leadership.

However, following the release of this new proposal, the White House indicated that the rule did not go far enough to lessen the burden on local grantees and directed HUD to revise the rule “to empower local communities and to reduce the regulatory burden” on local grantees (85 Federal Register at 47901). This, in essence, required HUD to start the process from scratch. HUD has determined that “affirmatively furthering fair housing” is a “vague, undefined term that could be open to several different plausible meanings.” Announcing that “HUD’s interpretation will be entitled to deference as long as it is reasonable,” HUD has adopted the so-called “Ordinary-Meaning Canon” and uses dictionary definitions of “affirm” and “further” to put forth new interpretations of grantees’ duties.

Basically, the new Choice Rule replaces the prior AFFH rule with three short provisions:

  • It defines “fair housing” as “housing that, among other attributes, is affordable, safe, decent, free of unlawful discrimination, and accessible as required under civil rights laws;
  • It defines “affirmatively further” to mean “to take any action that is rationally related to promoting any attribute or attributes of fair housing as defined in the previous subsection” (it should be noted that HUD did not attempt to define the term “rationally); and
  • It states that a grantee’s certification “that it will affirmatively further fair housing is sufficient if the participant takes, in the relevant period, any action that is rationally related to promoting one or more attributes of fair housing…”

In effect, a grantee can meet its obligation to affirmatively further fair housing by simply certifying that it has taken “and action” to promote the “attributes” of “fair housing” in the new rule. This level of obligation is so minimal as to be non-existent. For example, by promoting a single “attribute” of the new definition of “fair housing” – such as “safe housing” – a grantee will meet the requirement to show that they are affirmatively furthering fair housing. An even better example would be the certification by a locality that it is working to ensure that all of its housing is “decent,” – which is a word with virtually no meaningful definition and is as subjective a term on one could imagine – and, thus meeting the obligations of the locality.

This new rule is a brazen abandonment by the federal government of any responsibility to ensure that all Americans – regardless of race, color, religion, national origin, sex, familial status, or disability – have an equal right to housing. It constitutes a carte blanche permission slip for localities to continue to restrict the availability of housing in high opportunity areas to minorities and lower-income individuals.

With an election looming, and the possibility of a new administration in January 2021, this issue will again be front and center sooner rather than later.