Cities Hearing Mixed Messages on HUD’s New Fair Housing Rule

October 15, 2013

By Mike Wallace

Since 1968, the Fair Housing Act has required the U.S Department of Housing and Urban Development (HUD) to “affirmatively further fair housing” within all of its programs.  For cities and towns accepting HUD grants, such as the Community Development Block Grant (CDBG) or the HOME Investment Partnerships Program, this has meant undertaking an analysis of local impediments to fair housing and providing an explanation on how grant supported activities will help overcome these impediments.

Over time, however, different interpretations of the Fair Housing Act and uneven enforcement of the rules by different Presidential Administrations has weakened HUD’s oversight of grantee compliance.  As a result, outside groups have filled the vacuum in federal oversight by taking cities to court for non-compliance and/or failure to adhere to their own fair housing plans.

Judgments against cities unused to such scrutiny from HUD has resulted in significant penalties, loss of local control, and unanticipated costs associated with implementing court mandated steps to affirmatively further fair housing.

HUD, in an effort to provide clearer guidance, standards, and oversight to cities and other grantees subject to the Fair Housing Act, is proposing a new Fair Housing rule.  For cities, two proposed changes stand out for their potential to impact local control.

The first is a change to the way cities conduct their analysis of impediments to fair housing.  Under the proposed rule, cities would be required to use a nationally uniform set of data collected and provided by HUD as the basis of their analysis, significantly reducing the flexibility cities currently have to determine what data is relevant.  Data collected by the city or other local institutions could supplement the nationally uniform data. 

The second change is a clarification, and significant expansion, of the definition of “affirmatively furthering fair housing” that prescribes specific considerations beyond housing discrimination that local governments could be required to adopt, or risk losing HUD funding.

In comments to HUD, NLC along with the National Association of Counties (NACo) and the United States Conference of Mayors (USCM) has expressed appreciation that one of HUD’s stated aspirations for the proposed rule is to reduce the risk of litigation for program participants by providing greater clarity in the application of Fair Housing rules. 

However, the proposed rule falls short of that aspirational goal by failing to provide cities safe harbor against those lawsuits.  Instead, the proposed rule specifically says "HUD’s acceptance of the [fair housing plan] does not mean that HUD has determined that a jurisdiction has complied with its obligation to affirmatively further fair housing under the Fair Housing Act; or has complied with other civil rights laws, regulations, or guidance.”

In comments, NLC has strongly urged HUD to include language in the final rule to provide safe harbor to cities that comply with the standards of the proposed rule.

NLC is also concerned that the proposed rule could be overreaching and over prescriptive in requiring consideration of factors not specifically authorized in the Fair Housing Act.

For instance, the nationally uniform data provided by HUD could require cities to address impediments to education, employment, transportation, and environmental health in their analysis of fair housing – none of which are required as part of the Fair Housing Act. 

In response, NLC is urging HUD to list these data points as optional factors cities may consider and include in their fair housing plans, but not to list them as requirements.

On the whole, the proposed rule can be viewed as a good faith effort by HUD to strike a better balance between their statutorily required efforts to affirmatively further fair housing and their programmatic support for locally determined community planning and development. 

Reactions to the proposed rule from other interest groups have been mixed, and several are reaching out to local officials both in support and in opposition.  Careful consideration is recommended as such groups may be pursuing an agenda not supported by NLC policy.

Details: To submit questions or comments on NLC’s stance on the proposed rule changes, contact Mike Wallace at Wallace@nlc.org or on twitter at @MikeWallaceII.