HUD Proposes New Rule, New Resources for Local Governments to Advance Fair Housing

September 3, 2013

By Michael Wallace

The U.S. Department of Housing and Urban Development (HUD) has proposed a new rule to encourage greater compliance with the agency’s goal of “affirmatively furthering fair housing” as required under the Fair Housing Act.  Local governments and states receiving HUD grants would all be subject to the proposed rule, which is open for comments until Tuesday, September 17th, 2013.

Although local governments have always been subject to federal fair housing rules, they have been unevenly enforced by successive Administrations.  Currently, local governments receiving HUD funds are responsible for collecting and analyzing their own housing assistance data, and identifying any impediments to fair housing.  For many cities, the process of collecting and analyzing data is costly and staff-intensive, and as a result is often contracted out to third parties.  In some cities, the data is a source of litigation when local officials and housing advocates disagree over the analysis and what qualifies as an “impediment” to fair housing.

Under the proposed rule, rather than require local governments to collect and analyze data, HUD would perform the collection and analysis of local data, and then provide local governments an analysis of economic and racial disparities in neighborhoods through an assessment template.  HUD would also be authorized to provide guidance on overcoming any impediments revealed in their assessment template.  Local governments would be encouraged (but not required) to address any impediments to fair housing in their HUD planning documents including, Consolidated Plans, PHA Plans, and Capital Fund Plans.

HUD’s analysis of fair housing data would be based on meeting four primary goals: 

  • Overcoming historic patterns of segregation; 
  • Reducing racial and ethnic concentrations of poverty; 
  • Reducing disparities by race, color, religion, sex, familial status, national origin, or disability in access to community assets such as education, transit access, and employment, as well as exposure to environmental health hazards and other stressors that harm a person’s quality of life; and
  • Responding to disproportionate housing needs by protected class. 

The cost of complying with the new rule is unlikely to be uniform across local governments.  According to HUD, the transfer of responsibility for data collection and analysis from local government grantees to HUD will result in a cost savings for local governments.  Moreover, the standardization of “impediments to fair housing” as captured in the new assessment template may ultimately reduce fair housing litigation against cities.  Conversely, a renewed emphasis on affirmatively furthering fair housing may require costly and time-consuming alterations in local development projects supported by HUD funding.

HUD has posted the new rule and other documents explaining the proposal on their website