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November 30, 2019 HUMAN RIGHTS

Fair Housing Policy Under the Trump Administration

by Stephen M. Dane

Congress passed the federal Fair Housing Act with broad bipartisan support in 1968, one week after the assassination of Dr. Martin Luther King Jr. As originally enacted, the Fair Housing Act prohibited discrimination on the basis of race, color, national origin, sex, and religion. Congress also obligated the U.S. Department of Housing and Urban Development (HUD) to ensure that federal housing money is spent in ways that affirmatively further fair housing. The Act was expanded during the administration of President Ronald Reagan, again on a bipartisan basis, to include people with disabilities and families with children in the list of protected classes.

The Act remains one of the most important civil rights laws for promoting integration and freedom of choice in housing transactions. Freedom to choose where one lives is a critical component of the American dream. Yet more than 4 million instances of housing discrimination occur each year, and the vast majority are unreported. When families are denied equal access to their housing of choice, the opportunities for good jobs, quality education, and a clean and healthy environment become limited as well.

Although enforcement by private lawsuits is the primary means by which the Fair Housing Act is enforced, Congress empowered HUD and the Department of Justice to enforce the law as well. In addition to affirmative enforcement authority, Congress bestowed HUD with the authority to issue rules and regulations to “carry out” and “implement” the Act. Congress expressly mandated that HUD “give public notice and opportunity for comment with respect to such rules.”

President Donald J. Trump signs an Executive Order on establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing.

President Donald J. Trump signs an Executive Order on establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing.

Over the last several decades, HUD has adopted a number of significant regulations interpreting the Act, including a discriminatory effects standard, a regulation requiring local governments receiving federal funds to diagnose and overcome local impediments to fair housing, and a regulation allowing low-income families to use federal housing vouchers to move from poor and racially segregated communities to areas that provide greater opportunity in education and employment. Over the years, HUD has also adopted and published, often in conjunction with other federal agencies, scores of regulations, notices, joint statements, and policy guidance memos on topics as diverse as reasonable accommodation requests from people with disabilities, accessible design and construction standards, state and local land use laws, service and assistance animals, victims of domestic violence, and the assessment of complaints that involve sexual orientation, gender identity, and gender expression.

Under the Trump administration, however, these accomplishments are at risk of being wiped off the books—some illegally. Under the direction of Secretary Ben Carson—who has no prior experience in either civil rights or housing policy—HUD has been eliminating, delaying, or revising its fair housing regulations in ways that are at odds with the intent of the Fair Housing Act, and in conflict with longstanding federal housing policy. Below are just a few examples.

Suspension of the Small Area FMR Rule

Following an appropriate notice and comment period, the Small Area Fair Market Rent Rule (Small Area FMR Rule) was promulgated by HUD in 2016 after years of community input and careful study and analysis. The intent of the Rule was to allow tens of thousands of low-income families who participate in the Housing Choice Voucher (HCV) program—families that disproportionally are African American, Latino, and other racial minorities—to use their housing vouchers to move from poor and racially segregated communities to areas that provide greater opportunity in education, jobs, and more. In doing so, the Small Area FMR Rule aligns the federal government’s primary rent subsidy program with HUD’s statutory mandates to ensure fair housing and avoid contributing to concentrated poverty.

The HCV program—formerly known as the Section 8 voucher program—provides a housing subsidy to more than 2 million households nationwide, enabling them to secure affordable, decent-quality housing in the private market. A participating household generally pays 30 percent of its monthly income toward rent. An HCV covers the remainder of the total rent amount (including utilities), so long as the rent does not exceed an amount based primarily on what HUD determines is the “fair market rent,” or FMR, for a comparable dwelling in the area. By subsidizing housing through these vouchers rather than through public housing projects, the HCV program aims to provide low-income families greater geographic choice in housing. A primary objective of the HCV program is to permit low-income families to settle throughout metropolitan areas, thereby avoiding the high concentrations of poverty and racial segregation that have been linked to significant adverse health, educational, and economic outcomes for children and adults.

The Small Area FMR Rule adopted by HUD in 2016 requires the public housing agencies (PHAs) that administer the HCV program locally to set voucher values in 24 metropolitan areas based on the prevailing private market rents for each distinct zip code within those regions. This methodology, which improves on the prior formula used in large metropolitan areas, recognizes the existence of very different local rental markets within each metropolitan area and calibrates vouchers more finely to the amount needed to live in various neighborhoods. It thus enables voucher holders to access a wider range of housing, outside of voucher-concentrated, racially segregated areas.

On August 11, 2017, however—and without following any notice and comment procedure as required by the Administrative Procedures Act and the Fair Housing Act—HUD abruptly announced that it would not require PHAs to implement the Small Area FMR Rule’s requirements in 23 of the 24 metropolitan areas subject to the rule. (The only area where the Small Area FMR Rule was not suspended was Dallas, where HUD implemented small area FMRs pursuant to a fair housing settlement triggered by a private complainant.) Although HUD said it would entertain applications from PHAs to use small area FMRs voluntarily in the meantime, it also made clear that it would not be assisting PHAs in implementing small area FMRs and indicated that PHAs would be unwise to do so. HUD made no attempt to follow a notice and comment procedure, but instead simply wrote letters to the PHAs and posted a notice on its website.

HUD was promptly sued for violating the Administrative Procedure Act by two HCV holders and an advocacy group. On December 23, 2017, the U.S. District Court for the District of Columbia issued a preliminary injunction against HUD, finding that it had “no authority to act without notice and comment,” and that HUD’s decision-making in the matter was “arbitrary and capricious.” Open Communities Alliance v. Carson, Case No. 1:17-cv-02192 (D.D.C., 12/23/2017). HUD subsequently backed off its attempt to delay implementation of the Small Area FMR, and on February 15, 2018, stipulated to a judgment in the plaintiffs’ favor.

Suspension of the AFFH Process

Since its enactment in 1968, the Fair Housing Act has required more than the avoidance of housing discrimination. It also requires the federal government and its grantees to take affirmative steps to promote residential integration, undo the legacy of racial segregation, and otherwise further fair housing. Specifically, the Act requires HUD to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of [the Fair Housing Act],” 42 U.S.C. § 3608(e)(5). This “affirmatively furthering fair housing” (AFFH) provision ensures that the Fair Housing Act constitutes “an obligation to do more than simply refrain from discriminating,” NAACP v. Secretary of Housing and Urban Development, 817 F.2d 149, 155 (1st Cir. 1987), and also powers affirmative movement toward integration in communities across the country, as Congress intended. See Tex. Dep’t of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2525-26 (2015).

Although this AFFH provision has been part of the Fair Housing Act for 50 years, historically HUD permitted local jurisdictions to largely ignore that duty even as those jurisdictions collected billions of dollars in federal grants annually for housing and community development. That changed in 2015 when HUD promulgated—again following the required notice and comment process—its own AFFH Rule. That Rule requires jurisdictions to undertake a rigorous process of assessing local fair housing needs and making concrete plans to address them, including by soliciting community participation and addressing the comments submitted. A jurisdiction must memorialize its work in a detailed document called an Assessment of Fair Housing (AFH), which HUD must review. If the AFH does not meet the Rule’s requirements, HUD must reject it, explain its reasons, and then work with the jurisdiction to fashion a compliant AFH. In no uncertain terms, the Rule provides that jurisdictions that do not go through this process and emerge with HUD-approved AFHs may no longer receive federal housing and community development funds. The AFFH Rule therefore implements a key provision of the Fair Housing Act, which requires recipients of federal funds to take affirmative steps to combat racial segregation and otherwise affirmatively further fair housing.

As with the Small Area FMR Rule, HUD and Secretary Carson abruptly suspended—without notice and comment procedures—the core requirements of the AFFH Rule. On January 5, 2018, HUD suspended the AFH process and no longer required participating jurisdictions to submit AFHs or HUD to review those already submitted. Because of the existing submission schedule, the practical effect of HUD’s action is to remove the AFFH Rule’s requirements until 2024 or 2025 for most participating jurisdictions.

Once again, HUD’s action was challenged in court as a violation of the Administrative Procedure Act (APA). Unlike the Small Area FMR litigation, however, the only plaintiffs involved were advocacy organizations, which the court eventually determined did not have standing to challenge HUD’s actions. National Fair Housing Alliance v. Carson, U.S.D. Case No. 1:18-cv-01076 (D.D.C., 8/17/2018). No individuals were involved in the lawsuit as plaintiffs. Moreover, the court went on to opine that even if the plaintiffs had standing, HUD’s decision could not be challenged under the APA because HUD suspended the AFH process by withdrawing only “information collection” mechanisms, an action not subject to APA notice and comment requirements. Despite these procedural and technical findings, however, there is no dispute that HUD’s conscious delay in the adoption of an AFFH assessment tool will delay for years the effective implementation of the AFFH Rule and the promise it holds for decreasing segregation in the nation’s largest metropolitan areas.

Eviscerating the Disparate Impact Rule

Over the entire 50-year history of the Fair Housing Act, every court to face the issue has held that the Act implicitly embraces a disparate impact standard; meaning, a violation of the Act can be established by proof that a policy or practice has an adverse and disproportionate impact on a protected class, if not sufficiently justified by business necessity. HUD also endorsed this interpretation of the Act in a regulation adopted in 2013, “Implementation of the Fair Housing Act’s Discriminatory Effects Standard” (the Disparate Impact Rule). This regulation was effective by the time the U.S. Supreme Court conclusively declared in Texas Department of Community Affairs v. Inclusive Communities Project, 135 S. Ct. 2507 (2015), that disparate impact claims are cognizable under the Fair Housing Act. Indeed, Inclusive Communities cited the regulation several times, without any indication of disapproval.

In August 2019, however, HUD issued a Notice of Proposed Rulemaking that could effectively gut the current version of this regulation under the pretext of “implementing” Inclusive Communities. This is one of the Trump administration’s most extreme moves to scuttle or delay antidiscrimination laws. The proposed rule would allow financial institutions, insurance companies, and housing providers to adopt policies and practices or engage in covert discriminatory practices by imposing additional hurdles to sustaining and proving a violation of the Act based on a disparate impact theory of liability.

Specifically, victims of discrimination will face a dramatically higher burden than previously to establish a disparate impact claim under the Fair Housing Act. Language in the proposed rule suggests that a practice or policy that is profitable could be immune from challenge for its discriminatory impact—with the burden on discrimination victims to show that a company can make at least as much money without discriminating. Disparate impact is a critical tool to rein in discrimination in the use of algorithmic models—such as credit scoring, pricing, marketing, and automated underwriting systems. These practices can have starkly discriminatory effects but can operate as a hidden box, making those discriminatory effects difficult to attribute to any person’s intentional discrimination.

Yet, the proposed rule provides special defenses for business practices that rely on statistics or algorithms. HUD’s proposed rule could effectively immunize such covert discrimination by algorithm. In addition, the proposed Rule disincentivizes businesses to collect important data that can reveal discrimination. This means that victims of discrimination will be unable to identify whether discrimination is happening and lack the ability to challenge it if they do detect discrimination. HUD did not even attempt to defend these changes as good policy, instead justifying its actions as somehow required by the Inclusive Communities decision. But there is no support in the case law for the draconianc changes being proposed.

Unlike its previous strategies, this time around HUD is following the standard public notice and comment procedure required by the APA. Final comments to the proposed rule were due on October 18, 2019. Over 45,000 comments were submitted prior to the deadline. As of the time of publication of this article, HUD had not issued a Final Rule.

Elimination of the Informal Agency Guidance

Most recently, on October 15, 2019, President Donald Trump issued Executive Order 13891, ironically entitled “Promoting the Rule of Law through Improved Agency Guidance Documents.” 84 FR 55235 (Oct. 15, 2019). In this Executive Order, the president chastises federal agencies for having “sometimes used [their] authority inappropriately in attempts to regulate the public without following the rulemaking procedures of the APA.” The Executive Order requires that all “guidance documents”—which it defines as an agency statement of general applicability, intended to have future effect on the behavior of regulated parties, that sets forth a policy on a statutory, regulatory, or technical issue, or an interpretation of a statute or regulation—be rescinded if the federal agency determines that it “should no longer be in effect.” Moreover, an agency head must submit a report to the director of the Office of Management and Budget with the reasons for maintaining any guidance documents the agency head determines should not be rescinded. The director is required to provide such reports to the president.

Like all other federal agencies, HUD is subject to this new Executive Order. As noted above, HUD has issued a rich treasure trove of agency guidance documents on a wide range of fair housing topics, including discrimination against victims of domestic violence, reasonable accommodation requests from people with disabilities, state and local land use laws, service and assistance animals, and the treatment of fair housing complaints that involve sexual orientation, gender identity, and gender expression. These critical HUD agency guidance documents are now at risk of being rescinded, which will leave housing providers, tenants, and others at sea as to what their rights and responsibilities are in these critical areas.


Civil rights and fair housing advocates never harbored high hopes that the Trump administration would enforce the Fair Housing Act with much vigor. But the extreme efforts to which the Trump administration has gone to dismantle, sometimes lawlessly and without case law support, the fair housing policies expressly established by Congress, is extremely disconcerting to civil rights and fair housing advocates. More battles to either dismantle, or to preserve, existing fair housing protections will no doubt continue throughout the remainder of the Trump administration.

The author would like to acknowledge the valuable insights of his colleagues Michael Allen, Sara Pratt, and Sasha Samberg-Champion provided in this article.

Stephen M. Dane is a partner in the civil rights law firm of Relman, Dane & Colfax PLLC. The firm was involved in several of the cases cited in this article.