In early January 2020, the U.S. Department of Housing and Urban Development (HUD) released a notice of proposed rulemaking to change the Obama-era Affirmatively Furthering Fair Housing (AFFH) rule. The current AFFH rule was enacted in 2015 to pursue the purposes and policies behind the Fair Housing Act (FHA), as amended. The FHA, with its roots in the aftermath of the Civil War and the era of reconstruction, calls not only for the prohibition of discrimination in housing practices, but also for HUD’s program participants to take active action to combat patterns of historic segregation to allow for integration of living patterns and promotion of fair housing choice.
May 13, 2020 Feature
The Trump Administration’s Proposed Rule Change of the 2015 Affirmatively Furthering Fair Housing Rule
By Stephen W. Thorpe
Tools Used Before the Current Rule
Prior to the 2015 AFFH rule, HUD program participants met their mandate to affirmatively further fair housing by analyzing impediments to fair housing choice in an aptly named Analysis of Impediments (AI). The AI was used to identify impediments to fair housing choice in a participant’s jurisdiction, to plan, and to take action to combat the effects of those impediments. The participant would certify to HUD that it would engage in actions that would affirmatively further fair housing. The participant would be required to keep records of its actions but was not required to submit the analysis or the records for HUD review.
HUD’s review of the AI program overall signaled a need for improvement because patterns of segregation persisted. A 2010 report by the U.S. Government Accountability Office (GAO), titled “HUD Needs to Enhance Its Requirements and Oversight of Jurisdictions’ Fair Housing Plans,”1 affirmed that, among other things, HUD neither specified the content nor the scope of the AIs. This resulted in uneven analysis across jurisdictions and decreased the effectiveness of the AI as a planning tool. The report recommended HUD improve the program by providing effective guidance and technical assistance as well as the data already in HUD’s possession to help program participants plan for AFFH.
Current AFFH Rule
In response to the GAO report and its own finding, on July 19, 2013, HUD announced a proposed rule that would replace the AI in assessing fair housing.2 The proposed new assessment would better assist program participants in carrying out their obligation of AFFH by conditioning the receipt of HUD funds on identification of hurdles to fair housing, prioritizing overcoming those hurdles, and setting goals for housing and community development planning. In 2015, after receiving public comment and making changes, the proposed rule became a reality, replacing the AI with a standardized Assessment of Fair Housing (AFH).3
The stated goal of the 2015 AFFH rule was “to empower program participants and to foster the diversity and strength of communities by overcoming historic patterns of segregation, reducing racial or ethnic concentrations of poverty, and responding to identified disproportionate housing needs consistent with the policies and protections of the FHA.”4 The rule sought “to assist program participants in reducing disparities in housing choice, access to housing and opportunity” based on protected class status, thereby expanding economic opportunity and enhancing the quality of life.5
The key features in achieving those goals were:
(1) Replace the AI with AFH, which was meant to be a more effective and standardized assessment to assist program participants with identification and evaluation of fair housing issues.
(2) Provide nationally uniform data to program participants that would help frame their assessment activities. This was intended to assist program participants in determining goals to address fair housing issues and contributing factors to lack of housing choice.
(3) Provide focused directions on the purpose of the AFH and standards, which HUD would evaluate the AFH. This direction, coupled with clear standards, would allow for the use of technical assistance and reinforce the value and importance of planning activities for fair housing.
(4) Provide a more direct link between the AFH and subsequent program participant planning documents with the aspiration of tying fair housing planning into the priority setting, commitment of resources, and specific activities to be undertaken.
(5) Promote and facilitate collaboration between different jurisdictions and public housing agencies to develop regionally appropriate approaches to address fair housing issues. This would be done in collaboration with the public, with an emphasis on individuals who had been historically excluded because of their protected status under the FHA, by providing them with an opportunity to contribute regarding fair housing issues, goals, and how best to allocate HUD funding. The inclusion of community involvement is required under this rule as an integral part of the AFH.
With the election of President Donald Trump, the AFFH never was fully implemented. The administration determined that, even with the limited roll-out of the 2015 rule, that there was sufficient evidence to suspend the rule in 2018.6 As a result, the impacts of the AFH never were fully realized.
AFFH Proposed Rule Change
In January 2020, in a proposed rule change, HUD acknowledged that the statutory obligation to AFFH has not changed.7 Instead, HUD has determined that the current regulations are overly burdensome to both HUD and program participants. As a result, the program was determined to be ineffective for participants to meet their reporting obligations. This led HUD to propose revisions to both the assessment tool and the codified regulation.
In support of this stance, HUD proffered five justifications. First, the AFH is expensive to complete and its complexity resulted in a high failure rate from first-time submissions of participants during the first year. Second, HUD’s administration of the rule was overburdensome, citing increased expenditures during the first year of implementation. Third, the rule does not allow for HUD to tailor the rule depending on the program participant. HUD pointed to the requirement that every program participant regardless of civil rights record, size, or housing condition had to complete the same AFH process. Fourth, the rule emphasizes planning and process over the program participants’ evaluating the results of the assessment. Fifth, it was determined that the HUD-provided tools to compile data for future use were too difficult for participants to learn and operate.
On August 16, 2018, HUD published an Advance Notice of Proposed Rulemaking asking for public input regarding possible changes on the 2015 AFFH rule.8 The advance notice sought comments about reduction in regulatory burdens, results-oriented analysis instead of a focus on community characteristics, local control and incentives to increase fair housing choice by increasing housing supply, and efficient use of HUD resources.
After receiving over 700 public comments, HUD formulated measures to revise the 2015 rule. HUD is proposing that each program participant determine how it will meet its AFFH by scoring. The score will be determined by compiling data-driven measures that analyze whether each program participant (1) is free of adjudicated fair housing claims; (2) has an adequate supply of affordable housing throughout its jurisdictions; and (3) has an adequate supply of quality affordable housing. Program participants that score high at the outset or achieve improvement over a five-year cycle would be eligible for incentives provided by HUD. In contrast, HUD would use remedial resources and regulatory enforcement actions for program participants that score low on the assessment. Regardless of the score, all program participants would determine their own goals, based on their specific circumstance and how best to meet the statutory obligation under the FHA. HUD is proposing to make a change in the regulatory requirements for program participant certification of AFFH by making program participants certify their commitment to take steps to address obstacles to fair housing choice.
The proposed rule was open for public comment until March 16, 2020. The debate about whether the 2010 GAO’s criticism of the AI will be overcome by the proposed rule will be interesting and important to track, as local and state governments determine how to meet their AFFH obligations. As Justice Anthony M. Kennedy so aptly put it in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507, 2725 (2015): “Much progress remains to be made in our Nations’ struggle against racial isolation.”
Endnotes
1. GAO-10-905 (Sept. 14, 2010), https://www.gao.gov/assets/gao-10-905.pdf.
2. Affirmatively Furthering Fair Housing, Proposed Rule; 78 Fed. Reg. 43710 (July 19, 2013).
3. Affirmatively Furthering Fair Housing, Final Rule; 80 Fed. Reg. 42272 (July 16, 2015).
4. Id.
5. Id.
6. Affirmatively Furthering Fair Housing: Withdrawal of the Assessment Tool for Local Governments; 83 Fed. Reg. 23922 (May 23, 2018).
7. Affirmatively Furthering Fair Housing; Proposed Rule; 85 Fed. Reg. 2041 (Jan. 14, 2020).
8. Affirmatively Furthering Fair Housing: Streamlining and Enhancements; 83 Fed. Reg. 40713 (Aug. 16, 2018).