The U.S. Department of Housing and Urban Development (HUD) has finalized its Affirmatively Furthering Fair Housing (AFFH) regulation, a controversial initiative to equip communities that receive HUD funding with data and tools to help them better meet their obligations under the Fair Housing Act.
If local communities fail to meet this obligation, they would no longer be eligible for community development block grants and other HUD funding.
By providing local communities with data showing the percentage of affordable housing and the racial/socio-economic makeup of their neighborhoods, HUD hopes to make local governments more aware of whether they are meeting the priorities laid out in the Fair Housing Act and set goals for affordable housing and community development.
In addition to providing the data – most of which is already being collected through various federal agencies, including the U.S. Census – HUD says it will also provide guidance and technical assistance to local governments to guide their decision-making with regard to fair housing priorities.
Critics of the initiative say it is an over-reaching attempt by the Obama administration to ‘diversify’ wealthy neighborhoods by forcing them to adopt zoning laws that allow for the development of more affordable housing. Many have called it ‘social engineering.’
In June, the House voted 229-193 in favor of an amendment that would prevent HUD from implementing the rule – however, the regulation is still set for an up or down vote in the Senate. Should the Senate vote down the proposal, President Obama could still veto the decision, thus allowing HUD to enact the new rule.
The proposal – considered the first of its kind – would give the federal government unprecedented power to overrule the zoning laws of more than 1,200 local governments and force them to comply. In addition, it would set aside taxpayer money to build affordable housing in wealthy towns.
Rep. Paul A. Gosar, R-Ariz., who has been a vocal opponent of the proposed rule and who introduced the amendment, called it ‘one of the most far-reaching attempts yet to punish communities that don't submit to the president's liberal ideology.’
‘American citizens and communities should be free to choose where they would like to live and not be subject to federal neighborhood engineering at the behest of an overreaching federal government,’ Gosar said in a statement last month.
‘Furthermore, HUD officials shouldn't be holding hostage grant monies aimed at community improvement based on its unrealistic utopian ideas of what every community should resemble,’ he adds. ‘Local zoning decisions have traditionally been, and should always be, made by local communities, not bureaucrats in Washington, D.C. I am extremely pleased to see the House put a stop to this attempt by the Obama administration to control a fundamental aspect of the American Dream.’
The initiative in effect mandates the collection of information by municipalities on the racial, ethnic and income distribution of housing in their towns.
Critics of the initiative argue that once the information has been gathered, the government will, in turn, put pressure on those communities viewed as lagging behind in implementing the priorities of the Fair Housing Act.
However, as proposed, HUD's initiative only applies to those communities receiving HUD funds, which wealthy communities are less dependent. Some critics of the plan say it could result in wealthier communities thinking twice before applying for funding through HUD.
In a statement, Julian Castro, secretary of HUD, says, ‘Unfortunately, too many Americans find their dreams limited by where they come from, and a ZIP code should never determine a child's future. This important step will give local leaders the tools they need to provide all Americans with access to safe, affordable housing in communities that are rich with opportunity.’
HUD's press release mentions measures that will encourage communities to revitalize low-income neighborhoods through ‘targeted investments’ and measures that will increase ‘housing choice in areas of opportunity;’ however, the regulation lacks specifics as to how this will happen.
HUD's final rule will take effect 30 days after publication, however, it will not be fully implemented immediately, so as to give program participants more time to complete an assessment of fair housing, HUD's release states.
In related news, the U.S. Supreme Court recently upheld a circuit court's earlier ruling that the legal doctrine of disparate impact is applicable to the Fair Housing Act.
The 5-4 decision means borrowers who feel they were discriminated against when their loans were denied can bring class-action lawsuits against lenders – regardless of whether a lender's policies are found to be intentionally discriminatory.
In writing the court's decision, however, Justice Anthony Kennedy says that although minorities who allege racial discrimination don't have to prove intent to sue, mere statistical evidence of a policy's impact on a minority group might not in and of itself be grounds for a suit.
Kennedy further warns that when courts rule in disparate impact cases, they cannot impose racial targets or quotas, as that would be unconstitutional.
The ruling – a victory for housing and civil rights advocates – came as a surprise to some legal experts who had predicted that the conservative majority on the court would overturn the circuit court's earlier ruling.
To read HUD's final rule, click here.