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HUD Publishes a New Proposed AFFH Rule

Resolves Some Concerns; Raises Some Others

Jim Armstrong, PHADA Policy Analyst

On January 14, 2020, HUD published a proposed rule entitled, “Affirmatively Furthering Fair Housing.” This is the latest proposal in HUD’s 10-year effort to revise the affirmatively further fair housing (AFFH) rule. This proposal makes significant revisions to the requirements for HUD’s governmental grantees to complete periodic Assessments of Fair Housing (AFHs), and to the standards for assessing success in complying with AFFH policies. The public may comment on this latest proposal by March 16, 2020.


How HUD Arrived at a New Proposed AFFH Rule

For decades, HUD required localities receiving Community Development Block Grant (CDBG) or HOME Investment Partnerships Program (HOME) funds to complete an Analysis of Impediments to Fair Housing (AI). In 2010, the Government Accountability Office (GAO) published an extremely critical report of its investigation into HUD’s administration of the AI requirements. GAO recommended that HUD:

  • Expeditiously complete its efforts to revise AI regulations, and
  • Address three limitations:
    1. Provide standards for completing AIs and a standard format for those analyses,
    2. Require that AIs include time frames for implementing AI recommendations and require local officials to sign AIs, and
    3. Require grantees to submit AIs on regularly and
      • Verify timeliness of AI submissions,
      • Determine that they meet format requirements,
      • Assess grantees progress in addressing impediments, and
      • Assure consistency between AIs and other grantee reports.

Partly in in response to GAO’s report, HUD published a proposed AFFH rule in July 2013 that replaced the AI process with a new AFH process, imposed a new, confusing, complicated format for AFHs, required HAs to complete their own AFHs for the first time, and created web based AFH and AFFH tools for grantees to use in completing these assessments. On July 25, 2015, HUD published its final rule implementing requirements for AFH submissions, and began to publish AFH forms, guidance, and data for local CDBG and HOME grantees, for HAs and for States and insular areas. Forty-nine localities completed their first AFHs between October 2016 and October 2017, which averaged 204 pages but were as long as 832 pages. HUD never accepted or required revisions of 31 (63 percent) of those submissions.

At every opportunity, PHADA and others submitted lengthy, detailed comments concerning the overwhelming burden imposed by the rule on program participants and on HUD, the content of the regulation, the content and format of the new AFH form for HAs, and HUD’s web based AFFH data tool. Among other things, PHADA argued that HUD’s AFH process would do little to actually overcome illegitimate housing discrimination or disparate housing impacts.

After 2016, HUD took several steps that effectively suspended implementation of its AFH requirement, and in 2018 the department announced the extension of the deadline for submission of any AFHs by localities until after October 31, 2020. HUD’s new proposed AFFH rule may result in a revised implementation schedule that could become effective at some point after November 2020.


Proposed Changes to the Process

Under HUD’s AI requirement, governments that prepared Consolidated Plans needed to complete an Analysis of Impediments to Fair Housing as part of their planning processes. They were not required to submit those analyses to HUD and HUD did not routinely review them. Under HUD’s AFH requirement, governments that prepared Consolidated Plans and HAs that prepared 5-Year and Annual Plans needed to complete very lengthy and complicated AFH tools and submit those documents to HUD. HUD would review the submissions and accept them as complete (not approve them or endorse the actions AFHs proposed) or reject them and require revisions. AFH preparation was designed to occur in conjunction with other planning process governments and HAs completed.

HUD has proposed a radical revision to these processes. Rather than requiring program participants to prepare a detailed AFH, the proposal requires HUD to assess CDBG recipients’ success in meeting AFFH requirements by examining and publishing localities’ performance along a number of dimensions described below. HUD intends these metrics to determine whether a jurisdiction (1) is free of adjudicated fair housing claims; (2) has an adequate supply of affordable

Housing, and (3) has an adequate supply of quality affordable housing. HUD would offer localities that demonstrate high performance or significant improvement according to HUD’s measures unspecified incentives in HUD programs such as preference points for responses to NOFAs and preference in redistributions of recaptured funds. HUD would focus remedial or regulatory enforcement actions on localities that perform most poorly according to HUD’s measures.

It appears that localities that prepare Consolidated Plans due to participation in the HOME Investment Partnerships Program, the Housing Trust Fund, the Emergency Solutions Grant Program, or the Housing Opportunities for Persons with AIDs Program would not be subject to HUD’s assessment of AFFH progress. These localities will still certify their compliance with AFFH requirements.

In addition to HUD’s evaluation of AFFH performance, localities that prepare Consolidated Plans, including those that do not receive CDBG funds, would need to include at least three specific, measurable goals to further their AFFH responsibilities as part of their certifications that they are complying with AFFH requirements. HAs would no longer be required to prepare independent assessments or analyses. Instead, they will be explicitly required to participate in their localities’ Consolidated Plan preparations and would need to certify that they consulted with their localities and that their plans are consistent with Consolidated Plan AFFH goals in the 5-Year Plan and Annual Plan AFFH certifications.

The 2015 final AFH regulation included lengthy, prescriptive public consultation and participation requirements. HUD’s proposed rule would replace these burdensome processes with public participation requirements that are part of Consolidated Plan and HA 5-Year Plan and Annual Plan preparation.

In sum, procedurally, HUD has replace the 92-question online AFH instrument and its separate, complicated, and prescriptive public consultation and participation requirements with (1) a HUD assessment of localities’ performance in fulfilling program outcomes related to AFFH, (2) providing high performers unspecified incentives within HUD’s program awards, (3) inclusion of AFFH planning and goal setting within CDBG recipients’ preparation of their Consolidated Plans and HA’s 5-Year and Annual Plan, and (4) inclusion of public consultation and participation for AFFH planning within the Consolidated Plan, 5-Year Plan and Annual Plan public consultation and participation processes. These changes are very responsive to a number of comments PHADA has submitted since HUD’s first publication of a proposed AFFH rule in 2013 and subsequently in connection with the rule and with proposed AFFH forms.


Proposed Changes to Definitions

The existing rule’s definition of AFFH includes taking meaningful steps to replace segregated with integrated housing patterns and transform racially and ethnically concentrated areas of poverty into areas of opportunity. The proposed rule would amend that definition to, ‘‘advancing fair housing choice within the program participant’s control or influence.’’ While the reference to program participant’s influence may be helpful, HUD goes on to define fair housing choice as allowing, ‘‘individuals and families [to] have the opportunity and options to live where they choose, within their means, without unlawful discrimination related to race, color, religion, sex, familial status, national origin, or disability.’’ This new definition seems to skirt the issue of disparate impact which the U.S. Supreme Court legitimized in fair housing in 2015 and seems to emphasize only instances of illegitimate discrimination.

HUD proposes to define fair housing choice as (1) protected choice, meaning the absence of discrimination, (2) actual choice, meaning both the availability of affordable housing options and of information and resources to enable informed housing choices, and (3) quality choice, meaning that decent, safe and sanitary affordable housing, and accessible housing for people with disabilities is available.

These definitions would seem to remove references to the quality of neighborhoods (access to transportation, employment hubs, and quality education), and would seem to end considerations of the concentration of poverty or of racial or ethnic groups as a fair housing issue.


Proposed Metrics to Assess Success in AFFH

The proposed rule includes a list of data the department may use to assess localities’ success in fulfilling their AFFH obligations that is not exhaustive. At the moment those measures are:

  1. Lack of adjudicated fair housing violations. The only such violations that would be included are those brought for or on behalf of HUD or by the Department of Justice. Successful complaints brought by private individuals or by advocates would not be included.
  2. Affordable housing availability. HUD is considering metrics such as housing prices, fair market rents, housing cost burdens of very-low-to moderate-income families, housing choice voucher success rates, the geographic distribution of successful voucher holders, and “excess” voucher reserves.
  3. Housing quality and physical conditions. HUD is considering measures such as worst-case housing needs data, the prevalence of housing with lead-based paint hazards, and the quality of housing in jurisdictions according to REAC inspection scores.


Reactions to HUD’s Proposed Rule

Before publication of the proposal, fair housing and other advocates started publishing highly critical reactions. A coalition of fair housing advocacy organizations has established a web site (www.fightforhousingjustice.org), which includes information on this proposed AFFH rule, HUD’s proposed disparate impact rule, and a link for submitting public comments. Media coverage of HUD’s proposal has also characterized it as a significant retreat from the Fair Housing Act’s commitment to AFFH. While these positions may exaggerate issues surrounding the proposed rule, HUD has effectively proposed to replace assessments that include measures of housing segregation and the concentration of poor people of color with an assessment of the availability of quality affordable housing and whether there are adjudicated fair housing violations. HUD’s proposal does not detail all of the metrics the department may use in its assessments (HUD will publish measures and scoring methods in separate Federal Register notices), but the direction HUD has described seems to eliminate a number of topics that would otherwise fall within the Supreme Court’s endorsement of a disparate impact standard for fair housing. A critique of this approach is reasonable.


PHADA’s Next Steps

PHADA will continue its detailed analysis of HUD’s proposed AFFH rule, will strongly support elements of that proposal consistent with PHADA’s earlier comments, and will urge HUD to remedy elements of its proposal that appear to undercut the department’s investment in overcoming housing discrimination and s egregation.

The association will keep members informed of its plans for comments on this important proposed rule and will encourage PHADA members to submit their own comments concerning HUD’s proposal. Comments may be submitted to regulations.gov until March 16, 2020. As of January 21, 2020, 121 public comments have already been submitted.