Jim Armstrong, PHADA Policy Analyst
HUD’s Brand New Final AFFH Rule
- Replaces the 2015 final AFFH rule requiring Assessment of Fair Housing submissions by CDBG and HOME recipients and by HAs.
- Includes fair housing planning and public participation in consolidated plan preparation.
- Removes references to Fair Housing Act protected classes from the AFFH rule.
- Imposes minimal standards for meeting the new AFFH final rule standards.
- Defines fair housing as affordable, safe, decent, ree of unlawful discrimination, and accessible.
- Defines affirmatively furthering as any action rationally related to promoting one or more of these five fair housing attributes.
- Requires HAs to
- Contribute to consolidated plan development.
- Certify that they affirmatively further fair housing.
- Obtain their jurisdiction’s certification that Five Year and Annual Plans are consistent with consolidated plans.
- Fails to address GAO’s 2010 critique of AFFH implementation or its recommendations for improvement.
On August 7, following 4 years reconsidering a 2015 Affirmatively Furthering Fair Housing (AFFH) final rule, HUD published a “brand new” AFFH rule effective on September 8, 2020, entitled, “Preserving Neighborhood and Community Choice.” The Obama administration had published a final AFFH rule to replace the prior Analysis of Impediments (AI) requirement that had been in place since 1994. In 2018, HUD suspended implementation of that AFFH rule and solicited comments concerning how the department should amend the rule. Early in 2020, HUD published a proposed AFFH rule that would have replaced the 2015 rule and solicited comments on that proposal. The recently published 2020 final AFFH rule did not build on the January proposal, nor did HUD respond to any comments it received in response to its January proposal. Instead, HUD has published a final rule without soliciting any further comments concerning its final rule that is a radical departure from the January proposal.
Why a New “Brand New” Rule?
For some time, HUD had been under pressure concerning its inept compliance with the Fair Housing Act’s requirement to, “affirmatively further fair housing.” In 2010, in response to a request from 17 members of Congress, the Government Accountability Office (GAO) issued a report that was highly critical of HUD’s performance. HUD’s 2015 final AFFH rule represented a significant overhaul to HUD’s approach to AFFH and its former requirement that recipients of HUD funds certify that they affirmatively furthered fair housing and that CDBG and HOME fund recipients prepare Analyses of Impediments (AIs) to fair housing as part of their Comprehensive Plan preparations.
HUD’s 2015 final rule imposed a new requirement to complete an Assessment of Fair Housing (AFH) using complex, highly prescriptive forms, and submitting those AFHs to HUD. The department had to accept a submitter’s submission to complete the process. In addition, HUD expanded the population of program participants required to submit AFHs to include HAs in addition to CDBG and HOME recipients.
What the Brand New Final Rule Requires
The new final rule requires recipients of CDBG or HOME funds to certify that they have taken steps to affirmatively further fair housing as part of their consolidated plan preparation. The rule defines AFFH as encompassing two terms: Fair housing means:
… housing that, among other attributes, is affordable, safe, decent, free of unlawful discrimination, and accessible as required under civil rights laws.
Affirmatively furthering means:
… to take any action rationally related to promoting any attribute or attributes of fair housing as defined in the preceding subsection [emphasis added].
The new rule goes on to provide that a grantee’s certification is sufficient if:
… the participant takes, in the relevant period, any action that is rationally related to promoting one or more attributes of fair housing [emphasis added].
Although the new rule references “unlawful discrimination” in its definitions, it has deleted any explicit reference to protected classes (race, color, religion, national origin, sex, familial status, or disability) from definitions in the regulatory language, and those characteristics are only one of several attributes of fair housing that may be addressed by a grantee. As a result, it appears that if a grantee takes a single action during the term of its consolidated plan to make some housing in its jurisdiction more affordable, or safer, it will have satisfied requirements to affirmatively further fair housing even if those actions have no direct or indirect impact on the reduction or elimination of segregated housing patterns in the jurisdiction.
The recently published 2020 final AFFH rule did not build on the January proposal, nor did HUD respond to any comments it received in response to its January proposal. Instead, HUD has published a final rule without soliciting any further comments concerning its final rule that is a radical departure from the January proposal.
Rather than requiring a separate planning process resulting in an AFH, the new rule incorporates fair housing planning into the processes grantees use to develop consolidated plans. The rule includes fairly specific guidance concerning public and stakeholder input into planning for AFFH actions, but those requirements are much less prescriptive or burdensome than those contained in the 2015 final rule.
HAs’ roles under the new final rule are to:
- Consult with grantee localities submitting consolidated plans concerning the inclusion of public housing needs and program plans in those plans and concerning strategies and actions to affirmatively further fair housing,
- Continue to certify that they are affirmatively furthering fair housing, and
- Obtain their jurisdictions’ certifications that their Five Year and Annual Plans are consistent with applicable consolidated plans.
The new final rule imposes no additional planning or public participation requirements on HAs.
What Does the Brand New Final Rule Change?
The new final rule represents a radical shift in the federal approach to affirmatively furthering fair housing and to monitoring federal grantees’ efforts to do the same. The rule represents a retreat from the both beneficial and detrimental aspects of the 2015 final AFFH rule, a retreat from the approach HUD had been taking since 2018, exemplified in the department’s 2020 proposed AFFH rule, and even retreats from the department’s 1994 model requiring CDBG and HOME grantees to prepare AIs as part of their consolidated planning processes. Under the new final rule, even the most modest incremental steps to expand local affordable housing inventories without addressing exclusionary housing patterns would satisfy requirements of this rule and be deemed to affirmatively further fair housing. Grantees submitting consolidated plans would be free to propose more ambitious strategies to address fair housing issues, but it does not appear that there would be any federal impetus for them to do so.
Although 10 years ago, Congress and the GAO expressed explicit concern with HUD’s implementation of its AI model for AFFH, the new final rule fails to comport with any of the modest recommendations made in 2010 GAO’s report. Those recommendations were that:
- HUD establish standards for grantees to follow in updating AIs, and establish the format that they should follow in preparing the documents,
- HUD should require grantees to include time frames for implementing recommendations and the signatures of responsible officials, and
- HUD require that grantees submit their AIs to the department for review and to assess grantees’ progress in addressing identified impediments.
The new final rule requires submission of AFFH plans and strategies to HUD as part of grantees’ consolidated plans, but the rule fails to describe any standards for grantees to follow in preparing those fair housing plans and strategies or any particular oversight standards HUD may use in evaluating fair housing elements of consolidated plans, if any.
A Disturbing Rulemaking Precedent
In addition to retreating to the pre-1994 status quo concerning AFFH implementation, HUD’s final rule also announced a novel interpretation of the Administrative Procedure Act (APA). In its discussion of the new final rule, HUD announced that the APA’s notice and comment processes do not apply to this rule and instead that the rule falls into an exception to those requirements provided by the APA. As a result, HUD has published this dramatic change to its regulatory regime without soliciting or considering public comments concerning the advisability of this change. The department claimed that this exception was reasonable as the APA provides an exception for rules applicable to grants and the AFFH requirements are simply terms applicable to HUD grants. The Housing Development Law Institute (HDLI) wrote to Secretary Carson, expressing strong differences with this position. HDLI also pointed out that in1979 through public notice, the department agreed to submit all regulatory matters (even those that could fall within the APA’s exceptions) to public notice and comment and announced that any change to that policy would proceed through a regulatory process. Since HUD did not use notice and comment to make this change in its practice, HDLI argued that the change is illegitimate. PHADA wrote to Secretary Carson concerning this final rule as well, and that letter also raised serious concerns with the process HUD used to avoid the comment and rulemaking process.
HUD’s position may be understandable as it received almost 20,000 comments concerning its January 2020 proposed rule. The department’s course of action avoids any significant analysis of this substantial number of public comments, and the interpretation permits HUD to publish for effect a very significant modification to what it had published without any further public engagement. The standard HUD announced in its final AFFH rule may represent the beginning of the end of HUD’s use of the APA’s notice and comment procedure for rulemaking. That potential troubles many organizations that partner with the department.