January 8, 2020

By Kriston Capps (Read the story on City Lab)

HUD’s reversal of an Obama-era mandate on discrimination comes as the De Blasio administration releases its own, very different fair housing blueprint.

The Trump administration is walking back a rule on fair housing that requires communities to show how they’re working to undo long-established patterns of racial segregation. In its place, the U.S. Department of Housing and Urban Development is proposing an updated rule that bears little resemblance to the standard set by the Obama administration. Advocates for housing are crying out that the White House is operating in bad faith.

Known by its mantra-like moniker, Affirmatively Furthering Fair Housing (AFFH) is a mandate established by the Fair Housing Act of 1968. While this charge to desegregate is decades old, only within the last decade has the federal government sought to actively enforce the standard. In 2015, under then-Housing Secretary Julián Castro, HUD issued a “final rule” clarifying the federal government’s fair housing policies. This rule proved to be short lived: The Trump administration hit the brakes in 2018 by suspending a deadline for compliance with the rule, before anyone could fulfill its obligations. Then, on Tuesday, the department issued a new rule to replace the Obama standard altogether.

Officials in New York City, however, are standing by the original rule, which requires jurisdictions that receive federal housing dollars to produce a comprehensive fair housing assessment. While the city was no longer on the hook for the report after HUD paused the process two years ago, the administration of Mayor Bill de Blasio finished the assessment anyway—then built an entire policy platform around the results.

“If you don’t look hard at where you are and how you got there, you’re never going to do a good job of getting to a better place,” says Vicki Been, New York City’s deputy mayor for housing and economic development. “We’re not going to stick our heads in the sand the way that this administration is doing.”

The “Where We Live NYC” report is a blueprint for addressing fair housing challenges in America’s largest city—an effort rooted in the work that federal housing officials are now abandoning. The draft document offers a detailed look at racial discrimination, segregation, and other obstacles to fair housing, plus a draft plan for policies to address these barriers. The report establishes a baseline for understanding the experiences that families face in different parts of the city. A lengthy portion is devoted to the history of New York City’s growth and patterns of racial segregation since 1900. At more than 200 pages, “Where We Live NYC” shows the very real challenges the city faces to address discrimination by landlords, lenders, and leaders.

“What we’ve tried to do here is really lay out what we’ve got to solve for,” Been says. “It’s the result of 400 years [of discrimination]. It’s going to take a number of administrations to solve this.” The report, she says, “makes it harder for New Yorkers to walk away from that.”

The draft report outlines six goals that the city hopes to implement over the next five years. Those goals—policy proposals described at length—include devoting resources to combating discrimination by landlords, preserving naturally occurring affordable housing, enabling households with rental assistance to find homes in wealthier neighborhoods, and other strategies to shore up fairer living circumstances for renters and homeowners alike.

For example, the New York City Commission on Human Rights conducts so-called paired-testing exercises to suss out discrimination in the housing market. In these experiments, the agency sends out pairs of trained actors with different characteristics to test whether a broker or landlord is discriminating against potential buyers or tenants. One pair of would-be renters might have a traditional income stream, whereas the other might be using a housing voucher; others might have different immigration statuses. The report recommends expanding the work by the office in order to prevent differential treatment based on source of income, race, sex, disability, and other characteristics.

The research that led to the Where We Live report is a product of the AFFH push from HUD in 2015. The federal law hasn’t changed over this time at all: Desegregation is still an explicit mandate under the landmark Civil Rights-era legislation that followed the assassination of Martin Luther King Jr. But federal enforcement of this provision has been lax or confused at best over the 50 years since the passage of the Fair Housing Act.

“We know from past experience that without oversight, local governments often follow the path of least resistance, which time and time again has been shown to perpetuate structural barriers to equality and integration,” says Thomas Silverstein, counsel for the Lawyers’ Committee for Civil Rights Under Law.

HUD’s solution under Castro was to require every jurisdiction to perform an assessment of fair housing—mandatory documentation designed to be both exhaustive and standardized. The new rule proposed under Housing Secretary Ben Carson doesn’t require an assessment of fair housing. Little of the 2015 rule survived the review process.

“If you look at the definition [of Affirmatively Furthering Fair Housing] that’s in the current rule, it includes concepts like ensuring access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, and transforming racially and ethnically concentrated areas of poverty into areas of opportunity,” says Sasha Samberg-Champion, who practices civil rights law as counsel with Relman Colfax. “That’s all been taken out.”

He adds, “HUD is taking the fair housing out of Affirmatively Furthering Fair Housing.”

Instead, the new rule from HUD prioritizes access to affordable housing, with an emphasis on the supply and location of low-cost options for living. Many housing advocates argue that Carson aims to move the goal posts for Affirmatively Furthering Fair Housing from a mandate about race to one about class. The existing rule is not universally beloved, though, and some of its critics cheered the pivot by HUD.

Emily Hamilton and Salim Further, research fellows with George Mason University’s Mercatus Center, described the Obama-era rule as “bureaucratic symbolism.” While the rule requires state and local officials to draft lengthy reports, all that work comes to nothing if elected officials never act on (or read) their recommendations. The proposal to focus on easing restrictive zoning will serve all renters and buyers better, they say. “Instead, the new rule uses quantifiable statistics to identify jurisdictions that are succeeding–or failing–in allowing housing markets to serve residents (or prospective residents) of every color, class, and creed,” they write in a recent commentary.

Howard Husock, a senior fellow at the Manhattan Institute, writes in City Journal that the move by HUD to lower regulatory barriers is a positive good in and of itself. Husock describes the 2015 rule as “social engineering”—much as Carson himself has done—and compares AFFH to busing. He welcomes the government’s proposal to decouple the provision of housing dollars from work on desegregation. “HUD itself will highlight—but not mandate—good approaches,” Husock writes.

By the same token, Carson’s critics argue that the new rule weakens the government’s options for enforcing the fair housing mandate. The rule may allow HUD to withhold federal funds from jurisdictions that maintain barriers to new housing—a boon for affordable housing, potentially, but a tangent to fair housing. The department is giving up a policy stick for attacking segregation and (maybe) taking up a different one.

“In the past, Carson has suggested he would use the [Affirmatively Furthering Fair Housing] rule to loosen and lessen restrictive zoning that inhibits housing production, an important goal given the deep racial disparities created by some local zoning laws,” says Diane Yentel, president and CEO for the National Low Income Housing Coalition. “But even here he fails, choosing to instead let localities off the hook by explicitly stating there will be no consequences if they keep their restrictive zoning laws.”   

As the new rule from HUD notes, assessments submitted under the prior AFFH rule averaged 204 pages. If the new draft rule is made final, jurisdictions will need to do far less to demonstrate their compliance under the law. HUD estimates that each jurisdiction will spend about 10 hours total complying with the new rule. “That’s one day’s work for one person and call it a day, each year,” Samberg-Champion says.

The new rule also establishes a rational basis review as the legal standard for challenges under the Affirmatively Furthering Fair Housing standard, a legal term of art related to the level of scrutiny that courts must apply in judicial review of a law. In short, courts won’t need to spend too much time looking at complaints brought forward on fair housing grounds. “It’s extremely rare for any policy to be struck down on the basis of rational basis review,” Silverstein says. “With that standard, you’re sending a very strong signal that the bar is set as low as it possibly could be.”

The government’s new posture on Affirmatively Furthering Fair Housing is the latest signal that HUD, under Carson, is rethinking fair housing law. Last year, the department proposed a rule change on disparate impact, the legal theory that has guided housing law for more than half a century. That proposed rule would make it more burdensome for parties to bring forward fair housing complaints under the law. This latest rule change would curb the role of the federal government in steering jurisdictions away from discrimination in local policies.

New York City officials say that they’ll take the other road, and their Where We Live report—detailed briefs on policies and strategies for tackling citywide discrimination—follows the path paved by the Obama administration.

“It’s the first serious attempt to enforce the obligations of the Fair Housing Act since the Fair Housing Act was passed,” says Vicki Been, New York City’s deputy mayor for housing and economic development. “That was a long time ago. We need to make progress.”