On July 8, HUD released the long-awaited final rule implementing the Fair Housing Act of 1968’s obligation for jurisdictions receiving federal funds for housing and urban development to affirmatively further fair housing (AFFH). The Fair Housing Act not only makes it unlawful for jurisdictions to discriminate, but also requires jurisdictions to take actions to undo historic patterns of segregation and other types of discrimination, as well as to take actions to promote fair housing choice and to foster inclusive communities. The protected classes of the Fair Housing Act are race, color, national origin, religion, sex, disability, or familial status.
NLIHC and numerous civil rights organization praised HUD for the final AFFH rule In its press release, NLIHC noted that “because those protected by the Fair Housing Act are often low income, a stronger AFFH rule will help to overcome objections to the development of affordable rental housing.” Sheila Crowley, President and CEO of NLIHC said “The issuance of HUD’s final rule today puts local and state policymakers on notice that fair housing is an obligation, not a choice.”
HUD published a proposed AFFH rule on July 19, 2013 (see Memo, 7/19/13). On September 26, 2014, HUD published a proposed Fair Housing Assessment Tool to help guide the AFFH planning process (see Memo, 9/26/14). A revised version of the Assessment Tool was not released with the final AFFH rule; that is yet to come.
The opening text of the final rule declares that the purpose of the AFFH rule is to provide “program participants” (cities, counties, states, and public housing agencies (PHAs)) “with an effective planning approach to aid them in taking meaningful actions to overcome historic patterns of segregation, promote fair housing choice, and foster inclusive communities that are free from discrimination.”
In the preamble, HUD stresses that the new AFFH approach does not mandate specific outcomes. Rather, it establishes a standardized fair housing assessment and planning process to give program participants a more effective means to affirmatively further the purposes of the Fair Housing Act.
The final rule does not fundamentally change the AFFH system envisioned in the proposed rule; nor does it fundamentally alter the proposed rule. NLIHC’s preliminary review identifies a number of positive modifications and does not find any significant adverse changes.
AFFH has been law since 1968, but meaningful regulations providing jurisdictions and PHAs with guidance on how to comply have not been promulgated. Since 1974, CDBG recipients, and since 1998, PHAs have had to certify that they would affirmatively furthering fair housing. They have only been required to complete an analysis of impediments (AI) to fair housing choice, take appropriate actions to overcome the effects of impediments, and keep records of those actions.
The current system has not been effective, as noted by the General Accounting Office. Among its limitations is the lack of regulatory guidance. Consequently, there is no clarity about what constitutes an impediment to fair housing choice or an appropriate action to overcome it. Also the AI is not directly linked to a jurisdiction’s Consolidated Plan (ConPlan) or a PHA’s 5-Year PHA Plan. The AI is not submitted to HUD for review, and there is no prescribed schedule for AI renewal. As a result, many are not updated in a timely fashion. Finally, public participation is not required when drafting an AI.
Under the new system, the AI is replaced by the Assessment of Fair Housing (AFH). The rule provides a standardized framework for program participants to use to identify and examine “fair housing issues” and the underlying “contributing factors” that cause the fair housing issues. HUD will provide each program participant with data covering the local jurisdiction and the surrounding region and program participants must consider these data when assessing fair housing. HUD will receive, review, and decide whether the AFH can be accepted. The fair housing goals and priorities that program participants set in the AFH will be incorporated into their ConPlans and PHA Plans. Public participation is required in the development of the AFH, and the AFH must be submitted every five-years in synch with a new ConPlan or PHA Plan.
The new AFFH system will not begin until HUD publishes a revised version of the proposed Assessment Tool and the public has another 30 days to review and comment on it. HUD has yet to publish a revised Assessment Tool reflecting public comment submitted by November 25, 2014.
Most program participants will not be required to use the new AFFH system until 2020 and beyond. (See NLIHC’s Overview for details http://nlihc.org/sites/default/files/Preliminary-Overview_Final-AFFH-Rule.pdf) Until a program participant is required to submit an AFH, it must continue to follow the current AI process.
There are four basic components of the AFH.
- Analysis of the HUD-provided data, as well as local data, local knowledge, and information gained through the required public participation process. The analysis must identify:
- Integration and segregation patterns and trends.
- Racially or ethnically concentrated areas of poverty.
- Significant disparities in access to opportunity, such as quality education, employment, transportation, and environmental health.
- Disproportionate housing needs.
- Identification of “fair housing issues” and “contributing factors.” Fair housing issues are conditions that restrict fair housing choice or access to opportunity, including the four conditions listed above. Contributing factors create, contribute to, perpetuate, or increase the severity of one or more fair housing issues.
- Assignment of priorities to contributing factors and justification of the priority. Goals for overcoming the effects of the priority contributing factors must be set, along with metrics and milestones for assessing achievement.
- Inclusion of strategies and actions to implement the AFFH goals and priorities in ConPlans, Annual ConPlan Action Plans, or PHAs’ 5-Year Plans.
The rule amends the ConPlan regs by inserting references to the AFH in appropriate sections, particularly the consultation and public participation sections. Unique to the AFH, the rule requires ConPlan jurisdictions to consult with community-based organizations that represent protected class members and organizations that have relevant knowledge or data to inform the AFH. There must be at least one public hearing during the development of the AFH. One of the two ConPlan required hearings must address proposed strategies and actions for affirmatively furthering fair housing consistent with the AFH.
HUD must review and accept an AFH. The intent of the review is to determine whether the program participant has met the requirements for providing data analysis, assessing fair housing issues and contributing factors, and setting goals. HUD will not accept an AFH if it or a portion of it is “inconsistent” with fair housing requirements, or if it is “substantially incomplete.” The rule offers some examples.
PHAs must prepare an AFH once every five years. PHAs have three options for meeting their AFH requirements. 1) A PHA can work with a local government or a state government agency in preparation of the AFH. 2) A PHA can participate with one or more PHAs in the planning, public participation, and preparation of the AFH. 3) A PHA can conduct its own AFH.
An important element in the rule is that HUD clarifies that it supports a balanced approach to AFFH. NLIHC and many others were concerned that the proposed rule seemed to imply that federal funds could not be used preserve affordable housing or to revitalize areas of racial or ethnic concentrations of poverty that had suffered disinvestment, but where long-time residents wanted to continue to live while benefitting from improvements.
HUD indicates its support for a balanced approach at nine places in the preamble to the rule. For example:
- “…the use of various strategies including the development or preservation of existing affordable housing is not necessarily at odds with the planning requirements in this regulation.”
- “HUD’s rule recognizes the role of place-based strategies, including economic development to improve conditions in high poverty neighborhoods, as well as preservation of the existing affordable housing stock, including HUD-assisted housing, to help respond to the overwhelming need for affordable housing.”
- “The concept of affirmatively furthering fair housing embodies a balanced approach in which additional affordable housing is developed in areas of opportunity with an insufficient supply of affordable housing; racially or ethnically concentrated areas of poverty are transformed into areas of opportunity that continue to contain affordable housing as a result of preservation and revitalization efforts; and the mobility of low-income residents from low-opportunity areas to high-opportunity areas is encouraged and supported as a realistic, available part of fair housing choice.”
The text of the final rule revised two sections of the proposed rule to reflect the balanced approach. The statement of purpose [§5.150] concludes:
“A program participant’s strategies and actions must affirmatively further fair housing and may include various activities, such as developing affordable housing, and removing barriers to the development of such housing in areas of high opportunity; strategically enhancing access to opportunity, including through: targeted investment in neighborhood revitalization or stabilization; preservation or rehabilitation of existing affordable housing; promoting greater housing choice within or outside of areas of concentrated poverty and greater access to areas of high opportunity; and improving community assets such as quality schools, employment, and transportation.”
The section of the rule describing the required elements of an AHF, which includes the strategies and actions to implement the AFH that must be included in a ConPlan or PHA Plan [§5.154(d)(5)] reads in part:
“Strategies and actions must affirmatively further fair housing and may include, but are not limited to, enhancing mobility strategies and encouraging development of new affordable housing in areas of opportunity, as well as place-based strategies to encourage community revitalization, including preservation of existing affordable housing, including HUD-assisted housing.”
For more details, see NLIHC’s “Preliminary Overview of Final Affirmatively Furthering Fair Housing Rule.” http://nlihc.org/sites/default/files/Preliminary-Overview_Final-AFFH-Rule.pdf. NLIHC will prepare a detailed outline of the final rule in the weeks ahead.
The final AFFH rule is at http://www.huduser.org/portal/affht_pt.html#final-rule
NLIHC’s AFFH webpage is http://nlihc.org/issues/affh
NLIHC’s press release can be found at http://nlihc.org/press/releases/6022