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Advocates Sue HUD over AFFH Rule Suspension

Three advocacy organizations filed suit against HUD for suspending until October 31, 2020, the obligation of jurisdictions to submit an Assessment of Fair Housing (AFH) as required by the Affirmatively Furthering Fair Housing (AFFH) rule. The January 5, 2018 suspension in essence suspends the entire AFFH rule for more than 900 jurisdictions (out of 1,200) until 2024 or 2025 (see Memo, 1/8). The National Fair Housing Alliance, Texas Low Income Housing Information Services (Texas Housers), and Texas Appleseed filed their legal complaint on May 8, 2018.

The plaintiffs assert that HUD violated the Administrative Procedure Act (APA) in three ways:

  1. HUD failed to provide public notice and comment before suspending the AFFH rule’s requirement for jurisdictions to submit an AFH.
  2. HUD acted in an arbitrary and capricious manner because it did not provide a reasoned basis for the suspension.
  3. HUD abdicated its duty under the Fair Housing Act to ensure that recipients of HUD funds affirmatively further fair housing.

Plaintiffs seek preliminary and permanent injunctive relief, including a ruling that the January 5, 2018 Federal Register notice constitutes an unlawful agency action, and they call for the courts to order HUD to rescind the notice, immediately reinstate the AFH process, and take all necessary steps to implement and enforce the AFFH rule.

Failure to provide notice and comment. HUD abruptly announced the immediate suspension of the AFH requirements in the Federal Register on January 5, 2018 without the APA-required notice and comment. The APA requires a federal agency to publish a notice of proposed rulemaking in the Federal Register before issuing a substantive rule. The APA also requires an agency to “give interested persons an opportunity to participate in the rule making through the submission of written data, views, or arguments.”

Citing three court decisions, the plaintiffs add that once a rule is final, the agency “is itself bound by [it] until that rule is amended or revoked,” and the agency “may not alter such a rule without notice and comment.” Also, because the “suspension or delayed implementation of a final regulation normally constitutes substantive rulemaking under [the] APA,” such action requires compliance with the APA’s procedural requirements. Otherwise, “an agency could guide a future rule through the rulemaking process, promulgate a final rule, and then effectively repeal it, simply by indefinitely postponing its operative date.”

Acting in an arbitrary and capricious manner. The complaint raises three components. First, the plaintiffs assert that HUD made no attempt to explain why it was problematic or unexpected that 17 of the first 49 AFH submissions were not initially accepted. The AFFH rule anticipated that HUD would not accept some AFHs on first submission, especially because the AFH was a new concept and tool. The rule requires HUD to provide feedback to a jurisdiction for revising its AFH.

Second, HUD did not consider significant evidence. The complaint notes that 32 of the submissions HUD initially rejected were subsequently improved through a collaborative process between HUD and the jurisdictions, and all but a few were accepted after revision. AFHs not approved were deemed “deeply flawed.” Examples included failing to: recognize segregation in an entire section of a jurisdiction; include any metrics or milestones to measure improvements in fair housing; analyze HUD-provided data; or consider housing barriers for key constituents, such as people living in public housing.

HUD ignored the benefits of ongoing implementation of the AFFH rule. HUD’s suspension notice claimed that another reason for the suspension was that jurisdictions’ expended resources completing an AFH and HUD expended resources reviewing them. The notice did not, however, describe the magnitude of the expense or how the expense outweighed the benefits. The complaint refers to a study that found that AFHs submitted by 28 jurisdictions were a “striking improvement” over those jurisdictions’ previous Analyses of Impediments (AIs).

Third, HUD claimed that better technical assistance was needed to improve jurisdictions’ understanding of their obligations but did not explain why such a need warranted the suspension.

The plaintiffs state that, to the extent HUD’s current technical assistance is inadequate, it is because under Secretary Carson HUD has cut back on technical assistance offerings to local jurisdictions and has stopped issuing technical guidance to its own staff. Starting in 2017, HUD has forbidden its contractors or staff to engage in on-site technical assistance, failed to publish further guidance, and ceased to monitor and respond to questions about the AFFH rule submitted through the HUD Exchange Ask-A-Question portal.

HUD abdicated its duty under the Fair Housing Act to ensure that recipients of HUD funds affirmatively further fair housing. HUD promulgated the AFFH rule during the Obama administration in response to mounting evidence that the AI system, which was basically honor-based, resulted in jurisdictions accepting federal funds without taking meaningful steps to affirmatively further fair housing. By suspending the AFH, most jurisdictions will revert to the very flawed AI system.

Co-counsel for the plaintiffs are the Lawyers’ Committee for Civil Rights Under Law, the Poverty & Race Research Action Council, the NAACP Legal Defense and Educational Fund, the American Civil Liberties Union, the Public Citizen Litigation Group, and the law firm of Relman, Dane, and Colfax, PLLC.

A more detailed version of this Memo article can be found at: https://bit.ly/2Ibip7M

The complaint and related materials are available on the website of the Policy & Race Research Action Council at: https://bit.ly/2KOfpzX

More about the July 2015 AFFH rule is on page 7-5 of NLIHC’s 2018 Advocates’ Guide at: https://bit.ly/2G2zU8q

More about the Analysis of Impediments is on page 7-17 of NLIHC’s 2018 Advocates’ Guide at: https://bit.ly/2IckAIB

Read NLIHC’s statement commending the lawsuit at: https://bit.ly/2IbwPsZ