HUD Proposes Changes to the "Equal Participation of Faith-Based Organizations" Rule

HUD proposed drastic changes to the “Equal Participation of Faith-Based Organizations” rule (§5.109) on February 13. The proposed changes would remove the requirement that faith-based service providers receiving federal funds take reasonable steps to refer the people they serve to alternative providers if requested, and it would strip the requirement that providers give beneficiaries written notice of their religious freedom rights. Among other proposed changes, HUD would expand the existing exemption that allows faith-based organizations to accept federal grants and discriminate in employment. The proposed changes put the interests of taxpayer-funded entities ahead of the needs of people seeking critical services. NLIHC has prepared a “redline review of the proposed changes. Comments on the proposed rule are due April 13.

The HUD proposed rule is one of eight other similar rules intended to implement Executive Order (EO) 13831 issued on May 3, 2018. The eight other federal agencies that issued similar changes to §5.109 are the Departments of Agriculture, Education, Justice, Health and Human Services, Homeland Security, and Veterans Affairs, and the Agency for International Development. The proposed changes for the other eight agencies were published on January 16 with only a 30-day comment period, which closes today (February 18) at 11:59 pm ET. Readers interested in submitting a comment regarding any of those other eight agencies can go to a commenting portal

Americans United for Separation of Church and State has a four-page background overview about the proposed rules for HUD and the other eight agencies, as well as examples of social services programs affected and likely harms. In addition, the Coalition Against Religious Discrimination (CARD) has an 18-page comment template that offers a deeper analysis. CARD is a diverse group of religious, civil rights, education, labor, health, LGBTQ, and women’s organizations formed in the 1990s to monitor legislative and regulatory changes impacting government partnerships with religious and other nonprofit organizations and, in particular, to oppose government-funded religious discrimination.

The proposed changes would remove the requirement that faith-based service providers receiving federal funds take reasonable steps to refer the people they serve to alternative providers if requested. A person who is uncomfortable at a provider might forgo getting the assistance they need because they are unable to find an alternative provider on their own. For example, a gay homeless teen might not seek shelter at a facility funded with HUD’s Emergency Shelter Grant (ESG) program because the shelter is run by a religious organization and they know the religion condemns them for being gay. Someone who is Jewish might forgo affordable housing funded by HUD’s Housing Opportunities for Persons with AIDS (HOPWA) program because they might feel uncomfortable at a facility with Christian iconography throughout, even though receipt of HOPWA funds requires secular content only. A single, pregnant mother might not seek services from a faith-based provider that condemns her for having children outside of marriage. 

The proposed rule would eliminate the requirement for faith-based service providers to provide a written notice to the people they serve of their religious-freedom rights, including that a provider cannot discriminate against beneficiaries based on their religion or force beneficiaries to participate in religious activities, and that beneficiaries have a right to seek an alternative provider. Refusing to inform beneficiaries of their rights leaves them vulnerable because they do not know that they can object to discrimination, proselytization, or religious coercion when getting government-funded services. People using government-funded social services cannot exercise their rights if they do not know they have them.

The proposed rule would expand the existing exemption that allows religious organizations to accept grants and discriminate in employment with taxpayer funds. Under Title VII of the Civil Rights Act of 1964, as amended, religiously affiliated employers, using their own funds, may prefer co-religionists in employment. The existing regulations wrongly extend the Title VII exemption, which has been highly controversial since it was adopted, to government-funded jobs. The justification for the Title VII exemption—to maintain the autonomy of religious organizations and independence from the government—should disappear when the organizations solicit government grants.

HUD’s proposed change would extend this exemption even further, allowing faith-based organizations to base employment on the basis of acceptance of or adherence to the religious tenets of the organization. This makes it easier for providers to claim religion as a pretext to discriminate against people on other protected bases. HUD would allow a faith-based organization to fire or refuse to hire someone who is LGBTQ, a person who uses birth control, or a woman who is pregnant and unmarried, because the employer finds those employees do not correctly practice their religion.

Although the proposed rule states that all organizations participating in HUD programs must follow program requirements, it adds that such requirements are subject to any appropriate accommodations under the Religious Freedom Restoration Act (RFRA). Consequently, faith-based organizations can use RFRA as an exemption to allow them to deny access to the program if the organization has a religious objection. A transgender woman, therefore, could be turned away from a woman’s emergency shelter, or a same-sex couple could be refused a lease at a Project-Based Section 8 property.

In addition, households with Housing Choice Vouchers might also be denied leases if landlords have religious objections to particular voucher holders. A voucher is considered “indirect” federal financial assistance; it is provided to the household and not an organization. Theoretically, a voucher household has a choice where to use a voucher. It is conceivable, however, that a voucher holder who is a single LGBTQ person or a same-sex couple or a single head of household mother may be seeking an apartment closer to a job or an ailing elderly parent or in an area of greater opportunity, but is denied for religious reasons a lease at a property developed and operated by a faith-based organization or even a mom-and-pop landlord.

There are a number of other problematic provisions explained in CARD’s comment template. It and the Americans United background paper provide historical context and rebut HUD’s mistaken defenses using Supreme Court and other court decisions.

As CARD notes, many faith-based organizations provide important social services for people in need and have been partnering with the government for years, but that does not mean they should be allowed to take government funds and then place religious litmus tests on who they hire, who they serve, or which services they provide with those funds. Nor may they include religious content in their programs funded directly by the government. Faith-based organizations should continue to be partners with the government, but there needs to be clear safeguards in place to protect beneficiaries, especially against proselytizing and discrimination.

The proposed rule in the Federal Register is at:  

An easier to read version of the proposed rule is at:  

NLIHC’s redline showing the proposed changes to §5.109 is at:

Americans United’s four-page background explanation of the proposed rule changes is at:

Americans United’s examples of social services programs affected and potential harms is at:

CARD’s 18-page comment template is at:

President Trump’s Executive Order (EO) 13831 is at:

President Obama’s EO 13498 of February 5, 2009 is at:

President Obama’s EO 13559 of November 17, 2010 is at: