Texas Housers Sues HUD over Fair Housing Agreement with Houston

The Texas Low Income Housing Information Service (Texas Housers), an NLIHC state partner, filed a lawsuit challenging HUD for its failure to require the City of Houston to comply with Title VI of the Civil Rights Act of 1964 and the obligation to affirmatively further fair housing (AFFH) under Title VIII of the Civil Rights Act of 1968 (Fair Housing Act). Texas Housers provides two categories of Houston’s failures: failure to permit affordable multifamily housing in predominantly white neighborhoods and failure to address water drainage needs in most of Houston’s racially and ethnically segregated neighborhoods, resulting in repeated and prolonged flooding in the wake of hurricanes.

Texas Housers is bringing this legal complaint under the Administrative Procedure Act (APA) to compel HUD to enforce federal civil rights laws. Texas Housers argues that HUD violates the APA because it does not sanction Houston for inaccurately certifying that it complies with Title VI and AFFH, and because HUD has not withheld federal funding for failure to comply with those civil rights obligations.

Houston’s Failure to Permit Affordable Multifamily Housing in Predominantly White Neighborhoods

On January 11, 2017, HUD sent a letter to Houston Mayor Sylvester Turner stating that it found the city in noncompliance with Title VI, which prohibits racial discrimination in federally financed programs. HUD asserted that racial motivations led Houston to refuse a “Resolution of No Objection” for Fountain View, a mixed-income, 233-unit apartment building. HUD also concluded that Houston’s procedure for approving projects through the Low Income Housing Tax Credit (LIHTC) program was influenced by racially motivated opposition to affordable housing in predominantly white neighborhoods (see Memo, 1/30/17).

HUD’s January 11, 2017 letter stated that if Houston did not arrive at a Voluntary Compliance Agreement (VCA), HUD would begin administrative proceedings or refer the issue to the Department of Justice for judicial enforcement. Texas Housers wrote a letter to HUD on October 31, 2017, demanding HUD take immediate action to deliver a VCA that outlined a path for Houston to correct housing discrimination described in the January 11, 2017 HUD letter (see Memo, 11/13/17). HUD finally signed a VCA with Houston on March 2, 2018.

Texas Housers asserts that, with this VCA, HUD is effectively ending enforcement of civil rights laws in Houston. Acknowledging that Houston disputes facts in HUD’s January 11, 2017 letter, the VCA surrenders HUD’s responsibilities by stating that “resolution of the disputes would be time-consuming,” and “in order to expedite just resolution of these matters and to avoid further administrative procedures or litigation,” HUD and Houston have entered into the VCA.  In essence, HUD decided that expediency trumps equity.

The January 11, 2017 letter outlined eight remedies the City of Houston was required to address. The VCA has only four provisions directly relating to the four of the eight required remedies (the first, second, fourth and fifth).

The first remedy in the HUD letter required Houston to provide the Houston Housing Authority (HHA) funding needed to supplement HHA’s allocation of Community Development Block Grant-Disaster Recovery (CDBG-DR) to cover the cost of constructing Fountain View or another new construction project in low-minority and high-opportunity census tracts. Under the VCA, however, the City of Houston agrees to provide HHA an additional $2 million from the Federal Emergency Management Administration (FEMA) to assist households made homeless due to flooding after Hurricane Harvey. This VCA provision does not directly address and is not a remedy for the failure HUD identified in its January 11, 2017 letter calling for the development of a project similar to Fountain View in a low-minority and high-opportunity area. Assisting households left homeless by disasters should be a natural, primary use of Houston’s FEMA funds. Under the VCA, Houston also agrees to provide HHA $2.4 million in HOME and CDBG funds to house 250 chronically homeless individuals. This VCA provision also does not directly address the civil rights failures HUD identified in 2017. Assisting chronically homeless households should be a natural, primary use of Houston’s HOME and CDBG funds.

The second remedy in the HUD letter required Houston to develop a strategy for encouraging the development of affordable homes in areas that do not perpetuate segregation and that do not have a high concentration of poverty. Under the VCA, Houston agrees to apply to HUD for technical assistance.

The fourth remedy in the HUD letter required Houston to work with HHA to provide private owners incentives to accept vouchers. Under the VCA, Houston agrees to continue an existing Voucher Mobility Pilot program designed to serve 350 voucher households. Working with nonprofits and housing authorities, the pilot program encourages landlords in areas with high-performing schools to rent to households regardless of the source of their income.

The fifth remedy in the HUD letter required Houston to implement a site-selection policy for vetting and reviewing requests for Resolutions of Support or No Objection or Resolutions of No Support for LIHTC projects. Under the VCA, Houston agrees that during the two years of the VCA it will adopt a policy for objectively evaluating such Resolutions that will not permit veto or special points for any particular member of the City Council.

In its legal complaint, Texas Housers states that the VCA does not contain any of the provisions that HUD’s January 11, 2017 letter required to remedy Houston’s noncompliance. Texas Housers argues that the VCA does not prohibit the mayor from withholding future Resolutions from City Council consideration, nor does it require new procedures to prevent racially motivated opposition to affordable housing.

Houston’s Failure to Address Water Drainage Needs in Most of Houston’s Racially and Ethnically Segregated Neighborhoods

Texas Housers sent a letter to Anna Maria Farias, assistant secretary for Fair Housing and Equal Opportunity at HUD, on October 31, 2017, asking HUD to immediately investigate Houston’s failure to provide essential water control infrastructure and flood plain protections for neighborhoods that are predominantly occupied by minority populations and that contain significant concentrations of affordable housing (see Memo, 11/20/17).

The legal complaint filed by Texas Housers alleges that Houston regularly receives federal funding through CDBG and CDBG-DR, while maintaining entirely different and markedly inferior drainage systems in predominantly minority neighborhoods, which exposes residents of those neighborhoods to increased risk from storms. Eighty-eight percent of Houston’s “open ditch” drainage, which fails to protect homes from flooding, is located in African American neighborhoods, while predominantly white neighborhoods have superior underground drainage and storm drains.

Texas Housers describes the situation in two blogs: