HUD’s Proposed Rule Change Will Make It Easier to Advance Its Fair Housing Mission

Housing and Urban Development (HUD) Secretary, Ben Carson, will soon be proposing a revision of the “Affirmatively Furthering Fair Housing” rule. While the secretary’s reforms do not go as far as we would like, they are a substantial improvement in the way that HUD scrutinizes cities and counties that receive department funds.

The proposed rule, which we obtained, replaces a 2015 rule that was never fully implemented. HUD called the old rule “unduly burdensome and ineffective,” hinting that it was using large amounts of staff time on both sides of the relationship between HUD and its grantees.

The Affirmatively Furthering Fair Housing rule requires localities that receive HUD grants to complete what’s called an “Assessment of Fair Housing” to measure racial segregation in housing and local services. HUD then used these statistics to determine which jurisdictions must create plans to better advance integration, but there is little evidence that these plans resulted in improved access to housing for low-income or minority residents.

In a 2018 public interest comment responding to HUD’s request for ideas for reform, we suggested an alternate path forward: less paperwork, more teeth. The old rule required city or county staff to write long, detailed plans, which documented segregation patterns and barriers to fair housing before explaining how the locality would resolve those issues. But since state and local staff do not have the authority to carry out the plans (elected officials make the decisions in this area) the old rule was an exercise in bureaucratic symbolism.

The new proposed rule, we are happy to say, has incorporated some of our suggestions and is an all-around improvement of the regulation. Gone are the tedious reporting requirements. 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.

The proposed rule asks commenters to give feedback on what formulas HUD could use to rank jurisdictions based on their housing availability and affordability. This ranking–and Secretary Carson drawing attention to HUD’s grantees that have land use regulations that stand in the way of housing affordability–is the agency’s best opportunity to encourage reform.

As we suggested, the new proposed rule offers a clear process through which HUD can withhold funding from jurisdictions that refuse to advance fair housing. This is important both because it is a forceful response toward excessive regulation by local government and because it limits liability: only HUD grants, intended for goals the grantee does not apparently share, can be withheld.

There is a major missed opportunity that we hope HUD will revise before finalizing the rule. The new proposed rule still focuses on plans, not accomplishments. This focus is wrong for two reasons: first, it privileges creative writing over the gritty business of real governing. Second, and more importantly, it elevates unaccountable bureaucrats at the expense of local elected officials. Local governments should be taken seriously, in both successes and failures. But elected officials and voters cannot credibly promise future action. As a wise man said a long time ago (and far, far away), "do, or do not, there is no 'try'.” HUD should revise the rule to replace planned actions with completed actions.

It is important to keep the “Affirmatively Furthering Fair Housing Rule” in perspective. HUD has limited leverage to encourage local zoning reform; even withholding community development block grants (CDBG) from grantees may not be an effective incentive to encourage widespread regulatory reform; CDBG is a relatively small source of local government funding and these grants may not be important to wealthy, exclusionary jurisdictions. Further, localities may be able to implement rules that look like they will allow new housing to be built while maintaining an approval process that stands in the way of increased housing supply. 

This rule cannot achieve housing affordability or accessibility nationwide, it cannot undo decades of segregationist housing policy, it cannot even guarantee that every HUD grantee is using best practices. But, inherent limitations and all, it is a positive step toward a healthy and accountable relationship between HUD and the cities and counties that receive HUD grants.

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