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New Fair Housing Rule at HUD Signals Renewed Commitment to Civil Rights in President Obama's Second Term

Feb 12, 2013 | Updated Apr 14, 2013

The U.S. Department of Housing and Urban Development's release of the long-delayed "disparate impact" rule last week did not break any new legal ground, but it may signal a new resolve on the part of HUD leadership to more directly confront the agency's legacy of segregation during the Obama Administration's second term.

The new disparate impact rule adopts a standard for HUD review of administrative complaints that has been adopted by every federal appellate court to rule on the issue over the past 30 years. A civil rights plaintiff is permitted to challenge a facially "neutral" policy or practice that has a clear discriminatory effect on a protected class of persons -- like African Americans and other racial/ethnic minorities, or people with disabilities.

Under the disparate impact standard, policies that have a discriminatory effect can be examined by the court to ensure that they serve a legitimate purpose and that no effective, less-discriminatory means of achieving that purpose is available.

This clarification of HUD procedures is helpful, of course, but it is especially important in signaling that the administration may be willing to look at discrimination and segregation in housing more closely in the second term.

In a recently released study, "Affirmatively Furthering Fair Housing at HUD: A First Term Report Card", the Poverty & Race Research Action Council (PRRAC) looked closely at HUD's progress in addressing segregation in its own programs. The PRRAC study found a great deal of activity "inside" the agency to address the ongoing problem of segregation and to develop program rules to promote residential integration. But for the most part, by the end of the first term, most of these proposals had not yet appeared in print.

Residential segregation has been linked to disparities in education, health, employment, and criminal justice outcomes for people of color. HUD is the federal agency responsible for addressing segregated housing patterns, and it inherited from the 1968 Fair Housing Act an affirmative duty to promote integrated housing.

If the new disparate impact rule is any indication, we may see HUD release some of these stalled regulations and program guidance in the second term. We especially hope to see:

  • •New fair housing incentives in the Section 8 "Housing Choice Voucher Program": our largest federal housing program has done a notoriously poor job helping low income families access higher performing schools and lower poverty neighborhoods. Arcane program rules need to be redrawn to help families make moves to higher opportunity communities.

  • Stronger fair housing rules for public housing redevelopment: HUD's newest program to redevelop older public housing -- called "Choice Neighborhoods" -- is a vast improvement over the older "HOPE VI" program, but it still focuses too much on simply improving poor, segregated neighborhoods without also expanding residential choices for the people living in those neighborhoods.
  • Continuation of the Sustainable Communities Initiative: This new program, which combines regional housing and transportation planning, is probably the most innovative new program at HUD -- but local resistance to regional housing planning is strong, and HUD will need to provide leadership with stronger fair housing expectations for the program to live up to its promise.
  • Clear fair housing guidance for HUD grantees: HUD has been discussing for more than three years its plans to release a new proposed "Affirmatively Furthering Fair Housing Rule" to help guide state and local governments in their efforts to avoid racial segregation and re-concentration of poverty in local housing programs. It is now time for HUD to finally release this rule.
  • In addition to programs such as Section 8, Choice Neighborhoods, and Sustainable Communities, there's room for improvement in a number of other HUD programs as well.

    HUD, for example, is supporting housing mobility programs in Baltimore, Chicago and Philadelphia -- a great move but one that should not be limited to just three cities. HUD's new "Rental Assistance Demonstration" also presents an opportunity to promote access to opportunity for low income families, but so far HUD has overlooked the program incentives needed to make this happen.

    The Department of Treasury also plays a role in our legacy of housing segregation. The "Low Income Tax Credit" program (LIHTC), launched in 1987, is now our largest low-income housing development program, but the Treasury Department has never adopted fair housing guidance or regulations for the program. As a result, LIHTC housing is almost as segregated as the older HUD programs. Like HUD, the Treasury Department considered fair housing reforms during the first term, but did not get around to releasing any new rules. The Obama Administration now has a chance to fill in these long standing gaps in our civil rights protections.

    For years, housing and the American Dream have been inextricably linked. By acting on the fair housing initiatives it began to develop during President Obama's first term, HUD can help disadvantaged Americans settle into communities with quality homes, schools and employment opportunities. Multi-generational poverty will never be addressed if we continue to allow government housing programs to support residential segregation based on race and class.

    Philip Tegeler is executive director of the Policy & Race Research Action Council, a civil rights policy organization based in Washington, D.C. Receive PRRAC's Bimonthly Updates by clicking HERE. For a copy of PRRAC's "HUD First Term Report Card," click HERE.)