HUD says local communities must take action to ‘affirmatively further’ diversity

By Kevin Stocklin

Actions by the Biden administration to expand racial equity are making their way into America’s suburbs and towns.

The Department of Housing and Development (HUD) is implementing a new program that would compel any town, city, or county that accepts federal housing grants to “proactively take meaningful actions to overcome patterns of segregation, promote fair housing choice, eliminate disparities in opportunities, and foster inclusive communities free from discrimination.”

The program, called Affirmatively Furthering Fair Housing (AFFH), is a reinstatement of HUD’s 2015 AFFH Rule, originally introduced by the Obama administration but repealed in 2020 by the Trump administration, which criticized the policy’s “onerous burden on localities and federal overreach into local housing policy.”

Under the Biden policy, “in order to qualify for community development block grant funds, [communities] have to prepare and submit a plan to demonstrate that they are ‘affirmatively furthering fair housing,’” Howard Husock, senior fellow at the American Enterprise Institute and author of “The Poor Side of Town,” a critique of American housing policies, told The Epoch Times. “They will have to pass muster with regulators at HUD, who will review the steps they’re taking and decide whether they measure up.”

Among the things that HUD will look for, Mr. Husock said, is if low-income housing “is being built in ‘high-opportunity neighborhoods’; is it being built close to high-performing schools; is close to libraries or supermarkets; with public facilities being located in ways that best serve those of a low income.”

According to a statement by HUD Secretary Marcia Fudge, “Hardworking families are blocked from purchasing homes because of the color of their skin.”

The 1968 Fair Housing Act was enacted following the assassination of Martin Luther King, Jr. It prohibited discrimination in the sale, rental, and financing of housing based on race, religion, national origin, sex, disability, or family status.

However, a clause in the Act that directs the government to “affirmatively further fair housing” has been used by the Biden to expand enforcement beyond the transaction of buying or renting a home, intending to compelling municipalities to create equity plans for diversifying communities. 

“You could say you’re furthering it by doing spot checks on realtors to make sure they’re not discriminating,” Mr. Husock said. “But they’re interpreting ‘furthering’ to mean a mix of incomes in various zip codes.”

The new rule will mandate that “local governments and other recipients of HUD funding set ambitious goals to not only confront and reject housing discrimination in all forms but recognize and remedy enduring inequality,” Ms. Fudge stated. “This rule will be vitally important to our work to address ongoing segregation, disinvestment from communities of color and discrimination in housing markets.” 

Centralizing Authority in D.C.

Critics of the measure contend that, in addition to stepping outside the law’s original intent, it is yet another measure to centralize authority and decision-making with the federal government and weaken the voices in local communities. 

“It’s a long-running increase in federal purview over local authorities, going back to the ‘60s when federal grants and aid started to take off,” Mr. Husock said. “Once these kind of grants from the federal government started, and really ballooned to the point now that there are thousands of them, all of them can provide government leverage.

“The Biden administration is certainly part of that, but it’s a very long-running trend,” he said. 

This year, Congress provided $85 million to identify and remove barriers to affordable housing production in the 2023 Omnibus (Consolidated Appropriations) Act. 

“Each community has unique housing needs and unique challenges to affordable housing production and preservation,” a HUD spokesperson told The Epoch Times, regarding this funding. 

“For some communities, those barriers include land use policies and local regulations; for others, barriers might also include gaps in financing, insufficient infrastructure, or lack of capacity to develop and implement a housing plan,” HUD stated. The department “provides funding explicitly for addressing these types of barriers and advancing local housing strategies.”

The issue of community diversity came to a head in 2007, when the Anti-Discrimination Center of Metro New York filed a lawsuit against Westchester County, a wealthy suburb of New York City, for what it claimed was its failure to provide affordable housing and reduce segregation. However, the suit did not charge that Westchester had violated the Fair Housing Act. Rather, it charged Westchester with violating the Civil-War era False Claims Act by misrepresenting itself in its receipt of $45 million in community development grants from HUD by failing to “affirmatively further” fair housing as it had promised.

At the time, Susan Tolchin, an advisor to Westchester County, called the lawsuit “garbage,” stating: “We don’t have control over land use.” 

The result of the suit was a settlement in which Westchester County agreed to build 800 new units of low-income housing. This is a likely precedent for the enforcement of the AFFH.

Much of the ire of those pushing for racial equity in housing is directed at local zoning laws, which mandate things like single-family homes over multi-family housing, or minimum lot sizes. In 2022, California banned single-family zoning throughout the state. The law, SB 9, permitted the construction of up to four units on lots that were previously limited to a single home.

An estimated 1,200 communities will be affected by the HUD’s AFFH policy. However, it is unlikely that many of America’s wealthiest communities, like Concord Massachusetts or Beverly Hills California, will be affected because America’s richest towns often do not take HUD money. 

Some argue that local communities are already taking action on their own to foster affordable housing in ways that they prefer. 

According to Gretchen Baldau, director of the Commerce, Insurance, and Economic Development Task Force at the American Legislative Exchange Council (ALEC), “a lot of the ideas they propose are ideas that are coming from the states.”

“A lot of states are interested in ways that they can increase supply of housing so that housing can become more affordable; so that different types of housing can be built,” Ms. Baldau said. For example, Montana recently introduced a law expanding the types of housing that may qualify as single-family.

“It allows starter homes by allowing accessory dwelling units on different lots,” she said. “These are things like granny flats, or they can be freestanding, small structures, that as starter homes get people into the market as a homeowner. Then they can start moving up from there and using the equity they’re building as home owners to continue building their wealth.”

Kevin Stocklin

Author

Kevin Stocklin is a business reporter, film producer and former Wall Street banker. He wrote and produced “We All Fall Down: The American Mortgage Crisis,” a 2008 documentary on the collapse of the mortgage finance system. His most recent documentary is “The Shadow State,” an investigation of the ESG industry.