Friday, March 2, 2018

Assessing Fair Housing: HUD's Delay and the Dilemma this Poses for Jurisdictions

by Katherine M. O'Regan,
How should the numerous jurisdictions poised to start their Assessments of Fair Housing (or those who are already mid-process) proceed in the wake of an announcement that the federal government planned to push back deadlines for using this specific form of assessment as part of their legally-required planning process?

That's the question facing thousands of entities after the US Department of Housing and Urban Development (HUD) announced in January that it was delaying a previously issued final rule requiring that jurisdictions receiving HUD funding conduct an Assessment of Fair Housing (AFH) to meet, in part, their obligation to comply with the federal Fair Housing Act's requirement that they "affirmatively further fair housing" (AFFH).

HUD's notice extended the AFH deadline for one cycle for jurisdictions that had not yet had an AFH accepted and whose AFH deadline date fell before October 31, 2020. These jurisdictions, the announcement emphasized, must still meet their AFFH obligations. During the delay, they must conduct an Analysis of Impediments (AI) to fair housing choice (as they had prior to HUD's final AFFH rule) and take appropriate actions to overcome impediments identified by the analysis. However, unlike an AFH, there is no standardized form or specific content required for an AI, it need not be submitted to HUD, and HUD will not review it. (While the notice specified that the delay would be applicable as of the day it was issued, public comments on the notice can be submitted through March 6, 2018.)

When the delay was announced, many jurisdictions were in the final stages of conducting their AFHs; hundreds more were about to start. This raises two related questions that this blog tries to briefly answer. First, what does this delay mean for these jurisdictions? Second, how should they proceed?

Returning to the Flawed Analysis of Impediments (AI) Process

The notice calls for jurisdictions to return to a process that both the GAO and HUD itself deemed to be highly flawed. A 2010 GAO study reported that only 64 percent of program participants appeared to have AIs that were current, and questioned the usefulness of many of the AIs that did exist. It concluded that "[a]bsent any changes in the AI process, they will likely continue to add limited value going forward in terms of eliminating potential impediments to fair housing that may exist across the country." HUD's own internal analysis in 2009 came to the same conclusion, finding that about half of the AIs it collected for the study were outdated. incomplete, or otherwise of unacceptable quality.

To address some of the concerns raised in the GAO's report, HUD requires that AFHs be conducted with a standardized assessment tool and that jurisdictions provide measurable goals with a timeline for achieving them. As part of its justification for AFH postponement, HUD noted that 35 percent of the first AFHs submitted to HUD were initially not accepted. The AFH process, however, requires that HUD give feedback on AFHs that are not accepted. HUD provided such feedback and worked with jurisdictions to resolve deficiencies in the submissions. Ultimately, almost all of the 49 first submissions were accepted. In contrast, with AIs, there is no review or feedback from HUD. Notably, HUD's 2009 internal report found no evidence that jurisdictions were improving their AIs over time.

The combination of tighter standards, a better assessment tool, and a feedback loop seems to have produced stronger plans, according to MIT's Justin Steil and Nicholas Kelly, who compared the first 29 AFHs (as modified in response to HUD's comments on initial submissions) to the AIs previously conducted by those same jurisdictions. They found that compared to the earlier AIs, the final AFHs included more quantifiable goals as well as more specific policies and programs meant to achieve those goals. Such results, they noted, suggest the rule is working. "[T]he non-acceptances provided participants with the opportunity to respond to HUD feedback and to strengthen their final AFHs so as to meet their fair housing obligations. In short, the non-acceptances should be seen as strengths of the new rule not a failure."

What is HUD's Advice for a Good AI? Conduct an AFH?

For jurisdictions that have already begun their AFH, HUD's notice states that jurisdictions may continue to do so, as "the AFFH rule may provide program participants with a useful framework for complying with their AFFH obligations." HUD encouraged all participants to use the data and mapping tools as well as the AFH Assessment Tool in conducting their AIs, and to collaborate with other submitters in their region. But this vague guidance puts jurisdictions in the precarious position of identifying which elements of the AFH tool and process are necessary to meet its AFFH obligations.

Will Legal Challenges Reinstate the AFH?

The Trump administration has been aggressive in its use of delays to forestall the implementation of rules, temporarily or indefinitely. Many of these delays have been successfully challenged in the courts under the Administrative Procedures Act, which governs most federal rulemaking. For example, in December 2017, the US District Court for the District of Columbia enjoined HUD's two-year delay of its Small Area Fair Market Rent (FMR) rule, which would have required 24 metropolitan areas to use ZIP-code-level FMRs in setting rent payment standards for voucher recipients. HUD has since dropped its plans for delay, and advised more than 200 affected public housing authorities they must implement the new process within three months.

While no lawsuit has yet been filed against HUD's AFH delay, it is likely to come. (In theory, HUD could also modify its announcement in response to public comments, which, as noted above, must be submitted by March 6.) This suggests that jurisdictions should carefully weigh the risk that the delay will be reversed, and their duty to Affirmatively Further Fair Housing, as they determine how to conduct their new AIs. HUD's AFFH framework and assessment tool seem the best place to start. Notably, officials in some jurisdictions, such as New York City, have made public statements that they will move forward with a process that is true to the principles of the AFH.

However, whether jurisdictions will stay true to key advantages of the AFH, including robust public engagement and an open and transparent drafting process, remains to be seen. As Michael Allen notes in his contribution to the Joint Center's panel "What would it take for the HUD AFFH rule to meaningfully increase inclusion?," that may depend on whether a broad set of constituents come together to mobilize a strong ground game. Meanwhile, until the uncertainty created by HUD's decision is resolved, the AFH process and assessment tool may provide the safest and clearest path forward for jurisdictions.

Papers from the A Shared Future symposium are available on the JCHS website

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