HUD Issues Guidance on Review of Assessments of Fair Housing

The Fair Housing Act of 1968 requires jurisdictions receiving federal funds for housing and urban development to affirmatively further fair housing (AFFH). The Fair Housing Act not only makes it unlawful for jurisdictions to discriminate, but also requires jurisdictions to take actions to undo historic patterns of segregation and other types of discrimination, as well as to take actions to promote fair housing choice and to foster inclusive communities.

Since 1974, Community Development Block Grant recipients and, since 1998, PHAs have had to certify that they would affirmatively furthering fair housing. They have been required only to complete an analysis of impediments (AI) to fair housing choice, take appropriate actions to overcome the effects of impediments, and keep records of those actions. Now, after HUD finalized the AFFH rule in July 2015, its requirements apply to all recipients of federal housing funding, including local participating jurisdictions, public housing authorities, and state agencies.

Under the new system, the AI is replaced by the Assessment of Fair Housing (AFH). The rule provides a standardized framework for program participants to use to identify and examine “fair housing issues” and the underlying “contributing factors” that cause the fair housing issues. HUD will provide each program participant with data covering the local jurisdiction and the surrounding region, and program participants must consider these data when assessing fair housing. HUD will receive, review, and decide whether the AFH can be accepted.

If HUD rejects an AFH, HUD says it will “identify the steps the program participant may take to address deficiencies.” Not having timely approval could result in delayed access to program funds, which could cause construction delays and other problems.

Most program participants won’t be required to use the new AFFH system until 2020 and beyond. And until a program participant is required to submit an AFH, it must continue to follow the current AI process. The deadline for a designated group of jurisdictions to submit their first plans is Oct. 4, 2016. And HUD then has 60 days to accept or reject those plans. In July 2016, HUD issued specific guidance on how it will review government entities’ plans to affirmatively further fair housing.

Review Standards

When reviewing an AFH, the guidance states that HUD reviewers will apply the two review standards set forth in the AFFH Rule. Specifically, HUD will not accept an AFH if:

The AFH is inconsistent with fair housing or civil rights requirements. Under this standard, an AFH will not be accepted if HUD finds that the AFH, or a portion of the AFH, is inconsistent with fair housing or civil rights requirements.

The AFFH Rule itself states an AFH that is inconsistent with fair housing or civil rights requirements if HUD determines that the analysis of fair housing issues, fair housing contributing factors, goals, or priorities contained in the AFH would result in policies or practices that would operate to discriminate in violation of the Fair Housing Act or other civil rights laws. For example, an appropriate goal to address disparities in access to opportunity experienced by minority families may be the construction of affordable housing in high-opportunity areas, while an inappropriate goal would be the implementation of policies that limit occupancy of new housing to certain racial or ethnic groups. In the latter instance, HUD would find the goal to be inconsistent with fair housing or civil rights requirements.

Another way a reviewer would deem an AFH to be inconsistent with fair housing or civil rights requirement is if the AFH doesn’t identify policies or practices as fair housing contributing factors, even though the policies and practices result in the exclusion of a protected class from areas of opportunity.

Thus, where a program participant has information that a state or local policy or practice acts as a significant contributing factor for a fair housing issue, such as segregation, and where the AFH fails to discuss the policy or practice, that AFH would not be accepted by HUD. An example of this might be where a local residency preference operates to exclude protected class groups in the surrounding area and the AFH doesn’t discuss how this preference contributes to fair housing issues such as segregation and access to opportunity.

The AFH is substantially incomplete. Under this standard, an AFH won’t be accepted if HUD finds that the AFH or a portion of the AFH is substantially incomplete. According to the guidance, the AFFH Rule itself provides two examples of an AFH that is substantially incomplete [24 C.F.R. § 5.162(b)(ii)]:

• The AFH was developed without the required community participation or the required consultation;
• The AFH fails to satisfy a required element. Failure to satisfy a required element includes an assessment in which priorities or goals are materially inconsistent with the data or other evidence available to the program participant or in which priorities or goals are not designed to overcome the effects of contributing factors and related fair housing issues.

According to the guidance, some deficiencies that cause an AFH to be substantially incomplete are typically easy to identify and easy to fix. Examples include:

• A section or question in the Assessment Tool hasn’t been filled out;
• The HUD-provided data hasn’t been used to complete a question in the Assessment Tool;
• HUD-provided data or other information that’s readily available to the program participant (such as local data and local knowledge) is ignored while presenting contradictory information without providing appropriate justification;
• The AFH fails to include the required explanation of comments from the community participation process: a concise summary of the community participation process, public comments, and efforts made to broaden community participation in the development of the AFH; a summary of the comments, views, and recommendations, received in writing or orally at public hearings, during the community participation process; and a summary of any comments, views, and recommendations not accepted by the program participant and the reasons for non-acceptance; and
• The AFH doesn’t include a goal associated with a fair housing issue identified in the analysis and significant contributing factor(s) related to the issue, or the AFH includes a set of goals that, taken together, would not constitute a balanced approach to addressing fair housing issues.