Six Rules for Avoiding Discrimination When Marketing Your Assisted Site

HUD recently suspended the Affirmatively Furthering Fair Housing rule. This rule was a 2015 regulation that required any community receiving HUD development block-grant funding to routinely identify instances of racial segregation and provide solutions to counter them. It was intended to fulfill an unmet mandate of the Fair Housing Act, which forbids racial discrimination in housing and also requires local governments to work to desegregate their communities. According to the rule, local governments were required to submit a summary of their findings and goals to HUD for approval.

Although this Obama-era rule applicable to local governments was effectively suspended through HUD’s actions, HUD’s requirement for owners to create and implement an Affirmative Fair Housing Marketing Plan (AFHMP) at the site level remains intact. The AFMHP is a marketing strategy that targets a broad cross-section of the eligible population without regard to race, color, religion, sex, disability, familial status, or national origin [HUD Handbook 4350.3, par. 4-12(A)(1)]. The plan describes initial advertising, outreach (community contacts) and other marketing activities that inform potential renters of the existence of the units. Examples of HUD programs that require an AFHM Plan include:

·       Sections 207, 220, 221(d)(3) and (4) – Multifamily Rental Housing

·       Rental Assistance Payment (RAP) and Rent Supplement

·       Section 8 Project-Based Assistance

·       Section 202 Projects with Section 8 Assistance

·       Rural Housing Section 515 Projects with Section 8 Assistance

·       Section 202 with 162 Assistance – Project Assistance Grants (Section 202 PACs)

·       Section 202 with Project Rental Assistance Contracts (Section 202 PRACs)

·       Section 202 without Assistance (Income Limits Only)

·       Section 811 with Project Rental Assistance Contracts (Section 811 PRACs)

If your site is experiencing higher than normal vacancy rates, you may find that you have to start marketing your site to attract eligible households. When doing this, it’s important to create a marketing campaign that attracts eligible households but doesn’t exclude members of protected classes or discourage them from applying to live at your site. If you start placing ads and choosing media outlets in ways that improperly target, limit, or discriminate based on race, color, religion, national origin, sex, disability, or familial status, you may violate HUD rules and federal fair housing law.

Here are six rules to help you find advertising outlets to market your sites without running afoul of fair housing law. As you read these rules, keep in mind that you’re not violating fair housing law simply because your site doesn’t have a diverse or minority population. Your marketing must be aimed at a variety of ethnic groups, but you won’t be held liable if households belonging to only one or two groups respond. You just need to make sure that if all your current households are of one race, ethnic group, or national origin, it’s despite your marketing campaign and not because of it.

Rule #1: Comply with Fair Housing Marketing Plan

HUD requires sites to market their units in accordance with their AFHMP [HUD Handbook 4350.3, par. 4-12(A)(2)]. The AFHMP form (HUD Form HUD-935.2A) must be completed when either initially applying for funding or when the AFHMP is updated. The AFHMP describes how you intend to market the site to attract groups of all segments of the eligible population, and requires you specifically to target groups who are least likely to know about or apply for housing at the site. It asks for:

·       Target groups who, because of their location or other factors, are “least likely to apply” without extra marketing efforts—for example, whites, blacks, Hispanics, Asians, or the disabled;

·       Type, name, size, and frequency/duration of media you’ll use to market your site. This includes newspapers; radio or TV stations; billboards; and other methods (for example, swapping ads with local businesses or posting flyers at local stores);

·       Racial/ethnic identity of media audience;

·       Community contacts, such as neighborhood, minority or women’s organizations, churches, labor unions, employers, public and private agencies, disability advocates, and local leaders; and

·       The experience and training your staff has in marketing and fair housing laws.

Use your AFHMP as you would any written marketing plan that outlines marketing strategies. Not only is your AFHMP necessary to comply with HUD requirements, it will also help you and your staff members stay organized and market your site effectively. What’s more, it will show your commitment toward running an inclusive campaign that can help defend against accusations of discrimination.

If your AFHMP hasn’t been reviewed in the past five years, it may need an update. Owners are required to review their AFHMPs every five years [HUD Handbook 4350.3, par. 4-12(F)(2)]. When reviewing the plan, owners should look at the current demographics of the market area to determine if there have been demographic changes in the population in terms of race, ethnicity, religion, persons with disabilities, and/or large families. The owner will then determine if the population least likely to apply for the housing is still the population identified in the AFHMP, whether current advertising sources still exist, whether the advertising and publicity cited in the current AFHMP are still the most applicable, or whether advertising sources should be changed or expanded. Even if the demographics of the community have not changed, the owner should determine if the outreach currently being performed is reaching those it’s intended to reach as measured by project occupancy. If not, the AFHMP should be updated [HUD Handbook 4350.3, par. 4-12(F)(3)].

The revised plan must be submitted to HUD for approval. HUD or the contract administrator will review whether affirmative marketing is actually being performed in accordance with the AFHMP during an on-site monitoring review [HUD Handbook 4350.3, par. 4-12(F)(4)]. However, if after reviewing the AFHMP, an owner determines that it doesn’t need to be revised, the owner should maintain a file documenting what was reviewed, what was found as a result of the review, and why no change is required. HUD or the contract administrator may review this documentation during a monitoring review [HUD Handbook 4350.3, par. 4-12(F)(5)].

It’s important to note that HUD doesn’t require subsidized multifamily sites built before February 1972 to have an AFHMP, unless the site has been substantially rehabilitated after that date or the plan is required by a housing assistance contract. However, owners of such sites are required to affirmatively market their units to those least likely to apply [HUD Handbook 4350.3, par. 4-12(B)(5)].

Rule #2: Use Media Outlets Catering to Certain Ethnic Groups

Many newspapers, magazines, radio stations, websites, and other media outlets cater to particular ethnic groups. This doesn’t mean that marketing your site through these outlets is an automatic violation of fair housing law. As long as you’re also marketing your site to a wide audience, it’s not illegal to use an outlet that caters to specific ethnic groups or population segments as part of your marketing efforts.

In fact, HUD encourages you to do this as part of your AFHMP when these groups are the least likely to apply without special outreach. Of course, you must have a valid, nondiscriminatory reason for choosing a media outlet that caters only to certain groups. For example, you may find that a certain ethnic group has settled into your community and the surrounding neighborhood. As long as you’ve done nothing to create or encourage this scenario, you may choose an outlet that caters to the ethnic group, because it’s already well represented. It’s also valid to target groups that have historically faced discrimination, such as recent immigrants.

To market to a wide audience, you may need to extend the geographic reach of your marketing campaign. Say your site is located in an area that’s predominantly white and Christian. If you market your community only through neighborhood apartment publications, newspapers, and Christian radio stations, you won’t reach a diverse audience. So you must broaden your campaign to include media outlets that extend to audiences beyond the predominantly white area where your community is located. This could include apartment publications, newspapers, and websites that cover the entire metropolitan area or county.

Before you decide to advertise with a media outlet, ask for data on its readership or listener demographics. This way you’ll know whom your marketing will reach if you commit to that media outlet. Plus, you’ll need to give that data to HUD in your AFHMP.

Rule #3: Avoid ‘ZIP Code Marketing’ Unless You Can Show Sound Business Reasons for It

Many owners try to attract households to their site by sending marketing materials about their units to residents who live only within certain ZIP codes. If you do this, you may be violating fair housing law because this type of marketing, known as “selective geographic advertising,” is likely to yield discriminatory results.

To avoid problems, make sure you have a sound business reason to justify your strategy of targeting residents in certain ZIP codes. For instance, be able to prove that you’re targeting people in those ZIP codes because census data indicates that the average household income is very low and residents are more likely to be able to qualify for assisted housing. And have documentation to prove that, for instance, residents of these ZIP codes comprise a diverse segment of the population, or that your ZIP code targeting combined with your other marketing efforts allows you to reach a wide audience.

Rule #4: Have Nondiscriminatory Reasons for Going After the Competition

Many owners send marketing materials to residents in neighboring sites, inviting them to consider moving to their site. Before you do this, you should ask yourself why you want a competing site’s residents. Many owners who prefer, for instance, having white people live at their site may be quick to invite residents of a nearby all-white site to consider moving to their site. This shows a marketing preference, which violates fair housing law.

But if you can justify going after the competition with a valid, nondiscriminatory reason for doing so, go ahead. For instance, you may want to market to residents at a neighboring site because you offer better, more attractive amenities and facilities than your competitor, such as a swimming pool, impressive views, a scenic garden, or proximity to public transportation and shopping.

Rule #5: Document Your Marketing Efforts

HUD requires you to keep records showing how you accomplish what you’ve set out to do in your AFHMP [HUD Handbook 4350.3, par. 4-12(E)]. For example, keep copies of the advertisements you place, with detailed records of when and where you placed them and for what audience. Also, document your valid, nondiscriminatory reasons for going after the competition, using media outlets that cater to certain groups, or marketing to certain ZIP codes. Finally, keep records of any new marketing arrangements or ideas you’ve pursued that you didn’t mention in your AFHMP.

Keeping a written record of your marketing campaign will help you show you’ve complied with your AFHMP and prove that you’ve been running an inclusive marketing campaign without discrimination. And if the racial or ethnic makeup of your current residents isn’t diverse, your records will show that you did nothing to create or encourage this situation.

Rule #6: Include Equal Housing Opportunity Logo and Statement in Your Marketing Materials

HUD rules require all assisted sites to include the Equal Housing Opportunity logo, statement, or slogan in their ads and other marketing materials [HUD Handbook 4350.3, par. 4-12(D)(3)]. All advertising depicting persons should depict members of all eligible protected classes including individuals from both majority and minority groups.