Federal Agencies and the Birth of HUD’s AFFH

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By combining HUD, DOT and the EPA into a single Partnership for Sustainable Communities, President Obama force-multiplied the regulatory power of these massive agencies. Increasing the Power of Federal Agencies.

The move embedded HUD’s Livability Principles, which directs local zoning choices toward regions and densified communities with smaller parcels of land, in all three agencies. By claiming the change made it more efficient for government to protect the environment, social equity and the economy, most Americans paid little attention to its effect on private property. The executive branch’s new ability to impose demands on local communities was nearly unprecedented.

The Department of Transportation, redirected their funds toward “livability and sustainability improvements.” These initiatives create “opportunities to connect mixed income housing with transit or economic development initiatives to locate new jobs within a region along highly accessible multimodal corridors.40” None of these initiatives shows regard for individual property rights. Many are collectivist solutions that are at the expense of private property.

The EPA changed their decision-making process. Rather than base their actions and decisions on research and science, in 2012 the agency incorporated feel-good “sustainability” as the basis for their decision-making

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To assure no mistake about their intent, the agency defines “sustainable” by quoting the UN’s 1987 Brundtland Report, Our Common Future.41

The EPA’s Clean Power Plan will devastate energy producers and make electricity unaffordable for many families. Yet, when asked by Congress for the science behind their actions, EPA Director Gina McCarthy could not produce it. In 2015, based on nothing but “sustainability,” the EPA deemed itself authority over all of the waters of the US, including backyard ponds and dried-up streambeds.

Opponents have called this a severe “blow to American’s property rights.” As agencies issue more grants, communities find themselves with fewer and more restrictive choices. HUD’s Community Challenge Planning grants use various ‘strings’ to coerce communities into adopting “inclusionary zoning ordinances” and land acquisition, altering building codes and boosting construction of mixed-use and affordable housing. In this grant, HUD uses a point system weighted in favor of the Livability Principles to enable applicants to win the funds. The only way to get the grant is to comply with HUD’s restrictive Livability demands.

HUD’s Untapped Authority

By 2011, the administration realized that together, the 1964 Civil Rights Act and the 1968 Fair Housing Act, gave HUD controlling authority the agency had barely tapped.

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For years, HUD awarded Community Development Block Grants (CDBG) to recipients for a wide range of community needs. While HUD provided recipients with guidelines for using the funds, in general, the agency believed local communities were better equipped to decide what to do with the money than the federal government. As a result, many of the more stringent requirements of affirmatively furthering fair housing, as required since the Fair Housing Act, were only sporadically enforced. For example, many recipients never knew that once they accepted HUD CDBG funds for a project related to fair housing or urban development, the government could then control how recipients spent all other moneys related to these projects, whether public or private. Though mostly ignored, this rule has been in HUD’s Fair Housing Planning Guide since 1996.

A New York lawsuit was about to change all of that. Westchester County and the Launch of AFFH. In 2009, HUD intervened in a False Claims Act lawsuit brought against Westchester County by the Anti-Discrimination Center of Metro New York* (ADC) three years earlier. ADC argued that for several years, the county had made false statements on its HUD grant applications by agreeing they had met their obligation to “affirmatively further fair housing” and removed all barriers to minority discrimination.

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The courts decided against Westchester, ordering them to return $30 million in HUD funds and build 750 new affordable homes, most in white and wealthier areas. The court further decided that, since Westchester had a very small African-American community, the county would have to market in nearby counties to import minority families.

Outraged, in 2009 the county sought HUD’s assistance to lessen the settlement. Rather than assist the county, HUD saw this as an opportunity to become more aggressive. They imposed additional burdens on Westchester including that the required minority homes be built near “above average” schools and that a court appointed monitor should oversee the county’s implementation of the plan. The case was finally resolved in September of 2015 and HUD won on most counts.

*Note: The law firm of Allen, Relman, Dane and Colfax represented ADC in this case. As a leading plaintiff’s civil rights law firm, you will find them quoted throughout this report. There are three relevant points in this case.

First, the court ordered Westchester to pay $30 million from their own county budget to build 630 of the minority homes and affirmatively further fair housing. Second, HUD failed in their attempt to prove that Westchester engaged in any discrimination.

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As the court notes : “It bears emphasizing that this decision does not mean that any of Westchester County’s municipalities violated the Fair Housing Act or engaged in discrimination on the basis of race. In short, there has been no finding, at any point, that Westchester actually engaged in housing discrimination.” This is a critical point. Even though the discrimination charges failed, the False Claims Act charges were spectacularly successful.

The third is the most important lesson for other HUD entitlement communities. The attorneys used Westchester’s False Claims Act lawsuit as a test case to use in bringing other HUD recipients into compliance with AFFH.

After the 2009 settlement, then HUD deputy secretary Ron Sims made HUD’s intentions clear: “We’re clearly messaging other jurisdictions across the country that there has been a significant change in the Department of Housing and Urban Development, and we’re going to ask them to pursue similar goals as well,”

HUD wasted no time pursuing those “goals”. Westchester’s False Claims Act (FCA) settlement became the foundation for a new HUD ruling, Affirmatively Furthering Fair Housing and other cities were already in the agency’s sights.

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How HUD’s AFFH Devastates Property Rights

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Affirmatively Furthering Fair Housing is a term HUD has used for decades. On July 16, 2015, AFFH became the basis for a new rule adding severe strings to housing and urban development grants. These new stipulations shake the very foundation of private property ownership. As important as private property is to individual freedom, most landowners must still balance their rights between those of other members of the community. If your neighbor installs a 450’ tall windmill on his property, it can create noise pollution, increased danger, and reduce the value of neighbors’ home.

That is why local land use and zoning laws are so important. They resolve issues locally to protect both individual property owners and the community. Because these laws directly affect where and how you will live, the value of your home and what it will cost to maintain, it is vital for community members to keep decisions at the local level and to keep a watchful eye over the local officials who make them. HUD is about to change that.

Under their new, Affirmatively Furthering Fair Housing regulation, if public officials or public housing authorities accept HUD grants that effect fair housing or urban development, your community can lose its control over local zoning and land use, and be forced to join a region, even if that is against your community’s wishes. In some cases, the government can even coerce communities into reversing voters’ decisions.

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The reasoning behind HUD’s heavy-handedness seems logical on the surface. The Civil Rights Act of 1968, often called the Fair Housing Act, was a follow up to the original 1964 Civil Rights Act. The 1968 legislation was Congress’ response to the assassination of civil rights leader Martin Luther King. The purpose of the Fair Housing Act was to end housing discrimination against minority groups. In HUD’s words, “the Fair Housing Act protects people form discrimination when they are renting, buying or securing financing for any housing.”

Congress passed several Fair Housing related laws. In 1974, Community Development Block Grant program expanded HUD’s role by providing funds for communities to build and restore affordable housing. In spite of the advances in providing affordable housing, by 2013, the Obama administration concluded HUD had not done enough to eliminate America’s “legacy of housing discrimination and segregation.” The President believed that HUD had not been aggressive enough in managing how local communities spend the federal grant money.

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To address this, in April of 2013 HUD announced its proposal to create a massive new integration plan that would target the recipients of HUD housing funds in over 1200 communities.52 That plan was called Affirmatively Furthering Fair Housing. Because of the plan’s political volatility, the administration shielded it from public view for over a year. They withheld the proposal from the spring 2012 Unified Agenda announcement and again from the fall 2012 Unified Agenda. The Office of Management and Budget finally released the proposal to the public on December 21, 2012, during the Christmas holiday, after government operations had shut down. Because of the timing of the release, AFFH received little notice. The administration published the proposed rule in the Federal Register, July 19, 2013 and public comments ended September of 2013. (An additional period of comments ran from January 15, 2015 to February 17, 2015.) HUD received over 1000 comments from supporters and opponents of the plan.

A Tricky Review Process

In spite of the extended comment period, a review of HUD’s responses in the Federal Register reveals that the agency engaged in deceptive assurances to opponents’ concerns.

For example, when commenters wrote, “HUD’s rule is an effort to impede local control on zoning,” the agency replied, “This rule does not impose any land use decisions or zoning laws on any local government.”

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However, HUD reverses their assurance several paragraphs later when it states the agency will “assist recipients to adjust their land use and zoning laws to meet their legal obligation to affirmatively further fair housing.” In other words, it is technically true that HUD does not impose new zoning laws themselves; instead, they “obligate” you to impose them.

Affirmatively Furthering Fair Housing is not a HUD grant. Rather, it adds additional requirements to what you can and cannot do with funds received from other HUD grants. The effected grants are :

• Community Development Block Grant (CDBG)

• HOME Investment Partnerships (HOME)

• Emergency Solutions Grants (ESG)

• Housing Opportunities with Persons with Aids (HOPWA)

It is vital for public officials, community members, and especially property owners, to understand that a recipient’s obligation to affirmatively further fair housing does not stop with the grant money.

According to the Fair Housing Planning Guide, The recipient’s strategies and actions “will be accomplished primarily by making investments with federal and other resources.” Attorneys Allen, Relman, Dane and Colfax explain : “Although the grantee’s AFFH obligation arises in connection with the receipt of Federal funding, its AFFH obligation is not restricted to the design and operation of HUD-funded programs at the State or local level. The AFFH obligation extends to all housing and housing-related activities in the grantee’s jurisdictional area whether publicly or privately funded.”

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If your community accepts a HUD grant to build affordable housing and a private citizen donates money to improve the parks in your community that private money falls under the affirmatively furthering fair housing obligation.

HUD’s Fair Housing Assessment – Instrument of Coercion

As mentioned earlier, under AFFH, HUD can force your community to alter your land use and zoning laws, overturn voters’ decision and coerce your community into joining a region. Here is how the coercion occurs. Under HUD’s new rule, it is no longer sufficient for communities who accept AFFH related grant money to refrain from discrimination. They must take ‘meaningful actions” to end it. According to the ruling, grant recipients must take… “proactive steps to address the issues of segregation and related barriers, particularly as reflected in racially and ethnically concentrated areas of poverty.”

To assure recipients take these steps, HUD requires grant applicants to complete an Assessment of Fair Housing (AFH) as part of the application process. This assessment replaces the older Assessment of Impediments (AI) and requires far more community data. HUD estimates completion of the form will require approximately 200 hours, though some communities claim it can take substantially longer.

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Completion of the AFH involves a house-by-house analysis of community data including race, ethnicity, and concentrated areas of poverty, Limited English Proficiency, persons with disabilities and more.

Next, the AFH requires a full listing of community resources. These include “proficient” schools, jobs, transportation, housing, parks and recreational activities.

Finally, you will itemize any barriers that could make it harder for protected groups to access the community resources. HUD even provides a list of 40 barriers, or “contributing factors” recipients must agree to reduce or eliminate to qualify for the grant. Some “contributing factors” are as commonplace as community opposition to affordable housing; your community’s current zoning laws, or the failure of your community to cooperate with a region. HUD not only expects you to remove these barriers, they expect you to find and resolve even more. “Beyond the HUD-provided data, provide additional relevant information, if any, about disparities in access to opportunity in the jurisdiction and region affecting groups with other protected characteristics.

The program participant may also describe other information relevant to its assessment of disparities in access to opportunity.”  Allen, Relman, Dane and Cofax make it clear that HUD expects applicants to identify all impediments experienced by all protected classes, and must keep records of this analysis:

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“– Whether created by public or private sector, impediments must be analyzed

“– Impediments may include actions or policies that discriminate on the basis of protected class, whether by way of intentional discrimination or disparate treatment

“– A recipient is not excused from such an analysis by identifying the “greatest” or “most challenging” impediment; it must analyze everything it finds”.

HUD expects recipients to do more than complete the AFH. They expect deep community participation. According to HUD’s directions…III. Community Participation Process

1. Describe outreach activities undertaken to encourage community participation in the AFH process. Identify media outlets used and include a description of efforts made to reach the public, including those representing populations that are typically underrepresented in the planning process such as persons who reside in areas identified as R/ECAPs, persons who are limited English proficient, and persons with disabilities.

2. How successful were those efforts at eliciting community participation?

3. Summarize all comments obtained in the community participation process. Include a summary of any comments or views not accepted and the reasons why.

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In addition, the new Assessment of Fair Housing has other serious effects. Douglas County CO, has received HUD CDBG for years. They strive to be inclusive and a model of the type of community HUD desires.62 However, when the county first reviewed HUD’s Assessment of Fair Housing Tool, commissioners were surprised at what it contained.

Castle Rock, Co, a town in Douglas, seeing the restrictions, rejected the HUD grant money for 2016. Meanwhile, Douglas County conducted a thorough review of the Tool and concluded HUD’s Assessment of Fair Housing will “negate the county’s rights” and “seriously hamper our ability to…manage local affairs...” They noted that organizations such as NACo, NAHRO, NACCED, and NCDA submitted concerns during the initial 60‐day comment period (ending November 25, 2014) that went largely unaddressed.

“The Tool does not clearly define the intent of what it means to affirmatively further fair housing. “The information and definitions provided are vague, subjective and therefore open to interpretation.” “After reviewing the contributing factors identified in the Tool we find many to be contradictory in nature. Addressing one contributing factor may actually create barriers to furthering fair housing in another contributing factor.” 64

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Setting the Table for a Civil Rights Lawsuit

HUD expects you to invite civil rights advocates, affordable housing developers, community development organizations and any interested members of the public, to participate in identifying potential areas of discrimination. In completing the AFH, each contributing factor you identify is a potential area of discrimination. You are identifying potential discriminatory areas side-by-side with the very civil rights and activist groups most inclined to sue your community for discrimination. It is hard to impress enough how effectively the mere process of applying for these AFFH related funds sets the table for a costly civil rights lawsuit.65

Coercing Communities to Join a Region

Throughout the Assessment of Fair Housing Tool, HUD mentions the word regions over 70 times. This is for good reason. Though HUD never says as much, by creating your required plan to remove the contributing factors to discrimination, you are automatically self-annexing into a region. Here is how it happens. Applicants must use HUD’s own data tables, and their jurisdictional and regional trend maps to design your plan to remove the barriers and create an “integrated and balanced lifestyle.”66 (HUD does allow applicants to provide their own data, but must approve it first.) Agency Tyranny Page | 39

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