Edward Sullivan and Carrie Richter,
The Daily Record Newswire
Last September, the comment period closed for a federal Department of Housing and Urban Development proposed rule. That rule portends a very different course in the expectations of state and local governments in regard to affordable housing.
While retaining the prohibitions on housing discrimination, the new rule (now being reviewed by the Office of Management and Budget) requires proactive steps “to address significant disparities in access to community assets, to
overcome segregated living patterns and support and promote integrated communities, to end racially and ethnically concentrated areas of poverty, and to foster and maintain compliance with civil rights and fair housing laws.”
overcome segregated living patterns and support and promote integrated communities, to end racially and ethnically concentrated areas of poverty, and to foster and maintain compliance with civil rights and fair housing laws.”
Most local governments take federal money for housing or urban development, which implicates the new rules. Those dollars take the form of loan guarantees, urban renewal grants, homelessness programs, disaster relief, transportation and other infrastructure funds and a variety of other means.
A state or local grantee is “required to submit a certification that it will affirmatively further fair housing (AFFH), which means that it will: 1, conduct an analysis to identify impediments to fair housing choice within the jurisdiction; 2, take appropriate actions to overcome the effects of any impediments identified through that analysis; and 3, maintain records reflecting the analysis and actions in this regard.” The AFFH obligation extends to all housing and housing-related activities in the grantee’s jurisdictional area whether publicly or privately funded.
One effect of the new rule, which is likely to be challenged in federal courts, is that housing issues will not be treated in isolation, but in a relationship with other drivers of urban development. Thus, the connections between affordable housing and transportation or zoning, community expenditures in public services and facilities, racial or ethnic segregation and residency preferences or requirements are relevant issues for analysis and action.
Potentially, the new rule is not another effort at paper shuffling to deal with housing needs. Receipt of federal housing dollars requires repeated AFFH certifications of compliance with the analysis, action and records obligations noted above. The rule requires action to deal with problems identified, in part, by the use of uniform data. A state or local government may thus be sued for doing nothing in the face of an identified problem. Moreover, for those public agencies that certify compliance and do nothing or that support efforts to thwart affordable housing, litigation may be brought under the False Claims Act. And if the AFFH certifications were false, treble damages and attorney fees may be awarded, with a possible share going to a “relator” — one who “blows the whistle” on a noncomplying government.
The case of Westchester County, N.Y., though brought under current law, is instructive. Although certifying that it was affirmatively furthering fair housing when it received over $52 million in federal grants over the years, the county did not consider race-based impediments to fair housing choice even though it was part of one of the most segregated regions in the country. The county made no mention of housing discrimination or residential segregation and was successfully sued by a nonprofit activist organization under the False Claims Act.
The federal government joined the suit and a settlement was ultimately reached under which 750 affordable housing units must be built within seven years in the “whitest” neighborhoods of the county, the county must return $30 million to HUD because of its false certifications, $21.6 million of which was to fund integrative units (supplemented by $30 million more from the county), which was also required to pay $7.5 million to the “relator” for ferreting out false claims and another $2.5 million in attorney fees and costs. While the racial overtones of the county’s actions were extreme, the new rule raises the bar for reporting, actions and records required of state and local governments in housing matters.
Because the new rule does not depend on federal funding for enforcement, it is likely that nonprofit affordable housing organizations will follow the lead of their environmental brethren to undertake enforcement activity, using the “bounty” provided by the False Claims Act and Civil Rights Act to fund further enforcement.
If the rule is enacted and survives OMB review and court challenges, the national housing picture will be much different indeed. We all may be in for a very bumpy ride indeed.
—————
Edward Sullivan is an owner in the Portland office of Garvey Schubert Barer. Contact him at 503-553-3106 or at esullivan@gsblaw.com. Carrie Richter is an owner in the Portland office of Garvey Schubert Barer. Contact her at 503-553-3118 or at crichter@gsblaw.com.
The Daily Record Newswire
Last September, the comment period closed for a federal Department of Housing and Urban Development proposed rule. That rule portends a very different course in the expectations of state and local governments in regard to affordable housing.
While retaining the prohibitions on housing discrimination, the new rule (now being reviewed by the Office of Management and Budget) requires proactive steps “to address significant disparities in access to community assets, to overcome segregated living patterns and support and promote integrated communities, to end racially and ethnically concentrated areas of poverty, and to foster and maintain compliance with civil rights and fair housing laws.”
Most local governments take federal money for housing or urban development, which implicates the new rules. Those dollars take the form of loan guarantees, urban renewal grants, homelessness programs, disaster relief, transportation and other infrastructure funds and a variety of other means.
A state or local grantee is “required to submit a certification that it will affirmatively further fair housing (AFFH), which means that it will: 1, conduct an analysis to identify impediments to fair housing choice within the jurisdiction; 2, take appropriate actions to overcome the effects of any impediments identified through that analysis; and 3, maintain records reflecting the analysis and actions in this regard.” The AFFH obligation extends to all housing and housing-related activities in the grantee’s jurisdictional area whether publicly or privately funded.
One effect of the new rule, which is likely to be challenged in federal courts, is that housing issues will not be treated in isolation, but in a relationship with other drivers of urban development. Thus, the connections between affordable housing and transportation or zoning, community expenditures in public services and facilities, racial or ethnic segregation and residency preferences or requirements are relevant issues for analysis and action.
Potentially, the new rule is not another effort at paper shuffling to deal with housing needs. Receipt of federal housing dollars requires repeated AFFH certifications of compliance with the analysis, action and records obligations noted above. The rule requires action to deal with problems identified, in part, by the use of uniform data. A state or local government may thus be sued for doing nothing in the face of an identified problem. Moreover, for those public agencies that certify compliance and do nothing or that support efforts to thwart affordable housing, litigation may be brought under the False Claims Act. And if the AFFH certifications were false, treble damages and attorney fees may be awarded, with a possible share going to a “relator” — one who “blows the whistle” on a noncomplying government.
The case of Westchester County, N.Y., though brought under current law, is instructive. Although certifying that it was affirmatively furthering fair housing when it received over $52 million in federal grants over the years, the county did not consider race-based impediments to fair housing choice even though it was part of one of the most segregated regions in the country. The county made no mention of housing discrimination or residential segregation and was successfully sued by a nonprofit activist organization under the False Claims Act.
The federal government joined the suit and a settlement was ultimately reached under which 750 affordable housing units must be built within seven years in the “whitest” neighborhoods of the county, the county must return $30 million to HUD because of its false certifications, $21.6 million of which was to fund integrative units (supplemented by $30 million more from the county), which was also required to pay $7.5 million to the “relator” for ferreting out false claims and another $2.5 million in attorney fees and costs. While the racial overtones of the county’s actions were extreme, the new rule raises the bar for reporting, actions and records required of state and local governments in housing matters.
Because the new rule does not depend on federal funding for enforcement, it is likely that nonprofit affordable housing organizations will follow the lead of their environmental brethren to undertake enforcement activity, using the “bounty” provided by the False Claims Act and Civil Rights Act to fund further enforcement.
If the rule is enacted and survives OMB review and court challenges, the national housing picture will be much different indeed. We all may be in for a very bumpy ride indeed.
—————
Edward Sullivan is an owner in the Portland office of Garvey Schubert Barer. Contact him at 503-553-3106 or at esullivan@gsblaw.com. Carrie Richter is an owner in the Portland office of Garvey Schubert Barer. Contact her at 503-553-3118 or at crichter@gsblaw.com.
