The term “fair housing” sounds straightforward, predicated on ensuring that no one who can afford to rent or buy is turned away based on race or other discriminatory criteria. The Obama administration’s Department of Housing and Urban Development, however, took things much further, using fair-housing law “affirmatively” to push localities not only to bar discrimination but also to change the broad socioeconomic makeups of American communities. This meant, in effect, that any jurisdiction receiving federal funds had to demonstrate that it was serving low-income residents in dozens of ways—including areas well beyond HUD’s nominal reach, such as education.
Now the Trump administration is pulling back, but not abolishing, these rules, setting the stage for production of housing that will prove “naturally affordable” because of its design and density, in contrast with the more expensive, federally subsidized version. HUD Secretary Ben Carson appears to understand that small homes on small lots—even if bunched together in lower-income neighborhoods—tend to be affordable, even without subsidies. And, like one of his HUD predecessors, Jack Kemp, Carson reminds us that local regulatory barriers can push up housing costs and depress new supply.
The Trump administration will also call a halt to the use of federal community-development funds—earmarked originally to improve infrastructure and services in lower-income neighborhoods—as an incentive to force changes in local zoning policies to open wider areas for development. Localities receiving such funds—more than 1,200, including major population centers—will still have to report on what they’re doing to make housing more plentiful and less expensive. But the rules will not be narrowly prescriptive, acknowledging that “jurisdictions can advance fair housing in ways that HUD officials cannot predict because HUD lacks the extensive localized knowledge of state and local officials.” HUD itself will highlight—but not mandate—good approaches. The new approach differs dramatically from the heavy-handed social engineering of the Obama policy, which used federal funds to break up racial and ethnic concentrations and push suburbs to build housing for the poor in affluent, “high opportunity” zones.
Obama’s implicit assumption was that the residential patterns of American housing markets were themselves evidence of discrimination if racial integration, for instance, could not be demonstrated—and that lower-income neighborhoods could not be places of economic opportunity. As Obama-era Deputy HUD Secretary Ronald Sims put it, “a zip code is not just an address. It’s a life determinant.” Thus arose the goal of widely dispersing the minority poor and “deconcentrating poverty.” The idea that racial and ethnic neighborhoods might embody important aspects of community fabric and might be preferred by many Americans was dismissed in favor of planners’ preference for demographic manipulation. “Deconcentration” goals are so popular with liberal civil rights organizations—though not necessarily with elected officials in predominantly black districts—that the Civil Rights Litigation Clearinghouse (including the ACLU, NAACP Legal Defense Fund, and Lawyers Committee for Civil Rights Under Law) sued Carson when he announced that HUD would suspend enforcement of the Obama interpretation of fair housing and instead promulgate new rules, as it has now done.
Documents made public as a result of the lawsuit reveal how the Obama administration attempted to inject HUD influence into areas beyond housing. This becomes clear in looking at what HUD calls “denial letters”—communications with local governments informing them that they had failed to pass fair-housing muster. For instance, one Georgia county reported to HUD that it was seeking more affordable housing in order to help low-income households get better access to jobs. That wasn’t good enough for Obama’s HUD. The county had been “unclear as to how it intends to use this goal to address issues of segregation and racial/ethnic concentrations and poverty,” the department responded. Nor had the county taken steps to change its image, or, as HUD put it, its “perception in the broader metro area.” Nor had it dealt with the issue of “location of proficient schools”—in other words, that lower-income neighborhoods had poor school-achievement results. Rather than improving those schools, HUD’s solution was to move the students.
To state the obvious, HUD is not the local school board. Yet in the case of one North Carolina city, HUD included its views on “school enrollment policies” in the category of “disparities to access to opportunities.” As I’ve written in City Journal, this social-engineering approach essentially amounted to “housing as busing.”
The Obama-era HUD’s focus was on changing the core facts of life regarding American housing: that neighborhoods organize themselves around residents with similar levels of income and education. Rather than using community-development funds as once intended—to ensure that all neighborhoods get high-quality public services—HUD pushed one California city to “overcome segregation by providing housing choices in higher-opportunity areas where protected classes are less likely to live.” This is a dispiriting world view—that only wealthy American neighborhoods can offer opportunity.
The extravagance of HUD’s goals was matched only by the bureaucratic complexity of its reporting mandates. The hundreds of small and midsize municipalities required to show “AFFH progress” were also asked to use the “SMART system for setting goals and metrics and milestones . . . SMART stands for Specific, Measurable, Action Oriented, Realistic and Time Bound.” One can only pity small-city mayors or city managers forced to divert staff to such matters while the demands of local voters pile up.
The Obama HUD used its fair-housing policy as a powerful stick. It denied no less than 63 percent of all local submissions, in the process holding up federal funds local governments relied on. Nor was it easy to get even a passing grade. The typical submission ran more than 200 pages; Philadelphia’s exceeded 800 pages. With its new fair-housing regulations, the Trump administration is moving away from the overreach of the Obama era.