By Robert Romano

On May 8, the National Fair Housing Alliance filed suit in the U.S. District Court of the District of Columbia against the Department of Housing and Urban Development for delaying the 2015 Affirmatively Furthering Fair Housing regulation until 2020 or later.

This regulation allowed HUD to force more than 1,200 cities and counties that took $3 billion of annual community development block grants to rezone neighborhoods along income and racial criteria.

The lawsuit argues that HUD Secretary Ben Carson lacked authority to delay implementation of the rule when it was announced in Jan. 2018.

There’s only one problem. Even if that were true, since the announced delay, Congress has acted via the recent omnibus spending bill, which preempts everything HUD was doing on this regulation, especially in implementing it.

Under Division L, Title II of the Consolidated Appropriations Act of 2018, Section 234, it states, “None of the funds made available by this Act may be used by the Department of Housing and Urban Development to direct a grantee to undertake specific changes to existing zoning laws as part of carrying out the final rule entitled ‘Affirmatively Furthering Fair Housing’ … or the notice entitled ‘Affirmatively Furthering Fair Housing Assessment Tool’ …”

Yet the regulation still directs municipalities “to examine relevant factors, such as zoning and other land-use practices that are likely contributors to fair housing concerns, and take appropriate actions in response” [emphasis added] as a condition for receipt of the block grants.

Meaning, the regulation, as currently written, violates federal law. HUD could not implement it if it wanted to.

“The lawsuit is practically moot since it would be now be illegal for Carson to implement AFFH as currently written. In its present iteration, the HUD rule is illegal, since it still calls for changes to zoning,” Americans for Limited Government President Rick Manning noted in a statement in response to the suit.

Manning added, “HUD should move for immediate dismissal, as it is clear that Congress has preempted whatever vision of AFFH the Obama administration implemented.”

Even the National Fair Housing Alliance, acknowledges that the regulation has been used to address local zoning in its court filing, citing changes to zoning in Austin, Texas and Paramount, California.

The fact is, it will be very difficult for HUD to separate the regulation from its built-in mandate to address zoning issues. Here is what the regulation says about zoning:

“[Community Development Block Grant] [p]rogram participants will also assess whether laws, policies, or practices limit fair housing choice, as well as the role of public investments in creating, perpetuating, or alleviating the segregation patterns revealed by the assessment. Examples of such laws, policies, or practices include, but are not limited to, zoning, land use, financing, infrastructure planning, and transportation.” [emphasis added]

“Consistent with long-standing judicial guidance regarding AFFH, the proposed rule is designed so that program participants undertake a process that informs and engages the public and allows program participants to make educated judgments regarding the appropriate strategies and actions that are consistent with their obligations to affirmatively further fair housing. In doing so, it directs them to examine relevant factors, such as zoning and other land-use practices that are likely contributors to fair housing concerns, and take appropriate actions in response.” [emphasis added]

“Revising the [Assessment of Fair Housing] AFH (§ 5.164). New § 5.164 establishes the minimum criteria that will require a program participant to revise its AFH. Paragraph (a) of this section provides that if a program participant experiences a significant material change in circumstances that calls into question the continued validity of the AFH, then the program participant must revise its AFH…Paragraph (a)(1) provides examples of what a significant material change in circumstances may be, which would include… the jurisdiction has made significant policy changes, such as significant changes related to zoning, housing plans or policies, or development plans or policies… ” [emphasis added]

“This rule is needed to facilitate efforts to overcome barriers to fair housing choice. There are many different types of impediments to fair housing choice, including building and zoning codes, processes for site selection for low-income housing, lack of public services in low-income areas, less favorable mortgage lending for minority borrowers, and lack of public awareness of rights and responsibilities associated with fair housing. Some of these impediments may prevent people from moving out of racially concentrated areas of poverty and neighborhoods that perpetuate disparities in access to community assets.”

On the impact of the regulation: “Finally, in terms of quantifying the effects of the proposed rule, there is uncertainty about the potential impacts of whichever policy is selected by a program participant. For example, inclusionary zoning policies—one potential action that jurisdictions might take in this context—have been implemented by a number of communities across the country, often for the purpose of advancing fair housing goals . Research assessing these efforts is mixed, with some studies suggesting they increase prices and decrease housing stock in the long run, some studies showing they have no effect, and other studies indicating they increase the supply of multifamily housing units. For this example, as well as the other policies program participants might consider in the course of their AFFH planning process, the impact will depend on a complex interaction of a broad set of judgments and decisions by the jurisdiction, other jurisdictions, private and non-profit actors, and families, both in protected classes and not. These can differ across regions and families in ways that are impossible to predict in advance. Accordingly, impacts will be revealed in the months and years following policy implementation.” [emphasis added]

Undoubtedly, the National Fair Housing Alliance will want to cite the 1968 Fair Housing Act as somehow providing a statutory obligation for making zoning changes, but they should beware. By explicitly taking action in the 2018 spending bill to prohibit the Affirmatively Furthering Fair Housing regulation from being used to make zoning changes, Congress has effectively changed whatever effect the Fair Housing Act might have had in this area.

If HUD were to continue implementing the regulation, particularly to make changes to local zoning, it would be doing so in violation of the law. If anything, the only case that should be brought to federal court is one overturning this regulation that still seeks to subvert local governments by usurping zoning authority in violation of federal law.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.