The Lawyers’ Committee for Civil Rights Under Law, The National Fair Housing Alliance, and Poverty & Race Research Action Council recently issued a report entitled “Affirmatively Furthering Fair Housing at HUD: A First Term Report Card Part II” that looks at HUD’s record of “affirmatively furthering fair housing” (AFFH) as mandated in Section 3608 of the Fair Housing Act (FHA) during the first term of the Obama administration.

In Section 3608 of the FHA, HUD and its grantees are required to avoid the perpetuation of segregation, and to take affirmative steps to promote racial integration. According to the report, until the Obama administration, HUD historically has had a very limited enforcement program for ensuring state and local compliance with the AFFH obligation. A 2009 - 2010 Government Accountability Office (GAO) investigation of compliance by state and local governments with the AFFH requirement found both compliance by the recipients of federal funding and enforcement of AFFH requirements by HUD to be lacking.

Since then, however, the HUD Office of Fair Housing and Equal Opportunity has been re-energized. During the first term of the Obama administration, there has been significant enforcement of the AFFH requirement by HUD: (1) it has participated in and sought increased AFFH enforcement in several federal court cases involving AFFH issues; (2) it has processed and investigated private fair housing complaints where the allegations included violations of the AFFH requirement; (3) it has significantly increased its review of local Analyses of Impediments to Fair Housing (AIs), and some have been rejected; and (4) it has undertaken several compliance reviews concerning the AFFH requirement leading to voluntary compliance agreements addressing AFFH requirements.

The report also commended HUD’s recent adoption of the long-delayed “disparate impact” rule. The new rule adopts a standard for HUD review of administrative complaints that has been adopted by every federal appellate court to rule on the issue over the past 30 years. According to the rule, a civil rights plaintiff is permitted to challenge a facially “neutral” policy or practice that has a clear discriminatory effect on a protected class of persons—like African Americans and other racial/ethnic minorities, or people with disabilities. Under the disparate impact standard, policies that have a discriminatory effect can be examined by the court to ensure that they serve a legitimate purpose and that no effective, less-discriminatory means of achieving that purpose is available.

While the “disparate impact” rule isn’t technically an implementation of the AFFH requirement, the report states that it’s a crucial tool for HUD enforcement of the AFFH requirement. This is because the disparate impact standard is frequently invoked to challenge state and local government policy or action that “actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin.”

In many cases a private disparate impact claim in federal court against a local grantee is the step that triggers HUD AFFH review. And the report predicts that HUD’s adoption of the disparate impact rule, including the provision recognizing that actions that reinforce or increase segregation may violate the FHA, will clarify the applicable law in HUD administrative proceedings, and is a signal that HUD is taking its AFFH enforcement obligations more seriously.

Although the report concludes by giving HUD positive marks for its recent AFFH enforcement, the report also criticizes HUD because, “after almost four years of planning and design, HUD still has not published an AFFH regulation to better define the AFFH monitoring and enforcement process. Moreover, it is not clear that the proposed rule under consideration will establish a complaint process that will give private parties the ability to participate in the enforcement process as they do now. The lack of a clear complaint process has been a major hindrance to AFFH enforcement and it needs to be addressed in any new regulation.”