Final AFFH Rule Released

Late last week, HUD published on its website a final rule titled “Preserving Community and Neighborhood Choice.” This rule implements the Fair Housing Act’s duty to affirmatively further fair housing (AFFH). Although the rule has not yet been published in the Federal Register, it will go into effect 30 days after its official publication.

Background

In 1968, Congress passed the Fair Housing Act. This law created a duty for HUD grantees to affirmatively further fair housing. In 1994, President Clinton signed an executive order to issue regulations defining the affirmatively furthering fair housing duty. Regulations issued by the Department of Housing and Urban Development (HUD) in 1994 stated “that a grantee would fulfill its AFFH obligation by conducting an analysis of ‘impediments to fair housing choice within its jurisdiction’ and ‘taking appropriate actions to overcome the effects of any impediments.’” In 2015, the Department once again redefined the AFFH regulations to create “a new process called an Assessment of Fair Housing (AFH), effectively replacing [the analysis of impediments].” This rule was followed by assessment tools.

More recently, the rule continued to change. In 2018, HUD withdrew the AFH assessment tool. Then, in 2020, HUD proposed a revised AFFH rule. After reviewing the 2020 proposed AFFH rule, President Trump “expressed concern that the HUD approach did not go far enough” to reduce federal control of local housing decisions or lessen administrative burdens. President Trump asked HUD to reconsider the rule to see whether HUD could streamline the AFFH requirements to a greater extent, while still remaining in compliance with the law.

In promulgating this rule, HUD did not follow the notice-and-comment rulemaking requirements normally required by the Administrative Procedure Act (APA). The Department believes that this rule falls in an exception to the notice-and-comment requirement, which exempts notice-and-comment rulemaking for matters “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.” Despite the exception by the APA, the Department has a policy to follow the normal notice-and-comment rulemaking process in promulgating rules on these issues, but has decided to waive its normal policy because the AFFH rule “has already been the subject of extensive public debate.”

Definitional Changes

This rule changes the definition of affirmatively furthering fair housing. First, it broadens the definition of fair housing to mean “housing that, among other attributes, is affordable, safe, decent, free of unlawful discrimination, and accessible as required under civil rights laws.” Second, it defines the phrase “affirmatively further” as “any action rationally related to promoting any attribute or attributes of fair housing.” In essence, these changes broaden the term affirmatively furthering fair housing to make it an easier requirement to meet.

PHA Consultation

Entities that must submit consolidated plans to HUD (e.g., jurisdictions that receive community development block grants [CDBG]), are required to consult with local PHAs operating in their jurisdiction in creating their consolidated plans. Consultation should be regarding “consideration of public housing needs, planned programs and activities, strategies for affirmatively furthering fair housing, and proposed actions to affirmatively further fair housing in the consolidated plan.” Additionally, the consultation will help decide the entity’s “strategy for affirmatively furthering fair housing” and how the entity will “address the needs of public housing and, where necessary, the manner in which it will provide financial or other assistance to a troubled PHA to improve the PHA’s operations and remove the designation of troubled, as well as obtaining PHA input on addressing fair housing issues in the Public Housing and Housing Choice Voucher programs.”

There must also be consultation with residents. Both entities that submit consolidated plans and PHAs are required to encourage the participation of residents of public and assisted housing in developing and implementing the consolidated plan. The entity must “make an effort” to provide information to the PHA about “affirmatively furthering fair housing strategy” and “consolidated plan activities related to its developments and surrounding communities so that the PHA can make this information available” at public hearings for the “PHA plan.”

PHA Requirements

This rule includes certain requirements for PHAs. First, in creating an annual plan, PHAs must include information on “[h]ouseholds with individuals with disabilities and households of various races and ethnic groups residing in the jurisdiction or on the waiting list.” Additionally, PHAs must certify, in both their annual plan and 5-year plan that they are in conformity with applicable civil rights laws and that they will affirmatively further fair housing.

There are certain additional requirements and certifications for PHAs. First, PHAs “must ensure that the [a]nnual [p]lan is consistent with any applicable [c]onsolidated [p]lan for the jurisdiction in which the PHA is located.” The PHA must submit a certification by appropriate state or local officials that its annual plan is consistent with the consolidated plan. Additionally, this certification must include a description of how the annual plans are consistent with the consolidated plans. State housing agencies must be consistent with state consolidated plans. Finally, a PHA may request to change its fiscal year to better coordinate with the consolidated planning process.

Public housing agencies must maintain records of their AFFH certification.

Conclusion

In summary, the new rule no longer requires that PHAs complete analyses of impediments or fair housing assessments. Instead, PHAs must participate in the consolidated planning process for their local jurisdictions and make sure their annual plans are consistent with a jurisdiction’s consolidated plan with respect to affirmatively furthering fair housing. Additionally, PHAs must submit a certification from local or state officials that their annual plan is consistent with the local consolidated plan, a certification that the PHA is in compliance with applicable civil rights laws, and a certification that the PHA is affirmatively furthering fair housing. Finally, the definition of affirmatively furthering fair housing has been broadened to make meeting the requirement easier.

HUD’s press release can be found here.

The final rule can be found here.