Ben Carson stands with his right hand raised in a packed hearing room.
Ben Carson is sworn in to testify before a confirmation hearing on his nomination to be secretary of the U.S. Department of Housing and Urban Development on January 12, 2017. Kevin Lamarque/Reuters

Civil rights groups are fighting the suspension of a HUD rule they say helps low-income families move to better neighborhoods.

Suree Barnes needed to get out of Garland, Texas. There were bugs in her home, rowdy neighbors living across the street, and she was worried about the quality of her older daughter’s school.

Barnes, 37, had initially wanted to move to Garland from Richardson, Texas, because it was one of the few places in the Dallas area she could afford using her roughly $1,100-a-month federal housing choice voucher, and one she thought would provide a better neighborhood for her three kids. When Barnes realized she wanted out of Garland, she was able to move again to Royse City, a suburb in Rockwall County that fair housing advocates would call “higher opportunity”: It has better schools and a lower crime rate. Barnes was able to move not because of a radical change in her financial status, but because of a new way of calculating the payments for housing vouchers in the Dallas metropolitan area.  

The Housing Choice Voucher (HCV) program, run by the U.S. Department of Housing and Urban Development (HUD), subsidizes the housing costs of more than 2 million low-income households in America. Its current subsidies are based on the Fair Market Rent (FMR) standard, which public housing authorities calculate for each metropolitan area, and is generally around the 40th percentile of rents in the region.

But certain parts of the country, including Dallas, have been testing out a different formula. The Small Area Fair Market Rent (SAFMR) rule calculates the payment standard—the maximum amount of money a voucher provides—using postal Zip codes. The idea is that such payment standards would more accurately reflect the cost of renting in a specific neighborhood. Housing agencies in the Dallas metropolitan area were court-ordered to use the rule in 2011 as part of a fair housing settlement brought by the Inclusive Communities Project (ICP), a nonprofit that works to expand housing options for low-income families. At the Dallas Housing Authority in the City of Dallas, the number of voucher holders who moved Zip codes into high-opportunity neighborhoods tripled after the rule went into effect. Because 40 percent of the median in such a Zip code is higher than the 40 percent median region-wide, more housing in these Zip codes was now within reach of voucher-holders.

In 2016, HUD announced it would be rolling out the SAFMR rule in 24 areas around the country. But this August, the department put out a statement saying it was going to suspend widespread, mandatory implementation of the rule until 2020. In the statement, HUD gave three reasons for the suspension: It felt it had not provided enough guidance to state and local agencies about how to implement the rule; it wanted to review public comments on the rule before implementing it; and it believed a further cost-benefit analysis of the SAFMR demonstration was needed before the rollout could take place.

Civil rights groups challenged this position. In October, five groups—the NAACP’s Legal Defense and Education Fund, the law firm Relman, Dane & Colfax, the Poverty & Race Research Action Council (PRRAC), the Lawyers’ Committee for Civil Rights Under Law, and Public Citizen Litigation Group—filed a lawsuit against HUD. The lawsuit argues that by failing to implement the SAFMR rule, HUD has violated the Administrative Procedures Act, which governs how federal agencies propose and implement regulations.

Sheryl Seiling, the director of rent assistance for the Housing Authority of Cook County, one of the jurisdictions that had implemented the SAMFR rule, notes HUD’s concerns with the burden placed on local authorities. “Initially, it was time-consuming to set up—there’s 122 communities and God knows how many Zip codes,” she says. “But it was definitely worth it. We wouldn’t go back, because we would never be able to move anybody into an area of opportunity. We’re tremendously supportive of SAFMRs.”

Ajmel Quereshi, an attorney from the NAACP who is involved with the case, remains unconvinced by HUD’s other claims, noting that the department solicited two rounds of public comments on SAFMR expansion in 2015 and 2016 and that, in its own detailed interim report on SAMFRs, HUD acknowledges that the rule led to an increased availability of homes in high-rent neighborhoods while decreasing the average payment standard for each voucher.

“HUD studied this for a long time before they came out with this rule; it’s not some half-baked idea,” says Demetria McCain, president of the Inclusive Communities Project. “What they had been doing before was inefficient and inadequate to break up poverty.”

HUD in fact echoed this sentiment in its August 2017 interim report. “HCVs theoretically offer HCV holders the chance to locate in neighborhoods with high-performing schools, low rates of poverty, and other characteristics associated with opportunity for neighborhood residents,” the report states. “In practice, however, HCV holders are frequently concentrated in high-poverty neighborhoods with limited access to the amenities associated with resident opportunity.”

When vouchers were funded based on broader metro averages, “you’d have people who would not be able to move into certain, more expensive parts, because you were taking the area as a whole,” says Quereshi. “Given that the majority of voucher holders are minorities, the [suspension] of the rule is going to continue this pattern in which voucher holders that are primarily minority are segregated in certain areas.”

As Richard Rothstein illustrates in his book The Color of Law, the federal government has long played an active role in housing segregation. Beginning in the 1930s, the Federal Housing Authority used to deny black families mortgage policies, often preventing them from building up the home equity from which many middle-class Americans get their wealth. Public housing was formally segregated between black and white residents, with less funding going to black housing projects and amenities there.

Now, housing advocates are worried that choosing not to update the voucher calculation system could end up being another form of state-sponsored segregation. “People are thinking about this in terms of housing, and that’s right,” says Quereshi, “but when we’re talking about high-opportunity neighborhoods, we’re talking about neighborhoods that offer access to better jobs, more jobs, better schools, as well, and all of those things are really connected. It’s not just a housing issue.”

While the rule is only being put on hold for two years, advocates worry about families who will miss out on getting the help they need in the interim period. According to research by Raj Chetty, a professor at Stanford University, children who move to low-poverty neighborhoods before the age of 13 earn more as adults and are more likely to go to college. He estimates that 20 percent of the black-white earnings gap can be attributed to the county in which a child grows up.

“While there are still a few areas that are too expensive, in general [the SAFMR rule] opened up a whole part of the county that was previously really not rentable for our client base,” says Seiling. “They weren’t even considering anything different because it was too expensive.”

Most people agree that the current housing-voucher calculation system is not tenable. But as my colleague Alana Semuels has noted, there have been politicians and housing groups opposed to the SAMFR rule from its outset. For Caitlin Walter, a senior director of research at the National Multifamily Housing Council, a trade association, one main concern with the SAFMR rule is its methodology. “Zip codes are set up for postal deliveries, not the real estate market,” she says. Because of the way HUD collects data, and the lag time between when the data is collected and when it is used to calculate payment standards, she worries that the rule would end up using imprecise, granular data to set the standard in smaller regions. Walter also doubts that HUD’s interim report, which drew largely from the results of three regions in Texas, would apply in the same way to the rest of the country.

Megan Haberle, the director of housing policy at the Poverty & Race Research Action Council, isn’t convinced that HUD’s suspension is a result of any specific shortcomings in the policy itself. She attributes the rule’s suspension to industry pressure, something she says is “thematic of a lot of the Trump administration.”

“HUD has been getting quite a bit of pushback from industry groups formed of some of the public housing authorities who are concerned about revising their practices and the small amount of administrative burden this would take,” says Haberle.

“There was a lot of pushback in the Dallas area from the landlords who were in high-poverty neighborhoods and the people that work for them,” says McCain of Inclusive Communities. Landlords in high-poverty neighborhoods would end up receiving less money under the SAFMR rule, because they would receive lower subsidies than landlords in high-opportunity neighborhoods if voucher payments were tied to Zip codes. “But the voucher position is a program for tenants; it’s not for landlords,” she says.

Barnes, the Royce City mother, says she loves her new home and city. “It shouldn’t be that you can’t be in a nice neighborhood because you’re on housing [vouchers],” she says. “I feel like they should be pushing [voucher holders] out further to better neighborhoods. Sometimes you don’t have any money. The least you can have is your environment to make you want to do better.”  

There are problems that housing vouchers of any value cannot address: What, for example, happens to families who still live in the neighborhoods deemed “low-opportunity?” Residents who do not qualify for or do not seek out housing vouchers are going to continue to be deprived of better homes and school districts.

However, “there’s no question there’s a problem here, and [SAFMR] is a meaningful step in the right direction,” says Sasha Samberg-Champion, an attorney at Relman, Dane, & Colfax, who is involved in the suit. “The idea that now we have to go back to square one because some people say it’s not a perfect policy—that’s not how the law works. If that [were] the standard, we’d never get anything done.”

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