Carlos Osorio/AP

The HUD secretary's new attempt to roll back an Obama-era fair-housing rule has him wading into battle against exclusionary zoning.

Another fair housing rule could be heading back to the drawing board, the latest in the Trump administration’s efforts to rewrite and potentially revoke federal policies around race and discrimination in housing. But this time, there’s a twist.

On Monday, the U.S. Department of Housing and Urban Development announced that it aims to “streamline and enhance” an Obama-era rule on desegregation—the same rule that HUD Secretary Ben Carson once described as “social engineering.” If this sounds familiar, you’re right: It’s the third time this year that the department has taken aim at the rule.

This time, though, HUD is adopting a novel framework for rolling back its rule on desegregation: Carson is pitching this rule change as a way to fend off NIMBYism. The secretary wants to use the power of the purse to ease exclusionary zoning and build up to address housing affordability. But many critics—including those who might otherwise applaud any efforts to undercut the restrictive zoning rules that make multi-family housing so difficult to build in many areas—are questioning HUD’s motives. Even some Republican members of Congress may take exception to Carson’s plans to change how the rule works (instead of just getting rid of it).

At issue is a doctrine known as Affirmatively Furthering Fair Housing, a plank of the Federal Housing Act of 1968 that requires jurisdictions that receive funding from HUD to do more than just not discriminate. Under the law, any city, county, or state that receives federal housing funds must work to actively undo patterns of racial segregation—to affirmatively further this goal. The law has been on the books for 50 years, but HUD didn’t formally spell out what compliance would look like until 2015.

New rules on Affirmatively Furthering Fair Housing could change the policy in ways large and small—and possibly unrelated to the core issue of racial segregation. HUD’s advance notice of proposed rulemaking calls for comments on changes to minimize regulatory burden, advance local control over the process, and “encourage actions that increase housing choice, including through greater housing supply.”

This notice is the third whack that HUD has taken at the Affirmatively Furthering Fair Housing rule this year alone. First, in January, the department postponed the deadline for local governments to comply with the rule, bringing fair-housing assessments to a halt. Four months later, HUD scrapped one of the tools that municipalities were supposed to use to complete these assessments. This latest rules change is a continuation of these efforts to divert the fair-housing standard.

HUD’s ongoing pushback against the Obama-era rule has drawn a blistering response from housing advocates. More than 75 different national affordable housing and civil rights organizations condemned HUD’s delay in a joint statement back in January. In May, several of them came together to file a lawsuit against Carson and HUD to require the administration to enforce the Affirmatively Furthering Fair Housing rule, even while the department is mulling potentially significant changes. (The U.S. District Court in Washington, D.C., which sided with fair housing advocates in a different challenge against HUD last December, heard arguments on Thursday.)

Changes to the Affirmatively Furthering Fair Housing rule may not be entirely unpopular with public housing agencies, however. The rule “creates a huge planning and reporting requirement,” says Amy Glassman, a partner at Ballard Spahr who represents public housing agencies and other recipients of HUD funds. She says that some housing agencies criticize the rule because it forces them to generate onerous assessments, a draw on limited resources. “They believe in fair housing, and they believe in Affirmatively Furthering Fair Housing, but they think there’s gotta be a more efficient way to do it,” Glassman says.

On the other hand, adjusting the desegregation rule may not sit well with Republicans who simply want it off the books. In July 2017, Senator Mike Lee of Utah and Arizona Representative Paul Goas, along with 18 other GOP members of Congress, issued a letter to HUD complaining about the regulatory burden of the Affirmatively Furthering Fair Housing rule. The letter called on Carson to “rescind the AFFH rule in its entirety.”

“Rather than undermining the autonomy of local housing authorities, we believe the federal government must empower local communities to tackle their own unique challenges, in compliance with the Fair Housing Act, without the threat of a new arbitrary federal mandate,” the letter reads. Carson may instead choose to preserve the rule, but bend it toward a different purpose, one that could definitely conflict with local zoning authorities.

Previously, Carson’s HUD has also cast the rule as a burden on local communities. A spokesperson for HUD told CityLab back in January that 17 of the 49 initial Assessment of Fair Housing reports submitted by communities since the rule was promulgated in 2015 were rejected. Housing advocates pushing back against HUD have said that this is an acceptable failure rate for first-time submissions, given that the process is brand new (not to mention the fact that the country is deeply segregated).

And in the past, Carson has criticized Affirmatively Furthering Fair Housing in starker terms: Back in 2015, for example, he compared it to school busing in a Washington Times column. (The recent GOP letter praised those statements.) With this proposed rules change, though, Carson appears to be taking a different tack by pivoting on the policy rationale.

In an interview with The Wall Street Journal, the secretary discussed the changes to the desegregation rule primarily in terms of housing supply and demand. Exclusive zoning for single-family homes in Los Angeles, for example, represents an obstacle to affordable housing, or so Carson’s thinking goes. “Mr. Carson said the new rule would tie HUD grants, which many communities use to build roads, sewers, bridges and other infrastructure projects, to less restrictive zoning,” according to reporter Laura Kusisto.

“I want to encourage the development of mixed-income multifamily dwellings all over the place,” Carson told the Journal, citing YIMBY scripture, chapter and verse.

The Journal report prompted an outcry among baffled housing advocates. Softening the Affirmatively Furthering Fair Housing rule would not lead to less exclusionary zoning, they say. Using the affordable-housing crisis as a pretext for gutting fair housing protections misunderstands the fraught relationship between zoning and segregation.

“We’re all for ideas to remove obstacles to inclusive communities, including regulatory burdens that stand in the way of desegregation,” said Jesse Van Tol, CEO for the National Community Reinvestment Coalition, in a statement. “But we’re concerned that HUD is taking action to remove regulations, while not meaningfully addressing America’s deep problems of segregation and inequality.”

Sasha Samberg-Champion, an attorney who is suing HUD on behalf of the National Fair Housing Alliance and several Texas housing organizations, says that Carson’s framing amounted to ”an act of misdirection.” Using HUD funds to incentivize local communities to change restrictive zoning codes isn’t a terrible idea at all, he says. But relaxing zoning codes can’t substitute for robust enforcement of fair housing law. Without a federal mandate, communities can’t be counted on to pursue fair housing, even given an incentive to build more.

“You could certainly accomplish fair housing ends through changes to the zoning code,” Samberg-Champion says. In fact, under the Affirmatively Furthering Fair Housing rule, communities must examine the extent to which exclusionary zoning serves as an impediment to fair housing. (Republicans objected to this obligation specifically in their letter.) “I take it that what Secretary Carson is talking about is something a little different, which is creating new housing regardless of whether it impacts on segregation.”

Instead of pushing communities to use zoning to encourage fair housing, Carson may instead be seeking new ways to undermine regulations in one stroke, in this case federal desegregation rules and local zoning authority—potentially displeasing everybody.

Local hostility to multi-family housing, especially affordable housing, continues to negatively further racial segregation patterns today. New tools and principles give the government an opportunity to overturn and uproot these patterns. In 2015, the U.S. Supreme Court affirmed that housing policies that disproportionately negatively affect minorities are prohibited under federal law, even when those policies are not explicitly discriminatory. Exclusionary zoning was at the heart of the case that settled this “disparate impact” standard.

Despite longstanding precedent and Supreme Court affirmation, HUD reopened its rule on disparate impact in June. The National Fair Housing Alliance plans to submit a letter recommending that HUD make no changes whatsoever to the rule, per a draft obtained by CityLab. “HUD must vigorously enforce, rather than reconsider, the strong laws that level the playing field and give everyone a fair shot,” it reads.

Republicans in Congress, meanwhile, would like to see the disparate impact standard tossed overboard with the desegregation rule. Their July 2017 letter to HUD describes the Affirmatively Furthering Fair Housing rule as “a continuation of the previous administration’s radical pursuit of using disparate impact theory to punish communities that are not as demographically diverse as they would have wished.”

Carson flicked at the Republican view in his interview with the Journal:

In the Obama era, officials prioritized making it easier for lower-income people to move to wealthier communities, citing research that showed it improved outcomes for children. HUD’s latest move is another sign that the Trump administration has a different philosophy.

Mr. Carson said he is unconcerned about what “theoreticians” will say.

“The last administration, when they put this together they really went down an ideological pathway,” he said. “We are going to look at the people who are actually affected, what are they saying, what will be helpful to them.”

In that interview, Carson also waded into the battle that promises to shape cities for the next generation, the contest over building more housing that pits NIMBYism against YIMBYism. But the tools that HUD wants to bring to this struggle—such as the Affirmatively Furthering Fair Housing rule—still have a critical role to play in the fight against segregation.

“Building an adequate supply of housing is itself a good thing,” Samberg-Champion says, “but it’s really outside the scope of this rule, which should be to ensure that the benefits of such housing inure to the benefit of truly integrated neighborhoods.”

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