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HUD issues request for information on eliminating regulatory barriers to affordable housing

The U.S. Department of Housing and Urban Development (HUD) published a Request for Information (RFI) seeking public comment on Federal, State, local, and Tribal laws, regulations, land use requirements, and administrative practices that artificially raise the costs of affordable housing development and contribute to shortages in America’s housing supply.

This RFI is a request for members of the public to share their knowledge and provide recommendations to HUD regarding regulations, and practices that unnecessarily impede housing supply and information on innovative practices that promote increased housing supply. Read the RFI here.

“Owning a home is an essential component of the American Dream. It is imperative that we remove regulatory barriers that prevent that dream from becoming a reality,” said HUD Secretary Ben Carson. “Through this request, communities across the country will have the opportunity to identify roadblocks to affordable housing and work with State, Federal, and local leaders to remove them.”

In this RFI, HUD is seeking information on the following:

Specific HUD regulations, statutes, programs, and practices that directly or indirectly restrict the supply of housing or increase the cost of housing;
Policy interventions, solutions, or strategies available to State, local, and Federal decision makers to incentivize State and local governments to review their regulatory environment or aid them in streamlining, reducing or eliminating the negative impact of State and local laws, regulations, and administrative practices;
Ways that State-level laws, practices, and programs contribute to delays in the construction industry and specific laws, practices, and programs that could be reviewed;
Common motivations or factors that underlie local governments’ adoption of laws, regulations, and practices that demonstrably raise the cost of housing development, and whether such factors vary geographically;
Peer-reviewed research and/or representative surveys that provide quantitative analyses on the impact of regulations on the cost of affordable housing development;
Performance measures, quantitative and/or qualitative, the Council should consider in assessing the reduction of barriers nationally or regionally and advantages and disadvantages of each measure; and
Recommendations on how to best utilize HUD’s Regulatory Barriers Clearinghouse for States, local governments, researchers and policy analysts who are tracking reform activity across the country.

This RFI is a part of the work Secretary Carson is undertaking as the Chair of the White House Council on Eliminating Regulatory Barriers to Affordable Housing. The Council’s eight Federal member agencies are engaging with governments at all levels—State, local, and tribal—and other private-sector stakeholders on ways to increase the housing supply so more Americans have access to affordable housing.

President Trump signed Executive Order 13878, “Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing,” due to the fact that, for many Americans, the supply of available housing has not kept pace with the demand for housing by prospective renters and homebuyers, driving up housing costs. Regulations are often necessary to protect the health and safety of American citizens, such as clean air, water or disaster mitigation practices. However, outdated and overly burdensome, time-consuming, and costly regulatory requirements and restrictions prolong the completion of new housing supply and those costs are shifted to the consumer, particularly in tight markets.

As the Executive Order states, “Increasing the supply of housing by removing overly burdensome regulatory barriers will reduce housing costs, boost economic growth, and provide more Americans with opportunities for economic mobility. In addition, it will strengthen American communities and the quality of services offered in them by allowing hardworking Americans to live in or near the communities they serve.”

Responses to this RFI must be submitted online. Find the notice here.

Making Disparate Impact deliver fairness

HUD’s proposed revisions to our disparate-impact rule enhance our commitment to fairness for everyone.

Everyone agrees that discrimination has no place in society. But everyone also agrees that a city should be able to require that landlords kill rats without facing a lawsuit. The current “disparate impact” rule under the Fair Housing Act (FHA) does not reflect this common sense. But the Supreme Court has ruled that it does not have to be this way, and the Department of Housing and Urban Development (HUD) is proposing a revised rule that both fights discrimination and stops courts from second-guessing reasonable requirements (such as rat removal). It is good for housing and for the people protected by the FHA.

Long before becoming a pediatric neurosurgeon and later HUD secretary, I grew up in tenement housing where there were rats the size of cats. I did not know much about the world at the time, but one thing was self-evident: Nothing good comes from rats.

But in Gallagher v. Magner (2010), a federal appeals court allowed a lawsuit to proceed in Saint Paul, Minn., where the city was sued for aggressively enforcing its housing-code policy on rat removal. Landlords argued that the city’s enforcement efforts had an illegal disparate impact because they would drive up rents, disproportionately affecting minorities. The city withdrew its appeal of this case, which had reached the Supreme Court, bowing to significant pressure from the Obama-era Department of Justice.

Many Americans without law degrees may wonder how such a case could arise. The FHA prohibits discrimination in the sale, rent, or financing of housing-related activities based on protected classes such as race, sex, or religion. Traditionally, this has meant treating people from different groups differently, or “disparate treatment.” However, under “disparate impact,” businesses and towns can also be liable for policies and ordinances that are neutral on their face, neutral in intent, and neutrally applied but under which a protected minority group is disproportionately affected.

Disparate-impact litigation is hotly contested. Proponents argue that expansive disparate-impact liability helps overcome the country’s history of racism. They emphasize its use for targeting hidden or unconscious biases or remedying past wrongs. Critics argue that the FHA did not expressly authorize disparate-impact liability, that virtually every policy causes some statistical imbalance, and that it is unfair to hold governments and businesses liable for otherwise legal and even necessary actions—such as killing rats—because it was discovered after the fact to have a disproportionate effect.

The Supreme Court resolved some of this debate in 2015 under Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. There, it upheld the existence of disparate-impact liability under the FHA but outlined some prudential and constitutional limits. These limits, to quote the Supreme Court, help avoid setting “our Nation back in its quest to reduce the salience of race in our social and economic system.”

The proposed new rule better reflects the Supreme Court’s ruling in Inclusive Communities Project and provides everyone with better guidance on what constitutes unintentional but unlawful discrimination. Under HUD’s proposed revisions, plaintiffs must demonstrate that the challenged practice is arbitrary, artificial, and unnecessary. Plaintiffs must also show a robust causal link between the challenged policy and the disparity that is not established by statistical imbalances alone. Defendants would also be able to assert as a complete defense that the actions they took were required by other state, local, or federal laws. It is only fair that a party should not be found to violate one law for following another.

Our proposed rule revisions, if finalized, would make disparate-impact liability work better and more fairly. This will provide plaintiffs with a roadmap for pleading stronger cases (evidence shows only about 20 percent of claims are successful on appeal) while empowering defendants to assert effective defenses earlier in the process—saving them and their customers time and money. Ultimately, these changes will lead to more innovation and an increase of lower-cost housing and related services.

I understand that people may have differing opinions about the proposal. We welcome and encourage comment letters on any issues raised by the proposed rule and will consider all of them seriously to make sure the disparate impact regulation is as effective as it can be.

As numerous recent actions taken by HUD, such as our anti-discrimination lawsuits against Facebook and the city of Los Angeles and our investigation into San Francisco’s housing policies, demonstrate HUD remains vigilant in our mission of pursuing justice on behalf of Americans who are victims of housing discrimination. HUD’s proposed revisions to our disparate-impact rule enhance our commitment to fairness for everyone.

Author Ben Carson is secretary of the Department of Housing and Urban Development.

HUD awards more than $130 million to provide affordable housing to people with disabilities

The U.S. Department of Housing and Urban Development (HUD) awarded $131.3 million to 325 local public housing authorities across the country to provide affordable housing to approximately 15,363 additional non-elderly persons with disabilities. Secretary Ben Carson made the national announcement during a visit to Detroit, Michigan. The Detroit Housing Commission received $597,629 to serve the residents in their community living with disabilities. See the local impact of the housing assistance announced today.

“At HUD we’re committed to ensuring people with disabilities have a decent, safe, and affordable place to live,” said HUD Secretary Ben Carson. “The funding announced today allows our local partners to continue helping residents with disabilities live independently.”

The housing assistance announced today is provided through the HUD’s Mainstream Housing Choice Voucher Program which provides funding to housing agencies to assist non-elderly persons with disabilities, particularly those who are transitioning out of institutional or other separated settings; at serious risk of institutionalization; currently experiencing homelessness; previously experienced homelessness and currently a client in a permanent supportive housing or rapid rehousing project; or at risk of becoming homeless.

This program helps to further the goals of the Americans with Disabilities Act by helping persons with disabilities live in the most integrated setting. The program also encourages partnerships with health and human service agencies with a demonstrated capacity to coordinate voluntary services and supports to enable individuals to live independently in the community.

HUD awards more than $130 million to provide affordable housing to people with disabilities

HUD reaches settlement with California housing providers accused of disability discrimination

The U.S. Department of Housing and Urban Development announced today that it has reached a Conciliation/Voluntary Compliance Agreement with housing providers in San Diego, Sacramento and Oceanside, CA, settling allegations that they violated the Fair Housing Act and other laws when they refused to install grab bars in the showers of elderly tenants with disabilities and subsequently retaliated against them for making the requests. Read the agreement.

The providers include Mission Cove Seniors Housing Associates, L.P, Carolyn Compass Rose, LLC, Community Housing Works, Inc. of San Diego, ConAm Management Corporation of Sacramento, and the city of Oceanside, California.

The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities, including retaliating against individuals who make accommodation requests. Section 504 of the Rehabilitation Act of 1973 prohibits discrimination on the basis of disability in programs and activities receiving federal financial assistance, including refusing to make reasonable accommodations. In addition, Title II of the Americans with Disabilities Act of 1990 prohibits discrimination on the basis of disability in all activities, services and programs of public entities.

“The smallest accommodations mean a lot to individuals with disabilities,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “We welcome today’s settlement and hope that it reminds housing providers everywhere of the importance of meeting their obligation to comply with the nation’s fair housing laws.”

The case came to HUD’s attention when a married couple with disabilities who live in a HUD-subsidized senior apartment complex filed a complaint alleging that the owner and property manager of the complex refused to install grab bars in their bathroom and subsequently retaliated against them for making the request. Specifically, the couple claimed that after they asked for the accommodation, they were issued a notice accusing them of having created a noise disturbance. The housing providers denied discriminating against the couple but agreed to settle their complaint.

Under the terms of the settlement agreement, Mission Cove Seniors Housing Associates will pay $23,228 to the Legal Aid Society of San Diego, Inc. ($3,576 to cover the cost of legal services it provided and $19,652 for the complainants) and will rescind the noise complaint that was issued against the couple. In addition, ConAm Management agreed to notify all residents at the property that it will install grab bars in their bathrooms at no cost, and leasing and management staff who work with tenants at the complex and its regional portfolio manager who supervises the property will receive fair housing and reasonable accommodations training.

FHA releases 2019 annual report to Congress

The Federal Housing Administration (FHA) released its 2019 Annual Report to Congress on the economic condition of the agency’s Mutual Mortgage Insurance Fund (MMI Fund). FHA reports that at the end of Fiscal Year (FY) 2019, The FHA MMI Fund Capital Ratio for FY 2019 was 4.84 percent, the highest level since FY 2007.

The MMI Fund supports FHA’s single-family mortgage insurance programs, including all forward mortgage purchase and refinance transactions, as well as mortgages insured under the Home Equity Conversion Mortgage (HECM), or reverse mortgage program, since FY 2009.

“The financial health of FHA’s single-family insurance fund is as sound as it has been in over a decade,” said U.S. Housing and Urban Development Secretary Ben Carson. “We have a strong economy with nearly full employment due to President Trump’s leadership, and this economic growth helps set the foundation for ongoing improvements in our FHA portfolio.”

Commissioner Montgomery added, “This report is welcome news. The improvements we’ve begun to put in place in the last two years to stem the losses of the reverse mortgage portfolio, aided by favorable economic conditions, are contributing to some improvements in our reverse mortgage portfolio. Looking forward, we must focus on seeking the right balance between facilitating access to mortgage credit and managing risk. Our mission is to make certain FHA remains a stable and reliable resource to provide housing finance support for first-time homebuyers, and other underserved borrowers.”

Key highlights from FHA’s 2019 annual report

Congress has set a mandatory minimum Capital Ratio of 2 percent for the MMI Fund. The Capital Ratio for FY 2019 was 4.84 percent, the highest level since FY 2007. The Capital Ratio is one indicator of the Fund’s financial health and includes both FHA-insured single family forward and reverse mortgage portfolios.
As detailed in today’s FY 2019 annual report to Congress, FHA had insurance-in-force on single family mortgages valued at almost $1.3 trillion at the end of this fiscal year.
The performance of the forward book of business posted a stand-alone capital ratio of 5.44 percent. The MMI Capital (formerly referred to as economic net worth) of the forward book of business also improved year-to-year by over 42 percent with a value of over $66.6 billion.

The HECM portfolio continues to show a negative stand-alone capital ratio, but improved substantially from a negative (-) 18.83 percent capital ratio in FY 2018 to negative (-) 9.22 percent in FY 2019. The HECM portfolio also showed an improvement in MMI Capital, increasing $7.7 billion.

Independent actuary

Pinnacle Actuarial Resources, Inc. (Pinnacle) served as the independent actuary for FY 2019. By serving as a critical check on the results, an independent actuarial review remains an integral part of the Annual Report process. Pinnacle’s independent actuarial review reports for forward mortgages and HECM, confirming that the estimates used in the FY 2019 Annual Report to calculate the capital ratio are reasonable. The reports are available on HUD’s website.

Trump administration announces continued decline in veteran homelessness

During a press conference at Harbor Homes in Manchester, New Hampshire, U.S. Housing and Urban Development (HUD) Secretary Ben Carson announced veteran homelessness in the U.S. continues to decline according to a new national estimate. HUD’s Annual Homeless Assessment Report indicates the total number of reported veterans experiencing homelessness in 2019 decreased 2.1 percent and 793 more veterans now have a roof over their heads. View local estimates of veteran homelessness.

“Our nation’s veterans have sacrificed so much for our country and now it’s our duty to make certain they have a home to call their own,” said Secretary Carson. “We’ve made great progress in our efforts to end veteran homelessness, but we still have a lot of work to do to ensure our heroes have access to affordable housing.”

Each year, thousands of local communities around the country conduct one-night “Point-in-Time” estimates of the number of persons experiencing homelessness—in emergency shelters, transitional housing programs and in unsheltered locations. This year’s estimate finds 37,085 veterans experienced homelessness in January 2019, compared to 37,878 reported in January 2018. HUD estimates among the total number of reported veterans experiencing homelessness in 2019, 22,740 veterans were found in sheltered settings while volunteers counted 14,345 veterans living in places not meant for human habitation.

These declines are the result of intense planning and targeted interventions, including the close collaboration between HUD and the U.S. Department of Veterans Affairs (VA). Both agencies jointly administer the HUD-VA Supportive Housing (HUD-VASH) Program, which combines permanent HUD rental assistance with case management and clinical services provided by the VA. HUD-VASH is complemented by a continuum of VA programs that use modern tools and technology to identify the most vulnerable Veterans and rapidly connect them to the appropriate interventions to become and remain stably housed. This year to date, more than 11,000 veterans, many experiencing chronic forms of homelessness, found permanent housing and critically needed support services through the HUD-VASH program.

To date, 78 local communities and three states have declared an effective end to veteran homelessness, creating systems to ensure that a veteran’s homelessness is rare, brief, and a one-time encounter.

HUD and VA have a wide range of programs that prevent and end homelessness among veterans, including health care, housing solutions, job training and education. More information about VA’s homeless programs is available. Veterans who are homeless or at imminent risk of becoming homeless should contact their local VA Medical Center and ask to speak to a homeless coordinator or call the National Call Center for Homeless Veterans at 1-877-4AID-VET.