On July 16, I published this article in Housing Wire calling on HUD to back away from proposed changes to the disparate impact rule. I was one voice of many from industry and housing who called on HUD to not erode protections for families facing housing discrimination and the requirements for efforts to affirmatively further fair housing.
Unfortunately, HUD did not listen to large lenders, trade groups or housing advocates. In this time of BlackLivesMatter, the stark reminder that ignorance remains strong about this nation’s history of discrimination in housing became obvious. Secretary Carson and the Trump Administration not only reversed the important policy established just years earlier under Secretary Donovan and President Obama, but in the midst of their action President Trump triumphantly declared that the suburbs would be “safe” now.
In a series of tweets, President Trump declared, “I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood.” He added: “Your housing prices will go up based on the market, and crime will go down. I have rescinded the Obama-Biden AFFH Rule. Enjoy!”
This one tweet was met with shock by many. A release from the National Association of Realtors stated, “NAR is disappointed that HUD is retreating on its decades-long policy requiring that communities receiving taxpayer money address discrimination and segregation. We previously communicated that disapproval to the industry and to the public , and our stance remains unchanged. Our commitment to fair housing and the property rights of all is unwavering. Discrimination and bias have absolutely no place in housing.”
HUD has a long history of racial discrimination in housing, promoting or supporting “white only” neighborhoods in the not-too-distant past. HUD was at the center of establishing what is now known as “redlining” as official policy. In fact, FHA publications implied that different races should not share neighborhoods, and repeatedly listed neighborhood characteristics like “inharmonious racial or nationality groups.”
Richard Rothstein’s book, The Color Of Law, exposed the explicit role the government played in creating white-only suburbs for middle class Americans while forcing minorities into urban buildings. “The Federal Housing Administration, which was established in 1934, furthered the segregation efforts by refusing to insure mortgages in and near African-American neighborhoods — a policy known as ‘redlining.’ At the same time, the FHA was subsidizing builders who were mass-producing entire subdivisions for whites — with the requirement that none of the homes be sold to African-Americans.”
As to the new rule just finalized, NYU’s Furman Center points out how the new rule puts the entire burden of proof of discrimination on the consumer. “Under the new rule, plaintiffs claiming disparate impact will be required to satisfy an onerous, and at times impossible to meet, pleading standard at the outset of litigation.”
It adds this critical point: “The proposed rule exempts ‘single events’ from scrutiny because single events, it alleges, are materially different from broader policies and practices. It removes ‘perpetuation of segregation’ from the list of discriminatory effects prohibited under the FHA. The rule also creates loopholes for landlords and lenders to defend discriminatory housing policies and algorithms, either as belonging to a third party and therefore out of scope, or as necessary to achieve ‘legitimate objectives.’”
So… as long as you discriminate only once and not all the time I guess you’re off the hook.
The rule is an outrageous attack on fair lending and obligations to affirm support for people with lower incomes — those simply searching for ways to improve their family’s opportunities.
But the dagger in the back of our nation’s housing history was just turned an additional notch as President Trump doubled down, almost taking a page from the clear discriminatory language used years ago but never truly eliminated from communities.
Within recent years there have been communities in wealthy areas like Connecticut and some wards in New Orleans and elsewhere that have filed suit, or been sued, to fight for their ability to ban access to families simply wanting safe and affordable housing with access to quality schools and support systems to raise their children.
The outrage of these tweets from a sitting U.S. president, “you will no longer be bothered or financially hurt by having low income housing built in your neighborhood,” are themes that sound like echoes from the past. They were wrong then and wrong now, and certainly should not be part of today’s dialogue where class distinctions based on race are so pronounced despite decades of effort to tear down the barriers created by our government and protected so fiercely by laws that saw white versus black as an acceptable paradigm.
The actions taken by HUD and subsequently celebrated in tweets set this nation back generations. It will be up to governors, mayors, housing policy advocates and more to reverse the tide while we await the chance to correct this huge mistake and the disregard of fairness by this rule change.