Biden's First Executive Action On Housing Begins Reshaping Of Fair Housing Rules

With the stroke of a pen less than a week after taking office, President Joe Biden began the process of undoing his predecessor's housing policy, setting the federal government on a course that acknowledges past racial injustices it perpetrated and promises robust action in the future.

The action isn't much more than a first step, according to housing organizations and activists, since the Trump administration's actions were themselves predicated on reversing the Obama-Biden administration's efforts of the 2010s. But it's a necessary first step to take on housing discrimination, they told Bisnow this week.

The Jan. 26 memorandum Biden signed instructs incoming Housing and Urban Development Secretary Marcia Fudge to examine key fair housing policies of the Trump administration and to take "necessary steps" regarding those policies — language widely understood to mean the restoration of Obama-era rules.

The Trump administration's actions, finalized last year, modified the Disparate Impact Rule and repealed the Affirmatively Furthering Fair Housing, or AFFH, rule, both of which were enacted by the Obama administration.

"[The memorandum] isn't a panacea for the four million instances of housing discrimination in the U.S. each year, but it's a good first step," National Urban League President Marc Morial said in an email. "We're confident that after Secretary Fudge conducts this assessment, she will take steps to remove the Trump administration’s rules that eviscerated fair housing principles." 

Though only a first step, Morial said he expects it to kick off more effective enforcement for fair housing complaints, new programs to educate housing and lending providers about their fair housing obligations, and programs to educate consumers about their fair housing rights, as well as HUD working more closely with jurisdictions that receive federal funding to identify impediments to fair housing.

"The memorandum also instructs the new HUD Secretary to make sure that all of HUD’s programs further fair housing," Morial said. "This is something civil rights groups have been calling for since passage of the Fair Housing Act in 1968." 

At the heart of the matter is how to enforce the Fair Housing Act, which officially ended the practice of redlining neighborhoods, itself a legacy of Depression-era federal policy, and put a stop to explicit loan refusals to members of minority groups, which the government also used to facilitate.

As the memorandum points out, however, access to quality rental housing and the creation of wealth through homeownership have remained persistently unequal in the United States, and many neighborhoods are as racially segregated now as they were in the middle of the 20th century. 

"The Federal Government must recognize and acknowledge its role in systematically declining to invest in communities of color and preventing residents of those communities from accessing the same services and resources as their white counterparts," the memorandum states.

"The effects of these policy decisions continue to be felt today, as racial inequality still permeates land-use patterns in most U.S. cities and virtually all aspects of housing markets."

As a Fair Housing Act enforcement mechanism, the AFFH rule required local governments to document the steps they take to eliminate discriminatory roadblocks in their markets, using a highly detailed, standardized reporting system.

Under the Disparate Impact Rule, also formalized by the Obama administration, a policy can be found discriminatory if it has a disproportionate “adverse impact” against any protected group, even if the policy appears on its face to apply to everyone equally.

The Trump administration argued that the rules were overly burdensome.

“After reviewing thousands of comments on the proposed changes to the Affirmatively Furthering Fair Housing (AFFH) regulation, we found it to be unworkable and ultimately a waste of time for localities to comply with, too often resulting in funds being steered away from communities that need them most,” then-Secretary Ben Carson said in a press release when the AFFH was scrapped.

Carson wasn't alone in his assessment of AFFH. In their comment ahead of the Trump administration's action on the rule, Peter Van Doren and Vanessa Brown Calder of the libertarian-leaning Cato Institute suggested that it was unnecessary.

"If policymakers are interested in determining the cause of racial segregation in cities, they don’t have to collect data and guess at it," Van Doren and Calder wrote. "A major cause of racial segregation is already known: zoning regulation. Zoning regulation segregates by race because race is frequently correlated with income. ... HUD would be better off requiring cities and states measure overall zoning burden and report the value."

Most housing organizations and advocacy groups didn't see it that way, with Trump-era changes proving vastly unpopular with groups like the National Fair Housing Alliance, the National Housing Law Project, the National Low Income Housing Coalition, the National Community Reinvestment Coalition, the NAACP Legal Defense and Educational Fund. The reversal is correspondingly popular.

"During the Trump administration, HUD contended the [AFFH] rule was ineffective, when in reality it hadn't been given enough time to be meaningfully implemented," said Alexandra Cawthorne Gaines, vice president of the Poverty to Prosperity Program at the Center for American Progress.

"With adequate federal guidance and support for state and local data collection, as well as enforcement guidelines, the rule can strengthen HUD’s ability to make sure state and local partners cannot discriminate," Gaines said. 

Agatha So, a senior economic policy analyst at UnidosUS, formerly the National Council of La Raza, characterized Biden's action as part symbolic, part substantive, adding that HUD isn't the only agency that needs to be part of more robust enforcement of the Fair Housing Act.

"HUD is just one of many players fighting discrimination and redressing the impacts of historical policies," So said. "Such agencies as the FHA and the Office of the Comptroller of the Currency also have their housing obligations.

"I think the memorandum is very limited, and the administration will have to go further to address the effects of housing discrimination. It's important that the White House ensures that other agencies are part of its realizing its policies to fully address housing discrimination."

The Federal Reserve is considering a rule to adjust and modernize the Community Reinvestment Act, which So said plays a key role in driving investment into long-neglected communities, including housing and economic development investment.

During the Trump administration, the National Multifamily Housing Council advocated for changes to AFFH that focused on expanding supply, eliminating regulatory burdens and addressing housing affordability. The organization has taken the position that the Biden administration should take these factors into consideration as well.

"Multifamily housing, in particular, is burdened in many cases by discriminatory land use and zoning laws that only served to exacerbate housing supply and affordability challenges," NMHC Vice President, Construction, Development and Land Use Policy Paula Cino said. "We think that that's at the core of President Biden's executive order on housing discrimination.

"Our priority is to ensure that federal policy prevents discrimination in housing while supporting housing providers' ability to develop, own and operate their property. We're optimistic about working with the new administration."

Carmen Hill, past president and current director of the MultiCultural Real Estate Alliance for Urban Change, a nonprofit organized to address housing discrimination issues in South LA, stressed that the action is only the very beginning of what the federal government needs to do.

"As mentioned in the [memorandum], racially discriminatory housing practices still exist in 2021," Hill said. "However, it's too general about the actions that will be taken by the federal government. We need a federal agency that will have some real power to enforce fair housing laws."