On July 23, 2020, HUD released its "Preserving Community and Neighborhood Choice" final rule (the "Final Rule"). The Final Rule is pending publication in the Federal Register, so the effective date of the Final Rule is unclear. However, what is clear is that HUD is attempting to eliminate decades of fair housing progress through the Final Rule.
Under the Final Rule, HUD:
- Redefines and severely narrows the obligation to Affirmatively Furthering Fair Housing as taking “any action rationally related to promoting any attribute or attributes of fair housing,” which in the AFFH context is newly defined in the Final Rule as “housing that, among other attributes, is affordable, safe, decent, free of unlawful discrimination, and accessible as required under civil rights laws”;
- Eliminates the Assessment of Fair Housing (“AFH”) process;
- Does not reinstate the previous Analysis of Impediments (“AI”) process, which the now eliminated AFH process previously replaced; and
- Provides that a grantee's AFFH certification "will be deemed sufficient provided they took any action during the relevant period rationally related to promoting fair housing."
Further, the Final Rule is alarming because HUD did not engage in notice-and-comment rulemaking and believes it has the authority to do so. The Final Rule is substantively different than the proposed AFFH rule HUD released on January 14, 2020. By issuing this arguably completely new rule in final form, HUD is circumventing its notice-and-comment rulemaking requirements. To justify this circumvention, HUD argues in the Final Rule that the Secretary of HUD has the authority to waive the requirement to engage in notice-and-comment rulemaking in any "matter relating to … public property, loans, grants, benefits, or contracts." It is HUD's position that the AFFH regulations apply to grantees, and as such the Final Rule is exempt from notice-and-comment rulemaking.
Even given some other examples in recent years of HUD not adhering to notice-and-comment rulemaking, HUD’s position that the Secretary of HUD can waive all notice-and-comment rulemaking requirements related to loans, grants, benefits, and contracts sets a dangerous precedent since all HUD housing programs are structured around loans, grants, benefits, and contracts.
We urge members to review the Final Rule in detail. CLPHA will provide more in depth analysis shortly.