50 years after the U.S. Department of Housing and Urban Development (HUD) began carrying out the Fair Housing Act, it’s quietly moving away from its fair housing mission.
HUD Secretary Ben Carson, who took over HUD in March 2017, is considering removing the “fair housing for all” and “free from discrimination” portions from HUD’s mission statement, replacing it with the goal of “self-sufficiency” for the populations it serves. This proposed change — which is not final at the time of this writing — has most housing organizations shaking their heads, according to HousingWire.
What is fair housing?
HUD is responsible for enforcing the Fair Housing Act, which directs HUD to administer all of its programs in a way that complies with fair housing laws.
Some of HUD’s hallmark programs include:
- the Federal Housing Administration (FHA);
- public housing;
- Government National Mortgage Association (Ginnie Mae); and
- various Community Development and Planning Block Grants.
Fair housing prohibits discrimination in real estate transactions, zoning and land use laws. [42 United States Code §3601 et seq.]
Discrimination in a real estate transaction occurs when someone refuses to sell or rent — or negotiate to sell or rent — a residence due to an individual’s:
- race;
- color
- religion;
- sex;
- familial status (presence of children);
- disability status; or
- national origin. [42 USC §3604(a)]
Further, it is unlawful to advertise real estate in such a way that indicates discrimination against the protected groups mentioned above. [42 USC §3604(c)]
Editor’s note — To the list above, California’s Unruh Civil Rights Act also provides statewide protection against discrimination due to an individual’s age, ancestry, disability, genetic information, marital status, medical condition, gender identity, expression or sexual orientation. [Calif. Civil Code §51(e)]
What’s behind the shift
Following the backlash from the housing community, Carson asserts HUD will continue its commitment to fair housing, despite proposing language to remove “fair housing” from its mission statement. But then why remove fair housing in the first place?
HUD’s about-face is predictable considering the administration’s hands-off, anti-regulatory agenda. In fact, their change in mission is a mere formality, as HUD has already taken several steps back from HUD’s fair housing goals present under previous administrations.
During Carson’s past 14 months at HUD, it has:
- attempted to delay the expansion of Section 8 housing coverage;
- withdrawn a survey on homeless lesbian, gay, bisexual, transgender and queer (LGBTQ) individuals;
- removed publications on preventing violence against transgender people in homeless shelters; and
- halted many pre-Carson, high-priority investigations into housing discrimination, as detailed in a recent Vox article.
Some of their changes have met legal challenges.
The State of New York and the National Fair Housing Alliance recently sued HUD over their indefinite delay of an Obama-era fair housing assessment tool for local governments. HUD’s reasoning was it didn’t have the funds available to meet the technical aspects of the program, according to HousingWire.
But, according to supporters of the withdrawn tool, removing the tool allows local governments to continue to receive billions of dollars in federal funding without substantial checks in place to monitor that they are following fair housing rules.
Most recently, Carson has proposed to increase rent on public housing recipients, increasing their rent-to-income ratio from 30% to 35%. Democratic lawmakers — including Representative Waters, who represents California’s 43rd Congressional district, encompassing part of Los Angeles County — oppose the increase, claiming it has the potential to cause homelessness for 1.7 million current public housing residents.
What’s at stake
HUD’s mission is immensely important in California, where only 67 low-income units exist for every 100 low-income households, according to the Low Income Housing Coalition.
The good news is California will remain somewhat isolated from federal changes at HUD, since its progressive politics generally result in more assistance for low-income residents.
For instance, while housing protections for immigrants and LGBTQ individuals are unlikely to be put in place during Carson’s tenure at HUD, they are firmly in place here in California.
But loose reins on other HUD programs are still cause for concern. For example, FHA-insured mortgages make up a huge share of the loans used by first-time homebuyers. As we move into the next housing boom — expected around 2020-2021 — first-time homebuyers will become more active and will rely on fair access to these loans.
On the other end of the age spectrum, retiring Baby Boomers are increasingly selling their oversized suburban homes in favor of more conveniently-located and accessible homes. This means access to handicap-accessible housing, which falls under HUD’s fair housing mission, will become more important in the coming years.
Real estate professionals’ duty
Fortunately, even if HUD abandons certain segments of the population, homebuyers and renters of all types have real estate agents in their corner.
Real estate professionals need to inform their clients of their fair housing rights and keep an eye out for abuses by real estate agents, lenders, landlords and other real estate players.
What does a real estate agent need to watch out for?
If the agent is ever in doubt, they can remember this: different treatment is discriminatory treatment.
Different treatment is often the result of implicit discrimination. A decades’ long HUD study demonstrated real estate agents:
- show fewer properties; and
- give less information to minority clients.
This may not be explicit discrimination, but it negatively impacts the choices minority homebuyers make.
In addition to agent actions, real estate agents can watch lenders, who may hinder homebuyer access to credit. Predatory lending of minority applicants during the Millennium Boom resulted in the disproportionate loss of wealth in non-White populations.
To ensure brokers, agents, lenders and landlords don’t violate non-discrimination laws — even unintentionally — professionals need to:
- ask the same questions of all applicants — for example, landlords may ask about matters that will actually impact tenancy like pets or water beds, but never ask about a protected status like race, religion, sexual orientation, pregnancy, etc.; and
- keep records of client interactions — while a client is unlikely to pursue legal charges for discrimination, it’s best practice for an agent to keep track of all client interactions and property tours for several reasons, including identifying and preventing any unintentional biases.
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