A Deep Dive into the Proposed AFFH Rule Rewrite

On January 19, the Biden administration released their long-anticipated Notice of Proposed Rulemaking to rewrite and strengthen regulations implementing the Fair Housing Act’s mandate to “affirmatively further fair housing,” which require HUD and recipients of HUD funding to take additional steps towards ensuring fair housing beyond simply pledging not to discriminate. The rule—the most recent in a series of regulatory revisions and amendments over the years—aims to respond to previous feedback and criticism about AFFH implementation while giving the administration a tool to more forcefully advance its directive to redress discriminatory housing practices and policies.

To that end, the proposed rule makes the following key changes:

1. Streamlines grantees’ fair housing analysis obligations
2. Prioritizes the setting of realistic and meaningful fair housing goals
3. Provides flexibility for participants to design and execute their Equity Plans
4. Increases public transparency into HUD’s review process
5. Strengthens mechanisms for accountability, evaluation, and enforcement

Background

The proposed AFFH Rule is similar to HUD’s 2015 AFFH Rule, which was promulgated under the Obama administration and repealed in 2020 by the Trump administration, citing its onerous burden on localities and federal overreach into local housing policy. The proposed AFFH rule’s core planning process requires program participants to identify barriers to fair housing in their communities based on data analysis and community engagement. It also set goals to remedy them in the form of Equity Plans (a modified version of the Assessments of Fair Housing defined by the 2015 Rule), submit the plans to HUD for review, and implement the Equity Plans.

In response to communities who found the previous AFFH rule difficult to implement due to concerns around administrative capacity, demographic relevance, and the scope of data analysis, HUD has streamlined AFFH program requirements to ensure that all work required of grantees is directly tied to a meaningful fair housing outcome.

Summary of Key Changes

1. Streamlines grantees’ fair housing analysis obligations.

HUD has proposed replacing the lengthy planning assessment with a shorter, less data analysis-driven questionnaire.

The 2015 Rule included an Assessment Tool that provided HUD grantees with a large amount of data and a list of contributing factors and required them to respond to approximately 100 questions using data-driven analysis, which was difficult for HUD grantees with less relevant expertise and capacity to complete. The proposed rule eliminates the Assessment Tool and the contributing factors analysis, instead requiring participants to respond to questions in a few broad areas (seven for “consolidated plan” recipients and five for public housing agencies) and allowing them to determine their preferred format for the responses, with data analysis no longer required for each question.

The proposed rule also scales the expected complexity of answers based on the size of a HUD grantee. For example, smaller public housing agencies (PHAs) who are more likely to operate in rural areas or other localities with fewer community assets, more limited public infrastructure, more homogenous demographic patterns, and smaller populations may provide briefer answers so long as their responses are still grounded in the HUD-provided data and community engagement.

2. Prioritizes the setting of realistic and meaningful fair housing goals.

The latest interpretation of AFFH places more weight on long-term outcomes instead of asking grantees to spend limited resources on technical analysis.

The required analysis under the proposed rule condenses and streamlines what was required under the 2015 Rule to ensure that all work completed by HUD grantees for the Equity Plan analysis is directly tied to a fair housing goal. To that end, HUD no longer prescribes the content or length for the questionnaire’s answers and removed elements of analysis that posed a greater burden to program participants to complete than it did a benefit. Specifically, the analyses no longer require responses to the grant program questionnaire in the form of data analysis with specific percentages and calculation citations; a well-thought-out connection between their data analysis, their identification of fair housing issues, and their definition of fair housing goals will suffice.

To ensure that HUD grantees establish fair housing goals that are feasible and meaningful, grantees will also be required to incorporate those goals into other plans involving federal grants, namely the consolidated plan, annual action plan, or PHA plan. Directly linking the Equity Plan and other planning documents will enable HUD grantees to make more informed decisions about “how to overcome circumstances that cause, increase, contribute to, maintain, or perpetuate fair housing issues.”

3. Provides flexibility for participants to design and execute their Equity Plans.

Grantees would be given the opportunity to receive more HUD feedback to craft Equity Plans.

HUD also proposed to strengthen its engagement in fair housing planning. The 2015 Rule set forth a relatively rigid structure wherein HUD had 60 days from a fair housing plan’s submission to accept it or not; if a program participant could not revise the plan in time, their federal funding was automatically cut off. To allow for more flexibility, HUD will now permit 100 days to review an Equity Plan and grantees will have 180 days to revise and submit a final plan. Only by the end of the 180day deadline would HUD funding be terminated if the program participant has not taken steps to create a plan. The proposed rule also commits HUD to providing technical analysis and summaries synthesizing important takeaways from AFFH datasets to assist grantees in completing their Equity Plan analysis.

4. Increases public transparency into HUD’s review process.

HUD will make public its AFFH data, submitted Equity Plans, and the status of plan reviews.

The proposed rule strengthens the community engagement requirement that existed under the 2015 Rule, which stakeholders reported was effective in helping identify fair housing issues. New requirements would ensure that grantees consult a broad range of community members by holding convenings in diverse locations, adding accommodations to meetings so that they are accessible for all, and partnering with a diverse cross-section of local community-based organizations and stakeholders to reach protected class groups and underserved communities.

To aid and encourage public participation, HUD will also make public the data it provides to grantees to design their Equity Plans as well as the status of whether a plan has been accepted by HUD or not. This is intended to provide grantees with the opportunity to learn how others, with similar demographics and resources, conduct their analyses and create a more supportive, informed fair housing planning process.

5. Strengthens mechanisms for accountability, evaluation, and enforcement.

HUD and members of the public will be able to monitor grantees’ AFFH compliance through more frequent (but shorter) progress reports.

HUD has made alterations to the progress evaluation process that will allow for more regular communication between grantees and HUD as well as increased transparency with the public. The proposed rule increases the frequency of required progress evaluations from once every five years under the 2015 AFFH Rule to annually to provide more opportunities to adjust, revise, or reposition fair housing goals (especially if they have been met and new ones are necessary, or if circumstances have changed since a plan’s initial submission). These progress reports—which need not surpass a one- or two-page summary—will be posted online to HUD’s public AFFH webpage to enable and encourage members of the public to participate in enforcing AFFH obligations.

To enhance the proposed rule’s enforcement power, both HUD and the public will be given ways to ensure compliance with Equity Plan obligations. The new proposed AFFH rule will arm HUD with the ability to open compliance reviews and the public with the ability to file complaints into grantees who fail to comply with the rule, fail to meet an Equity Plan commitment, or commit an action that is materially inconsistent with the obligation to affirmatively further fair housing. These compliance reviews and complaint submission processes are consistent with the oversight and enforcement mechanisms that exist for other federal civil rights statutes implemented by HUD. However, instead of punishing the communities and individuals served by PHAs and HUD grantees by withholding funding, HUD plans to maintain a range of enforcement options that can ensure compliance.

HUD is currently seeking public comment on the rule, which will be open for 60 days once it is published in the Federal Register.