DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Statement of Regulatory Priorities

The Regulatory Plan for the Department of Housing and Urban Development (HUD) for Fiscal Year (FY) 2013 highlights the most significant regulatory initiatives that HUD seeks to complete during the upcoming fiscal year. As the federal agency that serves as the nation's housing agency, committed to addressing the housing needs of Americans, promoting economic and community development, and enforcing the nation's fair housing laws, HUD plays a significant role in the lives of families and communities throughout America. Through its programs, HUD works to strengthen the housing market and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

It is HUD's mission to promote non-discrimination and ensure fair and equal housing opportunities for all. In its Annual Performance Plan for Fiscal Years 2012-2013, HUD committed to creating places throughout the nation that effectively connect people to jobs, transportation, quality public schools, and other amenities-"geographies of opportunity." In this regard, HUD's Regulatory Plan for FY2013 focuses on strengthening, through regulation, a statutory requirement that will help HUD achieve this goal - affirmatively furthering fair housing.

Priority: Providing Communities of Opportunity for All

America's fundamental ideal that hard work and determination will open the doors to opportunity has been unevenly realized because access to opportunity has been affected by factors that are not tied to the choices or actions of an individual or family. Despite genuine progress and a landscape of communities transformed in the more than 40 years since the Fair Housing Act was enacted, the ZIP code children grow up in too often remains a strong predictor of their life course. From its inception, the Fair Housing Act (and subsequent laws reaffirming its principles) not only outlawed discrimination but also set out steps that needed to be taken proactively to overcome the legacy of segregation. The ongoing promise of equal opportunity remains as critical now as it ever has been, especially as diversity increasingly becomes a part of the lives of all Americans. HUD is committed to helping build a stronger and more secure economy that works for the middle class and those aspiring to join the middle class, through access, opportunity and fairness, and HUD can do this by strengthening the statutory mandate to affirmatively further fair housing.

HUD proposes to bring the obligation to affirmatively further fair housing into the 21st century by emphasizing access and opportunity in addition to helping eliminate discrimination and segregation. Even further, HUD's proposal embraces new tools that are now available and lessons learned from extensive local experience to help guide communities in fulfilling the original promise of the Fair Housing Act.

Regulatory Action: Affirmatively Furthering Fair Housing - A New Approach

To better fulfill the statutory obligation to affirmatively further fair housing, HUD proposes to replace the existing requirement to undertake an analysis of impediments with a fair housing assessment and planning process that will aid HUD program participants in improving access to opportunity and advancing the ability for all families to make true housing choices. To facilitate this new approach, HUD will provide states, local governments, insular areas, and public housing agencies (PHAs), as well as the communities they serve with data on patterns of integration and segregation; racially and ethnically concentrated areas of poverty; access to neighborhood opportunity through categories such as education, employment, low-poverty, transportation, and environmental health, among others; disproportionate housing needs based on the classes protected under the Fair Housing Act; data on individuals with disabilities and families with children; and discrimination. From these data, program participants will evaluate their present environment to assess fair housing issues, identify the primary determinants that account for those issues, and set forth fair housing priorities and goals. The benefit of this approach is that these priorities and goals will then better inform program participant's strategies and actions by improving the integration of the assessment of fair housing through enhanced coordination with current planning exercises. This proposed rule further commits HUD to greater engagement and better guidance for program participants in fulfilling their obligation to affirmatively further fair housing.

Aggregate Costs and Benefits

Executive Order 12866, as amended, requires the agency to provide its best estimate of the combined aggregate costs and benefits of all regulations included in the agency's Regulatory Plan that will be made effective in calendar year 2011. HUD expects that the neither the total economic costs nor the total efficiency gains will exceed $100 million.

Priority Regulations in HUD's FY 2013 Regulatory Plan

HUD -- Office of the Secretary

PROPOSED RULE STAGE

Communities of Opportunity for All through Affirmatively Furthering Fair Housing

Priority: Significant

Legal Authority: 42 U.S.C. 3600-3620; 42 USC 3535(d)

CFR Citation: 24 CFR 5

Legal Deadline: None

Abstract: Through this rule, HUD proposes to provide HUD program participants with more effective means to affirmatively further the purposes and policies of the Fair Housing Act, which is Title VIII of the Civil Rights Act of 1968. The Fair Housing Act not only prohibits discrimination but, in conjunction with other statutes, directs HUD's program participants to take steps proactively to overcome historic patterns of segregation, promote fair housing choice, and foster inclusive communities of opportunity for all. To promote more effective fair housing planning and assist every program participant meet requirements related to affirmatively furthering fair housing, HUD proposes in this rule to address directly concerns about the current fair housing planning process by making a number of key changes. These include: (1) a new fair housing assessment and planning tool, referred to as an assessment of fair housing, which will replace the current analysis of impediments, (2) the provision of nationally uniform data that will be the predicate for and help frame program participants' assessment activities, (3) meaningful and focused direction regarding the purpose of the assessment of fair housing and the standards by which it will be evaluated, (4) a more direct link between the assessment of fair housing and subsequent program participant planning products-the consolidated plan and the Public Housing Agency (PHA) Plan-that ties fair housing planning into the priority setting, commitment of resources, and specification of activities to be undertaken, and (5) a new HUD review procedure based on clear standards that facilitates the provision of technical assistance and reinforces the value and importance of fair housing planning activities.

Statement of Need: As recognized by HUD, program participants, civil rights advocates, the U.S. Government Accountability Office (GAO), and others, the fair housing elements of current housing and community development planning are not as effective as they could be, do not incorporate leading innovations in sound planning practice, and do not sufficiently promote the effective use of limited public resources to affirmatively further fair housing. The approach proposed by the rule addresses these issues and strengthens affirmatively furthering fair housing implementation. It does so by providing data to program participants related to fair housing planning, clarifying the goals of the affirmatively furthering fair housing process, and instituting a more effective mechanism for HUD's review and oversight of fair housing planning. The proposed rule does not mandate specific outcomes for the planning process. Instead, recognizing the importance of local decision-making, the rule proposes to establish basic parameters and help guide public sector housing and community development planning and investment decisions to fulfill their obligation to affirmatively further fair housing.

Summary of Legal Basis: The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, 42 U.S.C. 3601-3619), enacted into law on April 11, 1968, declares that it is "the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States." (See 42 U.S.C. 3601.) Accordingly, the Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions because of race, color, religion, sex, familial status, national origin, or handicap. (See 42 U.S.C. 3601 et seq. Also note that "handicap" is the original term used in the statute.) Section 808(e)(5) of the Fair Housing Act (42 U.S.C. 3608(e)(5)) requires that HUD programs and activities be administered in a manner affirmatively to further the policies of the Fair Housing Act. The Act leaves it to the Secretary to define the precise scope of the affirmatively furthering fair housing obligation for HUD's program participants.

Alternatives: HUD has approached the obligation to affirmatively further fair housing in various ways, and this proposed rule is intended in particular to improve fair housing planning by more directly linking it to the housing and community development planning processes currently undertaken by program participants as a condition of their receipt of HUD funds. At the jurisdictional planning level, HUD requires program participants receiving Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), Emergency Solutions Grants (ESG), and Housing Opportunities for Persons With AIDS (HOPWA) formula funding to undertake an analysis to identify impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments, and keep records on such efforts. Likewise, PHAs must commit, as part of their planning process for PHA Plans and Capital Fund Plans, to examine their programs or proposed programs, identify any impediments to fair housing choice within those programs, address those impediments in a reasonable fashion in view of the resources available, work with jurisdictions to implement any of the jurisdiction's initiatives to affirmatively further fair housing that require PHA involvement, maintain records reflecting those analyses and actions, and operate programs in a manner that is consistent with the applicable jurisdiction's consolidated plan. Over the past several years, HUD has reviewed the efficacy of these mechanisms to fulfill the affirmatively furthering fair housing mandate and has concluded that the analysis of impediment process can be a more meaningful a tool to integrate fair housing into the program participants' existing planning efforts.

Anticipated Cost and Benefits: HUD does not expect a large aggregate change in compliance costs for program participants as a result of the rule. As a result of increased emphasis on affirmatively furthering fair housing within the planning process, there may be increased compliance costs for some program participants, while for others the improved process and goal-setting, combined with HUD's provision of the foundational data, is likely to decrease compliance costs. Program participants are currently required to engage in outreach and collect data in order to meet the obligation to affirmatively further fair housing. There are some elements of the proposed rule that would increase compliance costs, but others would decrease such costs. HUD estimates net annual compliance costs in the range of $3 to $9 million.

Further, HUD believes the rule has the potential for substantial benefit for program participants and the communities they serve. The rule would improve the fair housing planning process by providing greater clarity to the steps that program participants undertake to meaningfully affirmatively further fair housing, and at the same time provide better resources for program participants to use in taking such steps. Through this rule, HUD commits to provide states, local governments, PHAs, the communities they serve, and the general public with local and regional data on patterns of integration, racially and ethnically concentrated areas of poverty, access to opportunity in select domains, and disproportionate housing needs based on protected class. From these data, program participants should be better able to evaluate their present environment to assess fair housing issues, identify the primary determinants that account for those issues, and set forth fair housing priorities and goals and document these activities.

Risks: This rule poses no risk to public health, safety, or the environment.

Timetable:

Regulatory Flexibility Analysis Required: No

Small Entities Affected: No

Government Levels Affected: No.

Agency Contact:

Patrick Pontius

Office of Policy Development and Research

U.S. Department of Housing and Urban Development

Phone: 202-402-3273

RIN: 2501-AD33