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(last updated 4.18.17)

Update on Affirmative Furthering Fair Housing: Practical and Political Considerations

[A commentary by Andrew Daniels, President, MAPPLAN Partners, Inc.]

On December 8, 2016, the NERC sponsored a training session that gave an overview of the new Affirmative Furthering Fair Housing (AFFH) requirements with a focus on deadlines for submission, logistics of the required process, and how certain fair housing concepts and tools could frame individual assessment submissions.

At that time, which was between the election and the actual change in leadership in the White House, one school of thought was that new administration would reverse the AFFH requirements.  This thinking was based on commentary from entities like Breitbart News and others in part based on the now well publicized history of Donald Trump and the fact that the Trump family real estate business was the subject of the first major legal enforcement efforts under Title VI of the Civil Right Act of 1968.

As of the publication date of this newsletter, the Trump Administration has taken no formal steps nor made official public comment on the status of the AFFH regulations. 

Any modifications or outright rescission of the regulations requires a formal rule making process.  This is the same process that was required to promulgate the current regulation.   Unlike regulations promulgated in the last days of the Obama Administration, for which there is legal precedent giving a new President authority to rescind outside of a rulemaking process, the AFFH regulations substantially predate that legal window.  An example of what a new President could do is the recent new law permitting individual states to not provide federal Medicare funding for family planning and education to organizations that also perform abortions.  AFFH cannot be rescinded by a mere stroke of a pen.  What has occurred is the filing of two congressional legislative Bills, one in the House and one in the Senate.  

H.R. 482 was introduced by Rep. Paul Gosar (R-AZ), and Senator Michael Lee (R-UT) introduced S. 103.  Both Bills use the term “nullify” with the intent of not removing the regulations but rather essentially freezing the requirements in their tracks.

An additional requirement of both Bills is that within 12 months of the passage of a final version of a Public Law, a Final Report based on broad consultation with state officials, local government officials, and officials of public housing agencies selected from a broad cross section of regional, economic and geographic perspectives be issued.  Given my first-hand experience with Congressionally mandated reports, this is an impossible schedule on a practical level.

There is a requirement that all recommendations must be by consensus with issues worthy of discussion but without consensus identified as such.  However of greater import is that all recommendations must be consistent with applicable Supreme Court Rulings.  As there are ample existing SCOTUS decision in support of both the 1964 and 1968 Civil Rights Acts and on the specific issue of affirmatively furthering fair housing, the Final Report may only result in a roughly 12 to 18 month delay in performance of an AFFH Assessment. 

This does not mean that the existing regulations would remain as written.  This would be highly unlikely as, in the opinion of this author; there are aspects of overreach in the existing regulations and unnecessary exposure that could negatively impact local communities for choices freely made by specific households, who are also members of protected classes.  In turn, there are without doubt existing economic and sociological realities that do create disparate impact and do result in local “economic and social impediments to access to better opportunities”.   Identification of impediments is important.  The creation of a context in which difficult conversations and hard to implement solutions become the subject of rancorous debate is not going to be a good process leading to good outcomes. 

But all my commentary is relevant ONLY if each legislative body passes a Bill and a Conference Committee reconciles them into a law that both bodies can pass.  Because of how each Bill is framed there is a major legislative “landmine” embedded within – the legal concept of “nullification”.

“Nullification” has become a growing legal concept and legislative tool that has been popularized by some entities such as the John Birch Society and for which a “primer” of the same title has been written by Thomas E. Woods, Jr.  It has been a tool used at the State level in efforts to override federal regulations, not yet federal statutes, pertaining to issues like gun control. 

To say the least, the tool is controversial.  The kernel of the legal theory is based on the notion that a regulation or other less than statutory action that is contrary to the Constitution can be “nullified” by sovereign state governments.  In this most recent and common use, it is an extra-judicial action by a state legislature in that it claims a right by a state level legislature to take matters into its own hands, without reliance on the judiciary when it has reason to believe that federal regulations or the like exceed a federal Constitutional grounding.  It can be seen as reaction from very conservative circles to the perceived administrative overreach of the Obama Administration.

It is a position that ONLY those powers and limitations that are explicit in the U.S. Constitution are and should be relevant.  This is a “strict constructionist” position that was the bailiwick of Justice Scalia and is asserted to be the same philosophy of newly appointed Justice Gorsuch.

It has been up to this point in time, a legislative tool at the state level concerning federal regulations and administrative actions.   H.R. 482 and S. 103 take the use of this tool to a new level and while only being applied to the AFFH in this specific context may open the door to “nullification” as a standard legislative tool.  It could in its most extreme application become the “nullification” of the Civil Rights Act of 1968.  Opening the door to dilution or gutting of the Civil Rights Act of 1968 or any existing law considered a Civil Rights law may be a bridge too far for most members of Congress regardless of party.

The federal judiciary will eventually look at “nullification”, and within several years, there will likely be Supreme Court case(s).  How the Supreme Court will look at the use of “nullification” may be surprising in that and despite SCOTUS’ conservative tilt, an affirmation of “nullification” makes the legislative branch at either the State or Federal level a determiner of constitutionality and usurps the role of the federal judicial branch in how it has been used[i]

This discussion of “nullification” is to identify that its application has little precedent and is controversial.  But, this is only one impediment to eventual passage. 

At a more practical level, problems with the two Bills are created by the ‘sausage making” aspects of the legislative process.  Neither of the primary sponsors are members of the relevant committees.  This also includes all twenty-three (23) co-sponsors of the House Bill as well as the single sponsor of the Senate Bill.  No committee has scheduled hearings nor has there been any public discussion of intent to have hearings on these specific Bills. 

The committee of cognizance in the Senate is the Committee on Banking, Housing & Urban Affairs, which has a daunting agenda on issues of higher priority to the Administration.  The other committee is the House Committee on Financial Services.  It is likely that issues around Dodd-Frank and other banking and financial regulatory matters will take precedence at every point over these Bills on AFFH, at least through the 2018 election.

In summary, no steps have been taken nor seem on the horizon to use the regulatory rulemaking tools to undo AFFH.  There is a congressional legislative process in play but only at the Bill filing stage, which is merely step one in a long sequence.  The framing of the legislation using the “nullification” legal theory brings a tool used at the State level that would appear to usurp the role of the federal judiciary despite a Report that is required to consider and comply with existing Supreme Court decisions.  There is already a mechanism for this in the form of individuals and entities with standing initiating lawsuits in Federal District Court – a well-established and constitutionally intended mechanism when question of constitutionally about a law, Executive Order or regulation are brought forward.

In terms of the basic question about the status of AFFH requirements, the passage of both Bills is questionable both in terms of legislative logistics and the interest beyond the current sponsors.  In particular, the Senate is considered to have minimal interest by the majority and a democratic filibuster in the Senate would be a likely outcome.  

I am hesitant to go so far as to say the legislative route is dead end for those who want AFFH requirements quashed.  At least one other option remains, which would be to have appropriations language inserted into the T-HUD Appropriations Bill to deny the use of federal funds to pay for any activities by HUD required to implement and administer the regulations. 

The practical consequences of that would be that the requirement for assessment and submissions could remain, deadlines which are coming up fast given need to submit 270 days prior to new Consolidated Plan and new baseline Agency Plan cycles.  HUD would have to accept Assessment when submitted as they would have no resource for review, but without the regulations rescinded or legally placed on hold the obligation to prepare an assessment and submit do not go away.  If HUD were to make submission voluntary, the lack of compliance with the requirements of the 1968 Civil Rights Act to affirmatively further fair housing may provide local advocates with the inroad to enforce compliance through the courts.

My bottom line conclusion is that compliance deadline will arrive before efforts to put the implementation of AFFH on hold are successful.  The potential for chaos is great but also not a problem for the current Administration, which seems to consider all chaos creative.

Copies of the congressional Bills are posted on the NERC website [inset web address]

This commentary is merely the opinion of its author as is not to be mistaken in any manner as the opinion of NERC NAHRO or any NAHRO Chapter.

[i]  An example of the use of “nullification” is the Kansas law signed April 16, 2013 by Governor Brownback nullifying the need to comply with federal gun control.  While a blanket legal challenge by the Brady Center to Prevent Gun Violence was dismissed in 2015 because a federal judge determined that the Brady Center did not have standing as an aggrieved party, the Center has successfully sued individual gun dealers since then with multi-million dollar settlements.  In short, gun dealers in Kansas commitment a felony when they deny a gun sale based on federal standard but risk huge liability claims when a gun they sell is used in a homicide by someone they know to be a risk to others under a legal a legal theory known as negligent entrustment.  Another example of negligent entrustment is lending your car to an intoxicated person who then causes harm or death.

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