The Future of Fair Housing
- Table of Contents
- About the Commission
- Acknowledgements
- Executive Summary
- Introduction
- I. Housing Discrimination and Segregation Continue
- II. Fair Housing Enforcement at HUD is Failing
- III. Fair Housing Enforcement at the Justice Department is Weak
- IV. The Need for Strong Fair Housing Programs
- V. Fair Housing and the Foreclosure Crisis
- VI. Federal Housing Programs
- VII. Fair Housing Obligations of Federal Grantees
- VIII. Regionalism and Fair Housing Enforcement
- IX. The President's Fair Housing Council
- X. Fair Housing Education: A Missing Piece
- XI. The Necessity of Fair Housing Research
- XII. Conclusion
Appendices
- Appendix A: Emerging Fair Housing Issues
- Appendix B: International Disapproval of U.S. Fair Housing Policy
- Appendix C:
- Appendix D: Commission Witnesses and Staff
Fair Housing Enforcement at HUD is Failing
The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability (handicap) and familial status.[88] Generally, the government’s enforcement process begins when an individual files a discrimination complaint with either HUD’s Office of Fair Housing and Equal Opportunity (FHEO) or a state or local governmental fair housing enforcement agency (FHAP agency). Many of these complaints are referrals by private nonprofit fair housing organizations that conduct testing and investigation of housing discrimination allegations.
The administrative enforcement process is intended to provide an impartial investigation of claims filed with HUD and FHAP agencies. The Fair Housing Act requires that complaints be investigated within 100 days if feasible and that the parties be provided a written statement of reasons when an investigation is not concluded within 100 days. There is also a statutory obligation to engage in conciliation efforts to attempt to resolve complaints. At the close of the investigation, the investigating agency makes a determination as to whether or not there is reasonable cause to believe that discrimination has occurred. If a determination of reasonable cause is made, the government charges the respondent with violating the law and brings a complaint on behalf of the complainant in an administrative hearing before a HUD administrative law judge or a judicial proceeding.
Extensive testimony and evidence presented to the Commission incontrovertibly demonstrated severe and ongoing problems with HUD’s administrative enforcement of the Fair Housing Act. Indicators show that there are problems in many areas.
More than four million instances of housing discrimination occur annually in the United States and yet fewer than 30,000 complaints are filed every year. In 2007, the 10 HUD offices processed 2,440 complaints, the 105 FHAP agencies processed 7,700 inquiries, and the 81 private fair housing agencies processed 18,000 complaints. Literally millions of acts of rental, sales, lending, and insurance discrimination, racial and sexual harassment discrimination, and zoning and land use discrimination go virtually unchecked. [89]
One key enforcement indicator is the number of cases in which HUD issues a charge of discrimination after an investigation. A charge is a determination that there is reasonable cause to believe that discrimination has occurred. In FY 1995, for example, 125 cases were charged. The number has spiraled downward in recent years, with charges issued in only 69 cases in 2002 and 31 cases in 2007.[90]
| Fiscal Year | Number of Charges Issued |
|---|---|
| 2001 | 88 |
| 2002 | 69 |
| 2003 | 23 |
| 2004 | 43 |
| 2004 | 47 |
| 2006 | 34 |
| 2007 | 31 |
The opportunity for a quick administrative hearing as one of the options for fair housing enforcement was considered a positive feature of the Fair Housing Amendments Act of 1988. HUD’s failure to properly investigate cases, make determinations, and issue charges, particularly in recent years, has made a farce of the system. Especially revealing is that there were no administrative law judge hearings in 2005 and 2006 and only two in 2007.[92] At present, there are no administrative law judges with fair housing knowledge and experience assigned at HUD.[93]
Setting Too High a Standard for a Cause Determination and Issuance of a Charge
One possible explanation for the low number of charges issued by HUD is that the reviewing attorneys set the bar too high. The administrative standard for permitting a Fair Housing Act claim to go forward to a hearing is a determination that there is "reasonable cause" to believe that the Fair Housing Act has been violated. [94] "Reasonable cause exists when one can conclude based on all relevant evidence [...] that a violation may have occurred." [95] The purpose of the reasonable cause determination is to screen out cases that lack evidence of discrimination. However, many HUD offices and FHAP agencies now apply a higher standard, one that exceeds even the "preponderance of evidence standard" required for a finding of liability. In short, they require too much proof before making a determination that a violation has occurred.[96]
Delayed Investigations
Congress intended the administrative process under the Fair Housing Act to be "economical and efficient,"[97] and to provide unrepresented victims of discrimination with a speedy and comprehensive remedy.[98] The FHA requires HUD to complete its investigation of fair housing complaints "within 100 days after the filing of the complaint...unless it is impracticable to do so."[99]
There have been repeated patterns of delays in completing investigations.[100] A report issued in 2001 by the National Council on Disability found that investigations were open much longer, on average, than 100 days. In FY 2000, for example, the average case was open 497 days from the date it was filed until the date it was closed.[101] A review of all of HUD’s cases in which a charge was issued between January 2004 and October 21, 2008, indicates that the average age of cases in which a determination of reasonable cause was made and a charge issued was 502 days. The shortest time period between the filing of a complaint and the issuance of a charge was 143 days, while the longest was 1254 days.[102]
Delays in the administrative processing of cases have been so severe that they have served as the basis for dismissal of cases by courts and administrative law judges.[103]
Missed Opportunities for Systemic Investigations
HUD has the authority to initiate its own investigations of discriminatory practices, providing a potent tool for large-scale investigations that can lead to sweeping change. Systemic investigations examine whole agencies or industries for widespread entrenched discriminatory practices, such as real estate steering, lending and insurance discrimination, and redlining, design and construction issues, zoning issues, and restrictive ordinances, in contrast to complaint-based investigations spurred by individual complaints of discrimination. Systemic investigations are the most effective and efficient way to bring about change and end behavior that perpetuates segregation and have the capability to reach the kinds of discrimination that are not identified by victims, or where the victims may be unaware of their rights or reluctant to file complaints. However, there is a consistent pattern of missed opportunities for systemic investigations in HUD enforcement.
HUD’s authority to initiate its own investigations holds great promise but has been underutilized.[104] Although HUD’s 2007 report to Congress indicates that FHEO filed 12 Secretary-initiated complaints and undertook four Secretary-initiated investigations,[105] HUD’s website lists only three Secretary-initiated complaints that have been resolved since 2002.[106] It appears that multiple complaints involving the same factual situation were counted multiple times in HUD’s report to Congress. Of the three complaints listed on HUD’s website, one is incorrectly listed as involving discrimination based on race/color rather than discrimination based on familial status. None of the complaints involved discrimination in lending, none were about subsidized housing, none challenged illegal activities causing segregation, and all involved individual circumstances rather than discrimination across neighborhoods or communities.
There have been a variety of problems in HUD’s handling of complaints that allege systemic discrimination. For example, the National Fair Housing Alliance states that it brought cases against four major insurance companies that were never fully investigated and languished for years.[107] It also filed eleven cases based on testing done as a follow up to HUD’s 2000 Housing Discrimination Study . Although the cases were filed almost three years ago, only one has been resolved.[108]
Independent Studies Confirm Deficiencies in Investigations
Recent independent studies conducted by the Government Accountability Office (GAO) and HUD’s Office of Inspector General found significant deficiencies in investigations by HUD and FHAP agencies—the kind of deficiencies that indicate a failure to follow the Fair Housing Act and HUD policy for investigations and which put otherwise strong cases in jeopardy. The problems include poor contact with complainants, poor contact with respondents, poor case processing and investigation, and poor efforts to resolve the complaints.
Two GAO studies concluded that many potential complainants were poorly treated and that staff did not move quickly and thoroughly to identify and file genuine complaints to begin an investigation.[109] GAO found that only 16 percent of complainants who were identified as having potential cases were assisted with filing complaints. Even worse, 30 percent of callers who attempted to file a complaint could not get through on their first try, and some callers did not receive a call back even after three tries. Finally, when complaints were filed, only half were filed within 20 days from the initial date of contact with the agency. This kind of delay results in lost housing opportunities, missed opportunities to conduct testing, and loss of credibility about the agency’s functions.
Lack of proper case processing, including notifying a respondent about a pending complaint, creating investigative plans, and providing both parties copies of the final decision are serious issues that can delay or defeat a case. GAO found that complaint notification letters were not found in 14 percent of the files for the complainants and 12 percent of the files for the respondents. Evidence that those letters had actually been received was not found in the files for complainants 33 percent of the time and for respondents 32 percent of the time. The studies conduced by the GAO and HUD’s Office of Inspector General both found that investigative plans were either missing from files altogether or missing important information. In 2006, 90 percent of the cases closed without a reasonable cause determination lacked an investigative plan. In 2007, 74 percent of those cases lacked investigative plans. The independent studies found that there was no notice of the final decision given to either a complainant or a respondent in more than half of the files where a cause determination was made (two files of four in 2006; two of three in 2007). A recent study by HUD’s Office of Inspector General found similar problems.[110]
The Fair Housing Act requires the parties to conduct adequate conciliation efforts throughout the life of a case; the failure to engage in conciliation efforts has resulted in the reduction of damages to complainants and the dismissal of fair housing cases entirely.[111] In 2006, there was no evidence of conciliation efforts in any of the four reasonable cause determination files reviewed by GAO. In 2007, 33 percent of the cause determination files lacked documentation of conciliation efforts. [112]
Inconsistencies Among HUD and Its Regional Offices
Witnesses identified inconsistencies in the application of the law and in investigative processes among HUD regional offices.[113] They described difficulties in getting complaints filed, outcomes that were inconsistent with court rulings on the Fair Housing Act, and delays throughout the process.[114] "HUD investigators do not have consistent training on the Fair Housing Act, investigation strategies and techniques, legal standards and case law, testing and more. There are also significant levels of inconsistent treatment of complaints and investigative processes between the ten HUD regional offices, so that different complainants with identical cases would have different treatment, different outcomes, and different levels of access to justice depending upon which region in which they filed a complaint."[115] In addition, a recent court decision found HUD’s determination letter practice to be confusing and inconsistent. The court concluded that inconsistency among and within regions was "unreasonable."[116]
FHEO Has Failed to Provide Adequate Staff and Leadership in the Civil Rights Arena.
HUD has chronically understaffed its fair housing enforcement, and many staff are poorly trained and directed about how to accomplish fair housing enforcement. At least 750 FTEs (Full Time Equivalent positions) are necessary for the existing fair housing work alone.[117] HUD’s staffing of the entire Office of Fair Housing and Equal Opportunity (FHEO) office, which has responsibility for enforcement as well as program compliance monitoring, has not reached that staffing level since FY 1994.[118] At 579 FTEs in FY 2007, the staffing numbers for FHEO are wholly inadequate and at their lowest levels since 1989.
| Year | FTEs for all of FHEO |
|---|---|
| 1989 | 625 |
| 1990 | 697 |
| 1991 | 740 |
| 1992 | 724 |
| 1993 | 729 |
| 1994 | 750 |
| 1995 | 684 |
| 1996 | 657 |
| 1997 | 621 |
| 1998 | 621 |
| 1999 | 582 |
| 2000 | 584 |
| 2001 | 622 |
| 2002 | 592 |
| 2003 | 744 |
| 2004 | 710 |
| 2005 | 624 |
| 2006 | 598 |
| 2007 | 579 |
Training that increases skill level and productivity must to be a priority for every fair housing enforcer.[119] There has never been an effective ongoing training program for FHEO staff. Training must be provided, and provided again, on all core functions of investigative work. Use of the internet to provide updated information, resources, case analysis, conciliation agreements, and other documents must be increased to keep all fair housing staff up to date on developing law and to help ensure consistent application of the law.[120] Computer-based systems should also be developed and enhanced to support monitoring of case investigation activity and monitoring of Congressionally funded programs that advance fair housing.
Other Problems with HUD-Based Enforcement
HUD’s Office of Fair Housing and Equal Opportunity (FHEO) is responsible for much more than enforcement of the Fair Housing Act. It enforces seven civil rights laws besides the Fair Housing Act, six Executive Orders, and Section 3 of the Housing and Urban Development Act of 1968. It conducts a series of activities relating to compliance with these other civil rights laws, including complaint investigation, compliance reviews, and reviews of applications for funding. Because enforcement of the Fair Housing Act is only one component of its activities, there are often conflicts in resource utilization, including staffing, travel funds, contract funds, and educational activities. There is too much on the table, and the various agency priorities are often competing for very limited resources.
Two former Assistant Secretaries of Fair Housing and Equal Opportunity, Roberta Achtenberg and Elizabeth Julian, described the structural conflicts and powerful internal constituencies at HUD that present significant challenges to the ability of HUD to play an effective role in fulfilling the promise of the Fair Housing Act.[121] Because HUD programs provide housing that is covered by the Fair Housing Act, there are grave internal disputes when enforcement action is taken, and deeply entrenched opposition from other offices of HUD to change that would advance fair housing principles. This opposition resulted in sometimes cramped interpretations of the law and resistance to significant expansion of fair housing enforcement activities. Former Assistant Secretary Achtenberg testified that in some cases, strong housing industry constituencies within HUD resisted pro-fair housing changes.[122]
The current enforcement system is not trusted by those who are most likely to use it. "Americans do not file complaints and use their fair housing rights because they have concluded they are essentially useless."[123] Several studies, including two conducted by HUD itself, concluded that large percentages (more than 80 percent of Americans and 88 percent of New Yorkers) would do nothing when confronted with discrimination because it would do no good.[124] A 2005 GAO sample survey of HUD and FHAP complainants found that half of all complainants were somewhat or very dissatisfied with the fair housing enforcement process. The GAO found that these negative views towards the fair housing investigative process diminished "the Act's effectiveness in deterring acts of housing discrimination or otherwise promoting fair housing practices."[125]
The enforcement system for fair housing is currently separated into two parts: FHEO, which is responsible for investigations, conciliation, and fair housing programs and education; and the Office of General Counsel, which is responsible for a variety of functions including concurrence on reasonable cause determinations and issuance of legal opinions. This separation between the investigators and the lawyers often ends up stalemating and delaying cases. Competing priorities in time and responsibility can cause case delays. In addition, disagreements between the two offices frequently results in non-concurrence by the General Counsel’s office regarding whether a particular set of facts is sufficient for a reasonable cause determination.
Currently, FHEO typically fully investigates a case before presenting it to the Office of General Counsel for review. There have been missed opportunities to involve the General Counsel’s office in the development of cases, to discuss questions about jurisdiction and planning an investigation, and to suggest avenues of investigation that might avoid legal pitfalls. Leaving the input of the General Counsel’s office until the end of an investigation can result in delays and failed cases. A reformed Office of Fair Housing should combine attorneys and investigative staff in headquarters and in the field under one management scheme and in one office to make the process faster, more effective, and more consistent.
Next Section: Create a New, Independent Fair Housing Enforcement Agency
Footnotes
[88] 42 U.S.C. § 3601 et seq.
[89] Oral Testimony of Shanna Smith (Atlanta).
[90] The Commission sent a request under the Freedom of Information Act for data on case processing by HUD and by FHAP agencies, including complaints filed, charges issued, and duration of investigations, covering the years from 1988 though 2008 on September 24, 2008 and it was received on October 1. No data from that request has been provided although the estimated time for response was 45 days from the date of receipt, or November 14, 2008.
[91] Nat’l Fair Hous. Alliance, The Crisis of Housing Segregation: 2007 Fair Housing Trends Report (2007).
[92] Oral Testimony of Shanna Smith (Atlanta).
[93] Testimony of Ira Goldstein (Atlanta), at 3; Oral Testimony of Shanna Smith (Atlanta).
[94] 42 U.S.C. § 3610(g).
[95] U.S. Dep’t of Hous. And Urban Development, Guidance Memorandum, Reasonable Cause Determinations under the Fair Housing Act (1999) (emphasis added), available at http://www.fairhousing.com/index.cfm?method=page.display&pagename=HUD_resources_reasonable_cause_memo.
[96] Testimony of Jim McCarthy (Chicago), at 4-5; Testimony of Dale Rhines (Boston), at 3-4.
[97] U.S. House of Representatives, Committee on the Judiciary, Report 100-711: The Fair Housing Amendments Act of 1988, 100th Congress, 2d Sess. (1988), reprinted at 1988 U.S. Code Cong. & Admin News 2173 at 2178.
[98] Oral Testimony of Shanna Smith (Atlanta).
[99] 42 U.S.C. § 3610(a)(1)(B)(iv)).
[100] See, e.g., Testimony of Jim McCarthy (Chicago), at 5; Testimony of Wayne Dawson (Atlanta), at 2-3. Testimony of Foster Corbin (Atlanta), at 3; Oral Testimony of Shanna Smith (Atlanta).
[101] Nat’l Council on Disability, Reconstructing Fair Housing 90 (Nov. 2001).
[102] Oral Testimony of Shanna Smith (Atlanta).
[103] Secretary v. Sparks, HUDALJ 05-92-1274-8 (Feb. 14, 2003) (citing cases).
[104] Testimony of Dale Rhines (Boston), at 3-4.
[105] U.S. Dep’t of Hous. & Urban Development, The State of Fair Housing, FY 2007 Annual Report on Fair Housing, available at http://www.hud.gov/offices/fheo/library/FairHousing-FY2007AnnualReport.pdf.
[106] U.S. Dep’t of Hous. & Urban Development, Secretary-Initiated Fair Housing Investigations, http://www.hud.gov/offices/fheo/enforcement/sec_initiated.cfm.
[107] Oral Testimony of Shanna Smith (Atlanta).
[108] Id.
[109] GAO, Fair Housing: Opportunities to Improve HUD’s Oversight and Management of the Enforcement Process, GAO-04-463 (April 2004), available at http://www.gao.gov/new.items/d04463.pdf; GAO, HUD Needs Better Assurance that Intake and Investigative Processes are Consistently Thorough, GAO 06-79 (October 2005) available at http://www.gao.gov/new.items/d0679.pdf.
[110] Department of Housing and Urban Development, Office of Inspector General, Evaluation of FHEO Housing Discrimination Complaint Processing and Compliance, IED 07-001, September 2008, available at http://www.hud.gov/offices/oig/ied/IED-07-001.pdf
[111] Secretary v. Sparks, HUDALJ 05-92-1274-8 (Feb. 14, 2003); see also Kelly v. HUD, 3 F.3d 951, 957-58 (6th Cir. 1993); Baumgartner v. HUD, 960 F.2d 572, 579 (6th Cir. 1992).
[112] See footnote 22.
[113] Testimony of Amy Nelson (Los Angeles), Testimony of Dale Rhines (Boston)
[114] Testimony of Amy Nelson (Los Angeles) at 4, Michael Allen memo, Atlanta hearing exhibit. Testimony of Jim McCarthy (Chicago), Testimony of Wayne Dawson (Atlanta), Testimony of Cathy Cloud (Houston),Testimony of Foster Corbin (Atlanta), Testimony of Dale Rhines (Boston).
[115] Testimony of Cathy Cloud (Houston) at 9.
[116] Boykin v. Key Corp., 521 F.3d 202 (2nd Cir., 2008).
[117] Testimony of Roberta Achtenberg (Los Angeles), at 3; Oral Testimony of Shanna Smith (Atlanta); see also Testimony of Elizabeth Julian (Atlanta) at 1.
[118] Nat’l Council on Disability, Reconstructing Fair Housing (Nov. 2001); U.S. Dep’t of Hous. & Urban Development, The State of Fair Housing, FY 2007 Annual Report on Fair Housing, available at http://www.hud.gov/offices/fheo/library/FairHousing-FY2007AnnualReport.pdf ; U.S. Dep’t of Hous. & Urban Development, The State of Fair Housing, FY 2005 Annual Report on Fair Housing, available at http://www.hud.gov/offices/fheo/library/FY2005_Annual_Report.pdf; HUD 2002 BudgetJustifications, available at http://www.hud.gov/about/budget/fy02/cjs/part_2/fairhousing/s_e.pdf; HUD 2004 Budget Justifications, available at http://www.hud.gov/offices/cfo/reports/04estimates/fheose.pdf.
[119] Testimony of Dale Rhines (Boston), at 5.
[120] Testimony of Roberta Achtenberg (Los Angeles), at 5.
[121] Testimony of Elizabeth K. Julian (Atlanta), at 1; see Testimony of Roberta Achtenberg (Los Angeles), at 1-2.
[122] Testimony of Roberta Achtenberg (Los Angeles), at 1.
[123] Testimony of John Goering (Boston), at 3.
[124] Id.
[125] U.S. GAO, Fair Housing: HUD Needs Better Assurance that Intake and Investigation Processes Are Consistently Thorough, GAO-06-79, at 72 (2005).
