Future of Fair Housing: Create a New, Independent Fair Housing Enforcement Agency

The Future of Fair Housing

Appendices

Appendix A: Emerging Fair Housing Issues
Appendix B: International Disapproval of U.S. Fair Housing Policy
Appendix C:
- Letter to Congressional Leaders
- Letter to U.S. Treasury Secretary Henry Paulson
Appendix D: Commission Witnesses and Staff

Create a New, Independent Fair Housing Enforcement Agency

In order to address the longstanding and systemic problems with fair housing enforcement at HUD, we recommend that preparation begin immediately to support the establishment of an independent fair housing enforcement agency that can provide the country with a powerful force that supports fairness and fair housing choice in a unified and systemic way. Support for an independent fair housing enforcement agency was the most consistent theme of the hearings. The evidence shows that the current enforcement system set forth for HUD in the Fair Housing Act (42 U.S.C. §3601 et seq.) is broken and has been for some time.

Fair housing enforcement and education at HUD have lost the confidence of the American public. Internal conflicts with HUD program areas over enforcement and interpretations of the Fair Housing Act have hampered strong enforcement. In addition, staffing and other budget constraints have prevented adequate staffing of fair housing functions. Internal battles between fair housing staff, fair housing lawyers, and program lawyers result in slow or no change in critical areas.

A new independent agency could be advised by an appointed commission that brings together representatives of industry, advocates, and enforcers. Unlike the structure of the Equal Employment Opportunity Commission (EEOC), this commission would have no authority over day-to-day operations or enforcement. It would help develop a strategic plan to advance fair housing issues and have the charge to provide input and leadership within its constituencies to support fair housing efforts at the national, regional, and local levels. Housing industry, practitioners, and advocates should be represented on such a commission.

The Government Accountability Office should immediately conduct a study of the options for establishing an independent fair housing agency or commission that would provide national leadership for change on fair housing related issues. The agency would focus solely on fair housing enforcement and fair housing and lending education; Although this type of structural change is not without costs and challenges, making the agency independent should help restore credibility to the effort in light of the many problems experienced with placement of fair housing enforcement at HUD.

A reformed independent fair housing enforcement agency would have three key components: (1) career staff including attorneys, with fair housing experience and competence as the key criteria for employment; (2) an advisory commission appointed by the president with the advice and consent of the Senate that is broadly representative of industry, advocates, and enforcers, and adequate staff; and (3) resources to make fair housing a reality. Such an agency would be empowered at the public policy level to work with the relevant cabinet secretaries to advance proactively all of the fair housing issues that are critical to building stronger communities.

Interim Steps

As an interim step to seeking legislation for an independent agency, HUD could establish a new fair housing enforcement priority by creating a new office that reports directly to the Secretary of HUD. This office would handle all fair housing enforcement work and fair housing education as well as the Fair Housing Initiatives Program, which funds private fair housing groups and fair housing education, and the Fair Housing Assistance Program, which funds state and local enforcement agencies.

At the same time, we must strengthen fair housing monitoring and compliance within federal housing programs at HUD, among federal grantees, and within other federal agencies that administer programs that affect housing markets. Our proposals for federal program reform and enhanced fair housing coordination of state and local grantees will also benefit from a fair housing office at HUD that is more deliberately focused on program reform and compliance. It is the Commission’s belief that by separating fair housing enforcement from civil rights compliance and monitoring, both functions will be strengthened.

Such an immediate restructuring could occur without significant expense. The current office of Fair Housing and Equal Opportunity would be divided immediately into two offices: the Office of Fair Housing headed by a Deputy Secretary, which would retain sole authority for all of the aspects of fair housing enforcement and education, and an Office of Civil Rights, headed by an Assistant Secretary, which would retain internal programmatic and compliance responsibilities for fair housing, including HUD’s responsibility for affirmatively furthering fair housing in its own programs and among HUD grantees, and its enforcement of other civil rights laws such as Section 504 of the 1973 Rehabilitation Act and Title VI of the 1964 Civil Rights Act.^[126]A third office, the President’s Fair Housing Council, would work with both of the new offices in meeting its responsibilities.

The new Office of Fair Housing would include the current FHEO Offices of Enforcement, including its systemic investigation and lending units, its Office of Policy, and the FHIP and FHAP programs. It would include enforcement, education, and FHIP and FHAP monitoring staff in all of HUD’s regional offices. It must also have strong resources to support development and dissemination of fair housing policy, training, and education as described later in this report. The Office must also have its own assigned attorneys, skilled and experienced in fair housing work, at headquarters and in all ten regional offices, and a travel, education, and contract budget that is adequate to support the creation of a strong national enforcement program and a strong public presence for fair housing.^[127]

Key new initiatives of a reformed Office of Fair Housing must include: development of an effective systemic investigation unit with staff throughout the country; development of a national rapid response unit that can respond efficiently and effectively to important investigative issues and to strong cases which require immediate attention; a quality assurance unit that would address the concerns about poor performance; outreach to communities that encounter discrimination but which are underrepresented in complaint filings; and outreach to the housing industry, which is often where discrimination is first suspected or detected. Because disability-based complaints make up the largest percentage of complaints filed with HUD, a reformed fair housing office should also increase its investigation of systemic discrimination against people with disabilities.

There is also a strong need for updated guidance for those who work in fair housing enforcement to ensure that the law will be consistently applied. A reformed fair housing organization should develop a system to issue and distribute interpretive guidance on the provisions of the Fair Housing Act and related laws. This interpretative guidance should be publicly available and explain the meaning of court and policy decisions impacting the application of the law.

A reformed fair housing office must recognize the roles of constituencies and political appointments without changing its fundamental mission to provide prompt, impartial investigations, to seek justice, and to use all available resources to advance housing opportunities free from discrimination. It must avoid politicization of decision-making in favor of transparent, effective leadership.

A reformed fair housing office must develop meaningful relationships with fair housing constituencies and develop its program in a way that draws from their strengths. The office could use an advisory group to solicit suggestions for fair housing education and enforcement initiatives from industry, advocates, and enforcers, as a powerful way of leveraging the strengths of each of those communities to make change.

Support the Role of the Housing Industry in Fair Housing Enforcement

As a former Assistant Secretary for Fair Housing and Equal Opportunity testified before the Commission, "Industry can be a partner in developing education and training materials with fair housing offices ... [I]ndustry groups in general support consistent prompt enforcement, when enforcement is warranted, and they also support consistent guidance and application of the law to avoid inconsistent outcomes from city to city, state to state, or region to region."^[128]

Industry involvement in fair housing enforcement efforts can involve several different approaches. First, thoughtful housing industry participants—agents, developers, builders, lenders, insurers—want to avoid being put in a position where the law is violated. The housing industry can support its members with continued educational materials and up-to-date trainings, especially when materials can be updated with current examples.

Second, housing industry representatives are often the first to see and identify housing discrimination. Developers of Low Income Housing Tax Credit properties, for example, may encounter exclusionary decision making by local government officials that is actionable under the Fair Housing Act. Similarly, a real estate agent that is assisting a family in purchasing a house is also injured when the seller refuses to sell to the family because of the buyer’s race. Many housing industry representatives live and work in neighborhoods where diversity is appreciated and may believe that they have been denied the opportunities of integrated living when practices that increase segregation occur in that neighborhood. In each of these situations, there should be support for members of the housing industry who file complaints because they have been injured by an act of discrimination.

Housing industry groups often have existing ethical and licensure rules that address acts of discrimination. One way industry groups can support enforcement is to take prompt action through local, state, and national organizations when a member has engaged in discriminatory practices, as demonstrated by findings of discrimination by agencies or courts. When general issues of discrimination arise, dialogue between fair housing practitioners and industry representatives can increase understanding about why discrimination is claimed and can encourage a prompt resolution by industry leadership. In general, industry leaders should encourage open discussion about enforcement activity and support the enforcement process.

Some industry groups are also beginning to engage in self-testing of businesses to examine industry practices for possible discrimination. This is a positive step in industry leadership because it results in higher levels of awareness of the ways in which discrimination may occur in the current marketplace and it can prevent repetition of practices that may be discriminatory.^[129]

Next Section: Fair Housing Enforcement at the Justice Department is Weak