May 11, 2018

Community Developments: HUD Invites Public Comment on Its 2013 Disparate Impact Rule

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  • Yesterday HUD announced that it will formally seek public comment on whether its 2013 Disparate Impact Regulation is consistent with the 2015 U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. Under the disparate impact rule, which aims to enforce the Fair Housing Act, housing providers, lenders and insurers can be held liable for seemingly neutral practices that have a discriminatory effect on classes of persons protected under the Fair Housing Act. The 2015 ruling by the Supreme Court established that the Fair Housing Act allows lawsuits based on disparate impact, but the court did not specifically rule on HUD’s regulation. (HousingWire, May 10) As previously highlighted in Community Developments, earlier this year HUD suspended the deadline for local governments that receive HUD funding to submit an Assessment of Fair Housing (AFH) – an examination of the local housing landscape that helps jurisdictions set their fair housing priorities and goals – until the next AFH submission date that falls after October 31, 2020.
     
  • In an interview with Place Makers, Enterprise’s Ahmad Abu-Khalaf discusses innovative strategies for expanding the supply of affordable homes. This discussion is part of a series of interviews with panelists for the “Affordability: The Intersection of Everything” forum that will take place at the Congress for the New Urbanism conference on May 17 in Savannah, GA. Abu-Khalaf notes that Enterprise recognizes that the rising demand for affordable housing has created a pressing need to identify innovative solutions for containing the cost of construction and expanding the supply of affordable homes. He notes several Enterprise-led efforts to increase cost-effectiveness and supply in the affordable housing delivery system, including identifying methods for bending the cost curve, using publicly owned parcels to create affordable homes, and understanding the small and medium multifamily housing stock, which provides 54 percent of the nation’s rental housing stock and is a key source of affordable housing. In addition, Abu-Khalaf points out that Enterprise has conducted research on promoting opportunity through Equitable Transit-Oriented Development (eTOD), aiming at identifying barriers and best practices to expanding the supply of affordable homes near transit and navigating federal transportation policies and programs that can support eTOD.
     
  • A new analysis by the Terner Center for Housing Innovation at UC Berkeley looks at how living in Low-Income Housing Tax Credit (Housing Credit) properties benefits low-income residents, particularly with regard to housing stability, economic mobility and access to education. The analysis, which is based on interviews and surveys with over 250 residents living in 18 properties across California, shows that one in five of those surveyed reported that they had experienced homelessness before moving into their current Housing Credit unit and 20 percent stated that they had been forced to move involuntarily -- either as the result of an eviction or rent increase. It also points out that the majority (58 percent) of working-age residents were employed - many of their jobs lacked good wages and benefits and opportunities for advancement, and the majority of parents were happy with their children’s school. Finally, the analysis notes that siting Housing Credit properties in low-poverty neighborhoods is insufficient on its own to expand opportunity for low-income, working families, explaining that in spite of the positive findings, broader housing market and labor conditions are likely to keep most residents in subsidized properties for the foreseeable future. (Terner Center for Housing Innovation, May 11) 
     
  • An analysis of new data from the Consumer Financial Protection Bureau on mortgage lending shows that big banks are moving away from the mortgage lending sector, especially for low- and moderate-income homebuyers seeking loans. The analysis finds that people with low- and moderate-incomes made up only 26.3 percent of borrowers in 2017, down from 36.6 percent in 2009. These changes can be partially explained by the federal rules that sought to address the subprime lending tactics that helped create the financial crisis and skyrocketing housing costs that have locked many people of modest means out of the market. Non-bank mortgage lenders have doubled down on volume— particularly through refinances — and now originate 56 percent of all home loans. However, housing advocates argue that banks are simply retreating to more lucrative segments of the market, noting that non-banks are not covered by the Community Reinvestment Act, and therefore are not required to invest in lower-income communities in the cities where they are based. (CNN Money, May 11)
     
  • Earlier this week the Louisiana House of Representatives advanced a bill that would ban inclusionary zoning, a policy that requires market-rate developers to include affordable housing in their new developments. Housing advocates and elected officials in New Orleans argue that the bill would remove the power of local government in setting housing policy, and the New Orleans City Council has voted unanimously to oppose the bill. The legislation now requires concurrence by the State Senate and Governor John Bel Edwards' signature, but given that Louisiana's three largest cities -- New Orleans, Baton Rouge and Shreveport -- oppose the bill, the likelihood of a gubernatorial veto is unclear. (NOLA.Com, May 9)

In Case You Missed It

  • As part of our ongoing commitment to support the development and preservation of affordable housing and sustainable communities, earlier this month Enterprise released two Section 4 Capacity Building grant funding opportunities. Applications for our 2018 funding round will follow a two-step application process: Enterprise will accept letters of intent (LOI) May 1 – 29 (submission deadline: May 29, 11:59 p.m. EDT). Successful applicants will be invited to submit a full proposal for funding in the week of July 9, and the deadline for submitting full proposal is August 6, 11:59 p.m. EDT. Awards are expected to be announced by September 17. 
     
  • Enterprise is accepting applications for two small grant opportunities for affordable housing developers and organizations interested in furthering sustainable practices in their current projects. Pre-development Grants of $5,000 each are available to 10 affordable housing development organizations committed, through one current project, to improving pre-development and engagement practices with residents and stakeholders. Excellence in Active Design Grants are $15,000 each and available for five affordable housing development organizations who are employing creative design strategies to encourage physical activity within one of their projects. The submission deadline for the two funding opportunities is Friday, May 18.

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