May 14, 2018

Community Developments: New Reports on Fair Housing Trends + Causes and Consequences of Gentrification

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  • The National Fair Housing Alliance has released its 2018 fair housing trends report, Making Every Neighborhood a Place of Opportunity, which outlines key obstacles to achieving the goals of the Fair Housing Act. The report shows that there were 28,843 complaints of housing discrimination last year, noting that the three most common types of complaints were based on disability (57 percent), race (19 percent) and family status (9 percent). It suggests that the biggest obstacle to fair housing rights is the federal government’s failure to enforce the law vigorously, pointing out that 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 addition, last year the Treasury Department issued a report that recommended HUD reconsider its use of the disparate impact rule – which allows holding housing lenders and providers liable for seemingly neutral practices that have a discriminatory effect on classes of persons protected under the Fair Housing Act. (FHA, May 2018) HUD has recently 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 that established that the Fair Housing Act allows lawsuits based on disparate impact. 
  • HUD has released a report that reviews the recent research on the causes and consequences of gentrification and identifies key steps policymakers can take to foster neighborhood change that is both inclusive and equitable. The report, which is in response to the House and Senate Committees on Appropriations’ request for the agency to examine the effects of rapidly rising rents in urban areas across the nation and ways to avoid displacement of lower-income families and long-term residents, suggests four key strategies : preserving existing affordable housing; encouraging greater housing development, including but not limited to affordable housing; engaging existing community residents; and using regional strategies. (HUD, May 2018)
  • Citing an example from San Francisco, an article in The New York Times Upshot highlights the disconnect between the rising demand for affordable housing and the scarcity of the available homes across the country. Last fall, 6,580 households applied for 95 affordable units in the Natalie Gubb Commons development that was reserved for households earning up to 50 percent of the area median income, which translates to 70 applicants per unit. The article explains that while lottery processes are meant to be fairer than a first-come, first-served approach, yet they do not distinguish the neediest from the merely needy. They also reward random chance, which is distinctly different notion of what is “fair.” The article points out that the reduction of the corporate tax rate from 35 to 21 percent in last year’s tax reform has reduced pricing and subsequent production for the Low-Income Housing Tax Credit (Housing Credit), noting that, according to Novogradac & Company, the fall in prices has translated to about $45,000 less per housing unit in San Francisco from investors in the common 4 percent tax credits. (The New York Times Upshot, May 12)
  • Last week a proposal that would tax Seattle’s highest earning businesses to generate funds for affordable and supportive housing advanced out of special committee with a narrow five-to-four vote, which is not enough to prevent a possible veto from Mayor Jenny Durkan. The proposal, which would impose a tax of 26 cents per Seattle employee-hour on businesses making $20 million a year or more in gross revenue, is expected to generate $75 million annually over the first five years of the tax, and then it would be eliminated and replaced with a 0.7 percent payroll tax that would generate greater funds. Around 75 percent of the $75 million annual fund would go towards building affordable housing and nearly 20 percent would be allocated to the city’s Housing and Human Services department to support various programs, including tiny houses, emergency shelters, public health response, and workplace stability to reduce turnover in service providers. (Curbed Seattle, May 11)

Upcoming Testimonies 

  • On Thursday, May 17, at 10 a.m. ET, Enterprise Community Partners’ CEO Terri Ludwig will testify before the U.S. Congress Joint Economic Committee on “The Promise of Opportunity Zones.” The hearing, which will also feature John Lettieri, co-founder and president of the Economic Innovation Group (EIG), and Maurice A. Jones, president and CEO of Local Initiatives Support Corporation (LISC), will be held in room 216 of the Hart Senate Office Building. 
  • Also, this Thursday at 10 a.m. ET, Enterprise Community Partners’ Vice President for Public Policy Marion McFadden will testify before the House Financial Services Committee on “Community Development Block Grant-Disaster Recovery Program – Stakeholder Perspectives.” The hearing will be held in room 2128 of the Rayburn House Office Building. 

For the latest housing and community development news and notes, follow the Enterprise policy team on Twitter: @E_Housing Policy and subscribe to the Capitol Express Newsletter. The Enterprise Public Policy team works to safeguard, expand and improve programs that end housing insecurity. Learn more about our public policy efforts.

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