The Rapidly Changing Fair Housing Landscape: HUD Rescinds Obama-Era AFFH Fair Housing Rule

Bradley Arant Boult Cummings LLP

The Trump administration recently announced that it has rescinded Affirmatively Furthering Fair Housing (AFFH), an Obama-era regulation intended to ensure compliance with the Fair Housing Act (FHA). AFFH requires cities and towns to analyze local housing data for discriminatory patterns and submit plans to address those issues in order to continue receiving federal funding. This rescission represents a major rollback of a fair housing enforcement mechanism.

This rescission is not altogether unexpected: HUD effectively suspended the rule in January 2018, when it issued a notice delaying the requirement that municipalities submit proposed plans until after October 31, 2020. The AFFH will be replaced with the “Preserving Community and Neighborhood Choice” rule, which defines fair housing much more broadly as “affordable, safe, decent, free of unlawful discrimination, and accessible under civil rights laws.” Most importantly, the new rule would allow municipalities the ability to self-certify compliance.

The rollback of the AFFH, and its replacement, is part of the current administration’s efforts to ease regulatory burdens on certain stakeholders. For instance, and as we have previously discussed, HUD has proposed a rule that may make it more difficult for litigants to make a prima facie case of disparate impact housing discrimination. Despite opposition from consumer and some industry members, it appears that HUD is moving forward with a final rule implementing this change.

Despite this trend, the fact remains that we are in an election year, and there’s a chance that a new administration will take office in January 2021. And while it would take time and effort for a Joe Biden-era HUD to reverse some of these trends through formal rulemaking, there are already indications that political will exists to do so. For instance, Rep. Alexandria Ocasio-Cortez has introduced amendments to a pending appropriations bill restricting the use of federal funds to support HUD’s implementation of the new proposed rules, which would effectively nullify them.

Given the current election-year uncertainty, it remains to be seen whether the new disparate rule will go into effect, and if so, how long it will last. In the meantime, lenders and other stakeholders should continue to monitor the rapidly evolving fair housing and fair lending landscape to ensure compliance with federal regulations and to anticipate upcoming changes. We will also continue to monitor the space and provide timely updates.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Bradley Arant Boult Cummings LLP

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