You may have heard about claims that a change in leadership in Washington will result in the development of lots of low-income developments in suburban areas. Without getting into the politics surrounding the discussion, I thought I could explain what I believe to be the source of this claim.
When jurisdictions receive certain types of US Department of Housing and Urban Development (HUD) funding, they are required to develop a Five-Year Consolidated Plan and participate in a Fair Housing analysis. The Fair Housing analysis documents potential barriers to people of all backgrounds having access to safe, decent housing. This study is called an Analysis of Impediments to Fair Housing Choice (AIFH).
The AIFH, which our firm has completed for several jurisdictions, involves a detailed look at the demographics, socioeconomics, and owner and rental housing market patterns of a given area. We hold public meetings and survey and interview members of the community and local officials regarding fair housing issues. Additionally, the Analysis considers zoning and planning rules; home mortgage approval data; and any housing discrimination complaints or cases filed with HUD, the state attorney general, or other agencies charged with enforcement.
Based on this research, the AIFH makes recommendations regarding what a community might do to strengthen the ability of all people to have access to decent housing. In writing their Consolidated Plans or Annual Action Plans, jurisdictions must take this information into account as they plan initiatives.
In 2015, HUD established a more rigorous Fair Housing review process, called Affirmatively Furthering Fair Housing (AFFH). The process provided communities with more tools and guidance to fulfill their mandates to increase fair housing opportunities. Additionally, the AFFH process required more specific and detailed reporting, including building in accountability measures for communities to report what changes they’ve made to promote and ensure fair housing.
While many appreciated the greater accountability built into this process, some jurisdictions challenged the new rules as being too complex and burdensome. In January 2018, HUD suspended the new process and in July, 2020, replaced this with Preserving Community and Neighborhood Choice, which rolls back some of the requirements but also some of the protections afforded by AFFH.
Many factors play into fair housing, but one of the most important is simply the presence of affordable, decent housing in a community. While the more rigorous AFFH process might have resulted in the building of a small number of low-income housing units in some wealthier jurisdictions, it probably wouldn’t make a significant difference. Rather, the biggest factor promoting affordable housing is the profitability of such housing for developers.
Many markets lacking affordable housing are in major growth areas, where housing prices are climbing for everyone, stressing the ability of low-income families, or seniors on fixed incomes, to afford their own home or reasonably-priced rentals. Without significant government tax-credit or loan programs to subsidize housing construction, developers will continue to build more middle-class or expensive housing to ensure their company’s viability and financial success.
