Federal 'Fair Housing' Policy Set for a Major Overhaul 

The new rule would ask localities receiving federal funding to report on their housing market outcomes and propose concrete steps for improving affordability.


The U.S. Department of Housing and Urban Development (HUD) sent a major rewrite of federal fair housing regulation to Congress in late December.

The proposed rule would ask localities receiving federal housing funding to report on their housing market outcomes and then to propose concrete steps for improving housing affordability. Localities that either have affordable housing or see housing become more affordable over a five-year period could be rewarded with additional grant money and other incentives. The department told Congress it would "focus remedial resources and potential regulatory enforcement actions" against the lowest-performing jurisdictions.

The rule is a marked change from the one issued by the Obama administration in 2015, which required HUD grantees to collect voluminous amounts of demographic data and then use that data to craft plans on combating racial segregation and concentrated poverty. The Trump administration argues that regulation was "overly burdensome" in their requirements and "too prescriptive" in its desired outcomes.

The new rule is light on details, and its early circulation has already provoked intense debate.

HUD's proposal "incentivizes a race to the top among localities based on housing affordability and availability and then offers a chance to put some teeth behind that," says Michael Hendrix, the director of state and local policy at the Manhattan Institute. But others argue it is much too narrow and actually weakens the federal government's enforcement powers. "The proposed rule entirely ignores the essential racial desegregation obligations of fair housing law," Diane Yentel, president of the National Low Income Housing Coalition, told The Washington Post.

Solomon Greene, a researcher at the Urban Institute and a former HUD staffer who helped craft the 2015 rule, says focusing narrowly on affordability misses the many ways that obstacles to fair housing can present themselves. "When talking about affordable housing from a fair housing perspective, you have to look at [what's] affordable for whom," Greene says. "Using a lens that looks at affordability from the perspective of protected classes is absolutely important and seems missing from the proposed rule."

Demanding local governments take specific actions on land-use planning is a huge intrusion of federal authority into a policy area that was once held to be the domain of cities and states, but Hendrix cautions against making the perfect the enemy of the good. So long as these grant programs exist, he says, they should at least be administered in a way that encourages better, freer housing policy. "So much of what this new rule points to is a more market-oriented approach to housing, which is what we should all be pushing for."

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  1. Nice, fair article that gives credit where it is due while pointing out what good next steps would be. I’ll have to keep an eye out for this author’s name.

  2. How about demanding states and cities respect property rights. Let people buy, build and sell with very little interference. And get the hell out of agriculture too.

  3. This is a bad idea. The Obama administration rightly focused on demographics, because if you donot force diversity on the evil clinger land loards then they will avoid the progress society needs. Us culture warriors need to ram this diversity down the necks of the clingers! I have a better housing pricing policy based on intersectionality.
    1. Establish a baseline rent
    2 You take off 7% of the base rent for every catigory of oppressed people you fall into, including but not limited to lgbtqgc, black, Mexican, the Rev kuck, native American, socialist, progressive, enviromentalist other non clinger groups
    3. Add 10%rent for the following. White, male, the Rev Kirk, straight, republican, libritarian, and other clinger groups that have engaged in systematic oppression.

    1. You have laid it out, bare-bones and plain, for us all to see and admire! Well done, bravo! Your tolerant benevolence shines!

      However, your words are entirely too plain… “White, male…”, etc. How about “melanin challenged, XX-Chromosomes-challenged…” etc? We’ll have to add a few million dollars for highly paid academics to fancify your words (so there won’t be so many hurt baby feelings, I mean, stigmatized poorly-labelled organisms), and THEN your ideas WILL sell (to our Masters in DC, at least)!

  4. ” . . . propose concrete steps for improving affordability . . . ”

    Eliminate HUD. Done.

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  6. So this “major” re-write is to tell grant recipients, “I want you to sit there and think about what you’ve done and then write me 5 paragraphs on how that makes you feel.” Hell, by the time you throw in a few “potentializing the optimal outcomes vis a vis the normalized matrix of stakeholder hierarchies” you’ve got a bureaucrat’s Secret Santa gift – they live for writing these sorts of bullshit reports! Yay!

    1. There’s a reason for when you’re shopping you’re sometimes asked to take a survey “to let us know how we’re doing” – when you want to know how well your employees are doing their jobs, you don’t ask the employees, you ask the customers.

      A simplified feedback form would be A) How much goddamn money did you spend? B) Did you help a single goddamn person? C) Send us a list of names and addresses and phone numbers of all the people you claim to have helped, because we’re pretty sure you’re lying and we’re going to check on your lying-ass ass.

  7. OT: Mark Cuban argues that any company receiving a federal bailout should be banned from using the funds to implement a stock buyback. On that point I agree with him. He goes a step further and argues that they should be banned from engaging in stock buybacks in perpetuity. I have no problem with stipulating that federal funds not be used for buybacks, which favor well-placed company insiders; I’m not as comfortable prohibiting companies from using their own money to prop up their stock price.

    I definitely wouldn’t have a problem with bailouts voiding executive golden parachutes.

    1. I have no problem with the government attaching strings to its money as a general rule. You want the government to pay the bills, you should live by its rules. IF you don’t like it, don’t ask for the money.

      1. I couldn’t agree more. Nothing drives me nuts more than hypocrites who take government money and then think they should be able to do whatever the hell they want with it. I’m just not convinced that taking a one-time bailout should subject a company to perpetual federal control over how it can direct its cash flow.

        1. I agree with you about that. The government has the right to call the shots but even that has its limits and a lifetime ban on stock buybacks is certainly over that limit.

    2. re: “buybacks … favor well-placed company insiders”

      Thbbbppp. Stock buybacks are a way of distributing profits. Under most scenarios, they are more supportive of personal choice and liberty than the alternatives.

      Consider the following. Company A earned $100,000 last year after paying all their debts, bonuses to employees, taxes, investments in profitable expansions, etc. They can sit on the cash (which, beyond a proper rainy day fund, does nobody any good), they can give the cash directly to shareholders or they can buy back their own stock. For simplicity, let’s say this company has only 100 shareholders, all of them with equal shares. Thirty of them want cash, twenty are worried about this year’s taxes and the other fifty don’t much care.
      – If you push out that $100k as dividends, each person gets $1000 whether she wants it or not. The thirty might decide that’s enough but they also might want more. The twenty worried about taxes now have incremental income they must report. The fifty … still don’t care. They’re up $1k and will probably use the money to buy more stock.
      – If you use that $100k to buy back the company’s stock, however, the thirty can take advantage of the offer to sell as much as they want to meet their personal cash-flow needs. For everyone else, the price goes up. Mathematically, the value of the stock will increase by $1k for each remaining investor. The twenty worried about this year’s taxes don’t have to worry because the increase is still unrealized gains.
      The fifty have the extra $1k and it’s already invested in a stock they presumably like.

      By buying back the company stock, the company gives its shareholders the most flexibility to take the money they need in the way that they need it. Dividends assume incorrectly that all shareholders have identical financial needs and desires.

      Yes, “well-placed company insiders” can exploit the information gap during the buyback decision cycle. But those same insiders can also exploit their information during the dividend cycle or lots of other times in the corporate lifecycle. Insider trading is a problem that is neither solved nor made worse by stock buybacks.

      None of that defends using bailout money for a buyback. Whether bailout money should come with strings is a separate debate. I am attacking only the idea that buybacks generally are in any way a bad idea.

  8. Maybe some places can never have affordable housing? Somewhere like Carmel by the Sea or Aspen is always going to be expensive. They are beautiful and wonderful places and in a world where the idle rich can go anywhere they like, people who want to live there are competing with incredible wealth to do so.

    The old saying about real estate being location, location, location, is true. And location is a finite resource. Only so many people can live in the valley where Aspen is located. Only so many people can live on Park Avenue. The obsession with affordable housing in every area is an absurd desire to distort what are for the most part natural outcomes of the market and preferences. Rich people will always outbid poor people for the best places to live. People will always prefer to live around other people who share some degree of a common culture and economic affluence. Urban planners and sadly a good number of Libertarians and conservatives who should know better have this idea that every neighborhood and town should be this mix of all incomes and races. That is a completely artificial creation. When left to their own devices people living in middle class suburbs don’t want to live next door to the section 8 apartment building. The people living in poor areas don’t want a bunch of single, trust fund hipster doofuses gentrifying their neighborhood and so forth.

    1. And no one wants to live next to a prison. Though oddly enough, a lot of people will voluntarily choose to live next to an airport.

      1. And then complain about all of the noise and demand the airport be closed.

    2. John, I suspect that your ideas stem from the fact that you understand the tautological nature of “rich people have more money than poor people”. If you do enough blotter acid and hang around enough Bernie supporters, you too can be puzzled as to why it is that rich people can afford more stuff and better stuff than poor people can afford. Why can’t we all have above-average incomes, why can’t we all be rich? It’s insane that Michael Bloomberg has enough money to give every single person in America a million dollars out of his pocket change and yet he won’t even pay my college tuition and my doctor’s bills.

  9. Let me understand this, since I was a mere lad in the 1950’s the government has been pushing the concept that best investment is a house and encouraged that investment with income tax deductions for mortgage interest and real estate taxes. Now, they want to take away the incentive by having localities forcing cheaper housing next to you. There is an old real estate adage: Never buy the most expensive house in a neighborhood.

    This seems like a policy to force a rush to the bottom to ever cheaper housing prices.

    What most people forget is that upscale housing introduces features that become standards, like indoor plumbing or electric fixtures.

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