The White House appears to be at war with itself on housing policy, following a late-night tweet from President Donald Trump that echoes right-wing criticisms of his own administration's pending, free-market-themed revamp of federal fair housing regulations.
Late Tuesday, Trump tweeted out an unprompted attack on the Obama-era Affirmatively Furthering Fair Housing (AFFH) rule, a 2015 regulation that required jurisdictions receiving federal housing funding to complete lengthy "assessments" on existing obstacles to fair housing, and then prepare plans for eliminating those obstacles.
"At the request of many great Americans who live in the Suburbs, and others, I am studying the AFFH housing regulation that is having a devastating impact on these once thriving Suburban areas," said Trump on Twitter. "Corrupt Joe Biden wants to make them MUCH WORSE. Not fair to homeowners, I may END!"
At the request of many great Americans who live in the Suburbs, and others, I am studying the AFFH housing regulation that is having a devastating impact on these once thriving Suburban areas. Corrupt Joe Biden wants to make them MUCH WORSE. Not fair to homeowners, I may END!
— Donald J. Trump (@realDonaldTrump) July 1, 2020
That tweet set off a storm of criticism from Democrats and progressives, who denounced the president's threat to end the AFFH rule as tantamount to bringing back segregation.
The same man who was sued by the DOJ for housing discrimination now wants to legalize housing discrimination. https://t.co/0pmswZEQu0
— Chuck Schumer (@SenSchumer) July 1, 2020
The Democratic response to Trump's tweet doesn't capture the full debate happening among conservatives, who have long criticized the 2015 AFFH, or the fact that the policy is overly burdensome and needs retooling. The assessments mandated by Obama-era rule saw jurisdictions producing 800-page reports that dived into everything from access to public transportation to labor market outcomes. Some grant recipients struggled to complete these assessments at all.
Since 2018, the Trump administration has been in the process of replacing it with something that incentivizes local governments to repeal regulations on housing construction.
"I want to encourage the development of mixed-income multifamily dwellings all over the place," U.S. Housing and Urban Development (HUD) Secretary Carson told The Wall Street Journal in 2018 when announcing the administration's plan to replace the AFFH rule. "I would incentivize people who really would like to get a nice juicy government grant" to reform their zoning codes.
In January 2020, HUD released the text of a proposed replacement rule that would require recipients of HUD funds to report on more narrow measures of housing affordability and quality, and then propose three concrete steps for improving those measures. Jurisdictions that showed improvement over time could be rewarded with additional grant money.
Progressives and housing activists have criticized the Trump administration's approach as insufficient for truly guaranteeing fair housing. Without the original AFFH's voluminous reporting requirements, they argue, both HUD and HUD grant recipients will lack the information they need to address long-standing patterns of segregation and concentrated poverty.
The Trump administration's approach has also been criticized from the right by those who've argued that trying to incentivize local jurisdictions to repeal regulations on new housing threatens suburban communities' local control.
"All the administration's proposed HUD rule does is change the AFFH requirement from a left-wing social engineering experiment to a right-wing attack on local control," wrote Jordan Bloom in The Daily Caller in February.
On Tuesday, National Review published an article by Stanley Kurtz of the Ethics and Public Policy Center which warned ominously that Joe Biden and Democrats wanted to use the AFFH to "abolish the suburbs."
"Once Biden starts to enforce AFFH the way Obama's administration originally meant it to work, it will be as if America's suburbs had been swallowed up by the cities they surround," wrote Kurtz. Suburban communities, he continues, "will even be forced to start building high-density low-income housing. The latter, of course, will require the elimination of single-family zoning. With that, the basic character of the suburbs will disappear."
Far from fighting against this dystopia, Kurtz argues Carson's HUD is embracing it.
"What Carson has developed so far is something you might call 'AFFH lite,'" writes Kurtz. "[Carson] still wants to use HUD money to gut suburban single-family zoning."
The fact that Trump's tweet attacking the AFFH closely mirrors Kurtz's rhetoric, and the fact that it came the same day as Kurtz's article, suggests something beyond coincidence, says Michael Hendrix of the Manhattan Institute.
"Someone got [the Kurtz article] into Trump's hands. Trump reads it and tweets. It's as simple as that," Hendrix tells Reason. And while Trump's tweet was explicitly going after Biden, by echoing the Kurtz article it was implicitly attacking the reforms being proposed by his own administration.
"There's a fight between different factions and different visions of housing reform," within the administration, Hendrix says, with a more free-market-inclined HUD on one side and suburban partisans on the other. This fight is now spilling out into the open.
Hendrix says that there are good policy reasons to support the reformed AFFH rule as proposed by Carson's HUD. Having localities report on a few straightforward measures of housing affordability would highlight cities where local policymakers are getting things right while sending a message to expensive, over-regulated jurisdictions.
Just getting rid of the AFFH rule—as Kurtz proposes and Trump has now threatened to do—also isn't really an option, says Hendrix. The rule is an attempt to implement the 1968 Fair Housing Act (FHA) requirement that federal housing programs be administered in a way "that affirmatively furthers fair housing."
Getting rid of the Obama-era AFFH doesn't repeal the FHA's underlying requirement that the federal government has some kind of regulation on the books ensuring their grant programs are furthering fair housing. Any effort to simply gut the law would likely see the courts impose their own solution or simply reinstate the old AFFH rule unchanged, says Hendrix. Indeed, Carson's suspension of the AFFH rule without a ready replacement sparked a lawsuit from the National Fair Housing Alliance demanding the rule be reinstated.
The comment period for the new AFFH rule the Trump administration proposed in January closed back in March. Everyone is now waiting for the publication of a finalized rule.
Obviously the most libertarian solution would be to eliminate all federal housing grant programs, giving Washington regulators little to bicker about.
But given that those grant programs exist, and that federal law attaches some strings to their administration, some form of regulation is required. Carson's proposal to rewrite these rules to incentivize sensible free market reforms on the part of jurisdictions receiving federal grants is probably the best implementation limited government advocates can hope for presently.
Should Trump decide to scrap his own pending fair housing reform, as his tweet suggested he might, it would be a loss for free markets, and likely just result in the return of the old Obama-era AFFH that no one in his administration likes.