“Housing is a necessary of life.”

United States Supreme Court

Block v. Hirsch, 256 U.S. 135, 156 (1921)

(per Justice Oliver Wendell Holmes, Jr.)

 

Despite the general recognition of the crucial importance of a good home to human development, tens of millions of low- and moderate-income Americans do not have the opportunity to buy or rent decent housing in wholesome neighborhoods. 

Among the biggest barriers to those opportunities are exclusionary governmental housing policies (“regulatory barriers to housing affordability”), such as exclusionary zoning. "State and local regulations are among the principal culprits behind the nation’s persistent affordability problems,” according to the Harvard University Joint Center for Housing Studies.

Examples of exclusionary zoning are the widespread requirements for large lots and home sizes in American suburbs—where most jobs now are located, and where almost all new urban jobs are being created. Other exclusionary housing policies include costly, high-end building, housing, and subdivision code requirements that are unnecessary for health and safety; and protracted, unduly expensive permitting procedures.

Such regulatory barriers often nullify reasonable efforts to increase the supply of moderately-priced housing. In other cases they increase the cost of that housing tremendously. Rigorous economic research has found that such barriers have caused prices for basic houses to be 40-50 percent above the costs of construction in most of the major metropolitan areas studied, across the United States. In certain high-opportunity metros (including Pacific Coast metros such as Los Angeles, San Francisco, and Seattle), prices exceed construction costs by several times that amount. For more, click on ECONOMIC EFFECTS OF EXCLUSIONARY HOUSING POLICIES.

Similar problems with unjustified regulatory barriers pose the biggest obstacles to housing affordability worldwide. For more, click on McKINSEY REPORT ON MEETING GLOBAL HOUSING AFFORDABILITY CHALLENGE.

The Equitable Housing Institute (EHI) is a charitable organization that focuses on eliminating exclusionary housing policies in the United States, in order to reduce homelessness and poverty. EHI is the only national organization focused primarily on removing those barriers for all low- and moderate-income Americans.

EHI’s primary tools are education and public policy advocacy. During its first five years (2008-2013), its advocacy was a catalyst in the addition to local housing plans in its home county of more than one additional affordable unit per day, and more than eight additional housing units per day overall (on average). (EHI’s headquarters is in Fairfax County, Virginia, in the Washington, DC, region).) For more, click on ABOUT EHI. 

Nationally, EHI’s website provides information on many aspects of exclusionary housing policies and ways to remove them. EHI also has advised people in various regions of the United States regarding specific issues in their areas.

EHI “holds one of the keys [to] the goal of more integrated communities and schools,” and is an “obvious candidate for funding,” according to Inside Philanthropy magazine.  “With its detailed research on housing law, and its ability to help municipalities take a hard look at their assumptions and priorities, EHI has an important role to play in the fight for fair housing.”  For more, click on Inside Philanthropy urges funders to support EHI.

 

RECENT EHI ARTICLES

First 100 days of Trump Administration see major changes in direction of federal housing policies

During the first 100 days of the Trump Administration:

• Dramatic funding reductions were proposed for numerous, major housing programs;
• The new leadership indicated it will put increased emphasis on public-private housing partnerships and on incentives for people who receive federal housing assistance to support themselves; and
• The Administration pressed for repeal of provisions of the Dodd-Frank Act that it says create unjustified barriers to the creation of mortgages and other financial transactions.

The Administration took no substantial steps directly to promote President Trump’s stated intention to reduce regulatory barriers to housing development, however.

Dr. Carson becomes HUD Secretary

On March 2, Dr. Ben Carson was sworn in as Secretary of the U.S. Department of Housing and Urban Development (HUD). Carson, who had no previous governmental experience, did not announce any major, new housing initiatives during the Administration’s first 100 days. He went on a listening tour, however, to several parts of the nation (Columbus (Ohio), Dallas, Detroit, and Miami), gathering information from HUD field staff, local leaders and residents of public housing developments.

Administration proposes cutting HUD budget more than 13% for FY 2018

On March 16, the Trump Administration announced its FY 2018 “Budget Blueprint,” which proposed reducing HUD’s budget by more than 13% (to $40.7 billion).  That proposal would eliminate funding for the venerable Community Development Block Grant program, which received $3 billion in funding for FY 2017, to support a wide range of urban development projects. The Administration proposal also would eliminate the HOME Investment Partnerships Program, the Choice Neighborhoods program and the Self-help Homeownership Opportunity Program, shaving an additional $1.1 billion from HUD’s budget.

However, Carson has said that some elements of those programs might be shifted to other initiatives, rather than eliminated. He also has said he anticipates that the removal of redundancies, inefficiencies and waste will allow for the budget reductions to have "no material effect."

As to able-bodied individuals receiving housing assistance, he said that “we do those people a great disservice when we simply maintain them.” During his listening tour, he peppered public housing officials with questions about which agency or company was paying for maintenance, what comforts the facilities were providing for aid recipients, and what kind of job training the facilities provided.

Carson plans to advance public-private partnerships, extending low-income housing tax credits and providing more opportunities for public-housing residents to get jobs at the buildings where they live. "The biggest tools are the partnerships — public, private, nonprofit and faith community partnerships — which allow us to leverage those federal dollars, anywhere from 2, 3, 4, 5 to 20-to-1."

Dodd-Frank repeal sought

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, enacted in response to the national financial crisis of 2007–2008, tightened federal regulation of financial institutions in many ways. Congress is debating legislation that would amend or repeal numerous Dodd-Frank provisions.  

Proponents of repeal, including Trump Administration officials, argue that community banks and credit unions, in particular, are struggling to keep up with the regulatory burdens imposed by the law. They also argue that those provisions add undue costs to transactions, thus slowing economic growth. Opponents argue that loosening Dodd-Frank restrictions to the extent that proponents advocate would lead to another financial crisis. 

For further details on the first 100 days of Trump Administration housing policy, click on TRUMP ADMINISTRATION’S FIRST 100 DAYS.

Regulatory barriers to housing development

Although the new Administration has not moved yet to reduce regulatory barriers to housing development, President Trump advocated doing so during the 2016 campaign. EHI has summarized his statements and steps that could be taken along those lines that would benefit low- and moderate-income Americans. For more, click on TRUMP ON REGULATORY BARRIERS TO HOUSING DEVELOPMENT.

Rent increases continue lower in EHI’s local emphasis area—the Washington, DC, region—than in other major metropolitan areas

 

Rent increases (“rent growth”) for housing in the Washington, DC, metropolitan area continued well below the national average, for the year ending in October 2016, even though rent growth nationwide was decelerating mildly. During that period, DC-area rent growth was:

• about half the national averages of 5.7% overall and 6% for “renters-by-necessity” (which includes Americans who lack the wealth to buy homes, such as low- and moderate-income people), and
• the lowest of all but one of the nation’s 30 largest metros.

(Those figures were reported by Yardi Matrix, a major, commercial real estate research and data platform focused on the apartment market industry.) The lower-than-average rent growth in the DC area, a trend now in its fourth year, is gratifying to EHI, because the DC region is where EHI has concentrated its local advocacy. For example, during EHI's first five years, one affordable housing unit per day was added to local plans in its home county (Fairfax County, Virginia), following EHI's advocacy,. For more, click on EHI's FIRST FIVE YEARS. 

The recent trend in the D.C. region is a dramatic change. Nowhere did rents rise faster, between 1980 and 2014, than the D.C. region—where they climbed 86 percent (adjusted for inflation), while renters’ incomes rose only by an inflation-adjusted 33 percent (according to a major new analysis by Apartment List). The new, lower rent growth in that region is especially helpful to low- and moderate-income people, because most of them rent, and housing costs generally consume much more of their incomes.

It also bears noting that the DC region is bucking the national trend toward less affordable home purchase prices. Home prices became less affordable in 63% of counties nationwide, for the year ended in September 2016—according to RealtyTrac. But the situation was much better in the DC area. While the District saw a 4 percent decline in affordability, Montgomery County and Arlington County each saw a 5 percent improvement in affordability from third quarter 2015 to third quarter 2016. Fairfax County saw a 2 percent improvement, and Alexandria saw a 1 percent improvement.

As to the rental market, DC-area housing demand fundamentals continue quite strong. Yardi’s observations about the recent deceleration in rent growth nationwide appear fully applicable to the DC area:

The deceleration is far from being a sign that the sector is overheated. Fundamentals in most markets continue to be strong. Occupancies of stabilized properties are not far from cyclical highs, while the growing population coupled with strong job numbers is producing above-trend household formation that leads to demand for apartments. Some 26 of our top 30 metros are above the 2.3% long-term average for rent growth, and we expect that to continue in most markets.

To read EHI’s full update, click on DC-AREA RENT INCREASES CONTINUE MODERATE THROUGH OCTOBER 2016. To access background information on recent rental cost trends in DC and nationwide, click on EHI HELPS ITS HOME REGION TO MUCH-IMPROVED RENTAL HOUSING COST RECORD (June 2016). 

 

 U.S. Supreme Court rules that housing practices with

disproportionate, adverse impact on minorities may violate

federal Fair Housing Act, regardless of intent

 

On June 25, 2015, the U.S. Supreme Court ruled that the federal Fair Housing Act (“FHA,” 42 U.S.C. § 3601 et seq.,) prohibits housing practices that have a disproportionately adverse effect on members of minority groups—unless those practices have a justifiable purpose and properly limited scope. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project (ICP), No. 13–1371 (June 25, 2015).

In a 5-4 decision, the Court held that discriminatory intent is irrelevant to whether such a “disparate impact” violation exists. The Court also explained what a litigant must show in order to prove, or, conversely defend against, an alleged violation. The Court’s decision applies both to government officials and private persons.

The FHA’s prohibition on practices that have such a “disparate impact” is an important basis for challenging exclusionary housing policies, because those policies often have much greater adverse impacts on minority group members than on the overall population. The Court stated:

These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification. Suits targeting such practices reside at the heartland of disparate-impact liability.

(Slip op. at 17) The Court’s opinion, authored by Justice Kennedy, clarified the elements of a disparate impact housing violation, which had been stated somewhat differently by certain lower courts. The Supreme Court essentially adopted the statement of those elements in the recent rule issued by the U. S. Department of Housing and Urban Development (HUD), regarding such cases.Implementation of the Fair Housing Act’s Discriminatory Effects Standard: Final Rule, 78 Fed. Reg. 11460 (2013) (codified at 24 CFR §100.500).

HUD’s formulation involves the same kind of burden-shifting approach the Court has formulated for other anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964 (equal employment opportunity). Thus, a person complaining of alleged housing discrimination (“plaintiff”) has the initial burden of proving “that a challenged practice caused or predictably will cause a discriminatory effect.” 24 CFR §100.500(c)(1) (2014).

If a plaintiff makes that showing, the burden shifts to the defendant to prove “that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests.”Id., §100.500(c)(2). If the defendant makes its showing, the plaintiff still can “prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.” Id., §100.500(c)(3).

To see the Supreme Court decision and/or HUD rule in their entirety, click on the hyperlinks above. 

EHI report shows how exclusionary housing policies are linked to deficiencies in low-income children's health, education, and general development

 

Many studies have found that housing problems—such as unsafe and unhealthful conditions, unaffordable housing costs, and neighborhoods isolated from high-performing schools and health facilities—are linked to increased developmental problems among low-income children. (Those children live in households that have incomes of 80 percent or less of their area’s median income.) Among the aspects of development involved are children’s health (physical, mental and emotional), safety, educational achievement, and general cognitive and behavioral development.

Because exclusionary housing policies raise major barriers to the production and preservation of adequate amounts of suitable housing, those policies:

• substantially increase the number of low-income children who must live in unsafe, unhealthful, and/or overcrowded housing conditions, and in decaying and/or unsafe neighborhoods;
• isolate many such children, and their neighborhoods, from most economic opportunities, and from high-performing schools and health facilities; and
• raise housing prices (by 20 to 50 percent in many major metropolitan areas), making those prices unaffordable to low- and moderate-income families with children—thus causing economic instability in those families, and many involuntary, disruptive moves (usually to poorer neighborhoods).

EHI has prepared a memorandum summarizing how exclusionary housing policies aggravate housing problems that have been linked to those adverse effects. (To access EHI’s memorandum in its entirety, please click CHILDREN'S DEVELOPMENT & XHPs.) EHI concludes that eliminating exclusionary housing policies is a crucial step toward improving low-income children’s development.

EHI’s analysis is based on an important new report by the U.S. Department of Housing and Urban Development (HUD) that summarizes in detail existing studies of housing and children’s development. (HUD PD&R, Evidence Matters: Housing’s and Neighborhoods’ Role in Shaping Children’s Future (Fall 2014) (“HUD 2014”), posted at: http://www.huduser.org/portal/periodicals/em/EM_Newsletter_fall_2014.pdf).  

 

MORE EHI ARTICLES

 

• 2016 Obama Administration Housing Development Toolkit addressed devastating impacts of regulatory barriers (primarily local exclusionary zoning and housing policies), on housing adequacy and affordability in America. It also discussed various action steps that states and local jurisdictions can take to reverse those impacts. For more, click on 2016 WHITE HOUSE TOOLKIT.
• Major report by McKinsey Global Institute finds that overcoming exclusionary housing policies is the most critical step in providing affordable housing--in the United States and around the world. For more, click on McKINSEY REPORT ON MEETING GLOBAL HOUSING AFFORDABILITY CHALLENGE.
• HUD issues Affirmatively Furthering Fair Housing Rule (July 2015), requiring greater consideration of exclusionary and other discriminatory housing conditions by federal housing fund recipients. For more, click on HUD issues AFFH Rule. To read the Rule itself, click on HUD, Affirmatively Furthering Fair Housing (AFFH): Final Rule, 80 Fed. Reg. 42,272, 42,352 (July 16, 2015). 
• Inside Philanthropy urges funders to support EHI’s efforts to break the grip of exclusionary zoning and other exclusionary housing policies on housing opportunities for low- and moderate-income people. For more, click on Inside Philanthropy urges funders to support EHI. 
• Recent Washington Post articles highlight serious, adverse effects of local housing and land use policies: For more, click on ROGER LEWIS ON REGULATORY BARRIERS, and AFFORDABLE RENTS FADING AWAY IN D.C. EHI has expressed similar views in letters printed by the Post. For more, click on EHI LETTERS IN WASHINGTON POST. 

• EHI analyzes whether Congress has Constitutional authority to prohibit unwarranted state and local regulatory restrictions on housing supply, if those restrictions affect interstate commerce—as a number of recent studies indicate they now do. For more, click on INTERSTATE EFFECTS OF RBHAs (2014). 

• EHI responds to Wall Street Journal article on new exclusionary policies in certain suburbs of Phoenix and Denver. For more, click on WSJ on new exclusionary policies.

• One affordable housing unit per day is added to plans in EHI's home county, following EHI's advocacy, during its first five years (2008-2013). For more, click on EHI's FIRST FIVE YEARS.

• EHI issues analysis of role of governmental land use planning in housing shortages and excessive costs. For more, click on EHI ANALYSIS OF JOBS-HOUSING REPORT

 

Equitable Housing Institute

P.O. Box 1402