[Federal Register Volume 78, Number 139 (Friday, July 19, 2013)]
[Proposed Rules]
[Pages 43710-43743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-16751]



[[Page 43709]]

Vol. 78

Friday,

No. 139

July 19, 2013

Part IV





Department of Housing and Urban Development





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24 CFR Parts 5, 91, 92, et al.





Affirmatively Furthering Fair Housing; Proposed Rule

  Federal Register / Vol. 78 , No. 139 / Friday, July 19, 2013 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 91, 92, 570, 574, 576, and 903

[Docket No. FR-5173-P-01]
RIN No. 2501-AD33


Affirmatively Furthering Fair Housing

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: Through this rule, HUD proposes to provide HUD program 
participants with more effective means to affirmatively further the 
purposes and policies of the Fair Housing Act, which is Title VIII of 
the Civil Rights Act of 1968. The Fair Housing Act not only prohibits 
discrimination but, in conjunction with other statutes, directs HUD's 
program participants to take steps proactively to overcome historic 
patterns of segregation, promote fair housing choice, and foster 
inclusive communities for all. As acknowledged by the U.S. Government 
Accountability Office (GAO) and many stakeholders, advocates, and 
program participants, the current practice of affirmatively furthering 
fair housing carried out by HUD grantees, which involves an analysis of 
impediments to fair housing choice and a certification that the grantee 
will affirmatively further fair housing, has not been as effective as 
had been envisioned. This rule accordingly proposes to refine existing 
requirements with a fair housing assessment and planning process that 
will better aid HUD program participants fulfill this statutory 
obligation and address specific comments the GAO raised. To facilitate 
this new approach, HUD will provide states, local governments, insular 
areas, and public housing agencies (PHAs), as well as the communities 
they serve, with data on patterns of integration and segregation; 
racially and ethnically concentrated areas of poverty; access to 
education, employment, low-poverty, transportation, and environmental 
health, among other critical assets; disproportionate housing needs 
based on the classes protected under the Fair Housing Act; data on 
individuals with disabilities and families with children; and 
discrimination. From these data, program participants will evaluate 
their present environment to assess fair housing issues, identify the 
primary determinants that account for those issues, and set forth fair 
housing priorities and goals. The benefit of this approach is that 
these priorities and goals will then better inform program 
participant's strategies and actions by improving the integration of 
the assessment of fair housing through enhanced coordination with 
current planning exercises. This proposed rule further commits HUD to 
greater engagement and better guidance for program participants in 
fulfilling their obligation to affirmatively further fair housing. With 
this new clarity through guidance, a template for the assessment, and a 
HUD-review process, program participants should achieve more meaningful 
outcomes that affirmatively further fair housing.

DATES: Comment Due Date: September 17, 2013.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410-0500: Communications must refer 
to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0001.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note:  To receive consideration as public comments, comments 
must be submitted through one of the two methods specified above. 
Again, all submissions must refer to the docket number and title of 
the rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number via TTY by calling the toll-free Federal Relay 
Service during working hours at 800-877-8339. Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Camille Acevedo, Associate General 
Counsel for Legislation and Regulations, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW., Room 
10282, Washington, DC 20410; telephone number 202-708-1793 (this is not 
a toll-free number). Hearing- or speech-impaired individuals may access 
this number via TTY by calling the toll-free Federal Relay Service 
during working hours at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

Purpose of the Regulatory Action

    From its inception, the Fair Housing Act (and subsequent laws 
reaffirming its principles) outlawed discrimination and set out steps 
that needed to be taken proactively to overcome the legacy of 
segregation through the obligation of affirmatively furthering fair 
housing (AFFH).
    Informed by lessons learned in localities across the country, HUD 
issues this proposed rule, which provides new tools now available to 
help guide communities in fulfilling the original promise of the Fair 
Housing Act. The proposed rule involves refining the fair housing 
elements of the existing planning process that states, local 
governments, insular areas, and public housing agencies (program 
participants) now undertake. The process proposed by this rule assists 
these program participants to assess fair housing determinants, 
prioritize fair housing issues for response, and take meaningful 
actions to affirmatively further fair housing.
    As recognized by HUD staff, program participants, civil rights 
advocates, the GAO, and others, the fair housing elements of current 
housing and community development planning are not as effective as they 
could be, do not incorporate leading innovations in sound planning 
practice, and do not sufficiently promote the effective use of limited 
public resources to affirmatively further fair housing. The approach

[[Page 43711]]

proposed by the rule addresses these issues and strengthens AFFH 
implementation. It does so by providing data to program participants 
related to fair housing planning, clarifying the goals of the AFFH 
process, and instituting a more effective mechanism for HUD's review 
and oversight of fair housing planning. The proposed rule does not 
mandate specific outcomes for the planning process. Instead, 
recognizing the importance of local decision-making, it establishes 
basic parameters and helps guide public sector housing and community 
development planning and investment decisions to fulfill their 
obligation to affirmatively further fair housing. In addition, it helps 
educate other public sector agencies in their planning and investment 
decisions, and provides relevant civil rights information to the 
community and other private and public sector stakeholders.

Summary of Legal Authority

    The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, 
42 U.S.C. 3601-3619) declares that it is ``the policy of the United 
States to provide, within constitutional limitations, for fair housing 
throughout the United States.'' See 42 U.S.C. 3601. Accordingly, the 
Fair Housing Act prohibits discrimination in the sale, rental, and 
financing of dwellings, and in other housing-related transactions 
because of race, color, religion, sex, familial status, national 
origin, or handicap.\1\ See 42 U.S.C. 3601 et seq. Section 808(e)(5) of 
the Fair Housing Act (42 U.S.C. 3608(e)(5)) requires that HUD programs 
and activities be administered in a manner affirmatively to further the 
policies of the Fair Housing Act. The Act leaves it to the Secretary to 
define the precise scope of the AFFH obligation for HUD's program 
participants.
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    \1\ Although the term ``disability'' is used today to refer to 
an individual's physical or mental impairment, the term ``handicap'' 
is the term used in the Fair Housing Act, as enacted in 1968.
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Summary of the Major Provisions of the Rule

    The proposed rule--in concert with other HUD policies--is 
structured to provide direction, guidance, and procedures for program 
participants to promote fair housing choice. The rule promotes these 
objectives and responds to the GAO's observations by:
    a. Refining the current requirement that program participants 
complete an Analysis of Impediments (AI) with a more effective and 
standardized Assessment of Fair Housing (AFH), through which program 
participants would evaluate fair housing challenges and goals using 
regional and national benchmarks and data tools to facilitate the 
measurements of trends and changes over time;
    b. Improving fair housing assessment, planning, and decision-making 
by providing data that program participants must consider in their 
AFHs, thereby aiding program participants establish fair housing goals 
to address these issues and concerns;
    c. Incorporating, explicitly, fair housing planning into existing 
planning processes, the consolidated plan and PHA Annual Plan, which in 
turn incorporates fair housing priorities and concerns more effectively 
into housing, community development, land-use, and other decision-
making that influences how communities and regions grow and develop;
    d. Encouraging and facilitating regional approaches to addressing 
fair housing issues, including effective incentives for collaboration 
across jurisdictions and PHAs, and incorporation of fair housing 
planning into regionally significant undertakings, such as major public 
infrastructure investments;
    e. Bringing people historically excluded because of characteristics 
protected by the Fair Housing Act into full and fair participation in 
decisions about the appropriate uses of HUD funds and other 
investments, through a requirement to conduct community participation 
as an integral part of program participants' AFHs; and
    f. Establishing an approach to affirmatively further fair housing 
that calls for coordinated efforts to combat illegal housing 
discrimination, so that individuals and families can make decisions 
about where to live, free from discrimination, with necessary 
information regarding housing options, and with adequate support to 
make their choices viable.
    Through these improvements, the rule seeks to make program 
participants more empowered to foster the diversity and strength of 
communities and regions by improving integrated living patterns and 
overcoming historic patterns of segregation, reducing racial and ethnic 
concentrations of poverty, and responding to identified 
disproportionate housing needs of persons protected by the Fair Housing 
Act. The rule also seeks to assist program participants in reducing 
disparities in access to key community assets based on race, color, 
religion, sex, familial status, national origin, or disability, thereby 
improving economic competitiveness and quality of life.
    HUD intends the guidance, data, tools, and procedural improvements 
provided under this proposed rule to reduce the current data collection 
burden on program participants. HUD will provide technical assistance 
and guidance that will allow program participants to spend less time 
gathering information and more time engaged in conversation with the 
community regarding the most effective means of advancing their fair 
housing goals. In addition, HUD is facilitating the integration of 
previously separate planning processes into a single planning process, 
to the extent feasible, both to streamline the work that program 
participants undertake and to support the weaving of fair housing 
values throughout housing and community development decision-making. 
Under this new process, program participants will submit assessments on 
a regular schedule and HUD will review them. In addition to achieving 
more meaningful fair housing outcomes through direct alignment with 
related planning and investment processes, HUD expects that the clarity 
and explicit direction provided by the proposed rule should help 
program participants comply with their affirmatively furthering fair 
housing responsibilities. One of HUD's aspirations for the proposed 
rule is that it will reduce the risk of litigation for program 
participants. Moreover, HUD's commitment to be an ongoing partner in 
the process should result submissions that meet the standards for 
analysis that the proposed rule seeks to establish.

Summary of Costs and Benefits

    As detailed in the Regulatory Impact Analysis (found at 
www.regulations.gov under the docket number 5173-P-01-RIA), HUD does 
not expect a large aggregate change in compliance costs for program 
participants as a result of the proposed rule. As a result of increased 
emphasis on affirmatively furthering fair housing within the planning 
process, there may be increased compliance costs for some program 
participants, while for others the improved process and goal-setting, 
combined with HUD's provision of foundational data, is likely to 
decrease compliance costs. Program participants are currently required 
to engage in outreach and collect data in order to meet the obligation 
to affirmatively further fair housing. As more fully addressed in the 
Regulatory Impact Analysis that accompanies this rule, HUD estimates 
net annual compliance costs in the range of $3 to $9 million.
    Further, HUD believes that the rule has the potential for 
substantial benefit

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for program participants and the communities they serve. The rule would 
improve the fair housing planning process by providing greater clarity 
to the steps that program participants undertake to meaningfully 
affirmatively further fair housing, and at the same time provide better 
resources for program participants to use in taking such steps, 
hopefully resulting in increased compliance and fewer instances of 
litigation. Through this rule, HUD commits to provide states, local 
governments, PHAs, the communities they serve, and the general public 
with local and regional data on patterns of integration, racially and 
ethnically concentrated areas of poverty, access to key community 
assets, and disproportionate housing needs based on classes protected 
by the Fair Housing Act. From these data, program participants should 
be better able to evaluate their present environment to assess fair 
housing issues, identify the primary determinants that account for 
those issues, set forth fair housing priorities and goals, and document 
these activities.
    The rule covers program participants that are subject to a great 
diversity of local preferences and economic and social contexts across 
American communities and regions. For these reasons, HUD recognizes 
there is significant uncertainty associated with quantifying outcomes 
of the process, proposed by this rule, to identify barriers to fair 
housing, the priorities of program participants in deciding which 
barriers to address, the types of policies designed to address those 
barriers, and the effects of those policies on protected classes. In 
brief, because of the diversity of communities and regions across the 
Nation and the resulting uncertainty of precise outcomes of the 
proposed AFFH planning process, HUD cannot quantify the benefits and 
costs of polices influenced by the rule. HUD is confident, however, 
that the rule will create a process that allows for each jurisdiction 
to not only undertake meaningful fair housing planning, but to have 
capacity and a well-considered strategy to implement actions to 
affirmatively further fair housing.

II. Background

A. Legal Authority

    The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, 
42 U.S.C. 3601-3619), enacted into law on April 11, 1968, declares that 
it is ``the policy of the United States to provide, within 
constitutional limitations, for fair housing throughout the United 
States.'' See 42 U.S.C. 3601. Accordingly, the Fair Housing Act 
prohibits discrimination in the sale, rental, and financing of 
dwellings, and in other housing-related transactions because of race, 
color, religion, sex, familial status, national origin, or handicap. 
See 42 U.S.C. 3601 et seq. Section 808(e)(5) of the Fair Housing Act 
(42 U.S.C. 3608(e)(5)), requires that HUD programs and activities be 
administered in a manner affirmatively to further the policies of the 
Fair Housing Act. Section 808(d) of the Fair Housing Act (42 U.S.C. 
3608(d)) directs other federal agencies to administer their programs 
relating to housing and urban development in a manner affirmatively to 
further the policies of the Fair Housing Act, and to cooperate with the 
Secretary in this effort.
    The Fair Housing Act's provisions related to ``affirmatively . . . 
further[ing]'' fair housing, contained in sections 3608(d) and (e), 
extend beyond the Act's anti-discrimination mandates. See, e.g., Otero 
v. N.Y. City Hous. Auth., 484 F.2d 1122 (2d Cir. 1973); Shannon v. HUD, 
436 F.2d 809 (3d Cir. 1970). When the Fair Housing Act was originally 
enacted in 1968 and amended in 1988, major portions of the statute 
involved the prohibition of discriminatory activities (whether 
undertaken with a discriminatory purpose or with a discriminatory 
impact) and how private litigants and the government could enforce 
these provisions.
    In section 3608 of the Fair Housing Act, however, Congress went 
further by mandating that ``programs and activities relating to housing 
and urban development'' be administered ``in a manner affirmatively to 
further the purposes of this subchapter.'' Congress has repeatedly 
reinforced this mandate, requiring in the Housing and Community 
Development Act of 1974, the Cranston-Gonzalez National Affordable 
Housing Act, and in the Quality Housing and Work Responsibility Act of 
1998, that covered HUD program participants certify as a condition of 
receiving federal funds that they will affirmatively furthering fair 
housing. See 42 U.S.C. 5304(b)(2), 5306(d)(7)(B), 12705(b)(15), 1437C-
1(d)(16).\2\
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    \2\ Section 104(b)(2) of the Housing and Community Development 
Act (HCD Act) (42 U.S.C. 5304(b)(2)) requires that, to receive a 
grant, the state or local government must certify that it will 
affirmatively further fair housing. Section 106(d)(7)(B) of the HCD 
Act (42 U.S.C. 5306(d)(7)(B)) requires a local government that 
receives a grant from a state to certify that it will affirmatively 
further fair housing. The Cranston-Gonzalez National Affordable 
Housing Act (NAHA) (42 U.S.C. 12704 et seq.) provides in section 105 
(42 U.S.C. 12705) that states and local governments that receive 
certain grants from HUD must develop a comprehensive housing 
affordability strategy to identify their overall needs for 
affordable and supportive housing for the ensuing 5 years, including 
housing for homeless persons, and outline their strategy to address 
those needs. As part of this comprehensive planning process, section 
105(b)(15) of NAHA (42 U.S.C. 12705(b)(15)) requires that these 
program participants certify that they will affirmatively further 
fair housing. The Quality Housing and Work Responsibility Act of 
1998 (QHWRA), enacted into law on October 21, 1998, substantially 
modified the United States Housing Act of 1937 (42 U.S.C. 1437 et 
seq.) (1937 Act), and the 1937 Act was more recently amended by the 
Housing and Economic Recovery Act of 2008, Public Law 110-289 
(HERA). QHWRA introduced formal planning processes for PHAs--a 5-
Year Plan and an Annual Plan. The required contents of the Annual 
Plan included a certification by the PHA that the PHA will, among 
other things, affirmatively further fair housing.
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    In examining the legislative history of the Fair Housing Act and 
related statutes, courts have found that the purpose of the AFFH 
mandate is to ensure that recipients of federal housing and urban 
development funds do more than simply not discriminate: it obligates 
them to take proactive steps to address segregation and related 
barriers for those protected by the Act, particularly as reflected in 
racially and ethnically concentrated areas of poverty. The United 
States Supreme Court, in one of the first Fair Housing Act cases it 
decided, referenced the Act's co-sponsor, Senator Walter F. Mondale, in 
noting that ``the reach of the proposed law was to replace the ghettos 
`by truly integrated and balanced living patterns.' '' Trafficante v. 
Metro. Life Ins. Co., 409 U.S. 205, 211 (1972).\3\ The Act recognized 
that ``where a family lives, where it is allowed to live, is 
inextricably bound up with better education, better jobs, economic 
motivation, and good living conditions.'' 114 Cong. Rec. 2276-2707 
(1968). As the Second Circuit has stated, section 3608(d) requires that 
``[a]ction must be taken to fulfill, as much as possible, the goal of 
open, integrated residential housing patterns and to prevent the 
increase of segregation, in ghettos, of racial groups whose lack of 
opportunity the Act was designed to combat.'' Otero, 484 F.2d at 1134.
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    \3\ Reflecting the era in which it was enacted, the Fair Housing 
Act's legislative history and early court decisions refer to 
``ghettos'' when discussing racially concentrated areas of poverty.
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    The Act leaves it to the Secretary to define the precise scope of 
the AFFH obligation for HUD's program participants. Over the years, 
courts have provided some guidance for this task. In the first 
appellate decision interpreting section 3608, for example, the Third 
Circuit emphasized the importance of racial and socioeconomic data to 
ensure that ``the agency's judgment was an informed one'' based on an

[[Page 43713]]

institutionalized method to assess site selection and related issues. 
Shannon, 436 F.2d at 821-22. In multiple other decisions, courts have 
set forth how the section applies to specific policies and practices of 
HUD program participants. See, e.g., Otero, 484 F.2d at 1132-37; 
Langlois v. Abington Hous. Auth., 207 F.3d 43 (1st Cir. 2000); U.S. ex 
rel. Anti-Discrimination Ctr. v. Westchester Cnty., 2009 WL 455269 
(S.D.N.Y. Feb. 24, 2009).
    In addition to the statutes and court cases emphasizing the 
requirement of recipients of federal housing and urban development 
funds to affirmatively further fair housing, Executive Orders have also 
addressed the importance of complying with this requirement.\4\
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    \4\ Executive Order 12892, entitled ``Leadership and 
Coordination of Fair Housing in Federal Programs: Affirmatively 
Furthering Fair Housing,'' issued January 17, 1994, vests primary 
authority in the Secretary of HUD for all federal executive 
departments and agencies to administer their programs and activities 
relating to housing and urban development in a manner that furthers 
the purposes of the Fair Housing Act. Executive Order 12898, 
entitled Executive Actions to Address Environmental Justice in 
Minority Populations and Low-Income Populations, issued on February 
11, 1994, declares that Federal agencies shall make it part of their 
mission to achieve environmental justice ``by identifying and 
addressing, as appropriate, disproportionately high and adverse 
human health or environmental effects of its programs, policies, and 
activities on minority populations and low-income populations.''
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B. The Need To Refine the Current AFFH Planning Framework

    HUD has approached the AFFH obligation in various ways,\5\ and this 
proposed rule is intended in particular to improve fair housing 
planning by more directly linking it to housing and community 
development planning processes currently undertaken by program 
participants as a condition of their receipt of HUD funds. At the 
jurisdictional planning level, HUD requires program participants 
receiving Community Development Block Grant (CDBG), HOME Investment 
Partnerships (HOME), Emergency Solutions Grants (ESG), and Housing 
Opportunities for Persons With AIDS (HOPWA) formula funding to 
undertake an analysis to identify impediments to fair housing choice 
within the jurisdiction take appropriate actions to overcome the 
effects of any impediments, and keep records on such efforts. See 24 
CFR 91.225(a)(1), 91.325(a)(1).\6\ Likewise, PHAs must commit, as part 
of their planning process for PHA Plans and Capital Fund Plans, to 
examine their programs or proposed programs, identify any impediments 
to fair housing choice within those programs, address those impediments 
in a reasonable fashion in view of the resources available, work with 
jurisdictions to implement any of the jurisdiction's initiatives to 
affirmatively further fair housing that require PHA involvement, 
maintain records reflecting those analyses and actions, and operate 
programs in a manner that is consistent with the applicable 
jurisdiction's consolidated plan. See 24 CFR 903.7(o), 903.15.
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    \5\ These include requirements involving the evaluation of site 
and neighborhood conditions under which HUD-funded housing 
development occurs and the affirmative marketing of units to promote 
integrated residences. See, e.g., 24 CFR 891.125, 941.202, 983.57.
    \6\ For these programs, the Consolidated Plan is intended as the 
program participant's comprehensive mechanism to gather relevant 
housing data, detail housing, homelessness, and community 
development strategies, and commit to specific actions. These are 
then updated annually through annual action plans.
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    Over the past several years, HUD has reviewed the efficacy of these 
mechanisms to fulfill the AFFH mandate and has concluded that the AI 
process can be a more meaningful tool to integrate fair housing into 
program participants' planning efforts. HUD's Fair Housing Planning 
Guide (Planning Guide), a document issued in 1996, provides extensive 
suggestions but does not fully articulate the goals that AFFH must 
advance. In addition, HUD has never provided data to grantees to help 
frame their analysis, and AIs are not regularly submitted to HUD for 
review.
    These observations are reinforced by a recent report by the GAO 
entitled ``HUD Needs to Enhance Its Requirements and Oversight of 
Jurisdictions' Fair Housing Plans,'' GAO-10-905, Sept. 14, 2010. See 
http://www.gao.gov/new.items/d10905.pdf (GAO Report). In this report, 
the GAO found that there has been uneven attention paid to the AI by 
local communities in part because sufficient guidance and clarity was 
viewed as lacking. Specifically, GAO noted the uneven quality of 
existing AIs and found that ``HUD's limited regulatory requirements and 
oversight'' contribute to many grantees placing a ``low priority on 
ensuring that their AIs serve as effective planning tools.'' Id. at 
1.\7\ In its recommendations, GAO emphasized that HUD could assist 
program participants by providing more effective guidance and technical 
assistance and the data necessary to prepare fair housing plans.
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    \7\ The GAO noted that close to 30 percent of the grantees from 
whom it sought documentation had outdated AIs and that almost 5 
percent of the grantees were unable to provide AIs when requested.
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    Stemming from substantial interaction with program participants and 
advocates, and the GAO Report, HUD's analysis is that the current AI 
process is insufficiently integrated into the grantees' planning 
efforts. Many program participants are actively grappling with how 
issues involving race, ethnicity, disability and other fair housing 
concerns do and should influence housing and community development 
planning and actions. HUD has found, however, that program participants 
must turn to outside consultants to collect data and conduct the 
analysis, and have little incentive to use this work as part of the 
consolidated plan or PHA Plan. Moreover, HUD believes that the current 
process does not fully incorporate refinements that have developed 
since the Planning Guide was promulgated in the way that innovators in 
the field address equity in the context of housing and urban 
development.\8\ Especially in a time of limited resources, HUD also 
believes that it can do more to support program participants in the 
process, especially through the provision of data, meaningful technical 
assistance, and guidance.
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    \8\ See, e.g., Department of Housing & Community Development 
Massachusetts, Affirmative Fair Housing and Civil Rights Policy 
(Apr. 2009), http://www.mass.gov/hed/docs/dhcd/hd/fair/affirmativefairhousingp.pdf.
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    The need to rethink HUD's approach to how program participants 
affirmatively further fair housing is reinforced by the fact that 
program participants are working in an America that is more diverse, 
with an increasing number of communities becoming more integrated. 
America has always been a demographically dynamic and diverse nation 
and its diversity is increasing, with over a third of the American 
population now nonwhite, Hispanic/Latino, or a combination of races.\9\ 
Within little more than a generation, America is poised to become a 
nation where traditional minorities are in the majority.\10\ The 
ramifications of this increased diversity encompass a broad array of 
dimensions, from the growing recognition of the correlation between 
negative health indicators and patterns of segregation and poverty to 
the increasing understanding regarding the importance of diversity in 
business, higher education, and elsewhere to prepare workers for the 
21st century

[[Page 43714]]

economy.\11\ HUD's proposed rule also recognizes other significant 
shifts, such as those related to persons with disabilities. 
Demographically, the aging of the population makes physically 
accessible housing and the preservation of housing choice for people 
with disabilities increasingly significant.\12\
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    \9\ See U.S. Department of Commerce, U.S. Census Bureau, The 
White Population: 2010, (Sept. 2011), http://www.census.gov/prod/cen2010/briefs/c2010br-05.pdf.
    \10\ See U.S. Department of Commerce, U.S. Census Bureau, An 
Older and More Diverse Nation by Midcentury Releases: CB08-123 (Aug. 
14, 2008), http://www.census.gov/newsroom/releases/archives/population/cb08-123.html.
    \11\ See Dolores Acevedo-Garcia et. al., Future Directions in 
Residential Segregation and Health Research: A Multilevel Approach 
Am. J. Public Health Vol. 93(2) p. 215-221 (Feb. 2003) available at 
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447719/?tool=pubmed; 
David R. Williams & Chiquita Collins, Racial Residential 
Segregation: A Fundamental Cause of Racial Disparities in Health 
Public Health Report Vol. 119 p. 404-416 (Sept.-Oct. 2001) available 
at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1497358/pdf/12042604.pdf.
    \12\ See U.S. Department of Health & Human Services, 
Administration on Aging, Aging Statistics (Sept. 1, 2011, 1:17:40 
p.m.), http://www.aoa.gov/aoaroot/aging_statistics/index.aspx.
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    Research indicates that disparities in access to community assets 
negatively impact educational and economic outcomes.\13\ Sustained 
exposure to highly distressed neighborhoods is associated with a 
reduction in children's odds of high school graduation by at least 60 
percent,\14\ while low-income students who have access to asset-rich 
neighborhoods with good schools may realize math and reading gains that 
help close the achievement gap.\15\ Given this research, HUD hopes this 
proposed rule and other efforts would reduce disparities in access to 
community assets based on race, color, religion, sex, familial status, 
national origin, or disability.
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    \13\ See Megan A. Turner & Karina Fortuny, Residential 
Segregation and Low-Income Working Families, The Urban Institute 
(Feb. 2009), http://www.urban.org/uploadedpdf/411845_residential_segregation_liwf.pdf.
    \14\ See Wodtke GT et al., (2011), Neighborhood Effects in 
Temporal Perspective: The Impact of Long-Term Exposure to 
Concentrated Disadvantage on High School Graduation. American 
Sociological Review. Vol. 76, No. 5, 713-736.
    \15\ See Heather L. Schwartz, Housing Policy is School Policy: 
Economically Integrative Housing Promotes Academic Success in 
Montgomery County, Maryland A Century Foundation Report p. 57 
(2010), http://www.rand.org/pubs/external_publications/EP201000161.html.
---------------------------------------------------------------------------

C. The Proposed AFFH Planning Framework

    To promote more effective fair housing planning and assist every 
program participant to meet requirements related to affirmatively 
furthering fair housing, HUD proposes in this rule to address directly 
concerns about the current fair housing planning process by making a 
number of key changes. These include: (1) A new fair housing assessment 
and planning tool, the AFH, which replaces the AI, (2) the provision of 
nationally uniform data that will be the predicate for and help frame 
program participants' assessment activities, (3) meaningful and focused 
direction regarding the purpose of the AFH and the standards by which 
it will be evaluated, (4) a more direct link between the AFH and 
subsequent program participant planning products--the consolidated plan 
and the PHA Plan--that ties fair housing planning into the priority 
setting, commitment of resources, and specification of activities to be 
undertaken, and (5) a new HUD review procedure based on clear standards 
that facilitates the provision of technical assistance and reinforces 
the value and importance of fair housing planning activities.
    In terms of the provision of greater clarity regarding the purpose 
of the fair housing assessment and planning process, the proposed rule 
will more clearly define the core goals involved in fulfilling program 
participants' affirmatively furthering fair housing mandate. In doing 
so, HUD begins with goals long associated with this mandate: addressing 
patterns of segregation while supporting integrated and integrating 
communities, as well as seeking to reduce disproportionate housing 
needs among protected class members.\16\ The proposed rule recognizes 
that segregation is due in part to a historical legacy of 
discrimination and continues to have adverse impacts, with the dual 
concentration of poverty and racial and ethnic populations still far 
too prevalent.\17\ Segregation carries a heavy social cost. Numerous 
studies indicate that segregation negatively impacts minorities' 
educational attainment, labor market outcomes, physical and mental 
health, and crime victimization.\18\ These negative outcomes translate 
to lower economic productivity for the Nation as a whole, and increased 
cost to society in a multitude of ways, from the justice system to the 
public health infrastructure. The importance of overcoming patterns of 
segregation and supporting means to advance integration are equally 
important as applied to persons with disabilities. Programmatically, 
HUD recognizes and is implementing means to overcome a legacy related 
to persons with disabilities that reflects a history of inappropriate 
segregation, institutionalization, and otherwise limited equal access 
to housing choices.\19\
---------------------------------------------------------------------------

    \16\ In setting forth these two goals, the proposed rule 
reinforces the proposition that a critical component of addressing 
segregation is providing support for those communities that are 
integrated or are integrating. Strategies and actions to promote the 
effective and long-term viability of these communities is an 
important component of these fair housing goals.
    \17\ See http://www.economicmobility.org/assets/pdfs/PEW_NEIGHBORHOODS.pdf.
    \18\ See, e.g., David Card & Jesse Rothstein, Racial Segregation 
and the Black-White Test Score Gap, 91 Journal of Public Economics 
2158-218 (2007); Edward L. Glaeser & David Cutler, Are Ghettos Good 
or Bad, 112 The Quarterly Journal of Economics 827-872 (1997); David 
Weiner, Byron Lutz & Jens Ludwig, The Effects of School 
Desegregation on Crime National Bureau of Economic Research, Working 
Paper No. 15380 (2009).
    \19\ It has been HUD's policy to encourage community-based 
rather than institutional residences for persons with disabilities. 
In furtherance of the Supreme Court's decision in Olmstead v. L.C., 
527 U.S. 581(1999), and pursuant to regulations at 24 CFR 8.4(d), 
HUD promotes housing in the most integrated setting appropriate to 
the needs of persons with disabilities.
---------------------------------------------------------------------------

    In refining the current AFFH framework, racially or ethnically 
concentrated areas of poverty are of particular concern because they 
couple fair housing issues with other significant local and regional 
policy challenges. These areas clearly fall in the domain of fair 
housing, as they often reflect legacies of segregated housing patterns. 
Of the nearly 3,800 census tracts in this country where more than 40 
percent of the population is below the poverty line, about 3,000 (78 
percent) are also predominantly minority. Racially or ethnically 
concentrated areas of poverty merit special attention because the costs 
they impose extend far beyond their residents, who suffer due to their 
limited access to high-quality educational opportunities, stable 
employment, and other prospects for economic success. Because of their 
high levels of unemployment, capital disinvestment, and other 
stressors, these neighborhoods often experience a range of negative 
outcomes such as exposure to poverty, heightened levels of crime, 
negative environmental health hazards, low educational attainment, and 
other challenges that require extra attention and resources from the 
larger communities of which they are a part. Consequently, 
interventions that result in reducing racially and ethnically 
concentrated areas of poverty hold the promise of providing benefits 
that assist both residents and their communities.\20\
---------------------------------------------------------------------------

    \20\ See William Julius Wilson, When Work Disappears: The World 
of the New Urban Poor 1996.
---------------------------------------------------------------------------

    The proposed rule acknowledges that the prospects for individual or 
familial success are influenced by a variety of neighborhood features 
far more extensive than just housing. These other neighborhood features 
must be important considerations in seeking to advance fair housing. 
HUD has consistently recognized that features

[[Page 43715]]

other than housing stock are important components assessing the quality 
of housing opportunities and land use and planning activities.\21\ 
Drawing upon pertinent research,'' \22\ the proposed rule incorporates 
a set of measures designed to assess the extent to which a particular 
area possesses or is linked to assets that correlate with an increased 
chance to improve an individual or family's life trajectory. It also 
proposes to provide program participants with the tools to assess the 
assets and stressors within a community that impact the quality of life 
of residents. In addition, the proposed rule notes that shifting 
residential and development patterns have significant implications for 
families with children, particularly impacting children's ability to 
receive a quality education. In setting forth this primary objective 
and commitment to providing relevant data tools and assessment 
techniques, the proposed rule attempts to follow the advice provided by 
the GAO report to give program participants more guidance and tools to 
prepare more effective fair housing plans.
---------------------------------------------------------------------------

    \21\ See, e.g., HUD Fair Housing Planning Guide 5-9 (emphasizing 
that jurisdictions should strive to equalize services, including 
schools, recreational facilities and programs, social service 
programs, parks, roads, transportation, street lighting, trash 
collection, street cleaning, crime prevention, and police protection 
activities, in their fair housing plan); see also, e.g., 24 CFR 
941.202 (requiring that, inter alia, environmental conditions, 
access to employment opportunities, and access to ``social, 
recreational, educational, commercial, and health facilities and 
services, and other municipal facilities and services'' be 
considered when choosing neighborhoods in which to locate public 
housing); 24 CFR 891.125.
    \22\ See Xavier de Souza Briggs, The Geography of Opportunity: 
Race and Housing Choice in Metropolitan America (2005).
---------------------------------------------------------------------------

    A second core innovation in the proposed rule involves HUD's 
provision of data to program participants as a starting point in the 
fair housing assessment process. This data will be drawn from 
nationally uniform sources(including data related to education, 
poverty, transit access, employment, exposure to environmental health 
hazards, and other critical community assets, as well as nationally 
uniform local and regional data on patterns of integration and 
segregation; racial and ethnic concentrations of poverty; 
disproportionate housing needs based on protected class; and 
outstanding discrimination findings. The provision of this data will 
both enable program participants to more knowledgably undertake their 
AFH and reduce the burden that currently exists for undertaking the AI. 
The HUD data may be supplemented by available local or regional 
information. HUD believes that these broader data will greatly assist 
housing and community development strategies, investments, and other 
actions to affirmatively further fair housing at the jurisdictional and 
regional level.
    By directly providing nationally uniform information about the fair 
housing dynamics of regions and communities to 1,200 local governments, 
all states, the insular areas, and more than 4,000 PHAs, HUD expects 
that officials, community members, and other stakeholders throughout 
the Nation will be able to have a more informed and transparent 
conversation about the fair housing potential of public and private 
investments, strategies, and initiatives. This offers significant 
opportunities for innovation and progress, especially given the ways in 
which this data is expected to enable communities to assess changes 
over time. Further, having a common, national baseline of fair housing 
indicators will facilitate coordination and connection with planning 
and assessment of civil rights implications in other domains closely 
related to housing and community development, such as transportation, 
education, employment, and health.
    Under the proposed rule, program participants will use HUD data to 
evaluate patterns of integration and segregation, racial and ethnic 
concentration of poverty, and disparities in access to valuable 
community assets and disproportionate housing needs based on protected 
class and evaluate the primary determinants of these conditions. 
Program participants will also assess whether laws, policies, or 
practices limit fair housing choice, as well as the role of public 
investments in creating, perpetuating, or alleviating the segregation 
patterns revealed by the assessment. Examples of such laws, policies, 
or practices include, but are not limited to, zoning, land use, 
financing, infrastructure planning, and transportation.
    A third critical innovation in the proposed rule that also responds 
directly to the GAO report is the AFH, which replaces the AI, and is 
completed by program participants with HUD data and guidance. The AFH 
will help program participants more effectively integrate fair housing 
concerns into the consolidated plan and PHA planning process. The 
proposed rule requires program participants to submit their AFH to HUD 
in advance of the consolidated plan and PHA Plan submission so that the 
AFH may then inform strategies and actions in those plans. HUD's review 
of an AFH will be based on standards for acceptance contained in the 
proposed rule, and an accepted AFH and completion of corresponding 
requirements related to affirmatively furthering fair housing in the 
consolidated plan and PHA Plan will be required for HUD to approve 
those respective plans. HUD will either accept the AFH or provide the 
program participant with specific reasons for non-acceptance, the 
actions the program participant needs to take to meet the criteria for 
acceptance, and, as appropriate, technical assistance to meet AFH 
requirements.
    Once accepted, the AFH will then inform consolidated plan and PHA 
Plan strategies, more directly and effectively incorporating fair 
housing planning into the comprehensive housing and planning processes 
that program participants now use.\23\ Consolidated plan program 
participants will demonstrate how their affordable housing and 
community development priorities and objectives will affirmatively 
further fair housing. These program participants will also identify any 
additional strategies and actions not directly tied to the priorities 
they are setting forth to further goals of the AFH. Similarly, these 
program participants will describe actions to affirmatively further 
fair housing in their annual action plans.
---------------------------------------------------------------------------

    \23\ The consolidated plan is a 5-year planning instrument. The 
annual action plan is the plan submitted by consolidated plan 
program participants that describes the consolidated plan actions 
that participants intend to carry out in a calendar year.
---------------------------------------------------------------------------

    The proposed rule similarly creates a structure for PHAs to 
cooperate fully in the creation of the AFH and then to use the 
resulting AFH to inform the PHA planning process, all as a predicate to 
the PHA certification that it will affirmatively further fair housing. 
As with consolidated plan program participants, PHAs will incorporate 
the AFH into the PHA planning process in order to inform strategies and 
actions in their 5-Year PHA Plans and/or Annual Plans to affirmatively 
further fair housing. PHAs will have the choice to participate with 
their local government in preparing the AFH, prepare the AFH 
independently, or follow the state's AFH. PHAs may adjust their 
planning cycle over time to assure that the AFH is completed before 
their PHA Plan work begins. For PHAs that participate in the new 
collaborative AFH, the resulting analysis is designed to be sufficient 
to support a 5-year planning horizon, and PHAs will not have to 
undertake the same exercise every year. This will free up PHA resources 
to focus on implementation and long-term strategies.

[[Page 43716]]

    Many fair housing issues transcend local jurisdictional boundaries. 
Solutions to such issues often involve coordinated actions by multiple 
jurisdictions, and require creative collaboration across traditionally 
disconnected policy domains. Coordination between jurisdictions that 
undertake consolidated planning and PHAs can allow for more effective 
deployment of limited resources, which is important because PHA 
programs, including notably the Housing Choice Voucher Program, can 
frequently be significant mechanisms to enable families to access 
communities offering assets that are often difficult for voucher 
families to obtain. In this context, regional assessments can be an 
important means for effectively addressing these issues, as well as 
those that are local to independent jurisdictions. Regional assessments 
are therefore encouraged in this rule.
    It is a statutory condition of HUD funding that program 
participants certify that they will affirmatively further fair housing, 
which, under the proposed rule, means that that they will take 
meaningful actions to further the goals identified in an AFH conducted 
in accordance with the requirements of this rule, and that the program 
participant will take no action that is materially inconsistent with 
its obligation to affirmatively further fair housing. It is important 
to note, however, that neither the proposed rule nor the improved 
process that it will establish defines the strategies or actions 
program participants will take. In fact, the proposed rule emphasizes 
that there are diverse approaches that can be taken. A program 
participant's strategies and actions may include strategically 
enhancing neighborhood assets (for example, through targeted investment 
in neighborhood revitalization or stabilization) or promoting greater 
mobility and access to communities offering vital assets such as 
quality schools, employment, and transportation consistent with fair 
housing goals. Consistent with long-standing judicial guidance 
regarding AFFH, the proposed rule is designed so that program 
participants undertake a process that informs and engages the public 
and allows program participants to make educated judgments regarding 
the appropriate strategies and actions that are consistent with their 
obligations to affirmatively further fair housing. In doing so, it 
directs them to examine relevant factors, such as zoning and other 
land-use practices that are likely contributors to fair housing 
concerns, and take appropriate actions in response.

D. Conclusion

    The opportunity to choose where one lives free from obstacles 
related to race, color, religion, sex, familial status, national 
origin, or disability is essential to the ability to engage as a full 
member of one's community. This promise of fair housing choice requires 
vigorous enforcement of laws barring discrimination, and proactive 
planning, strategies, and actions.
    In administering its programs and activities in a manner to 
affirmatively further fair housing, HUD is committed to taking active 
measures to build on progress made by communities across the country to 
affirmatively further fair housing, while confronting the reality that 
more must be done. This proposed rule, informed by local experience and 
the GAO report, offers such active measures.

III. Summary of Proposed Rule

    This rule proposes to amend the regulations in 24 CFR parts 5, 91, 
92, 570, 574, 576, and 903, as discussed in this section.

Affirmatively Furthering Fair Housing Regulations

    This proposed rule would amend HUD regulations in 24 CFR part 5 
that contain general HUD program requirements, and specifically 24 CFR 
part 5, subpart A, which contains generally applicable definitions and 
federal requirements that are applicable to all or almost all HUD 
programs. This rule proposes to add new Sec. Sec.  5.150-5.180 under 
the undesignated heading of ``Affirmatively Furthering Fair Housing.'' 
These new sections will primarily provide the regulations that will 
govern the affirmatively furthering fair housing planning process by 
states, local governments, and PHAs, but reserves additional sections 
in subpart A for HUD to continue to provide regulations that will 
assist all HUD program participants in more effectively affirmatively 
furthering fair housing.
    Purpose of Affirmatively Furthering Fair Housing Regulations (Sec.  
5.150). New Sec.  5.150 states that the purpose of HUD's new 
regulations (AFFH regulations) is to provide more effective means of 
meeting the statutory obligation imposed on HUD program participants to 
affirmatively further fair housing. The new AFFH regulations are 
intended to add clarity to the goals that are at the heart of 
affirmatively furthering fair housing, to provide for guidance and 
interaction between HUD and program participants and, to the extent 
appropriate, inform other housing and urban development programs that 
are subject to AFFH requirements. The new regulations envision a 
process that is structurally incorporated into the consolidated plan 
and the PHA planning process, building upon what is already familiar to 
HUD program participants and thus reducing burden and connecting 
disparate planning processes.
    Definitions (Sec.  5.152). New Sec.  5.152 provides the definitions 
that are used in the AFFH regulations. Several terms defined in this 
section are defined in other HUD regulations, and this section contains 
cross-references to the regulations that define such terms. New terms 
defined in this section include ``affirmatively furthering fair 
housing,'' ``assessment of fair housing, community participation,'' 
``disproportionate housing needs,'' ``fair housing choice,'' ``fair 
housing determinant,'' ``fair housing issue,'' ``fair housing 
enforcement and fair housing outreach capacity,'' ``integration,'' 
``racially or ethnically concentrated area of poverty,'' 
``segregation,'' and ``significant disparities in access to community 
assets.'' For disproportionate housing needs, integration, racially or 
ethnically concentrated area of poverty, segregation, and significant 
disparities in access to community assets, HUD will provide specific 
data sources and thresholds with the final rule and will update this 
information periodically through Federal Register notices, as data 
sources and methodologies improve.
    The definition of ``affirmatively furthering fair housing'' 
clarifies that AFFH, while including antidiscrimination measures, 
requires proactive steps to foster more inclusive communities and 
access to community assets for all those protected by the Fair Housing 
Act. The definition incorporates the goals animating the proposed rule, 
as reflected in the categories of the AFH (see Sec.  5.154) and 
described in the preamble, see Introduction, Parts I and II. It makes 
clear that the pursuit of these ends requires appropriate assessment 
and analysis, and actions based on this assessment and analysis. When 
compared to the definition of AFFH contained in the Planning Guide, 
this definition provides greater clarity about the purposes of AFFH, 
while retaining that AFFH will be accomplished through analysis and 
assessment and actions (including the investment of federal and other 
resources and implementation of strategies) based upon that analysis 
and assessment. The

[[Page 43717]]

proposed definition encompasses the key aspects of the definition 
incorporated in the Planning Guide, as satisfactory production of an 
AFH will require identifying what were previously called impediments, 
taking actions, and maintaining records. Certain terms that are in the 
Planning Guide definition do not need to be included in the proposed 
definition, as they are incorporated elsewhere in the rule.
    The definition of ``fair housing choice'' sets forth elements 
required for individuals and families to be able to live where they 
choose without barriers related to the classes protected under the Fair 
Housing Act: Actual choice, protected choice, and enabled choice. As 
explained in more detail in the preamble (see Introduction, Part II 
(B)), these elements are necessary for individuals and families to be 
able to achieve fair housing choice given the legacy of segregation, 
ongoing discrimination, and residential patterns that offer different 
levels of access to community assets.
    The definition of ``fair housing issue'' similarly builds on the 
core elements of AFFH as contained in that definition and fully 
explained in the preamble, and incorporates any other condition that 
impedes fair housing choice.
    The definitions of ``integration,'' ``segregation,'' ``racially or 
ethnically concentrated areas of poverty,'' and ``significant 
disparities in access to community assets'' are included because they 
are key components of the goals contained in the proposed rule and 
central elements in the new AFH; see Sec.  5.154. When appropriate, 
they identify cross-references to other legal standards that are 
relevant to how these terms apply to specific classes protected under 
the Act (e.g., integration and persons with disabilities). The 
definitions of ``integration,'' ``segregation,'' and ``racially or 
ethnically concentrated areas of poverty'' note that HUD will determine 
the appropriate data sources in addition to the decennial status to be 
used to identify such geographic areas.
    Assessment of Fair Housing (AFH) (Sec.  5.154). New Sec.  5.154 
sets forth the key requirement for more effectively fulfilling the duty 
to affirmatively further fair housing--an assessment of fair housing 
(AFH) by program participants. As discussed earlier, HUD has determined 
that the current process for affirmatively furthering fair housing is 
insufficient to ensure that program participants are meeting their 
obligation in a purposeful manner as contemplated by law. The AFH, 
which will be developed with data and guidance from HUD, will replace 
the AI previously required of program participants, which often 
required significant staff and other resources to complete without 
adequately informing subsequent planning and action. The result will 
not only be evidence that program participants have undertaken 
meaningful fair housing planning, but that they have a well-considered 
strategy to implement actions to affirmatively further fair housing. 
HUD believes that the process set forth in this proposed rule involving 
the submission and review of the AFH will thus lead to a more effective 
and collaborative fair housing planning process, especially since HUD 
is clarifying the goals and requirements of the process, providing data 
and other prerequisites, and integrating the AFH into other key 
planning documents for the use of HUD funds.
    Paragraph (b) of this section lists the HUD program participants 
that must perform such assessment, and these entities are: (1) States, 
insular areas, and local governments participating in HUD programs that 
are covered by the consolidated plan submission requirements in HUD 
regulations in 24 CFR part 91; and (2) PHAs receiving assistance under 
sections 8 and 9 of the U.S. Housing Act of 1937 . Currently, as noted, 
in support of the affirmatively furthering fair housing certification 
of the Consolidated Plan statute, 42 U.S.C. 10275(b)(15), HUD requires 
program participants that receive formula grants under the CDBG, ESG, 
HOME, and HOPWA programs to prepare an AI. See 24 CFR 91.2(a), 
91.225(a), 91.325(a), 91.425(a). Also, in support of the civil rights 
certification of the PHA Plan statute, 42 U.S.C. 1437c-1(d)(15), HUD 
requires PHAs to examine their programs for impediments to fair housing 
choice. See 24 CFR 903.7(o).
    Paragraph (c) provides that HUD will make available fair housing 
data to program participants to assist them in their assessment of the 
availability of fair housing choice in their jurisdictions and in 
overcoming barriers to such choice. In addition to any available local 
or regional information and information gained through community 
participation and consultation, HUD will provide, as a resource for 
program participants, a set of nationally uniform local and regional 
data on patterns of integration and segregation; racially and 
ethnically concentrated areas of poverty; access to neighborhood 
opportunities such as education, employment, low poverty, 
transportation, and environmental health, among others; 
disproportionate housing needs; data on individuals with disabilities 
and families with children; and discrimination. HUD will also provide 
PHA site locational data (including, to the extent available, units 
accessible for persons with disabilities), the distribution of housing 
choice vouchers, and occupancy data.
    HUD proposes using the data and thresholds specified in the data 
methodology appendix, the full details of which can be found at 
www.regulations.gov under docket number 5173-P-01-DM. To describe 
segregation dynamics, HUD will provide common social science measures 
of segregation, including the dissimilarity index and the isolation 
index. These measures will be accompanied by guidance to help program 
participants and others understand whether values suggest relatively 
low, moderate, or high levels of segregation. HUD will also provide 
data on disproportionate housing needs for protected classes, analogous 
to what is provided in HUD's consolidated planning process. Further, 
HUD will provide data to program participants that reports on the 
existence of racially concentrated areas of poverty (RCAP) in their 
jurisdictions. These data will include a designation that identifies 
whether a given census tract is an RCAP, based on HUD-established joint 
thresholds for minority and poverty concentrations.
    Finally, HUD has constructed key measures along an array of 
important categories. A simple poverty index captures the depth and 
intensity of poverty in a given neighborhood. The neighborhood school 
proficiency index uses school-level data on the performance of students 
on state exams to describe which neighborhoods have more proficient 
elementary schools and which have less proficient elementary schools. A 
labor market engagement index provides a summary description of the 
relative intensity of labor market engagement and human capital in a 
neighborhood. A job access index summarizes the accessibility of a 
given residential neighborhood as a function of its distance to all job 
locations, with distance to larger employment centers weighted more 
heavily. A health hazards exposure index summarizes potential exposure 
to harmful toxins emitted from industrial facilities at a neighborhood 
level. A transit index reflects a neighborhood's proximity to transit 
stops. The input variables for each index are listed below, with more 
detail on the construction of each measure available in the data 
appendix referenced above.

[[Page 43718]]



------------------------------------------------------------------------
             Dimension                         Input variables
------------------------------------------------------------------------
Poverty Index.....................  Percent of families living below the
                                     poverty line and percent of
                                     households receiving public
                                     assistance.
School Proficiency Index..........  Percent of elementary students who
                                     are proficient in reading and
                                     percent who are proficient in math
                                     according to state examinations.
Labor Market Engagement/Human       Neighborhood unemployment rate;
 Capital Index.                      neighborhood labor force
                                     participation rate; and percent of
                                     the population over the age of 25
                                     with a bachelor's degree or higher.
Job Access Index..................  Number of jobs in a neighborhood;
                                     distance from a neighborhood to
                                     employment centers; and number of
                                     workers commuting to those
                                     employment centers.
Health Hazards Exposure Index.....  Distance to facilities in EPA's
                                     Toxic Release Inventory database;
                                     volume of releases; and toxicity of
                                     released chemicals.
Transit Access....................  Distance to nearest fixed-rail or
                                     bus rapid transit station.
------------------------------------------------------------------------

    As with all data metrics, the measures in each category have 
strengths, as well as limitations. Limitations arise in particular in 
this instance because the metrics must rely on nationally available 
data, which are often coarser than data available for some localities. 
For example, measures for schools are reliant on broadly available test 
score information and not detailed measures of instructional quality, 
while measures of transit may not reflect the multitude of transit 
options (bus, trolley, ferry) in some communities. Program participants 
will have the flexibility to supplement or replace HUD measures when 
better local alternatives exist. Moreover, because research on 
measuring access to community assets is continually evolving, HUD is 
committed to reviewing the data on an ongoing basis for potential 
improvements.
    Specific solicitation of comment. Because these data are important 
and novel, HUD is seeking input on these data metrics, both in the 
context of this rule, as well as in a separate upcoming public comment 
process. This supplemental process will focus more directly on 
technical aspects of the strengths and limitations of specific metrics. 
Nonetheless, HUD seeks comment on the strengths and limitations of the 
proposed data. HUD is also interested in potential quantitative or 
qualitative data that are not currently included in the indicators that 
might effectively complement or replace the HUD-provided data.
    Paragraph (d) provides the content of the AFH that a program 
participant must submit to HUD. Paragraph (d) provides that the AFH 
must address segregation, concentration of poverty, disparities in 
access to community assets, and disproportionate housing needs based on 
race, color, religion, sex, familial status, national origin, or 
handicap. In addressing these subject areas, paragraph (d) provides 
that the AFH must include a summary of fair housing issues in the 
jurisdiction, including any findings or judgments related to fair 
housing or other civil rights laws and assessment of compliance with 
existing fair housing laws, regulations, and guidance. Additionally, 
the AFH must assess the jurisdiction's fair housing enforcement and 
fair housing outreach capacity.
    Paragraph (d) also provides for the AFH to include an analysis of 
the data concerning disparities in the jurisdiction's area, based upon 
HUD-provided fair housing data, as well as local or regional data 
available to the jurisdiction, and community input. Using this 
information, the program participant must identify, within the 
jurisdiction and region, integration and segregation patterns and 
trends across protected classes; racially or ethnically concentrated 
areas of poverty; whether significant disparities in access to 
community assets exist across protected classes within the jurisdiction 
and region; and whether disproportionate housing needs exist across 
protected classes.
    Paragraph (d) further provides that, using an assessment tool 
provided by HUD, each program participant must: (1) Identify the 
primary determinants influencing conditions of segregation; 
concentrations of poverty; disparities in access to community assets; 
and disproportionate housing needs based on protected class; and the 
most significant determinants of these disparities; (2) identify fair 
housing priorities and general goals and articulate a justification for 
the chosen prioritization; and (3) set one or more goal(s) for 
mitigating or addressing the determinants. In recognition of the 
proposition that this assessment will be part of existing statutory 
planning processes, paragraph (d) provides that the specific strategies 
or funding decisions subject to the consolidated plan, PHA Plan, or 
other relevant planning processes are not required to be detailed in an 
AFH. It is HUD's expectation that the AFH will also serve as a valuable 
tool to inform other planning documents or processes in addition to the 
consolidated plan and PHA Plan, such as PHA Capital Fund Plans, and 
transportation or education plans, in this way facilitating and 
supporting civil rights planning across policy domains.
    Paragraph (e) addresses AFH requirements for specific types of 
program participants. This paragraph addresses the AFH required for: 
(1) PHAs that participate with the relevant consolidated plan program 
participant; (2) HOME Program Consortia; (3) Insular Areas; and (4) the 
District of Columbia. With respect to PHAs, this paragraph provides a 
process for submission and review of a dissenting statement or 
alternative views on an AFH created with a consolidated plan program 
participant. With respect to preparation and submission of an AFH, a 
HOME Program consortium is considered to be a single unit of general 
local government. An insular area jurisdiction may choose to prepare an 
AFH following either the abbreviated AFH procedures in 24 CFR 91.235, 
or the complete AFH procedures applicable to local governments in 24 
CFR part 91, subpart C. The District of Columbia must follow the 
requirements applicable to local governments described in this subpart.
    Regional AFHs (Sec.  5.156). New Sec.  5.156 addresses and 
encourages regional assessments and fair housing planning, providing 
that that two or more program participants may join together to submit 
a single AFH to evaluate fair housing challenges, issues, and 
determinants from a regional perspective (Regional AFH). Regionally 
collaborating program participants need not be contiguous and may cross 
state boundaries, and a Regional AFH, like a local AFH, will examine 
regional data and account for regional dynamics. Regionally 
collaborating program participants must designate one member as the 
lead entity to oversee the development and submission of the 
assessment.
    Program participants are encouraged to cooperate to develop 
regional AFHs to achieve the sharing of resources and the development 
of regional strategies, goals, and outcomes to improve fair housing 
choice for individuals within regional areas. A consolidated plan 
program participant choosing to

[[Page 43719]]

participate in a Regional AFH should consider the implications of this 
approach on its consolidated plan. Each cooperating consolidated plan 
program participant remains responsible for its own consolidated plan 
and its obligation to affirmatively further fair housing in accordance 
with the consolidated plan and applicable program requirements. This 
section does not preclude program participants from entering into other 
cooperative arrangements to undertake regional fair housing assessments 
and planning.
    While new Sec.  5.156 encourages regional assessments, a regional 
assessment does not relieve each regionally collaborating program 
participant from its obligation to analyze and address local fair 
housing issues and determinates that affect housing choice within its 
respective jurisdiction.
    Community participation, consultation, and coordination (Sec.  
5.158). New Sec.  5.158 provides for community participation and 
consultation requirements for the purpose of ensuring that the AFH is 
informed by meaningful community participation and is integrated fully 
into the consolidated plan process, or other planning processes, as may 
be applicable. Section 5.158 specifies the minimum AFH community 
participation and consultation that must be undertaken, whether 
preparing the AFH singly or in combination with other program 
participants. For consolidated plan program participants, Sec.  5.158 
provides that a jurisdiction must follow the policies and procedures 
described in its applicable citizen participation plan adopted pursuant 
to the consolidated plan regulations in 24 CFR part 91 (specifically, 
24 CFR 91.105, 91.115, 91.401). This section also requires that the 
jurisdiction consult with the agencies and organizations identified in 
consultation requirements at 24 CFR part 91 (specifically, 24 CFR 
91.100, 91.110, 91.235, 91.401). For PHAs, Sec.  5.158 provides that 
PHAs must follow the policies and procedures described in 24 CFR 903.7 
and 903.19.
    Paragraph (b) of Sec.  5.158 addresses coordination and provides 
that PHAs may participate directly with jurisdictions, prepare their 
own AFH, or adopt a state's AFH.
    AFH Submission Requirements (Sec.  5.160). New Sec.  5.160 provides 
the requirements for submission of the AFH to HUD, and provides that 
the first time a program participant is undertaking the assessment, it 
must submit its AFH to HUD at least 270 calendar days before the start 
of the program year prior to the start of the 3- or 5-year consolidated 
planning process. This section provides an exception for the date on 
which newly eligible jurisdictions under the HOME program must submit 
an AFH. Under 24 CFR 92.104, newly eligible jurisdictions shall submit 
an initial AFH not later than 90 calendar days after providing 
notification under Sec.  92.103 that the jurisdiction intends to 
participate in the HOME program as a participating jurisdiction.
    New Sec.  5.160 provides that, after acceptance of a program 
participant's initial AFH, each program participant shall submit 
subsequent AFHs to HUD at least 195 calendar days before the start of 
the jurisdiction's program year in which they are submitting a 
consolidated plan. The submission dates set forth in this section, both 
for an initial AFH and subsequent AFHs, are established to allow the 
results of an accepted AFH to inform the consolidated plan and PHA 
planning process.
    Specific solicitation of comment. HUD specifically invites comments 
as to whether these time frames will achieve that objective.
    New Sec.  5.160 also addresses late submission of an AFH. Paragraph 
(b) of this section provides that an AFH accepted by HUD is a 
precondition for acceptance of the AFFH certification that is required 
for the consolidated plan and the PHA Plan. Paragraph (b) also provides 
that, if a jurisdiction fails to submit its AFH in a timely manner, HUD 
may require that the jurisdiction submit its consolidated plan within a 
corresponding period of time after that. However, in no event will the 
deadline be extended past August 16 of the federal fiscal year in which 
grant funds are appropriated, as provided in 24 CFR 91.15. Thus, as 
provided under the consolidated plan regulations, the failure to submit 
the consolidated plan by August 16 results in the loss of covered funds 
for the program participant for that funding year. See 24 CFR 91.15 
(a)(2).
    Paragraph (c) of Sec.  5.160 addresses the frequency of submission 
of an AFH, and provides that each consolidated plan program participant 
must submit an AFH at least once every 5 years, or at such time agreed 
upon by HUD and the program participants in order to coordinate AFH 
submission with time frames required of consolidated plans, cooperation 
agreements, or other plans. PHAs participating with their consolidated 
plan program participants in the AFH process will incorporate the 
resulting AFH into its PHA Plan every 5 years, and PHAs choosing to 
undertake their own AFH will further have to update their AFH annually. 
Program participants will thus be in a position to coordinate the AFH 
process with existing planning processes.
    Paragraph (d) of Sec.  5.160 provides that a consolidated plan 
program participant or a PHA may request to change a program year start 
date or fiscal year beginning date to better coordinate the submission 
of the AFH, consolidated plan, and PHA Plan.
    Review of AFH (Sec.  5.162). New Sec.  5.162 addresses review of 
AFHs by HUD. HUD's review of an AFH is to determine whether the program 
participant has met the requirements for providing its analysis, 
assessment, and goal setting as set forth in Sec.  5.154(d). This 
section provides that the AFH will be deemed accepted 60 calendar days 
after the date that HUD receives the AFH for review, unless before that 
date HUD has notified the program participant that the AFH is not 
accepted. This section provides that HUD will notify program 
participants in writing that the AFH has not been accepted, and the 
written notification will specify the reasons that the AFH was not 
accepted and the actions that program participants may take to meet the 
criteria for acceptance. Section 5.162 allows program participants to 
revise and resubmit AFHs within 45 calendar days after the date of the 
first notification of non-acceptance. The revised AFH will be deemed 
accepted after 30 calendar days of the date by which HUD receives the 
revised AFH, unless before that date HUD has provided notification that 
HUD does not accept the revised AFH. These time frames generally 
parallel the framework through which HUD currently reviews consolidated 
plan submissions.
    HUD's acceptance of an AFH means only that, for purposes of 
administering HUD program funding, HUD has determined that the program 
participant has provided the required elements of an AFH as set forth 
in Sec.  5.154(d). HUD's acceptance does not mean that HUD has 
determined that a jurisdiction has complied with its obligation to 
affirmatively further fair housing under the Fair Housing Act; has 
complied with other provisions of the Act; or has complied with other 
civil rights laws, regulations or guidance.
    Revising the AFH (Sec.  5.164). New Sec.  5.164 establishes the 
minimum criteria that will require a program participant to revise its 
AFH.
    Paragraph (a) of this section provides that if a program 
participant experiences a significant material change in circumstances 
that calls into question the continued validity of the AFH, then the 
program participant must revise its AFH.

[[Page 43720]]

    Paragraph (a)(1) provides examples of what a significant material 
change in circumstances may be, which would include: The jurisdiction 
is in an area for which the President has declared a disaster under 
title IV of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act that is significant; the jurisdiction has experienced 
significant demographic changes; the jurisdiction has made significant 
policy changes, such as significant changes related to zoning, housing 
plans or policies, or development plans or policies; or the 
jurisdiction is subject to significant civil rights findings, 
determinations, Voluntary Compliance Agreements, or other settlements. 
This section also provides that a program participant must revise its 
AFH upon written notification by HUD in which HUD specifies the 
significant material change that HUD has found to have taken place, 
thus requiring a revision to the AFH. Required revisions will be 
practical and focused on the relevant underlying change in 
circumstances, rather than necessarily requiring revision to the entire 
AFH. This section recognizes that population, demographic, and other 
data may not be accurate when there are sudden shifts in circumstances, 
and it is important for program participants to examine the information 
that is available to them at the time.
    Paragraph (a)(2) of Sec.  5.164 requires consolidated plan program 
participants, in their citizen participation plans adopted in 
accordance with the consolidated plan regulations in 24 CFR part 91, to 
specify the criteria that the program participant will follow in 
determining which significant material changes will require revisions 
to AFH. Paragraph (a)(2) specifies that the criteria must include, at a 
minimum, the criteria described in paragraph (a)(1) of Sec.  5.164.
    Paragraph (b) of Sec.  5.164 provides that revisions to the AFH are 
subject to community participation. This requirement underscores the 
importance of the jurisdiction's community being involved in the 
development of the AFH, including significant changes to the AFH. 
Paragraph (b) provides that the jurisdiction must follow the notice and 
comment process applicable to consolidated plan substantial amendments 
and the jurisdiction's citizen participation plan adopted in accordance 
with the consolidated plan regulations at 24 CFR part 91; specifically, 
Sec. Sec.  91.105, 91.115. Paragraph (b) requires that a consortium 
must follow the participation process applicable to consolidated plan 
substantial amendments under the consortium's citizen participation 
plan adopted pursuant to the consolidated plan regulations 24 CFR 
91.401.
    Paragraph (c) of Sec.  5.164 provides that revisions to the AFH 
must be submitted to HUD and will be reviewed pursuant to the process 
set forth in Sec.  5.162.
    Paragraph (d) of Sec.  5.164 provides that when an AFH is revised 
under this subpart, PHAs must revise their PHA Plan within 18 months 
pursuant to 24 CFR 903.15(e).
    As this section reflects, HUD has established requirements for 
revisions to the AFH that closely follow the requirements for 
consolidated plan substantial amendments, thereby providing a process 
with which consolidated plan program participants are thoroughly 
familiar and that can readily be adopted by PHAs.
    Recordkeeping (Sec.  5.166). This section establishes AFFH-related 
recordkeeping requirements for program participants. The maintenance of 
the information that formed the development of the AFH, including 
information obtained through consultation and community participation, 
is important for purposes of demonstrating why the AFH contains the 
strategies and actions that it does, and by inspection by HUD if HUD 
determines the need to examine the underlying information that resulted 
in the AFH. This section lists the specific documents that program 
participants are to maintain and provides that these records must be 
maintained for the period specified in program regulations.
    As this preceding discussion of the new AFFH regulations reflect, 
these new regulations, and specifically the new AFH, are established 
not only to reflect the importance of undertaking fair housing planning 
well, but to underscore that fair housing planning is an integral part 
of the consolidated and PHA planning processes.

Conforming Amendments Consolidated Plan Regulations (24 CFR Part 91)

    Because the AFFH regulations in 24 CFR part 5 build on existing 
consolidated plan regulations with respect to consultation, community 
participation, submission, and revisions, conforming amendments to the 
consolidated plan regulations must be made to reflect the incorporation 
of the AFH into the consolidated planning process.
Definitions (Sec.  91.5)
    Section 91.5, the definition section of HUD's consolidated plan 
regulations, would be revised to reflect that the terms ``affirmatively 
furthering fair housing,'' ``Assessment of Fair Housing or AFH and 
protected class'' are defined in 24 CFR part 5.
Consultation; Local Governments (Sec.  91.100)
    Section 91.100 of HUD's consolidated plan regulations would be 
amended in paragraph (a) to include the AFH in the consultation that a 
local government is required to undertake. With respect to the AFH, 
paragraph (a) requires the local government to consult with the same 
public and private agencies that the local government consults with in 
preparing the consolidated plan, but adds that such consultation shall 
also include any community- and regionally-based organizations that 
represent protected class members or advance fair housing laws.
    Paragraph (c) of Sec.  91.100, which requires the local government 
to consult with the local PHA, would be amended to provide that the 
jurisdiction must consult with the PHA regarding the AFH, affirmatively 
furthering fair housing strategies, and proposed actions to 
affirmatively further fair housing.
    The proposed rule adds a new paragraph (e) to Sec.  91.100 to 
address the requirement to affirmatively further fair housing. 
Paragraph (e) provides that the local government shall consult with 
community- and regionally based organizations that represent protected 
class members or enforce fair housing laws, such as state or local fair 
housing enforcement agencies (including participants in the Fair 
Housing Assistance Program (FHAP), fair housing organizations and other 
nonprofit organizations that receive funding under the Fair Housing 
Initiative Program (FHIP), and other public and private fair housing 
service agencies, to the extent such entities operate within its 
jurisdiction.
    As noted in paragraph (e), this consultation will help provide a 
better basis for the local government's AFH, its certification to 
affirmatively further fair housing and other portions of the 
consolidated plan concerning affirmatively furthering fair housing. 
Paragraph (e) provides that the consultation required under this 
paragraph can occur with any organizations that have the capacity to 
engage with data informing the AFH and are sufficiently independent and 
representative to provide meaningful feedback to a jurisdiction on the 
AFH, the consolidated plan, and their implementation. A Fair Housing 
Advisory Council, or similar group, that includes community members and 
advocates, fair housing experts, housing and community development 
industry participants, and other key stakeholders can meet this 
critical consultation requirement.

[[Page 43721]]

    The proposed rule requires consultation to occur throughout the 
fair housing planning process, meaning that the jurisdiction will 
consult with the organizations described in this section in the 
development of both the AFH and the consolidated plan. The AFFH-related 
consultation on the consolidated plan shall specifically seek input 
into how the goals identified in the accepted AFH inform the priorities 
and objectives of the consolidated plan. This community input and 
consultation is critical to understanding fair housing issues through 
the AFH and incorporating that understanding into the consolidated 
plan.
Citizen Participation Plan; Local Governments (Sec.  91.105)
    This section is amended to include the AFH in the requirements 
governing the local government's citizen participation plan. While 
reference to the AFH is made throughout Sec.  91.105, the amendments to 
specifically note are as follows:
    Paragraph (a)(2)(i) of this section would be amended to add 
explicit reference to residents and other interested parties that are 
encouraged to participate in the development of the AFH, and 
significant revisions to the AFH, along with participation in the 
development of the consolidated plan and substantial amendments to the 
consolidated plan.
    Paragraph (a)(2)(ii), which encourages the participation of local 
and regional institutions, would be amended to reflect that such 
participation is not only important to the consolidated plan but to the 
AFH as well.
    Paragraph (a)(2)(iii) of this section, which addresses consultation 
with PHAs, would be amended to include consultation with any resident 
advisory boards, resident councils, and resident management 
corporations.
    The proposed rule adds a new paragraph (a)(4) to Sec.  91.105 to 
require a local government to describe in its citizen participation 
plan the jurisdiction's procedures for assessing language needs in its 
area and to identify any need for translation of notices and other 
vital documents. New paragraph (a)(4) also provides that, at a minimum, 
the citizen participation plan shall require that the local government 
take reasonable steps to provide language assistance to ensure 
meaningful access to citizen participation by persons with Limited 
English Proficiency. This requirement reflects that local government 
across the Nation consist of individuals of many different backgrounds, 
including members of the community for which English is not their first 
language and therefore they lack the proficiency that may be needed to 
be fully involved in community affairs. This requirement strives to 
have local governments involve these individuals to the maximum extent 
possible.
    Paragraph (b) of Sec.  91.105 would be amended to provide that the 
local government's citizen participation plan must require that, as 
soon as practical after HUD makes data for the AFH available to the 
local government, the local government must make such information, and 
any other supplemental information that the local government plans to 
incorporate into its AFH, available to the public, public agencies, and 
other interested parties.
    Paragraph (c) of Sec.  91.105 would be amended to divide the 
existing paragraph into two subparagraphs. Paragraph (c)(1)(i) 
addresses the existing requirement concerning the local government to 
specify the criteria that a jurisdiction will follow in determining 
what changes in the local government's planned or actual activities 
constitute a substantial amendment to the consolidated plan. Paragraph 
(c)(1)(ii) would provide that the local government must specify the 
criteria the local government will use for determining when significant 
revisions to the AFH will be appropriate, and provides that, at a 
minimum, the local government's criteria must include the criteria 
specified in 24 CFR 5.164.
    Paragraph (e) of Sec.  91.105 would be amended to revise paragraph 
(1) into two subparagraphs. Paragraph (e)(1)(i) addresses the existing 
requirement for the number of public hearings to hold on the 
jurisdiction's consolidated plan. Paragraph (e)(1)(ii) would address 
the public hearing for the AFH and requires the local government to 
provide at least one public hearing before the proposed AFH is 
published for comment
    Paragraphs (f), (g), (h), (i), (j), and (l) would each be revised 
to reference the AFH.
Consultation; States (Sec.  91.110)
    This section would be revised to provide for the AFH to be subject 
to the same consultation requirements as state consolidated plans. Two 
new subparagraphs would be added to paragraph (a) of this section.
    Paragraph (a)(1) would specifically address consultation pertaining 
to public housing, with the objective to ensure that the PHA Plan is 
consistent with the consolidated plan.
    Paragraph (a)(2) would address consultation pertaining to 
affirmatively furthering fair housing, with the objective to ensure 
that there is a meaningful assessment of fair housing.
Citizen Participation Plan; States (Sec.  91.115)
    The proposed rule would amend paragraph (a)(1) of Sec.  91.115 to 
provide for a new effective date for the new provisions being added to 
this section pertaining to the AFH. References to the AFH would also be 
added to paragraph (a)(2) of this section. The amendments to this 
section include adding a new paragraph (a)(4) that would require 
reasonable efforts to provide language assistance to non-English-
speaking residents.
    Paragraph (b) of this section, which addresses development of the 
consolidated plan, would be amended to address development of the AFH 
in addition to the consolidated plan.
    Paragraph (c) of this section, which addresses criteria for 
amending the consolidated plan, would be revised to also address the 
criteria for amending the AFH.
    Paragraphs (f), (g), and (h) of this section, which address 
availability of information to the public, access to records, and 
complaints, respectively, would be amended to reference the AFH.
Strategic Plan (Sec.  91.215)
    This section of the consolidated plan regulations describes the 
prescribed content of the local government's strategic plan. This 
proposed rule adds to this section a new paragraph (a)(5) that requires 
the jurisdiction's consolidated plan to describe how the priorities and 
specific objectives of the jurisdiction will affirmatively further fair 
housing, and that the description should be done by setting forth 
strategies and actions consistent with the goals and other elements 
identified in an AFH conducted in accordance with Sec.  5.154. New 
paragraph (a)(5) provides that for issues not addressed by these 
priorities and objectives, the plan must identify additional objectives 
and priorities for affirmatively furthering fair housing.
Action Plan (Sec.  91.220)
    This section of the consolidated plan regulations lists the items 
that comprise a local government's action plan. Paragraph (k) of Sec.  
91.220 is divided into two subparagraphs. Paragraph (k)(1) requires the 
action plan to address the actions that the local government plans to 
take during the next year to address fair housing issues identified in 
the AFH. Paragraph (k)(2) addresses the existing provision of paragraph 
(k), which is the requirement of the local

[[Page 43722]]

government to list the actions that it plans to take to address, among 
other things, obstacles to meeting underserved needs, and fostering and 
maintaining affordable housing.
Certifications (Sec.  91.225)
    The proposed rule would amend paragraph (a)(1) of this section to 
provide that the local government's certification that it will 
affirmatively further fair housing means that the local government will 
take meaningful actions to further the goals identified in the AFH 
conducted in accordance with the requirements of 24 CFR 5.154, and that 
it will take no action that is materially inconsistent with its 
obligation to affirmatively further fair housing.
Monitoring (Sec.  91.230)
    The proposed rule revises this section to provide that a local 
government's monitoring of its activities carried out in furtherance of 
the consolidated plan, must include monitoring of strategies and 
actions that address the fair housing issues identified in the AFH.
Special Case: Abbreviated Consolidated Plan (Sec.  91.235)
    Paragraph (c) of this section, which defines what is an abbreviated 
plan, is revised to provide that the abbreviated plan must describe how 
the jurisdiction will affirmatively further fair housing by addressing 
issues identified in an AFH conducted in accordance with 24 CFR 5.154.
Strategic Plan (Sec.  91.315)
    This section of the consolidated plan regulations describes the 
prescribed content of the state government's strategic plan. The 
changes made to this section mirror the changes made to Sec.  91.215.
Action Plan (Sec.  91.320)
    This section of the consolidated plan regulations describes the 
prescribed content of the state government's action plan. The changes 
made to this section mirror the changes made to Sec.  91.315, but are 
found in paragraph (j) of Sec.  91.320.
Certifications (Sec.  91.325)
    Similar to the amendment to Sec.  91.225, the proposed rule would 
amend paragraph (a)(1) of Sec.  91.325 to provide that the state's 
certification that it will affirmatively further fair housing means 
that the state will take meaningful actions to further the goals 
identified in the AFH conducted in accordance with the requirements of 
24 CFR 5.154, and that it will take no action that is materially 
inconsistent with its obligation to affirmatively further fair housing.
Strategic Plan (Sec.  91.415)
    This section of the consolidated plan regulations describes the 
prescribed content of a consortia's strategic plan. This section 
requires a consortia to comply with the provisions of Sec.  91.215, 
which is proposed to be revised by this rule to incorporate the AFH in 
the strategic plan. The change that would be made to Sec.  91.415 by 
this rule is to require the consortia to set forth, in its strategic 
plan, strategies and actions consistent with the goals and other 
elements identified in an AFH conducted in accordance with new Sec.  
5.154.
Action Plan (Sec.  91.420)
    This section of the consolidated plan regulations describes the 
prescribed content of a consortia's action plan. Paragraph (b) of Sec.  
91.420 is revised to provide that the action plan must include actions 
that the consortia plans to take during the next year that will address 
fair housing issues identified in the consortia's AFH.
Certifications (Sec.  91.425)
    As with the amendments to Sec. Sec.  9.225 and 91.325, the proposed 
rule would amend paragraph (a)(1) of this section to provide that the 
consortia's certification that it will affirmatively further fair 
housing means that the consortia will take meaningful actions to 
further the goals identified in the AFH conducted in accordance with 
the requirements of 24 CFR 5.154, and that it will take no action that 
is materially inconsistent with its obligation to affirmatively further 
fair housing.
Amendments to the Consolidated Plan (Sec.  91.505)
    This section lists the criteria and procedures by which a 
jurisdiction must amend its approved consolidated plan. The proposed 
rule adds a new paragraph (d) to this section that requires a 
jurisdiction to ensure that amendments to the plan are consistent with 
its certification to affirmatively further fair housing and the 
analysis and strategies of the AFH.

HOME Investment Partnerships (HOME) Program Regulations

Submission of a Consolidated Plan and Assessment of Fair Housing (Sec.  
92.104)
    This section of the HOME program regulations which addresses the 
responsibility of a participating jurisdiction to submit its 
consolidated plan to HUD is revised to provide that the jurisdiction 
must also submit its AFH to HUD, in accordance with the AFFH 
regulations in 24 CFR part 5, subpart A.
Recordkeeping (Sec.  92.508)
    The proposed rule would amend the recordkeeping requirements of the 
HOME program to provide in paragraph (a)(7)(i)(C) of this section to 
require as part of the documentation that the participating 
jurisdiction has taken actions to affirmatively further fair housing, 
documentation of the participating jurisdiction's AFH.

Community Development Block Grant (CDBG) Regulations (24 CFR Part 570)

Definitions (Sec.  570.3)
    Section 570.3, the definition section of HUD's CDBG regulations, 
would be revised to reflect that the terms ``Affirmatively Furthering 
Fair Housing,'' and ``Assessment of Fair Housing or AFH'' are defined 
in 24 CFR part 5.
Eligible Planning, Urban Environmental Design, and Policy Planning 
Management--Capacity Building Activities (Sec.  570.205)
    This section which lists policy planning and capacity building 
activities would replace, in paragraph (a)(4)(vii), the reference to 
the AI with the AFH.
Citizen Participation--Insular Areas (Sec.  570.441)
    This section would be revised to provide that a citizen 
participation plan is also applicable to the AFH.
General (Sec.  570.480)
    Paragraph (c) of this section, which addresses HUD's review of 
state performance under the CDBG program, is revised to provide that 
such review includes review of the state's responsibility to 
affirmatively further fair housing.
Local Government Requirements (Sec.  570.486)
    Paragraphs (a)(2), (a)(4), and (a)(5) of this section would be 
revised to reflect that the local government requirements addressed by 
these paragraphs include requirements necessary for effective 
assessment of fair housing.
Other Applicable Laws and Related Program Requirements (Sec.  570.487)
    Paragraph (b) of this section, which addresses affirmatively 
furthering fair housing, provides that a state assumes responsibility 
for fair housing planning by taking meaningful actions to further the 
goals identified in an AFH undertaken in accordance with the

[[Page 43723]]

requirements of 24 CFR 5.154; and by not taking actions that are 
materially inconsistent with the state's obligation to affirmatively 
further fair housing.
Recordkeeping Requirements (Sec.  570.490)
    Paragraph (a) of this section would be amended to provide that 
documentation of the state's AFH is one of the records that a state 
must maintain as part of its records supporting its administration of 
CDBG funds.
Records To Be Maintained (Sec.  570.506)
    Similar to the amendment to Sec.  570.490, the proposed rule would 
amend this section to provide in paragraph (g)(1) that documentation 
related to the recipient's AFH is part of the fair housing and equal 
opportunity records that a recipient is required to maintain.
Public Law 88-352 and Public Law 90-284; Affirmative Furthering Fair 
Housing: Executive Order 11063 (Sec.  570.601)
    Paragraph (a)(2) of this section is amended to provide that the 
program participant's responsibility to undertake fair housing planning 
includes taking meaningful actions to further the goals identified in 
an AFH that is undertaken in accordance with the requirements of 24 CFR 
5.154 and not taking actions that are materially inconsistent with its 
obligation to affirmatively further fair housing.
Equal Opportunity and Fair Housing Review Criteria (Sec.  570.904)
    Paragraph (c) of this section is revised to provide that the review 
criteria for compliance with fair housing requirements includes review 
of a recipient's performance related to its responsibility to 
affirmatively further fair housing.

Housing Opportunities for Persons With AIDS (HOPWA) (24 CFR Part 574)

Recordkeeping (Sec.  574.530)
    The proposed rule would amend this section of the HOPWA regulations 
to include documentation of a program participant's AFH as records that 
must be maintained for a period of 4 years.

Emergency Solutions Grants Program (ESG) (24 CFR Part 576)

Recordkeeping and Reporting Requirements (Sec.  576.500)
    The proposed rule would amend paragraph (s) of this section to 
provide that documentation related to its AFH is additional 
documentation that an ESG recipient must maintain.

Public Housing Agency Plans (24 CFR Part 903)

What a PHA Must Do To Deconcentrate Poverty in Its Developments and 
Comply With Fair Housing Requirements (Sec.  903.2)
    The proposed rule would amend Sec.  903.2 by adding paragraph 
(a)(3), providing that for a PHA's development related activities, 
including affirmative marketing; tenant selection and assignment 
policies; applicant consultation and information; provision of 
additional supportive services and amenities; as well as construction, 
conversion, rehabilitation, modernization, demolition, disposition, 
designation, or physical accessibility of its housing and other 
facilities under its PHA Plan, should be designed to reduce racially or 
ethnically concentrated areas of poverty, reduce segregation and 
promote integration, reduce disparities in access to community assets, 
and address disproportionate housing needs by protected class.
    The proposed rule similarly would amend section (d) to specify that 
PHA policies that govern eligibility, selection, and admissions under 
its PHA Plan must be designed to reduce the concentration of tenants 
and other assisted persons by race, national origin, and disability in 
conformity with the applicable AFH. Moreover, any PHA plans for the 
construction, conversion, rehabilitation, modernization, demolition, 
disposition, designation, or physical accessibility of its housing and 
other facilities must be consistent with the applicable AFH.
Information Provided in the Annual Plan (Sec.  903.7)
    The proposed rule would revise Sec.  903.7, paragraph (o), to 
indicate that each PHA must certify, among other things, that it will 
affirmatively further fair housing, which means that it will take 
meaningful actions to further the goals identified in the AFH conducted 
in accordance with the requirements of 24 CFR 5.154, and that it will 
take no action that is materially inconsistent with its obligation to 
affirmatively further fair housing.
Relations of PHA Plan to Consolidated Plan (Sec.  903.15)
    The proposed rule would revise Sec.  903.15 in paragraph (a) to 
indicate that an AFH is required for the PHA Plan in accordance with 24 
CFR part 5, subpart A, but that PHAs may take one of three approaches 
in meeting this requirement, as appropriate.
    First, the PHA may participate with the relevant unit of general 
local government in developing an AFH together. For this option, the 
PHA will work with the local government where 60 percent of the PHA's 
projects (i.e., hard units only) are located; however, if the majority 
is closer to 50 percent, the PHA may choose the local government that 
more closely aligns to its planning activities. For PHAs with only 
Section 8 tenant-based assistance, the PHA will coordinate with the 
jurisdiction that governs the PHA's operations (e.g., where the Mayor 
appoints the Board that hires the Executive Director). If the PHA 
disagrees with any aspect of the AFH, it may submit a dissenting 
statement or submission of alternative views, which will become part of 
the AFH and be reviewed through the same process as the AFH. HUD may 
then accept the entire AFH or either portion of the AFH representing 
the views of the unit of general local government or the PHA.
    The second option is that the PHA conduct its own AFH with 
geographic scope and proposed actions scaled to the PHA's operations. 
Finally, as a third option, for PHAs that are covered by a state 
agency, the PHA may participate with the state in the preparation of 
the state agency's AFH but would be bound either way by the state 
agency conclusions contained in the state's AFH.
    Paragraphs (b) and (c) would provide that a PHA may request to 
change its fiscal year to better coordinate its planning with the 
planning done under the consolidated plan process, by the state or 
local officials, as applicable. If the PHA selects the second option, 
it must update its own AFH every year.
    Paragraph (d) would indicate that binding agreements such as a 
Recovery Agreement or Voluntary Compliance Agreement may incorporate 
the corrective actions that would require alternative AFH procedures, 
such as requiring that the PHA participate in its local jurisdiction's 
AFH.
    Paragraph (e) would indicate that if a significant change 
necessitates a PHA Plan amendment, the PHA will have up to 18 months to 
make this change to its PHA Plan in accordance with the provisions of 
Sec.  903.21.
Process for Reviewing Annual Plan (Sec.  903.23)
    Finally, the proposed rule would add a new paragraph (f) to Sec.  
903.23 to require PHAs to maintain a copy of the AFH and records 
reflecting actions to affirmatively further fair housing as described 
in Sec.  903.7(o).

[[Page 43724]]

IV. Questions for Commenters

    HUD welcomes comments on all aspects of the proposal. In addition, 
HUD specifically requests comment on the following issues:
    1. The field of geo-coded data is rapidly evolving and, as HUD 
works to refine data related to access important community assets, it 
welcomes suggestions for improvement. Such comments can include the 
description of cases or situations where the indicators may or may not 
appropriately portray neighborhood qualities. Are the nationally 
uniform data that HUD is providing to assist in the assessment of 
segregation, concentration of poverty, and disparities in access to 
community assets appropriate? Do these data effectively measure 
differences in access to community assets for each protected class, 
such as people with disabilities? To what extent, if at all, should 
local data, for example on public safety, food deserts, or PHA-related 
information, be required to supplement this nationally uniform local 
and regional data?
    2. HUD requests comment on how the goals and priorities arising out 
of the AFH would influence local regulations, siting decisions, 
infrastructure investments, and policies, in comparison to the existing 
processes using the AI.
    3. To what extent would the AFH and related public engagement and 
planning processes increase or decrease paperwork costs for program 
participants?
    4. What experiences do HUD program participants have with the 
policy interventions considered in the Regulatory Impact Analysis (RIA) 
(please see full RIA at www.regulations.gov under the docket number 
5173-P-01-RIA). What outcomes were observed? What data is available 
related to those outcomes?
    5. Are there nonfinancial incentives that HUD should consider to 
encourage regional collaboration among local governments and states and 
greater engagement with public housing planning; for example, bonus 
points in specific grant programs? HUD welcomes comments about other 
potential incentives as well.
    6. In terms of the cooperation of consolidated plan jurisdictions 
and PHAs, what are the best models and approaches and other 
considerations to facilitate that joint participation? What is the best 
method for consolidated plan program participants to use to begin their 
engagement with PHAs in the AFH process? Would a letter or other 
similar solicitation of involvement be sufficient?
    7. In this regard, the proposed rule acknowledges that the 5-year 
planning cycles and program/fiscal years for PHAs and consolidated plan 
program participants might differ. While PHAs can adjust their 5-year 
planning cycles to more closely coincide with consolidated plan program 
participant planning cycles simply by submitting the 5-year plan early 
(e.g., after 3 years instead of 5), it is more difficult to adjust 
program/fiscal year ends. The AFH is an important input for the 
consolidated plan and the PHA Plan, and it should be conducted before 
the PHA and consolidated plan program participant cycles begin. What 
would be the best way to accomplish this?
    8. Are there other planning efforts (for example, in 
transportation, education, health, and other areas) or other federal 
programs, such as the low income housing tax credit, that should be 
coordinated with the fair housing planning effort contemplated by this 
rule, and, if so, how and what issues would be best informed by this 
coordination? In recognition of the interdependent nature of how 
communities develop and what influences community progress related to 
the goals set forth in this rule, what are the appropriate scope of 
activities that should be considered ``activities relating to housing 
and urban development'' under the Fair Housing Act for purposes of this 
rule?
    9. An analysis of disproportionate housing needs is currently 
required as part of the consolidated plan, and this proposed rule would 
make disproportionate housing needs an element of the AFH as well. If a 
disproportionate housing needs analysis is a part of the AFH, should it 
remain in the consolidated plan as well? Is this analysis most 
appropriate in either the AFH or the consolidated plan, or is it 
appropriate, as the current proposed rule contemplates, to have the 
analysis in both places, assuming the analysis is the same for both 
planning exercises?
    10. Are there appropriate indicators of effectiveness that should 
be used to assess how program participants have acted with regard to 
the goals that are set out?
    11. What forms of technical assistance would be most useful to 
program participants in undertaking the AFH called for in the proposed 
rule?
    12. Are there any requirements of the new structure that the 
proposed rule will create that should be modified for states?
    13. Are there any requirements of the new structure that the 
proposed rule will create that should be modified for small program 
participants, such as small units of local general government and small 
PHAs?
    14. Are there aspects of incorporation of the new AFH community 
participation and consultation process into analogous aspects of the 
existing consolidated plan process that could be improved? For example, 
is 15 days sufficient now for public comment on consolidated plan 
program participants' annual performance report under 24 CFR 91.105(d)?
    15. What length of time (such as 12, 18, or 24 months) is needed 
for PHAs to revise their PHA Plans to address AFH recommendations?
    16. If the AFH is not acceptable after the back-and-forth 
engagement provided for in Sec.  5.162 of the proposed rule because of 
disagreements between program participants collaborating on an AFH, 
what process should guide the resolution of disputes between program 
participants?
    17. Should there be an end date for the technical assistance and 
back-and-forth engagement provided for in Sec.  5.162 if a portion of 
an AFH that involves multiple program participants can be accepted, 
thus allowing an individual program participant to be accepted?
    18. For program participants that have recently conducted a 
comprehensive AI, should HUD waive or delay implementation of the AFH 
requirement for those program participants?
    19. Section 5.164 of the proposed rule recognizes that events 
outside the control of a program participant may require revising the 
AFH during the course of a 5-year planning cycle. This is especially 
true in the case of a significant natural disaster, although the rule 
contemplates other similar material changes in circumstances that might 
likewise require revising the AFH. What process and challenges will a 
program participant face when an unexpected occurrence, such as a 
natural disaster, dictates that it take actions that may be contrary to 
its applicable plan contents? What impact might a natural disaster or 
similar type of occurrence have on a program participant's compliance 
with the AFH?

V. Findings and Certifications

Regulatory Planning and Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. 
Executive Order 13563 (Improving Regulations and Regulatory

[[Page 43725]]

Review) directs executive agencies to analyze regulations that are 
outmoded, ineffective, insufficient, or excessively burdensome, and to 
modify, streamline, expand, or repeal them in accordance with what has 
been learned. Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. This rule was determined to be a ``significant 
regulatory action,'' as defined in section 3(f) of Executive Order 
12866 (although not an economically significant regulatory action under 
the order). HUD submits that the approach to fair housing planning 
proposed by this rule is consistent with the objectives of Executive 
Order 13563 to reduce burden, as well as the goal of modifying and 
streamlining regulations that are outmoded and ineffective. HUD 
completed a Regulatory Impact Analysis for this proposal, which can be 
found at www.regulations.gov, under the docket number 5173-P-01-RIA. 
This section summarizes the findings of that analysis.

Summary of the Regulatory Impact Analysis

    This rule proposes to establish a regulatory framework for 
affirmatively furthering fair housing, as required by the Fair Housing 
Act. In accordance with the Fair Housing Act, program participants are 
required to use HUD funds in a manner that affirmatively furthers fair 
housing. In addition, these program participants have an independent 
statutory obligation to affirmatively further fair housing under 
several statutes. While to date, HUD has accepted, consistent with 
statutory requirements, a certification from these program participants 
that the program participant will affirmatively further fair housing, 
HUD has found, at times, that a program participant is either not 
affirmatively furthering fair housing or the program participant's 
affirmatively furthering fair housing strategy is inadequate.
    Through this rule, HUD proposes to provide recipients of HUD funds 
with more information to assist them in fulfilling the charge to 
affirmatively further fair housing. This proposed rule is needed for 
two reasons: to overcome barriers to fair housing choice and to 
encourage improvements in the current planning process.
    This rule is needed to facilitate efforts to overcome barriers to 
fair housing choice. There are many different types of impediments to 
fair housing choice, including building and zoning codes, processes for 
site selection for low-income housing, lack of public services in low-
income areas, less favorable mortgage lending for minority borrowers, 
and lack of public awareness of rights and responsibilities associated 
with fair housing. Some of these impediments may prevent people from 
moving out of racially concentrated areas of poverty and neighborhoods 
that perpetuate disparities in access to community assets. Other 
factors may prevent these neighborhoods from attracting a sufficiently 
broad distribution of people such that segregation and racial 
concentration of poverty dissipate over time. One purpose of this rule 
is to help program participants identify and alleviate these barriers 
to equality in access to important community assets.
    A second reason that the proposed rule is needed is because some of 
the traditional means of fair housing planning have not been as 
effective as they could be and can be updated with currently available 
information and approaches. Recipients of HUD grant funding can be 
assisted with better tools to understand patterns of segregation, 
racial and ethnic concentrations of poverty, disparities in access to 
community assets by protected class, and disproportionate housing needs 
based on protected class so that such program participants can better 
develop strategies, plans, and actions to address these fair housing 
concerns. The need for a revision of the current planning process was 
recognized by the GAO Report, which recommended the establishment of 
rigorous standards for AIs, regular submission of AIs, checking and 
verifying AIs, and measuring grantees' progress in addressing 
identified impediments to fair housing.
    Intended to help program participants overcome these barriers and 
encourage improvements in planning, this rule proposes a ``fair housing 
assessment'' and planning process that will aid HUD program 
participants in improving access to community assets and housing of 
their residents. HUD will provide states, local governments, PHAs, and 
the communities they serve with local and regional data on patterns of 
integration, racially and ethnically concentrated areas of poverty, 
access to community assets in select domains, and disproportionate 
housing needs based on protected class. From these data, program 
participants would be required to evaluate their present environment to 
assess fair housing issues, identify the primary determinants that 
account for those issues, and set forth fair housing priorities and 
goals and document these activities in an AFH report. The rule also 
proposes new procedures within HUD for evaluating grantees' fulfillment 
of their obligation to affirmatively further fair housing. While the 
change in compliance costs of the rule is expected to be small, the 
vast array of choices and strategies open to grantees make it difficult 
to be quantitatively precise beyond a qualitative description of the 
total and net benefits.
    HUD does not expect a large change in compliance cost as a result 
of the rule, as states, local governments, and PHAs are already 
required to prepare analyses of impediments to fair housing choice, 
undertake activities to overcome such barriers, and maintain records of 
the activities and their impact. HUD estimates a marginal compliance 
cost impact of between $3 million to $9 million compared to existing 
requirements, arising from new proposed features, the primary of these 
being program participants formally submitting the AFH to HUD for 
review and feedback; the more precise definition of the contents of the 
AFH as compared to existing AI requirements; HUD's provision of data 
for further analysis; and a more precisely defined community 
participation process. Further, HUD anticipates a reallocation of staff 
resources towards AFFH-related tasks, resulting in a notional internal 
transfer of funds towards AFFH.
    Regarding quantifiable benefits, the AFFH proposed rule is designed 
to help provide information and perspectives on fair housing issues to 
jurisdictions in a manner that is clearer and easier to elucidate. The 
goal is that the information, standards concerning the formulation of 
the AFH, and improved accountability will improve fair housing outcomes 
and thus the welfare of members of the protected classes and their 
communities. However, it is difficult to predict in order to quantify 
for the purposes of assessing regulatory impact exactly how a program 
participant will use the information, what decisions they will reach, 
and precisely how those decisions will affect members of protected 
classes. The AFFH process is only one factor that determines what 
actions are pursued and what impacts are ultimately achieved. At every 
step in the policy-making process there are uncertainties that have 
implications for both the types and size of effects that the rule may 
have.
    First, the ultimate effect of the rule will depend upon the policy 
preferences of individual program participants, including whether it is 
favorably predisposed toward fair housing

[[Page 43726]]

policies, the character of the local bureaucracy, and whether the 
limited incentives of the rule will affect the program participant's 
active engagement in its fair housing obligations. There is a multitude 
of perspectives that can drive resident and, by extension, 
jurisdictional preferences, which makes predicting jurisdictional 
preferences difficult.
    A second issue is whether the information emerging from the 
proposed process will be new for the jurisdiction. In some, but not all 
cases, the information will be new and shed light on issues that had 
not previously been emphasized, but which could now be understood to be 
important. In these instances, program participants might highlight 
additional goals or supplant existing goals with goals that are more 
effective and pertinent for fair housing outcomes. Importantly, the new 
goals could be of primary or secondary significance from a strategic 
perspective and compared to other competing legitimate public policy 
concerns, which has implications for the policies that are ultimately 
considered.
    Even with information about the general course of action a program 
participant will take, it remains difficult to predict the exact policy 
choices that the program participant will make. There are typically 
many policy options for addressing a particular concern, such as the 
availability of affordable housing or public transportation, and the 
proposed rule does not prescribe or enforce specific local or PHA 
policies. Instead, it allows for a flexible approach that is 
appropriate to local needs and housing market conditions and recognizes 
that available resources may represent a constraint. Which among the 
various policy options is selected by a program participant will depend 
fundamentally on the local context and the particular circumstances 
that prevail when the issues are considered.
    Despite the uncertainty regarding the precise actions that program 
participants might settle upon, it is possible to characterize the 
actions that program participants are likely to pursue. These can be 
grouped into four general categories, each defined by what they seek to 
accomplish in the local jurisdiction or by the relevant PHA, as 
appropriate. These categories are modifying local regulations and 
codes, constructing new developments, creating new amenities, and 
facilitating the movement of people. Each category features a large set 
of policy alternatives. After identifying fair housing issues and their 
root causes, prioritizing among them, and concluding which activities 
would be best to pursue, program participants will consider these 
alternatives and decide which, if any, should be included in subsequent 
plans and implemented. For each class of activities, the Regulatory 
Impact Analysis offers examples of how this process might play out for 
program participants.
    Finally, in terms of quantifying the effects of the proposed rule, 
there is uncertainty about the potential impacts of whichever policy is 
selected by a program participant. For example, inclusionary zoning 
policies--one potential action that jurisdictions might take in this 
context--have been implemented by a number of communities across the 
country, often for the purpose of advancing fair housing goals. 
Research assessing these efforts is mixed, with some studies suggesting 
they increase prices and decrease housing stock in the long run, some 
studies showing they have no effect, and other studies indicating they 
increase the supply of multifamily housing units. For this example, as 
well as the other policies program participants might consider in the 
course of their AFFH planning process, the impact will depend on a 
complex interaction of a broad set of judgments and decisions by the 
jurisdiction, other jurisdictions, private and non-profit actors, and 
families, both in protected classes and not. These can differ across 
regions and families in ways that are impossible to predict in advance. 
Accordingly, impacts will be revealed in the months and years following 
policy implementation.
    In brief, the proposed rule presents an improved process for 
carrying out the statutory AFFH mandate, resulting in the potential to 
improve the lives of people in protected classes who are denied fair 
housing choice by barriers to such choice. The best outcome of the rule 
would be for each jurisdiction to not only undertake meaningful fair 
housing planning, but also to have capacity and a well-considered 
strategy to implement actions to affirmatively further fair housing. 
However, the specific actions of a local government or PHA that would 
generate benefits for protected classes are not prescribed, obligated, 
or enforced by the proposed rule. Instead, the rule encourages a more 
engaged and data-driven approach to assessing the state of fair housing 
and planning actions to affirmatively further fair housing than before.
    Considering the overall impact of the proposed rule, estimates 
suggest the proposed rule will have relatively limited additional 
paperwork and planning costs. Program participants already are required 
to engage in outreach and collect data in order to satisfy existing 
obligations, and HUD is reducing significant data burdens. While some 
additional outreach costs are possible, they are expected to be 
relatively small. Thus, compliance costs of the proposed rule are 
expected to be comparable to those under the current regime.
    In terms of quantifying the community impacts of the proposed rule, 
this analysis has highlighted the uncertainty that exists regarding how 
the new information generated through the new AFH process will 
translate into different actions by program participants. In terms of 
estimating impact, this suggests that the probability that any 
particular outcome occurs is exceedingly small. Moreover, the analysis 
has identified uncertainty with respect to how much specific actions 
will advance fair housing goals.
    However, any different actions that are taken by program 
participants are likely to represent new local and PHA approaches to 
reducing segregation, eliminating racially concentrated areas of 
poverty, reducing disparities in access to community assets, and 
addressing disproportionate housing needs by protected class. HUD is 
confident that some of these new approaches will be more successful in 
achieving the goals of fair housing, meaning that communities will be 
more integrated, fewer people will live in neighborhoods with both high 
poverty rates and high racial concentrations, and there will be fewer 
and smaller disparities in access to quality education, job 
opportunities, and other community assets.

Environmental Impact

    This proposed rule is a policy document that sets out fair housing 
and nondiscrimination standards. Accordingly, under 24 CFR 50.19(c)(3), 
this proposed rule is categorically excluded from environmental review 
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally 
requires an agency to conduct a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements, unless the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities. The undersigned 
certifies that this rule would not have a significant economic impact 
on a substantial number of small entities.

[[Page 43727]]

    This rule proposes to strengthen the way in which HUD and its 
program participants meet the requirement under the Fair Housing Act to 
take affirmative steps to further fair housing. The preamble identifies 
the statutes and executive orders that address this requirement and 
that place responsibility directly on certain HUD program participants, 
specifically, local governments, states, and PHAs, underscoring that 
the use of federal funds must promote housing choice and open 
communities. Although local governments, states, and PHAs must 
affirmatively further fair housing independent of any regulatory 
requirement imposed by HUD, HUD recognizes its responsibility to 
provide leadership and direction in this area, while preserving local 
determination of fair housing needs and strategies.
    This rule primarily focuses on establishing a regulatory framework 
by which program participants may more effectively meet their statutory 
obligation to affirmatively further fair housing. The statutory 
obligation to affirmatively further fair housing applies to all program 
participants, large and small. The statutory obligation requires 
program participants to develop strategies to affirmatively further 
fair housing as part of statutorily imposed plans that address the use 
of HUD funds and that must be submitted to HUD for review and approval. 
This rule builds on the statutory requirements to affirmatively further 
fair housing in conjunction with the development of consolidated plans 
for state and local governments, and PHA Plans for PHAs and, in doing 
so, provides for all program participants to comply with their 
statutory requirements in a cost-efficient, but also effective manner.
    The current statutory requirement imposed on states, local 
governments, and PHAs requires the program participant to certify that 
it is affirmatively furthering fair housing. While that certification 
is a simple and brief document to submit to HUD, it nevertheless 
represents the attestation of the program participant that it will take 
steps to affirmatively further fair housing. While the certification is 
an important component of a program participant's statutory obligation 
to affirmatively further fair housing, even more important is the 
specific actions that the program participant plans to take to 
affirmatively further fair housing. Because the Fair Housing Act 
requires that HUD programs and activities be administered in a manner 
that affirmatively furthers the policies of the Fair Housing Act, it is 
important for HUD to review the plans that will guide the activities 
jurisdictions will undertake so that the Secretary can be assured that 
HUD program participants are in fact affirmatively furthering fair 
housing. The rule, therefore, provides for program participants to 
submit an AFH to HUD.
    The rule proposes to reduce the administrative burden on program 
participants in preparing and submitting an AFH to HUD as compared to 
the current AI process by HUD providing fair housing related data. HUD 
will provide program participants with local and regional data on 
access to community assets through categories such as education, 
employment, low-poverty exposure, and transportation, as well as 
patterns of integration and segregation, racial and ethnic 
concentrations of poverty, and disproportionate housing needs based on 
protected class, and data on national trends in housing discrimination. 
With this data, program participants can perform an in-depth evaluation 
for their area of patterns of integration and segregation, disparities 
in access to community assets by members of protected classes, racial 
and ethnic concentrations of poverty, and disproportionate housing 
needs based on protected class; identify the areas for improvement 
revealed by this data; and develop the tools, strategies, and 
priorities that program participants intend to deploy in these areas to 
respond to these patterns. HUD will also be available to provide 
technical assistance to program participants in the development of 
their AFHs. It is HUD's position that this provision of data by HUD and 
HUD's more active role in assisting program participants with an AFH 
will reduce burden for all program participants large and small, in 
meeting their statutory obligation to affirmatively further fair 
housing.
    Nevertheless, HUD is sensitive to the fact that the uniform 
application of requirements on entities of differing sizes often places 
a disproportionate burden on small entities.
    Specific solicitation of comment. HUD, therefore, is soliciting 
alternatives for compliance from small entities as to how these small 
entities might comply in a way less burdensome to them.

Executive Order 12612, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the executive order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the executive order.
    The proposed rule will assist program participants of HUD funds to 
satisfactorily fulfill the statutory AFFH obligation. As HUD has noted 
in the preceding section discussing the Regulatory Flexibility Act, and 
in the Background section of this preamble, the obligation to 
affirmatively further fair housing is imposed by statute directly on 
local governments, states, and PHAs. As the agency charged with 
administering the Fair Housing Act, HUD is responsible for overseeing 
that its programs are administered in a manner that further purposes 
and policies of the fair housing and entities receiving HUD funds 
fulfill their affirmatively furthering fair housing obligation.
    The approach taken by HUD in this rule is to help local 
governments, states, and PHAs meet this obligation in a way that is 
meaningful, but without undue burden. As noted throughout this 
preamble, HUD proposes to provide local and regional data on patterns 
of integration and segregation and access to community assets in 
education, neighborhood stability, credit, employment, transportation, 
health, and other community amenities, as well as national trends in 
housing discrimination. This approach, in which HUD offers data, clear 
standards, guidance, and technical assistance, is anticipated to reduce 
burden and costs that is involved in current regulatory schemes 
governing affirmatively furthering fair housing. Since federal law 
requires states and local governments to affirmatively further fair 
housing, there is no preemption, by this rule, of state law.

Paperwork Reduction Act

    The information collection requirements contained in this proposed 
rule have been submitted to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In 
accordance with the Paperwork Reduction Act, an agency may not conduct 
or sponsor, and a person is not required to respond to, a collection of 
information, unless the collection displays a currently valid OMB 
control number.
    HUD anticipates that the impact of this rule on document 
preparation time

[[Page 43728]]

is reduced from the burden that it may otherwise be because the rule 
integrates the AFH with the consolidated and PHA planning processes. 
Additionally, states, local governments, and PHAs are required already 
to undertake an AI, prepare written AFFH plans, undertake activities to 
overcome identified barriers to fair housing choice, and maintain 
records of the activities and their impact. The principal differences 
imposed by the proposed rule are that program participants would submit 
the plan to HUD for review and feedback, the contents of the plan would 
be more defined, HUD would provide data for further analysis, and there 
would be a more defined community participation process. Because the 
fair housing planning process is tied to existing consolidated plan and 
PHA Plan processes, local governments, states, and PHAs would not have 
to establish wholly new procedures.
    The burden of the information collections in this proposed rule is 
estimated as follows:

                                       Reporting and Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
                                                                                    Estimated
                                                                    Number of     average time      Estimated
                 Section reference                   Number of    responses per        for        annual burden
                                                      parties      respondent      requirement      (in hours)
                                                                                   (in hours)
----------------------------------------------------------------------------------------------------------------
Sec.   5.154 (Assessment of Fair Housing) & Sec.          4,550               1          200.00       910,000.00
 5.158 (AFH Submission Requirements including
 Recordkeeping), including Sec.   5.158 (Community
 participation and consultation); Sec.   91.100
 (ConPlan Consultation; local governments,
 requirements specific for AFH); Sec.   91.105
 (ConPlan Citizen participation plan, requirements
 specific for AFH); Sec.   92.104 (HOME Program--
 Submission of the AFH); Sec.   570.441 (CDBG--
 Inclusion of AFH in citizen participation plan
 for insular areas) and Sec.   903.15 (PHA Plan--
 Options for meeting requirements to prepare AFH)
 [This reporting requirement consolidates the
 recipients and burden hours for the consolidated
 plan jurisdictions (1,150), and PHAs (3,400), and
 builds on the response time and burden hours
 specified for preparation and submission of the
 consolidated plan, and PHA Annual Plan,
 respectively.]...................................
Sec.   5.156 (Regional AFHs) [This information            1,542               1          100.00       154,200.00
 collection requirement contemplates that perhaps
 a third of the 4071 PHAs will initially partner
 with jurisdictions to prepare a Regional AFH.]...
Sec.   5.164 (Revising the AFH) [This information         1,000               1           50.00        50,000.00
 collection requirement contemplates that perhaps
 a quarter of all respondents may have to, at any
 given point, be required to revise the AFH.].....
Sec.   91.215 (Local Government--Strategic plan,          1,000               1          270.00       270,000.00
 requirements specific for AFH)...................
Sec.   91.220 (Local Government--Action plan,             1,000               1          150.00       150,500.00
 requirements specific for AFH)...................
Sec.   91.315 (States--Strategic plan,                       50               1          700.00        35,000.00
 requirements specific for AFH)...................
Sec.   91.320 (States--Action plan, requirements             50               1          450.00        22,500.00
 specific for AFH)................................
Sec.   91.415 (Consortia--Strategic plan,                   150               1          200.00        30,000.00
 requirements specific for AFH)...................
Sec.   91.420 (Consortia--Action plan,                      150               1             100        15,000.00
 requirements specific for AFH)...................
                                                   -------------------------------------------------------------
    Total Burden..................................  ...........  ..............  ..............     1,637,200.00
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology; e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this rule. Under the provisions 
of 5 CFR part 1320, OMB is required to make a decision concerning this 
collection of information between 30 and 60 days after today's 
publication date. Therefore, a comment on the information collection 
requirements is best assured of having its full effect if OMB receives 
the comment within 30 days of today's publication. This time frame does 
not affect the deadline for comments to the agency on the proposed 
rule, however. Comments must refer to the proposal by name and docket 
number (FR-5173) and must be sent to:

HUD Desk Officer, Office of Management and Budget, New Executive Office 
Building, Washington, DC 20503, Fax number: (202) 395-6947, and
Colette Pollard, Reports Liaison Officer, Department of Housing and 
Urban Development, 451 7th Street SW., Room 2204, Washington, DC 20410.

    Interested persons may submit comments regarding the information 
collection requirements electronically through the Federal eRulemaking 
Portal at http://www.regulations.gov. HUD strongly encourages 
commenters to submit comments electronically. Electronic submission of 
comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt by HUD, and enables HUD to make them 
immediately available to the public. Comments submitted electronically 
through the http://www.regulations.gov Web site can be viewed by other 
commenters and interested members of the public. Commenters should 
follow the instructions provided on that site to submit comments 
electronically.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Grant

[[Page 43729]]

programs-housing and community development, Individuals with 
disabilities, Intergovernmental relations, Loan programs-housing and 
community development, Low and moderate income housing, Mortgage 
insurance, Penalties, Pets, Public housing, Rent subsidies, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 91

    Aged, Grant programs--housing and community development, Homeless, 
Individuals with disabilities, Low and moderate income housing, 
Reporting and recordkeeping requirements.

24 CFR Part 92

    Administrative practice and procedure, Grant programs-housing and 
community development, Low and moderate income housing, Manufactured 
homes, Rent subsidies, and Reporting and recordkeeping requirements.

24 CFR Part 570

    Administrative practice and procedure, American Samoa, Community 
development block grants, Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Lead poisoning, Loan 
programs--housing and community development, Low and moderate income 
housing, New communities, Northern Mariana Islands, Pacific Islands 
Trust Territory, Pockets of poverty, Puerto Rico, Reporting and 
recordkeeping requirements, Small cities, Student aid, Virgin Islands.

24 CFR Part 574

    Community facilities, Disabled, Grant programs--health programs, 
Grant programs--housing and community development, Grant programs--
social programs, HIV/AIDS, Homeless, Housing, Low and moderate income 
housing, Nonprofit organizations, Rent subsidies, Reporting and 
recordkeeping requirements, Technical assistance.

24 CFR Part 576

    Community facilities, Emergency solutions grants, Grant programs--
housing and community development, Grant program--social programs, 
Homeless, Reporting and recordkeeping requirements.

24 CFR Part 903

    Administrative practice and procedure, Public housing, Reporting 
and recordkeeping requirements.

    Accordingly, for the reasons described in the preamble, HUD 
proposes to amend parts 5, 91, 92, 570, 574, 576, and 903 of title 24 
of the Code of Federal Regulations as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

Subpart A--Generally Applicable Definitions and Federal 
Requirements; Waivers

0
1. The authority citation for part 5, subpart A, is revised to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437c-1(d), 1437d, 1437f, 
1437n, 3535(d), and Sec. 327, Pub.L. 109-115, 119 Stat. 2936; 42 
U.S.C. 3600-3620; 42 U.S.C. 5304(b); 42 U.S.C. 12704-12708; E.O. 
11063, 27 FR 11527, 3 CFR, 1958-1963 Comp., p. 652; E.O. 12892, 59 
FR 2939, 3 CFR, 1994 Comp., p. 849.
0
2. Subpart A is amended to by adding Sec. Sec.  5.150-5.180 under the 
undesignated heading of ``Affirmatively Furthering Fair Housing'' to 
read as follows:
* * * * *

Affirmatively Furthering Fair Housing

Sec.
5.150 Affirmatively Furthering Fair Housing: purpose.
5.152 Definitions.
5.154 Assessment of Fair Housing (AFH).
5.156 Regional assessments and fair housing planning.
5.158 Community participation, consultation, and coordination.
5.160 AFH submission requirements.
5.162 Review of AFH.
5.164 Revising the AFH.
5.166 Recordkeeping.
5.167-5.180 [Reserved]

Affirmatively Furthering Fair Housing


Sec.  5.150  Affirmatively Furthering Fair Housing: purpose.

    The purpose of the Affirmatively Furthering Fair Housing (AFFH) 
regulations in Sec. Sec.  5.150-5.180 is to improve fair housing choice 
for all through fair housing planning, strategies, and actions. The 
regulatory framework does this by providing clearer standards, greater 
technical assistance from HUD, and a stronger accountability system 
governing fair housing planning, strategies, and actions. In 
furtherance of the statutory obligation to affirmatively further fair 
housing under the Fair Housing Act; Title VIII of the Civil Rights Act 
of 1968; as well as, as applicable, the Housing and Community 
Development Act of 1974, the Cranston-Gonzalez National Affordable 
Housing Act, and the Housing Act of 1937, the regulations establish the 
specific requirements for the development and submission of an 
Assessment of Fair Housing (AFH) by program participants (including 
local governments, states, and public housing agencies (PHAs)), and the 
incorporation of that AFH into subsequent consolidated plans and PHA 
Plans. In this way, the AFFH regulatory framework provides program 
participants a way to assess issues related to fair housing choice and 
identify fair housing goals that will inform housing and community 
development policy and investment planning. A program participant's 
strategies and actions may include strategically enhancing neighborhood 
assets (e.g., through targeted investment in neighborhood 
revitalization or stabilization) or promoting greater mobility and 
access to areas offering vital assets such as quality schools, 
employment, and transportation, consistent with fair housing goals.


Sec.  5.152  Definitions.

    For purposes of this subpart, the terms ``consolidated plan'', 
``consortium'', ``unit of general local government'', ``jurisdiction'', 
and ``state'' are defined in 24 CFR part 91. The following additional 
definitions are provided for this subpart:
    Affirmatively furthering fair housing means taking proactive steps 
beyond simply combating discrimination to foster more inclusive 
communities and access to community assets for all persons protected by 
the Fair Housing Act. More specifically, it means taking steps 
proactively to address significant disparities in access to community 
assets, to overcome segregated living patterns and support and promote 
integrated communities, to end racially and ethnically concentrated 
areas of poverty, and to foster and maintain compliance with civil 
rights and fair housing laws. For participants subject to this subpart, 
these ends will be accomplished primarily by making investments with 
federal and other resources, instituting strategies, or taking other 
actions that address or mitigate fair housing issues identified in an 
assessment of fair housing (AFH) and promoting fair housing choice for 
all consistent with the policies of the Fair Housing Act.
    Assessment of Fair Housing (assessment or AFH) means the document 
that is submitted to HUD pursuant to Sec.  5.154 that includes fair 
housing data analysis, an assessment of fair housing issues and 
determinants, and an identification of fair housing priorities and 
general goals.
    Assessment tool. See definition of ``Instructions'' below.
    Community participation means a solicitation of views and 
recommendations from the public (including citizens, residents, and 
other interested parties), a consideration of

[[Page 43730]]

the views and recommendations received, and a process for incorporating 
such views in decisions and outcomes.
    Consolidated plan program participant means any entity specified in 
Sec.  5.154(b)(1).
    Disproportionate housing needs exists when the percentage of 
extremely low-income, low-income, moderate-income, and middle-income 
families in a category of housing need who are members of a protected 
class is at least 10 percent higher than the percentage of persons in 
the category as a whole. For this purpose, categories of housing need 
are cost burden and severe cost burden, overcrowding (especially for 
large families) and substandard housing conditions. The terms cost 
burden, severe cost burden, overcrowding, extremely low-income family, 
low-income family, moderate-income family, and middle-income family are 
defined in 24 CFR 91.5.
    Fair housing choice means that individuals and families have the 
information, options, and protection to live where they choose without 
unlawful discrimination and other barriers related to race, color, 
religion, sex, familial status, national origin, or handicap. It 
encompasses actual choice, which means the existence of realistic 
housing options; protected choice, which means housing that can be 
accessed without discrimination; and enabled choice, which means the 
availability and realistic access to sufficient information regarding 
options so that any choice is informed. For persons with disabilities, 
fair housing choice includes access to accessible housing, and, for 
disabled persons in institutional or other residential environments, 
housing in the most integrated setting appropriate as required under 
law, including disability-related services that an individual needs to 
live in such housing.
    Fair housing determinant means a factor that creates, contributes 
to, or perpetuates one or more fair housing issues.
    Fair housing enforcement and fair housing outreach capacity means 
the ability of a jurisdiction, and organizations located in the 
jurisdiction, to accept complaints of violations of fair housing laws, 
investigate such complaints, obtain remedies, engage in fair housing 
testing, and educate community members about fair housing laws and 
rights and includes any state or local agency that enforces a law 
substantially equivalent to the Fair Housing Act (see 24 CFR part 115) 
and any organization participating in the Fair Housing Initiative 
Programs (see 24 CFR part 125).
    Fair housing issue means ongoing local or regional segregation or 
the need to support integrated communities; racial or ethnic 
concentrations of poverty; disparities in access to community assets; 
disproportionate housing needs based on race, color, religion, sex, 
familial status, national origin, or handicap; and evidence of illegal 
discrimination or violations of existing civil rights law, regulations, 
or guidance, as well as any other condition that impedes or fails to 
advance fair housing choice.
    Instructions and assessment tool refer to guidance that HUD will 
issue to program participants providing directions on how to use the 
data to be provided and the assessment to be conducted pursuant to 
Sec.  5.154, and such guidance will be updated periodically as may be 
necessary.
    Insular area means any of the following: Guam, the Northern Mariana 
Islands, the Virgin Islands, and American Samoa.
    Integration means, based on the most recent decennial Census and 
other data sources as determined by HUD to be statistically valid, that 
particular geographic areas within a jurisdiction do not contain high 
concentrations of persons of a particular race, color, religion, sex, 
familial status, national origin, or handicap when compared to the 
jurisdiction or Metropolitan Statistical Area as a whole. For 
individuals with disabilities, integration also means that such 
individuals are housed in the most integrated setting appropriate. The 
most integrated setting is one that enables individuals with 
disabilities to interact with nondisabled persons to the fullest extent 
possible, consistent with the requirements of the Americans with 
Disabilities Act (42 U.S.C. 12101, et seq.), and Section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794). See 28 CFR, part 35, App. A 
(2010) (addressing 25 CFR 35.130).
    Program participants means any entities specified in Sec.  
5.154(b).
    Protected class means a class of persons who are protected from 
housing discrimination on the basis of race, color, religion, sex, 
familial status, national origin, or handicap under the Fair Housing 
Act.
    Racially or ethnically concentrated area of poverty (RCAP or ECAP) 
means a geographic area based on the most recent decennial Census and 
other data sources as they are determined by HUD to be statistically 
valid, with significant concentrations of extreme poverty and minority 
populations.
    Regionally collaborating program participants means those program 
participants collaborating to conduct a Regional AFH pursuant to Sec.  
5.156.
    Segregation means geographic areas, based on the most recent 
decennial Census and other data sources determined by HUD to be 
statistically valid, with high concentrations of persons of a 
particular race, color, religion, sex, familial status, national 
origin, or with a disability in a particular housing development, or a 
jurisdiction, compared to the jurisdiction or Metropolitan Statistical 
Area, as a whole resulting from fair housing determinants or other 
causes. For persons with disabilities, segregation includes the failure 
to provide housing in the most integrated setting possible.
    Significant disparities in access to community assets means 
measurable differences in access to educational, transportation, 
economic, and other important assets in a community based on housing 
unit location and race, color, religion, sex, familial status, national 
origin, or disability, based on the most recent decennial Census and 
other data sources determined by HUD to be statistically valid, program 
participant-provided supplemental or replacement data that has an 
empirical basis, or both.


Sec.  5.154  Assessment of Fair Housing (AFH).

    (a) General. To effectively meet the statutory obligation to 
affirmatively further fair housing, an assessment of the elements and 
factors that cause or maintain disparity, segregation, and racially or 
ethnically concentrated areas of poverty is central to the development 
of a successful affirmatively furthering fair housing strategy (AFFH 
strategy). For HUD program participants already required to develop 
plans for effective uses of HUD funds consistent with the statutory 
requirements and goals governing such funds, an AFH will be integrated 
into such planning.
    (b) Requirement to submit AFH. In furtherance of the statutory 
obligation to affirmatively further fair housing, an AFH must be 
developed and submitted in a manner and form prescribed by HUD by the 
following entities:
    (1) Jurisdictions and Insular Areas that are required to submit 
consolidated plans for the following programs:
    (i) The Community Development Block Grant (CDBG) programs (see 24 
CFR part 570, subparts D and I);
    (ii) The Emergency Solutions Grants (ESG) program (see 24 CFR part 
576);
    (iii) The HOME Investment Partnerships (HOME) program (see 24 CFR 
part 92); and

[[Page 43731]]

    (iv) The Housing Opportunities for Persons With AIDS (HOPWA) 
program (see 24 CFR part 574).
    (2) Public housing agencies (PHAs) receiving assistance under 
sections 8 and 9 of the United States Housing Act of 1937 (42 U.S.C. 
1437f and 42 U.S.C. 1437g).
    (3) Such other participants in HUD programs that may be subject to 
the AFFH regulations after [effective date of final rule] and announced 
by HUD through Federal Register notice.
    (c) Fair housing data provided by HUD. HUD will provide program 
participants with nationally uniform local and regional data on 
patterns of integration and segregation; racially and ethnically 
concentrated areas of poverty; access to assets in education, 
employment, low-poverty, transportation, and environmental health, 
among others; disproportionate housing needs; data on individuals with 
disabilities and families with children; and data on discrimination. 
HUD will also provide PHA site locational data (including, to the 
extent available, accessible units), the distribution of housing choice 
vouchers, and occupancy data. Program participants shall use this 
information, in addition to any available local or regional information 
and information gained through community participation and consultation 
undertaken in accordance with Sec.  5.158 to conduct an AFH.
    (d) Content. In accordance with instructions prescribed by HUD, 
each program participant shall conduct an AFH for the purpose of 
identifying goals to affirmatively further fair housing and to inform 
fair housing strategies in the consolidated plan, the PHA Plan, other 
public housing related program plans such as Capital Fund Plans, 
community plans including, but not limited to, education, 
transportation, or environmental related plans. The AFH will address 
integration and segregation, concentrations of poverty, disparities in 
access to community assets, and disproportionate housing needs based on 
race, color, religion, sex, familial status, national origin, or 
handicap. In addition, the AFH will assess the jurisdiction's fair 
housing enforcement and fair housing outreach capacity. At a minimum, 
the AFH will include the following elements:
    (1) Summary of fair housing issues and capacity to address. The AFH 
must include a summary of fair housing issues in the jurisdiction, 
including any findings or judgments related to fair housing or other 
civil rights laws and assessment of compliance with existing fair 
housing laws, regulations, and guidance, and an assessment of the 
jurisdiction's fair housing enforcement and fair housing outreach 
capacity.
    (2) Analysis of data. Based upon HUD-provided fair housing data, 
available local or regional data, and community input, the analysis 
will:
    (i) Identify integration and segregation patterns and trends across 
protected classes within the jurisdiction and region;
    (ii) Identify racially or ethnically concentrated areas of poverty 
within the jurisdiction and region;
    (iii) Identify whether significant disparities in access to 
community assets exist across protected classes within the jurisdiction 
and region; and
    (iv) Identify whether disproportionate housing needs exist across 
protected classes within the jurisdiction and region.
    (3) Assessment of determinants of fair housing issues. Using an 
assessment tool provided by HUD, the assessment will identify the 
primary determinants influencing conditions of integration and 
segregation, concentrations of poverty, disparities in access to 
community assets, and disproportionate housing needs based on protected 
class as identified under paragraph (d)(2) of this section.
    (4) Identification of fair housing priorities and general goals. 
Consistent with the analysis and assessment conducted under paragraphs 
(d)(2) and (3) of this section, the AFH must:
    (i) Identify and prioritize fair housing issues arising from the 
assessment and justify the chosen prioritization; and
    (ii) Identify the most significant fair housing determinants 
related to these priority issues and set and prioritize one or more 
goal(s) for mitigating or addressing the determinants. The strategies 
or funding decisions subject to the consolidated plan, PHA Plan, or 
other relevant planning processes are not required to be detailed in an 
AFH.
    (5) Summary of community participation. The AFH must include a 
concise summary of the community participation process, public 
comments, and efforts made to broaden community participation in the 
development of the assessment. A summary of the comments or views 
received in writing, or orally at public hearings, in preparing the 
final AFH, and a summary of any comments or views not accepted and the 
reasons why, must be attached to the final AFH.
    (e) Specific types of program participants--(1) PHAs. If a PHA 
participating with the relevant consolidated plan program participant, 
pursuant to 24 CFR 903.15(a)(1), disagrees with any aspect of the AFH, 
including, but not limited to, assessments, strategies, or priorities, 
the PHA may submit to HUD and the unit of general local government a 
dissenting statement or submission of alternative views by the PHA's 
governing board or commission. The dissents and alternative views will 
become part of the AFH and will have the same deadline and review 
process as the AFH. In the case that all of the differentiated sections 
of the AFH are acceptable, the PHA and the consolidated plan program 
participant will be considered to have accepted the AFH. If a subset of 
the differentiated sections is not accepted, then the AFH for the PHA 
or the consolidated plan program participant associated with those 
sections will be considered not to be accepted. The determination of 
whether the AFH is accepted for the consolidated plan program 
participant, for the PHA or for both, is a determination to be made by 
HUD.
    (2) HOME program consortia. This paragraph (e)(2) applies to HOME 
program consortia, as defined in 24 CFR 91.5 (see 24 CFR part 92). For 
purposes of the AFFH regulations, a HOME consortium is considered to be 
a single unit of general local government.
    (i) Home and CDBG consortia. Units of local government that 
participate in a HOME consortium must participate in submission of an 
AFH for the consortium, prepared in accordance with this section. CDBG 
entitlement communities that are members of a consortium must provide 
such additional information as necessary for the consortium's AFH.
    (ii) Community participation. The consortium must have a plan for 
community participation that complies with the requirements of this 
subpart. If the consortium contains one or more CDBG entitlement 
communities, the consortium must provide for community participation 
within each CDBG entitlement community, either by the consortium or by 
the CDBG entitlement community, in a manner sufficient for the CDBG 
entitlement community to certify that it is following a citizen 
participation plan.
    (3) Insular Areas. (i) An insular area must follow the AFH 
consultation, content, and submission requirements described in this 
subpart.
    (ii) Community participation. An insular area shall comply with the 
citizen participation requirements described in 24 CFR 570.441 if it 
submits an abbreviated consolidated plan under 24 CFR 91.235. The 
insular area shall follow the citizen participation requirements of 24 
CFR 91.105 and 91.100 (with the exception

[[Page 43732]]

of Sec.  91.100(a)(4)), if it submits a complete consolidated plan.
    (4) District of Columbia. The District of Columbia must follow the 
requirements applicable to units of general local government described 
in this subpart.


Sec.  5.156  Regional assessments and fair housing planning.

    (a) General. Two or more program participants (regionally 
collaborating program participants) may, and are encouraged to, 
collaborate to conduct and submit a single regional AFH to evaluate 
fair housing issues and determinants from a regional perspective 
(Regional AFH). The Regional AFH must be prepared in accordance with 
this subpart. Regionally collaborating program participants need not be 
contiguous and may cross state boundaries. Regionally collaborating 
program participants must designate one member as the lead entity to 
oversee the development and submission of the assessment.
    (b) Coordinating program years and submission deadlines. To the 
extent practicable, all regionally collaborating program participants 
must be on the same program year and fiscal year (as applicable) before 
submission of the Regional AFH. (See Sec.  5.160; 24 CFR 91.15; and 24 
CFR 903.5.) The applicable procedures for changing consolidated plan 
program participant program year start dates, if necessary, are 
described in 24 CFR 91.15. The applicable procedures for changing PHA 
fiscal year beginning dates, if necessary, are described in 24 CFR part 
903. If program year and/or fiscal year alignment is not practicable, 
the submission deadline for a Regional AFH must be based on the 
designated lead entity's program year start date, or fiscal year 
beginning date (as applicable). Within 18 months after the date of AFH 
acceptance, each regionally collaborating program participant that has 
a program year start date, or fiscal year beginning date, earlier than 
the designated lead entity must make appropriate revisions or 
amendments to its consolidated plan, or PHA Plan, to incorporate 
strategies and proposed actions consistent with the fair housing goals, 
issues, and other elements identified in the Regional AFH.
    (c) Community participation. The regionally collaborating program 
participants must have a plan for community participation that complies 
with the requirements of this subpart. The community participation 
process must include citizens, residents, and other interested parties 
of all regionally collaborating program participants, not just those of 
the lead entity, and be conducted in a manner sufficient for each 
collaborating consolidated plan program participant to certify that it 
is following its applicable citizen participation plan and each 
collaborating PHA to satisfy the notice and comment requirements in 24 
CFR part 903. To the extent that public notice and comment periods 
differ, the longer period shall apply. A significant revision required 
of any regionally collaborating program participant will trigger a 
requirement to revise the Regional AFH.
    (d) Content of the Regional Assessment. The Regional AFH must 
include the elements required under Sec.  5.154(d). A Regional AFH does 
not relieve each regionally collaborating program participant from its 
obligation to analyze and address local fair housing issues and 
determinants that affect housing choice within its respective 
jurisdiction.


Sec.  5.158  Community participation, consultation, and coordination.

    (a) General. To ensure that the AFH is informed by meaningful 
community participation, program participants must give the public 
reasonable opportunities for involvement in the development of the AFH 
and in the incorporation of the AFH into the consolidated plan, PHA 
Plan, and other planning documents as may be applicable. At a minimum, 
whether preparing an AFH singly or in combination with other program 
participants, AFH community participation must include the following 
for consolidated plan program participants and PHAs (as applicable):
    (1) Consolidated plan program participants. The consolidated plan 
program participant must follow the policies and procedures described 
in its applicable citizen participation plan adopted pursuant to 24 CFR 
part 91 (see 24 CFR 91.105, 91.115, and 91.401) in the process of 
developing the AFH, obtaining community feedback, and addressing 
complaints. The jurisdiction must consult with the agencies and 
organizations identified in consultation requirements at 24 CFR part 91 
(see 24 CFR 91.100, 91.110, 91.235, and 91.401).
    (2) PHAs. PHAs must follow the policies and procedures described in 
24 CFR 903.7 and 903.19 in the process of developing the AFH, obtaining 
community feedback, and addressing complaints.
    (b) Coordination. A PHA may participate directly with a 
consolidated plan program participant, prepare its own AFH, or adopt 
the state's AFH (see 24 CFR 903.15(a)). If the PHA and consolidated 
plan program participant prepare a single AFH, the program participants 
will work closely together to provide a forum for consideration of 
mutual issues affecting fair housing choice and exchange information as 
necessary to achieve coordination of AFH priorities and goals. The PHA 
and the consolidated plan program participant must actively participate 
in AFH community participation consistent with paragraph (a) of this 
section, and such participation will be in a cohesive manner. The PHA 
and consolidated plan program participant will exchange information 
pertaining to housing and community development programs within their 
respective responsibilities as necessary to assist in developing the 
AFH.


Sec.  5.160  AFH submission requirements.

    (a) General. (1) In order to ensure that fair housing 
considerations fully inform the consolidated planning and PHA Plan 
processes and provide accountability to the community, each program 
participant (including PHAs that choose to prepare their own AFH 
pursuant to 24 CFR 903.15) shall submit an initial AFH to HUD at least 
270 calendar days before the start of the program participant's program 
year, except that newly eligible jurisdictions under the HOME program 
shall submit an initial assessment as provided in 24 CFR 92.104.
    (2) After acceptance of its initial AFH, each program participant 
(including PHAs that choose to prepare their own AFH) shall submit 
subsequent AFHs to HUD at least 195 calendar days before the start of 
the jurisdiction's program year.
    (3) Program participants that participate in a Regional AFH shall 
submit initial and subsequent assessments as provided in Sec.  
5.156(d).
    (b) Late submission. An accepted AFH, or portion thereof, is a 
precondition for approval of a consolidated plan (see 24 CFR part 91) 
and of a PHA Plan (see 24 CFR part 903). If a consolidated plan program 
participant fails to submit an AFH in a timely manner, HUD may 
establish a date after AFH acceptance for the jurisdiction to submit 
its consolidated plan, but in no event past the August 16 deadline 
provided in 24 CFR 91.15. Failure to submit a consolidated plan by 
August 16 of the federal fiscal year for which funds are appropriated 
will automatically result in the loss of the CDBG funds to which the 
jurisdiction would otherwise be entitled. If a PHA preparing its own 
AFH fails to submit the AFH in a timely manner, the PHA must submit its 
AFH no later than 75

[[Page 43733]]

calendar days before the commencement of the PHA's fiscal year to avoid 
any impact on their funding.
    (c) Frequency of submission. Each consolidated plan program 
participant must submit an AFH at least once every 5 years, or as such 
time agreed upon by HUD and the program participant in order to 
coordinate the AFH submission with time frames used for consolidated 
plans, cooperation agreements, or other plans. (See 24 CFR 
91.15(b)(2).) PHAs participating with their consolidated plan program 
participants in the AFH process will incorporate the resulting AFH into 
its PHA Plan every 5 years, and PHAs choosing to undertake their own 
AFH will further have to update their AFH annually. (See 24 CFR 
903.15(b), (c)).
    (d) Coordination of program years and PHA fiscal years. A 
consolidated plan program participant or PHA may request to change its 
program year start date, or fiscal year beginning date, to better 
coordinate the submission of the AFH, consolidated plan and PHA Plan. 
For consolidated plan program participants, procedures for changing 
program years are described in 24 CFR part 91. For PHAs, procedures for 
changing both program and fiscal years are described in 24 CFR part 
903.


Sec.  5.162  Review of AFH.

    (a) General. (1) HUD's review of an AFH is to determine whether the 
program participant has met the requirements for providing its 
analysis, assessment, and goal setting as set forth in Sec.  5.154(d). 
The AFH will be deemed accepted 60 calendar days after the date that 
HUD receives the AFH, unless before that date HUD has provided 
notification that HUD does not accept the AFH. In its notification, HUD 
must inform the program participant in writing of the reasons why HUD 
has not accepted the AFH and the actions that the jurisdiction may take 
to address these reasons.
    (2) HUD's acceptance of an AFH means only that, for purposes of 
administering HUD program funding, HUD has determined that the program 
participant has provided the required elements of an AFH as set forth 
in Sec.  5.154(d). HUD's acceptance does not mean that HUD has 
determined that a jurisdiction has complied with its obligation to 
affirmatively further fair housing under the Fair Housing Act; has 
complied with other provisions of the Act; or has complied with other 
civil rights laws, regulations or guidance.
    (b) Standard of review. HUD may choose not to accept an AFH, or a 
portion of the assessment, if it is inconsistent with fair housing or 
civil rights laws or if the assessment is substantially incomplete. The 
following are examples of assessments of fair housing that are 
substantially incomplete:
    (1) An assessment that was developed without the required community 
participation or the required consultation;
    (2) An assessment that fails to satisfy required elements in this 
part. Failure to include a required element includes an assessment 
whose priorities or goals are materially inconsistent with the data and 
other evidence available to the jurisdiction.
    (c) Revisions and resubmission. The program participant may revise 
and resubmit the AFH to HUD within 45 calendar days after the date on 
which HUD provides written notification that it does not accept the 
AFH. The revised AFH will be deemed accepted after 30 calendar days of 
the date by which HUD receives the revised AFH, unless before the date 
HUD has provided notification that HUD does not accept the revised AFH.


Sec.  5.164  Revising the AFH.

    (a) General--(1) Minimum criteria for revising the AFH. The AFH 
must be revised under the following circumstances:
    (i) Whenever a significant material change in circumstances occurs 
that calls into question the continued validity of the AFH, such as the 
program participant is in an area for which the President has declared 
a disaster under title IV of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5121 et seq.) that is significant, 
significant demographic changes, significant policy changes (such as 
significant changes related to zoning, housing plans or policies, or 
development plans or policies), or significant civil rights findings, 
determinations, Voluntary Compliance Agreements, or other settlements; 
or
    (ii) Upon HUD's written notification specifying a significant 
material change that requires the revision.
    (2) Criteria for revising the AFH. The consolidated plan program 
participant citizen participation plan adopted pursuant to 24 CFR part 
91, PHA Resident Advisory Board requirements pursuant to 24 CFR 903.13, 
the PHA public comment process pursuant to 24 CFR 903.17, and the PHA 
amendment or modification process pursuant to 24 CFR 903.21 must 
specify the criteria that will be used for determining which 
significant material changes will require revisions to the AFH. Such 
criteria must include, at a minimum, the circumstances described in 
paragraph (a)(1) of this section.
    (b) Community participation. Revisions to an AFH are subject to 
community participation. The jurisdiction must follow the notice and 
comment process applicable to consolidated plan substantial amendments 
under the jurisdiction's citizen participation plan adopted pursuant to 
24 CFR part 91 (see 24 CFR 91.105, 91.115, and 91.401). A consortium 
must follow the participation process applicable to consolidated plan 
substantial amendments under the consortium's citizen participation 
plan adopted pursuant to 24 CFR 91.401. Insular areas submitting an 
abbreviated consolidated plan shall follow the citizen participation 
requirements of Sec.  570.441. The PHA must follow the notice and 
comment process applicable to significant amendments or modifications 
pursuant to 24 CFR 903.13, 903.15, 903.17, and 903.21.
    (c) Submission to HUD. Upon completion, the revision must be made 
public and submitted to HUD either at the time of the revision or at 
the time a consolidated plan substantial amendment must be submitted to 
HUD pursuant to 24 CFR 91.505(c) or, for PHAs preparing their own AFH 
pursuant to 24 CFR 903.15(a)(2), at the time a PHA Plan substantial 
amendment must be submitted to HUD pursuant to 24 CFR 903.23. Letters 
transmitting copies of revisions must be signed by the official 
representative of the jurisdiction authorized to take such action. A 
review by HUD of a revised AFH pursuant will be in accordance with the 
process provided under Sec.  5.162.
    (d) PHAs. Upon any revision to the AFH pursuant to this subpart, 
PHAs must revise their PHA Plan within 18 months pursuant to 24 CFR 
903.15(e).


Sec.  5.166  Recordkeeping.

    (a) General. Each program participant must establish and maintain 
sufficient records to enable HUD to determine whether the program 
participant has met the requirements of this subpart. A PHA not 
preparing its own AFH in accordance with 24 CFR 903.15(a)(2) must 
maintain a copy of the applicable AFH and records reflecting actions to 
affirmatively further fair housing as described in 24 CFR 903.7(o). All 
program participants shall make these records available for HUD 
inspection. At a minimum, the following records are needed for each 
consolidated plan program participant and each PHA that prepares its 
own AFH:

[[Page 43734]]

    (1) Information and records relating to the program participant's 
AFH and any significant revisions to the AFH, including, but not 
limited to, statistical data, studies, and other diagnostic tools used 
by the jurisdiction, any policies, procedures, or other documents 
incorporated by reference into the AFH, and significant material 
changes that led to a significant revision of the AFH pursuant to Sec.  
5.164;
    (2) Records demonstrating compliance with the consultation and 
community participation requirements of this subpart and applicable 
program regulations, including the names of organizations involved in 
the development of the AFH, summaries or transcripts of public meeting 
or hearings, public notices, and other correspondence, distribution 
lists, surveys, or interviews (as applicable);
    (3) Records demonstrating the actions the program participant has 
taken to affirmatively further fair housing, including activities 
carried out in furtherance of the assessment; the program participant's 
AFFH strategy set forth in its AFH, consolidated plan, or PHA Plan; and 
the actions the program participant has carried out to promote or 
support the goals identified in Sec.  5.154 during the preceding 5 
years;
    (4) Where courts or the United States Government have found that 
the program participant has violated any applicable nondiscrimination 
and equal opportunity requirements set forth in Sec.  5.105(a) of this 
subtitle or any applicable civil rights-related program requirement, 
documentation related to the underlying judicial or administrative 
finding and affirmative measures that the program participant has taken 
in response.
    (5) Documentation relating to the program participant's efforts to 
ensure that housing and community development activities (including 
those assisted under programs administered by HUD) are in compliance 
with applicable nondiscrimination and equal opportunity requirements 
set forth in Sec.  5.105(a) of this subtitle and applicable civil 
rights related program requirements;
    (6) Records demonstrating that consortium members, units of general 
local government receiving allocations from a state, or units of 
general local government participating in an urban county have 
conducted their own or contributed to the jurisdiction's assessment (as 
applicable) and documents demonstrating their actions to affirmatively 
further fair housing; and
    (7) Any other evidence relied upon by the program participant to 
support its affirmatively furthering fair housing certification.
    (b) Retention period. All records must be retained for such period 
as may be specified in the applicable program regulations.

[Sec. Sec.  5.167-5.180--Reserved]

PART 91--CONSOLIDATED SUBMISSION FOR COMMUNITY PLANNING AND 
DEVELOPMENT PROGRAMS

0
3. The authority citation for part 91 continues to read as follows:

    Authority:  42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-
11388, 12701-12711, 12741-12756, and 12901-12912.

0
4. In Sec.  91.5, the introductory text is revised to read as follows:


Sec.  91.5  Definitions.

    The terms Affirmatively Furthering Fair Housing, Assessment of Fair 
Housing or AFH, elderly person, and HUD are defined in 24 CFR part 5.
* * * * *
0
5. In Sec.  91.100, paragraphs (a)(1), (a)(5), and (c) are revised and 
paragraph (e) is added to read as follows:


Sec.  91.100  Consultation; local governments.

    (a) General. (1) When preparing the AFH and the consolidated plan, 
the jurisdiction shall consult with other public and private agencies 
that provide assisted housing, health services, and social services 
(including those focusing on services to children, elderly persons, 
persons with disabilities, persons with HIV/AIDS and their families, 
homeless persons), community- and regionally based organizations that 
represent protected class members, and organizations that enforce fair 
housing laws.
* * * * *
    (5) The jurisdiction also shall consult with adjacent units of 
general local government, including local government agencies with 
metropolitan-wide planning and transportation responsibilities, 
particularly for problems and solutions that go beyond a single 
jurisdiction.
* * * * *
    (c) Public housing. The jurisdiction shall consult with local 
public housing agencies (PHAs) operating in the jurisdiction regarding 
consideration of public housing needs, planned programs and activities, 
the AFH, strategies for affirmatively furthering fair housing, and 
proposed actions to affirmatively further fair housing in the 
consolidated plan. (See also 24 CFR 5.158 for coordination when 
preparing an AFH jointly with a PHA.) This consultation will help 
provide a better basis for the certification by the authorized official 
that the PHA Plan is consistent with the consolidated plan and the 
local government's description of its strategy for affirmatively 
furthering fair housing and the manner in which it will address the 
needs of public housing and, where necessary, the manner in which it 
will provide financial or other assistance to a troubled PHA to improve 
the PHAs operations and remove the designation of troubled, as well as 
obtaining PHA input on addressing fair housing issues in public housing 
and the Housing Choice Voucher Programs. It will also help ensure that 
activities with regard to affirmatively furthering fair housing, local 
drug elimination, neighborhood improvement programs, and resident 
programs and services, funded under a PHA's program and those funded 
under a program covered by the consolidated plan, are fully coordinated 
to achieve comprehensive community development goals and affirmatively 
further fair housing. If a PHA is required to implement remedies under 
a Voluntary Compliance Agreement, the local jurisdiction should work 
with or consult with the PHA, as appropriate, to identify actions it 
may take, if any, to assist the PHA in implementing the required 
remedies. A local jurisdiction may use CDBG funds for eligible 
activities or other funds to implement remedies required under a 
Voluntary Compliance Agreement.
* * * * *
    (e) Affirmatively furthering fair housing. The jurisdiction shall 
consult with community and regionally based organizations that 
represent protected class members, and organizations that enforce fair 
housing laws, such as State or local fair housing enforcement agencies 
(including participants in the Fair Housing Assistance Program (FHAP), 
fair housing organizations, and other nonprofit organizations that 
receive funding under the Fair Housing Initiative Program (FHIP), and 
other public and private fair housing service agencies, to the extent 
that such entities operate within its jurisdiction. This consultation 
will help provide a better basis for the jurisdiction's AFH, its 
certification to affirmatively further fair housing and other portions 
of the consolidated plan concerning affirmatively furthering fair 
housing. This consultation must occur with any organizations that have 
the capacity to engage with data informing the AFH and be sufficiently 
independent and representative to provide meaningful feedback to a 
jurisdiction on the AFH,

[[Page 43735]]

the consolidated plan, and their implementation. A Fair Housing 
Advisory Council, or similar group, that includes community members and 
advocates, fair housing experts, housing and community development 
industry participants, and other key stakeholders is an acceptable 
method, among others, to meet this consultation requirement. 
Consultation must occur throughout the fair housing planning process, 
meaning that, at a minimum, the jurisdiction will consult with the 
organizations described in this paragraph (e) in the development of 
both the AFH and the consolidated plan. Consultation on the 
consolidated plan shall specifically seek input into how the goals 
identified in an accepted AFH inform the priorities and objectives of 
the consolidated plan.
0
6. In Sec.  91.105, paragraphs (a)(1) and (a)(2)(i) through (iii) are 
revised, paragraph (a)(4) is added, and paragraphs (b), (c), (e)(1), 
(f), (g), (h), (i), (j) and (l) are revised to read as follows:


Sec.  91.105  Citizen participation plan; local governments.

    (a) Applicability and adoption of the citizen participation plan. 
(1) The jurisdiction is required to adopt a citizen participation plan 
that sets forth the jurisdiction's policies and procedures for citizen 
participation. (Where a jurisdiction, before [effective date of the 
final rule], adopted a citizen participation plan but will need to 
amend the citizen participation plan to comply with provisions of this 
section, the citizen participation plan shall be amended by [date to be 
determined]).
    (2) Encouragement of citizen participation. (i) The citizen 
participation plan must provide for and encourage citizens, residents, 
and other interested parties to participate in the development of the 
AFH, any significant revisions to the AFH, the consolidated plan, any 
substantial amendment to the consolidated plan, and the performance 
report. These requirements are designed especially to encourage 
participation by low- and moderate-income persons, particularly those 
living in slum and blighted areas and in areas where CDBG funds are 
proposed to be used, and by residents of predominantly low- and 
moderate-income neighborhoods, as defined by the jurisdiction. A 
jurisdiction must take appropriate actions to encourage the 
participation of all its citizens, including minorities and non-English 
speaking persons, as provided in paragraph (a)(4) of this section, as 
well as persons with disabilities.
    (ii) The jurisdiction shall encourage the participation of local 
and regional institutions, the Continuum of Care and other 
organizations (including businesses, developers, nonprofit 
organizations, philanthropic organizations, and community-based and 
faith-based organizations) in the process of developing and 
implementing the AFH and the consolidated plan.
    (iii) The jurisdiction shall encourage, in conjunction with 
consultation with public housing agencies, the participation of 
residents of public and assisted housing developments (including any 
resident advisory boards, resident councils, and resident management 
corporations) in the process of developing and implementing the AFH and 
the consolidated plan, along with other low-income residents of 
targeted revitalization areas in which the developments are located. 
The jurisdictions shall make an effort to provide information to the 
public housing agency (PHA) about the AFH, AFFH strategy, and 
consolidated plan activities related to its developments and 
surrounding communities so that the PHA can make this information 
available at the annual public hearing(s) required for the PHA Planning 
process.
* * * * *
    (4) The citizen participation plan shall describe the 
jurisdiction's procedures for assessing its language needs and identify 
any need for translation of notices and other vital documents. At a 
minimum, the citizen participation plan shall require that the 
jurisdiction take reasonable steps to provide language assistance to 
ensure meaningful access to citizen participation by non-English-
speaking persons.
    (b) Development of the AFH and the consolidated plan. The citizen 
participation plan must include the following minimum requirements for 
the development of the AFH and the consolidated plan.
    (1)(i) The citizen participation plan must require that, as soon as 
practical after HUD makes AFH-related data available to the 
jurisdiction pursuant to 24 CFR 5.154, the jurisdiction will make such 
information and any other supplemental information the jurisdiction 
plans to incorporate into its AFH available to the public, public 
agencies, and other interested parties.
    (ii) The citizen participation plan must require that, before the 
jurisdiction adopts a consolidated plan, the jurisdiction will make 
available to citizens, public agencies, and other interested parties 
information that includes the amount of assistance the jurisdiction 
expects to receive (including grant funds and program income) and the 
range of activities that may be undertaken, including the estimated 
amount that will benefit persons of low- and moderate-income. The 
citizen participation plan also must set forth the jurisdiction's plans 
to minimize displacement of persons and to assist any persons 
displaced, specifying the types and levels of assistance the 
jurisdiction will make available (or require others to make available) 
to persons displaced, even if the jurisdiction expects no displacement 
to occur.
    (iii) The citizen participation plan must state when and how the 
jurisdiction will make this information available.
    (2) The citizen participation plan must require the jurisdiction to 
publish the proposed AFH and the proposed consolidated plan in a manner 
that affords citizens, public agencies, and other interested parties a 
reasonable opportunity to examine its contents and to submit comments. 
The citizen participation plan must set forth how the jurisdiction will 
publish the proposed AFH and the proposed consolidated plan and give 
reasonable opportunity to examine each document's contents. The 
requirement for publishing may be met by publishing a summary of each 
document in one or more newspapers of general circulation, and by 
making copies of each document available at libraries, government 
offices, and public places. The summary must describe the contents and 
purpose of the AFH and/or the consolidated plan (as applicable), and 
must include a list of the locations where copies of the entire 
proposed document may be examined. In addition, the jurisdiction must 
provide a reasonable number of free copies of the plan and/or the 
assessment (as applicable) to citizens and groups that request it.
    (3) The citizen participation plan must provide for at least one 
public hearing during the development of the AFH and/or the 
consolidated plan (as applicable). See paragraph (e) of this section 
for public hearing requirements, generally.
    (4) The citizen participation plan must provide a period, not less 
than 30 days, to receive comments from citizens on the consolidated 
plan and/or the AFH (as applicable).
    (5) The citizen participation plan shall require the jurisdiction 
to consider any comments or views of citizens received in writing, or 
orally at the public hearings, in preparing the final AFH and/or the 
final consolidated plan (as applicable). A summary of these comments or 
views, and a summary of

[[Page 43736]]

any comments or views not accepted and the reasons why, shall be 
attached to the final AFH and/or the final consolidated plan (as 
applicable).
    (c) Consolidated plan amendments and AFH revisions. (1)(i) Criteria 
for amendment to consolidated plan. The citizen participation plan must 
specify the criteria the jurisdiction will use for determining what 
changes in the jurisdiction's planned or actual activities constitute a 
substantial amendment to the consolidated plan. (See Sec.  91.505.) It 
must include among the criteria for a substantial amendment changes in 
the use of CDBG funds from one eligible activity to another.
    (ii) Criteria for revision to the AFH. The jurisdiction must 
specify the criteria the jurisdiction will use for determining when 
significant revisions to the AFH will be appropriate. (At a minimum, 
the specified criteria must include the situations described in 24 CFR 
5.164.)
    (2) The citizen participation plan must provide citizens with 
reasonable notice and an opportunity to comment on substantial 
amendments to the consolidated plan and significant revisions to the 
AFH. The citizen participation plan must state how reasonable notice 
and an opportunity to comment will be given. The citizen participation 
plan must provide a period, not less than 30 days, to receive comments 
on the substantial amendment or significant revision before the 
amendment or revision is implemented.
    (3) The citizen participation plan shall require the jurisdiction 
to consider any comments or views of citizens received in writing, or 
orally at public hearings, if any, in preparing the substantial 
amendment of the consolidated plan or significant revision to the AFH 
(as applicable). A summary of these comments or views, and a summary of 
any comments or views not accepted and the reasons why, shall be 
attached to the substantial amendment of the consolidated plan or 
significant revision to the AFH (as applicable).
* * * * *
    (e) Public hearings. (1)(i) Consolidated plan. The citizen 
participation plan must provide for at least two public hearings per 
year to obtain citizens' views and to respond to proposals and 
questions, to be conducted at a minimum of two different stages of the 
program year. Together, the hearings must address housing and community 
development needs, development of proposed activities, proposed 
strategies and actions for affirmatively furthering fair housing 
consistent with the AFH, and review of program performance.
    (ii) To obtain the views of citizens on housing and community 
development needs, including priority nonhousing community development 
needs and affirmatively furthering fair housing, the citizen 
participation plan must provide that at least one of these hearings is 
held before the proposed consolidated plan is published for comment.
    (iii) Assessment of Fair Housing. To obtain the views of the 
community on AFH-related data and affirmatively furthering fair housing 
in the jurisdiction's housing and community development programs, the 
citizen participation plan must provide that at least one public 
hearing is held before the proposed AFH is published for comment.
* * * * *
    (f) Meetings. The citizen participation plan must provide citizens 
with reasonable and timely access to local meetings, consistent with 
accessibility requirements.
    (g) Availability to the public. The citizen participation plan must 
provide that the consolidated plan as adopted, substantial amendments, 
the HUD-accepted AFH, significant revisions, and the performance report 
will be available to the public, including the availability of 
materials in a form accessible to persons with disabilities, upon 
request. The citizen participation plan must state how these documents 
will be available to the public.
    (h) Access to records. The citizen participation plan must require 
the jurisdiction to provide citizens, public agencies, and other 
interested parties with reasonable and timely access to information and 
records relating to the jurisdiction's AFH, consolidated plan, and use 
of assistance under the programs covered by this part during the 
preceding five years.
    (i) Technical assistance. The citizen participation plan must 
provide for technical assistance to groups representative of persons of 
low- and moderate-income that request such assistance in commenting on 
the AFH and in developing proposals for funding assistance under any of 
the programs covered by the consolidated plan, with the level and type 
of assistance determined by the jurisdiction. The assistance need not 
include the provision of funds to the groups.
    (j) Complaints. The citizen participation plan shall describe the 
jurisdiction's appropriate and practicable procedures to handle 
complaints from citizens related to the consolidated plan, amendments, 
the AFH, revisions, and performance reports. At a minimum, the citizen 
participation plan shall require that the jurisdiction must provide a 
timely, substantive written response to every written citizen 
complaint, within an established period of time (within 15 working 
days, where practicable, if the jurisdiction is a CDBG grant 
recipient).
* * * * *
    (l) Jurisdiction responsibility. The requirements for citizen 
participation do not restrict the responsibility or authority of the 
jurisdiction for the development and execution of its consolidated plan 
or AFH.
* * * * *
0
7. In Sec.  91.110, paragraph (a) is revised to read as follows:


Sec.  91.110  Consultation; States.

    (a) When preparing the AFH and the consolidated plan, the State 
shall consult with other public and private agencies that provide 
assisted housing (including any state housing agency administering 
public housing), health services, and social services (including those 
focusing on services to children, elderly persons, persons with 
disabilities, persons with HIV/AIDS and their families, and homeless 
persons), state- and regionally-based organizations that represent 
protected class members and organizations that enforce fair housing 
laws during preparation of the consolidated plan. With respect to 
public housing:
    (1) The State shall consult with any state housing agency 
administering public housing (PHA) concerning consideration of public 
housing needs, planned programs and activities, the AFH, strategies for 
affirmatively furthering fair housing, and proposed actions to 
affirmatively further fair housing. This consultation will help provide 
a better basis for the certification by the authorized state official 
that the PHA Plan is consistent with the consolidated plan and the 
State's description of its strategy for affirmatively furthering fair 
housing, and the manner in which it will address the needs of public 
housing and, where applicable, the manner in which it will provide 
financial or other assistance to a troubled PHA to improve its 
operations and remove such designation, as well obtaining PHA input on 
addressing fair housing issues in public housing and the Housing Choice 
Voucher programs. It will also help ensure that activities with regard 
to affirmatively furthering fair housing, local drug elimination, 
neighborhood improvement programs, and resident programs and services, 
funded under a PHA's program and those funded under a program covered 
by the consolidated

[[Page 43737]]

plan, are fully coordinated to achieve comprehensive community 
development goals and affirmatively further fair housing. If a PHA is 
required to implement remedies under a Voluntary Compliance Agreement, 
the State should consult with the PHA and identify actions it may take, 
if any, to assist the PHA in implementing the required remedies.
    (2) The State shall consult with state- and regionally-based 
organizations that represent protected class members, and organizations 
that enforce fair housing laws, such as state fair housing enforcement 
agencies (including participants in the Fair Housing Assistance Program 
(FHAP)), fair housing organizations and other nonprofit organizations 
that receive funding under the Fair Housing Initiative Program (FHIP), 
and other public and private fair housing service agencies, to the 
extent such entities operate within the State. This consultation will 
help provide a better basis for the State's AFH, its certification to 
affirmatively further fair housing, and other portions of the 
consolidated plan concerning affirmatively furthering fair housing. 
This consultation must occur with any organizations that have the 
capacity to engage with data informing the AFH and be sufficiently 
independent and representative to provide meaningful feedback on the 
AFH, the consolidated plan, and their implementation. A Fair Housing 
Advisory Council or similar group that includes community members and 
advocates, fair housing experts, housing and community development 
industry participants, and other key stakeholders is an acceptable 
method, among others, to meet this consultation requirement. 
Consultation must occur throughout the fair housing planning process, 
meaning that, at a minimum, the jurisdiction will consult with the 
organizations described in this paragraph (a)(2) in the development of 
both the AFH and the consolidated plan. Consultation on the 
consolidated plan shall specifically seek input into how the goals 
identified in an accepted AFH inform the priorities and objectives of 
the consolidated plan.
* * * * *
0
8. In Sec.  91.115, paragraphs (a)(1) and (2) are revised, paragraph 
(a)(4) is added, and paragraphs, (b), (c), (f), (g), and (h) are 
revised to read as follows:


Sec.  91.115  Citizen participation plan; States.

    (a) * * *
    (1) The State is required to adopt a citizen participation plan 
that sets forth the State's policies and procedures for citizen 
participation. (Where a State, before [effective date of final rule], 
adopted a citizen participation plan but will need to amend the citizen 
participation plan to comply with provisions of this section, the 
citizen participation plan shall be amended by [date to be determined].
    (2) Encouragement of citizen participation. (i) The citizen 
participation plan must provide for and encourage citizens, residents, 
and other interested parties to participate in the development of the 
AFH, any significant revisions to the AFH, the consolidated plan, any 
substantial amendments to the consolidated plan, and the performance 
report. These requirements are designed especially to encourage 
participation by low- and moderate-income persons, particularly those 
living in slum and blighted areas and in areas where CDBG funds are 
proposed to be used and by residents of predominantly low- and 
moderate-income neighborhoods. A State must take appropriate actions to 
encourage the participation of all its citizens, including minorities 
and non-English speaking persons, as provided in paragraph (a)(4) of 
this section, as well as persons with disabilities.
    (ii) The State shall encourage the participation of statewide and 
regional institutions, Continuums of Care, and other organizations 
(including businesses, developers, nonprofit organizations, 
philanthropic organizations, and community and faith-based 
organizations) that are involved with or affected by the programs or 
activities covered by the consolidated plan in the process of 
developing and implementing the AFH and the consolidated plan.
    (iii) The State should also explore alternative public involvement 
techniques that encourage a shared vision of change for the community 
and the review of program performance, e.g., use of focus groups, and 
use of Internet.
* * * * *
    (4) The citizen participation plan shall describe the State's 
procedures for assessing its language needs and identify any need for 
translation of notices and other vital documents. At a minimum, the 
citizen participation plan shall require the State to make reasonable 
efforts to provide language assistance to ensure meaningful access to 
citizen participation by non-English speaking persons.
    (b) Development of the AFH and the consolidated plan. The citizen 
participation plan must include the following minimum requirements for 
the development of the AFH and consolidated plan.
    (1)(i) The citizen participation plan must require that, as soon as 
practical after HUD makes AFH-related data available to the State 
pursuant to 24 CFR 5.154, the State will make such information and any 
other supplemental information the State intends to incorporate into 
its AFH available to the public, public agencies, and other interested 
parties.
    (ii) The citizen participation plan must require that, before the 
State adopts an AFH or consolidated plan, the State will make available 
to citizens, public agencies, and other interested parties information 
that includes the amount of assistance the State expects to receive and 
the range of activities that may be undertaken, including the estimated 
amount that will benefit persons of low- and moderate-income and the 
plans to minimize displacement of persons and to assist any persons 
displaced. The citizen participation plan must state when and how the 
State will make this information available.
    (2) The citizen participation plan must require the State to 
publish the proposed AFH and the proposed consolidated plan in a manner 
that affords citizens, units of general local governments, public 
agencies, and other interested parties a reasonable opportunity to 
examine the document's contents and to submit comments. The citizen 
participation plan must set forth how the State will publish the 
proposed AFH and the proposed consolidated plan and give reasonable 
opportunity to examine each document's contents. The requirement for 
publishing may be met by publishing a summary of the proposed AFH and/
or the proposed consolidated plan (as applicable) in one or more 
newspapers of general circulation, and by making copies of the proposed 
document(s) available at libraries, government offices, and public 
places. The summary must describe the contents and purpose of the AFH 
and/or the consolidated plan (as applicable), and must include a list 
of the locations where copies of the entire proposed document(s) may be 
examined. In addition, the State must provide a reasonable number of 
free copies of the plan and/or the assessment (as applicable) to 
citizens and groups that request it.
    (3) The citizen participation plan must provide for at least one 
public hearing on housing and community development needs and proposed 
strategies and actions for affirmatively furthering fair housing 
consistent with the AFH before the proposed consolidated plan is 
published for comment. To obtain the public's views on AFH-related data 
and affirmatively furthering fair housing in the State's housing and 
community development

[[Page 43738]]

programs, the citizen participation plan must provide that at least one 
public hearing is held before the proposed AFH is published for 
comment.
    (i) The citizen participation plan must state how and when adequate 
advance notice will be given to citizens of the hearing, with 
sufficient information published about the subject of the hearing to 
permit informed comment. (Publishing small print notices in the 
newspaper a few days before the hearing does not constitute adequate 
notice. Although HUD is not specifying the length of notice required, 
it would consider two weeks adequate.)
    (ii) The citizen participation plan must provide that the hearing 
be held at a time and accessible location convenient to potential and 
actual beneficiaries, and with accommodation for persons with 
disabilities. The citizen participation plan must specify how it will 
meet these requirements.
    (iii) The citizen participation plan must identify how the needs of 
non-English speaking residents will be met in the case of a public 
hearing where a significant number of non-English speaking residents 
can be reasonably expected to participate.
    (4) The citizen participation plan must provide a period, not less 
than 30 days, to receive comments from citizens and units of general 
local government on the consolidated plan and/or the AFH (as 
applicable).
    (5) The citizen participation plan shall require the State to 
consider any comments or views of citizens and units of general 
received in writing, or orally at the public hearings, in preparing the 
final AFH and the final consolidated plan. A summary of these comments 
or views, and a summary of any comments or views not accepted and the 
reasons therefore, shall be attached to the final AFH and/or the final 
consolidated plan (as applicable).
    (c) Amendments. (1)(i) Criteria for amendment to consolidated plan. 
The citizen participation plan must specify the criteria the State will 
use for determining what changes in the State's planned or actual 
activities constitute a substantial amendment to the consolidated plan. 
(See Sec.  91.505.) It must include among the criteria for a 
substantial amendment changes in the method of distribution of such 
funds.
    (ii) Criteria for revision to the AFH. The State must specify the 
criteria it will use for determining when significant revisions to the 
AFH will be appropriate. (At a minimum, the specified criteria must 
include the situations described in 24 CFR 5.164.)
    (2) The citizen participation plan must provide citizens and units 
of general local government with reasonable notice and an opportunity 
to comment on substantial amendments and significant revisions to the 
AFH. The citizen participation plan must state how reasonable notice 
and an opportunity to comment will be given. The citizen participation 
plan must provide a period, not less than 30 days, to receive comments 
on the substantial amendment or significant revision before the 
amendment or revision is implemented.
    (3) The citizen participation plan shall require the State to 
consider any comments or views of citizens and units of general local 
government received in writing, or orally at public hearings, if any, 
in preparing the substantial amendment of the consolidated plan or 
significant revision to the AFH (as applicable). A summary of these 
comments or views, and a summary of any comments or views not accepted 
and the reasons why, shall be attached to the substantial amendment of 
the consolidated plan or significant revision to the AFH (as 
applicable).
* * * * *
    (f) Availability to the public. The citizen participation plan must 
provide that the consolidated plan as adopted, substantial amendments, 
the HUD-accepted AFH, significant revisions, and the performance report 
will be available to the public, including the availability of 
materials in a form accessible to persons with disabilities, upon 
request. The citizen participation plan must state how these documents 
will be available to the public.
    (g) Access to records. The citizen participation plan must require 
the State to provide citizens, public agencies, and other interested 
parties with reasonable and timely access to information and records 
relating to the State's AFH, consolidated plan and use of assistance 
under the programs covered by this part during the preceding five 
years.
    (h) Complaints. The citizen participation plan shall describe the 
State's appropriate and practicable procedures to handle complaints 
from citizens related to the consolidated plan, amendments, the AFH, 
significant revisions and performance report. At a minimum, the citizen 
participation plan shall require that the State must provide a timely, 
substantive written response to every written citizen complaint, within 
an established period of time (within 15 working days, where 
practicable, if the State is a CDBG grant recipient).
* * * * *
0
9. In Sec.  91.215, paragraph (a)(5) is added to read as follows:


Sec.  91.215  Strategic plan.

    (a) * * *
    (5)(i) Describe how the priorities and specific objectives of the 
jurisdiction under Sec.  91.215(a)(4) will affirmatively further fair 
housing by setting forth strategies and actions consistent with the 
goals and other elements identified in an AFH conducted in accordance 
with 24 CFR 5.154.
    (ii) For issues not addressed by these priorities and objectives, 
identify additional objectives and priorities for affirmatively 
furthering fair housing.
* * * * *
0
10. In Sec.  91.220, paragraph (k) is revised to read as follows:


Sec.  91.220  Action plan.

* * * * *
    (k)(1) Affirmatively furthering fair housing. Actions it plans to 
take during the next year that address fair housing issues identified 
in the AFH.
    (2) Other actions. Actions it plans to take during the next year to 
address obstacles to meeting underserved needs, foster and maintain 
affordable housing, evaluate and reduce lead-based paint hazards, 
reduce the number of poverty-level families, develop institutional 
structure, and enhance coordination between public and private housing 
and social service agencies (see Sec.  91.215(a), (b), (i), (j), (k), 
and (l)).
* * * * *
0
11. In Sec.  91.225, paragraph (a)(1) is revised to read as follows:


Sec.  91.225  Certifications.

    (a) * * *
    (1) Affirmatively furthering fair housing. Each jurisdiction is 
required to submit a certification that it will affirmatively further 
fair housing, which means that it will take meaningful actions to 
further the goals identified in the AFH conducted in accordance with 
the requirements of 24 CFR 5.154, and that it will take no action that 
is materially inconsistent with its obligation to affirmatively further 
fair housing.
* * * * *
0
12. Section 91.230 is revised to read as follows:


Sec.  91.230  Monitoring.

    The plan must describe the standards and procedures that the 
jurisdiction will use to monitor activities carried out in furtherance 
of the plan, including strategies and actions that address the fair 
housing issues and goals identified in the AFH, and that the 
jurisdiction will use to ensure long-term compliance with requirements 
of the programs involved, including civil rights related program 
requirements, minority

[[Page 43739]]

business outreach and the comprehensive planning requirements.
0
13. In Sec.  91.235, paragraphs (c)(1) and paragraph (4) are revised to 
read as follows:


Sec.  91.235  Special case; abbreviated consolidated plan.

* * * * *
    (c) What is an abbreviated plan?--(1) Assessment of needs, 
resources, planned activities. An abbreviated plan must contain 
sufficient information about needs, resources, and planned activities 
to address the needs to cover the type and amount of assistance 
anticipated to be funded by HUD. The plan must describe how the 
jurisdiction will affirmatively further fair housing by addressing 
issues identified in an AFH conducted in accordance with 24 CFR 5.154.
* * * * *
    (4) Submissions, Certifications, Amendments, and Performance 
Reports. An Insular Area grantee that submits an abbreviated 
consolidated plan under this section must comply with the submission, 
certification, amendment, and performance report requirements of 24 CFR 
570.440. This includes certification that the grantee will 
affirmatively further fair housing, which means it will take meaningful 
actions to further the goals identified in an AFH conducted in 
accordance with the requirements of 24 CFR 5.154, and that it will take 
no action that is materially inconsistent with its obligation to 
affirmatively further fair housing.
* * * * *
0
14. In Sec.  91.315, paragraph (a)(5) is added to read as follows:


Sec.  91.315  Strategic plan.

    (a) * * *
    (5)(i) Describe how the priorities and specific objectives of the 
State under Sec.  91.315(a)(4) will affirmatively further fair housing 
by setting forth strategies and actions consistent with the goals and 
other elements identified in an AFH conducted in accordance with 24 CFR 
5.154.
    (ii) For issues not addressed by these priorities and objectives, 
identify additional objectives and priorities for affirmatively 
furthering fair housing.
* * * * *
0
15. In Sec.  91.320, paragraph (j) is revised to read as follows:


Sec.  91.320  Action plan.

* * * * *
    (j)(i) Affirmatively furthering fair housing. Actions it plans to 
take during the next year that address fair housing issues identified 
in the AFH.
    (ii) Other actions. Actions it plans to take during the next year 
to implement its strategic plan and address obstacles to meeting 
underserved needs, foster and maintain affordable housing (including 
the coordination of Low-Income Housing Tax Credits with the development 
of affordable housing), evaluate and reduce lead-based paint hazards, 
reduce the number of poverty level families, develop institutional 
structure, enhance coordination between public and private housing and 
social service agencies, address the needs of public housing (including 
providing financial or other assistance to troubled public housing 
agencies), and encourage public housing residents to become more 
involved in management and participate in homeownership.
* * * * *
0
16. In Sec.  91.325, paragraph (a)(1) is revised to read as follows:


Sec.  91.325  Certifications.

    (a) General--(1) Affirmatively furthering fair housing. Each State 
is required to submit a certification that it will affirmatively 
further fair housing, which means that it will take meaningful actions 
to further the goals identified in an AFH conducted in accordance with 
the requirements of 24 CFR 5.154, and that it will take no action that 
is materially inconsistent with its obligation to affirmatively further 
fair housing.
* * * * *
0
17. Section 91.415 is revised to read as follows:


Sec.  91.415  Strategic plan.

    Strategies and priority needs must be described in the consolidated 
plan in accordance with the provisions of Sec.  91.215 for the entire 
consortium. The consortium is not required to submit a nonhousing 
Community Development Plan; however, if the consortium includes CDBG 
entitlement communities, the consolidated plan must include the 
nonhousing Community Development Plans of the CDBG entitlement 
community members of the consortium. The consortium must set forth its 
priorities for allocating housing (including CDBG and ESG, where 
applicable) resources geographically within the consortium, describing 
how the consolidated plan will address the needs identified (in 
accordance with Sec.  91.405), setting forth strategies and actions 
consistent with the goals and other elements identified in an AFH 
conducted in accordance with 24 CFR 5.154, describing the reasons for 
the consortium's allocation priorities, and identifying any obstacles 
there are to addressing underserved needs.
0
18. In Sec.  91.420, paragraph (b) is revised to read as follows:


Sec.  91.420  Action plan.

* * * * *
    (b) Description of resources and activities. The action plan must 
describe the resources to be used and activities to be undertaken to 
pursue its strategic plan, including actions it plans to take during 
the next year that address fair housing issues identified in the AFH. 
The consolidated plan must provide this description for all resources 
and activities within the entire consortium as a whole, as well as a 
description for each individual community that is a member of the 
consortium.
* * * * *
0
19. In Sec.  91.425, paragraph (a)(1)(i) is revised to read as follows:


Sec.  91.425  Certifications.

    (a) Consortium certifications--(1) General--(i) Affirmatively 
furthering fair housing. Each consortium must certify that it will 
affirmatively further fair housing, which means that it will take 
meaningful actions to further the goals identified in an AFH conducted 
in accordance with the requirements of 24 CFR 5.154, and that it will 
take no action that is materially inconsistent with its obligation to 
affirmatively further fair housing.
* * * * *
0
20. In Sec.  91.505, add paragraph (d) to read as follows:


Sec.  91.505  Amendments to the consolidated plan.

* * * * *
    (d) The jurisdiction must ensure that amendments to the plan are 
consistent with its certification to affirmatively further fair housing 
and the analysis and strategies of the AFH.
* * * * *

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

0
21. The authority citation for part 92 continues to read as follows:

    Authority:  42 U.S.C. 3535(d) and 12701-12839.

0
22. Revise Sec.  92.104 to read as follows:


Sec.  92.104  Submission of a consolidated plan and Assessment of Fair 
Housing.

    A jurisdiction that has not submitted a consolidated plan to HUD 
must submit to HUD, not later than 90 days after providing notification 
under Sec.  92.103, a consolidated plan in accordance with 24 CFR part 
91 and an Assessment of Fair Housing in

[[Page 43740]]

accordance with 24 CFR part 5, subpart A.
0
23. In Sec.  92.508, revise paragraph (a)(7)(i)(C) to read as follows:


Sec.  92.508  Recordkeeping.

    (a). * * *
    (7) * * *
    (i) * * *
    (C) Documentation of the actions the participating jurisdiction has 
taken to affirmatively further fair housing, including documentation 
related to the participating jurisdiction's Assessment of Fair Housing 
as described in 24 CFR part 5, subpart A.
* * * * *

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

0
24. The authority citation for part 570 continues to read as follows:

    Authority:  42 U.S.C. 3535(d) and 5300-5320.

0
25. In Sec.  570.3, revise the introductory text to read as follows:


Sec.  570.3  Definitions.

    The terms Affirmatively Furthering Fair Housing, Assessment of Fair 
Housing or AFH, HUD, and Secretary are defined in 24 CFR part 5. All of 
the following definitions in this section that rely on data from the 
United States Bureau of the Census shall rely upon the data available 
from the latest decennial census.
* * * * *
0
26. In Sec.  570.205, paragraph (a)(4)(vii) is revised to read as 
follows:


Sec.  570.205  Eligible planning, urban environmental design and 
policy-planning-management-capacity building activities.

    (a) * * *
    (4) * * *
    (vii) Assessment of Fair Housing.
* * * * *
0
27. In Sec.  570.441, paragraphs (b) introductory text and (b)(1) 
introductory text, and paragraphs (b)(2), (b)(3), (b)(4), (c), (d), and 
(e) are revised to read as follows:


Sec.  570.441  Citizen participation--insular areas.

* * * * *
    (b) Citizen participation plan. The insular area jurisdiction must 
develop and follow a detailed citizen participation plan and must make 
the plan public. The plan must be completed and available before the 
AFH and statement for assistance is submitted to HUD, and the 
jurisdiction must certify that it is following the plan. The plan must 
set forth the jurisdiction's policies and procedures for:
    (1) Giving citizens, residents, and other interested parties timely 
notice of local meetings and reasonable and timely access to local 
meetings consistent with accessibility requirements, as well as 
information, and records relating to the grantee's proposed and actual 
use of CDBG funds including, but not limited to:
* * * * *
    (2) Providing technical assistance to groups that are 
representative of persons of low- and moderate-income that request 
assistance in commenting on the Assessment of Fair Housing (AFH) and 
developing proposals. The level and type of assistance to be provided 
is at the discretion of the jurisdiction. The assistance need not 
include the provision of funds to the groups;
    (3) Holding a minimum of two public hearings for the purpose of 
obtaining citizens' views and formulating or responding to proposals 
and questions. Each public hearing must be conducted at a different 
stage of the CDBG program year. Together, the hearings must address 
affirmatively furthering fair housing, community development and 
housing needs, development of proposed activities, proposed strategies 
and actions for affirmatively furthering fair housing consistent with 
the AFH, and review of program performance. There must be reasonable 
notice of the hearings, and the hearings must be held at times and 
accessible locations convenient to potential or actual beneficiaries, 
with reasonable accommodations including material in accessible formats 
for persons with disabilities. The jurisdiction must specify in its 
citizen participation plan how it will meet the requirement for 
hearings at times and accessible locations convenient to potential or 
actual beneficiaries;
    (4) Assessing its language needs, identifying any need for 
translation of notices and other vital documents and, in the case of 
public hearings, meeting the needs of non-English speaking residents 
where a significant number of non-English speaking residents can 
reasonably be expected to participate. At a minimum, the citizen 
participation plan shall require the jurisdiction to make reasonable 
efforts to provide language assistance to ensure meaningful access to 
citizen participation by non-English speaking persons;
* * * * *
    (c) Publication of proposed AFH and proposed statement. (1) The 
insular area jurisdiction shall publish a proposed AFH and a proposed 
statement consisting of the proposed community development activities 
and community development objectives (as applicable) in order to afford 
affected citizens an opportunity to:
    (i) Examine the document's contents to determine the degree to 
which they may be affected;
    (ii) Submit comments on the proposed document; and
    (iii) Submit comments on the performance of the jurisdiction.
    (2) The requirement for publishing in paragraph (c)(1) of this 
section may be met by publishing a summary of the proposed document in 
one or more newspapers of general circulation and by making copies of 
the proposed document available at libraries, government offices, and 
public places. The summary must describe the contents and purpose of 
the proposed document and must include a list of the locations where 
copies of the entire proposed document may be examined.
    (d) Preparation of the AFH and final statement. An insular area 
jurisdiction must prepare an AFH and a final statement. In the 
preparation of the AFH and final statement, the jurisdiction shall 
consider comments and views received relating to the proposed document 
and may, if appropriate, modify the final document. The final AFH and 
final statement shall be made available to the public. The final 
statement shall include the community development objectives, projected 
use of funds, and the community development activities.
    (e) Program amendments. To assure citizen participation on program 
amendments to final statements and significant revisions to AFHs, the 
insular area grantee shall:
    (1) Furnish citizens information concerning the amendment or 
significant revision (as applicable);
    (2) Hold one or more public hearings to obtain the views of 
citizens on the proposed amendment or significant revision;
    (3) Develop and publish the proposed amendment or significant 
revision in such a manner as to afford affected citizens an opportunity 
to examine the contents, and to submit comments on the proposed 
amendment or significant revision;
    (4) Consider any comments and views expressed by citizens on the 
proposed amendment or significant revision and, if the grantee finds it 
appropriate, make modifications accordingly; and
    (5) Make the final amendment to the community development program 
or significant revision to the AFH available to the public before its 
submission to HUD.
* * * * *

[[Page 43741]]

0
28. In Sec.  570.480, paragraph (c) is revised to read as follows:


Sec.  570.480  General.

* * * * *
    (c) In exercising the Secretary's responsibility to review a 
State's performance, the Secretary will give maximum feasible deference 
to the State's interpretation of the statutory requirements and the 
requirements of this regulation, provided that these interpretations 
are not plainly inconsistent with the Act and the Secretary's 
enforcement responsibilities to achieve compliance with the intent of 
the Congress as declared in the Act. The Secretary will not determine 
that a State has failed to carry out its certifications in compliance 
with requirements of the Act (and this regulation) unless the Secretary 
finds that procedures and requirements adopted by the State are 
insufficient to afford reasonable assurance that activities undertaken 
by units of general local government were not plainly inappropriate to 
meeting the primary objectives of the Act, this regulation, the State's 
community development objectives, and the State's responsibility to 
affirmatively further fair housing (see Sec.  570.487(b)).
* * * * *
0
29. In Sec.  570.486, paragraphs (a)(2), (a)(4), and (a)(5) are revised 
to read as follows:


Sec.  570.486  Local government requirements.

    (a) * * *
    (2) Ensure that citizens will be given reasonable and timely access 
to local meetings consistent with accessibility requirements, as well 
as information and records relating to the unit of local government's 
proposed and actual use of CDBG funds;
* * * * *
    (4) Provide technical assistance to groups representative of 
persons of low and moderate income that request assistance in 
developing proposals (including proposed strategies and actions to 
affirmatively further fair housing) in accordance with the procedures 
developed by the State. Such assistance need not include providing 
funds to such groups;
    (5) Provide for a minimum of two public hearings, each at a 
different stage of the program, for the purpose of obtaining citizens' 
views and responding to proposals and questions. Together the hearings 
must cover community development and housing needs (including 
affirmatively furthering fair housing), development of proposed 
activities and a review of program performance. The public hearings to 
cover community development and housing needs must be held before 
submission of an application to the State. There must be reasonable 
notice of the hearings and they must be held at times and accessible 
locations convenient to potential or actual beneficiaries, with 
accommodations for persons with disabilities. Public hearings shall be 
conducted in a manner to meet the needs of non-English speaking 
residents where a significant number of non-English speaking residents 
can reasonably be expected to participate;
* * * * *
0
30. In Sec.  570.487, paragraph (b) is revised to read as follows:


Sec.  570.487  Other applicable laws and related program requirements.

* * * * *
    (b) Affirmatively furthering fair housing. The Act requires the 
State to certify to the satisfaction of HUD that it will affirmatively 
further fair housing. The Act also requires each unit of general local 
government to certify that it will affirmatively further fair housing. 
The certification that the State will affirmatively further fair 
housing shall specifically require the State to assume the 
responsibility of fair housing planning by:
    (1) Taking meaningful actions to further the goals identified in an 
AFH conducted in accordance with the requirements of 24 CFR 5.154;
    (2) Not taking actions that are materially inconsistent with its 
obligation to affirmatively further fair housing (see 24 CFR 5.150); 
and
    (3) Assuring that units of local government funded by the State 
comply with their certifications to affirmatively further fair housing; 
and
    (4) Assuring that units of local government funded by the State 
comply with their certifications to affirmatively further fair housing.
* * * * *
0
31. In Sec.  570.490, paragraph (a)(1) and paragraph (b) are revised to 
read as follows:


Sec.  570.490  Recordkeeping requirements.

    (a) State records. (1) The State shall establish and maintain such 
records as may be necessary to facilitate review and audit by HUD of 
the State's administration of CDBG funds under Sec.  570.493. The 
content of records maintained by the State shall be as jointly agreed 
upon by HUD and the States and sufficient to enable HUD to make the 
determinations described at Sec.  570.493. For fair housing and equal 
opportunity purposes, and as applicable, such records shall include 
documentation related to the State's AFH, as described in 24 CFR part 
5, subpart A. The records shall also permit audit of the States in 
accordance with 24 CFR part 85.
* * * * *
    (b) Unit of general local government's record. The State shall 
establish recordkeeping requirements for units of general local 
government receiving CDBG funds that are sufficient to facilitate 
reviews and audits of such units of general local government under 
Sec. Sec.  570.492 and 570.493. For fair housing and equal opportunity 
purposes, and as applicable, such records shall include documentation 
related to the State's AFH as described in 24 CFR part 5, subpart A.
* * * * *
0
32. In Sec.  570.506, paragraph (g)(1) is revised to read as follows:


Sec.  570.506  Records to be maintained.

* * * * *
    (g) * * *
    (1) Documentation related to the recipient's AFH, as described in 
24 CFR part 5, subpart A.
* * * * *
0
33. In Sec.  570.601, paragraph (a)(2) is revised to read as follows:


Sec.  570.601  Public Law 88-352 and Public Law 90-284; affirmatively 
furthering fair housing; Executive Order 11063.

    (a) * * *
    (2) Public Law 90-284, which is the Fair Housing Act (42 U.S.C. 
3601-3620). In accordance with the Fair Housing Act, the Secretary 
requires that grantees administer all programs and activities related 
to housing and community development in a manner to affirmatively 
further the policies of the Fair Housing Act. Furthermore, in 
accordance with section 104(b)(2) of the Act, for each community 
receiving a grant under subpart D of this part, the certification that 
the grantee will affirmatively further fair housing shall specifically 
require the grantee to take meaningful actions to further the goals 
identified in an AFH conducted in accordance with the requirements of 
24 CFR 5.154 and take no action that is materially inconsistent with 
its obligation to affirmatively further fair housing (see 24 CFR 
5.150).
* * * * *
0
34. In Sec.  570.904, paragraph (a)(1) introductory text, paragraph 
(a)(2), and paragraph (c) are revised to read as follows:


Sec.  570.904  Equal opportunity and fair housing review criteria.

    (a) General. (1) Where the criteria in paragraphs (b), (c), and (d) 
of this section are met, the Department will

[[Page 43742]]

presume that the recipient has carried out its CDBG-funded program in 
accordance with civil rights certifications and civil rights 
requirements of the Act relating to equal employment opportunity, equal 
opportunity in services, benefits and participation, and is 
affirmatively furthering fair housing unless:
* * * * *
    (2) In such instances, or where the review criteria in paragraphs 
(b), (c), and (d) of this section are not met, the recipient will be 
afforded an opportunity to present evidence that it has not failed to 
carry out the civil rights certifications and fair housing requirements 
of the Act. The Secretary's determination of whether there has been 
compliance with the applicable requirements will be made based on a 
review of the recipient's performance, evidence submitted by the 
recipient, and all other available evidence. The Department may also 
initiate separate compliance reviews under title VI of the Civil Rights 
Act of 1964 or section 109 of the Act.
* * * * *
    (c) Review for fair housing. (1) See the requirements in the Fair 
Housing Act (42 U.S.C. 3601-20), as well as Sec.  570.601(a).
    (2) Affirmatively furthering fair housing. The Department will 
review a recipient's performance to determine if it has administered 
all programs and activities related to housing and community 
development in accordance with Sec.  570.601(a)(2), which sets forth 
the grantee's responsibility to affirmatively further fair housing.
* * * * *

PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS

0
35. The authority citation for part 574 continues to read as follows:

    Authority:  42 U.S.C. 3535(d) and 12901-12912.

0
36. Section 574.530 is revised to read as follows:


Sec.  574.530  Recordkeeping.

    Each grantee must ensure that records are maintained for a four-
year period to document compliance with the provisions of this part. 
Grantees must maintain the following:
    (a) Current and accurate data on the race and ethnicity of program 
participants.
    (b) Documentation related to the formula grantee's Assessment of 
Fair Housing, as described in 24 CFR part 5, subpart A.

PART 576--EMERGENCY SOLUTIONS GRANTS PROGRAM

0
37. The authority citation for part 576 continues to read as follows:

    Authority:  42 U.S.C. 11371 et seq., 42 U.S.C. 3535(d).

0
38. In Sec.  576.500, add paragraph (s)(5) to read as follows:


Sec.  576.500  Recordkeeping and reporting requirements.

* * * * *
    (s) * * *
    (5) Documentation related to the recipient's Assessment of Fair 
Housing as described in 24 CFR part 5, subpart A.
* * * * *

PART 903--PUBLIC HOUSING AGENCY PLANS

0
39. The authority citation for part 903 continues to read as follows:

    Authority:  42 U.S.C. 1437c; 42 U.S.C. 3535(d).

0
40. Section 903.2 is revised by adding paragraph (a)(3) and revising 
paragraphs (d)(2) and (3) to read as follows:


Sec.  903.2  With respect to admissions, what must a PHA do to 
deconcentrate poverty in its developments and comply with fair housing 
requirements?

    (a) * * *
    (3) In accordance with the PHA's obligation to affirmatively 
further fair housing, the PHA's policies that govern its ``development 
related activities'' including affirmative marketing; tenant selection 
and assignment policies; applicant consultation and information; 
provision of additional supportive services and amenities; as well as 
construction, rehabilitation, modernization, demolition, disposition, 
designation, or physical accessibility of its housing and other 
facilities under its PHA Plan should be designed to reduce racial and 
national origin concentrations, including racially or ethnically 
concentrated areas of poverty, and to reduce segregation and promote 
integration, reduce disparities in access to community assets, and 
address disproportionate housing needs by protected class. Any 
affirmative steps or incentives a PHA Plans to take must be stated in 
the admission policy and be consistent with the applicable Assessment 
of Fair Housing conducted in accordance with the requirements of 24 CFR 
5.150 through 24 CFR 5.166.
* * * * *
    (d) * * *
    (2) Affirmatively Furthering Fair Housing. PHA policies that govern 
eligibility, selection and admissions under its PHA Plan must be 
designed to reduce the concentration of tenants and other assisted 
persons by race, national origin, and disability in conformity with any 
applicable Assessment of Fair Housing as defined at 24 CFR 5.150-5.166 
and the PHA's assessment of its fair housing needs as defined in this 
part at Sec.  903.7(o). Any affirmative steps or incentives a PHA plans 
to take must be stated in the admission policy. Any PHA plans for the 
construction, rehabilitation, modernization, demolition, disposition, 
designation, or physical accessibility of its housing and other 
facilities must be stated in the appropriate Capital Fund and 5-Year 
Plan as required by HUD and must be consistent with the applicable 
Assessment of Fair Housing.
    (i) HUD regulations provide that PHAs must take affirmative steps 
to overcome the effects of discrimination and should take affirmative 
steps to overcome the effects of conditions which resulted in limiting 
participation of persons because of their race, national origin, 
disability, or other prohibited basis (24 CFR 1.4(b)(6)).
    (ii) Such affirmative steps may include but are not limited to, 
appropriate affirmative marketing efforts; use of tenant selection and 
assignment policies that lead to desegregation (e.g., use of minimum/
ceiling rents, narrowly tailored site-based waiting lists and residency 
preferences such as those designed to assist in deinstitutionalizing 
individuals with disabilities); additional applicant consultation and 
information; and provision of additional supportive services and 
amenities to a development (such as supportive services that enable an 
individual with a disability to transfer from an institutional setting 
into the community).
    (3) Validity of certification. (i) A PHA's certification under 
Sec.  903.7(o) will be subject to challenge where it appears that a PHA 
Plan or its implementation:
    (A) Does not reduce racial and national origin concentration in 
developments or buildings and is perpetuating segregated housing;
    (B) Is creating new segregation in housing; or
    (C) Fails to meet the affirmatively furthering fair housing 
requirements at 24 CFR 5.150 through 5.166.
    (ii) If HUD challenges the validity of a PHA's certification, the 
PHA must establish that it is providing a full range of housing 
opportunities to applicants and tenants or that it is implementing 
actions described in paragraph (d)(2)(ii) of this section.
* * * * *

[[Page 43743]]

0
41. In Sec.  903.7, paragraph (o) is revised to read as follows:


Sec.  903.7  What information must a PHA provide in the Annual Plan?

* * * * *
    (o) Civil rights certification. (1) The PHA must certify that it 
will carry out its plan in conformity with title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d-2000d-4), the Fair Housing Act (42 U.S.C. 
3601-19), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794), and title II of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12101 et seq.). The PHA is required to submit a certification 
that it will affirmatively further fair housing, which means that it 
will take meaningful actions to further the goals identified in the AFH 
conducted in accordance with the requirements of 24 CFR 5.154, that 
will take no action that is materially inconsistent with its obligation 
to affirmatively further fair housing, and that it will address fair 
housing issues and determinants in its programs in accordance with 
paragraph (o)(3) of this section.
    (2) The certification is applicable to both the 5-Year Plan and the 
Annual Plan, including any plan incorporated therein, including but not 
limited to tenant and participant selection, occupancy, and capital 
activities.
    (3) A PHA shall be considered in compliance with the certification 
requirement to affirmatively further fair housing if the PHA fulfills 
the requirements of Sec.  903.2(d) and:
    (i) Examines its programs or proposed programs;
    (ii) Identifies any fair housing issues and determinants within 
those programs;
    (iii) Addresses those issues and determinants in a reasonable 
fashion in view of the resources available;
    (iv) Works with jurisdictions to implement any of the 
jurisdiction's initiatives to affirmatively further fair housing that 
require the PHA's involvement;
    (v) Operates programs in a manner consistent with any applicable 
consolidated plan under 24 CFR part 91 and with any order or agreement 
to comply with the authorities specified in paragraph (o)(1) of this 
section;
    (vi) Complies with any contribution or consultation requirement 
with respect to any applicable AFH under 24 CFR 5.150-5.166; and
    (vii) Maintains records reflecting these analyses, actions, and the 
results of these actions.
* * * * *
0
42. Section 903.15 is revised to read as follows:


Sec.  903.15  What is the relationship of the public housing agency 
plans to the Consolidated Plan and the Assessment of Fair Housing?

    (a) The preparation of an Assessment of Fair Housing (AFH) is 
required in accordance with 24 CFR 5.154-5.166. The PHA, as 
appropriate, has three options in meeting its AFH requirements. The PHA 
must notify HUD 60 days before its certification is due of the option 
it chooses. The options are:
    (1) Option 1. The PHA may participate with its unit of general 
local government and ensure that the PHA Plan is consistent with the 
applicable Consolidated Plan and AFH for the unit of general local 
government in which the PHA is located. For purposes of determining the 
applicable Consolidated Plan and AFH, the PHA will use the unit of 
general local government where 60 percent of the PHA's projects 
(counting hard units) are located. However, if the majority is closer 
to 50 percent, the PHA may choose the unit of general local government 
that more closely aligns to its planning activities under this part 903 
and 24 CFR part 905. For PHAs with only Section 8 tenant-based 
assistance, the PHA must the coordinate with the jurisdiction that 
governs the PHA's operation (e.g., where the Mayor appoints the Board 
that hires the Executive Director). The PHA must submit a certification 
by the appropriate officials that the PHA Plan is consistent with the 
applicable Consolidated Plan and AFH. (See also 24 CFR 5.158 for 
coordination when preparing an AFH jointly with a jurisdiction.)
    (2) Option 2. The PHA may conduct its own AFH with geographic scope 
and proposed actions scaled to the PHA's operations. The PHA would 
certify that its PHA Plan is consistent with the AFH and is required to 
submit a certification that it will affirmatively further fair housing, 
which means that it will take meaningful actions to further the goals 
identified in the AFH conducted in accordance with the requirements of 
24 CFR 5.154, and that it will take no action that is materially 
inconsistent with its obligation to affirmatively further fair housing.
    (3) Option 3. For PHAs that are covered by state agencies, the 
applicable Consolidated Plan and AFH are the State's Consolidated Plan 
and AFH. The PHA may choose whether to participate or not with the 
State in the preparation of the state agency's AFH but will be bound 
either way by the state agency conclusions contained in the State's 
AFH. These PHAs must demonstrate that their development related 
activities affirmatively further fair housing and must submit a 
certification by the appropriate officials that the PHA Plan is 
consistent with the applicable Consolidated Plan and AFH.
    (b) PHAs may request to change their fiscal years to better 
coordinate their planning with the planning done under the Consolidated 
Plan process, by State or local officials, as applicable.
    (c) If the PHA selects Option 2, it must update its own AFH every 
year. PHAs that select Option 1 are required to participate in the AFH 
process every 5 years. PHAs that select Option 3 are required to 
incorporate their State's Consolidated Plan and AFH once every 5 years.
    (d) PHAs may select one of the three options, unless their 
obligations are prescribed in a binding agreement with HUD such as a 
Recovery Agreement or Voluntary Compliance Agreement which may 
incorporate the corrective actions that would require alternative AFH 
procedures such as that the PHA must participate in their unit of local 
government's AFH.
    (e) If a significant change necessitates a PHA Plan amendment, the 
PHA will have up to 18 months to make this change to its PHA 5-Year 
Plan in accordance with the provisions of Sec.  903.21.
0
43. In Sec.  903.23, paragraph (f) is added to read as follows:


Sec.  903.23  What is the process by which HUD reviews, approves, or 
disapproves an Annual Plan?

* * * * *
    (f) Recordkeeping. PHAs must maintain a copy of the Assessment of 
Fair Housing as described in 24 CFR part 5, subpart A and records 
reflecting actions to affirmatively further fair housing as described 
in Sec.  903.7(o).

    Dated: June 25, 2013.
Shaun Donovan,
Secretary.
[FR Doc. 2013-16751 Filed 7-18-13; 8:45 am]
BILLING CODE 4210-67-P