[Federal Register Volume 83, Number 159 (Thursday, August 16, 2018)]
[Proposed Rules]
[Pages 40713-40715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17671]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

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

[Docket No. FR-6123-A-01]
RIN 2529-AA97


Affirmatively Furthering Fair Housing: Streamlining and 
Enhancements

AGENCY: Office of the Assistant Secretary for Fair Housing and Equal 
Opportunity, HUD.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: This advance notice of proposed rulemaking (ANPR) invites 
public comment on amendments to HUD's affirmatively furthering fair 
housing (AFFH) regulations. The goal of the regulations is to provide 
HUD program participants with a specific planning approach to assist 
them in meeting their statutory obligation to affirmatively further the 
purposes and policies of the Fair Housing Act. HUD is committed to its 
mission of achieving fair housing opportunity for all, regardless of 
race, color, religion, national origin, sex, disability, or familial 
status. However, HUD's experience over the three years since the newly-
specified approach was promulgated demonstrates that it is not 
fulfilling its purpose to be an efficient means for guiding meaningful 
action by program participants. Accordingly, HUD has determined that a 
new approach towards AFFH is required. As HUD begins the process of 
developing a proposed rule to amend the existing AFFH regulations, it 
is soliciting public comment on changes that will: Minimize regulatory 
burden while more effectively aiding program participants to plan for 
fulfilling their obligation to affirmatively further the purposes and 
policies of the Fair Housing Act; create a process that is focused 
primarily on accomplishing positive results, rather than on performing 
analysis of community characteristics; provide for greater local 
control and innovation; seek to encourage actions that increase housing 
choice, including through greater housing supply; and more efficiently 
utilize HUD resources. HUD is also reviewing comments submitted in 
response to the withdrawal of the Local Government Assessment Tool and 
will consider those comments during HUD's consideration of potential 
changes to the AFFH regulations.

DATES: Comment Due Date: October 15, 2018.

ADDRESSES: Interested persons are invited to submit comments to the 
Office of the General Counsel, Rules Docket Clerk, Department of 
Housing and Urban Development, 451 Seventh Street SW, Room 10276, 
Washington, DC 20410-0001. Communications should refer to the above 
docket number and title and should contain the information specified in 
the ``Request for Comments'' section. There are two methods for 
submitting public comments.
    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 20410-0500. Due to security measures at all federal 
agencies, however, submission of comments by mail often results in 
delayed delivery. To ensure timely receipt of comments, HUD recommends 
that comments submitted by mail be submitted at least two weeks in 
advance of the public comment deadline.
    2. Electronic Submission of Comments. Interested persons may submit 
comments 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 comments 
immediately available to the public. Comments submitted electronically 
through the http://www.regulations.gov website can be viewed by other 
commenters and interested members of the public. Commenters should 
follow 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 
notice.

    No Facsimile Comments. Facsimile (fax) comments are not acceptable.
    Public Inspection of Comments. All 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). Copies of all comments submitted are available for inspection 
and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Krista Mills, Deputy Assistant 
Secretary, Office of Policy, Legislative Initiatives, and Outreach, 
Office Fair Housing and Equal Opportunity, Department of Housing and 
Urban Development, 451 7th Street SW, Room 5246, Washington, DC 20410; 
telephone number 202-402-6577. Individuals with hearing or speech 
impediments 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. Background

    On July 16, 2015, HUD published in the Federal Register its 
Affirmatively Furthering Fair Housing (AFFH) final rule.\1\ The 
principal AFFH regulations are codified in 24 CFR part 5, subpart A, 
with other AFFH related regulations codified in 24 CFR parts 91, 92, 
570, 574, 576, and 903. The stated purpose of the AFFH final rule was 
to provide HUD program participants with a revised planning approach to 
assist them in meeting their legal obligation to affirmatively further 
the purposes and policies of the Fair Housing Act. Since issuance of 
the final rule, however, HUD has concluded that the current regulations 
are ineffective in helping program participants to meet this 
obligation. The highly prescriptive regulations give participants 
inadequate autonomy in developing fair housing goals as suggested by 
principles of federalism. Additionally, the current regulations are 
ineffective in addressing the lack of adequate housing supply, which 
has particular adverse impact on protected classes under the Fair 
Housing Act. Finally, evidence from

[[Page 40714]]

peer-reviewed literature indicates that the positive outcomes of 
policies focused on deconcentrating poverty are likely limited to 
certain age and demographic groups \2\ and are difficult to implement 
at scale and without disrupting local decision making. HUD reached 
these determinations for the following reasons:
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    \1\ 80 FR 42357.
    \2\ Chetty, Raj, Nathaniel Hendren, and Lawrence Katz. 2016. 
``The Effects of Exposure to Better Neighborhoods on Children: New 
Evidence from the Moving to Opportunity Project.'' American Economic 
Review 106 (4).
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    1. Ineffectiveness of assessment tools. Under the AFFH rule, HUD 
program participants are required to use an Assessment Tool to conduct 
and submit an Assessment of Fair Housing (AFH) to HUD. Because of the 
variations in the HUD program participants subject to the AFFH rule, 
HUD went through a process to develop three separate assessment tools: 
One for local governments, one for public housing agencies (PHAs), and 
one for States and Insular Areas.
    There are currently no approved assessment tools that are available 
for program participants to use. The different assessment tools are 
unavailable for different reasons. A final State and Insular Area 
Assessment Tool has not yet been developed by HUD. In the case of the 
Assessment Tool for use by PHAs, HUD published a Federal Register 
notice on January 13, 2017,\3\ announcing that the Assessment Tool was 
not yet available for use by PHAs because the HUD data needed to make 
the Assessment Tool workable was not yet available. HUD announced the 
availability of a Local Government Assessment Tool in a Federal 
Register notice published on December 31, 2015 \4\ and renewal of the 
Tool in a Federal Register notice published on January 13, 2017.\5\
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    \3\ 82 FR 4373.
    \4\ 80 FR 81840.
    \5\ 82 FR 4388.
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    Since publication of the January 13, 2017, notice, HUD became aware 
of significant deficiencies in the Local Government Assessment Tool 
impeding completion and acceptance of meaningful assessments by program 
participants. Accordingly, HUD withdrew the Local Government Assessment 
Tool in a Federal Register notice published on May 23, 2018.\6\ As more 
fully explained in the May 23, 2018, withdrawal notice, HUD's decision 
was informed by its review of the initial round of AFH submissions that 
were developed using the Local Government Assessment Tool. This review 
led HUD to conclude that the Tool is unworkable based upon: (1) The 
high failure rate from the initial round of submissions; and (2) the 
level of technical assistance HUD provided to this initial round of 49 
AFHs, which cannot be scaled up to accommodate the increase in the 
number of local government program participants with AFH submission 
deadlines in 2018 and 2019. Specifically, 63% of the initial 49 AFH 
submissions (31/49) were not accepted on initial submission. HUD 
returned 35% of these (17/49) as unacceptable. Many other AFH 
submissions (28% or 14/49) were accepted only after the program 
participants submitted revisions and additional information in the form 
of addendums in response to HUD's technical assistance. Interested 
readers are referred to the May 23, 2018, Federal Register notice for 
additional explanation regarding HUD's withdrawal of the Local 
Government Assessment Tool.
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    \6\ 83 FR 23922.
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    2. Public comments on HUD regulatory reform efforts. The request 
for comments contained in this ANPR is also consistent with HUD's 
efforts to carry out the Administration's regulatory reform efforts. On 
May 15, 2017, HUD published a Federal Register notice consistent with 
Executive Orders 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' and 13777, ``Enforcing the Regulatory Reform 
Agenda,'' inviting public comments to assist HUD in identifying 
existing regulations that may be outdated, ineffective, or excessively 
burdensome.\7\ HUD received 299 comments in response to the Notice, and 
136 (45% of the total) discussed the AFFH rule.
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    \7\ 82 FR 22344.
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    While some of the comments expressed support for the AFFH rule, 
most of the comments were critical of the rule and cited its complexity 
and the costs associated with completing an AFH. The commenters wrote 
that the final rule fails to consider critical factors for program 
participants, such as the scarcity of available resources and other 
program priorities. Many of these commenters complained that the 
estimates contained in the final rule regarding the amount of time it 
would take to complete an AFH were unrealistically low. Small PHAs, in 
particular, wrote that compliance with the rule would result in their 
incurring large expenses. Other commenters complained that the rule is 
overly prescriptive. Still others noted deficiencies with the data 
program participants are required to rely on in completing their AFHs.

II. This Advance Notice of Proposed Rulemaking

    As HUD begins the process of developing a proposed rule to amend 
the existing AFFH regulations, it is soliciting public comment on 
changes that will: (1) Minimize regulatory burden while more 
effectively aiding program participants to meet their legal 
obligations; (2) create a process that is focused primarily on 
accomplishing positive results, rather than on performing analysis of 
community characteristics; (3) provide for greater local control and 
innovation; (4) seek to encourage actions that increase housing choice, 
including through greater housing supply; and (5) more efficiently 
utilize HUD resources.
    While the following list is not exhaustive, HUD is particularly 
interested in comments on the following questions:
    1. What type of community participation and consultation should 
program participants undertake in fulfilling their AFFH obligations? Do 
the issues under consideration in affirmatively furthering fair housing 
merit separate, or additional, public participation and consultation 
procedures than those already required of program participants in 
preparing their annual plans for housing and community development 
(i.e., the Consolidated Plan, Annual Action Plan, or PHA Plan)? 
Conversely, should public input on AFFH be included as part of the 
Consolidated Plan/PHA Plan public involvement process?
    2. How should the rule weigh the costs and benefits of data 
collection and analysis? Should the proposed rule allow program 
participants to develop or use the data of their choice? Alternatively, 
should HUD require the use of a uniform data set by all program 
participants in complying with their AFFH obligation? Should it vary by 
the nature of the program participant? Instead of a data-centric 
approach, should jurisdictions be permitted to rely upon their own 
experiences? If the latter, how should HUD assess this more qualitative 
approach?
    3. How should PHAs report their AFFH plans and progress? Should 
jurisdictions be required to provide a detailed report of the analysis 
performed or only summarize the goals? How often should program 
participants be required to report on their AFFH efforts? Should the 
proposed rule retain or revise the current timeframes for required AFFH 
submissions? Should program participants continue reporting annually on 
their AFFH actions and results in their program plans and

[[Page 40715]]

annual performance reports or, given the long-term nature of many AFFH 
goals, should the reporting period be longer? Should planning and/or 
results be integrated into existing report structures, such as 
Consolidated Plans and Consolidated Annual Performance and Evaluation 
Reports (CAPERs), or utilize an alternative structure?
    4. Should the proposed rule specify the types of obstacles to fair 
housing that program participants must address as part of their AFFH 
efforts, or should program participants be able to determine the number 
and types of obstacles to address? Should HUD incentivize program 
participants to collaborate regionally to identify and address 
obstacles to affirmatively furthering fair housing, without holding 
localities accountable for areas outside of their control? Should HUD 
incentivize grantees and PHAs to collaborate in the jurisdiction and 
the region to remove fair housing obstacles? What are examples of 
obstacles that the AFFH regulations should seek to address? How might a 
jurisdiction accurately determine itself to be free of material 
obstacles?
    5. How much deference should jurisdictions be provided in 
establishing objectives to address obstacles to identified fair housing 
goals, and associated metrics and milestones for measuring progress?
    6. How should HUD evaluate the AFFH efforts of program 
participants? What types of elements should distinguish acceptable 
efforts from those that should be deemed unacceptable? What should be 
required of, or imposed upon, jurisdictions with unacceptable efforts 
(other than potential statutory loss of Community Development Block 
Grant, HOME, or similar funding sources)? How should HUD address PHAs 
whose efforts to AFFH are unacceptable?
    7. Should the rule specify certain levels of effort on specific 
actions that will be deemed to be in compliance with the obligation to 
affirmatively further the purposes and policies of the Fair Housing Act 
(i.e., ``safe harbors''), and if so, what should they be?
    8. Are there any other revisions to the current AFFH regulations 
that could help further the policies of the Fair Housing Act, add 
clarity, reduce uncertainty, decrease regulatory burden, or otherwise 
assist program participants in meeting their AFFH obligations?

III. Findings and Certifications

Environmental Impact

    This ANPR is exclusively concerned with nondiscrimination 
standards. Accordingly, under 24 CFR 50.19(c)(3), it is categorically 
excluded from environmental review under the National Environmental 
Policy Act (42 U.S.C. 4321-4347).

Regulatory Review--Executive Orders 12866 and 13563

    Per 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 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 ANPR was reviewed by OMB and determined to likely result 
in a ``significant regulatory action,'' as defined in section 3(f) of 
Executive Order 12866.

    Dated: August 9, 2018.
Anna Maria Far[iacute]as,
Assistant Secretary for Fair Housing and Equal Opportunity.
[FR Doc. 2018-17671 Filed 8-15-18; 8:45 am]
 BILLING CODE 4210-67-P