[Federal Register Volume 90, Number 105 (Tuesday, June 3, 2025)]
[Proposed Rules]
[Pages 23491-23494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09991]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 108 and 200
[Docket No. FR-6533-P-01]
RIN 2501-AE13
Rescission of Affirmative Fair Housing Marketing Regulations
AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would rescind the Department's Affirmative
Fair Housing Marketing regulations, which require a participant in an
FHA insurance or Multifamily Housing rental assistance program to
complete and submit a form supplied by HUD that describes its
affirmative fair housing marketing plan.
DATES: Comment Due Date: July 3, 2025.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule. All submissions must refer to the docket number and
title. There are two methods for submitting public comments.
1. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
https://www.regulations.gov.
2. 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.
In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed
rule may be found at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Scott Knittle, Principal Deputy
General Counsel, U.S. Department of Housing and Urban Development, 451
7th Street SW, Washington, DC 20410; telephone number 202-402-2244
(this is not a toll-free number). HUD welcomes and is prepared to
receive calls from individuals who are deaf or hard of hearing, as well
as from individuals with speech or communication disabilities. To learn
more about how to make an accessible telephone call, please visit
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
SUPPLEMENTARY INFORMATION:
I. Background
HUD's regulations governing Affirmative Fair Housing Marketing
(``AFHM'') are contained in 24 CFR parts 108 and 200, subpart M. See
final rule, Compliance Procedures for Affirmative Fair Housing
Marketing, 44 FR 47012 (August 9, 1979), codified as amended at 24 CFR
part 200, subpart M--Affirmative Fair Housing Marketing Regulations, 37
FR 75 (January 5, 1972), codified as amended at 24 CFR part 200,
subpart M. These regulations require applicants for participation in
Federal Housing Administration (FHA) housing programs to ``pursue
affirmative fair housing marketing policies in soliciting buyers and
tenants, in determining their eligibility, and in concluding sales and
rental transactions.'' 24 CFR 200.610. These regulations state that a
marketing program ``shall typically involve publicizing to minority
persons the availability of housing opportunities regardless of race,
color, religion, sex, handicap or familial status or national origin,
through the type of media customarily utilized by the applicant,
including minority publications or other minority outlets which are
available in the housing market area.'' 24 CFR 200.620(a). These
regulations additionally require applicants to submit affirmative fair
housing marketing plans, to be approved by HUD and made available for
public inspection. 24 CFR 200.625. Applicants who fail to comply with
these requirements are ``liable to sanctions.'' 24 CFR 200.635; see
also 24 CFR 108.50.
The compliance procedures under these regulations are extensive.
Ninety days before engaging in sales or rental marketing activities,
applicants must ``submit a Notification of Intent to Begin Marketing to
the monitoring office.'' 24 CFR 108.15. The monitoring office reviews
reports, monitors AFHM plans, and refers matters to the civil rights or
compliance reviewing office for possible
[[Page 23492]]
sanctions. 24 CFR 108.20. If an applicant fails to comply, a compliance
meeting must be held. 24 CFR 108.25. Individuals, as well as private
and public entities, may file complaints alleging violations of these
regulations. 24 CFR 108.35.
II. Justification for Rulemaking
Upon reviewing these regulations, HUD has determined that they
should be rescinded for six independent reasons.
A. The AFHM Regulations Are Inconsistent With HUD's Authority Under the
Fair Housing Act and Executive Order 11063
The Fair Housing Act, 42 U.S.C. 3601, et seq. (``the Act''),
prohibits discrimination in the sale or rental of housing, in
residential real-estate transactions, and in the provision of brokerage
services. Discrimination includes, among other things, refusing to rent
or sell ``because of race, color, religion, sex, familial status, or
national origin.'' 42 U.S.C. 3604(a.).\1\ HUD's rulemaking authority is
cabined to those rules necessary to prevent discrimination See United
States v. Mid-America Apartment Cmtys., Inc., 247 F. Supp. 3d 30, 35
(D.D.C. 2017). The Affirmative Fair Housing Marketing regulations are
not about preventing discrimination; rather, they require applicants to
affirmatively attract minority persons and to do so through ``minority
publications or other minority outlets.'' 24 CFR 200.620. Far from
supporting the race-neutral and purely prohibitory requirements of the
Act, the AFHM regulations require private parties to sort individuals
by race and engage in outreach based on race.
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\1\ The Act also makes it unlawful to discriminate because of
disability; that prohibition is reflected in different paragraphs
(e.g., Sec. 3604(f)).
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Moreover, the AFHM regulations require compliance with these
affirmative obligations under the threat of sanctions. See 24 CFR
200.635. Failing to provide outreach to minority groups is not
``discrimination'' as defined by the Act, yet the AFHM regulations
punish noncompliance with the ``denial of further participation in
Departmental programs and referral to the Department of Justice for
suit by the United States for injunctive or other appropriate relief.''
24 CFR 108.50. The Act provides no basis for such a punishment. Again,
the FHA and Executive Order 11063 are aimed at discrimination against
persons because of race, not informational disparities. To the extent
there are informational disparities, HUD has other tools under the
statute to address that issue. It is inappropriate for HUD to require
applicants, without payment, to do this outreach instead. See Whitman
v. Am. Trucking Ass'ns, Inc., 531 U.S. 457, 467-68 (2001) (``Congress,
we have held, does not alter the fundamental details of a regulatory
scheme in vague terms or ancillary provisions--it does not, one might
say, hide elephants in mouseholes.'').
B. The AFHM Regulations Are Unconstitutional Under the Equal Protection
Clause
Regardless of statutory authority, the AFHM regulations are
unconstitutional under the Equal Protection Clause. Requiring
applicants to reach out to different racial groups, in different
mediums, perpetuates the ``impermissible racial stereotype'' that
``members of the same racial group--regardless of their age, education,
economic status, or the community in which they live--think alike.''
Students for Fair Admissions, Inc. v. President & Fellows of Harv.
Coll., 600 U.S. 181, 220 (2023). The AFHM regulations also require
applicants to favor some racial groups over others, without a
compelling interest. The regulations mandate ``publicizing to minority
persons the availability of housing opportunities.'' 24 CFR 200.620(a).
But ``racial discrimination is invidious in all contexts,'' even when
it favors minority groups over majority groups. Students for Fair
Admissions, 600 U.S. at 213. The AFHM regulations require exactly
that--emphasizing minority groups over majority groups for outreach.
C. If the Act Permitted the AFHM Regulations, It Would Be an
Unconstitutional Delegation of Legislative Power
If the Act were to permit the AFHM regulations, the statute would
be an unconstitutional delegation of legislative power. Article I
provides that ``[a]ll legislative Powers herein granted shall be vested
in a Congress of the United States.'' U.S. Const. Art. I, section 1.
``Accompanying that assignment of power to Congress is a bar on its
further delegation.'' Gundy v. United States, 588 U.S. 128, 135 (2019).
If 42 U.S.C. 3614a--which states, the ``Secretary may make rules . . .
to carry out this subchapter''--is read to permit any regulation to
carry out the broad purposes of the Act, without even a public interest
limitation, then there is no ``intelligible principle.'' See id. The
AFHM regulations do more than simply ``fill up the details,'' and
create burdensome, affirmative obligations out of whole cloth. Wayman
v. Southard, 23 U.S. 1, 6 (1825). Worse, these obligations come with a
serious threat of sanction. None of this was contemplated by the
statute in more than vague terms.
D. HUD's Color-Blind Policy
Regardless of the constitutionality of the regulations, it is the
policy of the Department not to require applicants to engage in racial
sorting. HUD should encourage applicants to be color-blind, as it is
always immoral to treat some racial groups differently than others.
Even if the regulations increase visibility for minority housing
applicants or have other purported benefits, they are outweighed by
these important moral considerations.
E. Decreasing Burden on Applicants
It is the policy of the Department not to burden applicants unless
they have engaged in discrimination. Even if there are benefits
associated with the affirmative outreach in the AFHM regulations, the
Department's policy is that it is wrong to put the economic burden on
innocent private actors to achieve those benefits. HUD's commitment to
that value judgment outweighs the potential downsides of eliminating
the AFHM requirements, including the possibility that some racial
groups will receive more information about housing opportunities than
others.
F. HUD's Policy Is To Prevent Discrimination; Not To Equalize
Statistical Outcomes
It is the policy of the Department to prevent discrimination, not
to equalize statistical outcomes; however, AFHM regulations are based
on an assumption that equal outcomes are what matter. Reviews of AFHM
plans include ensuring that those plans ``accomplish . . . intended
objective[s],'' 24 CFR 108.20, but the objective of the Act is to
eliminate discrimination. The AFHM plans are aimed at increasing the
number of minority tenants in FHA assisted housing, not simply
eliminating discrimination. The Department's policy outweighs any
possible advantages of the AFHM regulations.
HUD has determined that each of these reasons, independently and
alone, justifies rescission of the AFHM regulations. Regardless of
their benefit, or any past findings, HUD must not maintain regulations
that are unlawful. HUD has determined that there is no reliance
interest in an unlawful regulation. See Dep't of Homeland Sec. v.
Regents of the Univ. of California, 591 U.S. 1, 32 (2020). Moreover,
regardless of lawfulness, HUD has no interest in
[[Page 23493]]
maintaining a rule that requires racial sorting, deems potentially
innocent private parties as discriminators, and puts the burden on
private parties without any evidence of discrimination. Those
interests, too, outweigh any reliance interests that may exist.
To the extent there is any uncertainty about the costs and benefits
of the AFHM regulations, it is also the policy of HUD to err on the
side of deregulation. HUD's limited resources should be focused on
fairly and rationally enforcing a discrete and manageable number of
regulations. The AFHM regulations are not a priority.
III. Justification for Shortened Comment Period
For HUD rules issued for public comment, it is HUD's policy to
afford the public ``not less than sixty days for submission of
comments'' (24 CFR 10.1). In cases in which HUD determines that a
shorter public comment period may be appropriate, it is also HUD's
policy to provide an explanation of why the public comment period has
been abbreviated.
Based on the justification for this rulemaking stated above, HUD
has determined that it is in the public interest to rescind the AFHM
regulations as expeditiously as possible. As such, while HUD seeks and
values input in the form of public comments, HUD has determined that a
shortened public comment period is justified. In this regard, HUD notes
that interested members of the public are familiar with these
regulations and should be able to respond effectively within the 30-day
period.
IV. This Proposed Rule
For the reasons stated above, this proposed rule would remove 24
CFR part 108 in its entirety (Sec. Sec. 108.1 through 108.50) as well
as subpart M of part 200 in its entirety (Sec. Sec. 200.600 through
200.640).
V. Findings and Certifications
Executive Orders 12866 and 13563, Regulatory Planning and Review
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects; distributive impacts; and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This proposed rule has been determined to be a
``significant regulatory action,'' as defined in section 3(f) of
Executive Order 12866, but not economically significant. Additionally,
this proposed rule would reduce the administrative and economic burdens
placed on applicants due to the AFHM regulations and is consistent with
Executive Order 13563.
Executive Order 14192, Regulatory Costs
Executive Order 14192, entitled ``Unleashing Prosperity Through
Deregulation,'' was issued on January 31, 2025. Section 3(c) of
Executive Order 14192 requires that any new incremental costs
associated with new regulations shall, to the extent permitted by law,
be offset by the elimination of existing costs associated with at least
10 prior regulations. The current burden estimate for Affirmative Fair
Housing Marketing Plans is more than 12,102 hours annually. This
consists of 5,703 Multifamily respondents and 30 Single Family and/or
Condo/Cooperative respondents either submitting new plans or reviewing
and updating (or determining that updates are not necessary) existing
plans. The proposed rule would eliminate this burden.
OMB has determined that this proposed rule would be a repeal of a
regulation resulting in reduced regulatory costs for purposes of
Executive Order 14192 by providing flexibility and reduced burdens for
applicants.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive order. This proposed rule would not have
federalism implications and would not impose substantial direct
compliance costs on State and local governments or preempt State law
within the meaning of the Executive order.
Environmental Impact
This proposed rule is a policy document that sets out fair housing
standards. Accordingly, under 24 CFR 50.19(c)(3), this rulemaking 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. This proposed rule
would remove the economic and administrative burden on applicants that
require them to market to different racial or other minority groups.
Specifically, the rulemaking would remove the requirement for
applicants to submit to HUD fair housing marketing plans and
notifications of intent to begin marketing. To the extent the proposed
revisions result in an economic impact, that impact would be positive
as the rulemaking would not only reduce costs associated with marketing
campaigns but would also relieve applicants of possible sanctions due
to AHFM compliance.
Accordingly, for the foregoing reasons, the undersigned certifies
that this proposed rule would not have a significant economic impact on
a substantial number of small entities. Notwithstanding HUD's
determination that this proposed rule would not have a significant
effect on a substantial number of small entities, HUD specifically
invites comments regarding any less burdensome alternatives to this
proposed rule that will meet HUD's objectives as described in the
preamble.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3520), 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 Office of Management and Budget
(OMB) control number. This proposed rule would not impose any
information collection requirements.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal
agencies to assess the effects of their regulatory actions on State,
local, and Tribal governments, and on the private sector. This
rulemaking does not impose any Federal mandates on any State, local, or
Tribal government, or on the private sector, within the meaning of the
UMRA.
VI. Electronic Access and Filing
Comments submitted electronically through the https://www.regulations.gov
[[Page 23494]]
website 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.
All comments and communications properly 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). HUD welcomes and is prepared
to receive calls from individuals who are deaf or hard of hearing, as
well as from individuals with speech or communication disabilities. To
learn more about how to make an accessible telephone call, please visit
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
List of Subjects
24 CFR Part 108
Fair housing, Reporting and recordkeeping requirements.
24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Housing standards, Lead poisoning, Loan
programs--housing and community development, Mortgage insurance,
Organization and functions (Government agencies), Penalties, Reporting
and recordkeeping requirements, Social security, Unemployment
compensation, Wages.
Accordingly, for the reasons described in the preamble, HUD
proposes to amend 24 CFR chapters I and II as follows:
PART 108--[REMOVED AND RESERVED]
0
1. Under the authority of 42 U.S.C. 3608 and 3535(d), remove and
reserve part 108.
PART 200--INTRODUCTION TO FHA PROGRAMS
0
2. The authority citation for part 200 continues to read as follows:
Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).
Subpart M--[Removed and Reserved]
0
3. Remove and reserve subpart M.
Scott Turner,
Secretary.
[FR Doc. 2025-09991 Filed 6-2-25; 8:45 am]
BILLING CODE 4210-67-P