MEMORANDUM OPINION
BERYL
A. HOWELL, CHIEF JUDGE.
The
Fair Housing Act, 42 U.S.C. §§ 3601, et
seq., enacted in 1968, requires the U.S. Department of
Housing and Urban Development (“HUD”) to
“administer the programs and activities relating to
housing and urban development in a manner affirmatively to
further the policies of” fair housing, id.
§ 3608(e)(5). HUD acknowledges that the agency has not
always administered programs in a manner to ensure that this
long-standing statutory requirement affirmatively to further
fair housing (“AFFH”) is met “as
effective[ly] as had been envisioned.” HUD Proposed
Rule, Affirmatively Furthering Fair Housing (“Proposed
AFFH Rule”), 78 Fed. Reg. 43, 710, 43, 710 (July 19,
2013). In 2015, HUD promulgated a rule, by notice-and-comment
rulemaking, to “provide[ ] HUD program participants
with an approach to more effectively and efficiently
incorporate into their planning processes the duty to
affirmatively further the purposes and policies of the Fair
Housing Act, ” including the AFFH requirement. HUD
Final Rule, Affirmatively Furthering Fair Housing
(“AFFH Rule”), 80 Fed. Reg. 42, 272, 42, 272
(July 16, 2015). Among the “[m]ajor [p]rovisions”
in this new Rule, id. at 42, 273, is a
“standardized Assessment of Fair Housing (AFH)”
process, id., to be rolled out along with an
Assessment Tool customized for different types of program
participants, id. at 42, 277, 42, 339, 42, 347, such
as States, local government agencies and Public Housing
Authorities (“PHAs”). To date, HUD has fully
issued an Assessment Tool only for use by local government
agencies. See generally HUD Notice, Affirmatively
Furthering Fair Housing Assessment Tool: Announcement of
Final Approved Document (“LG2015 Tool
Announcement”), 80 Fed. Reg. 81, 840 (Dec. 31, 2015);
HUD Notice, Affirmatively Furthering Fair Housing:
Announcement of Renewal of Approval of the Assessment Tool
for Local Governments (“LG2017 Tool
Announcement”), 82 Fed. Reg. 4, 388 (Jan. 13, 2017)
(discussing issues with the LG2015 Tool and describing
changes in the LG2017 Tool).
This
case is about two of HUD's notices, issued in May 2018,
one of which withdraws the only extant Assessment Tool that
was intended to help local government agencies measure
progress in meeting the AFFH requirement. See
generally HUD Notice, Affirmatively Furthering Fair
Housing: Withdrawal of the Assessment Tool for Local
Governments (“LG2017 Withdrawal Notice”), 83 Fed.
Reg. 23, 922 (May 23, 2018). As a result, “currently no
type of program participant has an Assessment Tool available
for use.” HUD Notice, Affirmatively Furthering Fair
Housing (AFFH): Responsibility to Conduct Analysis of
Impediments (“AI Reliance Notice”), 83 Fed. Reg.
23, 927, 23, 927 (May 23, 2018). The other HUD notice at
issue directs program participants to revert to prior HUD
guidance that they “will conduct an analysis of
impediments (AI) to fair housing choice within the
jurisdiction.” Id.
HUD
concedes that use of the LG2017 Tool and the AFH process laid
out in the AFFH Rule is “superior” to the prior
AI process in aiding program participants in meeting the AFFH
requirement. Tr. Motions Hr'g (Aug. 9, 2018) (“Mot.
Hr'g”) at 68:25-69:4, ECF No. 44; see also
Id. at 63:7-13 (responding to Court's query whether
HUD concedes “the AI process [ ] was so terribly
flawed, ” HUD's counsel stated “We've
developed a record of that, certainly . . . . You're
right”). Nevertheless, in HUD's view, the LG2017
Assessment Tool was “unworkable, ” warranting its
withdrawal. LG2017 Withdrawal Notice, 83 Fed. Reg. at 23,
923; see also Defs.' Mem. Opp. Pls.' Mot.
Preliminary Injunction & Expedited Summ. J.
(“Defs.' Opp'n PI”) at 12- 13, ECF No.
33. The plaintiffs contend otherwise, viewing the withdrawal
of the LG2017 Tool as impeding the progress made over the
last few years to fulfill the statutory promise of furthering
fair housing policies. See Am. Compl. ¶¶
6, 11-12, ECF No. 18.
The
plaintiffs, three non-profit organizations “with
purposes that include promoting fair housing, ”
id. ¶¶ 13, seek preliminary and permanent
injunctive relief under the Administrative Procedure Act
(“APA”), 5 U.S.C. § 706(2), against HUD and
Secretary Benjamin Carson in his official capacity
(collectively, “HUD” or
“defendants”), Am. Compl. ¶¶ 14, 19-20,
154-73, contending that the two May 2018 notices-one of which
withdraws the LG2017 Tool and the other of which directs
local government program participants “to revert
to” the earlier AI assessment method,
“effectively suspend[ ] the AFFH Rule indefinitely,
” id. ¶ 9. In the plaintiffs' view,
these two notices “constitute unlawful agency action,
” Am. Compl. ¶ 14, because they suspend the AFFH
Rule without notice-and-comment procedures and because the
withdrawal of the LG2017 Tool was arbitrary and capricious,
id. ¶¶ 10-14.[1]
Pending
before this Court are three motions. First, the plaintiffs
have moved, pursuant to Federal Rule of Civil Procedure 65
and Local Rule 65.1, for a preliminary injunction ordering
HUD “to (1) rescind [the] May 23, 2018 Notices, ”
referring to the LG2017 Withdrawal Notice and the AI Reliance
Notice; “(2) reinstate the Assessment Tool for Local
Governments”; and “(3) take all other necessary
steps to ensure prompt implementation of the AFFH
Rule.” Pls.' Mot. Preliminary Injunction &
Expedited Summ. J. (“Pls.' Mot. PI”) at 1,
ECF No. 19. Second, the defendants have moved to dismiss the
Amended Complaint, pursuant to Federal Rule of Civil
Procedure 12(b)(1), arguing that the plaintiffs lack
standing. See generally Defs.' Mot. Dismiss
Pls.' Am. Compl. (“Defs.' MTD”), ECF No.
38. Third, the State of New York seeks to intervene on behalf
of the plaintiffs pursuant to Federal Rule of Civil Procedure
24(a) or (b). NYS's Mot. Intervene Supp. Pls.
(“NYS's Mot. Intervene”) at 1, ECF No. 24.
For the
reasons provided below, the defendants' motion to dismiss
is granted and the remaining two motions for preliminary
injunctive relief and to intervene are therefore
denied.[2]
I.
BACKGROUND
The
relevant statutory and regulatory framework, as well as the
facts from which this litigation arises, are presented
below.[3]
A.
Statutory and Regulatory Framework
Since
1968, it has been “the policy of the United States to
provide, within constitutional limitations, for fair housing
throughout the United States.” 42 U.S.C. § 3601.
HUD's general obligation to affirmatively further fair
housing in line with this policy is discussed first, followed
by a summary of HUD's generally inadequate efforts to
fulfill this obligation when administering housing block
grant programs and ensuring compliance with statutory and
regulatory requirements by program participants.
1.
Overview of the AFFH Requirement
Congress
enacted the Fair Housing Act as Title VIII of the Civil
Rights Act of 1968, Pub. L. No. 90-284, 82 Stat. 81
(“FHA” or the “Act”), over fifty
years ago in an effort to achieve “truly integrated and
balanced living patterns.” 114 Cong. Rec. 3421, 3422
(1968) (statement of Sen. Mondale); see also Trafficante
v. Metro. Life Ins. Co., 409 U.S. 205, 211 (1972)
(“[A]s Senator Mondale who drafted § 810(a)
[‘Enforcement' by HUD] said, the reach of the
proposed law was to replace the ghettos ‘by truly
integrated and balanced living patterns.'” (quoting
114 Cong. Rec. at 3422)). The FHA was, in large part, a
response to the heightened racial tensions and riots erupting
in the United States throughout the 1960s, and the FHA's
passage reflected an understanding that “fair housing
legislation” was “the best way for [ ]
Congress” at that time “to start on the true road
to integration.” 114 Cong. Rec. at 3422 (statement of
Sen. Mondale); see also Tex. Dep't of Hous. &
Cmty. Affairs v. Inclusive Communities Project, Inc.,
135 S.Ct. 2507, 2516 (2015) (explaining the FHA was passed in
response to the assassination of Dr. Martin Luther King and
the “new urgency” “the Nation faced . . .
to resolve the social unrest in the inner cities”). The
FHA thus prohibits discrimination based on “race,
color, religion, sex, familial status, or national
origin” in the sale and rental of housing and other
residential real estate- related transactions. 42 U.S.C.
§§ 3604-05. Accordingly, the Act requires HUD to
“administer [ ] programs and activities relating to
housing and urban development in a manner affirmatively to
further the policies of” fair housing, id.
§ 3608(e)(5), a requirement known as the
“affirmatively further fair housing, ” or
“AFFH, ” requirement.
Courts
have recognized that the Act “imposes upon HUD an
obligation to do more than simply refrain from discriminating
(and from purposely aiding discrimination by others).”
NAACP v. Sec'y of Hous. & Urban Dev., 817
F.2d 149, 155 (1st Cir. 1987) (Breyer, J.) (noting that
Congress's goal in passing the FHA “reflects the
desire to have HUD use its grant programs to assist in ending
discrimination and segregation, to the point where the supply
of genuinely open housing increases”); see also
Shannon v. U.S. Dep't of Hous. & Urban Dev., 436
F.2d 809, 821 (3d Cir. 1970) (remanding HUD decision about a
proposed project change for HUD to consider the
“substantial net reduction in supply of housing in the
project area available to racial minority families, ”
as well as the “substantial net increase in racial
minority families in the area as a result of the project,
” which “is an equally obvious
consideration”). Indeed, pursuant to the AFFH
requirement, HUD must take action “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 opportunities the Act
was designed to combat.” Otero v. N.Y. City Hous.
Auth., 484 F.2d 1122, 1134 (2d Cir. 1973). HUD maintains
discretion in determining how the agency will fulfill its
AFFH obligation, but courts have “the power to review [
] claim[s] that the Secretary has not
‘administer[ed]' certain HUD programs ‘in a
manner affirmatively to further' the Act's basic
policy.” NAACP, 817 F.2d at 151 (last
alteration in original) (quoting 42 U.S.C. §
3608(e)(5)).
2.
HUD's Housing Block Grant Programs
One
method by which HUD furthers its AFFH obligation is through
the administration of housing block grant programs to State
and local governments. The largest of these programs is the
Community Development Block Grant (“CDBG”)
Program, which was established under the Housing and
Community Development Act of 1974, 42 U.S.C. § 5301,
et seq., to “provide annual grants to provide
housing and expand economic opportunities for low- and
moderate-income persons.” Defs.' Opp'n PI at 3;
see also 42 U.S.C. § 5301(c) (explaining that
the “primary objective” of the CDBG program is
“the development of viable urban communities, by
providing decent housing and a suitable living environment
and expanding economic opportunities, principally for persons
of low and moderate income”). In addition to the CDBG
Program, HUD administers block grants through other programs,
including the Emergency Solutions Grants (“ESG”)
Program, 42 U.S.C. § 11371, et seq.; the HOME
Investment Partnerships (“HOME”) Program,
id. § 12741, et seq.; and the Housing
Opportunities for Persons with AIDS (“HOPWA”)
Program, id. § 12901, et seq. HUD
also, through the U.S. Housing Act (“USHA”),
id. § 1437c-1, et seq., provides
grants to Public Housing Agencies (“PHAs”) for
public housing operations as well as capital for tenant-based
rental assistance. See AFFH Rule, 80 Fed. Reg. at
42, 275.
Jurisdictions
receiving these block grants must take certain actions to
continue receiving funds, including “submit[ting] a
consolidated plan” to HUD every three to five years. 24
C.F.R. § 570.302; see also Id. pt. 91. A
Consolidated Plan provides (1) “[a] planning document
for the jurisdiction, which builds on a participatory process
among citizens, organizations, businesses, and other
stakeholders”; (2) “[a] submission for federal
funds under HUD's formula grant programs for
jurisdictions”; (3) “[a] strategy to be followed
in carrying out HUD programs”; and (4) “[a]
management tool for assessing performance and tracking
results.” Id. § 91.1(b)(1)-(4). With the
Consolidated Plans, HUD is able to monitor a
jurisdiction's use of federal funds.
As
relevant here, recipients of housing block grants must also
certify that they will “affirmatively further fair
housing.” 42 U.S.C. § 5304(b)(2) (local government
recipients); id. § 5306(d)(7)(B) (State
recipients); id. § 12705(b)(15) (State and
local recipients); § 1437c-1(d)(16) (PHA recipients).
HUD's recent efforts to assist program participants in
meeting this requirement, as discussed next, are at issue in
this litigation.
3.
HUD's Regulation of Grantees through Analysis of
Impediments
Beginning
in the 1990s, a jurisdiction receiving HUD's housing
block grants could meet its AFFH obligations by
“submit[ting] a certification that it will
affirmatively further fair housing, which means that it will
conduct an analysis to identify impediments to fair housing
choice within the jurisdiction, take appropriate actions to
overcome the effects of any impediments identified through
that analysis, and maintain records reflecting the analysis
and actions in this regard.” 24 C.F.R. §
91.225(a)(1) (1995); see also HUD Final Rule,
Consolidated Submission for Community Planning and
Development Programs, 60 Fed. Reg. 1, 878, 1, 905, 1, 910, 1,
912 (Jan. 5, 1994).[4] This fair-housing planning analysis, known
as the “Analysis of Impediments in Fair Housing”
(“AI”), required jurisdictions certifying
compliance with the AFFH obligation to: (1) conduct an AI,
(2) take appropriate steps to address impediments identified
through the AI, and (3) maintain related records.
See 24 C.F.R. § 91.225(a)(1) (1995).
HUD
issued guidance on the AI process in a 1996 Fair Housing
Planning Guide. See generally U.S. Dep't of
Housing and Urban Development, Office of Fair Housing and
Equal Opportunity, Fair Housing Planning Guide (1996)
(“1996 Fair Housing Planning Guide”),
available at
https://www.hud.gov/sites/documents/fhpg.pdf. This Guide,
which is still available, explains that, because HUD had
“too often” failed in trying “to prescribe
national remedies for local situations, ” HUD developed
the AI process to allow local communities to meet the AFFH
obligation by “defin[ing] the problems, develop[ing]
the solutions, and be[ing] held accountable for meeting the
standards they set for themselves.” Id. at
i. As a definitional matter, HUD clarified that
actions “affirmatively further fair housing” when
“steps are taken to assure that the housing is fully
available to all residents of the community, regardless of
race, color, national origin, gender, handicap, or familial
status.” Id. at 5-4. To this end, “all
affected people in the community” needed to “be
at the table and participate in making those
decisions.” Id. at i. The guidance
document provides suggestions for adhering to the three
components of the fair housing planning process, but none of
the recommendations is binding. See Id. at 2-7 to
-26.
The AI
process reflected HUD's commitment at the time “to
devolved decisionmaking, ” id. at i,
and did “not generally” require that AIs be
submitted to HUD for review, id. at 2-24.
“Instead, as part of the Consolidated Plan performance
report, the jurisdiction” was required to provide
“a summary of the AI and the jurisdiction's
accomplishments during the past program year” to HUD,
which “could request the AI in the event of a complaint
and could review the AI during routine on-site
monitoring.” Id. at 2-24. HUD recommended, but
did not require, “that jurisdictions conduct or update
their AI at least once every 3 to 5 years (consistent with
the Consolidated Plan cycle).” Id. at 2-6.
Weaknesses
in the AI process as a method of ensuring compliance by
program participants with the AFFH requirement were exposed
“through litigation and reports and testimonies for
some years.” U.S. Gov't Accountability Office
(“GAO”), Rpt. No. GAO-10-905, Housing and
Community Grants: HUD Needs to Enhance Its Requirements and
Oversight of Jurisdictions' Fair Housing Plans 2 (2010)
(“GAO 2010 Report”), available at
https://www.gao.gov/assets/320/311065.pdf. These shortcomings
were recognized by HUD in a 2009 internal study based on
review of 45 AIs. See generally U.S. Dep't of
Housing and Urban Development, Office of Policy Development
and Research, Analysis of Impediments Study (2009)
(“HUD 2009 AI Study”), available at
http://www.documentcloud.org/documents/365748-hud-reporting-compliance-report.html.
For this study, HUD had solicited AIs from 70 randomly
selected jurisdiction but received only 45, signaling an
initial “cause for concern.” Id. at 15.
Based
on the 45 AIs submitted, HUD observed that “[c]itizens
seeking to obtain AIs would not consistently find them
readily available, ” that “many of the AIs
obtained were completed over ten years ago and need to be
updated, ” that “about three-fourths were
prepared by a single author or organization, ” and that
“a sizable proportion of the AIs reviewed did not
contain key aspects recommended for inclusion by the [1996]
Fair Housing Planning Guide.” Id. at 6-7, 15.
HUD found that “[m]any jurisdictions have obviously
taken the AI planning process very seriously, ” but
that the agency needed “to assess and work with [its]
state and local partners, governmental and private, to
explore options for improving the AI process and taking steps
for translating it into positive action on the fair housing
front.” Id. at 16. HUD recommended that the
agency: (1) provide “enhanced [ ] guidance and
assistance [to] increase completeness and quality” of
AIs, which “could take the form of providing better
access to federal data tools, broad-based training options or
in some cases perhaps more in-depth technical
assistance”; (2) find “other possible revenue
streams” to ensure jurisdictions have funding sources
for conducting AIs; (3) update the 1996 Fair Housing Planning
Guide; and (4) provide public access to AIs. Id. at
16-17. Noting “a basic fact with AIs-that jurisdictions
are not currently required to submit them to HUD, ”
id. at 17, the HUD 2009 AI Study pointed out that
the agency has “the enforcement authority to decertify
a jurisdiction's Consolidated Plan if the AI is
inadequate, ” id. Nevertheless, the HUD 2009
AI Study cautioned that any consideration of
“widespread HUD review, approval and/or
enforcement” must “observe the fact that AIs are
essentially local planning documents, and that options and
resources available to localities vary widely.”
Id. at 18.
The HUD
2009 AI Study was followed the next year by a more extensive
study by the GAO, based on review of 441 AIs, that identified
HUD's “limited regulatory requirements and
oversight” as the main reason for weaknesses in the AI
process. GAO 2010 Report (summary page).[5] In particular,
the GAO cited the absence of requirements in the regulations
“for updating AIs or their format” and for
grantees “to submit AIs to the department for
review.” Id. As a result, AIs were
“outdated” and grantees placed “a low
priority on ensuring that their AIs serve[d] as effective
fair housing planning tools.” Id.; see
also Id. at 31 (finding that “29 percent of all
AIs [were] outdated, including 11 percent that were prepared
in the 1990s” and thus that the AIs “d[id] not
likely serve as effective planning documents to identify and
address current potential impediments to fair housing
choice”). The GAO made three recommendations: first,
“that HUD establish standards for grantees to follow in
updating their AIs and the format that they should follow in
preparing the documents, ” id. at 32; second,
“as part of the AI format, ” that “HUD
require grantees to include time frames for implementing
recommendations and the signatures of responsible
officials” to enhance transparency and accountability,
as well as to facilitate a way to measure jurisdictions'
progress, id. at 32-33; and, finally, that
“HUD require, at a minimum, that grantees submit their
AIs to the department on a routine basis and that HUD staff
verify the timeliness of the documents, determine whether
they adhere to established format requirements, assess the
progress that grantees are achieving in addressing identified
impediments, and help ensure the consistency between the AIs
and other required grantee reports, ” id. at
33.
According
to HUD, the GAO 2010 Report's recommendations for clearer
standards, uniform formats, and increased transparency and
accountability in the AI process, with HUD review of AI
submissions, “reinforced” the agency's own
analysis of the deficiencies in the AI process. Proposed AFFH
Rule, 78 Fed. Reg. at 43, 713. In drafting the new rules to
overhaul the AI process, HUD sought specifically to
“respond[ ] to the GAO's observations, ”
id. at 43, 711, as described below.
4.
HUD's Regulation of Grantees through the AFFH
Rule
By
2013, HUD had determined that the then-existing requirements
for program participants to carry out their obligations to
affirmatively further fair housing needed to be
“refine[d], ” and, thus, HUD sought to provide
“a fair housing assessment and planning process”
to “better aid” participants in
“fulfill[ing] this statutory obligation.”
Id. at 43, 710. HUD's analysis stemmed
“from substantial interaction with program participants
and advocates” over “several years, ” as
well as from the GAO 2010 Report. Id. at 43, 713. On
July 19, 2013, HUD issued a Proposed Rule to “provide
direction, guidance, and procedures for program participants
to promote fair housing choice.” Id. at 43,
711. Addressing the concern raised by the GAO about the lack
of accountability, attributable both to the 1996 Fair Housing
Planning Guide's focus on “extensive
suggestions” without “fully articulat[ing] the
goals that AFFH must advance, ” and to the lack of any
requirement for AIs to be “submitted to HUD for review,
” the proposed rule “improve[d] 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.” Id. at 43, 713. On July 16, 2015, the
AFFH Rule was finalized. See generally AFFH Rule.
The
AFFH Rule makes significant changes to HUD's regulations
in order to remedy the noted deficiencies in the AI process,
including by adding: (1) new clarifying definitions,
see 24 C.F.R. § 5.152; (2) new regulations for
submitting an Assessment of Fair Housing (“AFH”),
see generally Id. pt. 5, (3) new requirements for
community participation, consultation, and coordination,
applicable to both AFHs and Consolidated Plans, see
Id. §§ 5.158(a), 91.100(a)(1), 91.105(a); (4)
new recordkeeping requirements, see Id. §
5.168; and (5) requirements to ensure that the regulations
governing Consolidated Plans also apply to the AFH
development process, see Id. pt. 91. These changes
are explained in turn below.
First,
the AFFH Rule adds a definition of “affirmatively
furthering fair housing, ” 80 Fed. Reg. at 42, 353, to
mean “taking meaningful actions, in addition to
combating discrimination, that overcome patterns of
segregation and foster inclusive communities free from
barriers that restrict access to opportunity based on
protected characteristics. Specifically, affirmatively
furthering fair housing means taking meaningful actions that,
taken together, address significant disparities in housing
needs and in access to opportunity, replacing segregated
living patterns with truly integrated and balanced living
patterns, transforming racially and ethnically concentrated
areas of poverty into areas of opportunity, and fostering and
maintaining compliance with civil rights and fair housing
laws.” 24 C.F.R. § 5.152. The Rule also defines
other key terms, adding a “definition of
‘data' to collectively refer to ‘HUD-provided
data' and ‘local data,' both of which terms are
also defined, ” AFFH Rule, 80 Fed. Reg. at 42, 277, and
“[r]evis[ing] the definition of
‘integration'” and “segregation”
to “provide greater clarity as to the meaning” of
these terms, id.
HUD
elected not to revise certain terms and instead opted to
strengthen various provisions of the Rule. For example, in
response to comments that HUD should “[s]trengthen the
definition of ‘community participation'” in
the proposed rule, id. at 42, 303, HUD responded
that “[t]he additional detail that commenters are
seeking about community participation can be found in [24
C.F.R.] § 5.158, entitled ‘Community
participation, consultation, and coordination, '”
id., which is discussed in more detail below.
Second,
the AFFH Rule adds a new part to the Code of Federal
Regulations addressing “Affirmatively Furthering Fair
Housing, ” see Id. at 42, 352; 24 C.F.R. pt.
5, that requires jurisdictions to conduct an AFH “for
the purpose of examining its programs, jurisdiction, and
region, and identifying goals to affirmatively further fair
housing and to inform fair housing strategies” in their
Consolidated Plans. 24 C.F.R. § 5.154(d). Program
participants must submit their first AFHs 270 days prior to
their first scheduled Consolidated Plan after a certain date,
which date is staggered depending on the type of participant.
See Id. §§ 5.160(a)(1)(i), 5.151. Given
this timing, “the AFFH Rule contemplates that many
program participants will not be required to submit an AFH
until years after the July 2015 promulgation of the Rule,
” Defs.' Opp'n PI at 9, but the rule
nonetheless “makes clear that program participants are
still required to comply with their longstanding AFFH
obligations regardless when the AFH submission requirement is
triggered, ” id. Program participants are
therefore required to “continue to conduct an [AI] . .
. in accordance with requirements in effect prior to August
17, 2015, ” until their AFH submission requirement is
triggered. 24 C.F.R. § 5.151.
The
AFFH Rule lays out in detail the required contents of an AFH.
Using HUD-provided data and HUD-created “Assessment
Tools, ” the AFH must include “an analysis of
fair housing data, an assessment of fair housing issues and
contributing factors, and an identification of fair housing
priorities and goals.” Id. § 5.152. A
program participant's AFH must “address integration
and segregation; racially or ethnically concentrated areas of
poverty; disparities in access to opportunity; and
disproportionate housing needs based on race, color,
religion, sex, familial status, national origin, and
disability, ” and “assess the jurisdiction's
fair housing enforcement and fair housing outreach capacity,
” id. §5.154(d), and must identify
various “contributing factors” that impede
furthering fair housing, id. § 5.154(d)(3)-(4).
In addition, the AFH must recommend “[s]trategies and
actions” to “affirmatively further fair
housing”; must “include a concise summary of the
community participation process, public comments, and efforts
made to broaden community participation in the development of
the AFH”; must “provide a summary of progress
achieved in meeting the goals and associated metrics and
milestones of the prior AFH”; and must “identify
any barriers that impeded or prevented achievement of
goals.” Id. § 5.154(d)(5)-(7). In
creating an AFH, the program participant must “consult
with other public and private agencies that provide assisted
housing, health services, and social services, ”
id. § 91.100(a)(1), at “various points in
the fair housing planning process, ” including,
“at a minimum, ” during “the development of
both the AFH and the consolidated plan, ” id.
§ 91.100(e)(3); see also Id. § 5.158(a).
As a
third change, the AFFH Rule imposes new requirements for
community participation, consultation, and coordination
applicable to the development of both AFHs and Consolidated
Plans. For example, to “ensure that the AFH, the
consolidated plan, and the PHA Plan and any plan incorporated
therein are informed by meaningful community participation,
program participants should employ communications means
designed to reach the broadest audience.” Id.
§ 5.158(a). These communications can 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 on the Internet, ” among other
locations. Id. In addition, Consolidated Plan
program participants must follow the existing requirements of
part 91, which requires consultation with various agencies
and organizations as well as the creation of a “citizen
participation plan” in the preparation of a
Consolidated Plan, in preparing their AFHs. See Id.
§ 91.105. The AFFH Rule reiterates that “[p]rogram
participants must certify that they will affirmatively
further fair housing” in accordance with preexisting
certification requirements laid out in 24 C.F.R. part 91 (for
Consolidated Plan program participants) and part 903 (for PHA
Plan program participants). Id. § 5.166(a).
Notably, the AFFH Rule also enhances the certification
requirements in part 91, requiring that program participants
now certify that they “will take no action that is
materially inconsistent with [their] obligation to
affirmatively further fair housing, ” id.
§ 91.225(a)(1); see also AFFH Rule, 80 Fed.
Reg. at 42, 301-02, which certification is also enhanced by
the new clarifying definition of AFFH requirement.
Once
completed, HUD reviews each AFH “to determine whether
the program participant has met the requirements for
providing its analysis, assessment, and goal setting, as set
forth in § 5.154(d).” 24 C.F.R. §
5.162(a)(1). HUD will not accept an AFH if it finds that
“the AFH or a portion of the AFH is inconsistent with
fair housing or civil rights requirements or is substantially
incomplete, ” id. § 5.162(b)(1), or that
the AFH was “developed without the required community
participation or the required consultation, ”
id. § 5.162(b)(1)(ii)(A). The AFFH Rule sets up
an iterative process if an AFH is rejected, in which HUD must
provide notice of the reasons for nonacceptance and as well
as an opportunity for the program participant to address
those reasons. Id. § 5.162(a)(1), (c). The AFFH
Rule also links the required AFH to the Consolidated Plans
that housing block grant recipients are required to submit
every three to five years. See Id. §§
5.1560(d), 570.302. Recipients are required to have an
accepted AFH before HUD will approve their Consolidated
Plans. See Id. § 5.162(d). Failure to timely
submit a compliant AFH might therefore result in a delay in
HUD's approval of the recipient's Consolidated Plan,
which, in turn, might “automatically result in the loss
of the [block grant] funds to which the jurisdiction would
otherwise be entitled.” Id. §
5.162(d)(1).
Fourth,
the AFFH Rule imposes new recordkeeping provisions, requiring
“[e]ach program participant” to “establish
and maintain sufficient records to enable HUD to determine
whether the program participant has met the
requirements” of the Rule. Id. §
5.168(a). These records include, inter alia, records
“relating to the program participant's AFH and any
significant revisions to the AFH, ”
“demonstrating compliance with the consultation and
community participation requirements” and “the
actions the program participant has taken to affirmatively
further fair housing, ” “relating to the program
participant's efforts to ensure that housing and
community development activities . . . are in compliance with
applicable nondiscrimination and equal opportunity
requirements, ” and “[a]ny other evidence relied
upon by the program participant to support its affirmatively
furthering fair housing certification.” Id.
§ 5.168(a)(1)-(3), (5), (7). These new recordkeeping
requirements help remedy concerns that had been expressed
before promulgation of the Rule regarding the lack of records
maintained by some program participants.
Finally,
the AFFH Rule revises many of the provisions in parts 91,
903, and others, to ensure that the regulations governing the
development process apply in virtually the same way to both
the Consolidated Plan process and the AFH process. See,
e.g., id. §§ 91.105 (citizen
participation plans), 91.205 (housing and homeless needs
assessment), 91.215 (strategic plan), 91.220 (action plan),
91.225 (certifications).
5.
HUD's Promulgation of Assessment Tools
Of
particular salience here is the AFFH Rule's requirement
that program participants use HUD-created “Assessment
Tools” to complete their AFHs. See AFFH Rule,
80 Fed. Reg. at 42, 272. The term “Assessment
Tool” “refers collectively to any forms or
templates, ” and accompanying instructions, provided by
HUD that “program participants must use to conduct and
submit an AFH pursuant to § 5.154.” 24 C.F.R.
§ 5.152. HUD issues “different Assessment Tools
for different types of program participants, ” and the
availability of Assessment Tools is “published in the
Federal Register.” AFFH Rule, 80 Fed. Reg. at 42, 277.
Participants are required to use Assessment Tools in creating
their AFHs, so if HUD has not yet issued a finalized
Assessment Tool for the relevant category of participants,
the participant's deadline for submitting a compliant AFH
is extended to a date not less than “9 months from the
date of publication” of the appropriate Assessment
Tool. 24 C.F.R. § 5.160(a)(1)(ii). The Assessment Tools
themselves are not included in the AFFH Rule, however, and
are separately issued by HUD, “subject to periodic
notice and opportunity to comment, ” to maintain
approval by the Office of Management and Budget
(“OMB”) under the Paperwork Reduction Act.
Id. § 5.152.
HUD's
first (and only fully implemented) Assessment Tool, the Local
Government Assessment Tool (“LG2015”), was
published in December 2015, see generally LG2015
Tool Announcement, 80 Fed. Reg. 81, 840, which triggered the
requirement for local government program participants to
submit AFHs, id. In January 2017, after two rounds
of notice and comment, and with approval from the OMB, HUD
issued a new iteration of this tool, called LG2017. See
generally LG2017 Tool Announcement, 82 Fed. Reg. 4, 388;
Defs.' Opp'n PI, Ex. 1, Decl. of Krista Mills
(“HUD Decl.”) ¶ 35, ECF No.
33-1.[6] As of the initiation of this lawsuit,
local government agencies were the only type of program
participants for which AFHs were required. See
Defs.' Opp'n PI at 11.
6.
HUD's 2018 Notices
This
lawsuit was initially prompted by HUD's notice, on
January 5, 2018, extending the deadline for local governments
to submit their AFHs “until their next AFH submission
deadline that falls after October 31, 2020.” HUD
Notice, Affirmatively Furthering Fair Housing: Extension of
Deadline for Submission of Assessment of Fair Housing for
Consolidated Plan Participants (“AFH Extension
Notice”), 83 Fed. Reg. 683, 684 (Jan. 5, 2018). HUD
explained that, based on review of the first 49 local
government AFH submissions, “local government program
participants need additional time and technical assistance
from HUD to adjust to the new AFFH process and complete
acceptable AFH submissions.” Id. at 685. The
notice of the extension also “invite[d] public comment
for a period of 60-days on the extension, ” which
comments would be considered in HUD's “ongoing
process of reviewing the Assessment of Fair Housing Tool for
Local Governments.” Id.
Five
months later, on May 23, 2018, HUD published three additional
notices in the Federal Register regarding AFH deadlines and
the LG2017 Tool, two of which are challenged in this lawsuit.
First, HUD announced the immediate withdrawal of the January
5, 2018, notice extending AFH deadlines until October 2020.
See generally HUD Notice, Affirmatively Furthering
Fair Housing: Withdrawal of Notice Extending the Deadline for
Submission of Assessment of Fair Housing for Consolidated
Plan Participants (“Extension Withdrawal
Notice”), 83 Fed. Reg. 23, 928, 23, 928 (May 23, 2018).
This announcement stated that, “[i]f HUD later finds it
prudent to revise the regulations, including by revising the
submission schedule, HUD will publish a notice of proposed
rulemaking to that effect for public comment.”
Id.
The
remaining two notices published that same day, May 23, 2018,
are at issue in this lawsuit. As noted, HUD withdrew the
LG2017 Tool, the second iteration of the Local Government
Assessment Tool, because “HUD has become aware of
significant deficiencies in the Tool impeding completion of
meaningful assessments by program participants, ” such
that the Tool “is inadequate to accomplish its purpose
of guiding program participants to produce meaningful
AFHs.” LG2017 Withdrawal Notice, 83 Fed. Reg. at 23,
922. As support, HUD provided that “[t]aken together,
63% of the 49 AFHs submitted were either: (a) Returned as
unacceptable and have not been successfully resubmitted, or
(b) accepted only after the program participant supplied
necessary additional information and revisions.”
Id. at 23, 924. In HUD's view, because only 37
percent of the initial 49 submissions had been deemed
acceptable, “the Tool was unduly burdensome and not
working as an effective device to assist program participants
with the creation of acceptable and meaningful AFHs with
impactful fair housing goals.” Id. at 23, 923.
Given the “significant problems” with the LG2017
Tool, HUD had “provided substantial technical
assistance to this initial round of program participants,
even for the AFHs that have been accepted”-but the
agency “does not have the resources to continue to
provide program participants with the level of technical
assistance that they would need to submit acceptable AFHs
using the current version of the Local Government Assessment
Tool.” Id. at 23, 925. HUD stated that it
would “review the Assessment Tool and its function
under the AFFH regulations to make it less burdensome and
more helpful in creating impactful fair housing goals,
” id. at 23, 922, and “solicit[ed]
comments and suggestions geared to creating a less burdensome
and more helpful AFH Tool for local governments, ”
which comments were due by July 23, 2018.
Id.[7]
Finally,
in the third notice published on the same day, HUD explained
that, in light of the withdrawal of the LG2017 Tool,
“currently no type of program participant has an
Assessment Tool available for use, ” and that program
participants must therefore rely on use of the AI. AI
Reliance Notice, 83 Fed. Reg. at 23, 927. HUD stressed that
Consolidated Plan program participants “must
nonetheless continue to comply with existing, ongoing legal
obligations to affirmatively further fair housing” by
“conduct[ing] an analysis of impediments (AI) to fair
housing choice within the jurisdiction, tak[ing] appropriate
actions to overcome the effects of any impediments identified
through that analysis, and maintain[ing] records reflecting
the analysis and actions.” Id. The latter two
directions-regarding taking “appropriate actions”
and recordkeeping-effectively remind program participants
about the continuing effective parts of the AFFH Rule,
including those set out in 24 C.F.R § 5.152 (defining
“[a]ffirmatively furthering fair housing”),
§ 5.168 (recordkeeping requirements, applicable,
inter alia, to “each consolidated plan program
participant”); § 570.490 (recordkeeping
requirements for States); § 574.530 (recordkeeping
requirements for HOPWA grantees); and § 576.500
(recordkeeping requirements for ESG Program). To assist,
“[t]he data HUD ha[d] developed in order to implement
the AFFH rule w[ould] remain available for program
participants to use in conducting their AIs.” AI
Reliance Notice, 83 Fed. Reg. at 23, 927.
HUD
also informed participants that “if HUD believes the AI
or actions taken to affirmatively further fair housing”
are “inadequate, ” then “HUD may require
submission of the full AI and other documentation.”
Id. HUD can also “question the
jurisdiction's AFFH certification by providing notice to
the jurisdiction that HUD believes the AFFH certification to
be inaccurate and provide the jurisdiction an opportunity to
comment.” Id. at 23, 928.
Despite
withdrawal of the LG2017 Tool, many components of the AFFH
Rule remain in effect. For example, the community
participation, consultation, and coordination requirements
stated in § 5.158 remain active insofar as they require
participants to “ensure that the AFH, the
consolidated plan, and the PHA Plan and any plan
incorporated therein are informed by meaningful community
participation.” 24 C.F.R. § 5.158 (emphasis
added). Thus, program participants submitting Consolidated
Plans must still “employ communications means designed
to reach the broadest audience” by, “as
appropriate, ” “publishing a summary of each
document in one or more newspapers of general
circulation” and “making copies of each document
available on the Internet, on the program participant's
official government Web site, and as well at libraries,
government offices, and public places.” Id.
Similarly, program participants must continue to
“certify that they will affirmatively further fair
housing when required by statutes and regulations governing
HUD programs, ” id. § 5.166, including by
complying with the revised enhanced certification
requirement, in § 91.225(a)(1), that participants
certify that they “will take no action that is
materially inconsistent with [their] obligation to
affirmatively further fair housing, ” id.
§ 91.225(a)(1), consistent with the new definition.
Participants must also continue to satisfy the new
recordkeeping requirements by “establish[ing] and
maintain[ing] sufficient records to enable HUD to determine
whether the program participant has met the requirements of
this subpart, ” id. § 5.168(a), and must
“make these records available for HUD inspection,
” id.
HUD
confirmed at the motions hearing what is plain from the AFFH
Rule: the new definitions in the AFFH Rule apply to
Consolidation Plans, Mot. Hr'g at 61:15-18 (responding to
Court query whether “these new definitions [ ] remain
active and, certainly, apply to consolidation plans, ”
HUD counsel stated “Yes”), and to the AI process
under the 1996 Fair Housing Planning Guide, id. at
62:3-25 (responding to Court query whether “that
guidance document use[s] any of the [ ] terms that are newly
defined in the rule, ” HUD counsel stated: “So
you're asking whether the definitions in that-the rule
would now be incorporated . . . . Yeah. . . . And so, now, we
have a definition that-you know, through duly promulgated
rule that would apply by law.”). Thus, HUD acknowledges
that the revived AI process is not the same process operating
prior to the AFFH Rule, due, at a minimum, to both the new
definitions in the Rule that provide more clarity about the
AFFH statutory requirement, and the provision of HUD-provided
data to encourage more “evidence-based decision
making.” Id. at 64:17-21; see also
Id. at 63:18-21 (responding to Court's query whether
“[t]his AI process that we have reverted to is not the
same process that it was pre-2015 AFFH rule, right?”
HUD counsel stated “That's right, Your
Honor”); id. at 64:8-11 (responding to
Court's query whether “[t]here is much more clarity
[in the AI process] because of those definitions as to what
HUD expects. Is that right?” HUD counsel stated
“Absolutely, Your Honor”).
In
short, even without an Assessment Tool in place, program
participants, including local government agencies, remain
bound by key definitional, recordkeeping, and enhanced
certification components of the AFFH Rule, and, importantly,
to complying with the AFFH statutory requirement. See
Id. at 69:7-15 (HUD counsel stating, “the standard
for both satisfying your obligations under an AI and an AFH
is affirmatively furthering fair housing, ” and that
“the AFH process is sort of a more targeted way of
going through that . . . a little bit more resource
intensive, . . . [b]ut the standard that the jurisdictions
are subject to either way is affirmatively furthering fair
housing”).
B.
The Instant Litigation
1.
The Plaintiffs
The
plaintiffs in this case are three non-profit organizations
who work to further fair housing across the country. The
National Fair Housing Alliance (“NFHA”) is a
“national, nonprofit, public service organization,
” incorporated in Virginia, which serves as a
“nationwide alliance of private, nonprofit, fair
housing organizations, including organizations in 28
states.” Am. Compl. ¶ 16. NFHA's
“mission is to promote residential integration and
combat discrimination in housing based on race, national
origin, disability, and other protected classes covered by
federal, state, and local fair housing laws.”
Id. Texas Low Income Housing Information Service,
Inc. (“Texas Housers”), is a Texas-based
non-profit corporation and “the principal statewide
advocacy group focused on expanding housing opportunities for
low-income residents of Texas.” Id.
¶¶ 3, 17. Texas Appleseed is similarly a
Texas-based non-profit organization that aims “to
promote social and economic justice for all Texans, including
by ensuring that all Texas families can recover in the wake
of natural disasters; that communities are rebuilt to be more
resilient; and that all families have the opportunity to live
in safe, decent neighborhoods with equal access to
educational and economic opportunity.” Id.
¶ 18.
All
three plaintiffs allege that they have “devoted
considerable resources” to the development and
implementation of the AFFH Rule. Id. ¶¶
119, 143. NFHA “was one of the leading advocates
pushing for the creation of the AFFH Rule to replace”
the AI process, id. ¶ 142, and “[o]nce
HUD issued the final AFFH Rule, NFHA and its members worked
in local communities across the country to generate effective
community participation and substantive provisions in AFHs
that would make meaningful differences to communities,
id. ¶ 144. NFHA members “actively
participated in the AFH planning process in many
jurisdictions, with NFHA providing resources, guidance, and
strategic help.” Id. Likewise, “[s]ince
the AFFH Rule's promulgation, ” Texas Housers and
Texas Appleseed (the “Texas Plaintiffs”) have
also “devoted resources to the development of effective
...