Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

National Fair Housing Alliance v. Carson

United States District Court, District of Columbia

August 17, 2018

NATIONAL FAIR HOUSING ALLIANCE, et al., Plaintiffs,
v.
BENJAMIN C. CARSON, SR., M.D., in his official capacity as Secretary of Housing and Urban Development, et al., Defendants.

          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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.