Memorandum on Redressing Discriminatory Housing Practices and Policies

On January 26, 2021, President Biden signed a “Memorandum on Redressing Our Nation’s and the Federal Government’s History of Discriminatory Housing Practices and Policies.” The Memorandum directs the Secretary of HUD to examine the effects of two rules concerning “affirmatively furthering fair housing” (AFFH) and “discriminatory effects” (also known as “disparate impact”) that were issued by HUD at the end of the Trump administration.  Based on this examination, the Secretary is directed to take any necessary steps to implement the Fair Housing Act in a manner that affirmatively furthers fair housing and prevents practices with an unjustified discriminatory effect.  This examination is expected to result in new regulatory actions in both areas.

Rules on both AFFH and “discriminatory effects” under the Fair Housing Act have proven particularly contentious. The AFFH rule, originally issued during the Clinton Administration and developed further in the Obama Administration, required jurisdictions that receive federal housing funds to assess what patterns of housing discrimination they may have and develop plans to diminish them. It also included a data-based tool for assessments. The “discriminatory effects” rule, originally promulgated during the Obama Administration, sets forth the test for determining whether a facially neutral policy or practice may violate the Fair Housing Act.

On August 7, 2020, HUD issued a rule mainly repealing the AFFH rule and accompanying guidance. The rule asserts the former rule and guidance were used to force states and localities to change zoning and other land use laws, which was not required by law or consistent with federalism principles and statutes protecting local control.  A separate HUD rule, issued September 3, 2020, amended HUD’s Fair Housing Act regulation to revise the test for determining whether a practice has an unjustified discriminatory effect, to better reflect the Supreme Court’s reading of the law.      

The January 26, 2021 Memorandum recounts that:  

“During the 20th century, Federal, State, and local governments systematically implemented racially discriminatory housing policies that contributed to segregated neighborhoods and inhibited equal opportunity and the chance to build wealth for Black, Latino, Asian American and Pacific Islander, and Native American families, and other underserved communities.”

The Memorandum observes that, although the Congress enacted the Fair Housing Act more than fifty years ago, “access to housing and creation of wealth through homeownership have remained persistently unequal in the United States.” It then affirms the Federal Government’s critical role “in overcoming and redressing this history of discrimination” and that “[t]his goal is consistent with the Fair Housing Act, which imposes on Federal departments and agencies the duty to ‘administer their programs and activities relating to housing and urban development . . . in a manner affirmatively to further fair housing (42 U.S.C. 3608(d)).  

The Memorandum notes, “[t]his is not only a mandate to refrain from discrimination but a mandate to take actions that undo historic patterns of segregation and other types of discrimination and provide access to long-denied opportunities.”