Archive

Posts Tagged ‘HUD’

HUD Codifies Disparate Impact

September 16th, 2013 No comments

By: Joseph Squadroni
Blog Category: Housing/Entitlement Programs

Early last month, the US Department of Housing and Urban Development (HUD) codified its prohibition under the Fair Housing Act (FHA) against housing practices  that have a disparate impact on members of certain protected classes, including race.  While not changing the substance of the law in any way—the disparate impact standard has been employed by HUD and the courts for over 40 years—the new rule brings about a formalistic change in the law with several byproducts.[1]

First, the rule will provide a clear and uniform national standard under which to apply the claim of disparate impact.  This means that the minor degrees of variation in the ways different circuit courts have applied the disparate impact standard (i.e. with respect to who bears the burden of proving a less discriminatory alternative housing practice) will be fully resolved.[2] The use of disparate impact claims has long protected home buyers from discrimination on the basis of race, making loans more readily available at lower costs to lower income families, many of whom are minorities.

Second, and more significantly, the new regulation will serve as a protection of the disparate impact standard should the Supreme Court decide to hear the case Mount Holly v. Mt. Holly Gardens Citizens in Action.  The case involves a constitutional challenge to the use of disparate impact claims and many think that a conservative majority will rule against the standard.[3]  With the passing of the rule, HUD seeks to protect the standard by hoping the Court will defer to its judgment in interpreting the breadth of its enforcement power under the FHA.[4]

Critics of disparate impact rules range from those who argue that they force banks and creditors to ignore risk factors associated with granting loans out of fear of being prosecuted to those who are concerned that the new rule will lead to an increase in frivolous lawsuits.[5]  Given the long-standing history and use of the disparate impact standard, my opinion is that it is unlikely the disparate impact standard will be struck down entirely.  It is more likely that if any change occurs, it will be only a heightened showing of the disparate impact claimed. Or, perhaps, a doing away with the “less discriminatory alternative” provision.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.


[1] Gregory D. Squires, Politics, HUD’s Disparate Impact Rule Praised by Fair Housing Advocates: Misunderstood by Critics, Huffington Post (Feb. 24, 2013), http://www.huffingtonpost.com/gregory-d-squires/huds-disparate-impact-rul_b_2755023.html.

[2] Id.

[3] Paul Sperry, CAMPS Real Time Legislative Information Under the Dome, HUD Formalizes ‘Disparate Impact’ Lending Rule To Sway Supreme Court, California Association of Mortgage Professionals (Mar. 9, 2013), http://realestatemarbles.com/campga/2013/03/09/hud-formalizes-disparate-impact-lending-rule-to-sway-supreme-court/.

[4] Id.

[5] Squires, supra note 1.

Federal Budget Cuts Will Harm Housing Programs for Poor Americans

August 9th, 2013 No comments

By: Andrea Petrou
Blog Category: Housing/Entitlement Programs

The Budget Control Act, a law passed in 2011, created $85 billion dollars in automatic budget reductions.  When the mandatory budget cut begins to take effect, agencies and programs that help the poor will suffer as a result. As agencies begin to administer the appropriate funds and carry out the respective cuts, aid will be denied to many low-income families that are in dire need of this extra money.  The Department of Housing and Urban Development estimates that there will be roughly about 125,000 individuals and families that will risk losing their housing and about 100,000 homeless will be removed from homeless shelters. Statistics on average annual incomes of those with public housing are alarming.  The average annual income of a public housing resident in Washington is a mere $12,911.

Sheila Crowley, the President of the National Low Income Housing Coalition, stated, “anything you take out of HUD is going to reduce services and cut programs.” In addition, to the housing programs that will suffer the loss, other programs such as job training for the unemployed, will also suffer harsh consequences.   Although these budget cuts are in their beginning stages, the country will have to wait to see the negative effects on housing for the poor. However, it is alarming that those who will suffer are those who need the help the most, especially those who make insufficient annual incomes.

 

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

Source:

Annie Lowrey, As Automatic Budget Cuts Go Into Effect, Poor May Be Hit Particularly Hard. N.Y.Times, March 3, 2013, at A13, available at http://www.nytimes.com/2013/03/04/us/politics/poor-face-most-pain-as-automatic-budget-cuts-take-effect.html?ref=us&_r=1&

Low-Income Households Get Relief From Hurricane Sandy

June 3rd, 2013 No comments

By *Jennifer Rutter

Blog Topic: Housing/Entitlement Programs

Low-Income Households Get Relief From Hurricane Sandy

Hurricane Sandy produced devastating affects on hundreds of thousands of people, but its aftermath has had a greater impact on low-income households.  Of the Sandy-related federal aid claims made by New York and New Jersey households, 43% had an income less than $30k while 68% of renters that made FEMA claims were low-income.[1]

Fortunately, the Department of Housing and Urban Development (HUD) has acted quickly and released the first round of the $16 billion in Community Development Block Grant funding from the Disaster Relief Appropriations Act of 2013 designed to restore housing and revitalize the economy in the regions most impacted by Hurricane Sandy.[2]

New Jersey’s Housing Voucher Program, funded by HUD, is providing displaced low-income households with vouchers to assist people in obtaining a permanent residence, which has been especially hard for renters.[3]  Homeowners in New Jersey may also be eligible for a mortgage forgiveness if they are unemployed or underemployed.[4]

Additionally, affected homeowners with Federal Housing Administration (FHA), Fannie Mae, or Freddie Mac mortgages that are facing foreclosure have been given an additional 90 days and the FHA has agreed not to evict persons in impacted areas through April 30, 2013.[5]

Although income levels made no difference to Hurricane Sandy’s path, the government has recognized the higher necessity among the impacted low-income households and acted accordingly.

 

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.