Lawsuit against HUD by Civil Rights Groups

November 2, 2017

Poverty & Race Research Action Council
Kimberly Hall, khall@prrac.org

Last week, civil rights groups filed a lawsuit to challenge the Trump administration’s recent suspension of the Small Area Fair Market Rent (SAFMR) Rule. This rule, issued by the Obama Administration in November 2016 was a major achievement in expanding fair housing choice for voucher households outside of high poverty areas.

The small area FMR rule would have changed the way that housing voucher values are calculated in 24 highly concentrated metropolitan areas.  The change would have given voucher families access to units in lower-poverty, higher cost areas.

Public housing authorities have historically based voucher payment standards on metropolitan-wide average rents, despite the fact that rents vary widely from neighborhood to neighborhood. This means that this rent level is too low for families to access many units in low-poverty neighborhoods (but is often artificially inflated in high-poverty areas, with landlords reaping the profits). The new rule instead requires PHAs to use zip-code level rent calculations, providing households with broader access to units in higher-rent neighborhoods, which often have high-performing schools, robust job markets, and other assets.

The Trump Administration’s suspension of the rule keeps in place the metropolitan-area wide system for calculating rents, except for the rare PHAs that voluntarily adopt SAFMRs. The decision to delay implementation for two years will prevent voucher holders from moving outside areas of poverty and in search of better opportunities. The suspension will also perpetuate voucher concentration and racial segregation in the affected metro areas.

During the Obama administration, HUD carefully designed the rule through extensive public commenting and research, including a number of tenant protections and documenting its conclusion that the rule would be an effective and necessary policy tool to help thousands of families across the country.

In contrast, the Trump administration’s suspension of the rule failed to follow even the basic principles of law required of federal agencies when they change or rescind a regulation. The new lawsuit is brought on behalf of voucher families in Hartford and Chicago, along with the Open Communities Alliance, a Connecticut based fair housing organization.  For further reading, the complaint in OCA v. Carson can be found here.

The mandatory SAFMR rule applies to PHAs in 24 metro areas (covering approximately 175 PHAs): Atlanta-Sandy Springs-Marietta (GA), Bergen-Passaic (NJ), Charlotte-Gastonia-Rock Hill (NC-SC), Chicago-Joliet-Naperville (IL), Colorado Springs (CO), Fort Lauderdale-Pompano Beach-Deerfield Beach (FL), Fort Worth-Arlington (TX), Gary (IN), Hartford-West Hartford-East Hartford (CT), Jackson (MS), Jacksonville (FL), Monmouth-Ocean (NJ), North Port-Bradenton-Sarasota (FL), Palm Bay-Melbourne-Titusville (FL), Philadelphia-Camden-Wilmington (PA-NJ-DE-MD), Pittsburgh (PA), Sacramento–Arden-Arcade—Roseville (CA), San Antonio-New Braunfels (TX), San Diego-Carlsbad-San Marcos (CA), Tampa-St. Petersburg-Clearwater (FL), Urban Honolulu (HI), Washington-Arlington-Alexandria (DC-VA-MD Metro Area), West Palm Beach-Boca Raton-Delray Beach (FL), and Dallas-Plano-Irving (TX). On August 11, HUD issued letters to PHAs in 23 of these areas suspending the rule for at least two years. The only metropolitan area where the rule was not suspended was Dallas, where HUD is required to use SAFMRs pursuant to a settlement agreement reach in a prior fair housing lawsuit.