President Donald Trump and HUD Secretary Ben Carson (Getty; iStock)
This summer, President Donald Trump warned low-income residents that the suburbs would be closed to them.
His administration overturned an Obama-era rule known as "Affirmative Promotion of Fair Housing" – a moment reinforced by a series of tweets from the president declaring victory for the suburbs across the country.
"I am excited to announce to everyone who is living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by building low-income homes in your neighborhood," President Trump tweeted in July. “Your house prices will go up based on the market and crime will go down. I've repealed the Obama-Biden-AFFH rule. Enjoy!"
The move took a long time. Federal regulators first suspended the rule in January 2018, which created a framework for local governments to eliminate discrimination and segregation in their jurisdictions.
The main reason for the change, according to the Department of Housing and Urban Development, was that the AFFH was "excessively burdensome and costly" and exceeded the authority of the federal government over zoning and land use decisions by municipalities.
Trump's tweet revealed what many have suspected behind opposition to suburban apartment building development – an aversion to low-income housing and the racial integration that comes with it.
"We knew this was coming," said Elaine Gross, founder of ERASE Racism, a Long Island-based organization that works to fight racism in local housing policy. "In the proposed rules, HUD already nodded to the municipalities and basically said," Don't worry, we won't do anything to force you to integrate. "
HUD replaced AFFH, under the supervision of Secretary Ben Carson, with a move that allows local authorities to self-certify that they are abiding by fair housing laws. Opponents of the change argue that this could further encourage governments to keep exclusion policies on the books. This could lead to multi-family developers clashing with the White House for building in suburbs – at a time when the demand for housing outside of urban centers is increasing.
With the Trump administration's fair housing setback, some developers are on the same side as MP Alexandria Ocasio-Cortez, who is usually a passionate opponent of the real estate industry. Ocasio-Cortez was quick to reject the fair living rollback and put laws in place in the House of Representatives to block the change.
"We must hinder President Trump's efforts to segregate communities and discriminate against black and brown homeowners and renters," Ocasio-Cortez said in a statement. "We cannot go back to the days of redlining and white flight."
No from the right, out of luck
Communities across the country have long argued that the AFFH requirements were burdensome and only created more bureaucracy for the communities.
Westchester County, for example, has long been audited for exclusive housing practices, which has resulted in the county submitting repeated reports to the federal government explaining how the issue has been resolved. The reports were rejected by the Obama administration and accepted by Trump in 2017.
In a recent interview with Fox News, President Trump called Westchester "Ground Zero" for the Democrats' efforts to "destroy the beautiful suburb".
Under the 2015 rule, the HUD asked municipalities that receive federal funding for housing to use the data provided by the agency to analyze patterns of racial bias in their neighborhood. The municipalities had to publish these results and then make plans to further reduce the barriers to fair living.
"The position (Trumps) seems to be at odds with everything I've seen and heard in my 50-year career."
Alan Hammer, Brach Eichler
"This idea that the federal government would not stand behind efforts to improve neighborhoods to create a mix of housing is really heartbreaking to me," said Glenn Kelman, CEO of national broker Redfin, told The Real Deal in August. "You just can't say that schools, jobs, groceries, everything can be separate but the same."
Affordable property developer Eli Weiss acknowledged that federal involvement in land use decisions could delay projects and incur additional costs. He also said he could understand why municipalities want control over creating policies that promote affordability and diversity.
"It all works in theory," said Weiss. "But if we look at it historically, we would not have the affordable housing crisis that we are in if everyone had looked at the issue carefully."
Because of New York state house rule policies, each location – there are 782 in the New York metropolitan area – is responsible for its zoning. As a result, very few municipalities allow the lawful development of apartment buildings.
"It has always been difficult to create low-income apartments in the suburbs," said Alan Hammer, who works as a lawyer at Brach Eichler and owns around 12,000 apartment buildings in the Tri-State. He added that Trump's decision to end Obama's fair housing needs would further constrain low-income housing.
"The position he has taken seems to contradict everything I have seen and heard in my 50-year career," said Hammer, a close confidante of Charles Kushner and former acting chairman of Kushner Cos. "He took this position for political reasons."
“It's 2020. People are accusing the president of a white suburban dog whistle. There are minorities living in the suburbs and, in very many cases, more white people in the suburbs. "
Lynne Patton, HUD
Lynne Patton, director of the New York City HUD office, told TRD she doesn't believe the removal of the AFFH rule would prevent affordable housing development. She said HUD analyzed the country's 100 largest metropolitan areas by population and size and found that 52 percent of African Americans, 60 percent of Hispanics, and 62 percent of Asian Americans live in suburbs.
"I think the mainstream media's racially ignorant assumption that only suburban whites live in the suburbs and only upscale whites in the suburbs is simply no longer true," argued Patton.
"This is 2020," she noted. “People are accusing the president of a white dog whistle in the suburbs. There are minorities living in the suburbs and, in very many cases, more white people in the suburbs. "
The house value proposition
William Case, CEO of Cincinnati-based lender American Mortgage Service, said the pendulum may have waved too far to allow communities to prevent affordable low-income and apartment building development.
"It's probably weaker than it had to be," he said. "I believe that some of the measures taken are purely political."
In April, for example, a developer sued the town of Warner Robins, Texas, for blocking a 90-unit rental project that was funded in part by low-income residential tax credits. The lawsuit alleges that opposition to the project was "partly driven by racist animus" and a desire to prevent low-income housing in the community.
The developer, Woda Cooper Companies, claims that the city positively failed to keep its promise to provide more fair housing – a condition for receiving certain federal funding – when it turned down the project.
In one of several brand tweets, Trump suggested low-income housing depressing property values in the suburbs.
Katherine O'Regan, who spent three years at the HUD during the Obama administration and now teaches policy and planning at New York University, said there was no reason to believe that the AFFH's repeal would increase property values.
In 20 of the country's least affordable real estate markets, including San Francisco and New York, low-income housing had virtually no impact on property values between 1996 and 2006, according to a 2016 study by Trulia.
Using fear to deal with housing problems at a time when communities are figuring out what investments to make while grappling with the pandemic is "extremely problematic," O’Regan argued.
"Where housing is built, where you invest in infrastructure, where you invest in communities, design things, and make changes to schools, all of those things are up for grabs," she said, comparing the president's comments to neighborhood destruction and race control in the 1960s and 1970s.
Even so, falling property values "can be a self-fulfilling prophecy if you make people very anxious," added O’Regan. People in such communities could potentially flee because they fear that their neighborhood will change, because they perceive that their property values will be negatively affected.
"It's circular logic," said O & # 39; Regan. "When a group of people leaves a neighborhood, property values actually go down."
But by making exclusion zones more aimed at keeping low-income housing out instead of having too much paperwork, Trump's comments could actually bolster the case for fair housing, according to several housing advocates.
The polarizing rhetoric could even get voters to vote in November, said Jolie Milstein, CEO of the New York State Association for Affordable Housing.
"I think the change is coming," said Milstein. "The current president making these statements is almost helpful to the fair housing movement because the kimono is open and we really see what the thinking is."
Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations, echoed that sentiment. He said the president's comments "exposed what drives opposition to affordable housing" and noted that Trump's remarks might make it easier for supporters to incite anti-developmentists to use euphemisms such as "preserving the character of the neighborhood".
"We have a lot of suburban communities who vote very generously – the stereotype is that they have a poster in front of their mansions called 'Black Lives Matter," "Kriesberg said of Boston residents. "Then they will oppose new rental apartments."
While an appeal was filed against the AFFH rule of 2015, according to the Law on Fair Housing of 1968, jurisdictions are still required in order to “positively promote fair housing”.
Under the new HUD measure, local governments meet this requirement through "any measure that is rationally linked to the promotion of fair housing" that is defined as "affordable, safe, decent, free from unlawful discrimination and accessible under civil rights law".
O’Regan noted that this broad definition could expose the premises to litigation as HUD no longer approves their housing practices.
"For those who don't want stress, don't want to do analysis and just don't care about fair housing issues, this could be a gift," she said. “I would be a little concerned if I were a jurisdiction: what standards are I adhered to? What kind of process should be behind this self-certification? "
O’Regan added that current leadership at the HUD may not question problematic self-certifications, but future leadership may reverse course. Democratic presidential candidate Joe Biden has already announced that he would reinstate the AFFH rule in his election.
Kriesberg argued that AFFH is not a silver bullet for solving strategies that perpetuate racism. The rule provided the municipalities with a framework to use federal funds in such a way that fair living is promoted. Governments that are already trying to proactively eradicate segregation are likely to continue doing so, while others will maintain the status quo.
"Nothing prevents us from changing," he said. "It's just that HUD isn't rushing us."