New HUD rule guts Obama program to rezone neighborhoods along income and racial guide

[HARDCORE]

New HUD rule guts Obama program to rezone neighborhoods along income and racial guidelines, proves Article I defunds by Congress work

By Robert Romano

The Department of Housing and Urban Development (HUD) under Secretary Ben Carson has completed its review of the 2015 Obama era Affirmatively Furthering Fair Housing (AFFH) regulation, and removed requirements for more than 1,200 cities and counties to make changes to local zoning in order to qualify for $3 billion of annual community development block grants.

Under the new rule, just finalized on Jan. 14, “Jurisdictions are free to choose to undertake changes to zoning or land-use policies as one method of complying with the AFFH obligation; however, no jurisdiction may have their certification questioned because they do not choose to undertake zoning changes.”

Believe it or not, this is a huge win for those who favor limited government and local control over decisions over what to build where.

The original 2015 regulation had included an explicit requirement calling for changes to local zoning, stating, “This final rule, and Assessment Tools and guidance to be issued, will assist recipients of Federal funding to use that funding and, if necessary, adjust their land use and zoning laws in accordance with their existing legal obligation to affirmatively further fair housing.”

At the time, this prompted Congress to take action against the AFFH rule by defunding the regulation’s implementation entirely in a House provision sponsored by U.S. Rep. Paul Gosar (R-Ariz.).

A more moderate provision sponsored by Sen. Susan Collins (R-Maine) passed the Senate easily 87 to 9 in 2016 that barred the regulation from being used to affect local zoning.
The Collins amendment was then put into the 2017 omnibus, the 2018 omnibus, the 2019 omnibus, and the Consolidated Appropriations Act of 2020, stating: “None of the funds made available by this Act may be used by the Department of Housing and Urban Development to direct a grantee to undertake specific changes to existing zoning laws as part of carrying out the final rule entitled ‘Affirmatively Furthering Fair Housing’ … or the notice entitled ‘Affirmatively Furthering Fair Housing Assessment Tool’…”

This author had submitted comments to HUD on this specific provision of law, noting that it barred implementation of AFFH as written and that, to comply, the regulation would have to be rewritten at a bare minimum to remove the zoning requirements and making any changes voluntary.

Now, with this final action by HUD, it has done so.

Ultimately, HUD found further legal justification to justify revising the AFFH rule to remove zoning mandates under 42 U.S. Code § 12705(c)(1), which states, “the adoption or continuation of a public policy identified pursuant to subsection (b)(4) [which includes local zoning ordinances as a potential barrier to affordable housing] shall not be a basis for the Secretary’s disapproval of a housing strategy…”

This provision, per HUD, “prohibits HUD from disapproving consolidated plans because a jurisdiction adopts or continues zoning ordinances or land-use policies.” Meaning funds cannot be denied on the basis of a city or county’s lack of a plan to change zoning, even if it is a barrier to more affordable housing.

Of course, future administrations might read 42. U.S. Code § 12705 the same way — the Obama administration certainly did not — and so to be on the safe side, Congress would be wise to continue including the Collins amendment in future omnibus bills to prevent this sort of overreach from ever happening again.

There are perfectly non-discriminatory reasons why localities may choose not to tinker with their local zoning. For example, in some jurisdictions, because demand for property would remain high, changes to zoning might still result in high prices, thereby mitigating the effects of reform to make housing more affordable. In densely populated regions, this will be a challenge, zoning or no zoning.

Americans for Limited Government President Rick Manning praised the HUD action, stating, “We are pleased that HUD Secretary Ben Carson produced a final rule that protects local zoning prerogatives while encouraging evaluation as to whether regulations have an adverse impact on housing affordability. This rightly stops the nationalization of zoning while still encouraging fair housing, once again placing primacy on cities and counties to make the best decisions for their communities. The last thing Americans needed was Washington, D.C. bureaucrats dictating zoning requirements based on Census maps, and Secretary Carson successfully ended this overreach.”

This could have gone much differently. Without Congress’ action in the months following the 2015 Obama regulation to defund federal intrusion into local zoning decisions, and then it being renewed repeatedly, sending a strong message to two administrations and asserting constitutional Article I powers of the purse, I cannot say that this rule would have ever been reformed.

I’m personally surprised five years of advocacy on this issue including grassroots outreach actually made a difference, but apparently it did.

For once, Washington, D.C. listened.

This is now one of those rare case examples limited government advocates can point to a direct Congressional action that was instrumental in helping to overturn a bad regulation. The power of the purse works to rein in government excesses, and we should let Congress know because they should use it more often.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.