Proposed rule would expand access to housing in HUD programs regardless of sexual orientation or gender identity

BY , Randall Kelly

On January 24, 2011, the U.S. Department of Housing and Urban Development (HUD) published a proposed rule in the Federal Register regarding housing discrimination. The proposed rule would make it illegal for owners and operators of HUD-assisted housing or housing with FHA-insured financing to make certain housing-related decisions based upon actual or perceived sexual orientation and gender identity.

Citing HUD’s mission of ensuring equal access to the various federal programs it administers, HUD concluded that the continuing evidence of discrimination against lesbian, gay, bisexual, and transgendered (LGBT) individuals and families supports the proposed rule. HUD also relied upon its observation that approximately twenty states, the District of Columbia, and over 200 municipalities have already enacted laws prohibiting housing discrimination based upon sexual orientation and gender identity.

The proposed rule does not impose a blanket ban on discrimination in federal housing programs on the basis of sexual orientation or gender identity, but rather eliminates those topics as legitimate grounds for decision-making by owners and other actors in administering federal housing programs. Thus, the proposed rule would first add two new definitions to the Code of Federal Regulations (CFR)—“Gender Identity” and “Sexual Orientation.” Using those definitions, HUD proposes to prohibit owners and operators of HUD-assisted housing or housing with HUD-insured financing from making inquiries about the sexual orientation or gender identity of an applicant for or occupant of the subject housing. This rule would apply both in cases where the dwelling is renter- or owner-occupied. This rule would not apply in cases where lawful inquiries are made because the housing involves the sharing of sleeping areas or bathrooms.

HUD’s proposed rule also directly targets practices that restrict opportunities for LGBT persons in federal rental housing and homeownership programs by expanding the definition of “family” as it relates to those programs. Thus, the proposed rule would prohibit programmatic exclusion because one or more members of a family are (i) LGBT, (ii) perceived to be LGBT, or (iii) are or are perceived to be in an LGBT relationship. The proposed rule lists the various HUD programs under which the new definition of “family” would apply. Those programs include the Section 8 housing choice voucher program, FHA programs, Community Development Block Grants (CDBG) programs, and Housing Opportunities for Persons with AIDS (HOPWA).

It is important to note that this prohibition on LGBT discrimination would also apply to the Home Investment Partnership Program and the project-based voucher program. The regulatory structure for both of these programs already references the proposed revised definition of “family” described above. Therefore, both of these programs would be affected by the proposed rule, but for slightly different technical reasons.

Finally, the proposed rule would amend HUD’s single-family regulations found at 24 CFR Part 203.33. The amended regulation would clarify that an FHA mortgagee’s analysis of a mortgage applicant’s credit worthiness shall not be based on actual or perceived sexual orientation or gender identity. In other words, determinations of borrower income and credit worthiness must be made in a “uniform manner” without regard to race, color, religion, sex, national origin, familial status, handicap, marital status, sexual orientation, or gender identity.

As noted above, the proposed rule is issued under HUD’s broad authority to assure equal access to federal housing resources, and is not based on its authority under the Fair Housing Act. Although the proposed rule points out that many states and localities prohibit discrimination in housing on the basis of sexual orientation or gender identity, the Fair Housing Act does not address those issues. Thus, the proposed rule expands the rights of LGBT persons in federal housing programs, but does not constitute a general prohibition discrimination on the basis of sexual orientation and gender identify in the housing market. It is also unclear whether the new rule would create substantive rights for renters of housing insured or assisted by HUD, or whether it is intended to be enforced by HUD action alone.

Comments on the proposed rule are due by March 25, 2011.

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Harry J. Kelly


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