In a shift from over 50 years of policy and practice, the US Department of Housing and Urban Development (HUD) has proposed rescinding its regulations requiring covered housing providers to affirmatively market their properties to underserved populations. HUD cites constitutional concerns and questions about the regulation’s alignment with the Fair Housing Act as the basis for the proposed changes.
My Nixon Peabody partner, Harry Kelly, recently authored an alert describing HUD’s proposal and what it could mean for the affordable housing industry moving forward. I have asked him to join me on the Housing Huddle to dive deeper into this topic and share his insights.
What are HUD’s affirmative fair housing marketing regulations, and why were they created?
These regulations were adopted in 1972, four years after the Fair Housing Act of 1968. Their purpose is to ensure equal housing opportunity for people with similar incomes, regardless of race or protected class status. They apply to all Federal Housing Administration housing programs and require participants to create affirmative fair housing marketing plans for new properties. These plans analyze market demographics and outline strategies to market properties broadly and fairly. The rules also require participants to adopt anti-discriminatory hiring and recruiting policies and educate their employees about fair housing issues and practices.
Why is HUD proposing to rescind these regulations?
HUD has offered several reasons:
- HUD cites legal concerns, constitutional issues, and a desire to align with a race-neutral policy, while maintaining its commitment to preventing housing discrimination.
- HUD argues the rules exceed its legal authority and infringe on Congress’s role.
- The agency cites recent US Supreme Court decisions on race-conscious practices in education, suggesting the rules may violate the Equal Protection Clause. However, the housing regulations do not mandate or allow racial preferences.
What changes should housing providers expect, and when?
If and when HUD finalizes its proposal to rescind the affirmative marketing rules, the most immediate impact would be the elimination of the requirement to prepare and submit marketing plans for HUD approval. While the plans themselves are relatively straightforward, their approval process can be slow. Removing the requirement may save time and some costs, especially related to staff training and compliance efforts.
Without the HUD-required plans, how can providers stay compliant with fair housing laws?
Even without the formal requirement, the Fair Housing Act still prohibits discriminatory marketing. Providers who skip marketing plans risk liability if their practices are found to be discriminatory. Creating and following a marketing plan—even without HUD approval—offers a strong defense against such claims.
As best practice, housing providers may consider:
- Continuing to draft and follow marketing plans, using existing HUD forms.
- Training staff on fair housing laws.
- Maintaining nondiscriminatory policies and practices.
The Nixon Peabody Affordable Housing team is available to support owners and managers in evaluating their strategies, preparing marketing plans, and ensuring continued compliance with fair housing laws.
