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“Housing is a necessary of life.”
Block v. Hirsch, 256 U.S. 135, 156 (1921)
(per Justice Oliver Wendell Holmes, Jr., writing for U.S. Supreme Court)
Adequate housing whose cost is affordable is a basic human need. Yet, tens of millions of low- and moderate-income Americans do not have the opportunity to buy, rent, or build such housing within a reasonable distance from where they work. The Equitable Housing Institute (EHI) is a charitable, legal services organization that provides education and “impact” legal services to reduce homelessness and poverty in the United States by increasing housing affordability.
EHI focuses on legal and policy ("regulatory") barriers to affordability, sometimes called "exclusionary housing policies." According to the Harvard University Joint Center for Housing Studies: "State and local regulations are among the principal culprits behind the nation’s persistent affordability problems.”
Regulatory barriers include exclusionary zoning policies--such as requirements for large lots and home sizes that dominate many American suburbs. Federal commissions created under both Democratic and Republican Presidents have found that suburban zoning ordinances often have created major barriers to housing affordability. Those barriers are increasingly significant because most jobs now are located in the suburbs.
Other common regulatory barriers include unjustified taxes, fees, exactions, and subdivision requirements on development of needed, moderately-priced housing. Often, regulatory barriers completely nullify efforts to provide such housing. In other instances, they impose excessive costs on it, causing prices to exceed construction costs by 40-50 percent and sometimes many times that much. The added costs severely limit the amount of moderately-priced housing that can be provided.
So, regulatory barriers are a major cause of housing shortages, chronic hyper-inflation in housing costs, housing "bubbles" and severe housing market contractions. Those barriers result in increased homelessness and poverty. For example, the U. S. Conference of Mayors regularly identifies shortages of affordable housing as a leading cause of homelessness in cities across the United States.
Also, regulatory barriers often prevent housing from being provided reasonably close to where people work and obtain basic services. That aggravates suburban sprawl--which causes excessive automobile commuting, traffic congestion, use of motor fuels, road building, air pollution, and environmental degradation deep into previously rural areas.
For further background information, please click on topics in the Background menu on this page.
Loudoun County (Virginia) needs major housing growth to meet challenge of Metrorail
The Washington, DC, area’s Metrorail (commuter rail) system is coming to Loudoun County, Virginia. Metrorail brings opportunities for needed housing growth, along with the additional commercial growth that Loudoun seeks. The County is planning for new development near the two stations, which currently are scheduled to open in late 2019.
EHI has studied Loudoun’s housing needs related to Metrorail and completed an extensive report on November 4, 2015. To read it, please click on Loudoun County’s Metrorail-Related Housing Needs.
Loudoun has substantial housing issues. For example, housing costs in the County are relatively high, even for pricey Northern Virginia. Many common occupations in Loudoun do not pay enough for the workers to afford those costs. Also, most of Loudoun’s workers commute from elsewhere, which indicates that Loudoun does not have an adequate amount of housing that its workers can afford.
Many thousands of workers (such as business owners and employees, professionals, service and retail employees) commute to jobs near Loudoun’s future Metrorail stations, and there are very few housing units in those areas. A high percentage of Loudoun’s housing is far from those areas and Loudoun’s other employment hubs. Unless Loudoun County changes its policies to permit much more housing relative to jobs in the Metrorail areas, the expected commercial buildup will compound many challenges for Loudoun residents, by causing:
- longer commuting times on more congested highways;
- more money spent on motor fuel, car and road maintenance, as a result;
- unduly sprawling development (bulldozing, paving over, and building in rural areas such as those in western Loudoun County, degrading those environments);
- higher housing prices, due to the inadequate housing supply for people who work in Loudoun;
- hyperinflation and occasional, rapid deflation in housing prices, such as the cycle that led to the severe, recent recession and national financial crisis of 2007-2009;
- more lower-income residents being reduced to poverty or perhaps even homelessness, due to excessive housing prices and transportation expenses—which together consume more than half of many Loudoun families’ incomes; and
- lost economic development and after-hours vitality in the station areas, because most of workers’ income and leisure time is spent near where they live, rather than near where they work.
Most of those problems will increase for many non-residents as well—including those who commute to Loudoun from elsewhere in Northern Virginia and the rest of the Washington region. Low- and moderate-income residents of those other jurisdictions often pay excessive amounts of their income for housing, due in part to government policies in jurisdictions such as Loudoun, which do not permit sufficient housing development.
Some Loudoun officials have been concerned that the added costs of services to new residents (such as extra school rooms and teachers, police, fire, and other public facilities and workers) might drain the county’s budget. However, recent, expert analyses indicate that there actually is little or no financial advantage to be gained from suppressing the supply of housing in the Metrorail areas. Those and many other issues are discussed in EHI’s full report (Loudoun County’s Metrorail-Related Housing Needs).
U.S. Supreme Court rules that housing practices with
disproportionate, adverse impact on minorities may violate
federal Fair Housing Act, regardless of intent
The U.S. Supreme Court decided on June 25 that the federal Fair Housing Act (“FHA,” 42 U.S.C. § 3601 et seq.,) prohibits housing practices that have a disproportionately adverse effect on members of minority groups—if those practices do not have a justifiable purpose and properly limited scope. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project (ICP), No. 13–1371 (June 25, 2015).
In a 5-4 decision, the Court held that discriminatory intent is irrelevant to whether such a “disparate impact” violation exists. The Court also explained what a litigant must show in order to prove, or, conversely defend against, an alleged violation. The Court’s decision applies both to government officials and private persons.
The FHA’s prohibition on practices that have such a “disparate impact” is an important basis for challenging exclusionary housing policies, because those policies often have much greater adverse impacts on minority group members than on the overall population. The Court stated:
These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification. Suits targeting such practices reside at the heartland of disparate-impact liability.
(Slip op. at 17) The Court’s opinion, authored by Justice Kennedy, clarified the elements of a disparate impact housing violation, which had been stated somewhat differently by certain lower courts. The Supreme Court essentially adopted the statement of those elements in the recent rule issued by the U. S. Department of Housing and Urban Development (HUD), regarding such cases.Implementation of the Fair Housing Act’s Discriminatory Effects Standard: Final Rule, 78 Fed. Reg. 11460 (2013) (codified at 24 CFR §100.500).
HUD’s formulation involves the same kind of burden-shifting approach the Court has formulated for other anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964 (equal employment opportunity). Thus, a person complaining of alleged housing discrimination (“plaintiff”) has the initial burden of proving “that a challenged practice caused or predictably will cause a discriminatory effect.” 24 CFR §100.500(c)(1) (2014).
If a plaintiff makes that showing, the burden shifts to the defendant to prove “that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests.”Id., §100.500(c)(2). If the defendant makes its showing, the plaintiff still can “prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.” Id., §100.500(c)(3).
To see the Supreme Court decision and/or HUD rule in their entirety, click on the hyperlinks above. For further information, please contact EHI.
HUD issues rule requiring more in-depth consideration of discriminatory and exclusionary housing conditions by applicants for federal housing funding
On July 8, 2015, the U.S. Department of Housing and Urban Development (HUD) issued a rule clarifying and strengthening its requirements that applicants for federal housing funding address discriminatory, exclusionary and other impediments to fair housing. HUD, Affirmatively Furthering Fair Housing (AFFH): Final Rule, 80 Fed. Reg. 42,272, 42,352 (July 16, 2015).
Under the rule, each applicant for federal housing funding will have to complete an Assessment of Fair Housing (AFH) identifying fair housing problems in the applicant’s area and contributing factors. The applicant must also commit to taking “meaningful actions” to address these problems.
HUD’s specific requirements for the AFH’s will be contained in an “Assessment Tool,” which HUD has not yet finalized. HUD has, however, provided an extended period for public comment on its currently proposed Assessment Tool, with the comment period extending through August 15, 2015. HUD, Affirmatively Furthering Fair Housing Assessment Tool; Solicitation of Comment, 80 Fed. Reg. 42,108 (July 16, 2015).
The actions expected of recipients of federal housing funding will vary, based on their area’s conditions. Among the possible actions are:
- developing affordable housing, and removing barriers to the development of such housing, in areas of high opportunity;
- strategically enhancing access to opportunity, including through:
- targeted investment in revitalization or stabilization of racially/ethnically concentrated areas of poverty (“R/ECAPs”);
- preservation or rehabilitation of existing affordable housing;
- promoting greater housing choice within or outside of areas of concentrated poverty and greater access to areas of high opportunity; and
- improving community assets such as quality schools, employment, and transportation.
24 C.F.R. § 5.150. HUD will provide each applicant with data covering its area, and applicants must use those data to help identify fair housing problems and to set goals and timetables for correcting problems that are within their control. HUD will not approve funding for a jurisdiction that does not submit an acceptable AFH. Applicants must provide opportunities for public participation in the development of the AFH and must submit a new AFH to HUD every five years.
The first required AFH from applicants will be not be until 2017 or later, and none will be required until at least nine months after HUD's publication of the applicable Assessment Tool. The rule, which will apply to both governmental and other applicants for federal housing funding, aims to improve on the current system, under which HUD grantees are required to prepare an Analysis of Impediments (AI) to fair housing choice. That process has been the subject of criticism. See, e.g., Government Accountability Office, HUD Needs to Enhance Its Requirements and Oversight of Jurisdictions’ Fair Housing Plans, (2010), posted at: http://www.gao.gov/assets/320/311065.pdf.
"Fight Exclusionary Zoning to Make Headway Against Inequality"—Inside Philanthropy
EHI called “one obvious candidate for funding”
A recent article in Inside Philanthropy urges funders to support EHI’s efforts to break the grip of exclusionary zoning and other exclusionary housing policies on housing opportunities for low- and moderate-income people. Kiersten Marek, Memo to Funders: Fight Exclusionary Zoning to Make Headway Against Inequality, Inside Philanthropy (March 3, 2015), posted at: http://www.insidephilanthropy.com/home/2015/3/3/memo-to-funders-fight-exclusionary-zoning-to-make-headway-ag.html.
The article notes that the harmful grip of exclusionary housing policies is especially evident in the suburbs, where most jobs now are located.
. . . Seventy-five percent of extremely low-income families now spend more than 50 percent of their income on housing, and affordable housing is incredibly scarce in middle and high income communities where the best public schools often are.
One result is that families of color are often trapped in poor neighborhoods with poor schools, and racial segregation in K-12 is as bad as ever in many places. In fact, right now, New York State—with its high housing costs and stratified communities—has the most segregated schools in the entire country.
The article points out that a “big reason for a scarcity of affordable housing, and more integrated U.S. communities, is exclusionary zoning laws, which block high-density housing in largely affluent white suburbs, keeping out people of color and low-income people in general.” Inside Philanthropy urges funders to “realize that residential stratification, and the legal regime that supports it, is a key driver of inequality, particularly in education,” and to “get more serious about addressing this problem.”
And one obvious candidate for funding? Thomas Loftus and the Equitable Housing Institute. With the organization's detailed research on housing law, and its ability to help municipalities take a hard look at their assumptions and priorities, EHI has an important role to play in the fight for fair housing.
[Emphasis added] To read the very insightful article in its entirety, you may click on the link above.
New EHI publication shows how exclusionary housing policies are linked to deficiencies in low-income children's health, education, and general development
Many studies have found that housing problems—such as unsafe and unhealthful conditions, unaffordable housing costs, and neighborhoods isolated from high-performing schools and health facilities—are linked to increased developmental problems among low-income children. (Those children live in households that have incomes of 80 percent or less of their area’s median income.) Among the aspects of development involved are children’s health (physical, mental and emotional), safety, educational achievement, and general cognitive and behavioral development.
Because exclusionary housing policies raise major barriers to the production and preservation of adequate amounts of suitable housing, those policies:
- substantially increase the number of low-income children who must live in unsafe, unhealthful, and/or overcrowded housing conditions, and in decaying and/or unsafe neighborhoods;
- isolate many such children, and their neighborhoods, from most economic opportunities, and from high-performing schools and health facilities; and
- raise housing prices (by 20 to 50 percent in many major metropolitan areas), making those prices unaffordable to low- and moderate-income families with children—thus causing economic instability in those families, and many involuntary, disruptive moves (usually to poorer neighborhoods).
EHI has prepared a memorandum summarizing how exclusionary housing policies aggravate housing problems that have been linked to those adverse effects. (To access EHI’s memorandum in its entirety, please click CHILDREN'S DEVELOPMENT & XHPs.) EHI concludes that eliminating exclusionary housing policies is a crucial step toward improving low-income children’s development.
EHI’s analysis is based on an important new report by the U.S. Department of Housing and Urban Development (HUD) that summarizes in detail existing studies of housing and children’s development. (HUD PD&R, Evidence Matters: Housing’s and Neighborhoods’ Role in Shaping Children’s Future (Fall 2014) (“HUD 2014”), posted at: http://www.huduser.org/portal/periodicals/em/EM_Newsletter_fall_2014.pdf).
"Unlocking land supply at the right location is the
most critical step in providing affordable housing"
—McKinsey Global Institute
A major new report on solutions to affordable housing problems in the United States and around the world declares: “Unlocking land supply at the right location is the most critical step in providing affordable housing.” McKinsey Global Institute, A blueprint for addressing the global affordable housing challenge, 7, 48 (October 2014) (“Blueprint”), posted at: http://www.mckinsey.com/insights/urbanization/tackling_the_worlds_affordable_housing_challenge. That report was unveiled in conjunction with UN-Habitat (the United Nations program focused on urban development issues worldwide).
Unlocking land supply for housing affordability involves governments adopting rules and policies that promote—rather than create barriers to—ample, suitable housing opportunities for low- and moderate-income people, in the right locations. The Equitable Housing Institute (EHI) works for the adoption of the appropriate rules and policies.
The right locations for affordable housing are places “where residents are within reach of jobs, schools, and vital services and where they can become part of the diverse fabric of the city.” McKinsey notes many examples of the fact that “housing built in the wrong location, no matter how well constructed and maintained, will fail.” (Blueprint at 49)
Unnecessary restrictions on housing development and preservation in government regulations and policies—such as local land use planning, zoning, and housing policies—are among the principal culprits behind America’s persistent affordability problems. The McKinsey report documents the fact that similar regulatory barriers are critical housing issues around the world, and the report focuses on solutions to them.
McKinsey estimates that six mechanisms that have been used around the world for unlocking land supply can combine to reduce the annualized cost of a standard housing unit by an average of 23 percent worldwide. Prominent among those mechanisms (especially in highly-industrialized nations such as the United States) are adjustments of land use rules and policies to permit ample housing development along with commercial development close to rapid-transit routes and other high-opportunity locations.
McKinsey identifies three major levers in addition to unlocking urban land that can substantially narrow the affordability gap. Those levers—and the potential cost reductions estimated for each—are:
- An industrial approach to deliver housing quickly, on a large scale, and at the desired cost (16 percent)
- Efficiencies in operations and maintenance (2 percent)
- Expanding access to lending and reducing financing costs (7 percent)
(E.g., Blueprint at v) With the use of all four of the basic levers, McKinsey estimates that the annualized cost of a standard housing unit could be reduced by an average of 48 percent worldwide. Blueprint at viii) For more, click on McKINSEY REPORT ON MEETING GLOBAL HOUSING AFFORDABILITY CHALLENGE.
EHI examines evidence that regulatory barriers to housing affordability have interstate effects and explores potential federal remedies
A number of recent studies indicate that regulatory barriers to housing growth and affordability in some of the nation's wealthier states are interfering with the ability of low- and moderate-income Americans to move into those states for better economic opportunities. EHI is examining whether Congress would have the authority to prohibit unwarranted state and local regulatory restrictions on housing supply ("exclusionary housing policies") that have interstate effects.
Economic analyses have shown that housing prices have become excessively high, compared to construction costs, in a large and increasing number of major metropolitan areas across the United States in recent decades. (For more on those analyses, see ECONOMIC EFFECTS OF EXCLUSIONARY HOUSING POLICIES.)
For example, between 2001 and 2011, there was a 49 percent increase in the number of households that paid more than 50 percent of their pre-tax income for housing. More than 20 million American households paid more than 50 percent on housing costs by 2011. (Harvard Univ. Joint Center for Housing Studies, State of the Nation's Housing 2013, p. 27.) The vast majority of those households were low-income.
Exclusionary housing policies have been largely responsible for the increasing disconnect between housing prices and construction costs. To access EHI's initial summary of relevant studies and legal considerations, click INTERSTATE EFFECTS OF RBHAs.
EHI raises issue of apparent interstate effects of regulatory barriers at national, bipartisan Housing Summit
On September 15 and 16, 2014, the Bipartisan Policy Center (BPC) held a Housing Summit in Washington, DC, concerning major federal housing initiatives for which there may be bipartisan support. BPC was founded in 2007 by former Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole, and George Mitchell. The summit, attended by more than one thousand housing officials, developers, academics, and advocates from across the United States, focused on five issues:
- Further reform in the Nation’s housing finance system, to create robust private sector housing investment and assure consumers fair access to sustainable and affordable mortgage credit;
- Continued support for homeownership (which still is the choice of most American households and a goal even for most younger renters);
- Affordable rental options for low-income Americans;
- Continued financial support for rural housing; and
- Better coordination of federal programs that deliver housing and related services to seniors—including those who wish to age in place.
EHI question about interstate effects of regulatory barriers
In a panel discussion of affordable rental options, EHI president Tom Loftus asked whether Congress should consider legislation to counter exclusionary housing policies in the states, given their apparent interstate effects. He pointed out that exclusionary housing policies undercut the effectiveness of federal housing programs and of Congress’ long-stated goal of a decent home and suitable living environment for every American family. He also noted the strong bipartisan agreement (summarized below) that exclusionary housing policies are a major, national housing problem.
There appears to be no significant consideration on the Hill yet of possible federal legislation on the subject. However, EHI will continue to study the possible federal ramifications of exclusionary housing policies that have interstate effects.
Bipartisanship—and nonpartisanship—are in EHI’s DNA
In his remarks opening the Summit, Senator Mitchell—a 1998 Nobel Peace Prize nominee for his leadership in the Northern Ireland peace process—emphasized the crucial importance of bipartisanship to progress on complex issues such as federal housing policy. He noted that all parties have something to contribute and emphasized the importance of full, respectful communication among interested parties before housing strategies are determined.
Senator Mitchell’s emphasis on bipartisanship strikes a responsive chord at EHI. Our mission is to solve what is seen as a major housing problem by knowledgeable people across the political spectrum. For example, federal commissions appointed by both Democratic and Republican Administrations, and by Congress, have determined that suburban zoning often creates major barriers to the construction and affordability of needed housing. Similar effects of zoning and other housing restrictions in many big, central cities also have been documented recently.
Removing those exclusionary policies would promote policy aims of Americans generally. Doing so would reduce poverty, inequality, and discrimination substantially. It also would prohibit government over-regulation that unduly restricts housing opportunities. It would allow government housing spending to stretch further, and it would not necessitate a new government spending program.
EHI fully supports a bipartisan approach to meeting Congress’ long-stated housing goals and America’s housing needs.
Recent Washington Post articles highlight serious, adverse effects of local housing and land use policies
Two articles in the Washington Post on Labor Day weekend 2014 identify regulatory barriers as prime factors in the lack of housing affordability in Washington, D.C., its suburbs, and other similar metropolitan areas. For more, click on ROGER LEWIS ON REGULATORY BARRIERS, and AFFORDABLE RENTS FADING AWAY IN D.C.
OTHER RECENT ARTICLES
- EHI responds to Wall Street Journal article on new exclusionary policies in certain suburbs of Phoenix and Denver. For more, please click on WSJ on new exclusionary policies.
- One affordable housing unit per day is added to plans in EHI's home county, following EHI's advocacy, during its first five years. For more, please click on EHI's FIRST FIVE YEARS.
- EHI issues analysis of role of governmental land use planning in housing shortages and excessive costs. For more, please click on EHI ANALYSIS OF JOBS-HOUSING REPORT.
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