The Department of Housing and Urban Development plans to expand its view of discriminatory housing practices to include local zoning rules to control building in suburban neighborhoods, a New York county official battling the federal agency warns.
Rob Astorino, the Republican executive of Westchester County, says his Manhattan suburb illustrates what the rest of the country can expect under a sweeping anti-discrimination regulation HUD is expected to finalize by Christmas.
"The battle for zoning in Westchester County (will be) the battle everywhere," Astorino said Tuesday during an American Enterprise Institute (AEI) briefing on Capitol Hill.
HUD has cut off $17 million in funding to Westchester for refusing to sue local municipalities to modify zoning ordinances to accommodate more subsidized housing. HUD claims the ordinances, which like almost every locality in America, set limits on building density, are racially "exclusionary.
"HUD has said that even quarter-acre (lot) single-family zoning, in their view, may very well be discriminatory and perpetuate 'segregation,'" Astorino said. "And (it) must be looked at, and even maybe attacked.
Disparities Vs. Discrimination
Over the past few years, Westchester, one of the toniest communities in America, has built 400 affordable-housing units in mostly white neighborhoods. It's under federal orders to build 350 more at a total cost of $51 million.
But HUD's not satisfied. "This is about changing every block, every neighborhood to the viewpoint of federal bureaucrats at HUD," Astorino said.
Under the Obama administration, housing officials no longer limit their view of housing discrimination to overt acts such as landlords and Realtors steering minorities away from predominantly white areas. They now consider any race-neutral policy that has the "effect" of creating "disparate access" for minorities to good jobs, schools and other suburban "assets" to be a racist "barrier.
To close racial "disparities," HUD in its new rule proposes tying federal funding for counties and cities to suburban integration of urban blacks and Latinos.
"This rule is needed to facilitate efforts to overcome barriers to fair housing choice," states the proposed rule, which runs about 30 pages.
"There are many different types of impediments to fair housing choice, including building and zoning codes, processes for site selection for low-income housing, lack of public services in low-income areas (and) less favorable mortgage lending for minority borrowers," HUD added in the rule, titled Affirmatively Furthering Fair Housing. "Some of these impediments may prevent people from moving out of racially concentrated areas of poverty and neighborhoods that perpetuate disparities in access to community assets.
While nonprofit housing groups overwhelmingly favor the rule, most of the almost 900 total comments submitted to HUD oppose it. Formal comments run 2-to-1 against it. Many critics called it "social engineering," while others said it was "racist in nature" or "anti-federalist." A common complaint concerned the "higher rates of crime" that frequently accompany subsidized housing.
HUD Secretary Shaun Donovan explains he's adding "teeth" to the 1968 Fair Housing Act to "repair the damage" minority communities have endured from subprime foreclosures. He noted that the mortgage crisis and recession wiped out "more than half of African-American wealth.
"We cannot have a healthy America if communities of color are hurting," he told the NAACP this summer while promising tougher housing regulations. "In too many of our hardest-hit communities — no matter how hard a child or her parents work — the life chances of that child, even her life span, (are) determined by the ZIP code she grows up in.
Meanwhile, HUD is mapping every neighborhood in America for "discrimination patterns" using sophisticated "geospatial" software. It plans to make the data readily available to affordable-housing pressure groups, such as the National Fair Housing Alliance and National Community Reinvestment Coalition, that receive millions in agency funding and work closely with HUD in crafting regulations.
Cities that show the worst "segregation" — such as Los Angeles, Chicago, Cleveland, Houston, Atlanta, Memphis, Charlotte and Raleigh, N.C., Indianapolis, and Cincinnati and Columbus, Ohio — will be aggressively "targeted" under the new rule.
Counties and cities receiving HUD grants will be required to submit detailed integration plans to Washington. Rejected plans threaten funding.
"This new rule is frightening because you're talking about 'disparate impact,'" Astorino said.
"Disparate impact" discrimination claims rely on statistics to indicate racism, rather than actual acts, a much lower standard of proof. HUD formalized the use of disparate impact in fair-housing investigations in a separate regulation earlier this year. Meanwhile, the Justice Department and Consumer Financial Protection Bureau are using the dubious theory against banks to enforce fair-lending laws.
"Discrimination in HUD's view no longer has to be behavior or criminal acts or anything like that. It is statistics," Astorino said. "And so what they're saying is, if a particular neighborhood has a disproportionate amount of whites, then de facto that community is (exclusionary). And HUD will be the final arbiter on land-use decisions based upon the statistics that they provide going forward.
Added Astorino: "Their end goal clearly is getting rid of as much of zoning as possible in the neighborhoods that they want to rid the zoning from.
AEI fellow Ed Pinto warned that the "social engineering" strings attached to HUD funding could end up harming communities if they aren't severed.
The former chief Fannie Mae credit officer recounted other "grandiose, utopian schemes" of HUD that have ended in disaster, including its failed public housing projects in Detroit, Chicago and other blighted inner cities, and its affordable-housing mandates that sped Fannie's and Freddie Mac's recent collapse.
"The rest of the country needs to understand how this will affect them if these rules go through," Astorino said.
Some are heeding his warnings. Officials in Rindge, N.H., for example, are reconsidering accepting HUD grant money out of fear the agency will demand changes in the town's zoning laws.
Only, HUD doesn't plan on using just carrots to motivate municipalities to carry out its agenda. It's also wielding a big stick.
"We are stepping up fair-housing enforcement," Donovan warned.
In 2011 alone, HUD charged more cases of housing discrimination than it had in the previous decade. All told, over the past three years its investigations have extracted $65 million in minority payouts and penalties from more than 25,000 defendants.
"We are not satisfied," said HUD's Donovan. "There are no stones we won't turn. There are no places we won't go. And there are no complaints we won't explore in order to eliminate housing discrimination."
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