HCD Director says California will further fair housing despite Trump

The federal Fair Housing Act of 1968 has for half a century required the State of California and other federal grantees to affirmatively further fair housing by reducing segregation and increasing access to opportunity for racial minorities and other protected classes under the Act. Last year HUD created a new Affirmatively Furthering Fair Housing (AFFH) rule to better enforce this duty and to provide technical guidance to grantees. However, Congressional Republicans and the newly nominated HUD Secretary, Dr. Ben Carson, have made no secret of their hostility to fair housing and to the new AFFH rule—and may seek to undermine or eliminate it.

California HCD Director Ben Metcalf served in the Obama Administration when HUD was developing the rule and is now helping oversee the State’s efforts to further fair housing. In an interview with the California Housing Partnership, Metcalf explains that the State will continue its work to further fair housing no matter what actions the Trump administration take to undermine the AFFH rule.

You previously were a high-ranking official at HUD. What impact will incoming HUD Secretary Ben Carson and the new administration have on California’s efforts to affirmatively further fair housing?

California Department of Housing and Community Development Director Ben Metcalf.

Ben Carson’s proposed appointment has definitely garnered attention to HUD—and particularly spotlighted his own bootstraps story coming up out of poverty in Detroit, as it relates to HUD’s work. He has also spoken in the past about removing dependencies on federal programs. So, one question that will get raised when Ben Carson lands at HUD is going to be: what will he bring from his own experience to HUD?

If Dr. Carson is serious about supporting economic revival of “inner cities,” as Trump has said in the past, the emerging consensus among folks who have been working in this area for a while is that one of the ways you do that is by supporting communities that have a mixture of incomes. We see again and again that neighborhoods of concentrated poverty are not conducive to either the development of new business or realizing the full potential of kids who are growing up. So, the hope is that Dr. Carson ends up seeing that furthering fair housing is in fact critical to what he and the president elect have spoken about in terms of helping folks realize their potential and bringing economic activity to areas that haven’t seen it.

There’s a lot at stake here. Dr. Carson wrote an op-ed in the summer of 2015 in which he criticized HUD’s new Affirmatively Furthering Fair Housing (AFFH) rule and raised concerns about it undercutting local control and local authority. The Republican Party also adopted the notion of doing away with the AFFH rule as a plank in its convention last summer, and we saw the House attempt to de-fund implementation of the AFFH rule in the last budget cycle. So, I think it’s certainly possible that we could find the rule being revisited or de-funded through the Congressional budget process. Further, HUD has yet to finalize the tool that states are intended to use to implement the AFFH rule. That may be something that could get picked back up and approached in a very different way with incoming secretary Ben Carson.

Even if HUD or Congress take action to diminish the AFFH rule, is there anything the administration could do to stop the State of California from pursuing its own fair housing assessment and developing new policies to further fair housing?

No. I think what I can safely say here is that—with or without the federal fair housing rule—the State of California will continue not only to implement our ongoing reporting obligations for HUD block grants and programs, but we will approach this work through the lens of the AFFH rule’s construct. We will do this both because the federal Fair Housing Act requires that we take proactive steps to further fair housing and also because we think the framework that HUD provided through the AFFH rule is actually helpful to effectuating the original intent of the Act—and to achieving the kind of outcomes that the State values: ensuring that folks growing up poor in California’s communities have a shot of accessing the middle class and avoiding some of the negative consequences associated with segregated communities or neighborhoods of highly concentrated poverty.

Congress could certainly defund HUD’s ability to oversee the AFFH rule through the budget process. One way we answer that is: well ok, we don’t need HUD looking over our shoulder here in the State of California to be able do this well. California also has a State Fair Employment and Housing Act and our own Housing Element law, which aligns in many ways with this work. I think there’s a supportive framework here.

What are the State’s current efforts around affirmatively furthering fair housing and how are these efforts different from what the State has done in the past?

We are now beginning the process of developing an Assessment of Fair Housing (AFH), which is due to HUD in 2018 and is the reporting requirement under the federal AFFH rule. And we will go forward with this work in some form regardless, even if HUD is not asking for it or looking over our shoulder.

The AFFH assessment will take the place of the State’s prior obligation to complete an Analysis of Impediments to Fair Housing Choice (AI)—which we have been required to administer because we receive a variety of federal program dollars—but it is much more robust and data-intensive. For example, under the AFFH direction from HUD, we are encouraged to think more holistically about patterns of investment across the state—and not just in rural areas outside federal entitlement jurisdictions, which is the focus of our investment of federal dollars.

Are other agencies involved as partners in this work? Are you going to be looking at non-HCD investments, like housing tax credits, as part of this analysis?

Yes. Our general thought is to look holistically at a pattern of investment and include the California Tax Credit Allocation Committee and other housing finance agencies as partners in that effort. Our plan is to start ramping up on some of that work in the spring.

Can you talk about the ‘both/and’ approach to furthering fair housing that balances efforts to expand housing choices for low-income and minority families in well-resourced neighborhoods with efforts to improve poor neighborhoods through sustained, comprehensive investments across multiple sectors—and whether this is the framework you are working with?

Yes, that is the framework that is described in the AFFH rule, which we conceptually agree with and embrace.

There are a couple ways to think about operationalizing this approach. One is through the support that we provide for jurisdictions and regions around planning efforts—for example, the Sustainable Communities Strategies developed by Metropolitan Planning Organizations via their Regional Transportation Plans, under SB375, which are supposed to be synced up with regional housing needs efforts. Housing Elements reviewed by HCD’s Policy Division also require action supporting fair housing. So these macro-planning efforts are very important.

We’ve also been working to incentivize jurisdictions that do the hard work of funding affordable housing development in communities that are relatively affluent—for example, through our Housing-Related Parks program, which has provided funds to jurisdictions that demonstrate that they’re able to produce a certain number of permanent low-income units in a given community.

And then we’re very interested in getting smarter about the incentives that we build into our funding programs—specifically, to make sure that those programs are funding projects where we can be most confident that low-income families are able to access opportunity to the greatest extent possible. Our programs do that to some degree already, in the sense that they often will have point scoring sections that reward projects that locate near schools or near transit.

But our approach has not been super sophisticated in the sense that, for example, sometimes the transit doesn’t have adequate frequency and sometimes the schools are not necessarily high-performing schools. So we’ve been working with the Haas Institute at Berkeley, UC Davis, and others to explore whether there are better ways that we could measure access to opportunity and reward projects that are more likely to provide access to opportunity for the families—and particularly the kids, who are growing up in those developments.

Lastly, I would mention a new program that we are launching with the Strategic Growth Council in the lead, which is Transformative Climate Communities (TCC). This new Cap-and-Trade funded $140 million program gives us, at the State level, a chance to do something that the federal government has pioneered, which is to think about our highest poverty, most disadvantaged communities in a slightly different way. Instead of throwing a resource here or a resource there, this approach pushes communities to think holistically, bring together different actors and come up with comprehensive plans that will be likely to alleviate poverty and create neighborhood revitalization opportunities in a place-based, multi-sectoral way. We’ll be asking the most disadvantaged communities in California to propose comprehensive solutions that not only lower their greenhouse gas profiles, but also increase opportunity for low-income people.

We plan to award three grants in the first funding round across three different locations. Although more support is needed, I think it’s really important to send the signal that not only do we want to help low-income families have mobility and access to opportunity, but—in the spirit of the both/and framework—we also want to think about strategies to overcome the structural drivers of long-term concentrated poverty in cities and neighborhoods.

How do you envision the role of affordable housing developers in furthering fair housing? How should they think about their role?

We don’t have a lot of state or federal resources in affordable housing today, so we want to make sure that we’re directing those resources in way that will have the maximal benefit—not just to get units built, but to actually make sure that homes are created that provide a platform for folks to move up the economic ladder and/or, if they are vulnerable populations or elderly individuals, to make sure they have the resources they need to be stable and age in place. How do we do this?

First of all, we need to ask a little bit more of affordable housing developers. Specifically, we need them to be thinking about outcomes affecting the folks who live in their housing—to make sure that in any investment, we are relying not just on gut or intuition but on hard data, evidence, and measurable outcomes that show whether these investments are actually increasing access to opportunity for low-income households.

Secondly, the affordable housing community needs to think about how they can work better with local jurisdictions. On the one hand, this involves supporting local jurisdictions that are doing the tough work of developing comprehensive solutions for neighborhoods of concentrated poverty—like with the State of California’s TCC model or the federal Choice Neighborhoods program model.

Further, although State housing law obligates jurisdictions to plan for the construction of affordable housing, we have not seen affordable housing developers consistently getting involved in the updating of Housing Elements—or otherwise being strong enough advocates around ensuring that jurisdictions make it as easy as possible to zone, permit, and build affordable and low-income entry-level workforce housing in more affluent communities. So, I would say to developers that they need to increasingly partner with advocates in jurisdictions that haven’t historically been as welcoming to affordable housing to become more receptive of affordable and denser multifamily housing.