1. (303) 321-2547 haggeler@bbcresearch.com
AFFh overview
September 22, 2016
Presented by
Heidi Aggeler, Managing Director 1999 Broadway, Suite 2200 Denver, Colorado 80202
(303)

2. agenda
AFFH Update

3. Affh overview AFFH = Affirmatively Furthering Fair Housing
AFFH provision enacted with the Fair Housing Act (FHA of 1968) and executive orders
The AFFH obligation extends to all federal agencies that administer housing and urban development programs.
The LIHTC is not viewed by the IRS as federal financial assistance. That said, the IRS does influence the distribution of tax credits and could, in theory, be held liable for a FHA violation.

4. Affh overview
Statutory non-discrimination provisions of the FHA and AFFH are different obligations:
FHA focuses on what cannot be done (e.g., “otherwise make unavailable or deny” housing)
AFFH requires that recipients of federal funds take “meaningful actions” to address segregation and related barriers for those protected by the Act

5. Affh overview
HUD’s AFFH Rule, adopted on July 16, 2015, applies to “program participants”— recipients of the Community Development Block Grant (CDBG), HOME, Emergency Solutions Grant (ESG), HOPWA—as well as PHAs.
Purpose of rule: “Provide HUD program participants with an approach to more effectively and efficiently incorporate into their planning processes the duty to affirmatively further the purposes and policies of the Fair Housing Act.”
“Refinement” of the Analysis of Impediments to Fair Housing Choice (AI) needed because of lawsuits (Westchester County) and General Accounting Office (GAO) audit

6. Affh overview Where the AFFH Rule addresses LIHTC and the QAP:
HUD “declines to mandate” coordination of allocation of block grant funds with other planning processes, including LIHTC.
HUD does not view Qualified Census Tract boost in LIHTC as inconsistent with AFFH requirement. To this end, HUD encourages both “place based” and “mobility based” strategies in state and local government AFFH implementation.
HUD requires that states and local governments analyze data on the location and occupancy of affordable LIHTC units and consider the impact of the QAP on fair housing issues. Location of LIHTC relative to segregated and high poverty areas is required.
HUD “welcomes innovate approaches by states to encourage HFAs to AFFH through “benefits and incentives.”

7. Affh overview
As part of the AFFH, HUD has made data and maps on the location of LIHTC, and other publicly supported housing, available online:

8. Affh overview
HUD also provides
demographics of the tract
for LIHTC:

9. Supreme court ruling involving lihtc
ICP v. TDHCA
First filed in Allocation of LIHTC to minority-concentrated areas and not in white areas was the policy and practice at question. ICP lawyers: “As of 2008, after 20 years of the LIHTC program, 92.29% of LIHTCs are in areas with more than 50% minority concentration.”
2012: Texas judge found that TDHCA violated FHA due to disparate impact segregation of LIHTC in minority concentrated areas in Dallas.
TCHCA v. ICP
TDHCA takes question of disparate impact to U.S. Supreme Court: “Is disparate impact cognizable under the Federal Fair Housing Act?” SCOTUS did not take on question of how to measure disparate impact, but provided guidance.

10. Supreme court ruling involving lihtc
TCHCA v. ICP (continued):
SCOTUS found that yes, disparate impact is cognizable under the FHA. Disparate impact liability is “consistent with the FHAs central purpose.” Yet, the FHA does not prescribe a particular vision of urban development nor does it create a double bind of liability—that is, housing authorities and developers should not be forced to choose between “rejuvenating a city core v. promoting low income housing in suburban communities.”
Court says that proving disparate impact is difficult:
Statistical disparity alone cannot prove
Local government not liable if can demonstrate a legitimate justification of policy or decision
One time actions are unlikely to establish disparate impact liability

11. Supreme court ruling involving lihtc
TCHCA v. ICP (continued):
Specifically,
Plaintiff must show evidence of “causality”—not only does a statistical disparity exist, but the defendant’s policy/ies caused the disparity. This prevents housing authorities from being “liable for racial disparities they did not create.”
SCOTUS suggests proving disparate impact claims are likely difficult for plaintiffs due to the “multiple factors that go into investment decisions about where to construct or renovate housing units.”

12. Supreme court ruling involving lihtc
ICP v. TDHCA
Judgment on August 26, 2016 in Dallas District Court. Found in favor of TDHCA.
TDHCA argued that decision to approve or deny LITHC developments is based on numerous factors, many of which are outside of TDHCA’s control
Judge found:
TDHCA’s denial of small number of applications over a 17 year period did not constitute a “policy.
No proof that exercise of discretion caused a statistically significant disparity in the location of low income housing
Factors other than TDHCA’s discretion—such as “developer’s preferences for building projects in certain areas, local and state laws and expressed needs of communities and local officials”—have not caused or contributed to disparity in location of LIHTC developments

13. What does this mean for chfa?
State Assessment of Fair Housing (AFH) requirements are under development. It is likely the state AFH will require a review of how the QAP affects housing options and access to opportunity for racial and ethnic minorities, families with children, persons with disabilities and seniors.
Draft state AFH suggests analysis of:
How leverage of funds affects location (e.g., criteria of state tax credit);
Community Revitalization Plan standards and how these are used in awarding credits;

14. What does this mean for chfa?
Draft state AFH suggests analysis of (continued):
3) Incentives for locating projects in particular areas or areas with particular characteristics (e.g., areas with housing needs);
4) Affirmative marketing requirements related to protected class; and
5) Preferences, points or threshold criteria for projects serving particular protected class groups (e.g., tenant populations with special housing needs).

15. What does this mean for chfa?
Notable comments from advocates on draft state AFH template:
How the absence of incentives affects siting in high opportunity areas, particularly families with children
Analysis of efforts to leverage LIHTC to increase the supply of accessible housing for persons with disabilities. Be aware of concentrating persons with disabilities through permanent supportive housing incentive points.
Examination of the commitment to project based voucher contracts in high opportunity neighborhoods and by bedroom size
Collection of data on LIHTC occupants
Source of income laws

16. What does this mean for chfa?
Recommendations for QAPs from the Poverty & Race Research Action Council:
Prohibit increasing concentrations or provide bonus points for high opportunity areas or amenities (high performing schools, transit)
Limit local participation in approvals to statutory minimum
Provide direction on affirmative marketing, including language access plans and accessibility for persons with disabilities
Provide bonus points for developments that actively market to voucher holders.

17. What does this mean for chfa?
Recommendations for QAPs from the Poverty & Race Research Action Council (continued):
5) Use “service enriched” development set asides or bonus points for developments that include supportive services and/or actively market to persons with disabilities.
6) Provide direction on service-enriched development models; include bonus points for developments that offer enhanced features that accommodate persons with disabilities.
7) Provide bonus points that offer job training, mobility counseling, child care/afterschool enrichment—other features and improve access to opportunity.

18. Defining areas of opportunity
What is an area of opportunity? Not specifically defined in rule.
HUD provides indicators:
Education
Employment
Transportation
Low poverty exposure
Environmentally healthy neighborhoods

19. Hud opportunity indices
School proficiency index: performance of 4th grade students on state exams
Labor market engagement index: level of employment, labor force participation, and educational attainment in a neighborhood.
Jobs proximity index proximity to jobs, with larger employment centers weighted more heavily.
Low transportation cost index: transportation costs as a percent of income for families that rent.
Transit trips index: estimates of transit trips for families that rent.
Low poverty index: poverty rate.
Environmental health index: exposure to poor air quality.
For all indices, index values range from 0 to 100 with higher values generally reflecting greater opportunity.