The US real estate market is neither free nor fair. As the cost of living rises and the demand for housing outstrips the supply for the eighth consecutive year, minorities, and low-income Americans have fewer choices about where and how to live. As a result, economic segregation is becoming more entrenched, while racial segregation persist as fewer Americans seek opportunity. Since 2000, the number of African Americans and Hispanic Americans living in high-poverty neighborhoods has risen by nearly 80 percent.
Secretary of Housing and Urban Development (HUD) Ben CarsonBen CarsonSunday preview shows: Multiple states detect cases of omicron variant Race not central to Rittenhouse case, but media is shouting it anyway Trump backs Peter Meijer’s top challenger in Michigan MORE He is expected to rewrite a rule that would encourage local governments to reform exclusionary zoning rules that stand in the way of affordable housing. The standard, Affirmative Promotion of Fair Housing (AFFH), was finalized in 2015 under the chairmanship of Barack ObamaBarack Hussein Obama ‘The Obama Portraits Tour’ Adds Stops In San Francisco, Boston Democrats Accuse GOP Of ‘Racial Harassment’ With Court Pick Attacks How Republicans Came To Revel In Hating Joe Biden MORE. Use the Fair Housing Act to bind effectively HUD funding to determine if jurisdictions are actively breaking down patterns of racial segregation.
It’s a worthy goal, but the AFFH rule did little to loosen the grip of the restrictive housing policies that led to residential segregation and opportunity disparity in the first place. Instead of making housing more affordable to correct redline errors, it was simply more paperwork for cities and consultants who wrote hundreds of pages of ineffective reviews.
Fair housing policy should protect Americans from discrimination when buying or renting a home, but it also means making sure they can afford that home. This goal cannot be achieved without reforming exclusionary land use regulations that prevent new housing construction, such as density limits or minimum lot sizes. Instead, communities can counter discrimination by expanding the affordability and availability of housing. This should be central to HUD’s fair housing assessment. Reducing zoning regulations is estimated to only reduce differences in racial segregation between neighborhoods by more than a third.
While HUD’s AFFH reform has yet to be issued, early signs indicate that it will, in fact, tie Community Development Block Grant (CDBG) funds to the affordability and availability of local housing markets. This should be applauded. These funds, which allow local leaders broad spending discretion, are intended to benefit low- and middle-income neighborhoods. Nearly 1,300 states, counties, cities and towns receive CDBG funds to pay for things like infrastructure improvements and redevelopment projects, and these flexible dollars are widely popular with local leaders. But if those same communities have restrictive and de facto segregationist zoning and land use rules that impoverish their residents, what good are these dollars?
In the future, these grants could be conditional, for example, on whether communities with high housing demand allow more homes to be built. Localities could demonstrate progress by streamlining “by right” housing approvals that avoid burdensome discretionary review processes. By establishing clearly defined metrics of housing availability and affordability, community reporting can be simple and results-based, with mayors competing for federal dollars and national prestige.
Ideally, more than just CDBG funds would depend on increased housing supply. Transportation financing would be the natural next step. Other agencies could qualify their funds based on AFFH’s performance, which Secretary Carson is equipped to encourage as chair of the White House Council on Removing Barriers to Affordable Housing Development. A similar proposal to link housing to transit has been introduced in bipartisan legislation by Rep. Scott PetersScott H. PetersOvernight Energy & Environment — From ‘zero’ on climate, spending bill Bipartisan lawmakers announce climate adaptation bill Desperate Democrats signal support for downsizing Biden’s bill MORE (D-California).
To be clear, zoning reform should not be enacted at the federal level. State and local leaders are responsible for ensuring that their land use regulations do not get in the way of markets that offer greater supply and variety of housing wherever there is demand. But as a growing number of affluent localities exclude poor and middle-income Americans, many of whom are minorities, due to their inflated home prices, there is less incentive for these jurisdictions to open their doors.
Reform of the AFFH rules will have many detractors, from those on the left concerned with destroying the Fair Housing Act to those on the right concerned with local control of land use decisions. But these concerns are misplaced. The Fair Housing Act is safe; simple rule-making is far from enough to gut it. Local control will also be more secure under a reformed AFFH rule. The one thing we can’t do is walk away from AFFH. If HUD says nothing, the courts will say something. Rather, we should allow HUD to focus on the things it can measure (housing availability and affordability) and leave the necessary work of land use reform in the hands of state and local legislators.
We cannot repeal the laws of supply and demand in housing. But we can help repeal the regulations behind America’s high housing costs. These onerous land use restrictions are key to combating segregation in today’s cities. Now is an opportunity for HUD to use its influence to help roll back exclusionary land use regulations and seriously address America’s housing affordability crisis for minority and low-income Americans and, indeed, for everyone. the Americans.
Michael Hendrix is the director of state and local policy at the Manhattan Institute. Follow him on Twitter @michael_hendrix.