Fair Housing Initiative Program

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FAIR HOUSING AND EQUAL OPPORTUNITY

FAIR HOUSING INITIATIVES PROGRAM

1. SUMMARY OF BUDGET REQUEST

   The fiscal year 2000 Budget request for the Fair Housing Initiatives Program (FHIP) is $27 million. This is an increase of $3.5 million from the fiscal year 1999 Appropriation. The increase supports activities by private fair housing groups which will significantly contribute to the Department's goal of doubling enforcement efforts. This increase includes $3.5 million for an innovative Fair Housing Partnership between State and local government fair housing enforcement agencies and private fair housing groups. This partnership will be funded equally by the FHIP and the Fair Housing Assistance Program (FHAP) through a combined $7 million set-aside. (See the FHAP Justification for a description of this Partnership component). Through its support of joint efforts by governmental and private entities, the partnership will foster fair housing outcomes that individual organizations could not achieve alone. Funding is needed to assist private activities which support the Department's enforcement of the Fair Housing Act, as well as the Department's affirmative administration of housing and community development programs. Funding is also needed to support the national initiative to increase the rate of homeownership among under-served groups. The request also includes $7.5 million for second-year funding of an audit-based testing program.

   The fiscal year 2000 funds will support the Secretary's commitment to fair housing and provide resources to implement those fair housing initiatives authorized under the Housing and Community Development (HCD) Act of 1987, as amended by the HCD Act of 1992.

   Despite more than 30 years of prohibitions against housing discrimination, audits of race and national origin discrimination in the rental and sales market continue to show high indices of discrimination nationwide. Although national homeownership rates have increased, a significant disparity continues to exist between the homeownership rate of Whites compared to that of minorities: 72 percent rate of Whites are homeowners, compared to a rate of less than 45 percent for Hispanics and Blacks. Home mortgage disclosure data indicate that lenders still reject Black and other minority applicants almost twice as often as Whites. Builders continue to construct housing inaccessible to disabled populations and families with children have extremely limited housing choices. Many cities with large populations continue to have no public or private fair housing organizations. Many protected classes remain unaware of their rights under the Fair Housing Act, while certain housing industry players do not know their responsibilities. These conditions are addressed by the President's "One America" initiative, which recognizes continued significant barriers to equal housing economic and social opportunity for many groups in our society. Eliminating these barriers and creating conditions of equal opportunity is at the core of the Federal Government's role to forge an "opportunity" society for all Americans. This request reflects the Department's focus on eliminating housing and lending discrimination, which is vital to making homeownership and economic opportunity a reality for all Americans.

   Thus, in fiscal year 2000, a partnership initiative is proposed to focus on new and underserved populations by ensuring the full protection of the Fair Housing Act and other civil rights laws for persons who face language, cultural, and other barriers that currently limit the utility of these laws to address persistent housing discrimination. The focus will include racial and ethnic minorities (e.g., immigrants), rural populations, persons with disabilities and the homeless. The Department will carry out this initiative through the existing Fair Housing Assistance Program and the Fair Housing Initiatives Program. This request includes a $3.5 million set-aside that will be added to the FHIP to support a fair housing partnership between the private and public fair housing sectors. This fair housing partnership effort will be funded equally by the Fair Housing Assistance Program (FHAP) through an equal $3.5 million contributions, for a combined $7 million set-aside. The Budget will also support other fair housing enforcement and education activities.

   To receive a portion of the proposed Fair Housing Partnership component of $7 million, eligible State and local agencies and private groups will be required to submit applications detailing the duties of each partner and how they will work together. Thus, the program will require State and local Fair Housing enforcement agencies and private groups to jointly engage in strategic planning to focus their fair housing activities. Further, the recipients will be required to coordinate their activities with HUD to ensure no duplication exists and that the results of their partnerships make a maximum contribution to the doubling effort. Successful partnership applications will be funded by both FHIP and FHAP, allocating funding to enforcement and/or education initiatives consistent with the FHIP program framework, and to the fair housing partnership component of FHAP.

   The Budget also proposes a fiscal year 2000 appropriation of $20 million for the Fair Housing Assistance Program (FHAP) which is described in a separate justification. The total funding requested for both programs in fiscal year 2000 is $47 million. Together, these two programs form a national comprehensive fair housing strategy against housing discrimination based upon greater cooperation between the public and the private sectors.

2. CHANGES FROM 1998 ESTIMATES INCLUDED IN THE 1999 BUDGET

   The obligations were significantly lower than shown in the 1999 Budget ($18.4 million). Actual obligations were $86 thousand. The reduction was due to the selection of grant recipients occurring near the end of fiscal year 1998, causing most of the obligations to occur in fiscal year 1999. Outlays also were lower at $12.1 million, $4 million below the estimate shown in the 1999 Budget reflecting slower rates of activity by FHIP agencies.

3. CHANGES FROM 1999 BUDGET ESTIMATES

   Changes reflect a decrease of $5.5 million in budget authority due to Congressional action. Obligations are expected to increase by $9.5 million to $38.5 million due primarily to the obligation of carryover from fiscal year 1998. Outlays are expected to increase by $2.4 million, over the $14.8 million shown in the 1999 Budget, due to an increase in obligations reflecting the actual carryover.

EXPLANATION OF INCREASES AND DECREASES

The fiscal year 2000 Budget request of $27 million represents an increase of $3.5 million above the 1999 appropriation of $23.5 million. The increase for the FHIP is to enable HUD to implement a strategic partnership between State and local civil rights agencies and private groups. Private fair housing groups and State and local enforcement agencies have different strengths and institutional orientations. Private fair housing groups traditionally have an advocacy-oriented, community-based approach and are more accessible to individuals who would not ordinarily approach a government entity. They do not have enforcement authority, such as subpoena power, to fully investigate apparent violations of the Fair Housing Act. In contrast, State and local agencies have such enforcement authority, including effective tools to address such serious issues as hate crimes and racial violence. However, they have had only a limited ability and/or inclination to reach out to underserved populations, at least in part because FHAP currently focuses upon reimbursement for the processing of complaints. The partnership includes all covered real estate practices and all protected bases. The partnership is intended to authorize an approach which draw upon the resources, strengths and expertise of both partners to carry out partnership activities. Because all complaints generated as a result of the partnerships will come to HUD, the Department will realize a rapid increase in the number of enforcement actions.

The allocation of funds within the proposed increase reflects the need to include both education and enforcement activities in the partnership. Thus, the $3.5 million increase for joint activities is divided between Private Enforcement and Education and Outreach. Approximately 20 awards will be made to private fair housing groups to work with FHAP agencies across the country. The FHAP agencies will also receive funding support for this effort. That support is separately discussed in the Fair Housing Assistance Program budget.

The $7.75 million for the Private Enforcement Initiative includes $1.75 million to fund 10 joint partnership awards for cooperative enforcement efforts with substantially equivalent FHAP agencies, and $6 million to fund 2-year private enforcement projects carried out by Fair Housing Organizations to address specific needs in approximately 20 communities. Where applicable, awards will provide funding for the entire duration of 2-year projects. The increase is necessitated by the fact that the Department is moving to double its enforcement actions by implementing two new enforcement approaches in FHIP. The Department anticipates providing additional support for private fair housing organizations filing cases with HUD, and funding organizations that demonstrate effective working relationships with Fair Housing Assistance Program (FHAP) agencies and HUD.

The $15.75 million in the Education and Outreach Initiative for 2000 includes $7.5 for the second year of the audit-based enforcement initiative in 20 selected communities; $1.75 million to fund 10 proposals under HUD's strategy for supporting joint partnerships with FHAP agencies. $5 million will support approximately 40 regional, local and community based awards, one award for educating the industry on recent fair housing developments and trends through newsletters and other national outreach mediums, and three awards to agencies to disseminate information from past national fair housing rights education campaigns in specialized projects to disseminate materials in other languages, accessible formats, and through culturally sensitive outreach efforts. The focus could be on protected classes such as Native Americans, African Americans, Hispanics, Asian Americans, persons with disabilities, families with children and additional underserved groups based on needs identified by applicants. There is also $1.5 million included for a national educational and outreach campaign.

The $3.5 million in the Fair Housing Organizations Initiative includes $1.5 million to continue the development of fair housing agencies that were created through FHIP funding over the past few years. There is a period of time when newly created groups need funds to further develop their capacity to be full service, broad-based fair housing organizations assisting all protected classes. It is essential that HUD provide continued support to fair housing agencies that are further developing their capacity to enforce the Fair Housing Act.

An additional $2 million will be used to fund the establishment of new fair housing organizations. It is envisioned that the focus of the funding for fiscal year 2000 will be on underserved groups. One group that has been in dire need of more fair housing activity is the residents of non-metropolitan areas, especially rural areas. Another group that has been underserved by existing fair housing organizations is non-English speaking minorities. It is envisioned that the outreach initiative funding could enable the creation of fair housing organizations to assist such populations.

PROGRAM DESCRIPTION AND ACTIVITY

1. Legislative Authority. Section 561 of the Housing and Community Development Act of 1987, as amended, authorizes the execution of grants, contracts, or cooperative agreements with State or local government agencies, public or private nonprofit organizations, institutions or other entities that are formulating or carrying out programs to prevent or eliminate discriminatory housing practices. FHIP supports projects and activities designed to enhance compliance with the Fair Housing Act and substantially equivalent State and local laws. Section 905 of the Housing and Community Development Act of 1992 expanded the provisions of the Fair Housing Initiatives Program to build the capacity of fair housing organizations in unserved and underserved areas, to establish a national media campaign for dissemination of fair housing information, and to establish funding for celebration of National Fair Housing Month.

FHIP is a critical component in the Department's effort to address fair housing education, enforcement and compliance. The other principal component of the Department's comprehensive fair housing strategy is the Fair Housing Assistance Program (FHAP), authorized by the Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988). That program, for which the Budget proposes a $20 million funding level in 2000, is described in a separate justification.

The Fair Housing Initiatives Program was established by the Housing and Community Development Act of 1987 for the purpose of eliminating and preventing housing discrimination. This program provides a coordinated approach to further the purposes of the Fair Housing Act, to guarantee the rights of all people to seek housing in an open market free of discrimination, and to inform the public and the housing industry of its rights and obligations under the Fair Housing Act. FHIP also enhances and facilitates the delivery of the Department's housing and community development programs, such as HOME and Community Development Block Grants, by providing a free and open housing market.

2.Purpose. The Fair Housing Initiatives Program is intended to supplement current fair housing enforcement activities of the Department. These activities include programs of enforcement, voluntary compliance, and education and outreach. FHIP provides the financial means to assist projects and activities designed to enhance compliance with the Fair Housing Law and substantially equivalent State and local laws.

3.Program Components. There are four major program components under the Fair Housing Initiatives Program. Together, these components support public and private enforcement, education and outreach activities, and capacity building for fair housing enforcement organizations.




a. The Private Enforcement Initiative. The total proposed level of funding for this major component of FHIP is $7.75 million in fiscal year 2000. Under this component, $6 million is for the following multiyear projects: (a) carry out testing and other investigative activities, such as regional audits of new construction to determine compliance with accessibility requirements; (b) discover and remedy discrimination in public and private real estate markets and real estate-related transactions through assisting victims to identify practices that denied them equal housing opportunity, and; (c) respond to individual complaints of discrimination from home seekers.

In addition, $1.75 million will be set aside for private fair housing groups and other private non-profit organizations that participate in the innovative fair housing partnership with FHAP agencies. This partnership initiative is proposed to focus on new and underserved populations by ensuring the full protection of the Fair Housing Act to persons who have language, cultural, and other barriers that currently limit the utility of these laws to address persistent discrimination. The focus is expected to include racial and ethnic minorities (e.g., recent immigrants), rural populations, persons with disabilities, and homeless persons. This allocation, along with a total of $1.75 million from the Fair Housing Organizations Initiative (FHOI) and the Education and Outreach Initiative (EOI) described below, will be used with a set-aside of $3.5 million from FHAP. FHAP agencies and private groups will jointly engage in strategic planning to focus their fair housing enforcement activities. They will be required to coordinate their activities with HUD to ensure no duplication exists and that the results of their partnerships make a maximum contribution to the doubling of enforcement effort.

b. The Education and Outreach Initiative. A funding level of $15.75 million is requested for this component of FHIP for fiscal year 2000. Under this component, resources will be used for the following specific activities: (a) $1.5 million for a national education and outreach projects, and for regional, local and community-based projects and, (b) $1.75 million for new fair housing partnership projects with FHAP agencies. At the national level, HUD plans to continue to disseminate education and outreach materials developed under the fiscal year 1999 campaign and earlier national outreach projects. However, the focus for these national campaigns will be on those protected classes that have been underserved because of cultural and language barriers or accessibility barriers for persons with disabilities. This campaign will involve several awards to groups serving protected classes with special outreach needs. At the national level, the Department also considers it essential to continue efforts to educate members of the housing industry. One award will be to educate the industry on rights and responsibilities, with a focus on recent developments, trends and significant activities through newsletters and multimedia approaches. The Department also recognizes the importance of education efforts in select communities and has provided $5 million to fund approximately 40 awards to enable regional, local and community-based outreach.

To continue the Anti-Discrimination Initiative begun in fiscal year 1999, $7.5 million will be allocated for the audit-based enforcement initiative in 20 additional communities. This audit-based enforcement project will establish local indices of discrimination based on race and national origin in sales and rental housing. This project will also allow development of an annual national index of discrimination. As important, the funding will continue the expansion of enforcement by HUD based upon testing carried out for HUD using a HUD-prescribed testing methodology. The communities selected will include metropolitan and non-metropolitan areas.

c. The Administrative Enforcement Initiative. No funds are being requested under this initiative for fiscal year 2000 because eligible applicants under the Administrative Enforcement Initiative receive support for case processing and other enforcement related activities under the Fair Housing Assistance Program.

d. The Fair Housing Organizations Initiative. The fiscal year 2000 Budget request for this component of the FHIP is $3.5 million. Funding will be provided to build the capacity of existing organizations to enforce the rights granted under the Fair Housing Act and to create two new fair housing enforcement organizations. The focus of funding will be to develop agencies to serve underserved protected classes. There are many areas without a public or private fair housing group within a reasonable distance or where such populations are not being effectively served by established groups. In fiscal year 2000, we will fund the creation of two fair housing agencies to better serve underserved population groups, including those that face language and cultural barriers. The efforts to develop fair housing groups in underserved areas commenced in 1994. Those new groups made a notable difference in the knowledge that people had in those communities of their fair housing rights and responsibilities. Funds will also be provided to enable continued development of at least 10 private organizations with less than 4 years of experience in fair housing enforcement to better assist underserved groups.

4. Performance Indicators. The request will increase support for locally based actions which prevent and eliminate discriminatory housing practices by funding education and enforcement activities, making an estimated 45 awards in 1998, 71 in 1999, and 186 in 2000. The request will fund the establishment of a national fair housing index through the continued funding of a HUD directed audit-based testing program in up to 15 communities in 1999 and up to 20 communities in fiscal year 2000. The request will increase the fair housing presence in communities which currently lack private fair housing groups or substantially equivalent agencies (i.e., underserved areas) by creating new groups--one in 1998, two in 1999, and two in 2000. In fiscal year 2000, the request will, for the first time, jointly fund (through the FHIP and the Fair Housing Assistance Program) fair housing partnerships of up to 30 private fair housing groups and substantially equivalent State and local agencies. This Fair Housing Partnership program will maximize resources and strengthen fair housing compliance at the regional, local and community level.

1. Private Enforcement Initiative. Under this Initiative, private groups were funded to support testing projects used to conduct systemic investigations and testing of individual complaints for judicial and administrative enforcement. Tests have been conducted in the rental, sales, mortgage lending and insurance markets. Under this initiative, fair housing organizations are now working together regionally to enforce the fair housing laws. Beginning in 1997, the program has focused on broadening the impact of the program by encouraging full-service, broad-based projects that address all protected classes.

   A prime example of FHIP enforcement action occurred in fiscal year 1998, when the Department, working closely with Housing Opportunities Made Equal (HOME) of Richmond, Virginia filed housing discrimination charges against the owners and managers of a Richmond apartment complex, who were accused of refusing to rent to African-Americans. HUD's investigation found several white tenants who stated that the on-site apartment manager boasted to white tenants that she was "keeping the niggers out." The apartment manager had also asked a tenant to stop her son's Black friends from visiting him.

   HUD filed civil charges against the apartment management company and the owners of the apartments, alleging violations of the Fair Housing Act for discrimination against prospective black tenants. Additionally, HUD issued an order barring the apartment manager from employment by any company that receives HUD housing assistance for 1 year. The Wedgewood Village Apartments is a HUD-insured development under the Section 236 program, which provides subsidies to landlords who rent to low- and moderate-income families. As a result of these charges, HUD took legal action to end the discriminatory practices at Wedgewood and obtained financial relief for the people harmed by the discrimination.

2. Education and Outreach Initiative. Under the Education and Outreach Initiative, educational materials, pamphlets, brochures, print ads, posters, and videos concerning fair housing have been developed and distributed in many languages. FHIP funds under this initiative have been instrumental in providing fair housing training for the housing industry and the general public. In 1997, funding of projects to reduce community tensions commenced with funding eight local community organizations to address issues that arise when persons seek to expand their housing choices as provided under fair housing laws. This special focus continued in 1998, with most of the funding used to support additional groups in efforts to address tensions such as have occurred when residents of public housing seek to use certificates and vouchers in non-segregated areas or when housing providers seek to develop small group homes for persons with disabilities. The successful practices of these grants can be duplicated in communities throughout the Nation.
3. Administrative Enforcement Initiative. This initiative has not been funded since fiscal year 1995.
4. Fair Housing Organizations Initiative. Since the first competition in 1994, 26 new fair housing enforcement organizations were established in areas that were identified as underserved or unserved in fair housing services. In 1998, funds were awarded to establish one more organization. These new organizations have made a substantial difference in the communities they serve and have assisted HUD and certified State and local agencies in documenting and addressing housing discrimination throughout the areas they serve. Competitions in recent years have funded the continued support of these new groups. Additionally, another 41 existing organizations have been funded to enhance their fair housing enforcement activities. In 1997, seven disability advocacy groups were funded under this initiative to develop their capacity to undertake fair housing enforcement activities, thus enabling such organizations to become full-service fair housing enforcement organizations, and seven other groups were assisted in general enhancement of their enforcement activities.

1. Unobligated Balances. The following table compares program obligations with funds available by year:

2. Obligated Balances. The status of obligated balances is as follows: