PROGRAM HIGHLIGHTS

SUMMARY OF BUDGET ESTIMATES

1. SUMMARY OF BUDGET REQUEST

The fiscal year 2001 Budget request for the Fair Housing Assistance Program (FHAP) is $21 million. This is an increase of $1 million over the fiscal year 2000 appropriation, of which approximately $500 thousand will be used to fund an additional five substantially equivalent State and local agencies.

In fiscal year 2001, the Budget proposes $7 million for the Fair Housing Partnership, to encourage joint private group and substantially equivalent state and local agencies projects for education and outreach initiatives under the FHAct. Through its support of joint efforts by governmental (FHAP) and private entities (FHIP), the partnership initiative will foster substantial and new fair housing results that individual organizations could not achieve alone. As in the past, the $7 million will be split equally between FHIP and FHAP programs (see the FHIP justification for the description of the FHIP component of the Fair Housing Partnership). Under the partnership, the substantially equivalent jurisdictions operating under the FHAP program will partner with FHIP agencies and will emphasize the Department's focus on educating the public and the housing industry on the Fair Housing Act's accessible design and construction requirements. The partnership will complement the FHIP national Project for Accessibility Training and Technical Assistance (PATTA), described in the FHIP justification. The partnership will also continue to address the enforcement initiatives which assist traditionally underserved populations, such as recent immigrants with language barriers and people with disabilities. The Department will carry out this initiative through the existing Fair Housing Assistance Program and the Fair Housing Initiatives Program (FHIP).

The balance of the $21 million requested for fiscal year 2001 will support the activities of approximately 93 substantially equivalent fair housing enforcement agencies, an increase of five over the 2000 level. These agencies will process housing discrimination complaints based on race, color, religion, sex, familial status, disability, and national origin.

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, there is a wide disparity between the homeownership rate of whites and some minorities: 72 percent of Whites are homeowners, compared to less than 45 percent of Hispanics and Blacks. Moreover, Home Mortgage Disclosure Act data indicate that lenders still reject lack applicants almost twice as often as Whites. In addition, much new multifamily housing remains inaccessible to people with disabilities, and families with children continue to have limited housing options in many areas due to unlawful discrimination.

To receive a portion of the proposed Fair Housing Partnership set-aside, State and local fair housing enforcement agencies and eligible private groups will be required to submit applications outlining the duties of each applicant, and the process by which each will work with their partners. The partnership will require State and local enforcement agencies and private groups to engage in strategic planning in order to focus their fair housing activities. Further, they will be required to coordinate their activities to avoid duplication and ensure the results of their partnerships make a maximum contribution to the Department's intensified enforcement effort. Successful partnership applications will be funded by both FHIP and FHAP, allocating funding to enforcement and/or education initiatives.

Private fair housing groups (FHIPs) and State and local enforcement agencies (FHAPs) funded by the Department have different strengths and institutional orientations. Private fair housing groups are traditionally community-based, and therefore more accessible to individuals who would not ordinarily approach a government entity. They also 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. However, they have had only limited success in reaching out to underserved populations. The Partnership is intended to create a new synergistic approach to draw upon the resources and strengths of both partners. Under the Partnership initiative, State and local agencies will be able to carry out enforcement activities beyond case processing and also education and outreach efforts which complement their enforcement efforts.

The Budget also proposes a fiscal year 2001 appropriation of $29 million for the Fair Housing Initiatives Program (FHIP), of which $3.5 million is for fair housing partnership projects. The total funding requested for FHAP and FHIP in fiscal year 2001 is $50 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 IN THE 1999 ESTIMATES INCLUDED IN THE 2000 BUDGET

The expected number of agencies qualifying for equivalent status in 1999 was 85. This represents no change from the 2000 Budget. The 2000 Budget estimated 1999 obligations at $24 million. Actual obligations in 1999 were $13 million, reflecting obligations at a slower rate than anticipated. Outlays in 1999 were $17.8 million, $8.3 million more than projected. This was due to agencies drawing-down funds at a greater rate than previously anticipated. The increased spendout rate reflects greater capacity of FHAP agencies as well as actual caseload activity.

3. CHANGES FROM 2000 BUDGET ESTIMATES

Obligations are expected to increase from $20 million to $29.8 million, reflecting the obligation of $9.8 million in carryover from 1999. Outlays are expected to decrease from $15.5 million to $13.1 million. The $2.4 million decrease reflects the liquidation of prior obligations at a faster rate than previously anticipated in fiscal year 1999.

EXPLANATION OF INCREASES AND DECREASES

The fiscal year 2001 appropriation request for the Fair Housing Assistance Program (FHAP) represents an increase of $1 million over the 2000 appropriation of $20 million. The $1 million increase will fund five additional substantially equivalent State and local agencies and contribute to the continuation of the Fair Housing Partnership between State and local government fair housing enforcement agencies and private fair housing groups.

This partnership will strengthen fair housing enforcement at the local level and will result in more cases being filed directly with the Department. The Fair Housing Partnership requires the FHAP agencies and the FHIP groups/organizations to form partnerships to address critical fair housing issues. In fiscal year 2000, the focus was upon partnership proposals that will meet the needs of unserved and underserved populations. The Department continues to emphasize the enforcement and education needs of these populations in the fiscal year 2001 partnership. The request for fiscal year 2001 will also encourage greater education and outreach to the public and the housing industry concerning the accessible design and construction requirements for new multifamily housing under the Fair Housing Act. This Initiative, which again will allocate funds to both FHAP and FHIP, will foster continued cooperation and coordination of the FHAP and FHIP agencies, groups, and organizations.

In fiscal year 2000, a total of 88 State and local fair housing enforcement agencies will be eligible for funding as substantially equivalent agencies. The Department estimates that at least five additional agencies will be certified in fiscal year 2001.

The FHAP program directly supports the Department's integrated program efforts to reduce housing discrimination by 2 percentage points by 2001 and reduce racial segregation in America. These are two clear outcome goals which the Department is focused on in order to fulfill our strategic Goal #2: "Ensure Equal Opportunity in Housing for all Americans." In addition, all of the Department's programs are focused on increasing awareness of fair housing laws to assist in achieving these outcome. All three of the Fair Housing related strategic objectives contained in the APP will be positively affected by the Fair Housing Partnership through empowering the public, encouraging networks of State and local fair housing enforcement agencies working in unison with private fair housing organizations, and encouraging a fair housing presence in places where there is little or no such presence. These are the driving forces behind ensuring that this Partnership will continues to be funded under both the FHIP and FHAP. HUD expects that an informed and educated public, housing/real estate industry, and mortgage banking and financing industry, along with aggressive and effective enforcement, will assist in affirmatively furthering fair housing, and eliminating housing discrimination and segregation of various population groups and income status.

Expected Outcomes: The FHAP agencies and the FHIP groups/organizations will work together to advance current efforts as well as to develop programs designed to: (a) educate, in a coordinated fashion on the State and local level, more members of the general public concerning the Fair Housing Acts; and (b) deal with housing discrimination in underserved and unserved areas, thus providing the means to better serve those who have been victims of discriminatory housing practices.

The fiscal year 2001 appropriation will be used to assist "substantially equivalent" agencies in case processing, data and information systems, training, special enforcement efforts, administrative costs, and capacity building activities, and education and outreach, in addition to the activities supported by the partnership initiative. A "substantially equivalent" agency is a State or local fair housing enforcement agency administering a fair housing law or ordinance that is substantially equivalent to the Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988). The FHAP complements the Department's enforcement activities by providing financial assistance to these agencies pursuant to the Fair Housing Act.

PROGRAM DESCRIPTION AND ACTIVITY

The Fair Housing Assistance Program (FHAP) is a proven and successful vehicle for the Federal Government to encourage and assist State and local fair housing enforcement agencies to participate in the enforcement of the Fair Housing Act. FHAP agencies meeting specified criteria are reimbursed for services carried out in connection with the investigation of complaints brought by individuals who claim their fair housing rights have been violated. These services include complaint investigations, conciliation, administrative enforcement/judicial proceedings, training and outreach, technical assistance, and other support activities designed to eliminate housing discrimination. Eligible recipients are defined as those State and local fair housing enforcement agencies that are certified as substantially equivalent, or agencies operating under an interim agreement for referral of complaints. The availability of this Federal financial assistance has encouraged State and local agencies to enact equivalent fair housing laws and ordinances.

1. Legislative Authority. The Fair Housing Act prohibits discrimination in the sale or rental of housing; in residential real estate-related transactions; in the provision of brokerage services; and in other housing-related activities. Section 810(f) of the Fair Housing Act allows for the Secretary to refer complaints to the FHAP agency whenever a complainant alleges a discriminatory housing practice within the jurisdiction of the State or local agency that has been certified as providing rights, remedies, procedures, and the availability of judicial review which are substantially equivalent to those in the Fair Housing Act. Section 817 of the Fair Housing Act provides that the Secretary may assist State and local agencies in administering a fair housing law by providing them with financial assistance.
2. Program Background. Since 1980, the Department has provided financial assistance under the FHAP to State and local agencies administering substantially equivalent fair housing laws and ordinances. When the Fair Housing Amendments Act was enacted in September 1988, all State and local agencies were required to amend their respective laws and ordinances to obtain substantial equivalency certification with the amended Federal law.

The Fair Housing Act mandates that the Department cooperate with and render technical assistance to State and local agencies formulating or carrying out programs to prevent or eliminate discriminatory housing practices. Section 810 of the Fair Housing Act specifically encourages cooperation with State and local agencies charged with the administration of State and local fair housing laws. The Fair Housing Assistance Program and the substantial equivalency certification process both serve to further fair housing by providing financial assistance and by encouraging State and local governments to enact and enforce legislation designed to ensure fair housing. Through training, legal, and administrative technical assistance, issuance of written guidelines, participation at meetings and conferences, and review of proposed legislation, the Department provides extensive assistance to help State and local fair housing enforcement agencies obtain certification under the Fair Housing Act. The Department also provides individually tailored technical assistance to any State or local government requesting such assistance.

IMPLEMENTATION OF THE PROGRAM

The implementing regulation for the FHAP, 24 CFR part 115, requires that the fair housing law administered by the agency be substantially equivalent and that a written agreement be executed. Also, agencies that participate in the FHAP must (a) conform to reporting and record-keeping requirements; (b) agree to on-site technical assistance and guidance and implementation of corrective action; (c) adhere to policies and procedures provided by the Department; (d) not unilaterally reduce the level of financial resources currently committed to complaint processing; (e) spend at least 20 percent of its total annual budget on fair housing activities; and (f) participate in HUD-sponsored or HUD-approved training. FHAP funds are divided into two categories: capacity building and contributions. Agencies receive capacity building funds in their first 3 years of participation in the program. The agencies become "contributions" agencies after the third year of participation in the FHAP. At that time, they are also eligible to receive case processing, training, special enforcement efforts, and administrative costs funds. Beginning in fiscal year 2000, a fifth component of fair housing partnership funded activities will be established under contributions.

Financial assistance to State and local fair housing enforcement agencies is contingent upon continued substantial equivalency. Substantial equivalency involves an affirmative conclusion on two separate issues: (1) whether the State or local law provides rights, remedies, procedures, and the availability of judicial review that are substantially equivalent to those found in the Fair Housing Act; and (2) whether the agency has the administrative capability to carry out the provisions of its fair housing law.

All certified agencies will process complaints based on race, color, religion, sex, national origin, familial status, and disability. This effort will require such agencies to commence and maintain the processing of each complaint through administrative and/or civil proceedings. The agencies will enter into partnerships with private fair housing groups to test for discrimination, and provide investigative assistance or any other assistance needed in order to further fair housing.

The $21 million funding level for agencies participating in the FHAP for fiscal year 2001 will be allocated as follows:

Case Processing--$11.65 million. It is estimated that in fiscal year 2001, FHAP agencies will process approximately 62 percent, or 6,250 complaints, of the total 10,000 complaints expected to be received by the Department. This amount covers the costs incurred by the FHAP agencies to process complaints from receipt through the administrative and/or civil proceedings. For each complaint processed, the agency will be paid $1,800, the same amount paid per complaint since fiscal year 1999. In addition, for each complaint that the agency finds cause, $1,000 will be added. This amount will cover the additional costs which result from preparing a case for hearing and from conducting a hearing and trial. The Department estimates that approximately 400 cases will fall into this category.

The Department expects that 93 State and local fair housing enforcement agencies will be certified as substantially equivalent in fiscal year 2001, up from 88 in fiscal year 2000.

Capacity Building--$1.61 million. The requested funds will be used in fiscal year 2001 to enable approximately 14 capacity-building agencies to develop and enhance comprehensive complaint processing resources, to train staff, and to develop and carry out activities deemed necessary for the efficient and effective implementation of the jurisdiction's fair housing ordinance. Each capacity building agency would receive $115 thousand.

Training--$2.125 million. All contributions agencies, which are agencies that have participated in the FHAP for 3 or more years(approximately 75 agencies), are eligible to receive training funds to support participation in HUD-sponsored or HUD-approved training and education and outreach activities. During fiscal year 2001, agencies may receive approximately $25,000 each for training. In addition, each of FHEO's ten "Hubs" will have access to approximately $25,000 in order to supplement the training needs of FHAP agencies.

Administrative Costs--$1.1 million. The Department will allocate administrative costs to the agencies using a formula based on the number of complaints processed in the previous funding year. If the agency does not meet the standards set out in Part 115 of 24 CFR for allocation by formula, a flat rate of $15,000 will be provided to the agency for administrative costs.

Special Enforcement Efforts (SEE)--$1 million. Agencies qualify to receive SEE funds based on the criteria in Part 115.305 of 24 CFR. These funds are designed to help the agencies enhance their enforcement processes. The amount each agency will be eligible to receive will be based on a formula of 20 percent of the previous year's cooperative agreement. Approximately 60 percent of the agencies will be eligible to receive funds in this category.

Fair Housing Partnership Category--$3.5 million. FHAP agencies may apply to qualify for funding under this category, based on criteria provided in the policy guidance outlined for this partnership. Funding will be available for partnership efforts that address discrimination against unserved and underserved populations. Such efforts may include activities other than those reimbursed under other program components, and may extend beyond complaint processing reimbursement. It is estimated that as many as 35 FHAP agencies will receive awards under this Fair Housing Partnership Component.

PROGRAM HIGHLIGHTS AND ACCOMPLISHMENTS

A number of significant accomplishments have occurred to support fair housing agencies. These accomplishments include:

• The FHAP was revised to deal with the delays that the program was experiencing with obligating funds, and the concerns regarding preparing and distributing the guidance in time for it to serve as an incentive for FHAP agencies.
• FHEO, together with the Office of General Counsel (OGC), reviewed, proposed and enacted fair housing laws and ordinances, as well as proposed and finalized regulations, legal opinions, and court cases of jurisdictions seeking equivalency. This process allowed FHEO to assist State agencies to enact substantially equivalent laws by providing clear and concise guidance and suggesting corrective actions that may be undertaken by the agency.
• FHEO has assisted non-equivalent agencies by providing technical assistance in the areas of writing and enacting a substantially equivalent law or ordinance.
• FHEO has provided, both on-site and off-site, technical assistance and training to FHAP agencies operating under an interim agreement to ensure successful performance in accordance with standards set forth in the Department's regulations.
• FHEO continues to provide policy guidance and formal training to the FHAP agencies. The training includes investigative techniques, conciliation enforcement and intake procedures, data and information systems, legal updates, disability and familial status topics, and other issues which serve to educate the agencies on the implementation of fair housing laws. The field offices provided agency-specific training as well as geographic training. The training was also expanded to include participation by private fair housing organizations.
• FHEO has provided computer software and hardware, as well as other training to assist the agencies in improving the efficiency and effectiveness with which they enforce the fair housing laws. These improvements include the implementation and use of Title VIII Paperless Office and Tracking System (TEAPOTS), a paperless file system, to organize and document investigation activity, and an enhanced case-tracking system.
• FHEO has provided technical assistance to several FHAP agencies whose equivalency status was in jeopardy and assisted such agencies in retaining their status as interim certified or certified agencies.
• FHEO continues to work with FHAP agencies to highlight significant and complex fair housing cases.
• For the first time, in fiscal year 2000, FHAP and FHIP agencies began working together in partnership, which results in a synergistic and comprehensive approach to enforcing the Fair Housing Act.

PERFORMANCE INDICATORS

The predominant role of the Office of Fair Housing and Equal Opportunity is to contribute to and facilitate the achievement of Strategic Objective 2.1: Housing discrimination is reduced. External factors that are not within the control of the Department that impact the success of achieving this objective include the following: (1) many people are not aware of their fair housing rights; and, (2) discrimination can be subtle as well as overt, which makes prevention and enforcement difficult.

Nevertheless, achievement of the below listed outcome and output indicators for the Fair Housing Assistance Program should result in the reduction of housing discrimination (numbering refers to their location in the Department's Annual Performance Plan):

• 2.1.a�HUD clients and partners have greater ability to promote fair housing, as shown by doubling enforcement actions by December 31, 2000.
• 2.1.3�The share of the population with adequate awareness of fair housing law increases.
• 2.1.c�The number of enforcement agencies rated as substantially equivalent under the Fair Housing Act increases by five to a total of 93.
• 2.1.d�At least 25 percent of FHAP grantees increase enforcement actions by 20 percent above FY 2000 levels.
• 2.1.e.1-The percentage of fair housing complaints aged over 100 days will decrease by 33 percentage points from FY 1999 levels to 40 percent of the HUD inventory.
• 2.1.3.2-The percentage of fair housing complaints aged over 100 days will decrease by 15 percentage points from FY 1999 levels to 45 percent of the inventory of substantially equivalent agencies.

The efforts of the Office of Fair Housing and Equal Opportunity to promote equal housing opportunities go beyond enforcement of fair housing laws. There are activities in which FHEO is involved that are not funded within either FHIP or FHAP but which do support Strategic Goal #2. One of those activities is the Analysis of Impediments to Fair Housing Choice (AI) which is a component of Fair Housing Planning within the Consolidated Plan. This activity will empower communities to implement their own strategies for promoting housing choice and coordinate them with their Consolidated Plan and community development programs. This is a cross-program activity that includes CPD and PIH.

STATUS OF FUNDS

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: