Congressional Justifications for 1998 Budget Estimates

Fair Housing and Equal Opportunity
Fair Housing Assistance Program

Program Highlights

Decrease -
1998 vs 1997
(Dollars in Thousands)
Program Level:
Assistance to State and Local Agencies
Number of Awards... 73 85 78 80 +2
Obligations.... $11,316 $15,000 $19,281 $15,000 -$4,281
Appropriation (Budget Authority):
Enacted or Proposed...
13,000 15,000 15,000 15,000 ...
Budget Outlays... 8,147 9,515 6,167 12,207 +6,040

Summary of Budget Estimates

  1. Summary of Budget Request

    The 1998 Budget requests $15 million for the Fair Housing Assistance Program (FHAP). The appropriation will be used to assist substantially equivalent agencies in case processing, training, education and outreach, providing and improving the agencies data and information systems, and capacity building activities. A substantially equivalent agency is a State or local agency administering a fair housing law or ordinances 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.

    The $15 million requested for 1998 will support the activities of approximately 80 certified fair housing enforcement agencies. These agencies will process housing discrimination complaints based on race, color, religion, sex, familial status, handicap and national origin, and enforce their fair housing laws through conciliation and administrative enforcement or judicial proceedings.

    The Budget also proposes a 1998 appropriation of $24 million for the Fair Housing Initiatives Program (FHIP) which is described in a separate Justification. The total funding requested for both programs in 1998 is $39 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 the 1996 Estimates Included in 1997 Budget

    The number of agencies qualifying for equivalent status in 1996 was 13 less than projected in the 1997 Budget. This was due to several agencies failing to pass equivalency laws and six agencies losing their status during the year.

    Due to the delay in the receipt of the 1996 appropriation, some obligations were made after September 30, 1996. Therefore, actual obligations in fiscal year 1996 were $11.3 million or $4.7 million less than projected in the 1997 Budget.

    Actual outlays were $8.1 million in 1996, approximately $4.8 million more than the $3.3 million projected. The increase in the outlays were due to a growth in the rate at which funds were disbursed to program recipients. Program recipients expended funds from the 1995 appropriation at more than twice the rate than had been anticipated, while also spending the 1996 appropriations more rapidly than anticipated.

  3. Changes from 1997 Budget Estimates

    Agencies participating in the program were reduced from 85 to 78. In 1996, 73 State and local agencies were certified as substantially equivalent. The Department estimates that at least five additional agencies will be certified during 1997. Obligations are expected to increase from $15 million to $19.3 million in recognition of the $4.3 million carryover from fiscal year 1996.

    Outlays for 1997 are projected to be $6.2 million, which is $3.3 million below the 1997 Budget estimate of $9.5 million. A porton of prior year obligations, expected to carryover and be disbursed in 1997, actually were liquidated in 1996.

Explanation of Increases and Decreases

During 1998, approximately five additional agencies will be certified; however, due to poor performance, FHAP expects to lose up to three agencies. This will leave a projected net of 80 certified agencies for 1998.

The 1998 appropriation request of $15 million represents no increase above the 1997 appropriation of $15 million. The $19.3 million estimated to be obligated in 1997 includes $4.3 million in unused balances carrying over from the previous year. No such carryover of unobligated balances is anticipated for 1998 and obligations are projected at $15 million. This reflects full use of the amount requested for 1998.

Program Description and Activity

The Fair Housing Assistance Program is a system for the Federal government to encourage and assist state and local agencies to shoulder part of the obligation under the Fair Housing Act. Agenicies investigate and resolve complaints brought by individuals whose rights to fair housing are claimed to be violated. Through the FHAP program, agencies meeting specified criteria are reimbursed for services in connection with the investigation of complaints. These activities include complaint investigations, conciliations, administrative enforcement/judicial proceedings, training and outreach, technical assistance, and other support activities designed to eliminate housing discrimination. The eligible recipients are defined as State and local agencies that are certified as substantially equivalent, or agencies operating under an interim agreement.

The availability of this Federal financial assistance has encouraged State and local agencies to develop equivalent fair housing laws and ordinances and accept referral of complaints from the Department.

  1. Legislative Authority. The Fair Housing Act prohibits discrimination in: (a) the sale or rental of housing; (b) residential real estate-related transactions; (c) the provision of brokerage services and (d) other housing related activities. Section 810(f) of the Fair Housing Act provides that 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, the Secretary shall refer such complaints to the agency. Section 817 of the Fair Housing Act provides that the Secretary may assist State or 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 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 new Federal law. In 1996, 73 State and local agencies were certified as substantially equivalent.

Section 817 of the Fair Housing Act requires 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. The Fair Housing Assistance Program and the substantial equivalency certification process both serve to further fair housing by providing financial incentives 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 agencies obtain certification with 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 Regulation, 24 CFR Parts 111 and 115-Regulatory Reinvention; Certification and Funding of State and Local Fair Housing Enforcement Agencies; Final Rule, Subpart C--Fair Housing Assistance Program 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 recordkeeping requirements, (b) agree to on-site technical assistance and guidance and implementation of corrective action, (c) adhere to policies and procedures provided by the Office of FHEO, (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) that the agency 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 which makes them also eligible to receive case processing, administrative costs, special enforcement efforts, and training funds.

Financial assistance to State and local agencies is contingent upon continued substantial equivalency. Substantial equivalency involves an affirmative conclusion on two separate issues: whether the State or local law provides rights, remedies, procedures, and availability of judicial review that are substantially equivalent to those found in the Fair Housing Act; and, 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 handicap. This effort will require such agencies to commence and maintain the processing of each complaint through administrative and/or civil proceedings.

The $15 million funding level for agencies participating in the FHAP for 1998 will be allocated under the following formula:

Case Processing - $11.050 million. It is estimated that in 1998 FHAP agencies will process approximately 76 percent, or 6,500 cases, of the estimated 8,500 fair housing complaints expected to be received by the Department. For each complaint acceptably processed, the agency will be paid $1,700--no increase over the 1997 level. This amount is for costs incurred by these agencies to process complaints from receipt through the administrative and/or civil proceedings.

Capacity Building - $1 million. The requested funds will be used in 1998 to enable capacity building agencies to develop and enhance comprehensive complaint processing resources, to train staff, and to carry out activities deemed necessary for the efficient and effective implementation of the jurisdiction's fair housing law or ordinance.

Training - $1.4 million. All contributions agencies, which are agencies that have participated in FHAP for 3 or more years, are eligible to receive training funds to support participation in HUD-sponsored or HUD-approved training and education and outreach activities, with $1,000 set aside for training data and information systems personnel. During 1998, agencies may receive approximately $16,000 each for training. In addition, each Fair Housing Enforcement Center will also have available $20,000 of FHAP funds to meet the training needs of State and local agencies.

Administrative Cost - $1.2 million. The Department will allocate $825,000 to the agencies using a formula based on the number of complaints acceptably processed in the previous funding year. In addition, approximately $375,000 will be needed to assist in the development, purchase and maintenance of software and hardware for uniform data and information systems. The Department will provide, to agencies that are in their third year and beyond in receiving FHAP funds, identical hardware and software to facilitate the transfer and tracking of dual-filed complaints and to communicate electronically with agencies.

Special Enforcement Efforts - $350 thousand. Funds will be provided to agencies that have used their enforcement mechanism under their respective fair housing ordinance or law (such as having held hearings or pursuing cases through the courts) or if the agencies handle systemic cases requiring a substantial amount of staff-time, material, and resources.

Program Highlights and Accomplishments

State and Local Fair Housing Agencies. A number of significant accomplishments have occurred to support fair housing agencies. These accomplishments include:

  • The Office of Fair Housing and Equal Opportunity (FHEO) continues to provide the agencies with training through substantial equivalency workshop sessions at National and Field Office policy and training conferences. Workshops have been presented on all topics as they affect the implementation of the agencies' fair housing laws and ordinances. Also, Enforcement Centers of FHEO have provided Field Office and agency-specific substantial equivalency training workshops.
  • FHEO, in conjunction with the Office of General Counsel, continues to review proposed and enacted fair housing legislation as well as proposed and final regulations, legal opinions, and court cases of States and localities seeking substantial equivalency certification under the Act. This process provides clear, specific, and concise explanations regarding legally sufficient provisions and suggests corrective actions that may be undertaken by the agency.
  • Fair Housing Enforcement Centers provide technical assistance to FHAP agencies operating under an interim agreement, to ensure successful performance in accordance with standards set forth in the Department's regulations.
  • Headquarters and Field staff have provided on-site technical assistance and performance assessment visits to all agencies with interim certification. In each instance, detailed reports and guidance were provided to the agencies.
  • Headquarters FHEO finalized a rule which streamlined the regulations governing certification and funding of State and local fair housing enforcement agencies by combining two regulations into a single part and eliminating redundancy.
  • FHEO Headquarters and Field staff, OGC and Field Counsel staff, and FHAP agency representatives, constituted a core team for the development and implementation of the Business Process Redesign (BPR) process. The changes in the Fair Housing Act enforcement process as a result of the implementation of BPR will result in a more modernized, customer-oriented civil rights enforcement organization respected as a nexus of information, support and coordination of fair housing initiatives at the Federal, state, and local levels of government. BPR recommended enhancements will be incorporated into the 1998 fiscal year program, specifically in the areas of technical assistance/training and administrative costs.

Status of Funds

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

    (Dollars in Thousands)
    Unobligated balances, start of year... $2,877 $4,281 ...
    Appropriations... 13,000 15,000 $15,000
    Recovery of prior year obligations... ... ... ...
    Subtotal... 15,877 19,281 15,000
    Obligations... -11,316 -19,281 -15,000
    Lapsed... -280 ... ...
    Unobligated balance, end of year... 4,281 ... ...

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

    (Dollars in Thousands)
    Obligated balance, start of year... $6,847 $10,016 $23,130
    Obligations incurred... 11,316 19,281 15,000
    Subtotal... 18,163 29,297 38,130
    Outlays... -8,147 -6,167 -12,207
    Obligated balance, end of year... 10,016 23,130 25,923


Content Archived: January 20, 2009