1.SUMMARY OF BUDGET REQUEST
The 1999 Budget request for the Fair Housing Initiatives Program (FHIP) is $29 million which will support targeted and coordinated enforcement actions.
The 1999 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. The increased funding reflects the Department�s efforts under the President�s "One America" proposal.
The Budget includes as a key priority, $10 million increase for an audit-based enforcement initiative to focus the Federal "crackdown on housing discrimination" in 20 selected communities through the award of 3-year grants. This $10 million is set-aside to provide demonstrations of effective strategies to fight discriminatory practices in the most effective, vigorous ways possible. These demonstrations will utilize testing methodologies and will develop valuable indices of housing discrimination in these communities which will highlight the need for expanded enforcement efforts as well as shaping successful strategies.
The projected budget authority needs for fiscal year 1999 reflects the Department�s goal of supporting the efforts of public and private organizations to provide fair housing education and enforcement services in addressing currently unmet needs. Despite 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 and mortgage lenders still reject black and other minority applicants almost twice as often as whites. Builders continue to construct housing that is inaccessible for the disabled and families with children have extremely limited housing choices. Many cities with large populations, such as Houston, TX; Indianapolis, IN; Shreveport, LA; and Jackson, MS have no fair housing organizations. The Department's efforts to expand homeownership are frustrated by persistent discrimination. Further the President's racial reconciliation initiative points to the racial divide which is both the result and cause of housing segregation. Thus, an "Anti-discrimination in Housing Initiative" is proposed. To deal with these major issues the Department will carry out a more targeted, focused and coordinated enforcement strategy. Included in this strategy is a commitment to doubling the number of housing discrimination cases where enforcement action is taken. Increased Fair Housing Initiatives Program funding is requested to: (1) provide funding to fair housing agencies to assist State and local governments in the development of approaches which remove impediments to fair housing in their respective communities; (2) provide funding for an audit-based enforcement projects in 20 metropolitan and non-metropolitan areas to establish indices of discrimination based on race and national origin in the sales and rental housing; (3) provide funding to the Department to develop a National Fair Housing Rights Education Campaign that will inform victims of what constitutes housing discrimination, discriminatory techniques and where to go for assistance if individuals believe that they were discriminated against by a housing provider; (4) provide funding to fair housing agencies located in selected geographic areas where housing discrimination is widespread or high incidence of racial discrimination or hate crimes associated with housing is prevalent and (5) provide funding for the development of fair housing consortia to establish alliances to address multi-jurisdictional discriminatory practices.
The Budget also proposes a 1999 appropriation of $23 million for the Fair Housing Assistance Program (FHAP) which is described in a separate justification. The total funding requested for both programs in 1999 is $52 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 1997 ESTIMATES INCLUDED IN THE 1998 BUDGET
The actual obligations incurred in fiscal year 1997 were the same as estimated in the 1998 Budget--$23.5 million. Outlays, however, were $2.9 million less than the estimate of $18.3 million shown in the 1998 Budget. The decreased level of outlays is due to prior years obligations being liquidated during 1996 at a greater rate than anticipated.
3. CHANGES FROM 1998 BUDGET ESTIMATES
The expected appropriation and related obligations were drastically reduced due to Congressional action. Both were decreased to $15 million from $24 million.
Outlays are expected to increase from $14.3 million to $16.1 million reflecting recent patterns of expenditures showing accelerated program activity.
EXPLANATION OF INCREASES AND DECREASES
The 1999 Budget request of $29 million represents an increase of $14 million above the 1998 appropriation of $15 million. This increase includes a $4 million increase to reflect the expanded number of FHIP recipients, including disability groups, which were funded in fiscal year 1997 and the exceptionally large number of grantees whose enforcement grants end in fiscal year 1998 (approximately 65). Funding is needed to promote private activities to support the Department's enforcement of the Fair Housing Act, as well as the Department's affirmative administration of housing and community development programs and the national initiative to increase the rate of homeownership among under-served groups.
The allocation of funds within the proposed increase reflects the hard choices the Administration faces within the current environment of limited budgetary resources and the need for adequate support for fair housing. The available funding will allow for an increase of $11 million for the Private Enforcement Initiative (PEI); an increase of $1 million for the Education and Outreach Initiative (EOI) and an increase of $2 million for the Fair Housing Organizations Initiative (FHOI).
An increase of $11 million for the Private Enforcement Initiative is requested to fund an additional 27 organizations. There will be vastly increased competition for these funds, as all of the multiyear PEI funding from fiscal year 1995, fiscal year 1996 and fiscal year 1997 will expire in fiscal year 1999, causing an unusually high demand for PEI funds. Given the large number of enforcement organizations that will be eligible for funding, support will be available for both 18-month and 2-year PEI grants and thereby increase the number of fair housing organizations which can receive awards under this enforcement initiative. HUD weighed the need for multiyear funding against the need to support fair housing efforts in more locations and believes this approach helps sustain local fair housing enforcement efforts and bolsters HUD efforts to double its enforcement actions. The Department anticipates providing additional support for 20 organizations under the audit-based enforcement initiative. This initiative is part of the Administration's "crackdown on housing discrimination" and will allow a focused effort in a variety of communities. This initiative supports the Department's strategic plan and goals under the Government Performance Results Act.
An increase of $1 million is requested for the Education and Outreach Initiative in fiscal year 1999. These funds will support a National Fair Housing Rights Education Campaign and a Best Practices in Enforcement and Education grant. The Education Campaign will inform victims of housing discrimination of what constitutes housing discrimination, that the Department is the primary Federal agency charged with enforcing the country's fair housing laws, and that complaints are investigated at no cost to victims. There is substantial evidence that victims of housing discrimination frequently do not know their rights under Federal, State and local laws, have limited information on the discriminatory techniques frequently used to deny them housing, and do not know where to go for assistance when they believe their rights have been violated. The Best Practices Campaign will disseminate information about good enforcement and education techniques to State and local governments, fair housing organizations and housing industry groups. Both grants will address all coverage, including handicap and familial status and cover rural areas as well as urban communities.
An increase of $2 million is requested for the Fair Housing Organizations Initiative. The most sizable portion of this increase is to support ten new organizations created under previous FHIP funding and to create two new fair housing organizations in underserved areas. New fair housing organizations do not have the same extent of funding for continued activities as more established groups. They are in previously or underserved areas where their "newness" makes it harder to get support. Without funding from HUD in their formative years, the continued existence of these new groups is at risk. HUD has already seen the demise of one new organization in Mississippi when HUD funding support ended. There are still some States in which there is neither a certified FHAP agency nor a private fair housing group and there are many heavily populated areas with no public or private fair housing group within a reasonable distance, especially in the mid-West, Northwest and South. Establishment of new groups is an intensive effort that takes at least 3 years to result in a viable organization. The Department proposes funding for two experienced organizations to establish new groups.
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; establish a national media campaign for dissemination of fair housing information; and to establish funding for an annual 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 $23 million funding level in 1999, is described separately in this volume.
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: (1) further the purposes of the Fair Housing Act; (2) guarantee the rights of all people to seek housing in an open market free of discrimination; and (3) 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 $20.3 million in fiscal year 1999. Under this component, $7.7 million is needed for single and multiyear projects to: (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; (c) develop special projects to respond to new and sophisticated forms of discriminatory housing conduct; (d) enhance the capacity of local fair housing organizations; (e) reduce steering, redlining and other methods that have resulted in high levels of segregation; and (f) provide funds for the costs of litigation and expert witness fees.
The Department will set aside $1 million to fund consortia whose applications demonstrate a partnership with regional, State, or local FHAP agencies to address that region�s most crucial discriminatory practices, as identified, in part, by the analysis of impediments carried out by HUD funded localities in locations where the Department has committed to a focused civil rights program, in furtherance of its Strategic Plan. These funded organizations will conduct a range of activities including testing and hiring real estate market consultants, statisticians, attorneys and other professionals who can assist in the conduct of their investigative activities. The funded organizations will then be required to file the results as fair housing complaints with HUD.
In addition, $1.6 million will be allocated for enforcement projects that will address specific, critical enforcement issues with systemic ramifications. Issues and geographic areas would be selected with a goal of broad representation and focus upon the country�s most pressing areas of discrimination, leading to enforcement action by HUD. Having learned that highly successful FHIP funded activities have resulted from such awards in the past, the Department will select the geographic areas where these critical enforcement issues are most urgent and fund a number of multiyear projects.
To focus the Federal crack-down on housing discrimination, $10 million is set aside for the multiyear audit-based enforcement initiative in 20 communities. This focused effort will be a coordinated enforcement initiative based on HUD-prescribed testing methodology and the development of indices of housing discrimination in these communities which will include metropolitan and non-metropolitan areas.
b. The Education and Outreach Initiative. A funding level of $5.5 million is requested for this component of FHIP for fiscal year 1999. Under this component, resources will be used for two specific activities: (a) two national awards and (b) approximately 29 regional, local and community-based projects.
In order for the Department to bring more enforcement actions and to have a more enduring impact on housing discrimination, HUD plans to fund a National Fair Housing Education Campaign. This campaign will educate victims regarding the subtle forms that discrimination can take, the remedies that are available, and, most important, that the Federal government through HUD is the primary agency charged with enforcing the country�s fair housing law. This campaign will also make known the Department�s role in investigating and achieving remedies for housing discrimination. A second national award will support the dissemination of information about good enforcement and education techniques. The remaining funds will support regional, local and community-based outreach projects, including the observance of Fair Housing Month, not to exceed approximately $150,000 per award under the regional/local/community-based component or for 12- to 30-month grants. In this component, we will specifically solicit projects to improve access to homeownership for racial/ethnic minorities and to reduce racial segregation.
c. The Administrative Enforcement Initiative. No funds are being requested under this initiative for fiscal year 1999 because eligible applicants under the Administrative Enforcement Initiative receive support for case processing and other special enforcement activities under the Fair Housing Assistance Program.
d. The Fair Housing Organizations Initiative. The 1999 Budget request for this component of the FHIP is $3.2 million. Funding will be provided to support eleven existing organizations and the creation of two new fair housing enforcement organizations in underserved areas and to build the capacity of existing organizations to enforce the rights granted under the Act. There are still some States in which there is neither a certified FHAP agency nor a private fair housing group and there are many heavily populated areas with no public or private fair housing group within a reasonable distance. 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. However, in order to ensure that those newly created groups remain viable, it is essential to provide funds for their continued development. The 1999 Budget will do this for at least 11 fair housing organizations.
4. Performance Indicators.
Through the FHIP in fiscal year 1999, the Department will
achieve the goal of supporting public and private fair housing enforcement organizations in their provision of fair housing services to their communities. Additionally, with funds awarded under the Private Enforcement Initiative, Fair Housing Organizations Initiative and the Education and Outreach Initiative, the Department expects to see HUD grantees in 20 communities undertake fair housing audit-based enforcement, using a HUD-developed standardized methodology, to develop local indices of discrimination, to identify and pursue violations of fair housing laws, and to promote new fair housing enforcement initiatives at the local level. The result, consistent with the goals of the Strategic Plan, will be more open communities, reduced homelessness and increased homeownership. There will be a special emphasis in the Education and Outreach Initiative to direct efforts to reduce discrimination in housing based on race/national origin. FHIP will assist the Department in doubling the number of housing discrimination cases where enforcement action is taken.
PROGRAM HIGHLIGHTS AND ACCOMPLISHMENTS
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. Additionally, funds from this initiative are used for legal fees in support of fair housing litigation. 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.
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. A registry of accessible housing units has been developed for the use of the community of individuals with disabilities on the East Coast. FHIP funds under this initiative have been instrumental in providing fair housing training for the housing industry, as well as private attorneys, and the general public. In 1997, funding of projects to reduce community tension commenced with funding eight organizations to address issues that arise when persons seek to expand their housing choices as provided under fair housing laws. This special focus continues 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. To maximize the remaining funds, the 1998 solicitation focused on wider dissemination of materials that have already been created.
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 in fair housing services. In 1998, funds were awarded to establish two more organizations in underserved areas. 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 were funded in 1997 to enhance their fair housing enforcement activities. Further, 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.
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:
OUTLAY ANALYSIS
($ in thousands)
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