New Obama housing rules target segregated neighborhoods

The Obama administration moved Wednesday to root out segregation across the United States with a contentious set of regulations meant to update decades-old housing law and bolster the president’s legacy on civil rights.

The Department of Housing and Urban Development (HUD) initiative is designed to diversify America’s wealthiest neighborhoods while reinvigorating poor communities around the country. Areas that don’t comply with the new rules risk losing federal funding.

HUD Secretary Julián Castro said the new rules would help America “overcome the legacy of segregation” in this country, and give poor families a better opportunity to succeed.

“Where a child grows up should not dictate where they end up,” Castro told reporters. “Unfortunately, too many Americans find their dreams limited by where they come from.”

HUD estimates the rule will cost local communities $25 million each year to comply, while the agency will spend another $9 million annually overseeing the process.

The rules have attracted fierce criticism from Republicans who say the effort amounts to unwarranted social engineering. They’re threatening to block funding for the rule in Congress.

Rep. Paul Gosar (R-Ariz.) decried the regulations as “President Obama’s most aggressive attempt yet to force his utopian ideology on American communities disguised under the banner of ‘fairness.’ ”

He accused HUD of “punishing neighborhoods that don’t fall in line with [Obama’s] liberal agenda.”

Responding to the cries of federal overreach, White House press secretary Josh Earnest maintained Wednesday that the administration believes “zoning is and should remain a
local power.”

The intent of the new rules, he said, is to provide local officials with data, tools and resources to allow local officials to make decisions that “ensure access to affordable, quality housing for every single American.”

Under the new housing discrimination rules, HUD would provide communities with local and regional information about “segregated living patterns” and “racially or ethnically concentrated areas of poverty” that must be addressed.

The agency would then use grant money as an incentive for these communities to become more diverse and “expand equal access to opportunity for all Americans,” according to the plan detailed for the first time Wednesday.

Castro called for a “balanced approach” that brings affordable housing to more affluent areas while also taking steps to upgrade poorer areas with better schools, parks, libraries, grocery stores and transportation routes as part of the gentrification of those communities.

“We know where you live matters,” Castro said. “Children who live in good neighborhoods do much better than those who are stuck in poverty.”

“My hope is more young people will graduate from high school and go on to college,” he said. “We all win when a child, regardless of their background, gets the opportunity to become a doctor, or an entrepreneur, or a teacher, or whatever their goal might be.”

The Fair Housing Act of 1968 prohibited direct and intentional housing discrimination, such as a real estate agent not showing a home in a wealthy neighborhood to a black family or a bank not providing a loan based on someone’s race.

HUD is now looking to root out more the subtle forms of discrimination that take shape in local government policies that unintentionally harm minority communities.

“Racially-concentrated areas of poverty exist in virtually every metropolitan area,” HUD notes in the rule. “Disparities in access to important community assets prevail in many instances.”

The 377-page housing rule will be phased in over time, beginning in 30 days.

HUD is certain to face a fight from groups opposed to the initiative.

“They clearly want to Manhattanize the suburbs,” said Hans von Spakovsky, a fellow at the conservative Heritage Foundation. 

But Castro emphasized that local communities will “remain in the driver’s seat” when it comes to developing housing policies that root out segregation.

“As a former mayor, the federal government should never plan for communities,” Castro said. “It should plan with them. We’re eager to work with local leaders in giving every person an opportunity to access fair housing.”

The recent turmoil in cities like Baltimore and Ferguson, Mo., is evidence of existing wide spread segregation in urban areas around the country, said Debby Goldberg, vice president at the National Fair Housing Alliance.

She said the new housing rule would create “healthy vibrant places” for low-income people to live.

“It’s clear to me that the legacy of segregation and the harms that it causes is still very much with us, and this rule will help communities overcome that,” Goldberg said.

“If we can’t figure out a way to turn that around, then we’re in trouble.” 

Critics warn the rules could have unintended consequences for poor communities.

“They’re shifting money from poor neighborhoods into wealthy suburban areas. Who’s that going to hurt?” von Spakovsky asked. “It’s going to hurt poor blacks who live in bad housing in inner city, urban neighborhoods.”

This story was last updated at 7:50 p.m.