Restoring Affirmatively Furthering Fair Housing Definitions and Certifications, 30779-30793 [2021-12114]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 86, Number 110 (Thursday, June 10, 2021)]
[Rules and Regulations]
[Pages 30779-30793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12114]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 91, 92, 570, 574, 576, 903

[Docket No. FR-6249-I-01]
RIN 2529-AB01


Restoring Affirmatively Furthering Fair Housing Definitions and 
Certifications

AGENCY: Office of Fair Housing and Equal Opportunity, HUD.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Department of Housing and Urban Development (HUD) 
publishes this interim final rule to restore certain definitions and 
certifications that have been through notice-and-comment scrutiny and 
that are grounded in legal precedent to its regulations implementing 
the Fair Housing Act's requirement to affirmatively further fair 
housing (AFFH) and reinstate a process by which HUD will provide 
technical assistance and other support to funding recipients who are 
engaged in fair housing planning to support their certifications. No 
program participant will be required to participate in this process, 
which is for the benefit of those who want assistance in fulfilling 
their statutory obligations. HUD will provide these services prior to 
the effective date of this interim final rule. HUD determined that it 
is necessary for this narrowly focused rule to go into effect on July 
31, 2021, because HUD funding recipients must certify compliance with 
their duty to AFFH on an annual basis and HUD itself has a continuous 
statutory obligation to ensure that the Fair Housing Act's AFFH 
obligations are followed. HUD finds that the definitions in the current 
regulation, which was promulgated in 2020 without notice-and-comment 
procedures, are at odds with the statutory AFFH duty as described in 
decades of judicial precedent and agency practice. This risks confusing 
funding recipients, who are certifying compliance with a regulatory 
definition that does not in fact satisfy their statutory AFFH 
obligation. While HUD therefore has determined that this rule will go 
into effect on July 31, it nonetheless solicits comments on this action 
so that it may consider public views before the effective date. HUD 
promulgates this interim final rule to ensure that program participants 
have regulatory certainty, while delaying the effective date long 
enough to provide time for HUD to

[[Page 30780]]

review comments and, if necessary, act on them prior to the effective 
date.

DATES: 
    Effective date: July 31, 2021.
    Comment due date: July 12, 2021.

ADDRESSES: Interested persons are invited to submit comments regarding 
this interim final rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW, Room 10276, Washington, DC 20410-0500. Communications must refer to 
the above docket number and title. There are two methods for submitting 
public comments. All submissions must refer to the above docket number 
and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov website can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    Note: To receive consideration as public comments, comments must be 
submitted through one of the two methods specified above. Again, all 
submissions must refer to the docket number and title of the rule.
    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-402-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number via TTY by calling the Federal Information Relay 
Service, toll-free, at 800-877-8339. Copies of all comments submitted 
are available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Sasha Samberg-Champion, Deputy General 
Counsel for Enforcement and Fair Housing, 451 7th Street SW, Room 
10110, Washington, DC 20410 telephone number 202-402-3413 (this is not 
a toll-free number). Persons with hearing or speech impairments may 
access these numbers via TTY by calling the Federal Relay Service at 
800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION: 

I. Background

The Affirmatively Furthering Fair Housing Mandate

    The Fair Housing Act (title VIII of the Civil Rights Act of 1968, 
42 U.S.C. 3601-3619) declares that ``it is the policy of the United 
States to provide, within constitutional limitations, for fair housing 
throughout the United States.'' See 42 U.S.C. 3601. The Fair Housing 
Act prohibits among other things, discrimination in the sale, rental, 
and financing of dwellings, and in other housing-related transactions, 
because of ``race, color, religion, sex, familial status,\1\ national 
origin, or handicap.'' \2\ See 42 U.S.C. 3604 and 3605. The Fair 
Housing Act extends beyond this non-discrimination mandate, requiring 
HUD to administer its programs and activities relating to housing and 
urban development in a manner that affirmatively furthers the purposes 
of the Fair Housing Act. 42 U.S.C. 3608(e)(5). While this mandate is 
directly imposed on HUD, HUD carries it out primarily by extending the 
obligation to certain recipients of HUD funding. Congress has 
repeatedly reinforced the AFFH mandate for funding recipients, 
embedding within the Housing and Community Development Act of 1974, the 
Cranston-Gonzalez National Affordable Housing Act of 1990, and the 
Quality Housing and Work Responsibility Act of 1998, the obligation 
that certain HUD program participants certify, as a condition of 
receiving Federal funds, that they will AFFH. See 42 U.S.C. 5304(b)(2), 
5306(d)(7)(B), 12705(b)(15), 1437C-1(d)(16). As described below, 
Congress enacted these requirements against the background of judicial 
and administrative construction of the Fair Housing Act's AFFH 
requirement, which is presumed to have been incorporated in those 
later-enacted Congressional mandates.
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    \1\ The term ``familial status'' is defined in the Fair Housing 
Act at 42 U.S.C. 3602(k). It includes one or more children who are 
under the age of 18 years being domiciled with a parent or guardian.
    \2\ Although the Fair Housing Act was amended in 1988 to extend 
civil rights protections to persons with ``handicaps,'' the term 
``disability'' is more commonly used and accepted today to refer to 
an individual's physical or mental impairment that is protected 
under federal civil rights laws, the record of such an impairment, 
and being regarded as having such an impairment. For this reason, 
except where quoting from the Fair Housing Act, HUD uses the term 
``disability.''
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    For decades, courts have held that the AFFH obligation imposes a 
duty on HUD and its grantees to affirmatively further the purposes of 
the Fair Housing Act. These courts have held that funding recipients, 
to meet their AFFH obligations, must, at a minimum, ensure that they 
make decisions informed by preexisting racial and socioeconomic 
residential segregation. The courts have further held that, informed by 
such information, funding recipients must strive to dismantle historic 
patterns of racial segregation; preserve integrated housing that 
already exists; and otherwise take meaningful steps to further the Fair 
Housing Act's purposes beyond merely refraining from taking 
discriminatory actions and banning others from such discrimination.
    Soon after the enactment of the Fair Housing Act, the U.S. Court of 
Appeals for the Third Circuit, in Shannon v. HUD, 436 F.2d 809 (3d Cir. 
1970), held that HUD is obligated to ``utilize some institutionalized 
method whereby, in considering site selection or type selection, it has 
before it the relevant racial and socio-economic information necessary 
for compliance with its duties'' under the Fair Housing Act. Id. at 
821. The Third Circuit further held that any HUD discretion must be 
exercised to not just prevent discrimination in housing, but to align 
the federal government ``in favor of fair housing.'' Id. at 819-20. It 
follows that, where HUD delegates decision-making responsibility to its 
grantees, HUD grantees must likewise gather and consider relevant 
information such as racial and socioeconomic segregation in housing to 
inform decisions that will foster integration and not further 
perpetuate segregation.
    Only a few years later, the U.S. Court of Appeals for the Second 
Circuit, in Otero v. New York City Housing Auth., et al., 484 F.2d 1122 
(2d Cir. 1973), similarly held that the obligation to AFFH requires 
that ``[a]ction must be taken to fulfill, as much as possible, the goal 
of open, integrated residential housing patterns and to prevent the 
increase of segregation, in ghettos,\3\ of

[[Page 30781]]

racial groups whose lack of opportunity the Act was designed to 
combat.'' Id. at 1134. Otero further held that, to accomplish this 
goal, HUD and funding recipients must take into account the 
socioeconomic and demographic makeup of the neighborhoods they govern, 
reasoning that ``the affirmative duty placed on the Secretary of HUD by 
Sec.  3608(e)(5) and through him on other agencies administering 
federally-assisted housing programs also requires that consideration be 
given to the impact of proposed public housing programs on the racial 
concentration in the area in which the proposed housing is to be 
built.'' Id. at 1133-34.
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    \3\ Reflecting the era in which it was enacted, the Fair Housing 
Act's legislative history and early court decisions, including those 
referenced throughout this preamble, refer to ``ghettos'' when 
discussing racially concentrated areas of poverty.
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    In NAACP, Boston Chapter v. HUD, 817 F.2d 149 (1st Cir. 1987), the 
U.S. Court of Appeals for the First Circuit likewise found that the 
AFFH mandate in 42 U.S.C. 3608(e)(5) requires, ``as a matter of 
language and of logic,'' that HUD and its funding recipients do more 
than refrain from discrimination. Id. at 154. NAACP involved a claim 
that HUD and Boston officials knew the city's neighborhoods and housing 
were racially segregated, yet they failed to utilize the ``immense 
leverage'' of federal funds to ``provide desegregated housing so that 
the housing stock is sufficiently large to give minority families a 
true choice of location.'' Id. at 152. The court held that HUD's 
obligation to AFFH requires that ``HUD do more than simply not 
discriminate itself''; rather, HUD must ``use its grant programs to 
assist in ending discrimination and segregation, to the point where the 
supply of genuinely open housing increases.'' Id. at 155. Like Shannon, 
NAACP explained that, to carry out this AFFH obligation effectively, 
HUD and its grantees must ``consider the effect of a HUD grant on the 
racial and socio-economic composition of the surrounding area,'' 
including historical patterns of segregation. Id. at 156.
    Thus, each federal court of appeals that has construed the Fair 
Housing Act's AFFH requirement has recognized that the AFFH obligation 
requires a funding recipient to consider existing segregation, 
including racial segregation, and other barriers to fair housing, and 
then take meaningful action to address them. These cases make plain 
that the AFFH obligation requires HUD and recipients of its funding to 
take proactive steps towards fair housing in this manner, beyond merely 
refraining from discrimination. These judicially recognized AFFH 
principles cannot be reconciled with PCNC's far more limited definition 
of affirmatively furthering fair housing, which a funding recipient 
satisfies by taking any step rationally related to any of a large set 
of objectives, some of which are not intrinsically about fair housing 
at all. More recently, courts applying and construing the AFFH 
requirement, and the precedents described above, have recognized that 
discretion and flexibility that HUD and its funding recipients have are 
inherent to the statutory obligation, because the precise actions 
needed depend on the local context. At the same time, they have 
continued to recognize that this discretion is cabined by the 
obligations to meaningfully assess racial and other forms of 
segregation and other impediments to fair housing and then take 
meaningful actions to address them. For example, in Thompson v. HUD, 
348 F. Supp. 2d 398, 409 (D. Md. 2005), the court found that HUD 
violated its duty to AFFH by limiting its efforts to desegregate public 
housing in Baltimore to the city limits, as opposed to widening its 
focus to the Baltimore region as a whole. Id. at 459, 461. In ordering 
HUD to take a regional approach, the court found that the AFFH mandate 
requires HUD to adopt policies ``whereby the effects of past 
segregation in Baltimore City public housing may be ameliorated by the 
provision of public housing opportunities beyond the boundaries of 
Baltimore City.'' Id. at 462. See also U.S. ex rel. Anti-Discrimination 
Ctr. v. Westchester Cnty., 2009 WL 455269 (S.D.N.Y. Feb. 24, 2009) 
(finding program participant's certification that it would AFFH 
deficient where it failed to adequately consider the impact of race on 
housing opportunities in the county).
    While the Supreme Court has never had occasion to consider the 
scope of the AFFH provision, it has consistently recognized and noted 
the Fair Housing Act's broad and remedial goals and has repeatedly 
observed that the Act is meant not just to bar discrete discriminatory 
acts, but to affirmatively counteract the nation's long history of 
racial segregation and discriminatory housing practices and policies.
    In Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 211 (1972), 
while analyzing the scope and purpose of the Act soon after the law was 
enacted and finding that it conferred very broad standing on private 
litigants to challenge discrimination, the Court relied on the 
statements of the Act's co-sponsor Senator Walter F. Mondale that: 
``the reach of the proposed law was to replace the ghettos `by truly 
integrated and balanced living patterns.' '' Decades later, in 
confirming the unanimous view of the courts of appeals that the Act 
permits disparate-impact claims, the Court further explained that 
``[m]uch progress remains to be made in our Nation's continuing 
struggle against racial isolation. . . . The Court acknowledges the 
Fair Housing Act's continuing role in moving the Nation toward a more 
integrated society.'' Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive 
Cmtys. Project, Inc., 576 U.S. 519, 546-47 (2015). As the Supreme Court 
held in Inclusive Communities Project, the Act's broad remedial 
purposes cannot be accomplished simply by banning intentional 
discrimination. The AFFH requirement plays a key role in the 
accomplishment of those purposes, requiring HUD and recipients of 
federal financial assistance to take affirmative steps to create an 
open, integrated society and to eliminate the barriers that stand in 
the way of truly equal housing opportunities for underserved 
populations.
    Moreover, Congress has repeatedly confirmed its view that the AFFH 
mandate imposes affirmative obligations on HUD funding recipients. In 
three separate statutes post-dating the Fair Housing Act--the Housing 
and Community Development Act of 1974, the Cranston-Gonzalez National 
Affordable Housing Act, and the Quality Housing and Work Responsibility 
Act of 1998--Congress has required covered HUD program participants to 
certify, as a condition of receiving Federal funds, that they will 
AFFH. See Public Law 93-383, the Housing and Community Development Act 
of 1974, 88 Stat. 633, (Aug. 22, 1974), as amended by Public Law 98-
181, Supplemental Appropriations Act of 1984, 97 Stat. 1153, (Nov. 30, 
1984) (codified at 42 U.S.C. 5304(b)(2), Pub. L. 101-625, Cranston-
Gonzalez National Affordable Housing Act, 104 Stat. 4079 (Nov. 28, 
1990) (codified at 42 U.S.C. 5306(d)(7)(B), 12705(b)(15); Pub. L. 105-
276, Quality Housing and Work Responsibility Act of 1998, 112 Stat. 
2461, (Oct. 21, 1998) (codified at 42 U.S.C. 42 1437C-1(d)(16). The 
certifications these laws require are designed to ensure compliance 
with a term that Congress necessarily understood to have the content 
given it by the courts and the agency tasked with overseeing 
compliance. See e.g., 42 U.S.C. 5304(b)(2) (requiring certification 
``that the grantee will affirmatively further fair housing''); 
5306(d)(7)(B) (``No amount may be distributed by any State or the 
Secretary under this

[[Page 30782]]

subsection . . . unless such unit of general local government certifies 
that . . . it will affirmatively further fair housing''), 12705(b)(15) 
(requiring certification ``that the jurisdiction will affirmatively 
further fair housing''), 1437C-1(d)(16) (requiring the public housing 
agency's certification that it ``will affirmatively further fair 
housing''). It is well-settled that Congress is presumed to be aware of 
an administrative or judicial interpretation of a statutory provision 
and to adopt that interpretation when it re-enacts that statute or uses 
the same statutory language elsewhere without change. Lamar, Archer & 
Cofrin, LLP v. Appling, 138 S. Ct. 1752 (2018) (citing Lorillard v. 
Pons, 434 U.S. 575, 580 (1978); Bragdon v. Abbott, 524 U.S. 624, 645 
(1998) (explaining that ``[w]hen administrative and judicial 
interpretations have settled the meaning of an existing statutory 
provision, repetition of the same language in a new statute indicates, 
as a general matter, the intent to incorporate its administrative and 
judicial interpretations as well.''). See also Tex. Dep't of Hous. & 
Cmty. Affairs, 576 U.S. at 536-38 (applying the concept of ``implicit 
ratification'' to the Fair Housing Act).

HUD's Implementation of the Affirmatively Furthering Fair Housing 
Mandate

    For decades, consistent with this judicial precedent, HUD 
interpreted the AFFH mandate as requiring the agency to use its 
programs to do more than simply not discriminate and bar others from 
discriminating. HUD instead interpreted this obligation to mean that it 
was required to use its programs to take affirmative steps to 
proactively overcome historic patterns of segregation, promote fair 
housing choice, and foster inclusive communities for all.\4\ Since 
1996, HUD required its grantees to support their certifications that 
they were affirmatively furthering fair housing by undertaking an 
Analysis of Impediments to Fair Housing Choice (AI), a form of fair 
housing planning. For example, HUD regulations for program participants 
that submit Consolidated Plans require an AFFH compliance 
certification. For many years, these regulations provided that, in 
making such certification, a grantee would commit to conducting an 
``analysis of impediments to fair housing choice within the 
jurisdiction, take appropriate actions to overcome the effects of any 
impediments identified through that analysis, and maintain records 
reflecting the analysis and actions in this regard.'' 24 CFR 
91.225(a)(1), 91.325(a)(1) and 91.425(a)(1) (1996). The AI is meant to 
be an assessment of conditions, both public and private, that affect 
fair housing choice within a grantee's jurisdiction. HUD's Fair Housing 
Planning Guide (FHPG) provided extensive guidance on how to AFFH by 
supplying a framework for fair housing planning.
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    \4\ The requirement of recipients of Federal housing and urban 
development funds and other Federal funds to affirmatively further 
fair housing has also been reiterated through executive order 
predating the PCNC rule. Executive Order 12892, entitled 
``Leadership and Coordination of Fair Housing in Federal Programs: 
Affirmatively Furthering Fair Housing,'' issued January 17, 1994, 
vests primary authority in the Secretary of HUD for all federal 
executive departments and agencies to administer their programs and 
activities relating to housing and urban development in a manner 
that furthers the purposes of the Fair Housing Act.
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The 2015 AFFH Rule
    In July 2013, HUD proposed regulations that codified and 
implemented the agency's longstanding interpretation of the AFFH 
requirement. After undertaking an extensive review of comments, HUD 
issued its 2015 final AFFH rule to implement the statutory requirement 
with respect to consolidated plan and public housing agency program 
participants, published on July 16, 2015 at 80 FR 42272.
    Consistent with decades of understanding of the obligation to AFFH 
as discussed throughout this preamble, the rule defined a funding 
recipient's AFFH duty as ``taking meaningful actions that, taken 
together, address significant disparities in housing needs and in 
access to opportunity, replacing segregated living patterns with 
racially balanced living patterns, transforming racially or ethnically 
concentrated areas of poverty into areas of opportunity, and fostering 
and maintaining compliance with civil rights and fair housing laws.'' 
The rule further defined ``meaningful actions'' as ``significant 
actions that are designed and can be reasonably expected to achieve a 
material positive change that affirmatively furthers fair housing by, 
for example, increasing fair housing choice or decreasing disparities 
in access to opportunity.'' The AFFH rule defined ``fair housing 
choice,'' in turn, to mean that ``individuals and families have the 
information, opportunity, and options to live where they choose without 
unlawful discrimination and other barriers related to race, color, 
religion, sex, familiar status, national origin, or disability.'' In 
sum, HUD restated and memorialized the substantive content of the 
statutory obligation to AFFH, based on longstanding precedent in 
caselaw, administrative practice, and congressional intent and 
ratification, in various definitions in the 2015 AFFH rule.
    In addition, the 2015 AFFH rule established a process whereby 
program participants \5\ would conduct a more standardized Assessment 
of Fair Housing (AFH) instead of an AI. The rule further required the 
program participant to certify that it would take meaningful actions to 
further the goals identified in its AFH. Program participants were not 
required to conduct and submit an AFH until after HUD had made 
available its Assessment Tool available for their use.\6\ and instead 
were instructed to continue conducting AIs (i.e., a variant of the same 
process they had followed for many years) to meet their AFFH 
obligations. 24 CFR 5.160(a)(3) (2015).
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    \5\ Program participants subject to the requirements of the 2015 
rulemaking included jurisdictions and insular areas required to 
submit consolidated plans for the Community Development Block Grant 
(CDBG) program (see 24 CFR part 570, subparts D and I); the 
Emergency Solutions Grants (ESG) program (see 24 CFR part 576); the 
HOME Investment Partnerships (HOME) program (see 24 CFR part 92); 
and the Housing Opportunities for Persons With AIDS (HOPWA) program 
(see 24 CFR part 574); as well as Public housing agencies (PHAs) 
receiving assistance under sections 8 or 9 of the United States 
Housing Act of 1937 (42 U.S.C. 1437f or 42 U.S.C.1437g).
    \6\ Along with a HUD-provided assessment tool, HUD-provided data 
also needed to be available to program participants to trigger the 
obligation to conduct an AFH under the 2015 AFFH rule.
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    Following promulgation of the 2015 AFFH rule, HUD began to 
implement the process contemplated by its 2015 AFFH rule, including 
producing assessment tools for program participants to use to conduct 
AFHs. HUD reviewed forty-nine submitted AFHs. In 2018, however, HUD 
paused implementation. HUD published three Federal Register Notices on 
May 23, 2018, one of which withdrew the Assessment Tool for Local 
Governments, the only available HUD-provided Assessment Tool for 
program participants to use when conducting an AFH. 83 FR 23927 (May 
23, 2018). As explained in a second Federal Register Notice published 
that same day, HUD directed all program participants who had not yet 
completed an AFH that they would continue to be required to conduct an 
AI. 83 FR 23927-23928.\7\ This well-established AI obligation and 
planning process continued to be in place until the PCNC regulation 
took effect on September 8, 2020.
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    \7\ The third Federal Register Notice withdrew an earlier Notice 
that had extended the deadline for submitting an AFH for certain 
program participants. 83 FR 23928.

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[[Page 30783]]

The 2020 Proposed Rule and PCNC
    HUD published a proposed rule in January 2020, 85 FR 2014 (January 
14, 2020), to repeal and replace the 2015 AFFH rule. However, on August 
7, 2020, at 85 FR 47899, HUD abandoned that proposed rulemaking and 
instead promulgated the PCNC final rule, which not only repealed the 
2015 AFFH rule, but eliminated the regulatory framework that preexisted 
that rule. It thus left program participants without any obligation to 
undertake any type of fair housing planning (whether an AFH, an AI, or 
any other) and leaving HUD without any mechanism to assist 
jurisdictions that wished to continue such activity. As described 
below, and of particular relevance to this rulemaking, the PCNC rule 
also redefined the AFFH obligation to which funding recipients must 
certify, without reconciling the new definition with the statutory 
requirement and judicial precedent.
    HUD promulgated PCNC without following notice-and-comment 
rulemaking procedures deciding that the PCNC rule was exempt from the 
Administrative Procedure Act (APA)'s notice and comment requirement 
because the regulation ``applies only to the AFFH obligation of 
grantees.'' The APA exempts from notice-and-comment rulemaking any 
``matter relating to agency management or personnel or to public 
property, loans, grants, benefits, or contracts.'' 5 U.S.C. 553(a)(2). 
However, as PCNC acknowledged, HUD's ``rule on rules'' at 24 CFR part 
10 requires HUD generally to follow the APA notice-and-comment 
rulemaking procedures notwithstanding any statutory exception that 
might otherwise apply, such as the grantmaking exception. HUD instead 
relied upon the Secretary's general regulatory waiver authority at 24 
CFR 5.110 and codified at 42 U.S.C. 3535(q) to waive any regulatory 
requirement ``[u]pon determination of good cause.'' As justification, 
the preamble to the PCNC rule stated that ``AFFH has been the subject 
of significant debate and public comment over the course of many years 
and this rule will ensure that program participants have the timely 
clarity they need concerning their legal obligations as grantees.'' 85 
FR 47901. In the waiver notice accompanying the PCNC regulation, HUD 
asserted that ``[i]n light of this public engagement, continued notice 
and comment concerning AFFH is unnecessary and would simply be a legal 
formality without adding substance to the debate.'' \8\ The waiver did 
not acknowledge that, while other issues related to the AFFH 
requirement had been the subject of notice and public comment, the 
definition of AFFH that appears in the PCNC rule had never been 
published for public comment. Notwithstanding this lack of prior notice 
and comment, the PCNC rule withdrew the 2015 rule's definition of the 
AFFH obligation and replaced it with a novel definition that HUD now 
finds was not a reasonable interpretation of the statutory mandate. The 
PCNC rule acknowledged that, under any reasonable reading of the AFFH 
requirement, compliance ``requires more than simply not 
discriminating,'' and grantees are required to ``actually promote fair 
housing.'' 85 FR 47902. Nevertheless, the rule went on to define ``fair 
housing'' as ``housing that, among other attributes, is affordable, 
safe, decent, free of unlawful discrimination, and accessible as 
required under civil rights laws.'' 85 FR 47905. The rule thus 
redefined ``fair housing'' to include attributes such as ``safe'' and 
``decent'' that, while laudable and consistent with HUD's mission, are 
legally distinct from the requirements of the Fair Housing Act's AFFH 
obligation. It then revised the regulatory definition of 
``affirmatively further'' to mean ``to take any action rationally 
related to promoting any attribute or attributes of fair housing . . 
.'' Id. (emphasis added). Finally, the PCNC rule provided that a 
program participant's certification of compliance with this statutory 
duty would be deemed sufficient if the participant took, during the 
relevant period, ``any action that is rationally related to promoting 
one or more attributes of fair housing. . . ,'' using the definition of 
``fair housing'' described above. 85 FR 47906.
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    \8\ Partial Waiver of 24 CFR 10.1 Notice-and-Comment Requirement 
(July 23, 2020), https://www.hud.gov/sites/dfiles/ENF/documents/6228-F-01%20PCNC%20-%20SIGNED%20Waiver%20-%207.23.20.11.42.pdf.
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    Thus, under the PCNC rule, a program participant's certification of 
compliance with the AFFH obligation amounted to a certification that 
the program participant would take any action rationally related to 
promoting one or more of the following ``attributes'': Housing that is 
affordable, safe, decent, free of unlawful discrimination, or 
accessible as required under civil rights laws. This certification 
requirement can be satisfied with minimal or no action not already 
required by other non-civil rights statutes and HUD rules, and without 
doing anything to remedy fair housing issues. For example, a 
jurisdiction taking any steps to meet HUD's programmatic requirements 
for maintaining the physical condition of federally supported housing, 
such as ensuring that fire exits are not blocked, smoke detectors are 
in good working order, or lighting is adequate, could certify 
compliance under the PCNC rule, despite taking no steps to stop 
discrimination that violates the Fair Housing Act, let alone any 
proactive steps of the kind the AFFH statutory mandate requires. Put 
simply, the PCNC rule made a participant's certification insufficient 
to ensure compliance with the AFFH obligation.
    HUD thus finds that the PCNC rule did not interpret the AFFH 
mandate in a manner consistent with statutory requirements, HUD's prior 
interpretations, or judicial precedent. Nor did it provide sufficient 
justification for this substantial departure. Rather than attempting to 
reconcile its definition with these precedents, the PCNC rule dismissed 
them as mistaken in conclusory fashion. 85 FR 47902.
    Through this rule, HUD is repealing the PCNC rule and publishing 
this interim final rule to reinstate the relevant definitions that were 
promulgated pursuant to the APA's notice and comment requirements in 
HUD's 2015 AFFH rule, as well as appropriate certifications that 
incorporate these definitions, effective on July 31, 2021. This interim 
final rule thus reinstates the regulatory requirement, consistent with 
the statutory mandate, agency interpretations, and judicial precedent, 
that program participants certify that they take meaningful actions 
that, taken together, address significant disparities in housing needs 
and in access to opportunity, replacing segregated living patterns with 
truly integrated and balanced living patterns, transforming racially or 
ethnically concentrated areas of poverty into areas of opportunity, and 
fostering and maintaining compliance with civil rights and fair housing 
laws. Program participants have long been accustomed to certifying 
compliance with this substantive standard and comparable procedural 
requirements (such as completion of the AI process). Additionally, 
while this interim final rule does not require program participants to 
undertake any specific type of fair housing planning to support their 
certifications, it provides notice that HUD will once again offer 
technical support and other assistance for jurisdictions that wish to 
undertake AFHs, AIs, or other forms of fair housing planning.

[[Page 30784]]

II. Justification for Interim Rule

Good Cause Under the Administrative Procedure Act

    In general, HUD publishes a rule for public comment in accordance 
with both the APA, 5 U.S.C. 553, and the agency's regulation on 
rulemaking at 24 CFR part 10. Both the APA and Part 10, however, 
provide for exceptions from that general rule where HUD finds good 
cause to omit advance notice of the opportunity for public comment. The 
good cause requirement is satisfied when prior public procedure is 
``impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(B). In order to publish a rule for effect prior to 
receiving and responding to public comments (i.e., an interim final 
rule), the agency must make a finding that ``good cause'' exists.
    HUD has determined that good cause exists to promulgate this 
interim final rule because it is in the public interest to publish this 
rule without advance notice and public comment in light of the present 
circumstances, and that subjecting the rule to notice and comment prior 
to publication would be impracticable and unnecessary. HUD's 
determination is based on, among other things, a combination of the 
following considerations. This interim final rule rescinds the PCNC 
regulation, currently codified at 24 CFR parts 5, 91, 92, 570, 574, and 
903. HUD finds that the PCNC rule was promulgated improperly without 
notice and comment, and without sufficient explanation for its 
substantial departure from prior agency interpretations and judicial 
precedent concerning the AFFH obligation. As a result, the PCNC Rule 
creates substantial risks that reliance on the rule's certifications by 
HUD funding recipients, many of which are in jurisdictions where 
caselaw is irreconcilable with the PCNC rule, may place them in 
jeopardy of violation of their statutory AFFH obligations, and, were 
HUD to accept these certifications, may place the agency at risk of 
violating its own statutory duty to affirmatively further fair housing. 
While the PCNC rule fundamentally altered the regulatory landscape, 
this interim final rule is limited in scope and imposes no new 
requirements that have not already been the subject of prior notice and 
comment. It reinstates provisions that were in effect prior to the PCNC 
rule's promulgation. Under the unique circumstances here, HUD has good 
cause to omit advance notice and public comment prior to this rule 
taking effect.
    Notwithstanding these good cause determinations for this IFR 
interim final rule to take effect without advance notice and comment, 
HUD still requests and encourages public comments on all matters 
addressed in this rule. Moreover, HUD recognizes that program 
participants may need some time to adjust to this restoration and may 
choose to seek assistance from HUD in doing so, and therefore delays 
the effective date until July 31, 2021. HUD has determined this is the 
longest delay it can provide consistent with the need to reinstate AFFH 
certifications that help ensure program participants' compliance with 
their statutory AFFH obligations in their expenditure of billions of 
federal dollars prior to the date on which many program participants 
make their annual certifications of compliance. HUD thus requests 
comments within 30 days of publication so that it may consider public 
views prior to the effective date.

This Limited Rulemaking Is Consistent With Notice-and-Comment 
Principles, Because It Restores Provisions That Have Gone Through 
Notice and Comment While Rescinding Provisions That Have Not

    This limited rulemaking reinstates definitions and corresponding 
certifications from the 2015 AFFH rule and provides notice of the 
reinstatement of a voluntary process by which HUD will assist program 
participants in complying with their AFFH obligations. HUD previously 
promulgated these provisions after extensive notice-and-comment 
process, so they are familiar to HUD program participants. HUD 
published a Notice of Proposed Rulemaking (NPRM) for its AFFH rule in 
2013 and received over one thousand public comments. 78 FR 43709. HUD 
reviewed and considered those comments and then promulgated the AFFH 
rule in 2015.\9\ In this interim final rule, HUD is reinstating 
definitions already promulgated in the 2015 rule, with a few technical 
changes to conform provisions that previously assumed the existence of 
mandatory fair housing planning process and other procedures, such as 
completing an AFH or AI, to the more limited structure of this interim 
final rule.
---------------------------------------------------------------------------

    \9\ HUD's full response to public comment on the restored 
definitions is contained in the preamble to the original publication 
of the 2015 AFFH rule at 80 FR 42272. Cf. Citronelle-Mobile 
Gathering, Inc. v. Gulf Oil Corp., 420 F. Supp. 162, 170-71 (S.D. 
Ala. 1975), remanded on other grounds, 578 F.2d 1149 (5th Cir. 1978) 
(noting that the agency could have invoked ``good cause'' if it had 
been required to repromulgate its existing regulations because the 
regulations had previously been promulgated pursuant to notice and 
comment, stating, ``No real purpose would have been served by 
requiring the redundant solicitation of public comment. This had 
already been previously accorded for exactly the same regulation in 
question . . . Repromulgation would have required the administrative 
procedures be once more employed, necessitating delay and a lapse in 
regulatory enforcement. This would have served no useful 
purpose.'').
---------------------------------------------------------------------------

    Reinstating these definitions and corresponding certifications 
prior to public notice and comment is also necessary because the PCNC 
rule provided no opportunity for the public to comment before 
comprehensively redefining the AFFH mandate and the content of 
corresponding certifications that funding recipients make on a regular 
basis. Where, as here, a familiar regulatory definition that has passed 
through extensive notice and comment scrutiny is available, HUD 
believes the public interest is disserved by requiring funding 
recipients to certify compliance to a definition that has not benefited 
from public comment.
    As an initial matter, HUD now believes it is doubtful that PCNC's 
invocation of notice and comment waiver authority was appropriate. PCNC 
invoked HUD's general regulatory waiver authority under 24 CFR 5.110 to 
waive its Part 10 regulations, which otherwise would have required 
notice-and-comment procedures, but in doing so it downplayed the 
statutory requirement that HUD maintain its Part 10 regulation, as well 
as the general principle that notice-and-comment rulemaking for major 
legal change best serves the public interest. A longstanding statutory 
provision requires HUD to maintain its Part 10 requirements, i.e., to 
comply with notice-and-comment requirements.\10\ In the PCNC rule, HUD 
minimized the significance of this provision, stating that Congress did 
``not abrogate the Secretary's independent statutory authority under 42 
U.S.C. 3535(q) to waive regulations in specific circumstances.'' 85 FR 
47904 (FN 78). HUD now believes that this was an overly restrictive 
reading of this provision that ignored Congress's clear intent to limit 
HUD's authority to eschew notice-and-comment requirements.
---------------------------------------------------------------------------

    \10\ See Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 1998, 
Public Law 105-65, 111 Stat. 1344, 1365, Sec.  208 (Oct. 27, 1997).
---------------------------------------------------------------------------

    In any event, regardless of whether PCNC's reliance on the 
regulatory waiver to bypass notice-and-comment requirements was lawful, 
HUD believes it disserved the public interest such that there is a 
strong interest in immediately restoring a regulatory definition that 
has gone through notice-and-comment scrutiny and more sustained agency 
and public consideration. PCNC abandoned the agency's longstanding

[[Page 30785]]

understanding of the AFFH obligation, declined to follow judicial 
precedent, and suddenly altered the duties and obligations of funding 
recipients around the country. No judicial authority or HUD guidance 
exists that would help program participants, communities, and fair 
housing stakeholders reconcile this newly minted definition with 
better-established understandings of the AFFH requirement. PCNC 
acknowledged this lack of judicial or agency precedent supporting its 
redefinition of the AFFH requirement. See 85 FR 47902, 47903 FN 54, 
62.\11\ It relied solely on dictionaries, id. at 47901-902, but without 
explaining how this approach justified the redefinition of the term 
``fair housing'' to include actions that do not constitute fair housing 
as this term is ordinarily used. HUD relied heavily on a policy-driven 
conclusion that it is too burdensome for program participants to 
conduct any fair housing analysis, not just of the sort that was 
required by the 2015 rule, but of the sort that was required for 
decades before. Id. at 47902-903. These fundamental changes in how the 
agency understands and implements a statutory obligation are of the 
magnitude that should warrant notice and comment.
---------------------------------------------------------------------------

    \11\ PCNC's preamble pointed to the Cranston Gonzales National 
Affordable Housing Act, of 1990, Public Law 101-625 102, 105, for 
the proposition that ``Congress also broadened national housing 
policy grants administered by HUD, requiring AFFH certifications, to 
include goals such as a `decent, safe, and sanitary housing for 
every American' and increasing the supply of `affordable housing.''' 
See 85 FR 47901. But this statute has several purposes. While one of 
its purposes was to promote decent, safe, and sanitary housing, and 
it incorporated a requirement that covered entities certify that 
they would affirmatively further fair housing, the statute does not 
include a nexus between that purpose and fair housing. As a result, 
HUD's prior reliance on Cranston Gonzalez to justify this novel 
definition of fair housing was misplaced.
---------------------------------------------------------------------------

    In this context, this interim final rule is not an attempt to avoid 
notice and comment obligations; instead, it suspends a rule that is 
inconsistent with the AFFH statutory mandate, HUD's prior 
interpretations, and judicial precedent and was improperly promulgated 
without notice and opportunity for comment in favor of provisions drawn 
from a rule that assiduously followed that process. HUD believes that 
leaving the PCNC rule in place--thus causing grant recipients to rely 
upon a confusing rule that was promulgated in disregard of notice and 
comment obligations--while seeking comment prior to publication on a 
proposal to reinstate provisions from the 2015 rule would subvert 
rather than honor the purposes of the notice and comment process. Cf. 
Friends of Animals v. Bernhardt, 961 F.3d 1197, 1206 (D.C. Cir. 2020) 
(``But we do not see how a government action that illegally never went 
through notice and comment gains the same status as a properly 
promulgated rule such that notice and comment is required to withdraw 
it. . . we are faced only with the repeal of a ``rule'' that illegally 
never went through notice and comment--in other words, a `non-rule 
rule.'''). The notice-and-comment requirement is intended to ``serve 
the public interest by providing a forum for the robust debate of 
competing and frequently complicated policy considerations.'' Nat. Res. 
Def. Council v. Nat'l Highway Traffic Safety Admin., 894 F.3d 95, 115 
(2d Cir. 2018); see also Consumer Energy, Etc. v. F.E.R.C., 673 F.2d 
425, 446 (D.C. Cir. 1982) (``The value of notice and comment prior to 
repeal of a final rule is that it ensures that an agency will not undo 
all that it accomplished through its rulemaking without giving all 
parties an opportunity to comment on the wisdom of repeal.''). HUD has 
determined that these salutary purposes are best served by reinstating 
provisions that have been subject to this ``robust debate'' but were 
undone without notice and comment, particularly as there has been 
little reliance on the PCNC rule's definitions and certifications, 
which have been in place for only a short period of time.
    Consistent with its commitment to principles of notice-and-comment 
rulemaking, HUD now solicits comments on the provisions it now 
promulgates on an interim basis and will consider all comments prior to 
the effective date of this interim final rule. HUD anticipates 
separately issuing an NPRM, which (unlike this interim final rule) will 
propose provisions that have not previously gone through notice and 
comment rulemaking. That notice will set forth and seek comment on more 
detailed proposed implementation of a program participant's AFFH 
obligations and will seek to build on and improve the processes set 
forth in the 2015 AFFH rule to further help funding recipients comply 
with their statutory obligation while reducing the regulatory burden on 
them. HUD welcomes public participation in these efforts to continue to 
strengthen fair housing outcomes while reducing burden on program 
participants.

HUD Believes the PCNC Rule Is Not Based on a Reasonable Construction of 
the AFFH Requirement as Construed by the Courts and Ratified by 
Congress

    While HUD has ample discretion to construe and apply the AFFH 
requirement, the PCNC regulation is fundamentally inconsistent with the 
agency's longstanding interpretation of its and funding recipients' 
statutory obligation to AFFH, as well as the decades of authority 
described above interpreting the scope of this obligation. The current 
regulation does not require that program participants take any steps to 
further any fair housing outcomes as the term ``fair housing'' is 
generally understood, whereas the Housing and Community Development Act 
of 1974, the Cranston-Gonzalez National Affordable Housing Act, and the 
Quality Housing and Work Responsibility Act of 1998 all require program 
participants to certify that they will affirmatively further fair 
housing as Congress understood and ratified the term. This conflict 
puts program participants at risk of confusion and violation of a 
statutory duty. It is in the public interest not to expose program 
participants to that risk.
    As explained above, under the current regulation, a program 
participant's certification of compliance with the AFFH obligation 
amounts only to a certification that the program participant will take 
any single action rationally related to promoting one or more of the 
following ``attributes:'' Housing that is affordable, safe, decent, 
free of unlawful discrimination, or accessible as required under civil 
rights laws. Put simply, under PCNC, HUD is not requiring program 
participants to certify that they are taking actions that meet their 
actual statutory obligation to AFFH, and HUD risks not fulfilling its 
own understanding of its statutory obligations.
    The PCNC rule thus does not represent a selection among reasonable 
options within HUD's discretion. Had HUD given notice and taken comment 
before promulgating it, this substantive infirmity would almost 
certainly have been pointed out and HUD would have had to address it. 
The failure to abide by notice-and-comment requirements before 
promulgating the PCNC rule therefore is closely connected with the 
failure to put in place regulatory definitions that are consistent with 
precedent and that foster compliance with the law. HUD believes the 
public interest is best served by the timely reinstatement, prior to 
the deadline by which a great number of program participants must 
certify compliance, of definitions that not only went through notice-
and-comment procedures but are familiar to program participants; are 
consistent with well-established judicial and agency precedent 
construing the AFFH obligation and certifications incorporating these 
definitions; and are further elaborated by years of regulatory

[[Page 30786]]

guidance that HUD has issued to assist grantees in compliance. 
Compliance with AFFH is included as a condition in a myriad of funding 
notices that HUD publishes on a regular basis and that it cannot delay 
past the effective date of this interim final rule. Similarly, HUD 
cannot delay past the effective date of this interim final rule because 
participants in the Community Development Block Grant (CDBG) program 
must submit their Annual Action Plans, which include AFFH 
certifications, by August 16 each year.
    Each year, HUD provides States, local governments, and public 
housing agencies with billions of dollars in federal financial 
assistance, appropriated and authorized by Congress. As part of HUD's 
obligations as a grantor agency, consistent with longstanding statutory 
requirements, HUD oversees the use of such funds to ensure that 
taxpayer dollars are used in a responsible manner that is consistent 
with the law. For example, HUD is obligated to ensure that all federal 
grants are made consistently and in accordance with federal grant 
making requirements set forth at 2 CFR part 200. These requirements 
obligate HUD to engage in active oversight of its recipients, including 
ensuring compliance with civil rights requirements. See, e.g., 2 CFR 
200.300 (``The Federal awarding agency must manage and administer the 
Federal award in a manner so as to ensure that Federal funding is 
expended and associated programs are implemented in full accordance 
with the U.S. Constitution, Federal Law, and public policy 
requirements: Including, but not limited to, those protecting free 
speech, religious liberty, public welfare, the environment, and 
prohibiting discrimination.'').
    As a vital part of this oversight role, HUD requires program 
participants to annually certify that they will comply with various 
federal requirements, including the obligation to affirmatively further 
fair housing. Under the PCNC Rule, these certifications are to a 
standard that is inconsistent with the underlying legal obligation, 
preventing HUD from relying on them to carry out its oversight 
obligations. For these reasons, and with impending deadlines including 
the August 16 CDBG annual action plan deadline, it is imperative that 
HUD immediately provide its recipients with legally supportable 
definitions and certifications for HUD to meet its own obligations as a 
grantor agency and put its grantees on notice that PCNC represents a 
standard that HUD now believes is not consistent with the statutory 
obligation to affirmatively further fair housing. Moreover, because 
certifications made under the PCNC rule do not require compliance with 
the Fair Housing Act, allowing that rule to remain in place risks 
further entrenching segregation and inequity in access to housing and 
opportunity, challenges that have been exacerbated by presently 
converging health, economic, and climate crises.

HUD Is Delaying the Effective Date of This Interim Final Rule Until 
July 31, 2021

    While HUD is providing notice immediately that it does not regard 
the PCNC definitions as compliant with the statutory AFFH obligation, 
HUD's prior interpretations, and judicial precedent, HUD is delaying 
the effective date of this interim final rule until July 31, 2021 to 
give program participants time to adjust. HUD has determined that this 
is the longest delay of the effective date it can provide while 
ensuring that municipalities and other participants in the Community 
Development Block Grant program can submit annual action plans, 
including AFFH certifications, that are consistent with the AFFH 
statutory obligation as described above. CDBG annual action plans must 
be submitted by August 16 each year, and so HUD has determined that it 
is necessary for this rule to go into effect before then and to provide 
program participants with sufficient notice.\12\
---------------------------------------------------------------------------

    \12\ See 42 U.S.C. 5316(b); 24 CFR 91.15(a); 24 CFR 
570.304(c)(1).
---------------------------------------------------------------------------

    Between the date of publication and the effective date, HUD will 
provide additional clarity to affected program participants. HUD will 
provide guidance and technical support to program participants 
regarding the interim final rule, including with respect to the 
reinstated definitions and certifications and with respect to fair 
housing planning and actions that program participants may voluntarily 
undertake in support of their certifications. Additionally, although 
the definitions have already been the subject of notice-and-comment 
rulemaking, HUD will seek comment for a period of 30 days from 
publication to solicit additional views. HUD will carefully consider 
all such comments and in response to those comments, as it deems 
appropriate, may amend the interim final rule accordingly.

Conclusion

    Under the totality of the circumstances described above, HUD 
believes this limited-in-scope interim final rule is justified by good 
cause.\13\ HUD finds that the PCNC rule is contrary to the AFFH 
statutory mandate and constitutes a substantial departure from HUD's 
prior interpretations and judicial precedent. Moreover, the PCNC rule 
is contrary to multiple Congressional mandates with which HUD must act 
promptly to comply by removing the PCNC regulation and restoring 
definitions upon which program participants can reasonably rely in 
certifying compliance with their statutory duty to AFFH. HUD further 
finds that the PCNC rule was improperly promulgated without a 
sufficient reason for forgoing notice and comment rulemaking. This 
interim final rule reinstates provisions that have already undergone 
sufficient notice and comment processes, and HUD is now inviting 
additional comment and delaying the effective date of this interim 
final rule until July 31, 2021. HUD may further revise this interim 
final rule before its effective date in response to these comments. 
Additionally, HUD is reestablishing voluntary processes and technical 
assistance to assist program participants in complying with their 
statutory AFFH obligations and engage in fair housing planning.
---------------------------------------------------------------------------

    \13\ See Petry v. Block, 737 F.2d 1193, 1200 (D.C. Cir. 1984) 
(``For here the combination of several extraordinary factors 
validates the Department's adoption of the interim rule under the 
mantle of `good cause.' ''); see also Nat'l Women, Infants, & 
Children Grocers Ass'n v. Food & Nutrition Serv., 416 F. Supp. 2d 
92, 105-107 (D.D.C. 2006) (finding that, under the totality of 
circumstances, a combination of the four reasons advanced by the 
agency established good cause to promulgate an interim final rule).
---------------------------------------------------------------------------

III. This Interim Final Rule

    Against this backdrop, this interim rulemaking is narrowly focused 
to meet the urgent need to withdraw the PCNC rule definition, which 
promotes confusion and noncompliance with the statutory obligation to 
AFFH, and to reinstate a definition that properly states that duty and 
is the result of notice and comment rulemaking. This interim final rule 
restores the understanding of the AFFH obligation for certain 
recipients of federal financial assistance from HUD to the previously 
established understanding by reinstating legally supportable 
definitions that are consistent with a meaningful AFFH requirement and 
certifications that incorporate these definitions. HUD has also amended 
the certifications in the program regulations at 24 CFR 91.225, 91.325, 
91.425, 570.487, 903.7, and related record keeping requirements to 
restore meaningful AFFH certifications that incorporate appropriate 
definitions.

[[Page 30787]]

Amendments to 24 CFR parts 92, 570, 574, and 576 include updated cross-
references and clarification of program participants in the HOME, CDBG, 
Housing Opportunities for Persons With AIDS (HOPWA), and Emergency 
Solutions Grants programs regarding recordkeeping requirements. In a 
similar manner, this interim final rule amends 24 CFR 903.7(o), 903.15, 
and 24 CFR 903.23(f) to update cross-references to the amended 
definitions and certification provisions in 24 CFR 5.151 and 5.152 and 
to explain the relationship of the public housing agency plans to the 
consolidated plan and a PHA's fair housing requirements. The 
regulations also explain how HUD will assist program participants in 
carrying out their obligation and provides attendant definitions in 24 
CFR 5.152. With this interim final rule, HUD does not, however, 
reinstate the obligation to conduct an AFH or AI, or mandate any 
specific fair housing planning mechanism.
    The effect of the reinstatement of the 2015 AFFH rule definitions 
and certifications incorporating those definitions is that recipients 
once again can rely on HUD's regulatory definition to accurately 
articulate the purpose and meaning of their AFFH obligation. The 
critical importance of requiring funding recipients to certify to a 
regulatory definition that is consistent with longtime understandings 
of the AFFH obligation was recognized by the court in National Fair 
Housing Alliance v. Carson, 330 F. Supp. 3d 14 (D.D.C. 2018). In that 
case, plaintiffs challenged HUD's withdrawal of the Local Government 
Assessment Tools (and effective suspension of the AFH process), 
contending that eliminating these procedural requirements put HUD in 
violation of its own obligation to ensure that funding recipients 
comply with the AFFH requirement. The court determined that HUD's 
actions were not contrary to the Fair Housing Act because the AI 
requirement and the 2015 rule's definitions and certifications 
incorporating those definitions remained in place. See 330 F. Supp. 3d 
at 45. Accordingly, when HUD published PCNC and replaced the 2015 
rule's definitions with ones unmoored from the Fair Housing Act, it 
withdrew the underpinnings of National Fair Housing Alliance v. 
Carson's reasoning that HUD was continuing to require compliance with 
the Act's substantive obligation.
    Since some of the 2015 Rule's definitions may not be applicable 
absent the obligation to conduct an AFH or AI, HUD is not reinstating 
all definitions from the 2015 AFFH rule at 24 CFR 5.152 (2015). 
Instead, HUD is promulgating only those that are applicable and in 
force under this limited-in-scope interim final rule.\14\ HUD is 
providing the definitions at 24 CFR 5.151 in order to inform program 
participants of how these terms are applied. The definitions include: 
``Affirmatively Furthering Fair Housing,'' ``Disability,'' ``Fair 
Housing Choice,'' ``Housing Programs Serving Specified Populations,'' 
``Integration,'' ``Meaningful Actions,'' ``Racially or Ethnically 
Concentrated Areas of Poverty,'' ``Segregation,'' and ``Significant 
Disparities in Opportunity.'' These definitions correspond with the 
AFFH statutory mandates, HUD's long-standing interpretations, and 
judicial precedent.
---------------------------------------------------------------------------

    \14\ While some definitions from the 2015 AFFH rule referred to 
the Assessment Tool to provide more information, HUD does not 
restore these references. HUD has removed references to the AFH and 
other provisions of the 2015 AFFH rule that are no longer 
applicable. HUD restores 24 CFR 5.150 to similarly align with this 
approach, explaining that the purpose of the regulations, pursuant 
to the statutory obligation to affirmatively further fair housing, 
is to provide program participants with a substantive definition of 
the AFFH requirement, as well as to provide access to an effective 
planning approach to aid those program participants that wish to 
avail themselves of it in taking meaningful actions to overcome 
historic patterns of segregation, promote fair housing choice, and 
foster inclusive communities that are free from discrimination. 
These conforming edits to the definitions and purpose do not change 
the meaning of the terms; they merely align them to the previously 
published regulations that are restored here. HUD believes that the 
restoration of these definitions will be helpful to recipients as 
they certify that they are affirmatively furthering fair housing 
consistent with prior judicial interpretations of the statutory 
mandate to affirmatively further fair housing.
---------------------------------------------------------------------------

    HUD provides the definition of ``Affirmatively Furthering Fair 
Housing'' based on numerous judicial interpretations of the Fair 
Housing Act. For example, in Otero v. New York City Housing Auth., the 
Second Circuit held that the AFFH mandate requires that ``[a]ction must 
be taken to fulfill, as much as possible, the goal of open, integrated 
residential housing patterns and to prevent the increase of 
segregation, in ghettos, of racial groups whose lack of opportunities 
the Act was designed to combat.'' Otero, 484 F.2d at 1134. It found 
that this requirement flows from the evident legislative purpose, as 
Senator Mondale ``pointed out that the proposed law was designed to 
replace the ghettos `by truly integrated and balanced living patterns.' 
'' Otero, 484 F.2d at 1134 (citing 114 Cong. Reg. 3422).
    Similarly, in NAACP, Boston Chapter v. HUD, 817 F.2d at 154, the 
First Circuit held that ``as a matter of language and logic, a statute 
that instructs an agency `affirmatively to further' a national policy 
of nondiscrimination would seem to impose an obligation to do more than 
simply not discriminate itself.'' NAACP, Boston Chapter, 817 F.2d at 
154. It found that ``. . . a failure to `consider the effect of a HUD 
grant on the racial and socio-economic composition of the surrounding 
area' '' would be inconsistent with the Fair Housing Act's mandate. Id. 
at 156. Further, the court found that ``the need for such consideration 
itself implies, at a minimum, an obligation to assess negatively those 
aspects of a proposed course of action that would further limit the 
supply of genuinely open housing and to assess positively those aspects 
of a proposed course of action that would increase that supply.'' Id. 
If HUD is ``doing so in any meaningful way, one would expect to see, 
over time, if not in any individual case, HUD activity that tends to 
increase, or at least, that does not significantly diminish, the supply 
of open housing.'' Id.
    Similarly, in Thompson v. HUD, the court found that the AFFH 
mandate requires consideration of the effect of its policies on the 
racial and socioeconomic composition of the surrounding area. Thompson, 
348. F. Supp. 2d at 409; see also Garrett v. Hamtramck, 335 F. Supp. 
16, 27 (E.D. Mich. 1971), aff'd 503 F.2d 1236 (6th Cir. 1974). HUD 
believes the 2015 rule's definition of AFFH is consistent with these 
rulings and others and can ensure that HUD and its program participants 
comply with the AFFH requirement.
    Relatedly, in this interim final rule, HUD is including a 
definition of ``Fair Housing Choice'' that is consistent with these 
cases and others. For example, in Thompson, the court found that, ``it 
is appropriate to note that there is a distinction between telling a 
person that he or she may not live in [a] place because of race and 
giving the person a choice so long as the place in question is, in 
fact, available to anyone without regard to race.'' 348 F. Supp. 2d at 
450.
    The other definitions provided in this interim final rule, which 
help to detail the meaning of the AFFH obligation, are similarly rooted 
in judicial precedent and statutory purpose. In Otero, the Second 
Circuit held that the AFFH mandate extends beyond HUD and to its 
recipients (in that case, the housing authority) and required funding 
recipients to take affirmative steps to promote integration. 484 F.2d 
at 1124. The obligation of program participants to take ``Meaningful 
Actions,'' as defined in the 2015 rule and in this interim final rule, 
is a reasonable interpretation of this holding. See also NAACP, Boston 
Chapter, 817 F.2d at

[[Page 30788]]

154 (requiring the assessment of actions in a ``meaningful way'').
    In addition, because the AFFH obligation as intended by Congress 
and construed by the courts requires efforts to decrease segregation 
and promote integration, HUD finds it appropriate to once again include 
those concepts in the definition of AFFH and, in turn, reinstate the 
definitions for both ``Segregation'' and the converse, ``Integration,'' 
from the 2015 rule. See Client's Council v. Pierce, 711 F.2d 1406, 1425 
(8th Cir. 1983) (``Congress enacted section 3608(e)(5) to cure the 
widespread problem of segregation in public housing''); see also 
Resident Advisory Bd. v. Rizzo, 425 F. Supp. 987, 1013-1019 (E.D. Pa. 
1976) aff'd in part, rev'd in part on other grounds, 564 F.2d 126 (3d 
Cir.), cert. denied, 435 U.S. 908 (1977) (``Each case brought under 
[3608(e)(5)] requires a close analysis of the facts peculiar to that 
case and the city in which the facts have occurred . . . in view of the 
pattern of racial segregation which prevailed in both private and 
public housing in Philadelphia, the City of Philadelphia has not, under 
the facts of this case, met its duty of affirmatively implementing the 
national policy of fair housing and has violated Title VIII of the 
Civil Rights Act of 1968.); Otero, 484 F.2d at 1133-34 (explaining that 
``. . . the affirmative duty placed on the Secretary of HUD by Sec.  
3608(e)(5) and through him on other agencies administering federally-
assisted housing programs also requires that consideration be given to 
the impact of proposed public housing programs on the racial 
concentration in the area in which the proposed housing is to be 
built.'').
    HUD is also reinstating the definition of ``Housing Programs 
Serving Specified Populations'' in this rule. Such programs include HUD 
and Federal Housing programs, such as HUD's Supportive Housing for the 
Elderly, Supportive Housing for Persons with Disabilities, and homeless 
assistance programs under McKinney-Vento Homeless Assistance Act (42 
U.S.C.11301, et seq.), and housing designated under section 7 of the 
United States Housing Act of 1937 (42 U.S.C. 1437e) that serve specific 
identified populations and comply with Federal civil rights statutes 
and regulations. The inclusion of this definition is necessary to 
assure current and prospective program participants that participation 
in these specified Federal housing programs does not present a fair 
housing issue of segregation, provided that such programs are 
administered to comply with program regulations and applicable civil 
rights requirements.
    Judicial precedents similarly held that, as a necessary precursor 
to fulfilling the ultimate obligation of pursuing actions that foster 
desegregation and avoid perpetuating segregation, the AFFH mandate 
requires program participants to assess the demographics of discrete 
geographic areas when conducting an analysis. For example, the Third 
Circuit found that the AFFH mandate requires obtaining the information 
necessary to make informed decisions on the effects of site selection 
or type selection of housing with regard to racial concentration, 
determining that even within the discretion afforded by the AFFH 
mandate, judgment must be ``informed.'' See Shannon, 436 F.2d at 820-
22.
    In light of these judicial precedents, this rule reinstates the 
definitions of ``Data'' and ``Significant Disparities in Access to 
Opportunity.'' In doing so, it restores a reasonable interpretation of 
precedents holding that the AFFH obligation requires the consideration 
of data such as the racial demographics of neighborhoods, other 
geographic areas, and housing developments, as a necessary precursor to 
taking meaningful action to promote integration, decrease segregation, 
undo racially or ethnically concentrated areas of poverty, and overcome 
significant disparities in access to opportunity. See, e.g., Blackshear 
Res. Org. v. Housing Auth. of City of Austin, 347 F. Supp. 1138, 1148 
(W.D. Tex. 1971) (holding that both the PHA and HUD were charged with 
the obligation to AFFH and their decision ``failed to consider that 
policy'' and must be set aside because HUD had not considered ``hard, 
reliable data showing the racial demography of any of these areas'' 
despite the readily available data that could have been consulted.).
    Finally, HUD is including definitions of ``Protected 
Characteristic,'' ``Protected Class,'' and ``Disability.'' The 
definition of ``Disability'' in this interim final rule, as in the 2015 
AFFH Rule, is intended to be consistent with other federal civil rights 
laws with which program participants must comply, such as Section 504 
of the Rehabilitation Act of 1973 and the Americans with Disabilities 
Act of 1990, as amended by the ADA Amendments Act of 2008. HUD 
incorporates by reference the definition of disability under Section 
504 and the ADA as interpreted by the Attorney General, see 28 CFR 
35.108, for purposes of the affirmatively furthering fair housing 
obligation under Section 808(e)(5) so as to provide consistency and 
clarity to HUD program participants, which are all already bound by the 
same definition under those statutes.
    In addition to reinstating these definitions, HUD restores the 
certifications that incorporate these definitions. HUD has sometimes 
required funding recipients to certify to compliance with certain 
procedures (such as creating an AI) that implement the caselaw above 
and has sometimes required certification to a substantive standard. HUD 
is not mandating any particular procedure by which program participants 
must engage in fair housing planning in this interim final rule, but 
rather is reinstating a meaningful substantive definition of AFFH.
    Additionally, HUD interprets its own statutory obligation as 
requiring it to assist program participants with compliance, and in any 
event HUD's experience teaches it that such assistance leads to better 
fair housing outcomes. Through this interim final rule, HUD resumes a 
process for providing technical assistance to program participants that 
engage in fair housing planning, including, in particular, the familiar 
AI and AFH processes.
    HUD anticipates that many program participants may wish to engage 
in voluntary fair housing planning processes that support their AFFH 
certifications. Most program participants have already prepared an AI 
or AFH, which were required by the regulations that preceded the PCNC 
rule, and so HUD anticipates that many program participants may wish to 
continue to implement or update their AI or AFH to support their AFFH 
certifications. Accordingly, HUD will provide technical assistance and 
other support to program participants that voluntarily engage in the AI 
or AFH planning processes. This interim final rule does not require 
program participants to comply with these processes, but HUD 
anticipates the continued use of the AI or AFH process are ways program 
participants may choose to support AFFH certifications while 
maintaining continuity.
    Program participants may also choose to support their 
certifications and maintain records in other meaningful ways, provided 
they can appropriately certify that they will AFFH, consistent with the 
definitions that are restored in this rule. Program participants are 
encouraged to seek technical assistance from HUD's Office of Fair 
Housing and Equal Opportunity (FHEO) regarding any fair housing 
planning process.
    Under its authority regarding a grantee's certifications, HUD may 
review recipients' records and documents to confirm the validity of

[[Page 30789]]

certifications submitted to HUD in connection with the receipt of 
Federal funds. HUD only intends to undertake such a review when it has 
reason to believe the certifications submitted are not supported by the 
recipients' actions. HUD expects these instances to be rare and will 
provide all required notice to recipients of any review to be 
undertaken.
    Consistent with this interim final rule, HUD will separately 
restore the guidance and resources available for recipients' use in 
conducting fair housing planning until such time as HUD finalizes a new 
regulation to implement the statutory mandate to AFFH at 42 U.S.C. 
3608(e)(5). While the AFFH Rule Guidebook was published to further the 
implementation of the 2015 AFFH rule, its content may assist recipients 
in identifying areas of analysis and strategies and actions that would 
overcome historic patterns of segregation, promote integration, 
increase access to opportunity, and ensure fair housing choice. As 
such, HUD will republish both the FHPG and the AFFH Rule Guidebook. It 
also will keep the AFFH Data and Mapping Tool (the AFFH-T) publicly 
available,\15\ so that program participants have racial, socioeconomic, 
and other data to engage in fair housing planning.
---------------------------------------------------------------------------

    \15\ HUD has continued to update the data used in this tool on a 
yearly basis. The data was last updated in summer 2020.
---------------------------------------------------------------------------

    HUD will also make available the Assessment Tool for Local 
Governments and the Assessment Tool for Public Housing Agencies, which 
previously were made available as an optional format to follow to 
conduct an AI, and which some program participants have chosen to use 
to guide their fair housing planning processes.
    HUD's provision on a voluntary basis of a variety of familiar tools 
is intended to reduce the burden on recipients while ensuring that they 
have tools for fair housing planning in order to AFFH as HUD works 
toward an implementation scheme that will further reduce burden for 
recipients while bolstering fair housing outcomes.
    As noted, HUD will solicit comments through a separate NPRM on how 
to amend the 2015 AFFH rule to achieve both burden reduction and 
material, positive change that affirmatively furthers fair housing.
    For the reasons described in this preamble, this rule is necessary 
to comply with the Congressional mandate to AFFH and the statutory 
certifications, consistent with the directive in the FY1998 
appropriations. While HUD will solicit public comments on the NPRM 
through separate Federal Register notice, HUD here requests and 
encourages public comments on all matters addressed in this interim 
final rule.

IV. Findings and Certifications

Executive Orders 12866 and 13563, Regulatory Planning and Review

    Pursuant to Executive Order 12866 (Regulatory Planning and Review), 
a determination must be made whether a regulatory action is significant 
and therefore, subject to review by the Office of Management and Budget 
(OMB) in accordance with the requirements of the Executive Order. This 
interim final rule has been determined to be a ``significant regulatory 
action,'' as defined in section 3(f) of Executive Order 12866, but not 
economically significant. Because nothing in this rule imposes any 
specific regulatory requirements and because the substantive standard 
that this rule reinstates is one that program participants have long 
followed, HUD anticipates that this rule will have no economic effects.
    Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned.'' Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. This interim final rule clarifies the obligation 
with which HUD grantees are already required to comply by statute. HUD, 
therefore, believes that this final rule would provide flexibility and 
freedom for HUD grantees to AFFH, consistent with the statutory 
mandate, and is consistent with Executive Order 13563.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of Section 6 of the Executive Order. This rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive Order.

Environmental Impact

    This final rule is a policy document that sets out fair housing and 
nondiscrimination standards. Accordingly, under 24 CFR 50.19(c)(3), 
this final rule is categorically excluded from environmental review 
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally 
requires an agency to conduct a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements, unless the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities. Because HUD 
determined that good cause exists to issue this rule without prior 
public comment, this rule is not subject to the requirement to publish 
an initial or final regulatory flexibility analysis under the RFA as 
part of such action.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520), an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information, unless the 
collection displays a currently valid Office of Management and Budget 
(OMB) control number. The information collection requirements for 
Affirmatively Furthering Fair Housing collected have previously been 
approved by OMB under the Paperwork Reduction Act and assigned OMB 
control number 2506-0117 (Consolidated Plan, Annual Action Plan & 
Annual Performance Report).

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal 
agencies to assess the effects of their regulatory actions on state, 
local, and tribal governments, and on the private sector. This rule 
does not impose any Federal mandates on any state, local, or tribal 
government, or on the private sector, within the meaning of the UMRA.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs--housing and community 
development, Individuals with

[[Page 30790]]

disabilities, Intergovernmental relations, Loan programs--housing and 
community development, Low and moderate income housing, Mortgage 
insurance, Penalties, Pets, Public housing, Rent subsidies, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 91

    Aged; Grant programs--housing and community development; Homeless; 
Individuals with disabilities; Low and moderate income housing; 
Reporting and recordkeeping requirements.

24 CFR Part 92

    Administrative practice and procedure; Low and moderate income 
housing; Manufactured homes; Rent subsidies; Reporting and 
recordkeeping requirements.

24 CFR Part 570

    Administrative practice and procedure; American Samoa; Community 
development block grants; Grant programs--education; Grant programs-
housing and community development; Guam; Indians; Loan programs--
housing and community development; Low and moderate income housing; 
Northern Mariana Islands; Pacific Islands Trust Territory; Puerto Rico; 
Reporting and recordkeeping requirements; Student aid; Virgin Islands.

24 CFR Part 574

    Community facilities; Grant programs--housing and community 
development; Grant programs--social programs; HIV/AIDS; Low- and 
moderate-income housing; Reporting and recordkeeping requirements.

24 CFR Part 576

    Community facilities; Grant programs--housing and community 
development; Grant programs--social programs; Homeless; Reporting and 
recordkeeping requirements.

24 CFR Part 903

    Administrative practice and procedure; Public housing; Reporting 
and recordkeeping requirements.

    Accordingly, for the reasons described in the preamble, HUD amends 
24 CFR parts 5, 91, 92, 570, 574, 576, and 903 as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for part 5, subpart A, continues to read as 
follows:

    Authority: 29 U.S.C. 794, 42 U.S.C. 1437a, 1437c, 1437c-1(d), 
1437d, 1437f, 1437n, 3535(d), and Sec. 327, Pub. L. 109-115, 119 
Stat. 2936; 42 U.S.C. 3600-3620; 42 U.S.C. 5304(b); 42 U.S.C. 12101 
et seq.; 42 U.S.C. 12704-12708; Executive Order 11063, 27 FR 11527, 
3 CFR, 1958-1963 Comp., p. 652; Executive Order 12892, 59 FR 2939, 3 
CFR, 1994 Comp., p. 849.

0
2. Revise Sec.  5.150 to read as follows:


Sec.  5.150  Affirmatively Furthering Fair Housing: Purpose.

    Pursuant to the affirmatively furthering fair housing mandate in 
section 808(e)(5) of the Fair Housing Act, and in subsequent 
legislative enactments, the purpose of the Affirmatively Furthering 
Fair Housing (AFFH) regulations is to provide program participants with 
a substantive definition of the AFFH requirement, as well as to provide 
access to an effective planning approach to aid those program 
participants that wish to avail themselves of it in taking meaningful 
actions to overcome historic patterns of segregation, promote fair 
housing choice, and foster inclusive communities that are free from 
discrimination.

0
3. Revise Sec.  5.151 to read as follows:


Sec.  5.151  Affirmatively Further Fair Housing: Definitions.

    For purposes of Sec. Sec.  5.150 through 5.152, the terms 
``consolidated plan,'' ``consortium,'' ``unit of general local 
government,'' ``jurisdiction,'' and ``State'' are defined in 24 CFR 
part 91. For PHAs, ``jurisdiction'' is defined in 24 CFR 982.4. The 
following additional definitions are provided solely for purposes of 
Sec. Sec.  5.150 through 5.152 and related amendments in 24 CFR parts 
91, 92, 570, 574, 576, and 903:
    Affirmatively furthering fair housing means taking meaningful 
actions, in addition to combating discrimination, that overcome 
patterns of segregation and foster inclusive communities free from 
barriers that restrict access to opportunity based on protected 
characteristics. Specifically, affirmatively furthering fair housing 
means taking meaningful actions that, taken together, address 
significant disparities in housing needs and in access to opportunity, 
replacing segregated living patterns with truly integrated and balanced 
living patterns, transforming racially or ethnically concentrated areas 
of poverty into areas of opportunity, and fostering and maintaining 
compliance with civil rights and fair housing laws. The duty to 
affirmatively further fair housing extends to all of a program 
participant's activities and programs relating to housing and urban 
development.
    Disability. (1) The term ``disability'' means, with respect to an 
individual:
    (i) A physical or mental impairment that substantially limits one 
or more major life activities of such individual;
    (ii) A record of such an impairment; or
    (iii) Being regarded as having such an impairment.
    (2) The term ``disability'' as used herein shall be interpreted 
consistent with the definition of such term under section 504 of the 
Rehabilitation Act of 1973, as amended by the Americans with 
Disabilities Act Amendments Act of 2008. This definition does not 
change the definition of ``disability'' or ``disabled person'' adopted 
pursuant to a HUD program statute for purposes of determining an 
individual's eligibility to participate in a housing program that 
serves a specified population.
    Fair housing choice means that individuals and families have the 
information, opportunity, and options to live where they choose without 
unlawful discrimination and other barriers related to race, color, 
religion, sex, familial status, national origin, or disability. Fair 
housing choice encompasses:
    (1) Actual choice, which means the existence of realistic housing 
options;
    (2) Protected choice, which means housing that can be accessed 
without discrimination; and
    (3) Enabled choice, which means realistic access to sufficient 
information regarding options so that any choice is informed. For 
persons with disabilities, fair housing choice and access to 
opportunity include access to accessible housing and housing in the 
most integrated setting appropriate to an individual's needs as 
required under Federal civil rights law, including disability-related 
services that an individual needs to live in such housing.
    Housing programs serving specified populations. Housing programs 
serving specified populations are HUD and Federal housing programs, 
including designations in the programs, as applicable, such as HUD's 
Supportive Housing for the Elderly, Supportive Housing for Persons with 
Disabilities, homeless assistance programs under the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11301 et seq.), and housing 
designated under section 7 of the United States Housing Act of 1937 (42 
U.S.C. 1437e), that:
    (1) Serve specific identified populations; and
    (2) Comply with title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs); the 
Fair Housing Act (42 U.S.C. 3601-19), including the duty to 
affirmatively

[[Page 30791]]

further fair housing; section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794); the Americans with Disabilities Act (42 U.S.C. 12101, et 
seq.); and other Federal civil rights statutes and regulations.
    Integration means a condition, within the program participant's 
geographic area of analysis, in which there is not a high concentration 
of persons of a particular race, color, religion, sex, familial status, 
national origin, or having a disability or a particular type of 
disability when compared to a broader geographic area. For individuals 
with disabilities, integration also means that such individuals are 
able to access housing and services in the most integrated setting 
appropriate to the individual's needs. The most integrated setting is 
one that enables individuals with disabilities to interact with persons 
without disabilities to the fullest extent possible, consistent with 
the requirements of the Americans with Disabilities Act (42 U.S.C. 
12101 et seq.) and section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794). See 28 CFR part 35, appendix B (2010) (addressing 28 CFR 
35.130 and providing guidance on the Americans with Disabilities Act 
regulation on nondiscrimination on the basis of disability in State and 
local government services).
    Meaningful actions means significant actions that are designed and 
can be reasonably expected to achieve a material positive change that 
affirmatively furthers fair housing by, for example, increasing fair 
housing choice or decreasing disparities in access to opportunity.
    Racially or ethnically concentrated area of poverty means a 
geographic area with significant concentrations of poverty and minority 
populations.
    Segregation means a condition, within the program participant's 
geographic area of analysis, in which there is a high concentration of 
persons of a particular race, color, religion, sex, familial status, 
national origin, or having a disability or a type of disability in a 
particular geographic area when compared to a broader geographic area. 
For persons with disabilities, segregation includes a condition in 
which the housing or services are not in the most integrated setting 
appropriate to an individual's needs in accordance with the 
requirements of the Americans with Disabilities Act (42 U.S.C. 12101, 
et seq.), and section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794). (See 28 CFR part 35, appendix B (2010), addressing 25 CFR 
35.130.) Participation in ``housing programs serving specified 
populations'' as defined in this section does not present a fair 
housing issue of segregation, provided that such programs are 
administered to comply with title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d-2000d-4) (Nondiscrimination in Federally Assisted 
Programs): The Fair Housing Act (42 U.S.C. 3601-19), including the duty 
to affirmatively further fair housing: Section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794); the Americans with 
Disabilities Act (42 U.S.C. 12101, et seq.); and other Federal civil 
rights statutes and regulations.
    Significant disparities in access to opportunity means substantial 
and measurable differences in access to educational, transportation, 
economic, and other important opportunities in a community, based on 
protected class related to housing.

0
4. Add Sec.  5.152 to read as follows:


Sec.  5.152  AFFH Certification and Administration.

    (a) Certifications. Program participants must certify that they 
will comply with their obligation of affirmatively furthering fair 
housing when required by statutes or regulations governing HUD 
programs. Such certifications are made in accordance with applicable 
regulations. Consolidated plan program participants are subject to the 
certification requirements in 24 CFR part 91, and PHA Plan program 
participants are subject to the certification requirements in 24 CFR 
part 903.
    (b) Administration. To assist program participants in carrying out 
their obligation of affirmatively furthering fair housing, and 
supporting their certifications pursuant to paragraph (a) of this 
section, HUD will provide technical assistance to program participants 
in various ways, including by:
    (1) Making HUD-provided data and informational resources available, 
including about how to voluntarily engage in fair housing planning, 
such as:
    (i) Analyzing fair housing data, assessing fair housing issues and 
contributing factors, assessing fair housing priorities and goals; 
taking meaningful actions to support identified goals; and taking no 
action that is materially inconsistent with the obligation to 
affirmatively further fair housing; or
    (ii) Conducting an analysis to identify impediments to fair housing 
choice within the jurisdiction, taking appropriate actions to overcome 
the effects of any impediments identified through that analysis, and 
maintaining records reflecting the analysis and actions in this regard; 
or
    (iii) Engaging in other means of fair housing planning that 
meaningfully supports this certification;
    (2) Permitting a program participant to voluntarily submit its fair 
housing planning for HUD feedback from the responsible office; and
    (3) Engaging in other forms of technical assistance.
    (c) Procedure for challenging the validity of an AFFH 
certification. The procedures for challenging the validity of an AFFH 
certification are as follows:
    (1) For consolidated plan program participants, HUD's challenge to 
the validity of an AFFH certification will be as specified in 24 CFR 
part 91.
    (2) For PHA Plan program participants, HUD's challenge to the 
validity of an AFFH certification will be as specified in 24 CFR part 
903.
    (d) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Data refers collectively to the sources of data provided in 
paragraphs (d)(1)(i) and (d)(1)(ii) of this definition. When 
identification of the specific source of data in paragraphs (d)(1)(i) 
and (d)(1)(ii) is necessary, the specific source (HUD-provided data or 
local data) will be stated.
    (i) HUD-provided data. The term ``HUD-provided data'' refers to 
HUD-provided metrics, statistics, and other quantified information that 
may be used when conducting fair housing planning. HUD-provided data 
will not only be provided to program participants but will be posted on 
HUD's website for availability to all of the public;
    (ii) Local data. The term ``local data'' refers to metrics, 
statistics, and other quantified information, relevant to the program 
participant's geographic areas of analysis, that can be found through a 
reasonable amount of search, are readily available at little or no 
cost, and may be used to conduct fair housing planning.
    (2) Program participants means:
    (i) Jurisdictions and Insular Areas, as described in 570.405 and 
defined in 570.3, that are required to submit consolidated plans for 
the following programs:
    (A) The Community Development Block Grant (CDBG) program (see 24 
CFR part 570, subparts D and I);
    (B) The Emergency Solutions Grants (ESG) program (see 24 CFR part 
576);
    (C) The HOME Investment Partnerships (HOME) program (see 24 CFR 
part 92); and
    (D) The Housing Opportunities for Persons With AIDS (HOPWA) program 
(see 24 CFR part 574).
    (ii) Public housing agencies (PHAs) receiving assistance under 
sections 8 or

[[Page 30792]]

9 of the United States Housing Act of 1937 (42 U.S.C. 1437f or 42 
U.S.C. 1437g).
    (3) Protected characteristics are race, color, religion, sex, 
familial status, national origin, having a disability, and having a 
type of disability.
    (4) Protected class means a group of persons who have the same 
protected characteristic; e.g., a group of persons who are of the same 
race are a protected class. Similarly, a person who has a mobility 
disability is a member of the protected class of persons with 
disabilities and a member of the protected class of persons with 
mobility disabilities.

PART 91--CONSOLIDATED SUBMISSIONS FOR COMMUNITY PLANNING AND 
DEVELOPMENT PROGRAMS

0
5. The authority citation for part 91 continues to read as follows:

    Authority: 42 U.S.C. 3535(d), 3601-19, 5301-5315, 11331-11388, 
12701-12711, 12741-12756, and 12901-12912.


0
6. Revise Sec.  91.225(a)(1) to read as follows:


Sec.  91.225  Certifications.

    (a) * * *
    (1) Affirmatively furthering fair housing. Each jurisdiction is 
required to submit a certification, consistent with Sec. Sec.  5.151 
and 5.152 of this title, that it will affirmatively further fair 
housing.
* * * * *

0
7. Revise Sec.  91.235(c)(4) to read as follows:
    (c) * * *
    (4) Submissions, certifications, amendments, and performance 
reports. An Insular Area grantee that submits an abbreviated 
consolidated plan under this section must comply with the submission, 
certification, amendment, and performance report requirements of Sec.  
570.440 of this title. This includes the certification that the grantee 
will affirmatively further fair housing pursuant to Sec. Sec.  5.151 
and 5.152 of this title.
* * * * *

0
8. Revise Sec.  91.325(a)(1) to read as follows:


Sec.  91.325  Certifications.

    (a) * * *
    (1) Affirmatively furthering fair housing. Each State is required 
to submit a certification, consistent with Sec. Sec.  5.151 and 5.152 
of this title, that it will affirmatively further fair housing.
* * * * *

0
9. Revise Sec.  91.425(a)(1)(i) to read as follows:


Sec.  91.425  Certifications.

    (a) * * * (1) * * * (i) Affirmatively furthering fair housing. Each 
Consortium is required to submit a certification, consistent with 
Sec. Sec.  5.151 and 5.152 of this title, that it will affirmatively 
further fair housing.
* * * * *

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

0
10. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d), 12 U.S.C. 1701x and 4568.


0
11. Amend Sec.  92.508 by revising paragraph (a)(7)(i)(C) to read as 
follows:


Sec.  92.508  Recordkeeping.

    (a) * * *
    (7) * * *
    (i) * * *
    (B) Documentation of the actions the participating jurisdiction has 
taken to affirmatively further fair housing pursuant to Sec. Sec.  
5.151, 5.152, 91.225, 91.325, and 91.425 of this title.
* * * * *

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

0
12. The authority citation for part 570 continues to read as follows:

    Authority: 12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 3535(d) and 
5301-5320.


0
13. Revise Sec.  570.487(b) to read as follows:


Sec.  570.487  Other applicable laws and related program requirements.

* * * * *
    (b) Affirmatively furthering fair housing. The Act requires the 
state to certify to HUD's satisfaction that it will affirmatively 
further fair housing pursuant to Sec. Sec.  5.151 and 5.152 of this 
title. The Act also requires each unit of general local government to 
certify that it will affirmatively further fair housing.
* * * * *

0
14. In Sec.  570.506, revise paragraph (g)(1) to read as follows:


Sec.  570.506  Records to be maintained.

* * * * *
    (g) * * *
    (1) Documentation of the actions the participating jurisdiction has 
taken to affirmatively further fair housing pursuant to Sec. Sec.  
5.151, 5.152, 91.225, 91.325, and 91.425 of this title.

0
15. Revise Sec.  570.601(a)(2) to read as follows:


Sec.  570.601  Public Law 88-352 and Public Law 90-284; affirmatively 
furthering fair housing; Executive Order 11063.

    (a) * * *
    (2) Public Law 90-284, which is the Fair Housing Act (42 U.S.C. 
3601-3620). In accordance with the Fair Housing Act, the Secretary 
requires that grantees administer all programs and activities related 
to housing and community development in a manner to affirmatively 
further the policies of the Fair Housing Act.
* * * * *

PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS

0
16. The authority citation for part 574 continues to read as follows:

    Authority: 12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 3535(d) and 
5301-5320.


0
17. Revise Sec.  574.530(b) to read as follows:


Sec.  574.530  Recordkeeping.

* * * * *
    (b) Documentation of the actions the grantee has taken to 
affirmatively further fair housing, pursuant to Sec. Sec.  5.151 and 
5.152 of this title.
* * * * *

PART 576--EMERGENCY SOLUTIONS GRANTS PROGRAM

0
18. The authority citation for part 576 continues to read as follows:

    Authority:  12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 11371 et seq., 
42 U.S.C. 3535(d).


0
19. Amend Sec.  576.500 by revising paragraph (s)(1)(ii) to read as 
follows:


Sec.  576.500  Recordkeeping and reporting requirements.

* * * * *
    (s) * * *
    (1) * * *
    (ii) Documentation of the actions that the recipient has taken to 
affirmatively further fair housing, pursuant to Sec. Sec.  5.151 and 
5.152 of this title.
* * * * *

PART 903--PUBLIC HOUSING AGENCY PLANS

0
20. The authority citation for part 903 continues to read as follows:

    Authority: 42 U.S.C. 1437c; 42 U.S.C. 1437c-1; Pub. L. 110-289; 
42 U.S.C. 3535d.


0
21. Amend Sec.  903.7 by revising paragraph (o) to read as follows:


Sec.  903.7  What information must a PHA provide in the Annual Plan?

* * * * *

[[Page 30793]]

    (o) Civil rights certification. (1) The PHA must certify that it 
will carry out its plan in conformity with title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 20000d-2000d-4), the Fair Housing Act (42 U.S.C. 
3601-19), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794), and title II of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12101 et seq.), and other applicable Federal civil rights laws. 
The PHA must also certify that it will affirmatively further fair 
housing pursuant to Sec. Sec.  5.151 and 5.152 of this title.
    (2) The certification is applicable to the 5-Year Plan and the 
Annual Plan.
* * * * *

0
22. Amend Sec.  903.15 by adding paragraph (c) to read as follows:


Sec.  903.15   What is the relationship of the public housing agency 
plans to the Consolidated Plan and a PHA's Fair Housing Requirements?

* * * * *
    (c) Fair housing requirements. A PHA is obligated to affirmatively 
further fair housing in its operating policies, procedures, and capital 
activities. All admission and occupancy policies for public housing and 
Section 8 tenant-based housing programs must comply with Fair Housing 
Act requirements and other civil rights laws and regulations and with a 
PHA's plans to affirmatively further fair housing. The PHA may not 
impose any specific income or racial quotas for any development or 
developments.
    (1) Nondiscrimination. A PHA must carry out its PHA Plan in 
conformity with the nondiscrimination requirements in Federal civil 
rights laws, including title VI of the Civil Rights Act of 1964, 
section 504 of the Rehabilitation Act of 1973, the Americans with 
Disabilities Act, and the Fair Housing Act. A PHA may not assign 
housing to persons in a particular section of a community or to a 
development or building based on race, color, religion, sex, 
disability, familial status, or national origin for purposes of 
segregating populations.
    (2) Affirmatively furthering fair housing. A PHA's policies should 
be designed to reduce the concentration of tenants and other assisted 
persons by race, national origin, and disability. Any affirmative steps 
or incentives a PHA plans to take must be stated in the admission 
policy.
    (i) HUD regulations provide that PHAs must take steps to 
affirmatively further fair housing. PHA policies should include 
affirmative steps to overcome the effects of discrimination and the 
effects of conditions that resulted in limiting participation of 
persons because of their race, national origin, disability, or other 
protected class.
    (ii) Such affirmative steps may include, but are not limited to, 
marketing efforts, use of nondiscriminatory tenant selection and 
assignment policies that lead to desegregation, additional applicant 
consultation and information, provision of additional supportive 
services and amenities to a development (such as supportive services 
that enable an individual with a disability to transfer from an 
institutional setting into the community), and engagement in ongoing 
coordination with state and local disability agencies to provide 
additional community-based housing opportunities for individuals with 
disabilities and to connect such individuals with supportive services 
to enable an individual with a disability to transfer from an 
institutional setting into the community.
    (3) Validity of certification. (i) A PHA's certification under 
Sec.  903.7(o) will be subject to challenge by HUD where it appears 
that a PHA:
    (A) Fails to meet the affirmatively furthering fair housing 
requirements at 24 CFR 5.150 through 5.152
    (B) Takes action that is materially inconsistent with its 
obligation to affirmatively further fair housing; or
    (C) Fails to meet the fair housing, civil rights, and affirmatively 
furthering fair housing requirements in 24 CFR 903.7(o).
    (ii). If HUD challenges the validity of a PHA's certification, HUD 
will do so in writing specifying the deficiencies, and will give the 
PHA an opportunity to respond to the particular challenge in writing. 
In responding to the specified deficiencies, a PHA must establish, as 
applicable, that it has complied with fair housing and civil rights 
laws and regulations, or has remedied violations of fair housing and 
civil rights laws and regulations, and has adopted policies and 
undertaken actions to affirmatively further fair housing, including, 
but not limited to, providing a full range of housing opportunities to 
applicants and tenants in a nondiscriminatory manner. In responding to 
the PHA, HUD may accept the PHA's explanation and withdraw the 
challenge, undertake further investigation, or pursue other remedies 
available under law. HUD will seek to obtain voluntary corrective 
action consistent with the specified deficiencies. In determining 
whether a PHA has complied with its certification, HUD will review the 
PHA's circumstances relevant to the specified deficiencies, including 
characteristics of the population served by the PHA; characteristics of 
the PHA's existing housing stock; and decisions, plans, goals, 
priorities, strategies, and actions of the PHA, including those 
designed to affirmatively further fair housing.

0
23. Amend Sec.  903.23 by revising paragraph (f) to read as follows:


Sec.  903.23  What is the process by which HUD reviews, approves, or 
disapproves an Annual Plan?

* * * * *
    (f) Recordkeeping. PHAs must maintain records reflecting actions to 
affirmatively further fair housing pursuant to Sec. Sec.  5.151, 5.152, 
and 903.7(o) of this title.

    Dated: June 4, 2021.
Marcia L. Fudge,
Secretary.
[FR Doc. 2021-12114 Filed 6-9-21; 8:45 am]
BILLING CODE 4210-67-P