5

The Fair Housing Challenge to Community Development

EDWARD G. GOETZ

Since the 1960s, community development organizations have been investing in new and rehabilitated housing in high-poverty neighborhoods. Nonprofit organizations, including community-based organizations, and some for-profit developers specializing in affordable housing have for years been supported by regional and national financial intermediaries (e.g., the Local Initiatives Support Corporation [LISC] and Enterprise Community Partners) and the public sector in developing subsidized, low-cost housing in disadvantaged neighborhoods. In recent years, fair housing advocates have posed a strong challenge to community developers regarding the effectiveness of place-based housing and neighborhood initiatives. According to this challenge, community development efforts are, at best, ineffective in reversing long-standing trends of decline in disadvantaged neighborhoods and, at worst, counterproductive to those objectives and to the cause of racial equity. Some fair housing activists have advocated instead for a set of spatial strategies to address racial equity that they insist are more consistent with the mandates of the Fair Housing Act.

The fair housing challenge to community development is about housing policy and how best to achieve racial equity more generally. The equity question revolves around whether integration is a necessary precondition for racial justice. Many insist on the imperative of integration and the necessity of pursuing integration to fully address contemporary issues of racial injustice.¹ These advocates routinely enlist studies on the effects of neighborhood characteristics on individual outcomes to show the importance of spatial inequality and the need for integration.² Two elements of this literature are particularly relevant to fair housing advocates. First is the core assertion that neighborhood conditions play a central role in determining life chances and that people of color have been disproportionately consigned through discrimination and other mechanisms to disadvantaged neighborhoods that maintain and perpetuate social, political, and economic inequalities. The second important element of the argument is that significant public action has contributed to these patterns of spatial injustice.

This second element of the argument in particular is relied upon to justify a public policy response, arguing that the public sector has some responsibility to right the wrongs to which it has so directly contributed. Dispersal of subsidized housing and households and deconcentration of poverty have been the dominant approaches that fair housing advocates deem necessary to achieve integration and racial justice. Community development efforts that continue to locate subsidized housing in disadvantaged communities of color contribute to the problem, not to the solution.

These views contrast with those who question the necessity, or even the advisability, of integration and who distinguish between segregation (the spatial pattern of racial clustering) and the “diverse social factors that contribute to bringing it about or maintaining it.”³ According to this argument, our efforts should focus not on rearranging people into different neighborhoods but rather on addressing the factors that produce spatial and racial inequalities. Integration into white-dominated neighborhoods (the only type of integration that whites, as a rule, tolerate) entails what Mary Pattillo calls a “celebration of Whiteness.”⁴ Furthermore, the fair housing argument for integration is generally justified by the desire to provide access to the same opportunities that are available to whites in predominantly white neighborhoods. Philosopher Tommie Shelby thus argues that integration reinforces “the symbolic power that whites hold over blacks by encouraging whites to see their relationships with blacks not as intrinsically valuable forms of interracial community but as an avenue for blacks to share in (not abolish) white privilege.”⁵

Yet there is no necessary connection that leads from an acknowledgment of the problem of spatial inequity to integration as a solution. Just as reasonable a response is what Iris Marion Young calls the movement of resources rather than of people.⁶ How do these competing visions of racial equity play out in housing policy debates between fair housing advocates who emphatically offer the integrationist approach and community development organizations whose work focuses on neighborhood improvement?

Two Movements

The fair housing and affordable housing/community development movements are largely separate projects. Fair housing advocacy emerged out of the racial desegregation efforts of the mid-twentieth century.⁷ As noted in Chapter 1, most of its early political actions were focused on opening communities and housing submarkets to African American occupancy. The community development movement arose later and focused on conditions within disadvantaged—and often racially segregated—inner-city neighborhoods. Political scientist Mara Sidney, one of the few scholars to study the two movements side by side, points out that despite baseline agreements on issues of social justice, very little collaboration occurs between advocates in the two camps. She writes, “Fair housing groups do not typically partner with the affordable housing movement in local movements for regional justice,” and “national fair housing policy has produced a population of local fair housing groups that have trouble developing allies and do little to mobilize the public behind their cause. . . . At the same time, for a variety of reasons, affordable housing advocates may not perceive fair housing or civil rights advocates as natural allies.”⁸ This division has meant that the two movements have largely developed in isolation from each other. Although both are concerned with housing conditions for low-income people and people of color, they operate largely independently.

This separation is duplicated within the bureaucracy of the federal agency charged with affordable housing and fair housing implementation—the U.S. Department of Housing and Urban Development (HUD). Fair housing officials within HUD regard themselves and their objectives as marginalized within an agency that prioritizes the development of affordable units over the pursuit of integration or desegregation. Even worse, they report “deeply entrenched opposition” within HUD to initiatives that would further fair housing objectives.⁹

Separate Agendas

Although both movements have core concerns that center on housing justice, they have largely separate agendas. The fair housing movement sees itself as the watchdog over implementation of the Fair Housing Act. HUD’s relative lack of commitment to enforcement and lack of sufficient resources devoted to enforcing fair housing have meant that enforcement is often accomplished through the private litigation strategies of fair housing advocates. The Fair Housing Act is seen by experts as having two objectives—equal access (the elimination of discrimination) and integration.¹⁰ As many have pointed out, equal access is process-oriented, with the goal of all having equal treatment in housing transactions.¹¹ Integration, on the other hand, is outcome-oriented, with the objective of racially mixed communities. Fair housing activists pursue both objectives and perceive a significant overlap between the two. Freer choice in housing markets for people of color is expected to lead to a number of outcomes, including the spatial outcomes of desegregation and integration.

Fair housing activism is not limited to monitoring private actions in the housing market. The Fair Housing Act obligates the federal government to operate its housing programs in such as a way as to “affirmatively further” fair housing goals. This mandate has led to fair housing advocacy related to whether public programs of housing assistance are themselves discriminatory or in any way not serving the goal of integration. Thus, fair housing litigation efforts may frequently target public agencies, alleging that the implementation of their programs creates, maintains, or perpetuates patterns of racial segregation. It is at this point that the fair housing movement comes into conflict with the efforts of affordable housing activists and community developers.

Community development advocates approach questions of racial justice from a different perspective. The movement focuses on building economic and political capacity within disadvantaged neighborhoods to deal with the material and political needs of those communities. Community developers work in disadvantaged neighborhoods, applying an ever-dwindling variety and number of resources to the task of revitalizing disadvantaged areas and providing affordable housing that is safe and well run for people with limited incomes. Their work is concentrated in low-income neighborhoods of central cities in an attempt to counter or to replace the limited private- and public-sector investment in those communities.

Affordable housing is a key element of community development activities. Affordable housing is valued for its own sake, for the stability it provides to lower-income families, for the improvement in living conditions that it represents for many families, and for the money that it saves low-income families that can then be used for other necessities. Affordable housing is also valued for the physical upgrading that it typically represents for disadvantaged neighborhoods.

When, as is often the case, affordable housing developers are community-based, nonprofit developers, they may also enrich their housing with social services that are supportive of lower-income families. Community ownership of real estate is also valued as a means of building capital, allowing community ownership of assets, discouraging more exploitative and external control of the neighborhood, and being more responsive to the development agenda of residents rather than speculative capital markets. According to the model, any profits from such housing are kept “within the community” by being reinvested locally to produce other benefits for residents.

Fair housing activists increasingly object to the housing focus of community development organizations. The associate director and staff attorney for the Fair Share Housing Center of New Jersey, for example, filed a lawsuit against the state of New Jersey, claiming that the “case challenges the notion that more or new affordable housing in cities is fundamentally helpful for revitalization. In fact, building affordable housing in the cities has no net revitalizing effect at all.”¹² They see such actions as perpetuating patterns of racial segregation, and they object to the continued development of such housing in communities of color. Indeed, to the extent that community developers rely on public resources to provide affordable housing in low-income neighborhoods, their actions are sometimes indistinguishable, according to fair housing advocates, from the type of discriminatory public policies that have contributed to segregation and concentrations of poverty in the past. For this reason, one fair housing writer characterizes community developers as the “poverty housing industry”—a phrase calculated to conjure images of a large-scale, impersonal constellation of actors who profit from the provision of housing to poor people.¹³ To some fair housing advocates, then, the very work of community development must be curtailed to reorient housing subsidies to neighborhoods with better opportunity structures, so that the residents of assisted housing can also benefit from resource-rich neighborhoods and avoid the detrimental effects of low-income neighborhoods.

The Three Stations of Fair Housing Spatial Strategy

The fair housing movement has, over the past two decades, generated an ever-more-aggressive spatial strategy with the aim of achieving greater integration. This strategy has generated within the movement more frequent criticism of community development. Indeed, the relations between the two movements have worsened to the point that several “mediation” efforts have been attempted by national foundations, tracts have been written on both sides attempting to explain and resolve the tension, and lawsuits have been initiated against affordable housing practices.¹⁴

The distinction between the equal access and integration objectives of fair housing has become more pronounced as the spatial strategies of the movement have evolved.¹⁵ In fact, it is possible to identify three stations of fair housing spatial strategy that represent an increasingly aggressive approach to achieving integration goals: (1) opening exclusionary communities, (2) preventing further segregation, and (3) dismantling existing low-income communities of color.

Each of these strategies is an extension of the movement’s reach—that is, the progression is an accumulation of strategies, not the replacement of earlier methods with new ones. The second and third stations, in particular, produce tension between fair housing and community development. There is no conflict between fair housing and community development advocates in the pursuit of nondiscrimination—that is, equal access. The debate between the two positions arises only in relation to the spatial strategies of fair housing.

1. Opening Exclusionary Communities

In its early stages, from the 1940s through the 1960s, the fair housing movement focused primarily on “opening” housing markets and providing equal access to all communities regardless of race or ethnicity. Thus, the movement began with calls to open white neighborhoods and the suburbs to non-white families. Policy initiatives in this station have been of four types: (1) the expansion of various housing subsidy programs to increase low-cost housing production in the suburbs; (2) the elimination of land-use regulations that have the effect of excluding lower-income housing in suburban communities; (3) the elimination of private deed restrictions and covenants and other discriminatory private-sector actions within the housing market, such as steering, that have had the effect of creating and maintaining neighborhood color lines; and (4) voluntary “mobility” programs that facilitate the movement of families into predominantly white or lower-poverty neighborhoods.

Policies in this station include fair-share regional housing approaches, for example, that establish concrete goals for affordable housing development for all communities within a region in an effort to enhance the spread of affordable housing options, to diversify predominantly white communities, and ultimately to enhance the housing options of very-low-income people and people of color.¹⁶ In some locations, higher levels of government have been given review powers over local land-use decision making when those decisions have prevented affordable housing developments from going forward.¹⁷ Some jurisdictions have used “inclusionary housing” programs that require or incentivize private developers to build a number (or percentage) of affordable units in exchange for approving a market-rate housing development proposal.¹⁸ Finally, such mobility programs as Moving to Opportunity for Fair Housing (MTO) have provided portable housing voucher subsidies to families to make moves to neighborhoods with more whites and/or less poverty.

On these issues and about these policies, there is general agreement between fair housing and community development advocates. Indeed, members of both camps would point to the need for greater efforts to build affordable housing in those communities where it does not yet exist in large numbers. Although there is no conflict between the two movements on this question, a lack of sufficient resources devoted to affordable housing makes it impossible to meet housing needs in exclusionary communities and in disadvantaged neighborhoods. Thus, conditions of resource scarcity, which are more or less a permanent aspect of affordable housing policy, position community development and dispersion as competing goals.

2. Preventing Further Segregation

Fair housing advocacy, however, quickly expanded beyond opening exclusionary communities to incorporate efforts to mitigate the development or perpetuation of racially defined housing submarkets. Programs of this sort, which mark the second station of fair housing’s spatial strategy, have come in two varieties: (1) “impaction” rules that limit the production of subsidized housing in neighborhoods that are already considered segregated or poverty-concentrated and (2) “integration maintenance” programs that manage and limit the entry of minority families into communities to establish and maintain prescribed integration levels.

The second station of fair housing spatial strategy is fundamentally different than the first by virtue of the fact that the policies utilized place the burden for integrating on members of the protected class. These policy approaches work by limiting housing choices for members of the protected class so as to avoid concentrations or resegregation. Because of this, impaction and integration maintenance programs were among the first that brought the fair housing movement into conflict with affordable housing/community development objectives. Impaction rules limit the amount of subsidized housing in disadvantaged areas, leaving families who might have benefited from subsidized housing and do not wish to move to predominantly white neighborhoods without it. It is arguable even that impaction rules limit the overall amount of assisted housing because of the great resistance to subsidized housing by residents who already live in the areas that integrationists find acceptable.

The decision in Shannon v. HUD (1971), for example, was an early demonstration of the intent of the fair housing movement to prevent further ghettoization by restricting the placement of subsidized housing in disadvantaged neighborhoods and of the court’s interpretation of the Fair Housing Act as authorizing such action. The case resulted in the development of “siting restrictions” that required HUD to have in place a method of judging the impact of a proposed development on the pattern of racial occupancy in the affected neighborhood. More recently, the objective of preventing further segregation has surfaced in criticisms of the Low-Income Housing Tax Credit (LIHTC) program. Community development advocates chafe under these siting restrictions, which they claim limit their ability to effectively address the housing needs that exist in disadvantaged neighborhoods.

So-called integration maintenance programs worked by limiting the access of disadvantaged groups to communities or to housing developments to maintain a degree of racial diversity deemed appropriate by program designers. Access by disadvantaged groups was limited to prevent the racial turnover of these neighborhoods and resegregation of disadvantaged families. The courts have since ruled that such limitations are unconstitutional, and these programs no longer exist.

3. Dismantling Existing Low-Income Communities of Color

The third station of fair housing’s spatial strategy is the dissolution of existing communities in the name of desegregation. As such, it is the most interventionist of the three stations. This strategy is most prominent in a series of desegregation lawsuits pursued by fair housing attorneys in the 1980s and early 1990s. The settlements reached in a number of cities resulted in the demolition of public housing projects, the shift of housing subsidies into housing choice vouchers, and the displacement and relocation of public housing residents. The third station of fair housing’s spatial strategy is also reflected in the demolition and redevelopment of public housing through the federal HOPE VI program and other forms of subsidized housing through the Choice Neighborhoods Initiative. While many of the residents of these public housing developments welcome the chance to move, the universal nature of the approach (usually involving demolition of housing and displacement of all residents) virtually ensures the displacement of many who do not. Some residents, typically very-low-income African Americans, not only object to their forced displacement but actively protest it.¹⁹ To the extent that these efforts involve the involuntary displacement of lower-income families and relocation to other neighborhoods, this strategy also generates opposition from affordable housing advocates.

Origins of the Tension

The tension between integration and community development is as old as federally assisted housing for lower-income families. Within ten years of its introduction, the public housing program, the nation’s oldest form of subsidized housing for low-income households, prompted debate within the community about where such housing should be built and whether its primary effect was to provide much-needed housing for the community or to perpetuate patterns of residential segregation.²⁰

As the civil rights movement of the 1950s and 1960s progressed, many activists within the community, including several mainstream civil rights organizations, such as the Congress of Racial Equality (CORE) and the Student Nonviolent Coordinating Committee (SNCC) began to advocate less for integration and more for the development of political and economic capacity within communities. Leaders from Malcolm X to Stokely Carmichael were suspicious of integration and regarded it to be a hollow prospect. Malcolm X thought integration “a deception”—a kind of political sleight of hand that diverted attention from more fundamental questions of power. He believed that integration was “another tool of the oppressor, one that retained the basic inequalities in society.”²¹ As the 1960s wore on, the alternative ideas of power and community control increasingly challenged the integrationist message of the mainstream civil rights movement.²²

The community development movement emerged out of the tumult of the 1960s and the attempts to fashion new solutions to the problems of American ghettos. Community Development Corporations (CDCs) were created by federal legislation in the 1960s as a means of combining political goals of community control on the one hand with ownership and control of economic and financial assets on the other. The CDC approach was seen as an alternative to the top-down methods of urban renewal and that program’s repeated failure to produce sufficient affordable housing on cleared sites. CDCs were, according to John T. Baker, “efforts of leaders within low-income, predominantly black communities to create institutions through which residents of low-income communities could exercise control over important social, political, and economic resources both within and beyond the boundaries of their communities.”²³ Laura Hill and Julia Rabig call CDCs “one of the Black freedom movement’s most enduring legacies.”²⁴

The choice between “gilding the ghetto” on the one hand and integrating on the other became the framing question for American urban policy by the end of the 1960s. Facing a fourth consecutive summer of ghetto rioting in America’s cities, President Lyndon Johnson in 1967 appointed a National Advisory Commission on Civil Disorders. It was charged with examining the scale of rioting that had been occurring since 1964 and determining the causes and possible means of preventing future disorders. The commission positioned its work within the framework of the two prevailing ideas about how to deal with conditions in communities: ghetto enrichment and residential integration.

The relative merits of these strategies were more and more the subject of debate within the fair housing movement by the end of the 1960s; the question of whether to work to improve ghetto areas was on the agenda within the housing rights movement as it never had been before.

Movement historian Juliet Saltman notes that the National Committee Against Discrimination in Housing (NCDH) newsletter, Trends, contained an average of thirty-seven references to integration in each issue in 1956. By 1970, the average issue included the term only twice.²⁵ In its place was a growing emphasis on revitalizing the ghetto and discussion of the merits of multiple strategies. The debate consumed the movement for several years. As Saltman recounts:

Open housing activists frequently conceptualized the debate as being between integration on the one hand and greater choice and access to housing on the other. While understanding the terms of this tradeoff, open housing advocates often found it difficult to make a choice. Saltman describes local open housing activism across the country and its ambivalence about this issue. She reports on activists in Denver who worked “to provide every citizen of the metro area freedom of choice but in practice they encouraged everyone to make integrative moves.” In Los Angeles, she reports, “the immediate goal was to allow people out of the ghetto, but the long-term goal was related to freedom of choice,” while in Seattle, activists prioritized desegregation while the director indicated that the intent was “first, last, and always, a free and meaningful choice in housing for everyone everywhere.”²⁷

The question has persisted in many forms since then. Several housing policy developments throughout the 1970s, 1980s, and 1990s have reflected this basic debate. The question of where to place assisted housing produced court rulings and the introduction of siting restrictions for HUD housing in the 1970s.²⁸ Important legal decisions established the expectation that HUD would consider the place impacts of the siting of affordable housing developments to reduce the overconcentration of such projects in minority and low-income neighborhoods. Yet the issue remained contentious because HUD and local actors insisted that such housing provided neighborhood-based benefits to disadvantaged areas, and thus a blanket policy of dispersing such housing would have the effect of depriving low-income neighborhoods of much-needed capital investment and housing resources.²⁹

The operation of some integration maintenance programs put the distinction between housing access and integration into stark relief. These programs, operated by local fair housing organizations, were initiatives aimed at preserving racial diversity in communities where it already existed and at keeping communities that had diversified from resegregating through a combination of white flight and the in-migration of people of color. Integration maintenance programs are usually undertaken by previously white communities to manage the changing racial composition of their populations to maintain a desired mix. Such management includes “discouraging additional black occupancy” in neighborhoods that have a preferred level of integration,³⁰ which is typically just below the percentage of people of color that would induce white families to move out. As such, the programs incorporated the notion of a tipping point (the percentage of people of color within a neighborhood that would trigger white flight).³¹ In some cases, integration maintenance programs have included incentives for white families to remain in a community that is changing or have consisted of attempts to attract white in-movers. In these instances, the programs work by attempting to influence the residential choices of families. Whether it is by discouraging further entry into neighborhoods or incentivizing whites to move in, sociologist Harvey Molotch characterizes these efforts as “competing for whites.”³² The normative standard for integrated neighborhoods in these programs is the white neighborhood, and integration means attracting a few, but not too many, people of color, while trying “to maintain a physical environment conducive to middle-class white residency.”³³

One type of integration maintenance program, however, worked by more actively limiting housing access by people of color to limit their numbers within a community to a prescribed level. Once again, the overriding concern in these quota-based approaches was the imperative to avoid activating white fear and prejudice and thus avoid creating white flight and racial turnover. By restricting housing opportunities for people of color to an approved percentage within a predominantly white community, these programs involved a form of purposeful discrimination in the service of integration when families of color were denied housing opportunities on the basis of their skin color. Quota-based integration management programs rather starkly revealed the potential conflict between the fair housing goals of choice and access on the one hand and the achievement and maintenance of integration on the other. Such programs, as William Wilson and Richard Taub point out, “violate[d] the letter of the 1968 Fair Housing Act by limiting the housing options of racial minorities.”³⁴ They also violated many local housing ordinances, thereby forcing some communities to modify their nondiscrimination ordinances to allow such action.³⁵

Contemporary Conflict

The Spatial Distribution of Tax-Credit Housing

The debate between community development and integration has surfaced in contemporary times in several ways. One of the most notable is the concern over the geographic distribution of low-income tax-credit housing. Fair housing advocates argue that the program is being operated in ways that perpetuate segregation by placing too many units in minority and high-poverty neighborhoods. Thus, the tax-credit controversies are examples of the second station of fair housing spatial strategy, a concern with preventing further segregation.

The LIHTC program operates by providing tax credits to investors in subsidized housing. Public agencies with responsibility for implementing the program develop Qualified Allocation Plans that set out the guidelines for distributing tax credits to developer applicants. These Qualified Allocation Plans allow the states to build into the program ancillary policy objectives by incentivizing certain types of developments, such as those near transit facilities, or projects with energy-saving designs, for example. In fact, the federal legislation requires that Qualified Allocation Plans incorporate additional selection criteria, including whether the project serves populations with special housing needs, provides for eventual tenant ownership, or is energy-efficient.³⁶ The statute indicates that Congress intended the LIHTC program to serve many policy objectives and that it wanted states to have some flexibility in prioritizing them.

The statute requires that preferences be given to projects that serve the lowest-income tenants, that provide assisted housing for the longest period of time, and that are located in distressed neighborhoods (so-called qualified census tracts) and contribute to “a concerted community revitalization plan.”³⁷ Qualified census tracts are defined in the law as tracts with either a poverty rate greater than 25 percent or in which more than 50 percent of households have incomes at or below 60 percent of the area’s median income. The qualified census tract requirement is, in effect, a congressional directive to use the LIHTC program to support community development projects in disadvantaged neighborhoods.

The qualified census tract requirement is the provision of the law that is most widely opposed by fair housing advocates because of the incentive it provides for development in disadvantaged neighborhoods. As fair housing attorney Elizabeth Julian argues, “When the LIHTC program was created, the legacy of segregation in prior housing programs for low-income people was ignored in both the statute and the regulatory process.”³⁸ Frequently, LIHTC implementation is criticized for ignoring the second clause of the qualified census tract requirement: that the housing built in disadvantaged neighborhoods be tied to a “concerted community revitalization plan.” That is, LIHTC projects in qualified census tracts are criticized for being one-off projects that only have the effect of locating affordable, subsidized units in a high-poverty neighborhood rather than being part of a larger community development effort. Revision of the qualified census tract requirement is a standard recommendation in assessments of the LIHTC program.³⁹

Legal challenges in New Jersey, Texas, Connecticut, and Minnesota have contested the allocation of tax credits, alleging that the program’s implementation has unnecessarily and unlawfully concentrated units in disadvantaged neighborhoods.⁴⁰ The New Jersey case was filed with the aim of forcing “a ruling from the Court that would prevent any LIHTC allocations in high-poverty, predominantly minority census tracts.”⁴¹ The plaintiffs strongly challenged the idea that building tax-credit housing in central-city neighborhoods had any potential to revitalize the community. The Fair Share Housing Center of New Jersey asserted that the case “challenges the notion that more or new affordable housing in cities is fundamentally helpful for revitalization. In fact, building affordable housing in the cities has no net revitalizing effect at all.”⁴²

Affordable housing developers responded by arguing that the position of the plaintiffs in the New Jersey case, one that would limit LIHTC housing in core neighborhoods, was the equivalent of “condemning poor people to awful living conditions while claiming to fight on their behalf.”⁴³ In the end, the court ruled in favor of the defendants, upholding the New Jersey Qualified Allocation Plan. Since then, however, the state has changed its allocation plan in the direction advocated for by fair housing activists and now includes more incentives for development in “opportunity neighborhoods.”⁴⁴

Texas Department of Housing and Community Affairs v. The Inclusive Communities Project

In Texas, the Inclusive Communities Project, a fair housing advocacy group based in Dallas, filed suit in March 2008, alleging that the tax-credit projects in the Dallas metro area were being “disproportionately located in the slum and blighted neighborhoods.”⁴⁵ Although the case began as a challenge to the allocation of tax credits in Texas’s Qualified Allocation Plan, it eventually reached the Supreme Court on the question of whether claims based on the disparate impact of a policy were actionable under the Fair Housing Act. Disparate impact claims do not require proof of intent to discriminate but instead require proof that a policy led to an adverse and disparate impact on one or more of the protected classes in the Fair Housing Act and that a less discriminatory alternative policy is available. In the summer of 2015, the Supreme Court ruled in favor of the Inclusive Communities Project and established that disparate impact claims were in fact cognizable under the Fair Housing Act.

The Supreme Court did not, however, rule on the substance of the Inclusive Community Project’s case against the state of Texas. The court reaffirmed the validity of multiple policy objectives in the operation of housing policy. It reasoned that “from the standpoint of determining advantage or disadvantage to racial minorities, it seems difficult to say as a general matter that a decision to build low-income housing in a blighted inner-city neighborhood instead of a suburb is discriminatory, or vice versa.”⁴⁶ Furthermore, noted the court, “If the specter of disparate-impact litigation causes private developers to no longer construct or renovate housing units for low-income individuals, then the FHA [Fair Housing Act] would have undermined its own purpose. . . . And as to governmental entities, they must not be prevented from achieving legitimate objectives.”⁴⁷ The decision clearly acknowledges community development and puts it on equal footing with dispersal. The decision holds that “disparate-impact liability mandates the ‘removal of artificial, arbitrary, and unnecessary barriers,’ not the displacement of valid governmental policies. . . . The FHA is not an instrument to force housing authorities to reorder their priorities.”⁴⁸ The court continues, “It would be paradoxical to construe the FHA to impose onerous costs on actors who encourage revitalizing dilapidated housing in our Nation’s cities merely because some other priority might seem preferable.”⁴⁹ Thus, the Supreme Court decision in the case affirms the legitimacy of disparate impact claims but leaves intact the central debate between the competing policy objectives of integration and community development.

After the case was sent back to the trial court, however, the Inclusive Communities Project lost when the district court ruled that the plaintiffs had not proven that a specific policy in the Texas Qualified Allocation Plan was the direct cause of the spatial and racial disparities in the location of tax-credit projects in the Dallas region.⁵⁰ The interpretation of the ruling by practitioners, however, is what will actually determine its impact. One policy blog written shortly after the ruling maintains that “it is highly likely that developers and advocates of traditional community development will need to meet much higher standards for showing how current and future minority residents would benefit from revitalization.”⁵¹ The writers, both affiliated with the Urban Land Institute, a national organization of real estate and land-use professionals, go on to aver that “community developers may face more concerted legal opposition to their housing activities as well.”⁵² Some evidence suggests that governmental officials also see the court’s ruling as a directive to shift strategies away from investment in the urban core. Two months after the decision, for example, an official with the Georgia Department of Community Affairs said, “If the end result [of the agency’s practices] is that we are primarily building in high minority areas with no access to community resources, then we need to make changes in the Qualified Allocation Plan [of the tax-credit program].”⁵³ If this interpretation prevails, the early net effect of Texas DHCA v. The Inclusive Communities Project will be a victory for the spatial strategy of fair housing advocates at the expense of community development.

Affirmatively Furthering Fair Housing

Finally, as discussed throughout this volume, HUD under the Barack Obama administration also acted to codify the affirmatively furthering fair housing provision of the 1968 Fair Housing Act. The provision to “affirmatively further” fair housing requires that in addition to regulating the actions of the private sector in housing, the federal government must ensure that its own programs and its own actions further fair housing goals. This clause has been interpreted to apply directly to federal actions implementing housing programs (for example, governing the siting of federally subsidized housing to ensure that the placement of subsidized units does not maintain or enhance patterns of segregation) and, more indirectly, to apply to the use of federal housing and community development funds by state and local governments.

The affirmatively furthering fair housing provision establishes the obligation on the part of the federal government to ensure that local governments spend federal housing and community development funds in accordance with fair housing goals. As a result, the Obama administration issued the Affirmatively Furthering Fair Housing (AFFH) Rule in 2015. Specifically, it strengthens the requirements for local governments to assess local fair housing issues and to incorporate fair housing goals into local plans of action by laying out steps for analyses of local housing conditions. While being designed as a way to analyze spatial inequities and create housing programs to combat segregation, the AFFH Rule reiterates the agency’s dual focus by noting the legitimate “role of place-based strategies . . . to improve conditions in high poverty neighborhoods, as well as preservation of the existing affordable housing stock . . . to help respond to the overwhelming need for affordable housing.”⁵⁴ Still, on balance, the AFFH Rule limits the notion of acceptable community development to rehabilitation (nothing is said about new development in impacted neighborhoods) and warns against a sole reliance on development in disadvantaged neighborhoods when the chance to develop in opportunity neighborhoods exists.

As for action steps, however, the AFFH Rule requires only the completion of an analysis and the preparation of a housing approach that would be consistent with local conditions. The 2015 AFFH regulations were hailed by fair housing advocates as an important step in extending the effectiveness of the Fair Housing Act. Given the backlash during the Donald Trump administration against the rule, however, it is as yet undetermined whether it will lead to a generalized shift in local policy away from meeting housing needs in central-city neighborhoods and toward a greater emphasis on dispersal and integration. The regulations do not resolve the issue related to the relative importance of equal access and integration in Title VIII.

The words of Obama’s HUD secretary, Julián Castro, confirm that the agency did not intend for the AFFH Rule to endorse integration over community development:

These words are similar to another statement of Castro’s in late 2015. After endorsing the idea of moving people to “opportunity” neighborhoods, he noted, “At the same time, you can’t forget about the distressed areas and investing in the older urban core neighborhoods.” Government, he said, cannot “forget about folks who also want to live [in central neighborhoods], where they have lived forever. That’s their home, that’s where they want to be. If you gave them a choice to go somewhere else they wouldn’t because they want to live there.”⁵⁶

The Trump administration, while hostile to the AFFH Rule, has had less to say about how it would approach the tension between fair housing and community development.

Conclusion

The aggressive spatial strategy of fair housing, a strategy that emphasizes integrated settlement patterns, has led to heightened levels of tension with community development and affordable housing efforts directed at lower-income, minority neighborhoods. The spatial strategy of fair housing, however, has the potential to create tensions with other policy objectives as well.

Federal initiatives in sustainability and transportation policy, especially efforts to coordinate transportation and housing investments, present fair housing activists with the same concerns.⁵⁷ The logic of coordinated investment and transit-oriented development, another periodic goal of the federal government, suggests that affordable housing should be present where transit service levels are high. The problem, for fair housing advocates, is that transit service is often greatest in central-city areas with high concentrations of poverty that they find inappropriate for more affordable housing investment.

HUD’s development of the Location Affordability Index (LAI) similarly presents fair housing advocates with concerns. The LAI measures the combined housing and transportation costs in a neighborhood, providing a more complete understanding of the true cost of living in any given area than is provided by traditional housing affordability measures. Whether it is used to determine how housing programs affect the transportation costs of assisted families or where to place assisted housing to minimize transportation costs, the LAI highlights the advantages of locating affordable housing in core areas that are well served by transit. This feature is alarming to fair housing groups, who call the LAI an “inappropriate tool for siting new low-income housing” and have opposed transit-oriented development plans that call for affordable housing along transit lines because of fears that locating assisted housing by transit lines would perpetuate segregation.⁵⁸ In fact, fair housing activists worry that HUD and the Department of Transportation overemphasize the importance of housing cost and transit access; they urge policy makers to instead “recognize the additional variables greatly impacting household costs and quality of life.”⁵⁹

Fair housing advocates frequently criticize the development of affordable housing in disadvantaged neighborhoods as a “path of least resistance.” Such an argument suggests that affordable housing is placed in low-income neighborhoods because these neighborhoods lack the resources to effectively oppose such housing. Thus, developers and agencies go where they have a higher likelihood of success, and a reinforcing pattern of spatial concentration of subsidized units ensues. Ironically, the second and third stations of the fair housing spatial strategy outlined above also follow paths of least resistance. Integrationists who focus their strategy on stopping or reducing affordable housing development in disadvantaged neighborhoods capitalize on antipathies toward subsidized housing shared by policy makers and middle- and upper-income citizens. It is typically not difficult to enlist opposition to subsidized housing, especially with an argument that certain places have too much of it. Indeed, as I have pointed out elsewhere, the logic of opposition to affordable housing in the core actually provides a rationale for opposition in exclusionary areas.⁶⁰ Defining subsidized housing as a community problem only reinforces the resistance of white middle- and upper-income communities.

Similarly, at the third station of fair housing spatial strategy, integrationists who pursue the demolition of public housing and the dispersal of low-income communities also trade on these attitudes. Additionally, however, the third station of fair housing spatial strategy also activates the considerable self-interest of landowners, developers, and local officials who benefit from the demolition of public housing and the economic and land-use transitions that follow.

Convincing some elected officials and property owners that they have received too much subsidized housing is not so difficult a task, especially compared to the difficulties involved in convincing other officials in exclusionary communities that they need to produce more of such housing. When fair housing integrationists add their voices to the array of interests already opposed to subsidized housing, they follow a path of least resistance. While they may succeed in convincing some officials and activists that their communities are being taken advantage of, these efforts do nothing to get housing built in exclusionary communities. What fair housing integrationists repeatedly fail to demonstrate is how shutting off subsidized housing in the core, or demolishing it, will necessarily reduce opposition to the production of subsidized housing in exclusionary communities.

When fair housing integrationists move to restrict affordable housing in certain communities and try to discourage or limit occupancy in certain neighborhoods, they assert the primacy of integration over other housing goals, such as equal access. In so doing, they offer a stylized reading of the Fair Housing Act that privileges integration over access. The legislative history of fair housing, the language of the act itself, and subsequent actions by the courts and Congress do not support a privileged position for integration.

Furthermore, efforts to date in engineering integration have perforce accommodated white intolerance at all stages. Although levels of white segregation exceed those of other groups, efforts to break up segregated communities have focused on the demolition and redevelopment of communities of color. The very definition of integration itself tends to be that level of minority occupancy that whites will tolerate, such that program administrators work to limit the reconcentration of people of color in new communities. The reluctance on the part of the courts, policy makers, and fair housing integrationists to burden the white community with the obligation of integration is a central fact of integration efforts in the United States. As a result, our efforts to integrate typically come at the expense of communities of color, through the manipulation or restriction of housing choice, or via the denial of needed community development funding.

Fair housing advocates would do better to direct their activism toward those communities that resist subsidized housing rather than toward those that build it. We know that in the United States, the wealthy are more segregated than the poor, and that whites are more segregated than people of color. The fair housing movement should return to advocacy that forces open the communities that exercise exclusionary tactics.

ENDNOTES

1. Elizabeth Anderson, The Imperative of Integration (Princeton, NJ: Princeton University Press, 2010); Florence Roisman, “Constitutional and Statutory Mandates for Residential Racial Integration and the Validity of Race-Conscious, Affirmative Action to Achieve It,” in The Integration Debate: Competing Futures for American Cities, ed. Chester Hartman and Gregory Squires (New York: Routledge, 2009), 67–84.

2. Ingrid Gould Ellen and Margery Austin Turner, “Does Neighborhood Matter? Assessing Recent Evidence,” Housing Policy Debate 8, no. 4 (January 1, 1997): 833–866; Robert J. Sampson, Jeffrey D. Morenoff, and Thomas Gannon-Rowley, “Assessing ‘Neighborhood Effects’: Social Processes and New Directions in Research,” Annual Review of Sociology 28, no. 1 (2002): 443–478.

3. Tommie Shelby, Dark Ghettos: Injustice, Dissent, and Reform (Cambridge: Harvard University Press, 2016), 39.

4. Mary E. Pattillo, “The Problem of Integration,” The Dream Revisited, January 20, 2014, available at http://furmancenter.org/research/iri/essay/the-problem-of-integration.

5. Shelby, Dark Ghettos, 70.

6. Iris Marion Young, Inclusion and Democracy (Oxford: Oxford University Press, 2002).

7. Juliet Saltman, Open Housing: Dynamics of a Social Movement (New York: Praeger, 1978).

8. Mara S. Sidney, “Fair Housing and Affordable Housing Advocacy: Reconciling the Dual Agenda,” in The Geography of Opportunity: Race and Housing Choice in Metropolitan America, ed. Xavier de Souza Briggs (Washington, DC: Brookings Institution Press, 2005), 266–286.

9. National Commission on Fair Housing and Equal Opportunity, The Future of Fair Housing: Report of the National Commission on Fair Housing and Equal Opportunity (National Commission on Fair Housing and Equal Opportunity, 2008).

10. Alexander Polikoff, “Sustainable Integration or Inevitable Resegregation: The Troubling Questions,” in Housing Desegregation and Federal Policy, ed. John Goering (Chapel Hill: University of North Carolina Press, 1986), available at https://www.questia.com/library/105726029/housing-desegregation-and-federal-policy; Charles E. Daye, “Whither ‘Fair’ Housing: Mediations on Wrong Paradigms, Ambivalent Answers, and a Legislative Proposal,” Washington University Journal of Law and Policy 3, no. 1 (January 1, 2000): 241–294; Robert W. Lake and Jessica Winslow, “Integration Management: Municipal Constraints on Residential Mobility,” Urban Geography 2, no. 4 (October 1, 1981): 311–326; Leonard S. Rubinowitz and Elizabeth Trosman, “Affirmative Action and the American Dream: Implementing Fair Housing Policies in Federal Homeownership Programs,” Northwestern University Law Review 74 (1979): 491–616; Sidney, “Fair Housing and Affordable Housing Advocacy.”

11. Daye, “Whither ‘Fair’ Housing.”

12. Robert Neuwirth, “Renovation or Ruin: Is the LIHTC Program Promoting Segregation?” Shelterforce, September 1, 2004, available at https://shelterforce.org/2004/09/01/renovation-or-ruin/.

13. Myron Orfield and Will Stancil, “Why Are the Twin Cities So Segregated?” Mitchell Hamline Law Review 43, no. 1 (2017): 2.

14. Edward G. Goetz, The One-Way Street of Integration: Fair Housing and the Pursuit of Racial Justice in American Cities (Ithaca, NY: Cornell University Press, 2018).

15. Ibid.

16. Justin D. Cummins, “Recasting Fair Share: Toward Effective Housing Law and Principled Social Policy,” Law and Inequality: A Journal of Theory and Practice 14, no. 2 (1996): 53.

17. Sharon Krefetz, “The Impact and Evolution of the Massachusetts Comprehensive Permit and Zoning Appeals Act: Thirty Years of Experience with a State Legislative Effort to Overcome Exclusionary Zoning,” Western New England Law Review 22, no. 2 (January 1, 2001): 381.

18. Nico Calavita, Kenneth Grimes, and Alan Mallach, “Inclusionary Housing in California and New Jersey: A Comparative Analysis,” Housing Policy Debate 8, no. 1 (January 1997): 109–142.

19. Antonio Raciti, Katherine A. Lambert-Pennington, and Kenneth M. Reardon, “The Struggle for the Future of Public Housing in Memphis, Tennessee: Reflections on HUD’s Choice Neighborhoods Planning Program,” Cities 57 (September 2016): 6–13; Amy L. Howard and Thad Williamson, “Reframing Public Housing in Richmond, Virginia: Segregation, Resident Resistance and the Future of Redevelopment,” Cities 57 (September 2016): 33–39.

20. Preston H. Smith II, Racial Democracy and the Black Metropolis: Housing Policy in Postwar Chicago (Minneapolis: University of Minnesota Press, 2012); James Q. Wilson, Negro Politics: The Search for Leadership (Glencoe, IL: Free Press, 1960); St. Clair Drake and Horace R. Cayton, Black Metropolis: A Study of Negro Life in a Northern City (Chicago: University of Chicago Press, 1970).

21. James Tyner, The Geography of Malcolm X: Black Radicalism and the Remaking of American Space (New York: Routledge, 2006), 79.

22. Peniel E. Joseph, ed., The Black Power Movement: Rethinking the Civil Rights—Black Power Era (New York: Routledge, 2006).

23. John T. Baker, “Community Development Corporations: A Legal Analysis,” Valparaiso University Law Review 13, no. 1 (1978): 55.

24. Laura Warren Hill and Julia Rabig, eds., The Business of Black Power: Community Development, Capitalism, and Corporate Responsibility in Postwar America (Rochester, NY: Boydell and Brewer, 2012), 9.

25. Saltman, Open Housing.

26. Ibid., 310–311.

27. Ibid., 125.

28. Shannon v. HUD, 436 F. 2d 809 (3d Cir. 1970).

29. Goetz, The One-Way Street of Integration.

30. Harvey Luskin Molotch, Managed Integration: Dilemmas of Doing Good in the City (Berkeley: University of California Press, 1972).

31. Lake and Winslow, “Integration Management”; Molotch, Managed Integration.

32. W. Dennis Keating, The Suburban Racial Dilemma: Housing and Neighborhoods (Philadelphia: Temple University Press, 1994).

33. Molotch, Managed Integration, 101.

34. William Julius Wilson and Richard P. Taub, There Goes the Neighborhood: Racial, Ethnic, and Class Tensions in Four Chicago Neighborhoods and Their Meaning for America (New York: Knopf Doubleday Publishing Group, 2011), 179.

35. Lake and Winslow, “Integration Management.”

36. The full list of selection criteria that Qualified Allocation Plans must include is “project location, housing needs characteristics, project characteristics, including whether the project includes the use of housing as part of a community revitalization plan, sponsor characteristics, tenant populations with special housing needs, public housing waiting lists, tenant populations of individuals with children, projects intended for eventual tenant ownership, the energy efficiency of the project, and the historic nature of the project.” Internal Revenue Code §42 (m)(1)(C).

37. Internal Revenue Code §42 (m)(1)(B)(ii). The qualified census tract incentive was added to the program by amendment in 1989.

38. Elizabeth K. Julian, “Recent Advocacy Related to the Low-Income Housing Tax Credit and Fair Housing,” Journal of Affordable Housing and Community Development Law 18, no. 2 (2009): 185–192.

39. Jill Khadduri, Creating Balance in the Locations of LIHTC Developments: The Role of Qualified Allocation Plans (Washington, DC: Poverty and Race Research Action Council and Abt Associates, February 2013), available at http://www.prrac.org/pdf/Balance_in_the_Locations_of_LIHTC_Developments.pdf; Casey Dawkins, “The Spatial Pattern of Low Income Housing Tax Credit Properties: Implications for Fair Housing and Poverty Deconcentration Policies,” Journal of the American Planning Association 79, no. 3 (July 3, 2013): 222–234.

40. In re: Adoption of 2003 Low Income Housing Tax Credit Allocation Plan, 848 A. 2d 1, 5 (N.J. Super. Ct. App. Div. 2004). Another suit was filed in 2002 by the Connecticut Civil Liberties Union against the state allocating agency in Connecticut on the basis of the segregatory impact of the LIHTC program in the Hartford metropolitan area, In Re: Declaratory Ruling on Connecticut Low Income Housing Tax Credit Program; see the brief description in Keren M. Horn and Katherine M. O’Regan, The Low Income Housing Tax Credit and Racial Segregation (New York: Furman Center for Real Estate and Public Policy, 2011); The Inclusive Communities Project, Inc., v. The Texas Department of Housing and Community Affairs, complaint filed March 28, 2008, in the U.S. District Court, Northern District of Texas, Dallas Division, 3:08-CV-546-D, 12; Housing Discrimination Complaint: Metropolitan Interfaith Council on Affordable Housing, et al. v. State of Minnesota, et al.

41. James A. Long, “The Low-Income Housing Tax Credit in New Jersey: New Opportunities to Deconcentrate Poverty through the Duty to Affirmatively Further Fair Housing,” Annual Survey of American Law 66, no. 1 (May 12, 2010): 54.

42. Neuwirth, “Renovation or Ruin.”

43. Ibid.

44. Ingrid Gould Ellen and Keren Horn, Effect of QAP Incentives on the Location of LIHTC Properties: Multi-Disciplinary Research Team Report (Washington, DC: U.S. Department of Housing and Urban Development, 2015).

45. The Inclusive Communities Project, Inc., v. The Texas Department of Housing and Community Affairs, 546 U.S. 12 (2015).

46. Ibid.

47. Ibid.

48. Ibid.

49. Ibid.

50. Julieta Chiquillo, “After Supreme Court Victory, Dallas Nonprofit Loses Racial Bias Suit against Texas Agency,” Dallas News, August 31, 2016, available at https://www.dallasnews.com/news/dallas/2016/08/31/supreme-court-victory-dallas-nonprofit-loses-racial-bias-suit-texas-agency.

51. Stockton Williams and Maya Brennan, “A New Landscape of Housing Access and Opportunity,” Urban Land Magazine, November 30, 2015, available at https://urbanland.uli.org/economy-markets-trends/new-landscape-housing-access-opportunity/.

52. Ibid.

53. Anna Simonton, “What a Fair Housing Victory in the U.S. Supreme Court Means for Atlanta | Atlanta Progressive News,” Atlanta Progressive News, September 19, 2015, available at http://atlantaprogressivenews.com/2015/09/19/what-a-fair-housing-victory-in-the-u-s-supreme-court-means-for-atlanta/.

54. “Affirmatively Furthering Fair Housing,” Federal Register 9 (January 14, 2020): 2041–2061.

55. Shelterforce Staff, “Interview with HUD Secretary Julián Castro,” Shelter-force, February 4, 2016, available at https://shelterforce.org/2016/02/04/ishelterforce_i_exclusive_interview_with_hud_secretary_julian_castro-2/.

56. Melissa Harris-Perry, “Julian Castro on Public Housing in New Orleans,” Melissa Harris-Perry (MSNBC, August 30, 2015), available at https://www.msnbc.com/melissa-harris-perry/watch/julian-castro-on-public-housing-in-new-orleans-516027971685.

57. See Edward G. Goetz, “Sustainable Fair Housing? Reconciling the Spatial Goals of Fair Housing and Sustainable Development in the Obama Administration,” in Urban Policy in the Time of Obama, ed. James DeFilippis (Minneapolis: University of Minnesota Press, 2016); Edward G. Goetz, “The Fair Housing Tightrope in the Obama Administration: Balancing Competing Policy Objectives of Fair Housing and Locational Efficiency in Assisted Housing,” Journal of Urban Affairs 37, no. 1 (February 2015): 53–56.

58. Philip Tegeler and Hanna Chouest, “The ‘Housing + Transportation Index’ and Fair Housing,” Poverty and Race (2011); available at https://prrac.org/the-housing-transportation-index-and-fair-housing/; Oak Park Regional Housing Center, “Affirmatively Furthering Fair Housing and the Center for Neighborhood Technology’s H+T Affordability Index,” February 2012, 7.

59. Oak Park Regional Housing Center, “Affirmatively Furthering Fair Housing and the Center for Neighborhood Technology’s H+T Affordability Index,” 2.

60. Edward G. Goetz, “The Politics of Poverty Deconcentration and Housing Demolition,” Journal of Urban Affairs 22, no. 2 (June 2000): 157–173.