Rescission of Affirmative Fair Housing Marketing Regulations

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT <CFR>24 CFR Parts 108 and 200</CFR> <DEPDOC>[Docket No. FR-6533-P-01]</DEPDOC> <RIN>RIN 2501-AE13</RIN> <SUBJECT>Rescission of Affirmative Fair Housing Marketing Regulations</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Secretary, U.S. Department of Housing and Urban Development (HUD). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This proposed rule would rescind the Department's Affirmative Fair Housing Marketing regulations, which require a participant in an FHA insurance or Multifamily Housing rental assistance program to complete and submit a form supplied by HUD that describes its affirmative fair housing marketing plan. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Comment Due Date:</E> July 3, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Interested persons are invited to submit comments regarding this proposed rule. All submissions must refer to the docket number and title. There are two methods for submitting public comments. 1. <E T="03">Electronic Submission of Comments.</E> Interested persons may submit comments electronically through the Federal eRulemaking Portal at <E T="03">https://www.regulations.gov.</E> 2. <E T="03">Submission of Comments by Mail.</E> 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. In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed rule may be found at <E T="03">www.regulations.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Scott Knittle, Principal Deputy General Counsel, U.S. Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; telephone number 202-402-2244 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as from individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit <E T="03">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> HUD's regulations governing Affirmative Fair Housing Marketing (“AFHM”) are contained in 24 CFR parts 108 and 200, subpart M. See final rule, Compliance Procedures for Affirmative Fair Housing Marketing, 44 FR 47012 (August 9, 1979), codified as amended at 24 CFR part 200, subpart M—Affirmative Fair Housing Marketing Regulations, 37 FR 75 (January 5, 1972), codified as amended at 24 CFR part 200, subpart M. These regulations require applicants for participation in Federal Housing Administration (FHA) housing programs to “pursue affirmative fair housing marketing policies in soliciting buyers and tenants, in determining their eligibility, and in concluding sales and rental transactions.” 24 CFR 200.610. These regulations state that a marketing program “shall typically involve publicizing to minority persons the availability of housing opportunities regardless of race, color, religion, sex, handicap or familial status or national origin, through the type of media customarily utilized by the applicant, including minority publications or other minority outlets which are available in the housing market area.” 24 CFR 200.620(a). These regulations additionally require applicants to submit affirmative fair housing marketing plans, to be approved by HUD and made available for public inspection. 24 CFR 200.625. Applicants who fail to comply with these requirements are “liable to sanctions.” 24 CFR 200.635; <E T="03">see also</E> 24 CFR 108.50. The compliance procedures under these regulations are extensive. Ninety days before engaging in sales or rental marketing activities, applicants must “submit a Notification of Intent to Begin Marketing to the monitoring office.” 24 CFR 108.15. The monitoring office reviews reports, monitors AFHM plans, and refers matters to the civil rights or compliance reviewing office for possible sanctions. 24 CFR 108.20. If an applicant fails to comply, a compliance meeting must be held. 24 CFR 108.25. Individuals, as well as private and public entities, may file complaints alleging violations of these regulations. 24 CFR 108.35. <HD SOURCE="HD1">II. Justification for Rulemaking</HD> Upon reviewing these regulations, HUD has determined that they should be rescinded for six independent reasons. <HD SOURCE="HD2">A. The AFHM Regulations Are Inconsistent With HUD's Authority Under the Fair Housing Act and Executive Order 11063</HD> The Fair Housing Act, 42 U.S.C. 3601, <E T="03">et seq.</E> (“the Act”), prohibits discrimination in the sale or rental of housing, in residential real-estate transactions, and in the provision of brokerage services. Discrimination includes, among other things, refusing to rent or sell “because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. 3604(a.). <SU>1</SU> <FTREF/> HUD's rulemaking authority is cabined to those rules necessary to prevent discrimination <E T="03">See United States</E> v. <E T="03">Mid-America Apartment Cmtys., Inc.,</E> 247 F. Supp. 3d 30, 35 (D.D.C. 2017). The Affirmative Fair Housing Marketing regulations are not about preventing discrimination; rather, they require applicants to <E T="03">affirmatively</E> attract minority persons and to do so through “minority publications or other minority outlets.” 24 CFR 200.620. Far from supporting the race-neutral and purely prohibitory requirements of the Act, the AFHM regulations require private parties to sort individuals by race and engage in outreach based on race. <FTNT> <SU>1</SU>  The Act also makes it unlawful to discriminate because of disability; that prohibition is reflected in different paragraphs ( <E T="03">e.g.,</E> § 3604(f)). </FTNT> Moreover, the AFHM regulations require compliance with these affirmative obligations under the threat of sanctions. <E T="03">See</E> 24 CFR 200.635. Failing to provide outreach to minority groups is not “discrimination” as defined by the Act, yet the AFHM regulations punish noncompliance with the “denial of further participation in Departmental programs and referral to the Department of Justice for suit by the United States for injunctive or other appropriate relief.” 24 CFR 108.50. The Act provides no basis for such a punishment. Again, the FHA and Executive Order 11063 are aimed at discrimination against persons because of race, not informational disparities. To the extent there are informational disparities, HUD has other tools under the statute to address that issue. It is inappropriate for HUD to require applicants, without payment, to do this outreach instead. <E T="03">See Whitman</E> v. <E T="03">Am. Trucking Ass'ns, Inc.,</E> 531 U.S. 457, 467-68 (2001) (“Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.”). <HD SOURCE="HD2">B. The AFHM Regulations Are Unconstitutional Under the Equal Protection Clause</HD> Regardless of statutory authority, the AFHM regulations are unconstitutional under the Equal Protection Clause. Requiring applicants to reach out to different racial groups, in different mediums, perpetuates the “impermissible racial stereotype” that “members of the same racial group—regardless of their age, education, economic status, or the community in which they live—think alike.” <E T="03">Students for Fair Admissions, Inc.</E> v. <E T="03">President & Fellows of Harv. Coll.,</E> 600 U.S. 181, 220 (2023). The AFHM regulations also require applicants to favor some racial groups over others, without a compelling interest. The regulations mandate “publicizing to minority persons the availability of housing opportunities.” 24 CFR 200.620(a). But “racial discrimination is invidious in all contexts,” even when it favors minority groups over majority groups. <E T="03">Students for Fair Admissions,</E> 600 U.S. at 213. The AFHM regulations require exactly that—emphasizing minority groups over majority groups for outreach. <HD SOURCE="HD2">C. If the Act Permitted the AFHM Regulations, It Would Be an Unconstitutional Delegation of Legislative Power</HD> If the Act were to permit the AFHM regulations, the statute would be an unconstitutional delegation of legislative power. Article I provides that “[a]ll legislative Powers herein granted shall be vested in a Congress of the United States.” U.S. Const. Art. I, section 1. “Accompanying that assignment of power to Congress is a bar on its further delegation.” <E T="03">Gundy</E> v. <E T="03">United States,</E> 588 U.S. 128, 135 (2019). If 42 U.S.C. 3614a—which states, the “Secretary may make rules . . . to carry out this subchapter”—is read to permit <E T="03">any</E> regulation to carry out the broad purposes of the Act, without even a public interest limitation, then there is no “intelligible principle.” <E T="03">See id.</E> The AFHM regulations do more than simply “fill up the details,” and create burdensome, affirmative obligations out of whole cloth. <E T="03">Wayman</E> v. <E T="03">Southard,</E> 23 U.S. 1, 6 (1825). Worse, these obligations come with a serious threat of sanction. None of this was contemplated by the statute in more than vague terms. <HD SOURCE="HD2">D. HUD's Color-Blind Policy</HD> Regardless of the constitutionality of the regulations, it is the policy of the Department not to require applicants to engage in racial sorting. HUD should encourage applicants to be color-blind, as it is always immoral to treat some racial groups differently than others. Even if the regulatio ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━