Regional Plan Association Comments on HUD’s Implementation of Fair Housing Act Disparate Impact Standard

WASHINGTON, Nov. 3 -- Enrique Buenaventura of Regional Plan Association [https://www.rpa.org/] has issued a public comment on the Department of Housing and Urban Development's proposed rule entitled "HUD's Implementation of the Fair Housing Act's Disparate Impact Standard". The comment was posted on Oct. 18, 2019:

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The Regional Plan Association (RPA) appreciates the opportunity to submit comments on HUD's Notice of Proposed Rule-making affecting the Implementation of the Fair Housing Act's Disparate Impact Standard. RPA improves the New York metropolitan region's economic health,/1 environmental sustainability and quality of life through research, planning and advocacy.

For almost a century, RPA has been an indispensable source of ideas and plans for policy makers and opinion sharers across the tri-state region. We are concerned that the proposed rule-making does not attempt to incorporate an accurate understanding of fair housing issues, spatial planning as a historic causation of inequality, and the consequences of biased automated decision making systems (algorithms).

By exempting individualized decisions from the scrutiny of the Fair Housing Act's Disparate Impact Standard, the proposed rule-making fails to recognize the relations between segregation, spatial planning, and the modern practice of relying on individual discretionary reviews for land use decisions.

Over the last century, urban planning and both public- and private-sector actions have undermined the basic human value that everyone should be able to live a full, healthy and productive life, reinforcing the legacy of racism and discrimination in the U.S., and creating the region's geography of segregation, isolation, and inequality. Policies like unequal access to financing, restrictive covenants, blockbusting, redlining, and racial steering divided the region into largely poor communities of color and affluent, largely white neighborhoods.

The infrastructure that allowed New York's metropolitan region to grow created environmental injustices, such as urban highway construction that tore apart immigrant and communities of color, and transportation that served only some parts of the population. These cannot be forgotten, because they shaped where we live, and where we live is directly linked to our access to opportunity: the jobs we can reach, the quality of our health and schools, and ultimately, the success our children can achieve./2

Many of these policies exist in different forms today: discrimination in housing still uses source of income or credit scores to weed out applicants; blacklisting excludes renters who have ever been to court regardless of the reason or outcome; exclusionary zoning keeps segregation alive; inequitable school financing perpetuates unequal educational outcomes; energy and environmental policies create unhealthy living conditions; and transit services do not serve all residents equally.

In an effort to reverse this, RPA's Fourth Regional Plan emphasized the necessity of strengthening and improving fair housing laws, based on the understanding that affordable housing policies alone will not end discriminatory practices. The Plan also advocated for the protection of low-income residents from being displaced from the urban areas where many reside by building wealth in communities that have suffered through disinvestment, strengthening rent regulations and protections, and ending homelessness by providing legal counsel and increased funding for affordable and supportive housing.

The proposed changes to the Fair Housing Act's Disparate Impact Standard fail to recognize contemporary local land use regulations and zoning changes which are largely based on individualized decisions. Hundreds of jurisdictions throughout the tri-state area require special permits or conditional use permits for broad ranges of uses, including important housing types like senior housing and even residences with as few as two units. By requiring special permits, rather than allowing the use as-of-right, the local government reserves for itself the chance to review the merits of each project./3

A preliminary analysis suggests that New York City alone has been relying more frequently on spot rezoning (individualized zoning map amendments). The frequency of these discretionary reviews has doubled since 2016, compared to the prior 15 years, for areas that are on average six times smaller./4

Under the proposed rule change, most of these private spot rezoning applications, individual discretionary decisions by nature, would be exempt by the regimes from Disparate-Impact scrutiny.

Segregation by race and income is not an accident; racism and bias stemming from the country's long legacy of discrimination has persistent effects still felt across the United States. Segregation also persists spatially. When compared with other large metropolitan areas, New York ranks highest in income inequality and continues to rank as one of the most racially and ethnically segregated regions in the United States./5

The proposed rule change would fail to advance the original intention of the Fair Housing Act and aggravate the implications of historic spatial planning.

By detaching liabilities from third party generated automated decision making systems and placing the burden of proof on the plaintiff, the proposed rule-making will most likely exacerbate housing discriminatory practices. From criminal justice to health care to education, employment, and housing, we are seeing computational and predictive technologies deployed into or supplanting private and governmental decision-making procedures and processes. As a result, many advocates, academics, and policymakers have begun to raise concerns, urging adequate safeguards, oversight, appeal, and redress mechanisms for protecting vulnerable populations from harm./6

Under the proposed rule-making, lenders would not be liable or responsible for the effects of an algorithm provided by a third party. This will encourage the use of biased algorithms used by lenders and property owners that deliver judgments on credit risk, home insurance, mortgage interest rates, and more. In addition, placing the burden of proof on the parties claiming discrimination is unjustifiable. Assuming that a plaintiff has access to highly skilled data engineers or computer scientists needed to demonstrate that a particular algorithm was developed in a biased way is not only unrealistic but goes against the original intention of the fair housing act.

We urge for HUD to address our comments and thoroughly examine the implications of the proposed rule-making.

The RPA appreciates the opportunity to submit comments on this critical decision.

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Footnotes:

1/ 84 Fed. Reg. 42854 (proposed Aug. 19, 2019)

2/ Regional Plan Association. 2015. "Spatial Planning and Inequality." http://library.rpa.org/pdf/RPA-4RP-Whitepaper-Spatial-Planning-and-Inequality.pdf

3/ Edward H. Ziegler, Jr., 1 Rathkopf's The Law of Zoning and Planning Sec. 11:4 (4th ed. 2019)

4/ NYC Department of City Planning, GIS Zoning Features (September 2019)

5/ Regional Plan Association. 2015. "Spatial Planning and Inequality." http://library.rpa.org/pdf/RPA-4RP-Whitepaper-Spatial-Planning-and-Inequality.pdf

6/ Litigating Algorithms: Challenging Government Use of Algorithmic Decision Systems, AI Now Institute (September 2018).

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=HUD-2019-0067-0001

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