Donald Trump’s Civil Rights Office for Housing Has Found the Real Problem: Pets

Originally published in The Intercept on March 23, 2018.
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The Office of Fair Housing and Equal Opportunity at the Department of Housing and Urban Development was designed to confront discrimination, segregation, and poverty. Instead, under the Trump administration, the agency is gearing up to confront a much stranger boogeyman: The emotional support snake.

For media and lawmakers, the idea of pet owners selfishly and fraudulently exploiting legal accommodations for Americans with disabilities has proven irresistible. It’s a story that hits all the right buttons: entitled and oversensitive pet owners, smitten with ridiculous animals, lying to befuddled businesses, and, with the weight of federal law behind them, forcing workaday Americans to endure the presence of an unwanted critter.

Fear of phony pups and fraudulent felines has been percolating for years. The idea got a big boost in 2014, when the New Yorker ran a piece featuring its author successfully testing the proposition that she could bypass many “no pets allowed” policies with a phony doctor’s note. She brought a 15-pound turtle into a museum, a 26-pound turkey into a restaurant, a snake into a movie theater, and an alpaca on a train. The journalist showed how easy it was to convince confused business owners to let her in with her exotic animals, since the cost of denying someone their legal accommodations is quite high.

The public got another dose of outrage this past January, when a woman tried to board a flight out of Newark International Airport with a peacock named Dexter. The passenger insisted her bird was an “emotional support animal,” which, under the Air Carrier Access Act, passengers can legally bring on planes. United Airlines didn’t buy it and refused to let her on. A few days later, United announced that it would be  tightening its policies around companion animals and now requires new documents to verify an animal’s health and training. Delta Air Lines did the same thing, and both companies say they’ve seen nearly double the amount of passengers flying with animals in recent years. “Dexter, unwittingly, may have struck a blow for sanity,” wrote New York Times columnist David Leonhardt in a recent piece titled, “It’s Time to End the Scam of Flying Pets.” Leonhardt said he hopes to see all airlines adopt “fairly strict” rules soon, and that the whole scandal is a “fascinating case study of how mass cheating can become acceptable.”

But while peacocks and “mass cheating” among pet owners make for juicy stories, civil rights advocates worry about where all this self-righteous anger is heading. Sources connected to HUD, helmed by Ben Carson, say that Anna Maria Farías, the federal assistant secretary for Fair Housing and Equal Opportunity, has said cracking down on assistance animals is a “priority,” and that HUD may issue new guidance restricting access to emotional support animals as early as the beginning of April.

The federal housing agency has been meeting with representatives from housing industry groups, including the National Apartment Association, but it has so far ignored entreaties from fair housing and disability rights groups to hold similar meetings, representatives of those groups say.

“The National Fair Housing Alliance has reached out to HUD about accommodation verification, but HUD has declined, thus far, to confer with us regarding this particular matter,” said Morgan Williams, the group’s general counsel, in a statement to The Intercept. “We expect HUD would meet with fair housing and disability rights advocates in the course of any consideration of guidance on reasonable accommodations and assistance animals under the Fair Housing Act.”

Brian Sullivan, a spokesperson for HUD, told The Intercept that the agency has no comment at this time on whether it plans to issue further guidance on emotional support animals.

The agency’s refusal to publicly comment on the issue, combined with its meetings with housing industry groups, has advocates bracing for things to get worse. Under federal law, individuals with physical or mental disabilities can bring assistance animals with them on planes or keep them in their homes, and they can also bring trained service dogs to other public places. But in just a few short years, 21 states have moved to criminalize the misrepresentation of such animals, with another 13 drafting similar legislation to take up this year. Advocates note that evidence for a supposed fake assistance animal crisis has been extremely limited, and many times outrage can be traced back to mental health stigma more generally.

“There are unfortunately people who take advantage of laws intended to protect people with disabilities, but I think the problem has been blown completely out of proportion,” said Marcy LaHart, an attorney in Florida who represents individuals denied reasonable animal accommodations. “What I see far more is people who have legitimate mental health issues — things like depression, anxiety, and panic attacks — who are harassed because they don’t know what they need to do, what they need to provide, to verify their legitimate need. They’re automatically assumed to be frauds because they don’t ‘look disabled.’”

In the popular consciousness, service dogs and emotional support animals are essentially interchangeable. But legally, they’re very different things: the former protected by Americans with Disabilities Act and the latter coming from the Fair Housing Act.

The Americans with Disabilities Act and related regulations say that service dogs, which have been “trained to do work or perform tasks” related to a specific disability, must be given broad access to public places where pets are typically not allowed. The ADA sharply limits inquiries related to the animal. All that can be asked of the owner is whether their dog is needed because of a disability, and what tasks it has been trained to perform. It’s illegal to request documentation for the service dog or to inquire about the owner’s disability.

In some ways, the protections of the Fair Housing Act are much broader. The FHA (in combination with Section 504 of the Rehabilitation Act) gives individuals the right to keep “emotional support animals” in their homes, provided they can produce a letter from a trained professional that says an animal could help them cope with mental or physical issues, including anxiety, depression, and post-traumatic stress disorder. Unlike the ADA’s service dogs, emotional support animals do not have to be specifically trained to perform specific tasks, and they do not have to be dogs.

The confusion over these differences stems in part from the fact that, while people are generally restricted to keeping their emotional support animals at home, they can also take them on planes. It’s not a coincidence that many high-profile complaints about ostensibly ridiculous support animals involve encounters during air travel: that’s the only public place the law requires them to be allowed. (Even then, there are some exceptions, such as the case of Dexter the peacock.) But planes are about the extent of it: People who rely on emotional support animals can’t take them into restaurants, schools, and movie theaters, all places where trained service dogs are allowed entry under the ADA.

Now, civil rights advocates say they hear that HUD plans to issue new guidance soon, in an effort to rein in alleged emotional support animal fraud.

Mary Rosenberg and Ken Walden, two disability rights lawyers who work at the Chicago-based Access Living with connections to HUD, told The Intercept  their sources say the forthcoming guidance might place new limits on acceptable breeds of emotional support animals (barring pit bulls, for example), erect new hoops for who can verify a disability, and prohibit certain exotic or non-traditional animals.

“What we heard was that Anna Maria Farías essentially thinks emotional support animals might be appropriate for armed military veterans with PTSD, but not really for people beyond that,” said one national fair housing advocate, “based on nothing more than her personal whim.”

Indeed, this past fall HUD filed a charge against a West St. Paul, Minn., apartment complex that ordered an army veteran to get a cat instead of a dog. “Assistance animals play a vital role in helping our veterans cope with service-related disabilities,” said Farías in a press release, that exclusively referred to the tenant as a veteran. HUD declined to make Farías available for an interview.

If HUD does decide to issue new guidance around emotional support animals, how it will comport with past HUD legal interpretations is not yet clear. In 2013, HUD issued guidance that civil rights groups viewed favorably, which clarified housing providers’ legal obligations in relation to the Americans with Disabilities Act. (More than half of all fair housing complaints concern individuals with disabilities, and nearly half of those involve animal-related issues.)

“One issue with new guidance from HUD is there are a lot of people who already have emotional support animals, and this could send them into a limbo,” said Rosenberg. “Whatever the guidance is, it might make it seem like individuals are not allowed to have the animals they already live with, which could fuel a lot of anxiety and confusion.”

“It remains unclear to us if new guidance would supplant the old guidance, contradict it, or complement it,” added Walden.

Federal guidance does not carry the same legal power as statutes or regulations. However, like the Obama-era guidance on transgender bathrooms in public schools, the promulgation or repeal of federal legal interpretations can carry political implications and shape policy.

One major reason critics say there’s an urgent need to crack down on alleged fraud is because of the growth of new websites that sell inexpensive documentation that falsely identify pets as service dogs or emotional support animals. Even in apartments where pets are allowed, buildings often charge tenants a monthly or annual pet fee. But if an animal is considered an emotional support animal, not a pet, landlords (and airlines) can’t charge tenants (or passengers) for their animals. Many suspect that non-disabled individuals are using this new cottage industry to bypass pet fees, or policies that prohibit pets. The New Yorker article noted that the National Service Animal Registry, a commercial business that sells certificates, vests, and badges for helper animals, signed up 11,000 emotional support animals in 2013, up from 2,400 in 2011.

But civil rights advocates say there are major misconceptions about these websites and those who turn to them. While writers like Leonhardt characterize customers as selfish and intentional cheats, advocates say plenty of people who turn to these sites have real needs and may not understand that what they’re doing is illegitimate.

“Just because someone uses one of these websites doesn’t mean they don’t have a disability,” said Williams, of the National Fair Housing Alliance. “They may have no concept that they’re using a website that other people might deem problematic.”

“Sometimes I have people come to me who have already gotten a certificate from an online vendor and generally we’ll explain to them that those aren’t sufficient under the Fair Housing Act,” said LaHart. “We’ll ask them to get a letter from a provider who can truly verify their need, and that’s pretty much it, and we’ll proceed from there. Some people don’t have doctors or were just mortified at having to discuss mental illness. They might think they’re weak because they suffer from depression. I find that particularly in the older generation.”

LaHart calls the online companies selling fake animal support letters “crooks” and says governments should be going after the sellers, not the buyers. “There’s a way to go after those providers and not throw the baby out with the bathwater,” she said.

Aside from pointing to how easy it can be to obtain fake certification and swag, disability rights lawyers emphasize that there’s been very little proof of actual widespread fraud. They suspect that housing providers are more likely looking for ways to limit their liability under the Fair Housing Act. One major difference between the Fair Housing Act and the Americans for Disabilities Act is that individuals who have been discriminated against can only sue for monetary damages under the former. Matthew Dietz, a disability rights lawyer, told The Intercept that in his practice, the Fair Housing Act has a lot more teeth. “When I sue a condo association, I sue the association itself, I sue the property manager, and I sue each and every individual on the board of directors,” he said.

The Intercept asked the National Apartment Association for statistics or survey data it uses to show that there’s been an increase in problematic requests for animal accommodation.

Nicole Upano, the NAA’s senior manager for government affairs, responded by pointing to the 2014 New Yorker article, and added that as of this week, the National Service Animal Registry had registered 181,984 service and emotional support animals. “To put this number in perspective, NAA is aware of more than 20 websites or online providers that offer documentation to their customers in exchange for a fee,” she said.

Though it is possible that some of those websites also sell fake doctor’s notes, these figures don’t shed real light on alleged fraud in housing because certified animals — fake or not — are not relevant for securing accommodations under the Fair Housing Act. In the housing context, emotional support animals don’t need certification. Tenants just need a third party to verify that they have a disability and could benefit from living with an animal.

In addition to lobbying for new federal regulations that would crack down on alleged fraud, housing industry groups have also been pushing for legislation on the state level to limit access to emotional support animals. While many of these efforts are framed as ways to better protect the rights of those with legitimate disabilities, civil rights advocates worry the new statutes could have the adverse effect of preventing or deterring people from receiving accommodations to which they are legally entitled. For example, new legislation signed this month by South Dakota Gov. Dennis Daugaard requires tenants seeking to live with an emotional support animal to provide verification that comes “from a licensed health care provider.”

But under HUD’s 2013 guidance, for example, legitimate third parties include social workers, not all of whom have clinical training. In some cases, animal trainers, case workers, or even guidance counselors have testified to an individual’s need for an assistance animal. “We worry these laws could have a chilling effect on tenants and anyone who was called upon to verify their need for assistance,” said Walden, a disability rights lawyer.

Florida passed a law in 2015 that makes it a crime for people to falsely claim that they need service dogs. LaHart, the attorney, notes that even though the law doesn’t apply to emotional support animals, condominium associations have sometimes pointed to it as a way to scare tenants seeking accommodations.

“Condo lawyers and sometimes board members will try to use the new law as a way to intimidate people who have asked for a housing accommodation,” she told The Intercept. “I think there is definitely potential for a chilling effect. And I never even see the people who don’t come into my office who get those kind of letters [from condo associations] and just give up.”

Proponents of the new restrictions say they don’t necessarily want to lock people up for their cats and dogs, but that there needs to be more societal pressure and social stigma on non-disabled individuals who break the laws. “The moral compass is gone from people,” one Minnesota resident who wants to see her lawmakers crack down on animal fraud told a local news outlet.

But at the end of the day, advocates say, much of the debate stems from people questioning both the legitimacy of an individual’s disability, and an individual’s preference to use animals as their preferred coping mechanism. National media has certainly done its part to fuel public distrust. While existing research on the benefits of emotional support animals is mixed and limited, recent stories have nonetheless taken to casting assistance animals in a notably negative light. “Therapy animals are everywhere. Proof that they help is not,” read one Washington Post headline from last summer. “The Surprisingly Weak Scientific Case for Emotional Support Animals” read another recent story in Vox.

Dietz, a disability rights attorney, says these kinds of articles are missing the point. “As a society we treat medication, like Xanax or Prozac, as a more acceptable response to anxiety and depression, even though the costs are so much more and the efficacy may not be as much,” he said. “Just as you wouldn’t ask someone, “Does your Prozac really help you?” — you shouldn’t be arguing with someone about if their dog really does provide them with mental and emotional support. The person with the disability should be the one in charge of their own health and the way they care for themselves. And as long as it doesn’t bother anyone else, an accommodation should be made.”

For Dietz, service animals are just the latest in what he sees as a long history of challenging accommodations for people with disabilities, and he says it certainly won’t be the last. “A couple of years ago, the biggest issues were parking spaces,” he said. “People debated whether a person was really disabled enough to need the parking space, and how visible does the disability need to be. In five years, it’s going to be whether the person can really smoke marijuana in their house or is that an unreasonable request? As time goes on, how we choose to treat people with disabilities and the accommodations available to them change.”

For all the hype and chaos, one team of researchers noted the lack of objective data surrounding the public’s understanding of service and emotional support animals, and decided to administer an anonymous online survey to those who do not have one of their own. Their study, published last year in the International Journal of Environmental Research and Public Healthfound that “despite the media’s focus on abuses and false representations of these dogs, most participants reported feeling the majority of people are not taking advantage of the system.”

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The Fight for the Suburbs

Originally published in the January/February 2018 issue of The New Republic.
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Due in no small part to his praise for white supremacists, his calls to deport immigrants, and his push to ban Muslims, Donald Trump has spurred Americans to protect racial minorities and work toward a more just society. That fight is playing out not just in sanctuary cities like New Haven and Los Angeles, or in the streets of Charlottesville. It is also being waged in Washington, at the Department of Housing and Urban Development.

One of HUD’s central responsibilities is to implement the Fair Housing Act, the landmark anti-discrimination law that turns 50 years old in 2018. While efforts to desegregate inner cities continue at a frustratingly slow pace, fair housing advocates did win significant victories during the Obama years. In 2015, HUD issued a rule that provided local governments with new data tools to identify segregated living patterns and meet their legal obligations to promote integration. “These actions won’t make every community perfect,” Barack Obama said at the time. “But they will help make our communities stronger and more vibrant.” A year later, the administration issued another regulation to help families move out of poor, segregated neighborhoods—in part by increasing the purchasing power of their housing vouchers.

But Trump’s administration threatens to undercut these gains. HUD Secretary Ben Carson has criticized the Obama-era rules as “mandated social engineering” and promised his agency would “reinterpret” them. Over the summer, the department announced it would be suspending the rule to help poor families relocate to more affluent neighborhoods, prompting the NAACP Legal Defense Fund and other civil rights groups to file a lawsuit in response.

But the struggle for fair housing is not simply a series of legal fights over regulations and subsidy formulas. It involves much larger battles—ones that take aim at Americans’ basic living patterns and the country’s history of government-sponsored segregation. And as the racial makeup of our cities and suburbs continues to shift, this conflict could profoundly impact U.S. electoral politics. Indeed, civil rights advocates maintain, a successful push for fair housing could transform not only the demographics of our country but even its political future.

The Fair Housing Act was born out of racial violence. Following the urban riots that exploded across the country in 1967, President Lyndon Johnson established the Kerner Commission to investigate the unrest. In February 1968, the commission pointed to insidious racial segregation as the cause, having created “two societies, one white, one black.” That month, Democratic Senator Walter Mondale and Republican Senator Edward Brooke—the only African American in the Senate—introduced the Fair Housing Act. The law would help create “truly integrated and balanced living patterns,” Mondale said.

Critics argued that making it easier for black families to move into white neighborhoods would trample their property rights and constitute “discrimination in reverse.” Still, as racial strife grew more pronounced, and as Martin Luther King Jr. traveled the country calling for an elimination of the nation’s slums, pressure to address segregated housing continued to mount.

King’s assassination on April 4, 1968 finally pushed fair housing through an otherwise recalcitrant Congress. The day after King’s death, Mondale took to the Senate floor and implored his colleagues to uphold King’s legacy by immediately passing the bill. Johnson signed the legislation into law six days later.

The Fair Housing Act has grown stronger over the years. Its protections now cover seven classes: race, color, religion, sex, national origin, disability, and families with children. In 1988, Congress also beefed up the law’s enforcement mechanisms and increased the penalties associated with violating it.

Yet even with these gains, many urban areas still exhibit apartheid levels of segregation. In 2015, Mondale called integration the “unfinished business” of his fair housing law. “When high-income black families cannot qualify for a prime loan and are steered away from white suburbs, the goals of the Fair Housing Act are not fulfilled,” he said. “When the federal and state governments will pay to build new suburban highways, streets, sewers, schools, and parks, but then allow these communities to exclude affordable housing and nonwhite citizens, the goals of the Fair Housing Act are not fulfilled.” In many ways, the country remains divided into two societies—one white, one black.

Exploiting the country’s racial divisions has been a feature of modern American politics since at least Richard Nixon’s adoption of the Southern Strategy. Over the past half-century, Democrats have consolidated support in cities, while Republicans have increasingly targeted rural areas. Since Trump’s victory, these trends have fueled the argument that Democrats must win more white, working-class voters if they are to reclaim political power.

But this tidy framing of cities versus rural America overlooks today’s true electoral battleground: the suburbs. Following World War II, as affluent whites fled the inner cities, suburbs became a central pillar of support for the Republican Party. In 1980, 78 percent of suburban census tracts were predominantly white. That fell to 42 percent by 2009, and diverse suburbs jumped from 16 percent to 37 percent over the same period. Suburban areas, in other words, no longer resemble the Leave It to Beaver landscape of yesteryear. Today, more than 60 percent of suburbanites live in integrated or predominantly nonwhite areas.

These shifts present problems for the Republican Party—which has historically relied on the suburbs as bulwarks against blue cities—and opportunities for Democrats, as evidenced most recently by the gubernatorial election in Virginia. In 2016, though Trump won more suburban votes than Hillary Clinton, he was still the third Republican presidential candidate in a row to fail to win 50 percent of the suburban vote. Trump lost not only inner-ring suburbs around Chicago, New York, and Philadelphia, but also places like Cobb County, Georgia—which The New York Times once referred to as the “suburban Eden where the right rules.”

Fair housing has always been partly political in its aim. “The existence of segregated residential patterns helps politicians draw safe districts for white voters,” says Elizabeth Julian, a former HUD official and founder of the Inclusive Communities Project, a Dallas-based fair housing group. She argues that breaking down the racial, ethnic, and economic barriers that prevent people from living where they’d like to is not only good policy, but could also defuse some of the explosive dynamics that gave rise to Trump, and bolster the Democratic coalition in the process. “The political potential of integration is an overlooked benefit of integration,” Julian says.

Policies that promote desegregation could, of course, invite backlash. White suburban voters could retreat further into the fast-growing, right-leaning exurbs. And those who stay put could grow even more conservative if they feel a greater sense that their neighborhoods are being threatened by newcomers who don’t look like them. Still, those who worry about what Trump represents would do well to explore the possibilities of integrated, inclusive communities as a way to deny racial demagogues easy political footing. The Fair Housing Act was passed to spare America from what seemed to be a looming collapse. Now, at 50, it may yet do so.

1,500 Affordable Housing Units Headed for Baltimore Could Multiply

Originally published in Next City on October 24, 2017.
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The state of Maryland announced in October it would provide 1,500 new affordable housing opportunities in high-opportunity parts of the Baltimore region, a victory for fair housing advocates who filed a federal complaint with HUD in 2011.

The complainants alleged that Maryland administered its Low Income Housing Tax Credit (LIHTC) program in a discriminatory way, steering families with children into high-poverty, black neighborhoods, while building a disproportionate number of affordable units for seniors, especially white seniors, in the predominantly white suburbs.

This legal settlement not only requires Maryland to build new units, but also to offer incentives to developers to build affordable family-size housing, and to consider subsidizing transportation alternatives in areas that lack quality public transit.

Fair housing advocates say that getting 1,500 affordable units off the ground will make it significantly easier to build even more units in high-opportunity areas going forward.

“Once you knock down these barriers, once the development community starts changing its business model to incorporate looking for sites in high-opportunity areas, once the units get built and the sky doesn’t fall — the political opposition tends to lessen,” says Barbara Samuels, a fair housing attorney with the ACLU of Maryland. “It builds up its own momentum, and we see these 1,500 units as a step that will lead to other future steps.”

The coalition that filed the complaint, the Baltimore Regional Housing Campaign (BRHC), didn’t expect their efforts to take as long as they did, but they did expect an administrative complaint to move faster than filing a lawsuit.

In 1995, the ACLU of Maryland filed a federal suit taking aim at Baltimore’s racially segregated public housing. Though the court eventually ruled in favor of the plaintiffs, and as part of the legal remedy Baltimore has established one of the most successful housing mobility programs in the U.S., the case didn’t settle until 2012; the lawsuit approach took 17 years.

Meanwhile, the last two decades have brought about increased attention to segregation in the LIHTC program. Florence Roisman, a law professor at Indiana University, published a law review article in 1998 arguing that the LIHTC program, which is run by the Treasury Department, not HUD, was operating outside the confines of civil rights law. As LIHTC is the largest federal program to subsidize place-based affordable rental housing, Roisman urged corrective action.

In 2002, the Connecticut ACLU sued the state’s housing finance agency, arguing that LIHTC units in Hartford led to increased racial segregation, in violation of state law. In 2004, fair housing advocates in New Jersey sued their state, saying its LIHTC policies encouraged racial segregation, in violation of the Fair Housing Act. These and other developments influenced advocates in Maryland, who convened in early 2006, to explore what barriers prevented LIHTC units from being developed in higher-opportunity areas of their state.

It became clear then that one of the largest impediments standing in the way was Maryland’s policy of requiring local officials to sign off on LIHTC development, effectively empowering politicians with a pocket veto, no matter how important the affordable housing project was. A HUD study published in 2015 and conducted by New York University’s Furman Institute singled out Maryland’s local approval policy as one that led to notable increases in LIHTCs being deployed to develop housing in poor neighborhoods. Advocates tried to pressure Maryland to abandon this policy, but when efforts at voluntary persuasion failed, the BRHC filed its complaint.

In 2014, in response to the complaint and increased local advocacy, Maryland’s legislature opted to get rid of its local veto requirement. As part of the new legal settlement announced this month, the state has agreed to never reinstate it.

“If we can accomplish all this here, we can do it anywhere,” says Samuels. “You don’t need to go back far to remember when Baltimore was known as the city that killed [the] Moving to Opportunity [program].” Moving to Opportunity was a housing experiment that ran from 1994 to 1998 and involved moving individuals out of high-poverty areas with vouchers into low-poverty census tracts, to see how this would improve their lives. But politicians and racist homeowners in suburban Baltimore County rebelled early on, and U.S. Senator Barbara Mikulski of Maryland led the effort to kill funding to expand the program nationally.

Now, though, Maryland has a well-regarded mobility program, revamped LIHTC policies as a result of the BRHC fair housing complaint, and in 2016, Baltimore County settled another fair housing complaint, agreeing to spend $30 million over the next decade to support developers building 1,000 affordable units in higher-income neighborhoods. Baltimore County also agreed to establish its own mobility program, to assist families in predominantly black, poor neighborhoods in relocating to more affluent suburbs.

In 2015, a team of Harvard researchers published a study examining the long-term impacts of the Moving to Opportunity program. They found that poor children who moved to better neighborhoods were more likely to attend college and earned more in the workforce when compared to similar adults who hadn’t moved. The researchers also found that of the nation’s 100 largest counties, Baltimore ranked last in terms of facilitating upward mobility — partly due to its high degree of racial and economic segregation. Fair housing is no silver bullet, but Maryland’s renewed commitment to integrated housing is a bright spot for civil rights.

Unlearning the lessons of the housing crisis

Originally published in Curbed on January 19, 2017.
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Nearly six million American families lost their homes to foreclosure between September 2008 and September 2015.

This unprecedented housing crisis, promulgated by well-documented Wall Street fraud and predation, led—eventually—to government action, culminating in July 2010, when President Obama signed the Dodd–Frank Wall Street Reform and Consumer Protection Act into law.

Dodd-Frank outlawed some prominent forms of predatory lending and established a new agency—the Consumer Financial Protection Bureau—whose primary mandate is to aggressively penalize firms for fraudulent and shady business practices. Three years after its launch, the CFPB had addressed more than 400,000 consumer complaints concerning issues like unauthorized credit card fees and ballooning mortgage payments, and distributed more than $10 billion in settlements back to consumers.

Another three-odd years later,  Donald J. Trump’s surprising presidential victory has sent a deep chill down the spines of housing and civil rights advocates across the country. In his capacity as a developer, Trump was a defendant in one of the largest cases ever brought by the federal government for housing discrimination against African-Americans. In his short political career, he has pledged to deregulate the housing and financial sectors, and his early cabinet appointments have close ties to Wall Street.

“We’re about a decade out from the housing crisis, and it’s important that we don’t succumb to this collective amnesia about what happened,” says Sarah Edelman, the director of housing policy at the Center for American Progress. “We’re at real risk of returning to predatory lending and losing the protections Congress put in place to make sure nothing like that ever happens again.”

The Fair Housing Act of 1968 bars landlords, lenders, and sellers from discriminating based on race, sex, religion, or national origin, and requires recipients of federal funds to proactively promote housing integration. In 2015, under Obama, the Department of Housing and Urban Development released a new federal rule—known as the “Affirmatively Furthering Fair Housing Rule”—to provide communities with new tools to ensure they meet their fair housing obligations.

At the time, Republicans decried the AFFH rule as government overreach. Trump’s now-nominee for HUD secretary, Ben Carson, called it a dangerous “social engineering” scheme in an opinion piece published during his 2015 primary run. And while campaigning for president, Trump said he’d rescind the rule.

Already active litigation regarding violations of housing and civil rights law would also likely be stymied by a motivated Trump administration. For context, the civil rights division of the Department of Justice filed more than 100 lawsuits between 2012 and 2015, with a majority of those casesconcerning housing and lending discrimination. Former DOJ officials predictthat Trump’s administration will not be as committed to enforcing fair housing laws, especially if the Senate confirms Alabama Senator Jeff Sessions as the incoming attorney general.

Sessions allegedly railed against the NAACP and the ACLU for trying to “force civil rights down the throats of people,” according to testimony at his 1986 confirmation hearing for a federal judgeship (he was ultimately denied the position because of such remarks). If Sessions brings this point of view to his new role, Justice Department lawyers working on fair housing cases could be reassigned, and Trump’s team could simply avoid pursuing similar suits in the future.

Stuart Rossman, a staff attorney at the National Consumer Law Center, raises several additional concerns for fair housing advocates. For the past few years, two homeowners’ insurance trade associations have been challenging a 2013 HUD rule that formalized how housing discrimination cases could be tried under the so-called “disparate impact” standard, which lets individuals allege housing discrimination without having to prove that someone intentionally sought to discriminate.

The Obama administration has vigorously defended the rule in court. “Will the [Trump] government now throw up their hands and send their lawyers home?” asks Rossman. If the rule is thrown out, individuals may find it more difficult to bring fair housing cases forward.

And then there’s the matter of proving these cases once they’re on the docket. At present, the federal government collects detailed demographic data from banks under the Home Mortgage Disclosure Act, including price data for loans and information about who has been denied service. “Banks very much want to keep this information private, because they know when it’s collected it will be scrutinized,” Rossman explains. By evaluating HMDA data, lawyers can assess if banks are treating some groups of people differently than others.

“I’m not saying there’s not overt discrimination cases out there, but the systemic, institutional type of cases which affect a broad range of individuals are far more likely to [fall under] disparate impact,” Rossman says. “The banks, auto lenders, and insurance companies are far too sophisticated to engage in overt sexism, racism, and ageism. If you can’t get that aggregate analysis to make a disparate impact claim, you’re in a really bad spot to sue.”

Since the HMDA’s passage in 1975, each administration has had a fair amount of discretion to interpret the law. If, say, Trump’s team decides they don’t need to require banks to report as much information as they do now, changing HUD’s disclosure requirements, lawyers could find themselves locked out from the sort of aggregate data needed to prove housing discrimination in court.

Rossman also points to a tactic taken by George W. Bush’s administration, which used the Office of the Comptroller of the Currency to protect banks from civil rights suits initiated by state attorneys general and private lawyers. That means there are multiple strategies the Trump administration could pursue to avoid fair housing litigation at both the federal and local levels.

On the finance side of the equation, Trump’s nominee to lead the Treasury Department is Steven Mnuchin—a Goldman Sachs veteran of 17 years. Mnuchin founded and ran a mortgage lender, OneWest Bank, that was recently accused of housing discrimination in a federal complaint filed by two nonprofit groups. According to the complaint, OneWest (now a subsidiary of CIT Bank), was far more likely to foreclose on black and Latino homes than to lend to those owners, and neglected to maintain foreclosed homes in black and Latino neighborhoods, hastening their decline, while it actively maintained foreclosed homes in majority white areas.

“Mnuchin has a lot of rhetoric about his interest in protecting working families, but that’s not what his record has shown,” says Paulina Gonzalez, the executive director of the California Reinvestment Coalition, one of the groups to lodge the complaint. “The evidence speaks for itself.” That evidence now includes a newly disclosed 2013 memo from the California attorney general’s office alleging that OneWest repeatedly flouted a variety of foreclosure laws.

Mnuchin isn’t the only Goldman alum lined up to set financial policy in the Trump era. The president-elect has also named Gary Cohn, the president and COO of Goldman Sachs, to direct the National Economic Council, the president’s main forum for economic policy advice. Likewise, Jay Clayton, a Wall Street attorney whose firm has long represented Goldman Sachs, was recently nominated to lead the Securities and Exchange Commission. During the last administration, SEC regulations were key to holding banks accountable for bad behavior that led to the mortgage crisis, but the New York Times calls Clayton’s appointment “a strong signal that financial regulation in the Trump administration will emphasize helping companies raise capital in the public markets over tightening regulation.”

Trump will also have the ability to appoint leaders to all three of the major financial regulatory agencies: the Federal Reserve, the Federal Deposit Insurance Corporation, and the OCC. “Though the good news is we now have legal standards that prohibit irresponsible lending, it only underscores how important those regulatory agencies are, and their leadership,” says John Taylor, the president and CEO of the National Community Reinvestment Coalition.

“These appointments are critical,” Taylor continues. “Is [Trump] finding people whose first obligation is to ensure that average working class Americans are treated fairly, or is he looking out primarily for the businesses and agencies that might be affected by regulation?”

Ultimately, housing advocates worry about what will happen if Trump and congressional Republicans deregulate the housing industry and repeal the young Dodd-Frank law. Trump’s transition team has already said it’s looking to “dismantle” Dodd-Frank and Mnuchin has said targeting it would be a top priority for him. Many experts have suggested that rather than go through the trouble of repealing Dodd-Frank entirely, Republicans may look for ways to starve it, rendering it ineffective.

David Dayen, journalist and author of Chain of Title, a 2016 bestseller on the foreclosure crisis, says Trump may even be motivated to “weaponize” Dodd-Frank—using it to selectively advance his personal goals.

For example, Obama’s Justice Department has been pressuring Deutsche Bank to pay billions of dollars for its malfeasance during the housing crisis. Trump owes Deutsche Bank $364 million. Similarly, the FDIC and the Federal Reserve have been investigating Wells Fargo for anti-consumer practices. Donald Trump owes $410 million to Wells Fargo. Dayen sums up Trump’s fiscal conflicts of interest: “Trump may find it very appealing to be able to prosecute some financial institutions and not enforce rules at others.”

The unraveling of post-housing crisis protections could be especially dangerous as Republicans talk animatedly about privatizing Freddie Mac and Fannie Mae, the quasi-public agencies that help stabilize the U.S. housing market by securing the insurance markets and keeping mortgage rates low. Mnuchin has already said the next administration will get the government out of Freddie Mac and Fannie Mae.

On top of housing discrimination fears, advocates worry about what Trump’s administration could do to exacerbate demand for affordable housing across strata: for homeowners and renters, urbanites and rural dwellers. “After millions had their homes foreclosed upon, and millions more millennials delayed homeownership due in part to crushing student loan debt, demand for rental units has reached its highest levels since the 1960s, resulting in skyrocketing rents,” explains Diane Yentel, president of the National Low Income Housing Coalition.

Between 2005 and 2015, roughly nine million households moved from owning homes to renting—the largest change over any 10-year period on record. As a result, Wall Street firms started investing more heavily in single-family rentals, and a recent report out of Atlanta found that these institutional landlords were more likely to evict tenants than mom-and-pop ones. “It’s really important to keep watching these companies as they develop, because many of them are not located in jurisdictions with strong tenant protections,” Sarah Edelman says.

The stakes are high, and the litany of housing risks is long. But, thanks to the progress made over the last eight years, advocates at least will enter the Trump years with language and policy proposals they lacked a decade ago when foreclosures hit en masse. “Back then, progressives didn’t have a shelf of ideas, or the architecture to actually make the system safer,” says Dayen. This anti-discrimination framework will be threatened, and in some cases dismantled, under Trump. But it can also be defended, and restored.

 

 

What The Texas Ruling Means for Fair Housing

Originally published in Next City on September 9, 2016.
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Fair housing advocates scored a major victory in 2015 when the Supreme Court upheld the so-called “disparate impact” standard, a legal theory that says individuals can allege housing discrimination under the federal Fair Housing Act without having to prove that someone intentionally sought to discriminate. The Inclusive Communities Project (ICP), a Dallas-based nonprofit, had argued in court that the Texas Department of Housing awarded its low-income housing tax credits in a way that perpetuated segregation, concentrating affordable housing in black neighborhoods with high poverty.

Lost amid the excitement of the nation’s highest court reiterating the aims of the Fair Housing Act, a law passed in 1968 that bars housing discrimination and requires recipients of federal funds to promote housing integration, was that ICP’s original case got sent back to a lower court for review. Two weeks ago, a district judge in Texas issued a new ruling for this case, finding that ICP failed to prove housing discrimination under the disparate impact theory. Their case has been dismissed, and they have not yet decided if they’ll appeal.

Fair housing disparate impact cases are fairly rare, and also hard to win. Stacy Seicshnaydre, a professor at Tulane University Law School, has analyzed the history of disparate impact claims brought under the Fair Housing Act. She found that plaintiffs were successful in only 20 percent of their cases on appeal, a notably low rate.

Seicshnaydre says that disparate impact cases under the Fair Housing Act are just generally more expensive and difficult, compared to other kinds of suits. They tend to require more outside expertise, for example, since one has to include a statistical analysis demonstrating there have been disparities.

“A Supreme Court decision eliminating the disparate impact theory would have been a huge setback,” says Seicshnaydre. “The fact that the district court decided the ICP didn’t prove its case is disappointing, but it doesn’t have the same impact that a Supreme Court decision would have had. Disparate impact theory is still recognized as a good theory, so I think that’s still an incredibly favorable result for the fair housing movement.”

Indeed, the past year and a half has brought about a host of additional gains for integration advocates. Just before the Supreme Court released its decision in 2015, Harvard economists Raj Chetty, Nathaniel Hendren and Lawrence Katz released a study illustrating the connections between one’s geography and economic mobility. The researchers analyzed which counties were the worst for facilitating upward mobility, demonstrating how opportunity is significantly impacted by where a person grows up. Research released this spring by Eric Chyn, an economist at the University of Michigan, found additional evidence to support the idea that moving poor children into higher-opportunity neighborhoods carries long-term benefits for them as adults.

The federal government has also stepped up its efforts to promote fair housing. Following the Supreme Court decision, HUD released a new federal rule to provide communities with the supports they need to meet their fair housing obligations. They have since pushed for historic fair housing settlements in places like Maryland and Minnesota, emphasizing the need to affirmatively integrate housing under the Fair Housing Act.

“These efforts and events are having an impact. They’re encouraging, and sometimes forcing, communities to grapple with difficult, entrenched issues that were decades in the making,” says Diane Yentel, president and CEO of the National Low Income Housing Coalition. “Much more scrutiny is being given to where and how affordable housing is developed.”

There have also been notable improvements in Texas since ICP first brought its original suit. The state agency revised its process for allocating housing tax credits, now offering greater rewards to developers seeking to build in higher-income areas. Some recalcitrant towns have presented challenges, but in Dallas, a housing committee on the city council has been working on a plan to expand affordable housing units throughout the city, as part of a major effort to write the city’s first-ever housing policy. The Dallas Morning News editorial board recently praised these efforts to create more mixed-income neighborhoods, saying this carries “the potential to make Dallas a more equitable city for all of its residents.” The committee’s proposals should head to the full city council as soon as next month.

Ultimately, to achieve fair housing, Yentel says we’ll need greater investment in programs like the National Housing Trust Fund and Section 8 vouchers, in order to expand access to affordable housing, while also revitalizing distressed areas. “Realizing fair housing means providing low-income people with genuine choices about where to live,” she says. “And that requires that we work towards making every community one of opportunity.”

When the Poor Move, Do They Move Up?

Originally published in The American Prospect on April 6, 2016.
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When Martin Luther King Jr. was assassinated in April of 1968, the bill that would become the federal Fair Housing Act was at risk of stalling in Congress. King’s assassination, and the nationwide civil disturbances that ensued, helped the Act sail through the legislative process. Lyndon Johnson signed the bill into law just two weeks later; today, in recognition of these transformative events, April has been designated National Fair Housing Month.

But the battle over the underlying aims of fair housing remains unfinished. Walter Mondale, one the Fair Housing Act’s primary sponsors, declared its objective to be the creation of “truly integrated and balanced living patterns,” and federal courts have interpreted that phrase to indicate that the elimination of racial segregation is a key aim of the 1968 law. Yet, 48 years later, the federal government still does very little to incentivize racially and economically integrated neighborhoods—chiefly because of the political peril involved, but also because scholars and housing experts have failed to resolve whether promoting integrated neighborhoods would even be desirable or beneficial. A wave of new research, however, is helping to settle the experts’ debate, and may pave the way to fulfilling the Fair Housing Act’s original promise.

Eric Chyn, an economist at the University of Michigan, recently published a housing mobility study that takes a long-term look at children who were forced out of Chicago’s public housing projects in the 1990s. Three years after their homes were demolished, the displaced families lived in neighborhoods with 25 percent lower poverty and 23 percent less violent crime than those who stayed put. Chyn finds that children who were forced to move were 9 percent more likely to be employed as adults than those who remained in public housing, and had 16 percent higher annual earnings. He suggests this could be partly due to the fact that displaced children had fewer criminal arrests in the long run and were exposed to less violence growing up than their non-displaced peers.

His study provides stronger evidence for the idea that moving to higher-opportunity neighborhoods is beneficial for the poor. In particular, Chyn’s study addresses an issue that housing policy researchers have been grappling with since the Moving to Opportunity (MTO) initiative—a large-scale experiment that involved moving randomly assigned families out of high poverty neighborhoods into census-tracts with less than 10 percent poverty. The experiment, which ran from 1994-1998, was devised to see if moving families improved their life outcomes. While relocation substantially lowered parents’ rates of depression and stress levels, MTO did not significantly improve their financial situation. However, researchers found that children who moved under the age of 13 were more likely to attend college and earned significantly more than similar adults who never moved.

Social scientists were left to question why the positive effects of relocation only seemed to appear for younger children. They also wondered whether the families that moved through MTO—all of whom voluntarily applied for vouchers in a lottery—shared characteristics that families who never applied lacked. Just a quarter of all families eligible to move through MTO applied for vouchers, and perhaps the experiment had some selection bias, effectively skewing the results.

By looking at Chicago’s public housing demolitions, Chyn was able to study the impact of moving on all families forced to relocate, not just those who volunteered to do so. Within this less select grouping, he finds that all children, including those who moved past the age of 13, experienced labor market gains as adults. This finding helps to reconcile some tensions in the neighborhood effects literature and suggests that MTO’s findings may be less reliable than previously understood.

Chyn concludes that his paper “demonstrates that relocation of low-income families from distressed public housing has substantial benefits for both children (of any age) and government expenditures.” Based on his results, Chyn suggests that moving a child out of public housing by using a standard housing voucher would increase the lifetime earnings of that child by about $45,000. He also argues that this policy would “yield a net gain for government budgets” since housing vouchers and moving costs are similar to project-based housing assistance.

But Chyn’s study—which focuses on Chicago’s projects in the 1990s—does not tell the whole story. In particular, it tells us little about what would happen if we involuntarily moved families out of public housing to racially segregated, slightly less impoverished neighborhoods today.

A series of economic trends and public policies significantly aided the poor during the 1990s—trends and policies that are nowhere in evidence today. As Paul Jargowsky, the director of the Center for Urban Research and Urban Education at Rutgers, has shown, in the ‘90s, the Earned Income Tax Credit was just being implemented, the minimum wage was increased, and unemployment dropped to 4 percent for a sustained number of years, which lead to real wage increases. The number of people living in high poverty neighborhoods between 1990 and 2000 dropped by 25 percent—from 9.6 million to 7.2 million.

“This [Chyn article] is a nicely designed study, but if you want to understand it, you have to understand everything else that was going on during that time period,” says Patrick Sharkey, an NYU sociologist who studies neighborhoods and mobility. Sharkey buys the finding that in this particular context, a forcible move may have actually helped kids growing up in Chicago in the 1990s, but he says to extrapolate those findings even to the current situation in Chicago, let alone other cities, would be a mistake. Chicago’s public housing during that period was widely recognized as the most violent, and troubled, in the entire country.

In an interview, Chyn says he agrees that Chicago “has some particular features that may limit how we can generalize” his findings, and acknowledges that the city’s public housing in the 1990s “was a particularly disadvantaged system.” He says that his results would best inform policy in other cities that have “high-rise, very dense, particularly disadvantaged public housing.”

Whatever its limitations, Chyn’s study adds to a substantial body of research on the effects that neighborhoods have on the children who grow up in them and their families. Given that most families with vouchers moved to neighborhoods that were only slightly less poor and segregated than the ones they’d left, there is reason to suspect that the labor market gains observed in both Chyn’s study and MTO represent just the lower bound of potential mobility benefits.

For example, 56 percent of displaced families in Chyn’s study still wound up in neighborhoods with extreme poverty, meaning census tracts with poverty levels that exceed 40 percent. The rest, nearly 44 percent of those displaced, moved to neighborhoods that were, on average, 28 percent impoverished—a poverty rate lower than the others, but still roughly twice the national average.

The fact that those who moved did better is not grounds to conclude that they are doing well. The average adult-age annual earnings for Chyn’s sample of displaced children was only about $4,315, compared to $3,713 for non-displaced children. (These numbers factor in the incomes of those who are unemployed.) Displaced children with at least some labor income as adults earned $9,437 on average, compared to $8,850 for non-displaced children.

In other words, while the labor prospects and earnings have improved for those who moved as children, they still remain quite poor.

Writing in The New York Times, Justin Wolfers, an economist, and one of Chyn’s thesis advisers, said these findings“could fundamentally reshape housing policy.” At minimum, they reinforce the growing body of evidence that suggests people who move into lower-poverty, racially integrated neighborhoods do better on a variety of social indicators than those who live in high-poverty, racially segregated ones. If our housing policy moves in a more integrative direction, that would be a fundamental shift.

Both Chyn and Raj Chetty, the lead researcher on long-term labor outcomes for children in MTO, have touted the cost-savings potential of moving families with standard housing vouchers. More important than these savings, though, is the question of whether these findings could spur a new commitment to integrative housing.

We know, based on research from sociologists like Sharkey, Stefanie DeLuca, and others, that poor, minority families are unlikely to relocate to whiter, more affluent neighborhoods without serious housing counseling and support. This kind of mobility assistance requires time and money—which the federal government currently does little to promote.

Over the past decade and a half, there has been a steep increase in the number of high-poverty neighborhoods—whose populations nearly doubled from 7.2 million in 2000 to 13.8 million by 2015. As Jargowsky has shown, this increase began well before the start of the Great Recession, and the fastest growth in the black concentration of poverty has been in metropolitan areas with 500,000 to 1 million people, not in the country’s largest cities.

Researchers are still exploring if it’s possible to improve the life outcomes of families that live in racially segregated, high-poverty neighborhoods through investments in those neighborhoods. For now, the evidence suggests that such investments are much less effective than mobility and integration (though, as DeLuca has noted, many such experiments have been underfunded or poorly designed). Chyn’s auspicious findings, released just in time for National Fair Housing Month, bolster the idea that moving families to neighborhoods with greater opportunity could significantly help the poor.