Eradicating structural racism has suddenly appeared on the agenda of virtually all private, public and nonprofit organizations, but the Trump administration remains unmoved leading up to the November elections.
Nowhere is this more evident than in housing market and housing finance policies and proposals.
Structural racism has again catapulted to the forefront of national matters, with “Black Lives Matter” and “Defund the Police” slogans painted on streets across America. So too, corporate America has joined in the fight against inequality by committing $1.6 billion to organizations fighting racism and injustice.
Yet the Trump administration seems intent on doing everything it can to perpetuate rather than ameliorate structural racism, as well as its costly repercussions.
These patterns are not just spatial curiosities. They are at the core of a host of economic and social problems. Research has demonstrated that residents of predominantly poor and non-white neighborhoods have lower incomes, fewer and less-safe housing choices, limited access to healthy food and health care services, inferior educational opportunities and more.
Beyond this, all neighborhoods are affected in the more segregated cities, which experience lower levels of economic growth, average incomes and educational attainment in addition to higher homicide rates than less segregated cities. One can make the case that not all people of color want to reside in an integrated community, but discrimination by providers of housing services remains a central cause of the nation’s segregated housing patterns.
There have been some positive developments in recent years prior to when the Trump administration took several steps to eliminate or weaken some of the key tools that have accounted for that progress.
For example, the Obama administration promulgated a rule to clarify the application of disparate impact to housing, a legal standard used to identify an unlawful practice even if there was no intent to discriminate.
But now, the U.S. Department of Housing and Urban Development has proposed a revised rule that would make it virtually impossible for a plaintiff to establish disparate impact discrimination, while making it easy for respondents to avoid liability. One defense could be that the policy or practice that adversely affected a protected class was a standard industry practice. In other words, if everybody engages in a problematic practice then it’s okay.
But many lenders, including Bank of America and Quicken Loans, have urged HUD to scrap its plan to rollback this critical tool for addressing structural racism.
Similarly, HUD has proposed a new rule regarding the obligation of recipients of federal community development funds to affirmatively further fair housing. The Obama administration previously issued a clarification to this obligation that included requiring fund recipients to examine the local housing market and identify discriminatory policies and practices, then take actions to eradicate those problematic actions.
In 2018, HUD suspended this rule even though it had “yielded promising results from its early rollout.” The agency has now issued a proposal that would eliminate the affirmative planning, among other fair housing requirements.
Further evidence of the Trump administration's dismantling of fair housing efforts is seen in the transformation of the Consumer Financial Protection Bureau. Created in 2011, the CFPB generated $11 billion in restitution for more than 25 million consumers in its first five years.
Since then, many investigations have been halted, industry-friendly rules have been enacted and the Office of Fair Lending and Equal Opportunity was transformed from an enforcement to an advisory body.
The Community Reinvestment Act of 1977 that was enacted primarily to prevent redlining in lending has been another target. This federal law that grades banks based on their investments in low- and moderate-income neighborhoods has generated trillions of investment dollars in underserved communities.
But CRA “reforms” recently enacted by the Office of the Comptroller of the Currency will reduce incentives that encourage such investments. Interestingly, the Federal Deposit Insurance Corp. and the Federal Reserve (which also oversee the CRA) did not join the OCC. As a result, there will be differences in the law’s enforcement, which may further reduce CRA’s impact.
Sadly, the louder the call for addressing structural racism, the more this administration seems to double down on its opposition to that agenda.
Hopefully, other elected officials, fair housing enforcement agencies, along with fair housing advocates will successfully resist these attacks and protect those laws that have nurtured greater justice and equality in housing and other areas for all Americans.
