And now our Congress is taking aim at a valuable federal tool for providing affordable housing.
Rep. Ed Royce (R-California) will soon introduce a bill in the House of Representatives that would block the National Housing Trust Fund and the Capital Magnet Fund from receiving much-needed funding from Fannie Mae and Freddie Mac, the two large mortgage companies that the federal government took over during the height of the 2008 financial crisis.
The National Housing Trust Fund (NHTF) was established in a 2008 recovery act, to produce, preserve, rehabilitate and operate rental housing for extremely low-income Americans. As part of the same act, the Capital Magnet Fund (CMF) was created to provide competitive grant funding to support affordable housing development.
Both programs were to be funded via contributions from Fannie Mae and Freddie Mac, as part of their obligations as government-sponsored enterprises. But when the federal government seized complete control of both companies, former Federal Housing Finance Agency leader Edward J. DeMarco suspended their ability to contribute to NHTF and CMF.
As a result, NHTF has been left completely unfunded, while CMF received one round of regular appropriations funding in 2010. Last year, former Congressman Melvin Watt replaced DeMarco, but only after a contentious nomination process – Republicans opposed Watt’s appointment on the grounds that he would reinstate funding for NHTF and CMF.
In December, Watt did just that. And now Royce and other representatives want to block funding for NHTF and CMF before it even gets off the ground.
“Money coming in from [Fannie Mae and Freddie Mac] should go to the taxpayers instead of a slush fund for ideological housing groups to play around with,” Royce has stated.
Of course, the money from the “slush fund” would go toward taxpayers, if Royce’s bill is defeated. Just not the “taxpayers” Royce cares about.
If NHTF is allowed to begin working, funding would start rolling out to states in the early part of next year. In the program’s first year, states would be required to use all of their funding for rental housing that benefits households below 30 percent of the average median income. This is the “extremely low-income” (ELI) category the program is meant to target.
For reference, ELI households far well below even the standard of the federal poverty level. In 2014, the national poverty threshold for a household of three was $18,552 per year. In Biloxi, Mississippi, for example, the ELI threshold for three people in 2014 was $14,050.
These are the households that NHTF was meant to protect. The program targets the population most vulnerable to the economic downturn, and that remains without adequate support six years later. Meanwhile, the one round of funding the CMF program did receive led to the creation of 6,800 affordable homes. Imagine how many more homes could have been built if the program was allowed to be funded as intended.
2015 has brought strong signs that our economy is doing better than it has since the economic crisis began those six long years ago. And yet just a few weeks into the new year, fair housing attempts to support low-income households are met with threats on all sides: at the local level, in the judiciary and now in Congress.
In a strongly worded editorial the Dallas Morning News has called on the US Supreme Court to reject the State of Texas plea to overturn disparate impact in the ICP lawsuit.
The effect was to corral minorities inside existing ghettos. True, the new construction offered a temporary boost to downtrodden neighborhoods. But because of inherent flaws in the tax-credit system, over time the urban-decay problems have tended to surface again and again as new projects age and lose their shine. Instead of renewing neighborhoods, these tax-credit decisions have perpetuated segregation and deterred balanced development between northern and southern Dallas.
…The injustice of this situation should weigh heavily in the court’s deliberations. Hard-fought civil rights gains won since the landmark 1954 Brown vs. Board of Education ruling are at stake in this decision.
If the justices rule that challengers like ICP must prove racist intent, it will impose an almost insurmountable hurdle. Rare are the times when state housing authorities publicly divulge their innermost, true motives on where they place their projects.
Although this newspaper certainly cares if a racist intent exists, what most matters is the effect on neighborhoods. A Supreme Court ruling supporting the state could allow authorities to restore outdated policies that effectively ensure perpetuation of segregated pockets of poverty.
… In our view, segregation is the greater evil. Not only would a favorable ruling for the state harm civil rights, it would seriously erode efforts to bridge Dallas’ north-south gap.
For more on the Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. case, see ourpreviousposts.
Inside the Supreme Court of the United States this morning, arguments began in a crucial fair housing case. Outside on the steps, braving the cold, supporters rallied to remind the justices of the dire need to #KeepHousingFair for all Americans.
Tomorrow, the Supreme Court of the United States takes up a case about housing discrimination in Dallas that has brought national attention to the cause of fair housing. Texas state political leaders seem to be willfully blind to housing discrimination and segregation in bringing this lawsuit to limit Fair Housing remedies. Almost fifty years after passage of the Fair Housing Act the long struggle against segregated housing is still being fought at the local level in many American cities and perhaps in no place is the problem worse than Texas.
The area around Beaumont in East Texas has been the scene of an ongoing battle over housing segregation for thirty years. A federal court case in the mid-1980s found that more than 90 percent of public housing in East Texas was racially segregated. In 1993, after a court order finally forced the all-white Beaumont suburb of Vidor to accept black tenants at its public housing development, the Ku Klux Klan and Vidor residents protested and harassed the four African-American men and women who moved into the formerly all-White public housing forcing them to flee town within six months.
This outrage came as the Clinton administration seized control of the local housing authority and forcibly integrated Vidor’s public housing under the protection of federal marshals. HUD also seized control of the Beaumont Housing Authority (BHA) in 2000, after Andrew Cuomo, then the Secretary of Housing and Urban Development (HUD), confronted BHA’s refusal to locate public housing anywhere but in the most segregated, polluted, economically depressed area of Beaumont. HUD forced BHA to purchase “scattered site” homes and duplexes to use as public housing, making housing outside the “projects” available for the first time to the nearly all Black tenants of BHA in less impoverished, less crime-ridden, less polluted and less segregated neighborhoods.
Today, BHA seeks to expand its racially segregated housing. Using federal funds earmarked for disaster recovery for Hurricane Ike, BHA proposes to sell off the scattered homes, literally the only public housing available to families outside of segregated, high poverty neighborhoods. Despite having sufficient disaster recovery funds to purchase land and build quality housing in lower poverty, less polluted neighborhoods, the public housing authority also plans to tear down and rebuild in place Concord Homes, a 100-unit public housing development located in the North End neighborhood where BHA has long concentrated public housing. In doing so, this local government agency seeks to lock in and maintain housing segregation for future generations.
Five of BHA’s eight housing developments are within a half-mile of Concord Homes, an area that is 77 percent African-American and in the city’s poorest Census tracts. The area’s median household income is $14,935, barely a quarter of the national average. Concord Homes abuts a heavily-used rail line carrying chemicals to and from the Port of Beaumont and large petrochemical refineries. It is in a neighborhood zoned for industrial use next to a commercial junkyard and two toxic air pollution release sites: a concrete plant and an asphalt plant. Ninety-five percent of Concord Homes residents are African-American and all are poor.
Rejecting the opportunity to use disaster recovery funds to provide housing outside this segregated, industrially polluted, impoverished neighborhood, BHA wants to rebuild Concord Homes in the same place. Coupled with its proposal to sell off scattered site units located in residential neighborhoods, BHA’s plan would leave Beaumont’s public housing tenants with no choice but to live in one of the many projects BHA owns in this segregated, high-poverty part of town.
Texas Low Income Housing Information Service and our partner, Texas Appleseed, have proposed alternative solutions that would offer an alternative to more segregated housing and comply with fair housing law. BHA could develop smaller, multi-family public housing developments in lower poverty, higher opportunity neighborhoods or existing or new scattered site single family and duplex homes could be acquired for Concord Homes families. The funds are available to make this happen. Local racial attitudes and prejudice are all that stand in the way.
Several months ago we met with BHA leaders, Beaumont city and county elected officials and their supporters who asked us not to object to rebuilding Concord Homes. “We tried integration in Beaumont,” they told us. “It didn’t work.”
That is a shocking statement coming from a delegation of a community with Beaumont’s history. All we can say is that Beaumont has also created and enforced racial segregation for a hundred and fifty years. It has not worked and it is unlawful.
Fair Housing law does not give government agencies like the Beaumont Housing Authority the right to choose segregation for its current and future generations of renters.
BHA’s insistence on maintaining segregated housing is a tragic legacy. Concord Homes residents, present and future, have the legal right to an opportunity to live in a safe, non-polluted neighborhood. The 1968 Fair Housing Act, passed just days after the assassination of Dr. Martin Luther King, Jr., stands in the way of governmental and private actors who would maintain the legacy of discrimination and segregation that current and future African-American and Mexican-American families have suffered in East Texas for generations.
As the justices of the Supreme Court listen to the arguments of the State of Texas, which seeks to limit the applicability of federal Fair Housing law, they should ask: “What about Beaumont?”
Here in Texas, yesterday was a chance for Rick Perry to again demonstrate how badly the state needs that reminder. Showing some audacious timing, the outgoing governor remarked in his farewell speech to the state legislature that “Texas doesn’t recognize the artificial barriers of race, class or creed.”
They’ll argue that it doesn’t matter if the way the state approved affordable apartment developments resulted in segregating low-income housing in the same predominantly black, low-opportunity neighborhoods in south Dallas. Since Texas “doesn’t recognize the artificial barriers of race” or class – i.e. doesn’t explicitly say, these neighborhoods are where poor African-Americans will live – there can be nothing wrong with segregated housing.
The Fair Housing Act of 1968 prohibits discrimination in intent or in practice. The State of Texas was shown to discriminate in practice, so now they’re asking the Supreme Court to get rid of that part of the law.
The #KeepHousingFair campaign stands up to Perry’s claim that Texas is blind to race and class and yet, in Dallas and elsewhere, perpetuates a system that results in racial and economic segregation. The Supreme Court needs to remember the Fair Housing Act, and that comments like Perry’s are why it still matters that we #KeepHousingFair.
It is easy to overlook what is really at stake in the Dallas fair housing lawsuit appeal before the Supreme Court. The State of Texas would have us believe the case is over racial quotas, but it is not. It is about whether families will get to choose a better, safer home and a chance for their children to succeed in school.
A woman in Frisco, Texas, whom I’ll call Mary, illustrates what is at stake for families. Mary is a working mother raising three sons ages 6, 9 and 15. She has a full-time job as a medical assistant that she likes, but the job barely pays enough to support her family. Fortunately Mary has a Housing Choice Voucher.
The most important thing in Mary’s life is the well-being and success of her children. Mary, who is African-American, struggled for years to raise her children in an impoverished, racially segregated area of South Dallas. Today Mary and her family, through a combination of her Housing Choice Voucher and a Low Income Housing Tax Credit (LIHTC) apartment, live in a neighborhood in Frisco, in north Dallas County, that is worlds apart from her former home in south Dallas’ Turner Courts public housing project.
Mary was permitted to choose to move to a neighborhood where she and her children are thriving. Tise promise of fair housing is what is at stake before the Supreme Court.
Mary’s family’s former and current neighborhoods illuminate the striking differences between the inner-city and suburbs. Her old South Dallas neighborhood was situated in a Census tract that is predominately African-American and Hispanic, making its share of minorities well above the regional average. The Frisco neighborhood in which the family resides today is more integrated and roughly typical to Dallas regional demographics. It is majority White, Non-Hispanic, with a greater percentage of Hispanics than the regional average, but still much less than the old Turner Courts project area. Frisco’s share of African-Americans is just a fraction of the share residing in Turner Courts.
Mary’s old neighborhood
Mary’s new neighborhood
African American, Non-Hispanic
Hispanic, Any Race
Source: US Census, ACS 2008-2012
The family’s former neighborhood is a textbook example of the concentration of poverty. Over half of all residents of that Census tract live below the poverty level. This number is astounding compared to both the Dallas regional average and the family’s current neighborhood in Frisco. Moreover, the median family income (MFI) of the old neighborhood is less than 30% of Dallas’ MFI, while the Frisco neighborhood, solidly middle-class, marginally exceeds the Dallas area MFI.
Median Family Income
Source: ACS 2008-2012
Crime rates between the two neighborhoods offer a striking contrast . The violent crime rate in old neighborhood is almost four times higher than near the family’s new neighborhood. Moreover, NeighborhoodScout (a neighborhood quality rating website) found the old neighborhood to be in an area that suffered more from crime than 85% of neighborhoods nationwide. In contrast, the family’s new residence is in an area that is safer than over half of neighborhoods nationwide.
In terms of property crime rates, the Turner Courts area is well above the Dallas average. The property crime rate around Mary’s family’s former residence is also twice as high as the area in which they currently live.
The difference in quality public schools near the family’s former and new residence is even more dramatic. At their former home, Mary’s teenage son would have attended Lincoln High School, which did not pass the Texas Education Agency’s (TEA) standards outlined in their 2014 Accountability Ratings. More than 85 percent of Lincoln’s students are economically disadvantaged, more than a quarter change schools within a year and the graduation rate is lower than the state average (88 percent). The dropout rate at Lincoln is also more than twice the state average of 6.6%.
Today, Mary’s eldest son now attends Wakeland High School in Frisco. This school met the TEA standards and has a much lower percentage of students who are economically disadvantaged or who change schools within a year. Over 97 percent of students graduate from Wakeland and less than 1 percent drop out.
Economically Disadvantaged (%)
Sources: TEA Accountability Ratings, 2014. TEA Class of 2013 Four-Year High School Completion Rates.
A brief analysis of Environmental Protection Agency (EPA) environmental “facilities of interest” yields some understanding of the types of land use near Mary’s family’s former and current residences. Both residences are located fairly close to railroad tracks and major highways, which can contribute to noise and air pollution. Within a mile of their old apartment, there are numerous sites related to air emissions, toxic releases, hazardous waste, and water discharge. Of the 19 sites within about a one-mile radius, six sites are owned and operated by the City of Dallas, one is an auto parts store, three are dry cleaners and eight are manufacturing or industrial facilities. There is one brownfield site within about a mile of their old apartment.
Sites of environmental interest to the EPA near Mary’s Frisco neighborhood are fewer and less hazardous. Of the nine sites found within a mile of the family’s new home, six are commercial businesses, including a pharmacy, hardware store, retail chain stores, a wholesale grocer and an orthodontics office. While some of these larger retailers could be sources of truck and vehicle traffic, they are also uses of land that can be seen as more beneficial than harmful to nearby families. Sites near the Frisco neighborhood that could be cause for concern include one municipally-owned wastewater treatment plant and an auto paint and body shop.
Housing Choice Makes a Difference
Raising three kids on a medical assistant’s pay is tough. A housing voucher makes it possible for Mary to keep her family together. But in Dallas, as in most places, there are not a lot of landlords outside of impoverished neighborhoods who are willing to accept a voucher. Low Income Housing Tax Credit apartments are required by law to do so. That is why it is important that government agencies ensure that LIHTC apartments are available across the region and not only in impoverished neighborhoods where there is already an abundance of available apartments.
Mary is grateful for a chance to raise her family in a place where most of her neighbors have jobs and few struggle with poverty. It gives her peace of mind knowing that her children can go to and from school and play in the park in a neighborhood where crime is not a major problem. As a medical professional she cares that her family is not exposed to the significant environmental hazards of her old neighborhood. But most of all, it’s the schools that make the biggest difference. Mary proudly shows off her third grader’s report card with all A’s and B’s. Her son in high school is doing so well that he is eligible for an early college program that allows high school students to get an associate’s degree at a local community college. He’s deciding between that program and continuing to play football for his new school, which he loves. That is his choice because his mother had a choice of where to live.
Choice is what fair housing is all about. Housing choice for African-American families like Mary’s is available in Dallas today because the Texas Department of Housing and Community Affairs changed the rules for where LIHTC apartments are built in response to the original lawsuit that will now be heard by the Supreme Court.
If you were Mary, would you want your family to have a choice of where to live? That is the question the Supreme Court needs to answer.
As a whole, Texas has made some real progress toward equal opportunity and fair housing in the forty-six years since the Fair Housing Act was enacted. But for lower-income households of color, progress lags. One major problem is the lack of affordable housing opportunities for African-American and Hispanic households outside traditional high-poverty, racially segregated neighborhoods.
This is one reason Congress passed the Fair Housing Act — to ensure equal opportunity and fair housing for everyone. Government agencies have an opportunity and a legal obligation to address persistent housing segregation when they use public funds to build new affordable housing. There simply is no excuse for government to continue to restrict minority citizens’ subsidized housing choices to segregated, distressed neighborhoods when public resources are available that can offer people a choice of other places to live. Finding a better place to live is one important pathway out of poverty.
While we are not a party to this lawsuit, we are concerned both about the state’s appeal and what it says about the State of Texas’ commitment to equal opportunity, civil rights and fair housing. Many households with lower incomes depend on the apartments created through the Low Income Housing Tax Credit program for a decent, affordable place to live. A large share of families living in tax credit units are African Americans.
In the appeal the Supreme Court will take up, the facts are not in dispute. In the Dallas metro area, over decades the Texas Department of Housing and Community Affairs (TDHCA) awarded many millions of dollars through the Low Income Housing Tax Credit program to private developers to build affordable apartments. Geographic choices of where tax credit units would be located were partly driven by TDHCA’s governing board’s discretion and partly driven by an application scoring system adopted by TDHCA that weighs a number of factors. The result, year after year, was that TDHCA paid developers to build apartments largely in low-income, African-American neighborhoods in South Dallas instead of in neighborhoods that had no subsidized housing, lower poverty and where African-American households were less concentrated.
In March 2012 Federal District Judge Sidney A. Fitzwater, who was appointed to the bench by President Reagan, ruled in the original Inclusive Communities Project vs. Texas Department of Housing and Community Affairs lawsuit that the way the state housing agency awarded the federal housing tax credits in the Dallas area has a “disparate” racial impact, violating §3604(a) and §3605(a) of the Fair Housing Act (Title VIII, Civil Rights Act of 1968). Webster defines disparate as, “markedly distinct in quality or character.”
Judge Fitzwater found that TDHCA had the power to fix this and had to take corrective action to remedy the disparate impact. He noted in his opinion, “Nor is there a basis for finding that TDHCA cannot allocate LIHTC in a manner that is objective, predictable, and transparent, follows federal and state law, and furthers the public interest, without disproportionately approving LIHTC in predominantly minority neighborhoods and disproportionately denying LIHTC in predominantly Caucasian neighborhoods.”
Following the court’s ruling, TDHCA quickly came up with a plan to do what the judge directed. The judge approved the plan. The agency implemented it, and, lo and behold, it worked pretty well. In the past two years, TDHCA has awarded funds to developers to build apartments all across the Dallas metro area, including places where there is no affordable housing, in neighborhoods with good schools, that do not flood, have lower crime, and better access to jobs —for the first time opening up choices to families about where they live instead of continuing to concentrate almost all the affordable housing units in distressed and high crime South Dallas neighborhoods.
This should have been the happy ending of the story. But it is not. Governor Perry and Texas Attorney General Gregg Abbott decided to appeal Judge Fitzwater’s decision in an effort to have the Supreme Court render fair housing enforcement of the Civil Rights Act of 1968 effectively impossible.
Attorney General Abbott’s legal argument is based on the false premise that, “…the widespread application of disparate-impact liability creates incentives for landlords, property owners, and government entities to resort to illegal race-conscious decision making as a way to stave off potential disparate-impact lawsuits. … Nowhere are these incentives more pronounced than in the housing context, where racial quotas and set-asides may be the only way for a potential defendant to prevent litigants from establishing a ‘prima facie case’ against him.”
The attorney general’s appeal ignores decades of actions by the State of Texas that produced segregated African-American apartment projects in high poverty, segregated neighborhoods. The appeal ignores the state’s actions that trap multiple generations of African-American Texans, past and future, in segregated neighborhoods with poor public services and denies families an essential tool for improving their fortunes – the option to choose the community in which to live. The attorney general’s appeal seeks to protect government entities from “resort to illegal race-conscious decision making” yet it fails to acknowledge the undisputed fact that the state itself has largely contributed to the creation and preservation of racial segregation.
Especially significant is that the state’s plan, approved by Judge Fitzwater, that has been in place for more than two years is addressing segregation without establishing any race-based quota or racial set-asides. This is the fact of the case despite the attorney general’s claim in the appeal that racial quota and set-asides are required to address a disparate impact finding.
I wish that the Texas attorney general had balanced his zeal to protect government entities from the imaginary requirement of adopting racial quotas and set-asides against the proven need to protect the interests of citizens from those government agencies denying them an opportunity to choose to live in better neighborhoods.
This is an important case. Attorney General Abbott urges nothing less than the effective repeal of the Fair Housing Act (Title VIII, Civil Rights Act of 1968) through judicial preemption of its principal enforcement tool. So long as they do not explicitly proclaim their intent to unlawfully discriminate, he would permit government agencies to allocate public funds for housing where ever they choose, regardless of the impact on the fair housing rights of citizens and neighborhoods. We have seen the impact of this policy in creating extreme racial segregation, and concentrated poverty in Dallas African-American neighborhoods. The only governmental action the Texas attorney general would consider illegal would be one accompanied by an official resolution that states, “the State of Texas resolves to take the following action to unlawfully discriminate against African-Americans because of their race.” Following the Texas attorney general’s logic, the State of Texas could legally concentrate every low-income, government-subsidized housing development in one county of the state of Texas so long as it did not formally acknowledge it was doing so to unlawfully discriminate.
This is a breathtaking assertion of the power of government over the rights and interests of its citizens. It is totally inconsistent with the prevailing values of Texans – values of limited government power that in other instances are embraced by Texas leaders, including the governor and attorney general.
The Fair Housing Act prohibits discrimination in practice, as well as discrimination by design. It is not in dispute that discrimination in practice occurred in Dallas. Disparate impact has been the law of the land for almost fifty years. In Dallas it worked to help right a wrong inflicted by government policy on African-American citizens – without racial quotas or set-asides. Now, our governor and state attorney general have mounted an appeal seeking to overturn the remedy the state agency has successfully implemented and to also undo a half century of progress in fair housing. The Supreme Court must reject this misguided effort to permit government agencies to override Americans’ most basic civil rights.