A. J. Johnson Partners with Mid-Atlantic AHMA for June Affordable Housing Training

person A.J. Johnson today 05/09/2023

During the month of June 2023, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for six training sessions intended for real estate professionals, particularly those in the affordable multifamily housing field. Four of the sessions will be presented via live webinar and two will be in-person. The in-person session will also include administration of the HCCP exam. A KEY TRAINING WILL BE THE JUNE 21 WEBINAR ON THE SWEEPING CHANGES TO AFFORDABLE HOUSING PROGRAMS AS A RESULT OF THE FINAL HUD RULE ON HOTMA.  The following sessions will be presented:

June 6: Intermediate LIHTC Compliance (In-person training in Richmond, VA) - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements relating to setting rents at a tax-credit property. This course contains some practice problems but is more discussion oriented than the Basic course. A calculator is required for this course.

June 7: Advanced LIHTC Compliance  (In-person training in Richmond, VA) - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making with regard to how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. Individuals who take both two days of training will be provided with study materials and a practice exam to assist in preparation for the HCCP exam, to be administered on June 16.

June 8: Review of testable areas and administration of the Housing Credit Certified Professional (HCCP©) exam (In-person exam in Richmond, VA). Following the two days of intensive and comprehensive LIHTC training, AJ will provide a review of program requirements and will administer the HCCP exam in person.

June 14: Preparing Affordable Housing Properties for Agency-Required Physical Inspections - Agency inspections of affordable housing properties are required for all affordable housing programs, and failure to meet the required inspection standards can result in significant financial and administrative penalties for property owners. This three-hour training focuses on how owners and managers may prepare for such inspections, with a concentration on State Housing Finance Agency inspections for the LIHTC program. Specific training areas include (1) a complete discussion of the most serious violations, including health & safety; (2) how vacant units are addressed during inspections; (3) when violations will be reported to the IRS; (4) the 20 most common deficiencies; (5) how to prepare a property for an inspection; (6) strategies for successful inspections; and (7) a review of the most important Uniform Physical Conditions Standards as they relate to the five inspectable areas [site/doors & windows/electrical/building exterior & systems/Units & Common Area]. In addition, an update on the current status of REAC will be presented as will a discussion of the new "NSPIRE" protocol, that will ultimately replace the current REAC procedures. At the end of the training, attendees will have a blueprint they can use to prepare their properties for agency-required physical inspections - regardless of the program under which they operate.

June 20: The Verification and Calculation of Income and Assets on Affordable Housing Properties  (live webinar)- This five-hour live webinar (there will be a 1.5-hour lunch break) provides concentrated instruction on the required methodology for calculating and verifying income, and for determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, along with military pay, pensions/social security, self-employment income, and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD-required techniques for the determination of income. The second component of the training focuses on a detailed discussion of requirements related to the determination of asset value and income and is applicable to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, HOME, and HOPE VI. Multiple types of assets are covered, both in terms of what constitutes an asset and how must they be verified. This section also concludes with a series of problems, designed to test the student’s understanding of the basic requirements relative to assets.

June 21: HOTMA - FINAL RULE -  On January 9, 2023, HUD published a final rule implementing The Housing Opportunity Through Modernization Act (HOTMA),  which was signed into law on July 29, 2016.  This final rule was published in the Federal Register on February 14, 2023, and will become effective on January 1, 2024. Virtually all HUD programs are impacted by the rule, as are the Low-Income Housing Tax Credit (LIHTC) Program and the Rural Development Section 515 Program. The final rule makes sweeping changes to HUD programs and will have a significant impact on the determination of income for the LIHTC Program. This full-day training will explain the sweeping changes made by the final rule and will cover the following areas: (1) Definitional changes relating to earned and unearned income, non-recurring income, and foster children; (2) Revised Income Exclusions; (3) New requirements relative to Student Financial Assistance; (4) Changes to the HUD permitted deductions from gross income, including a full review of the new "hardship exemptions;" (5) Brand new rules regarding assets; (6) New Interim Recertification requirements; (6) Changes to the HOME Program; and (7) the new definition of "annual income."

June 22: Documentation of Lease Violations - Managers of multifamily housing properties too often find themselves in the position of not being able to enforce the terms of a lease or evict a resident for severe violations simply because of a failure to properly document the file. While failure to pay rent is the most common lease violation, other issues create the greatest challenge with regard to eviction or lease enforcement.  This 90-minute session will review some of the most problematic material lease violations and discuss how to properly document those violations. Topics to be discussed will include hoarding, tenant-on-tenant harassment, assistance animal violations, smoking violations (in non-smoking buildings), unauthorized occupants, and "quiet use and enjoyment" issues.  The training is intended for site managers and leasing staff, as well as regional property managers. This session is a must for all managers of HUD, Rural Development, and LIHTC properties, and will provide plenty of opportunity for Q & A.

These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA that is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs.

Persons interested in any (or all) of these training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

Latest Articles

Historic Housing Expansion in Reconciliation Act

Since being signed into law on July 4, I have read the "One Big Beautiful Bill twice, in an effort to determine its impact on housing - especially affordable housing. What follows is my take on the impact of the bill on affordable housing in the United States. The "One Big Beautiful Bill Reconciliation Act marks the most significant expansion of affordable housing programs in over twenty years, permanently transforming the Low-Income Housing Tax Credit program and delivering the largest housing investment in its 39-year history. Signed into law by President Trump on July 4, 2025, the legislation will fund an estimated 1.22 million additional affordable rental homes over the next decade through improved tax credit provisions and streamlined financing methods. This expansion comes at a critical time when the nation faces a serious affordable housing shortage, with the changes taking effect on January 1, 2026, and offering unprecedented long-term stability for developers and investors. The legislation narrowly passed along party lines 218-214 in the House and 51-50 in the Senate, with Vice President Vance casting the deciding vote as part of a massive $3.4 trillion reconciliation package that reshapes federal fiscal policy across multiple sectors. While the broader bill includes controversial provisions like significant tax cuts and reductions to safety net programs, the housing provisions have received bipartisan praise from industry stakeholders who see them as vital for addressing America s housing crisis. Legislative details and comprehensive scope The One Big Beautiful Bill Act (H.R. 1, P.L. 119-21) originated from the budget reconciliation process as a lengthy 870-1,000 page package that includes broad tax cuts, targeted spending hikes, and social program adjustments. The legislation is estimated to have a fiscal impact of $3.4 trillion over a decade, with housing provisions accounting for $15.7 billion in tax credit expansions. The bill s path through Congress highlighted strong partisan divides, with Democrats consistently opposing the legislation despite backing many of its housing provisions. The reconciliation process allowed Republicans to bypass the Senate filibuster, making it possible to pass the bill with a simple majority. The legislation includes provisions from 11 House committees and 10 Senate committees, showing its wide-ranging scope across federal policy areas. Beyond housing, the act makes the 2017 Tax Cuts and Jobs Act individual tax rates permanent, eliminates taxes on tips and overtime pay, raises the state and local tax deduction cap to $40,000 for earners under $500,000, and allocates $350 billion for border security. However, these benefits come with significant cuts to Medicaid and SNAP programs, creating a complex policy landscape that impacts housing affordability in conflicting ways. Transformative LIHTC program enhancements The legislation provides the most significant Low-Income Housing Tax Credit expansion since the program started in 1986. The main feature is a permanent 12% increase in 9% LIHTC allocations, raising the per-capita allocation from $3.00 to about $3.36 beginning in 2026. Although this percentage increase appears small, it results in an extra $132 million per year in tax credit authority across the country, with proportional increases for the eight states, D.C., and four territories that get small-state minimum allocations. The second major LIHTC change permanently lowers the private activity bond financing threshold from 50% to 25% of total project costs for 4% credit deals. This change fundamentally shifts the economics of affordable housing development by making projects eligible for non-competitive 4% credits with much less bond financing. According to a Novogradac analysis, this single change will enable 1.14 million more affordable rental homes between 2026 and 2035, forming the majority of the legislation s housing production impact. The Congressional Budget Office estimates these LIHTC changes will cost $15.7 billion over 2026-2035, making them highly cost-effective compared to other federal housing programs. The permanent nature of these provisions sets this expansion apart from previous temporary measures, offering unmatched certainty for the affordable housing sector s long-term planning and investments. The legislation initially included extra provisions for rural and tribal communities, but these were removed in the final version. The House bill would have provided an automatic 30% basis boost for properties in rural areas and tribal lands, but these enhancements did not make it through the reconciliation process, marking a significant narrowing of the original scope. Broader affordable housing provisions and opportunity zones Beyond LIHTC, the legislation includes several other housing-related provisions that expand development incentives and homeownership opportunities. The act makes the Opportunity Zones program permanent with enhanced incentives, allowing investors to defer taxation of capital gains from qualified opportunity zone investments until December 31, 2033, and providing a 10% basis increase for investments held five or more years. The legislation requires that 33% of newly designated opportunity zones be in rural areas, with automatic qualification for rural and tribal regions. This geographic focus addresses previous criticisms that opportunity zones mainly benefited already-developing urban areas while overlooking rural communities that could gain the most from investment incentives. The New Markets Tax Credit program has received permanent reauthorization with $5 billion allocated annually, ensuring stability for community development financial institutions and community development entities that fund affordable housing and commercial projects in low-income areas. This permanent setup removes the uncertainty caused by repeated short-term extensions. For homeownership, the legislation reestablishes the tax deduction for mortgage insurance premiums and makes permanent the 20% deduction for qualified business income, which specifically benefits real estate professionals. The act also raises the child tax credit to $2,500 per qualifying child through 2028 and offers various other tax incentives that could indirectly boost homeownership capacity. Market dynamics and development impacts The legislation s housing provisions will fundamentally change affordable housing development patterns and market dynamics. Lowering private activity bond requirements from 50% to 25% for 4% LIHTC deals will shift significant development activity from the competitive 9% credit market to the non-competitive 4% market. This change provides developers with greater certainty and faster project timelines, as 4% credits don t need the lengthy competitive allocation process that characterizes 9% credits. State housing finance agencies will need to modify their allocation strategies to handle increased demand while overseeing their private activity bond capacity. States with oversubscribed multifamily bond programs will benefit most from the 25% threshold reduction, as more projects will become feasible with lower bond financing requirements. The ongoing 12% increase in 9% LIHTC allocations will strengthen states ability to fund competitive projects, potentially lowering the oversubscription ratios that make 9% credits highly competitive. However, the effectiveness of these changes depends largely on the availability of gap financing sources, since LIHTC generally covers only 60-70% of development costs. This could become a critical issue since the Administration s 2026 budget proposal calls for the elimination of the HOME and CDBG programs. Construction capacity and workforce availability pose significant challenges to implementation. The U.S. construction industry faces major labor shortages, and the possibility of adding over one million new housing units could strain existing resources. Material costs might also increase due to new tariffs announced by the administration, potentially reducing some of the financial advantages of the increased tax credit provisions. Stakeholder reactions reveal sharp divisions The housing provisions have received enthusiastic support from industry groups despite opposition to the broader legislation. The National Association of Home Builders described the act as "the first time in a long time that housing has been prioritized, while the National Association of Realtors commended the achievement of their "top 5 priorities, including permanent lower tax rates and improved business income deductions. The Mortgage Bankers Association emphasized that the legislation preserves "pro-housing and pro-economic growth tax provisions, especially highlighting the permanent mortgage interest deduction and the reestablished mortgage insurance premium deduction. These industry groups see the legislation as offering crucial long-term certainty for housing investment and development. However, housing advocacy organizations offer a more nuanced view. The National Low Income Housing Coalition supports expanding the LIHTC but strongly opposes the broader legislation s cuts to Medicaid and SNAP programs. Executive Director Kim Johnson stated that "while LIHTC is an important program, LIHTC units are rarely affordable enough for households with the lowest incomes, who will be most affected by safety net reductions. The National Housing Conference praised the legislation, with President David Dworkin calling the housing provisions "the most consequential and positive housing legislation in decades. This highlights the industry s focus on production capacity rather than broader affordability issues. Implementation timeline and administrative challenges The legislation s housing provisions take effect on January 1, 2026, with state housing agencies already preparing for implementation. States will receive their enhanced LIHTC allocations starting with the 2026 allocation year, requiring updates to Qualified Allocation Plans and application processes to handle the increased volume. The Treasury Department and IRS need to develop regulatory guidance for the new private activity bond threshold calculations and basis boost provisions. State housing finance agencies are updating their technology systems and training staff for the expected increase in application volume, with some smaller states worrying about their ability to handle the expanded program scale. The Congressional Budget Office estimates that the housing provisions will cut the primary deficit by $85 billion through economic growth effects, indicating that increased housing production will generate enough economic activity to partly offset the legislation s fiscal costs. However, this estimate relies on successful implementation and full use of the expanded credit authority. Rural and tribal communities face specific implementation challenges because these areas often lack the developer capacity and technical expertise needed to fully utilize LIHTC programs. The legislation provides for enhanced technical assistance, but successful implementation will require ongoing efforts to build local capacity and expertise. Comparison to previous housing policy initiatives The One Big Beautiful Bill Act represents the largest federal housing investment since the Housing and Economic Recovery Act of 2008, but it has fundamentally different characteristics. While HERA provided temporary expansions in response to the financial crisis, the current legislation implements permanent program improvements that offer long-term stability. The 2008 legislation included a temporary 10% increase in LIHTC allocations and established the 9% minimum credit rate, but these provisions were meant as crisis response measures. The permanent nature of the current expansion sets it apart from earlier temporary initiatives and offers unmatched certainty for industry planning. Compared to Obama-era housing initiatives, the current legislation adopts a supply-side approach that emphasizes tax incentives rather than direct spending programs. The Obama administration focused on foreclosure prevention, GSE reform, and crisis response, while the current strategy prioritizes increasing production capacity through enhanced tax credits and development incentives. The 2018 Consolidated Appropriations Act increased LIHTC allocations by 12.5% for 2018-2021, but this temporary boost expired and required yearly congressional approval. The current legislation s permanent structure removes this uncertainty and allows the industry to plan for the long term. Conclusion and long-term implications The One Big Beautiful Bill Act s housing provisions mark a historic expansion of federal affordable housing programs, with the potential to significantly increase housing production over the next decade. The legislation s permanent improvements to the LIHTC program offer unprecedented stability and certainty for the affordable housing industry, while the enhanced financing mechanisms are expected to streamline development processes and shorten project timelines. However, the overall impact of the legislation on housing affordability remains complex and potentially contradictory. While the supply-side provisions are expected to increase the production of affordable housing, the simultaneous cuts to Medicaid and SNAP programs could lower housing purchasing power for the lowest-income households. The Congressional Budget Office estimates that the lowest-income households will lose an average of $1,600 per year, while higher-income households will gain $12,000 annually, indicating that the benefits may mainly go to higher-income groups. The success of these provisions ultimately depends on effective implementation, sufficient construction capacity, and the availability of additional financing sources. The legislation sets the framework for significant increases in housing production, but turning this potential into actual affordable housing units will require coordinated efforts from federal agencies, state housing finance agencies, and private sector developers. For housing policy analysts and practitioners, the legislation presents both significant opportunities and notable challenges. The permanence of key provisions offers stability for long-term planning, while the scale of potential production increases demands substantial capacity building and system adaptation. The coming years will reveal whether this historic expansion leads to meaningful progress on America s affordable housing crisis.

USDA Proposes Mandatory Market Studies for Section 538 Projects

The U.S. Department of Agriculture s Rural Housing Service (RHS) is tightening requirements for project feasibility under its Section 538 Guaranteed Rural Rental Housing Program (GRRHP). In a newly proposed rule, RHS will require all applicants seeking loan guarantees for new construction to submit a formal market study as part of a complete application. This may sound like a bureaucratic tweak, but it has real implications for lenders, developers, and rural communities. What s the Section 538 Program? Section 538 is the USDA s flagship loan guarantee program for rural multifamily housing. It backs up to 90% of loans made by private lenders for the construction or rehab of rental housing serving low- and moderate-income households in USDA-defined rural areas. It s a public-private partnership model that has delivered thousands of affordable units to small towns that are often overlooked. What s Changing and Why? Up to now, the rules under 7 CFR part 3565 have encouraged applicants to "demonstrate market feasibility, but have not required any specific documentation to prove it. Some lenders submitted comprehensive market studies; others relied on summaries, broker letters, or hastily compiled spreadsheets. That inconsistency is what the USDA wants to eliminate. Under the proposed rule, all new construction applications must include a comprehensive market study. This will: Ensure projects are built in markets with demonstrated need; Avoid oversaturation and risk to the existing affordable housing stock; Align USDA requirements with industry norms (e.g., LIHTC, HUD programs); Improve efficiency and uniformity in loan guarantee underwriting. What s a Market Study, Exactly? A professional market study typically includes: A demographic and economic profile of the market area; Rent comparables and absorption trends; An analysis of supply and demand for affordable units; Impact projections on existing housing stock; Supportable rent and unit mix recommendations. In short, it s the backbone of a smart housing investment and USDA wants it in every file. Who s Affected? Lenders & Developers: Must budget time and cost for a market study before the USDA will consider a loan guarantee for new construction. Property Managers: May see less risk of oversupplied markets hurting occupancy. USDA & Taxpayers: Benefit from better quality control and reduced risk of supporting white elephants in underserved areas. Comments Wanted Speak Now or Forever Hold Your Feasibility USDA is inviting public comments through August 30, 2025 (60 days from publication). Visit regulations.gov and search Docket No. RHS-24-MFH-0024 or RIN 0575-AD42. If you have a stake in affordable rural housing, this is your shot to weigh in. Bottom Line Requiring a market study isn t red tape it s a reality check. The move helps ensure scarce affordable housing dollars are spent where demand is real and sustainable. For lenders and developers, it s one more hoop, but also a safeguard. For rural communities, it s a sign that USDA wants housing investments to be grounded in facts, not optimism. Smart growth starts with smart data. This rule aims to make sure rural housing does just that. For more updates on affordable housing policy and compliance, stay connected with A. J. Johnson Consulting Services.

RD to Implement HOTMA Income and Certification Rules on July 1, 2025

Although HUD has postponed implementation of HOTMA for its Multifamily Housing Programs until January 1, 2026, the USDA Rural Housing Service (RHS) Office of Multifamily Housing has announced that the Housing Opportunity Through Modernization Act (HOTMA) will take effect on July 1, 2025, bringing significant changes to income calculation rules for multifamily housing programs. Key Implementation Details To accommodate the federally mandated HOTMA requirements, Rural Development published comprehensive updates to Chapter 6 of Handbook 2-3560 on June 13, 2025. All multifamily housing tenant certifications effective on or after July 1, 2025, must comply with the new HOTMA requirements. Recognizing the challenges of the transition period, Rural Development has announced a six-month grace period. Between July 1, 2025, and January 1, 2026, the agency will not penalize multifamily housing owners for HOTMA-related tenant file errors discovered during supervisory reviews. Legislative Background HOTMA was signed into law on July 29, 2016, directing the Department of Housing and Urban Development (HUD) to modernize income calculation rules established initially under the Housing Act of 1937. After years of development, HUD published the Final Rule on February 14, 2023, updating critical regulations found in 24 CFR Part 5, Subpart A, Sections 5.609 and 5.611. The HOTMA changes specifically affecting the RHS Multifamily Housing portfolio are contained in 24 CFR 5.609(a) and (b) and 24 CFR 5.611, which standardize income calculation methods across federal housing programs. Notable Policy Changes Unborn Child Consideration One of the most significant changes involves how unborn children are counted for household eligibility purposes. Under the new rules, pregnant women will be considered as part of two-person households for income qualification purposes, aligning Rural Development policies with other affordable housing programs, including HUD and the Low-Income Housing Tax Credit (LIHTC) programs. However, the household will not receive the $480 dependent deduction until after the child is born, maintaining consistency in benefit distribution timing. Updated Certification Forms Rural Development has released an updated Form RD 3560-8 Tenant Certification, which was initially published on December 6, 2024, and revised on April 18, 2025. The form is available on the eForms Website for immediate use. The previous version of the form has been renumbered as RD 3560-8A and should be used for all tenant certifications effective before July 1, 2025. Implementation Timeline The HOTMA implementation has experienced some delays. Originally scheduled to take effect on January 1, 2025, the Rural Housing Service announced on October 3, 2024, that implementation would be postponed to July 1, 2025, to allow additional time for property owners and managers to prepare. Rural Development initially implemented HOTMA through an unnumbered letter dated August 19, 2024, which outlined the overview and projected timeline for implementation. Industry Impact The HOTMA changes represent the most significant update to federal housing income calculation rules in decades, affecting thousands of multifamily housing properties across rural America. Property owners and managers have been working to update their systems and train staff on the new requirements. The six-month penalty-free transition period demonstrates Rural Development s commitment to supporting property owners through this complex regulatory change while ensuring long-term compliance with federal requirements. Moving Forward Multifamily housing stakeholders are encouraged to review the updated Chapter 6 of Handbook 2-3560 and ensure their staff is adequately trained on the new HOTMA requirements. Property owners should also verify they have access to the updated Form RD 3560-8 and understand the timing requirements for its use. For ongoing updates and additional resources, stakeholders can subscribe to USDA Rural Development updates through the GovDelivery subscriber page. The implementation of HOTMA represents a significant step toward modernizing and standardizing income calculation methods across federal housing programs, ultimately improving consistency and fairness in affordable housing administration.

HUD’s Proposed Rule to Eliminate Affirmative Fair Housing Marketing Plans: A Critical Analysis

Introduction The Department of Housing and Urban Development (HUD) has proposed eliminating the requirement for Affirmative Fair Housing Marketing Plans (AFHMPs), a cornerstone of fair housing enforcement for decades. This proposed rule, published on June 3, 2025, represents a significant departure from established fair housing practices and raises serious concerns about the federal government s commitment to ensuring equal housing opportunities for all Americans. HUD s justification for this elimination rests on six primary arguments, each of which fails to withstand careful scrutiny and analysis. Background on Affirmative Fair Housing Marketing Plans AFHMPs have long served as essential tools in combating housing discrimination by requiring property owners and managers to actively market housing opportunities to groups that are least likely to apply. These plans ensure that information about available housing reaches all segments of the community, not just those who traditionally have had better access to housing information networks. Analysis of HUD s Justifications 1. Claims of Inconsistency with Fair Housing Act Authority HUD argues that its authority under the Fair Housing Act and Executive Order 11063 is limited to the "prevention of discrimination, claiming that AFHM regulations go beyond this scope by requiring outreach to minority communities through targeted publications and outlets. The agency characterizes this as impermissible "racial sorting. This argument fundamentally misunderstands both the nature of discrimination and the historical context of fair housing enforcement. Information disparities have long been one of the most prevalent and effective forms of housing discrimination. When certain groups systematically lack access to information about housing opportunities, the discriminatory effect is equivalent to being explicitly excluded. The failure to provide equal access to housing information is, in itself, a discriminatory act, not merely a neutral information gap. AFHMPs address this reality by ensuring that housing information reaches all communities, particularly those that have been historically excluded from traditional marketing channels. 2. Constitutional Challenges Under Equal Protection HUD contends that AFHM regulations violate the Equal Protection Clause by requiring applicants to favor some racial groups over others. This characterization is both inaccurate and misleading. AFHMPs do not create preferences or favor any particular group. Instead, they ensure equitable access to information by targeting outreach to communities that are "least likely to apply for specific housing opportunities. This principle applies regardless of the racial or ethnic composition of those communities. For instance, housing developments located in predominantly minority neighborhoods are required to conduct affirmative marketing in white communities since white residents would be least likely to apply for housing in those areas. The regulation is race-neutral in its application it focuses on reaching underrepresented groups regardless of their racial identity. This approach promotes inclusion rather than exclusion and advances the constitutional principle of equal protection under the law. 3. Delegation of Legislative Power Concerns HUD s third argument that the Fair Housing Act s authorization of AFHM regulations constitutes an unconstitutional delegation of legislative power represents perhaps the weakest aspect of their legal reasoning. Congress explicitly mandated that affirmative efforts be made to eliminate housing discrimination. As the administrative agency responsible for implementing congressional intent in this area, HUD possesses both the authority and the responsibility to determine the most effective means of carrying out this mandate. The development of specific regulatory mechanisms to achieve Congress s stated goals falls squarely within HUD s legitimate administrative authority and represents appropriate implementation of legislative intent rather than overreach. 4. The "Color Blind Policy Justification HUD frames its opposition to AFHMPs as part of a "color-blind policy approach, arguing that it is "immoral to treat racial groups differently and that the agency should not engage in "racial sorting. This argument mischaracterizes the function and operation of AFHMPs. These plans do not sort individuals by race or treat different racial groups unequally. Rather, they ensure that all groups have equal access to housing information by specifically reaching out to those who are least likely to receive such information through conventional marketing channels. Critically, AFHMPs require marketing to the general community in addition to targeted outreach. This comprehensive approach ensures broad access to housing information while addressing historical information disparities that have contributed to ongoing patterns of segregation. 5. Burden Reduction for Property Owners HUD argues that "innocent private actors should not bear the economic burden of preparing marketing plans unless they have actively engaged in discrimination. This position suggests that property owners should be exempt from fair housing obligations unless they can prove intentional discriminatory conduct. This reasoning effectively provides cover for property owners who prefer that certain groups remain unaware of housing opportunities. The "burden of creating inclusive marketing strategies is minimal compared to the societal cost of perpetuating information disparities that maintain segregated housing patterns. The characterization of comprehensive marketing as an undue burden ignores the fundamental principle that equal housing opportunity requires proactive effort, not merely passive non-discrimination. This represents a retreat to a "wink and nod approach to fair housing enforcement that falls far short of the Fair Housing Act s aspirational goals. 6. Prevention vs. Equal Outcomes HUD s final argument contends that AFHM regulations improperly focus on equalizing statistical outcomes rather than preventing discrimination. This argument creates a false dichotomy between prevention and opportunity creation. AFHMPs exist not to guarantee equal outcomes but to ensure equal opportunity by providing equal access to housing information. When information about housing opportunities is not equally available to all segments of the community, the opportunity for fair housing choice is compromised from the outset. True prevention of discrimination requires addressing the structural barriers that limit housing choices, including information disparities. The Broader Implications HUD s proposed elimination of AFHMP requirements represents a concerning retreat from decades of progress in fair housing enforcement. The proposal effectively returns to an era when discrimination, while technically prohibited, was facilitated through information control and selective marketing practices. The reality of housing markets is that access to information varies significantly across communities. Property owners and managers possess considerable discretion in how they market available units. Without regulatory requirements for inclusive outreach, there are few incentives to ensure that information reaches all potential applicants. Anyone with experience in affordable housing development and management understands that information flow can be deliberately targeted and shaped. This targeting can either expand housing opportunities for underserved communities or systematically exclude them. Marketing strategies can be designed to minimize applications from certain groups while maintaining technical compliance with non-discrimination requirements. Conclusion The six justifications offered by HUD for eliminating AFHMP requirements fail to provide compelling reasons for abandoning this critical fair housing tool. The arguments reflect a fundamental misunderstanding of how housing discrimination operates in practice and ignore the crucial role that information access plays in maintaining or dismantling segregated housing patterns. Rather than advancing fair housing goals, the proposed rule exacerbates existing disparities by removing a key mechanism for ensuring that all communities have equal access to housing information. The elimination of AFHMPs would represent a significant step backward in the ongoing effort to achieve the Fair Housing Act s vision of integrated communities and equal housing opportunities for all Americans. The current proposal suggests an agency leadership more committed to reducing the regulatory burden on property owners than to expanding housing opportunities for underserved communities. This represents a troubling departure from HUD s mission and responsibilities under federal fair housing law. Moving forward, policymakers, housing advocates, and community leaders must carefully consider whether this proposed rule serves the public interest or merely provides cover for practices that perpetuate housing segregation through more subtle but equally effective means.

Want news delivered to your inbox?

Subscribe to our news articles to stay up to date.

We care about the protection of your data. Read our Privacy Policy.