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How Trump is rolling back housing desegregation rules, explained

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Critics argue the proposed changes will weaken protections against housing discrimination

A row of greybrick row houses.
The Trump Administration has recently become engaged with anti-housing segregation laws and regulations on multiple fronts.
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One of the most pernicious ways that segregation and racism have manifested themselves in U.S. society is via laws and regulations about where people can live. Decades of racially motivated housing covenants and redlining have created unequal neighborhoods in many cities, often divided along racial and ethnic lines.

While landmark legislation during the civil rights era, most significantly the Fair Housing Act of 1968, sought to outlaw discrimination and end racial bias in the housing market, the law has yet to achieve its aim. A recent report by the National Fair Housing Alliance found that housing discrimination complaints were on the rise, increasing 8 percent last year; wide racial gaps exist in homeownership rates; and discrimination is still endemic in many ways, as demonstrated by an extensive Newsday investigation last year revealing widespread evidence that realtors were treating people of color unfairly.

Secretary of Housing and Urban Development Ben Carson and other officials have repeatedly pushed to change and in some cases roll back anti-segregation regulations, often arguing that these rules inhibit the construction of much-needed affordable housing. Critics of the administration say Carson and others are gutting much-needed protections and creating an environment that will lead to increased segregation.

In the midst of a national affordable housing crisis, the administration, which has repeatedly proposed significant cuts to government housing assistance, is advancing a vision where the government has a much smaller role in the housing market. Here are some of the various ways that the Trump administration has tried to roll back regulations meant to fight segregation.

Weaken the Affirmatively Furthering Fair Housing rule

Put in place in 2015 by the Obama administration to strengthen the Fair Housing Act of 1968, the Affirmatively Furthering Fair Housing (AFFH) rule required recipients of Community Development Block Grant money, a funding source used by over 1,300 municipalities across the nation, to engage in a formal review process to make sure new developments weren’t contributing to segregation, and then create their own fair housing goals.

The rule was meant to push local governments to create data-driven planning processes and rules meant to lessen segregation. But it was never fully implemented. Earlier this month, HUD published a proposed rule change that would do away with the Obama-era standard.

Advocates, such as the National Low-Income Housing Coalition (NLIHC), have said the proposed rule “represents a complete retreat from efforts to undo historic, government-driven patterns of housing discrimination and segregation throughout the U.S.”

Sec. Carson said that the threat of AFFH’s regulatory burden was “suffocating investment in some of our most distressed neighborhoods that need our investment the most.”

Halting the collection of data meant to track mortgage discrimination

The Consumer Financial Protection Bureau has recently proposed cutting back on collecting data that helps track discrimination in the mortgage market. At the same time, the homeownership gap between black and white Americans is the highest it’s been in 50 years, and hasn’t appreciatively changed since the FHA was first passed.

Exempting algorithms from bias

In August, HUD proposed a rule that stated that landlords, lenders, and property sellers who use third-party machine learning algorithms to evaluate approvals can’t be held liable for discrimination that results from these algorithms. This proposal has alarmed housing advocates and AI experts, who believe that the rising use of this technology in the housing market can lead to skewed results. Biased data can create biased results, and researchers from Berkeley found that AI systems discriminated against potential homebuyers of color, rejecting a total of 1.3 million creditworthy applicants between 2008 and 2015.

“All technological systems will manifest discrimination,” says Lisa Rice, president of the National Fair Housing Alliance. “The bias is baked into the data.”

Changing rules on urban investment

Outside of HUD, the Trump appointee in charge of the Office of the Comptroller of the Currency, Joseph Otting, wants to change regulations that govern the Community Reinvestment Act. The 1977 law was meant to combat discrimination by mandating that banks invest and lend in disinvested neighborhoods. Otting’s proposal, which he released in December, would change the formula used to evaluate banks to one more closely tied to the amount of money spent in low-income neighborhoods. He says it’s a change that would lead to more regulatory certainty and eventually more investment. Community groups believe the change may instead allow banks to meet their requirement by funding megaprojects such as sports stadiums, as opposed to members of the community in need.

Fair Lending enforcement has decreased

Senators Sherrod Brown and Elizabeth Warren filed a complaint with the Government Accountability Office over enforcement of fair lending cases. Politico found that the Consumer Bureau has only filed one fair lending case in the past two years it was under control of a Trump appointee, versus 14 over the five-year tenure of the former director.