House Report 111-678 - VETERANS, WOMEN, FAMILIES WITH CHILDREN, AND PERSONS WITH DISABILITIES HOUSING FAIRNESS ACT OF 2010

[House Report 111-678]
[From the U.S. Government Publishing Office]

111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-678

======================================================================

VETERANS, WOMEN, FAMILIES WITH CHILDREN, AND PERSONS WITH DISABILITIES
HOUSING FAIRNESS ACT OF 2010

_______

December 9, 2010.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Frank of Massachusetts, from the Committee on Financial Services,
submitted the following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 476]

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred
the bill (H.R. 476) to authorize funds to prevent housing
discrimination through the use of nationwide testing, to
increase funds for the Fair Housing Initiatives Program, and
for other purposes, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.

CONTENTS

----------
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 4
Background and Need for Legislation.............................. 5
Hearings......................................................... 10
Committee Consideration.......................................... 10
Committee Votes.................................................. 11
Committee Oversight Findings..................................... 11
Performance Goals and Objectives................................. 11
New Budget Authority, Entitlement Authority, and Tax Expenditures 11
Committee Cost Estimate.......................................... 12
Congressional Budget Office Estimate............................. 12
Federal Mandates Statement....................................... 13
Advisory Committee Statement..................................... 13
Constitutional Authority Statement............................... 13
Applicability to Legislative Branch.............................. 13
Earmark Identification........................................... 13
Section-by-Section Analysis of the Legislation................... 13
Changes in Existing Law Made by the Bill, as Reported............ 15
Dissenting Views................................................. 18

Amendment

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Veterans, Women, Families with
Children, and Persons With Disabilities Housing Fairness Act of 2010''.

SEC. 2. TESTING FOR DISCRIMINATION.

(a) In General.--The Secretary of Housing and Urban Development shall
conduct a nationwide program of testing to--
(1) detect and document differences in the treatment of
persons seeking to rent or purchase housing or obtain or
refinance a home mortgage loan, and measure patterns of adverse
treatment because of the race, color, religion, sex, familial
status, disability status, or national origin of a renter, home
buyer, or borrower; and
(2) measure the prevalence of such discriminatory practices
across the housing and mortgage lending markets as a whole.
(b) Administration.--The Secretary of Housing and Urban Development
shall enter into agreements with qualified fair housing enforcement
organizations, as such organizations are defined under subsection (h)
of section 561 of the Housing and Community Development Act of 1987 (42
U.S.C. 3616a(h)), for the purpose of conducting the testing required
under subsection (a).
(c) Program Requirements.--The Secretary shall--
(1) submit to the Congress an evaluation by the Secretary of
the effectiveness of the program under this section; and
(2) issue regulations that require each application for the
program under this section to contain--
(A) a description of the assisted activities proposed
to be undertaken by the applicant;
(B) a description of the experience of the applicant
in formulating or carrying out programs to carry out
the activities described in subsection (a); and
(C) a description of proposed procedures to be used
by the applicant for evaluating the results of the
activities proposed to be carried out under the
program.
(d) Report.--The Secretary of Housing and Urban Development shall
report to Congress--
(1) on a biennial basis, the aggregate outcomes of testing
required under subsection (a) along with any recommendations or
proposals for legislative or administrative action to address
any issues raised by such testing; and
(2) on an annual basis, a detailed summary of the messages
received by the Office of Fair Housing and Equal Opportunity of
the Department through its 24-hour toll-free telephone hotline,
through electronic mail, and through its website.
The Secretary may submit the reports required under paragraph (1) of
this subsection as part of the reports prepared in accordance with
paragraphs (2) and (6) of section 808(e) of the Fair Housing Act (42
U.S.C. 3608(e)) and section 561(j) of the Housing and Community
Development Act of 1987 (42 U.S.C. 3616a(j)).
(e) Use of Results.--The results of any testing required under
subsection (a) may be used as the basis for the Secretary, or any
Federal agency authorized to bring such an enforcement action, or any
State or local government or agency, public or private nonprofit
organization or institution, or other public or private entity that the
Secretary has entered into a contract or cooperative agreement with
under section 561 of the Housing and Community Development Act of 1987
(42 U.S.C. 3616a) to commence, undertake, or pursue any investigation
or enforcement action to remedy any discriminatory housing practice (as
such term is defined in section 802 of the Fair Housing Act (42 U.S.C.
3602)) uncovered as a result of such testing.
(f) Definitions.--As used in this section:
(1) Disability status.--The term ``disability status'' has
the same meaning given the term ``handicap'' in section 802 of
the Civil Rights Act of 1968 (42 U.S.C. 3602).
(2) Familial status.--The term ``familial status'' has the
same meaning given that term in section 802 of the Civil Rights
Act of 1968 (42 U.S.C. 3602).
(g) Relationship to Other Laws.--Nothing in this section may be
construed to amend, alter, or affect any provision of criminal law or
the Truth in Lending Act (15 U.S.C. 1601 et seq.).
(h) Regulations.--Not later than the expiration of the 180-day period
beginning on the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall issue regulations that establish
minimum standards for the training of testers of organizations
conducting testing required under subsection (a). Such regulations
shall serve as the basis of an evaluation of such testers, which shall
be developed by the Secretary, and such regulations shall be issued
after notice and an opportunity for public comment in accordance with
the procedure under section 553 of title 5, United States Code,
applicable to substantive rules (notwithstanding subsections (a)(2),
(b)(B), and (d)(3) of such section).
(i) Authorization of Appropriations.--There are authorized to be
appropriated to carry out the provisions of this section $15,000,000
for each of fiscal years 2011 through 2015.

SEC. 3. INCREASE IN FUNDING FOR THE FAIR HOUSING INITIATIVES PROGRAM.

(a) In General.--Section 561 of the Housing and Community Development
Act of 1987 (42 U.S.C. 3616a) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by inserting ``qualified''
before ``private nonprofit fair housing enforcement
organizations,''; and
(B) in paragraph (2), by inserting ``qualified''
before ``private nonprofit fair housing enforcement
organizations,'';
(2) by striking subsection (g) and inserting the following:
``(g) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated to
carry out the provisions of this section $42,500,000 for each
of fiscal years 2011 through 2015, of which--
``(A) not less than 75 percent of such amounts shall
be for private enforcement initiatives authorized under
subsection (b);
``(B) not more than 10 percent of such amounts shall
be for education and outreach programs under subsection
(d); and
``(C) any remaining amounts shall be used for program
activities authorized under this section.
``(2) Availability.--Any amount appropriated under this
section shall remain available until expended to carry out the
provisions of this section.'';
(3) in subsection (h), in the matter following subparagraph
(C), by inserting ``and meets the criteria described in
subparagraphs (A) and (C)'' after ``subparagraph (B)''; and
(4) in subsection (d)--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking ``and''
at the end;
(ii) in subparagraph (D), by striking the
period and inserting ``; and''; and
(iii) by adding after subparagraph (D) the
following new subparagraph:
``(E) websites and other media outlets.'';
(B) in paragraph (2), by striking ``or other public
or private entities'' and inserting ``or other public
or private nonprofit entities''; and
(C) in paragraph (3), by striking ``or other public
or private entities'' and inserting ``or other public
or private nonprofit entities''.
(b) Regulations.--Not later than the expiration of the 180-day period
beginning on the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall issue regulations that establish
minimum standards for the training of testers of organizations funded
with any amounts made available to carry out this section for any of
fiscal years 2011 through 2015. Such regulations shall serve as the
basis of an evaluation of such testers, which shall be developed by the
Secretary, and shall be issued after notice and an opportunity for
public comment in accordance with the procedure under section 553 of
title 5, United States Code, applicable to substantive rules
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such
section).

SEC. 4. SENSE OF CONGRESS.

It is the sense of Congress that the Secretary of Housing and Urban
Development should--
(1) fully comply with the requirements of section 561(d) of
the Housing and Community Development Act of 1987 (42 U.S.C.
3616a(d)) to establish, design, and maintain a national
education and outreach program to provide a centralized,
coordinated effort for the development and dissemination of the
fair housing rights of individuals who seek to rent, purchase,
sell, or facilitate the sale of a home;
(2) expend for such education and outreach programs all
amounts appropriated for such programs;
(3) promulgate regulations regarding the fair housing
obligations of each recipient of Federal housing and community
development funds to affirmatively further fair housing, as
that term is defined under title VIII of the Civil Rights Act
of 1968 (42 U.S.C. 3601 et seq.); and
(4) fully comply with the requirements of section 810(a) of
the Fair Housing Act (42 U.S.C. 3610(a)).

SEC. 5. GRANTS TO PRIVATE ENTITIES TO STUDY HOUSING DISCRIMINATION.

(a) Grant Program.--The Secretary of Housing and Urban Development
shall carry out a competitive matching grant program to assist public
and private nonprofit organizations in--
(1) conducting comprehensive studies that examine--
(A) the causes of housing discrimination and
segregation;
(B) the effects of housing discrimination and
segregation on education, poverty, and economic
development; or
(C) the incidences, causes, and effects of housing
discrimination and segregation on veterans and military
personnel; and
(2) implementing pilot projects that test solutions that will
help prevent or alleviate housing discrimination and
segregation.
(b) Eligibility.--To be eligible to receive a grant under this
section, a public or private nonprofit organization shall--
(1) submit an application to the Secretary of Housing and
Urban Development, containing such information as the Secretary
shall require;
(2) agree to provide matching non-Federal funds for 50
percent of the total amount of the grant, which matching funds
may include items donated on an in-kind contribution basis; and
(3) meet the requirements of a qualified fair housing
enforcement organization, as such term is defined in section
561(h) of the Housing and Community Development Act of 1987 (42
U.S.C. 3616a(h)), or subcontract with a qualified fair housing
enforcement organization as a primary subcontractor.
(c) Report.--The Secretary of Housing and Urban Development shall
submit a report to the Congress on a biennial basis that provides a
detailed summary of the results of the comprehensive studies and pilot
projects carried out under subsection (a), together with any
recommendations or proposals for legislative or administrative actions
to address any issues raised by such studies. The Secretary may submit
the reports required under this subsection as part of the reports
prepared in accordance with paragraphs (2) and (6) of section 808(e) of
the Fair Housing Act (42 U.S.C. 10 3608(e)) and section 561(j) of the
Housing and Community Development Act of 1987 (42 U.S.C. 3616a(j)).
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out the provisions of this section $5,000,000 for
each of fiscal years 2011 through 2015.

SEC. 6. LIMITATION ON USE OF FUNDS.

None of the funds made available under this Act, or the amendments
made by this Act, may be used for any political activities, political
advocacy, or lobbying (as such terms are defined by Circular A-122 of
the Office of Management and Budget, entitled ``Cost Principles for
Non-Profit Organizations''), or for expenses for travel to engage in
political activities or preparation of or provision of advice on tax
returns.

Purpose and Summary

H.R. 476 is intended to strengthen enforcement of federal
fair housing laws as well as improve education efforts
surrounding discrimination in home rentals, sales, insurance,
and lending. Specifically, the bill would authorize a
nationwide fair housing enforcement testing program, increase
the authorization level for the Department of Housing and Urban
Development's (HUD) Fair Housing Initiatives Program (FHIP),
and establish a competitive matching grant program at HUD for
private nonprofit organizations to examine the causes of
housing discrimination and segregation and its effects on
education, poverty, and economic development.

Background and Need for Legislation

The federal Fair Housing Act (FHA) was enacted in April
1968 in response to the assassination of Dr. Martin Luther King
``to provide, within constitutional limitations, for fair
housing throughout the United States.'' The Act, which applies
to all types of public and private housing, including single
family homes, apartments, condominiums, mobile homes, and
others, originally prohibited discrimination on the basis of
``race, color, religion, or national origin'' in the sale or
rental of housing, the financing of housing, or the provision
of brokerage services. In 1974, the Act was amended to add sex
discrimination to the list of prohibited activities. Similarly,
in 1988 the Act was amended to prohibit discrimination on the
additional grounds of physical and mental handicap, as well as
familial status. The 1988 amendments also provided HUD and the
Department of Justice (DOJ) with the authority to initiate
complaint proceedings and impose additional remedies. The Act
also was extended to cover ``residential real estate-related
transactions,'' which include both the ``making [and]
purchasing of loans . . . secured by residential real estate
[and] the selling, brokering, or appraising of residential real
property.'' Thus, the provisions of the FHA extend to the
secondary mortgage market.
The FHA may be enforced in varying ways by HUD, the
Attorney General, and victims of discrimination. While HUD has
primary enforcement through agency adjudication, the DOJ and
aggrieved individuals may also bring actions in federal courts
under certain circumstances. The Office of Fair Housing and
Equal Opportunity (FHEO) within HUD is responsible for
investigating both individual and systemic complaints of
lending discrimination. FHEO also undertakes Secretary-
initiated investigations based on Home Mortgage Disclosure Act
data or other information that suggests that a lender may have
discriminated on a prohibited basis. In addition, FHEO also
carries out activities to educate the public about lending
discrimination. In 2009, the Patricia Roberts Harris National
Fair Housing Training Academy began its Fair Lending Initiative
to combat the effects of the mortgage lending crisis. This
effort was strengthened by an additional appropriation provided
by Congress in FY 2009, which enabled FHEO to establish a $2
million mortgage rescue component within the Fair Housing
Initiative Program for nonprofit groups assisting victims of
fraud and lending abuse.
Despite some progress made by HUD, DOJ, and others in
eradicating housing discrimination, alleged and actual
violations of the Act persist. According to testimony by
several witnesses before the Housing and Community Opportunity
Subcommittee, African Americans still experience the highest
degree of residential segregation. One witness commented that
65 percent of the African American population would have to
move in order to become fully integrated into a metropolitan
area. Furthermore, according to testimony by John Trasvina,
Assistant Secretary for Fair Housing and Equal Opportunity
(FHEO), racial and ethnic minorities continue to be subject to
different treatment when securing a mortgage. Assistant
Secretary Trasvina stated that approximately five percent of
the housing discrimination cases that are filed each year with
the Department and its State and local fair housing agency
partners in the Fair Housing Assistance Program (FHAP) involve
lending discrimination while thirty percent of these cases have
resulted in a determination of ``cause to believe
discrimination occurred,'' a settlement, or a conciliation. His
testimony noted that these cases resulted in over $2 million in
monetary compensation or assistance to complainants and policy
changes.
HUD's most recent Housing Discrimination Study, which was
conducted by the Urban Institute, found high rates of housing
discrimination nationwide in the rental and sale of housing.
The study found discrimination in 20.3 percent of cases in
which an African American tried to rent an apartment and in
16.8 percent of cases in which an African American attempted to
purchase a home. For Hispanics, the numbers were even higher;
discrimination was found in 23.4 percent of cases in which they
tried to rent an apartment and 18.3 percent in cases where they
tried to purchase a home. Those numbers were similar for Asian
American and Pacific Islanders as well. HUD's report found
discrimination in 21.5 percent of the time for rentals and 20.4
percent of the time for home purchases.
Independent studies also have reached similar conclusions
to those documented in HUD's Housing Discrimination Study. A
recent study by the National Fair Housing Alliance (NFHA) found
that 30,758 fair housing complaints were filed in 2008, which
is the highest total number of complaints on record. Private
fair housing groups processed 20,173, or 66 percent, of the
total complaint load. In contrast, HUD processed 2,123
complaints, and state and local fair housing agencies processed
8,429 complaints. The Department of Justice (DOJ) filed 33 fair
housing cases. These complaints, however, represent only a
small fraction of the actual violations. According to testimony
by Shanna Smith, Executive Director and Chief Executive Office
of NFHA, an estimated 4 million fair housing violations occur
each year. Ms. Smith noted that one reason that so few victims
file housing discrimination complaints each year is that the
discrimination is so subtle as to be undetectable by most
individuals. Another reason cited by Ms. Smith is that private
fair housing groups that conduct the majority of fair housing
enforcement work nationwide historically have lacked the
funding needed to operate at a capacity that can adequately
address the high level of housing discrimination.
While the FHA was enacted more than 40 years ago, the
Committee notes that numerous studies and witnesses
acknowledged that housing discrimination continues. To more
effectively address this problem, the bill proposes to
strengthen enforcement of the nation's fair housing laws by
expanding testing for housing discrimination, increasing the
authorization for HUD's Fair Housing Initiative Program,
establishing a competitive matching grant program at HUD to
examine the causes of housing discrimination and segregation
and their effects on education, poverty, and economic
development, and encourage HUD to issue new regulations in
connection with its mandate to affirmatively further fair
housing.

TESTING FOR HOUSING DISCRIMINATION

Detecting housing discrimination is usually done by what is
called ``paired testing''. Paired testing uses two testers.
These testers pose as identical home seekers except for the
trait being discriminated against and visit real estate or
rental agents to inquire about the availability of advertised
housing units. Most paired testing uses paired minority and
white applicants testing for racial and/or ethnic
discrimination, but paired testing can be done using testers
posing as applicants of different sexes, religions, familial
status, or disability status if discrimination based on those
traits is being tested. This methodology provides direct
evidence of possible discrimination in rental, purchase, or
mortgage markets.
Fair housing organizations, federal, state and local
governments, researchers and academics, and the housing
industry use testing evidence to identify disparate treatment
in the housing market. In testimony before the Housing and
Community Opportunity Subcommittee, Assistant Secretary
Trasvina expressed the Department's support for expansion of
testing, noting that testing has been widely accepted by
federal courts. Indeed, the U.S. Supreme Court recognized the
use of testers as a legitimate and vital enforcement tool in
its 1982 decision in Realty Corp. v. Coleman (455 U.S. 363, 373
(1982)) in which it granted standing to testers to sue for
injuries under the federal Fair Housing Act. Writing for the
Court, Justice Brennan described testers as ``individuals who,
without an intent to rent or purchase a home or apartment, pose
as renters or purchasers for the purpose of collecting evidence
of unlawful steering practices.'' Assistant Secretary Trasvina
and several other witnesses who testified before the Housing
and Community Opportunity Subcommittee commented that the U.S.
Court of Appeals for the Seventh Circuit expressed support for
testing as a tool for proving unlawful housing discrimination
in Richards v. Howard, 712 F.2d 319, 321 (7th Cir. 1983)
finding that ``[i]t is frequently difficult to develop proof in
discrimination cases and the evidence provided by testers is
frequently valuable, if not indispensible.'' Indeed, Assistant
Secretary Trasvina testified that testing proved to be
indispensible in a number of the Department's investigations
that led to charges of discrimination based on familial and
racial status. In one case, FHEO utilized on-site and telephone
tests in Pennsylvania to uncover a prohibited discriminatory
practice against families, while in another case, FHEO sent
testers to a property following a number of individual
complaints by African American renters who sought to live in a
64-unit townhouse property in Ohio. Other witnesses testified
that targeted testing of housing service providers has changed
the business practices of apartment management companies, real
estate agencies, homeowners insurance providers, architects and
housing developers and mortgage lenders and insurance
providers.
By providing for a nationwide enforcement testing program,
H.R. 476 recognizes that testing is a critical tool not only
for investigating and redressing housing discrimination but
also for systemic enforcement efforts to indentify the very
types of subtle discrimination that currently go unreported. As
one witness testified, such an approach is consistent with the
federal government's longstanding tradition of focusing on
eradication of large-scale forms of discrimination, which
otherwise would not likely be redressed by State and local fair
housing organizations, civil rights organizations or private
individuals because of limited budgets and resources. Knowledge
of the nationwide testing program will also serve to promote
awareness of the various forms of discriminatory housing
practices that are prohibited by the federal Fair Housing Act
and, as a result, also serve to deter violations and strengthen
compliance.
The Committee recommends that all testing conducted as part
of the national testing program should be conducted by private
non-profit fair housing organizations with a successful history
of bringing enforcement actions and meritorious complaints
based on evidence gathered through testing. Fair housing
organizations are based in communities and aware of the
different market challenges that exist. Regional fair housing
coalitions and national consortiums can be effective in
coordinating systemic testing for the most direct and sustained
impact. To most effectively accomplish the goals of this Act,
the Committee recommends that funding be directed to national
and regional fair housing organizations with a long history of
testing, meritorious complaints and enforcement actions. Such
groups subsequently may enter into subcontracts with local
groups that have a proven history of testing.
To ensure a sustained effort to eliminate systemic
discrimination and undertake this broad effort, the Committee
recommends that fair housing organizations receive grants of at
least 24 to 36 months. Grantees should not face the 12-month
time constraint present in some of the current FHIP funding.
Past experience has shown that many FHIP grantees could not
rely upon consistent funding from HUD, due in part to
insufficient funding for FHIP. Successful systemic testing
requires consistent investigation to identify discriminatory
practices and policies that exist in particular geographic
areas or that exist across geographic areas but are perpetuated
by specific persons.

FAIR HOUSING INITIATIVES PROGRAM

The Fair Housing Initiatives Program (FHIP) is a program
within HUD that assists victims of housing discrimination by
connecting them with local fair housing organizations and other
non-profits that receive funding through FHIP. These FHIP
organizations partner with HUD to help people identify
government agencies that handle complaints of housing
discrimination. They also conduct preliminary investigations of
claims, including sending testers to properties suspected of
practicing housing discrimination.
In addition to funding organizations that provide direct
assistance to individuals who feel they have been discriminated
against while attempting to purchase or rent housing, FHIP has
four initiatives that promote fair housing laws and equal
housing opportunity awareness, including the:
Fair Housing Organizations Initiative (FHOI)--
provides funding to non-profit fair housing organizations to
build capacity and handle fair housing enforcement and
education initiatives;
Private Enforcement Initiative (PEI)--offers
testing and enforcement assistance to the nationwide network of
fair housing groups.
Education and Outreach Initiative (EOI)--provides
funding to State and local government agencies and non-profit
organizations for community outreach initiatives regarding the
Fair Housing Act.
Administrative Enforcement Initiative (AEI)--helps
State and local governments who administer laws similar to the
Fair Housing Act that broaden an agency's range of enforcement
and compliance activities. No funds are currently available for
this program.
FHIP was last authorized by Congress in 1994 at $26
million. In FY 2009, eligible and qualified fair housing
enforcement organizations submitted applications totaling $75.4
million, which exceeded the amount appropriated by Congress.
For FY 2010, FHIP was funded at $42.5 million in FY 2010, which
helped fund 93 fair housing organizations. Despite the
increase, there are many states and large metropolitan areas
with no fair housing agency. In addition, many fair housing
organizations have had to reduce staffing levels or close
entirely due to insufficient resources. In fact, the bi-
partisan National Commission on Fair Housing and Equal
Opportunity, co-chaired by former HUD Secretaries Henry
Cisneros and Jack Kemp, issued a report on the state of fair
housing in which it recommended a significant increase in FHIP
funding. In its report, the Commission noted that that ``[t]he
Fair Housing Initiative Program was created in the late 1980s
to support and fund fair housing enforcement and education
across the country. While the program has been an effective
change agent in communities, severe funding constraints and an
erratic funding stream have limited its usefulness. Current
appropriation levels are grossly inadequate to fund existing
private fair housing groups to perform enforcement activities .
. . Only 28 groups in the country received consistent funding
over the five-year period from FY 2003 to FY 2007 and 26
private fair housing groups including some of the oldest and
most respected groups, have closed or are at risk.''
H.R. 476 begins to address the Commission's recommendations
by increasing the authorization level for FHIP from $26 million
to $42.5 million, equal to the amount appropriated by Congress
in FY 2010. This funding level would help fund most of the
existing fair housing organizations and enable them to develop
innovative ways to fight emerging discrimination such as
systemic testing, in which qualified fair housing organizations
incorporate knowledge of emerging negative housing trends into
an investigation and develop plans to determine if
discrimination is driving this trend. Additional funding also
would provide qualified fair housing organizations with the
needed resources to follow through on discriminatory housing
practices that are uncovered in order to take legal action and
pay for litigation costs.

AFFIRMATIVELY FURTHER FAIR HOUSING MANDATE

Title VIII of the federal Fair Housing Act (42 U.S.C.
Sec. 3608) requires HUD and its grantees to ``affirmatively
further fair housing.'' This mandate applies to all HUD grant
programs, including the Community Development Block Grant
Program and the HOME Investment Partnership Program, two of
HUD's largest grant programs. A number of witnesses testified
that this mandate has often gone unmet. In fact, HUD Assistant
Secretary Trasvina and several other witnesses discussed one
such case that was brought against Westchester County, New
York. In this case, it was alleged that Westchester County had
made false claims to the federal government when it certified
that it would affirmatively further fair housing, though it had
never analyzed racial segregation patterns in areas where it
placed new affordable housing. The Committee commends HUD and
the Department of Justice for using its authority to help
facilitate an historic and mutually-beneficial settlement to
the claims whereby Westchester County has agreed to build 750
new affordable housing units in neighborhoods with small
minority populations, remove existing impediments to fair and
affordable housing and take active steps to ensure its housing
and development practices are fair to families without regard
to their race or ethnicity.
Finally, while the Committee recognizes that HUD is in the
process of revising its current regulations regarding the
obligation of recipients of federal funds to affirmatively
further fair housing, it notes that Section 5 of the bill
restates Congress intent in having this mandate fully
implemented and enforced.

Hearings

The Subcommittee on Housing and Community Opportunity held
a hearing on January 20, 2010, entitled, ``H.R. 476, the
Housing Fairness Act of 2009.'' The following witnesses
testified:

PANEL ONE

The Honorable John Trasvina, Assistant
Secretary for Fair Housing and Equal Opportunity, U.S.
Department of Housing and Urban Development

PANEL TWO

Ms. Shanna L. Smith, President and Chief
Executive Officer, National Fair Housing Alliance/Co-
Chair of the Leadership Conference on Civil Rights Fair
Housing Task Force
Ms. Leslie Proll, Director, NAACP Legal
Defense & Educational Fund, Inc./Co-Chair of the
Leadership Conference on Civil Rights Fair Housing Task
Force
Mr. David Berenbaum, Chief Program Officer,
National Community Reinvestment Coalition
Ms. Jeanne McGlynn Delgado, Vice President,
Business and Risk Management Policy, National Multi-
Housing Council/National Apartment Association
Professor Brian Gilmore, Director, Fair
Housing Clinic, Howard University School of Law

Committee Consideration

The Committee on Financial Services met in open session on
July 28, 2010, and ordered H.R. 476, Veterans, Women, Families
with Children, and Persons with Disabilities Housing Fairness
Act of 2010, as amended, favorably reported to the House by a
voice vote. Earlier, the Subcommittee on Housing and Community
Opportunity marked up the bill on May 27, 2010, and ordered the
bill, as amended, forwarded to the Full Committee by a voice
vote.

Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. No
record votes were taken with in conjunction with the
consideration of this legislation. A motion by Mr. Frank to
report the bill, as amended, to the House with a favorable
recommendation was agreed to by a voice vote.
During the consideration of the bill in Full Committee, the
following amendments (to the Committee Print showing the
amendment recommended by the Subcommittee on Housing Community
Opportunity) were considered:
An amendment by Mr. Lee, no. 1, regarding a General
Accountability Office study on testing for discrimination, was
offered and withdrawn.
An amendment by Mr. Carson, no. 2, regarding a HUD report
on studies and pilot projects, was agreed to by a voice vote.
During the consideration of the bill in the Subcommittee on
Housing and Community Opportunity, the following amendment was
considered:
An amendment by Mr. Green, no. 1, a manager's amendment,
was agreed to by a voice vote.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held a hearing and made
findings that are reflected in this report.

Performance Goals and Objectives

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:

Purpose and Summary

H.R. 476 is intended to strengthen enforcement of federal
fair housing laws as well as improve education efforts
surrounding discrimination in home rentals, sales, insurance,
and lending by authorizing a nationwide fair housing
enforcement testing program, increasing the authorization level
for the Fair Housing Initiatives Program, and establishing a
competitive matching grant program at HUD for private nonprofit
organizations to examine the causes of housing discrimination
and segregation and its effects on education, poverty, and
economic development.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.

Committee Cost Estimate

The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.

Congressional Budget Office Estimate

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:

U.S. Congress,
Congressional Budget Office,
Washington, DC, August 10, 2010.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 476, the Veterans,
Women, Families with Children, and Persons With Disabilities
Housing Fairness Act of 2010.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz.
Sincerely,
Robert A. Sunshine
(For Douglas W. Elmendorf, Director).
Enclosure.

H.R. 476--Veterans, Women, Families with Children, and Persons With
Disabilities Housing Fairness Act of 2010

Summary: H.R. 476 would authorize the appropriation of
about $255 million over the 2011-2015 period for Department of
Housing and Urban Development programs to study, detect, and
prevent discriminatory housing practices. Assuming
appropriation of the authorized amounts, CBO estimates that
implementing the bill would cost $214 million over the 2011-
2015 period. Enacting the legislation would not affect direct
spending or revenues; therefore, pay-as-you-go procedures do
not apply.
H.R. 476 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated Cost to the Federal Government: The estimated
budgetary impact of H.R. 476 is shown in the following table.
CBO assumes that the amounts authorized will be appropriated by
the start of each fiscal year and that outlays will follow the
historical rate of spending for the authorized programs or for
similar activities. The costs of this legislation fall within
budget function 750 (administration of justice).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2011-
2011 2012 2013 2014 2015 2015
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level................................. 63 48 48 48 48 255
Estimated Outlays................................... 26 42 50 48 48 214
----------------------------------------------------------------------------------------------------------------

Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: H.R. 476
contains no intergovernmental or private-sector mandates as
defined in UMRA. State, local, and tribal governments would
benefit from grant funds authorized in the bill. Any costs they
incur, including matching funds, would result from complying
with conditions of federal assistance.
Estimate prepared by: Federal Costs: Mark Grabowicz; Impact
on State, Local, and Tribal Governments: Lisa Ramirez-Branum;
Impact on the Private Sector: Jimmy Jin.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Constitutional Authority Statement

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States) and clause 3 (relating to
the power to regulate interstate commerce).

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

Earmark Identification

H.R. 476 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.

Section-by-Section Analysis of the Legislation

Section 1. Short title

This section establishes the short title of the bill, the
``Veterans, Women, Families with Children, and Persons with
Disabilities Housing Fairness Act of 2010.''

Section 2. Testing for discrimination

This section authorizes the U.S. Department of Housing and
Urban Development (HUD) to administer a nationwide enforcement
testing program to measure patterns of adverse treatment on the
basis of race, color, religion, sex, familial status,
disability or national origin in rentals, real estate sales and
mortgage lending practices. Qualified fair housing enforcement
organizations will conduct the testing. HUD, State and local
governments, and fair housing organizations may investigate or
bring enforcement actions when housing discrimination is found.
HUD will submit to Congress an evaluation of the effectiveness
of the program and issue regulations requiring applicants to
describe the proposed activities and procedures to be used as
well as regulations establishing minimum standards for the
training of testers. HUD will report to Congress, on a biennial
basis, the results of its nationwide enforcement testing,
including recommendations for legislative or administrative
actions. In its biennial updates to Congress, HUD will also
provide a detailed summary of the messages received by the 24-
hour toll-free hotline, through electronic mail, and through
its website, for reported housing discrimination. This program
is authorized for $15 million for FY 2011-FY 2015.

Section 3. Increase in funding for the Fair Housing Initiatives Program

This section amends the Fair Housing Initiative Program
(FHIP), which was authorized as part of the Housing and
Community Development Act of 1987, by stipulating that only
``qualified private nonprofit fair housing enforcement
organizations'' receive funds under the private enforcement
initiative. Qualified fair housing organizations are required
to have at least two years' experience in complaint intake,
complaint investigation, testing for fair housing violations,
and enforcement of meritorious claims. Under this section, HUD
is also required to issue regulations within 180 days of bill
enactment establishing minimum standards for the training of
testers.
This section authorizes $42.5 million annually for FHIP
from FY 2011 to FY 2015, to be divided as follows:
No less than 75 percent of total funding for
private enforcement; and
No more than 10 percent of total funding for
education and outreach.

Section 4. Sense of Congress

This section states that HUD should fully comply with FHIP
authorizing language to develop and disseminate an annual
national media campaign to educate the general public of fair
housing rights, including public service announcements,
television, radio and print advertisements, posters, pamphlets
and brochures. It also states that HUD should promulgate
regulations regarding the obligation to affirmatively further
fair housing for all recipients of federal housing funds as
required by federal Fair Housing Act (42 U.S.C. 3608).

Section 5. Grants to private entities to study housing discrimination

This section requires HUD to administer a competitive
matching grant program for private nonprofit organizations to
examine the causes of housing discrimination and segregation
and their effects on education, poverty and economic
development. This section also expands the scope of research to
include a study on the extent of housing discrimination against
veterans and military personnel, the causes of such
discrimination, and its effects. A non-federal fund match of 50
percent of the grant amount is required. Qualified fair housing
enforcement organizations or their primary subcontractor are
given a priority in grant selection. This section authorizes $5
million for the competitive grant program annually from FY 2011
to FY 2015 for this program.
This section also directs HUD to submit a report to
Congress, on a biennial basis, that provides a detailed summary
of the results of the comprehensive studies and pilot projects
authorized by this Act, as well as specifying any
recommendations for legislative or administrative actions to
address any issues raised by the studies.

Section 6. Limitation on use of funds

This section prohibits funds authorized under this Act from
being used for any political activity, political advocacy, or
lobbying, or for expenses for travel to engage in such
activities or in preparing or providing advice on tax returns.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

SECTION 561 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1987

SEC. 561. FAIR HOUSING INITIATIVES PROGRAM.

(a) * * *
(b) Private Enforcement Initiatives.--
(1) In general.--The Secretary shall use funds made
available under this subsection to conduct, through
contracts with qualified private nonprofit fair housing
enforcement organizations, investigations of violations
of the rights granted under title VIII of the Civil
Rights Act of 1968, and such enforcement activities as
appropriate to remedy such violations. The Secretary
may enter into multiyear contracts and take such other
action as is appropriate to enhance the effectiveness
of such investigations and enforcement activities.
(2) Activities.--The Secretary shall use funds made
available under this subsection to conduct, through
contracts with qualified private nonprofit fair housing
enforcement organizations, a range of investigative and
enforcement activities designed to--
(A) * * *

* * * * * * *

(d) Education and Outreach.--
(1) In general.--The Secretary, through contracts
with one or more qualified fair housing enforcement
organizations, other fair housing enforcement
organizations, and other nonprofit organizations
representing groups of persons protected under title
VIII of the Civil Rights Act of 1968, shall establish a
national education and outreach program. The national
program shall be designed to provide a centralized,
coordinated effort for the development and
dissemination of fair housing media products,
including--
(A) * * *

* * * * * * *

(2) Regional and local programs.--The Secretary,
through contracts with fair housing enforcement
organizations, other nonprofit organizations
representing groups of persons protected under title
VIII of the Civil Rights Act of 1968, State and local
agencies certified by the Secretary under section
810(f) of the Fair Housing Act, [or other public or
private entities] or other public or private nonprofit
entities that are formulating or carrying out programs
to prevent or eliminate discriminatory housing
practices, shall establish or support education and
outreach programs at the regional and local levels.
(3) Community-based programs.--The Secretary shall
provide funding to fair housing organizations and other
nonprofit organizations representing groups of persons
protected under title VIII of the Civil Rights Act of
1968, [or other public or private entities] or other
public or private nonprofit entities that are
formulating or carrying out programs to prevent or
eliminate discriminatory housing practices, to support
community-based education and outreach activities,
including school, church, and community presentations,
conferences, and other educational activities.

* * * * * * *

[(g) Authorization of Appropriations.--There are authorized
to be appropriated to carry out the provisions of this section,
$21,000,000 for fiscal year 1993 and $26,000,000 for fiscal
year 1994, of which--
[(1) not less than $3,820,000 for fiscal year 1993
and $8,500,000 for fiscal year 1994 shall be for
private enforcement initiatives authorized under
subsection (b), divided equally between activities
specified under subsection (b)(1) and those specified
under subsection (b)(2);
[(2) not less than $2,230,000 for fiscal year 1993
and $8,500,000 for fiscal year 1994 shall be for
qualified fair housing enforcement organizations
authorized under subsection (c)(1);
[(3) not less than $2,010,000 for fiscal year 1993
and $4,000,000 for fiscal year 1994 shall be for the
creation of new fair housing enforcement organizations
authorized under subsection (c)(2); and
[(4) not less than $2,540,000 for fiscal year 1993
and $5,000,000 for fiscal year 1994 shall be for
education and outreach programs authorized under
subsection (d), to be divided equally between
activities specified under subsection (d)(1) and those
specified under subsections (d)(2) and (d)(3). Any
amount appropriated under this section shall remain
available until expended.]
(g) Authorization of Appropriations.--
(1) In general.--There are authorized to be
appropriated to carry out the provisions of this
section $42,500,000 for each of fiscal years 2011
through 2015, of which--
(A) not less than 75 percent of such amounts
shall be for private enforcement initiatives
authorized under subsection (b);
(B) not more than 10 percent of such amounts
shall be for education and outreach programs
under subsection (d); and
(C) any remaining amounts shall be used for
program activities authorized under this
section.
(2) Availability.--Any amount appropriated under this
section shall remain available until expended to carry
out the provisions of this section.
(h) Qualified Fair Housing Enforcement Organization.--(1) The
term ``qualified fair housing enforcement organization'' means
any organization that--
(A) * * *

* * * * * * *

An organization which is not solely engaged in fair housing
enforcement activities may qualify as a qualified fair housing
enforcement organization, provided that the organization is
actively engaged in each of the activities listed in
subparagraph (B) and meets the criteria described in
subparagraphs (A) and (C).

* * * * * * *

DISSENTING VIEWS

The Republican Members of the Committee on Financial
Services support the goal of fair housing and believe that
housing discrimination in any form is unacceptable. However, we
continue to be concerned that this bill creates two new
programs, is duplicative of other Federal initiatives to combat
this type of discrimination, and authorizes over $100 million
in new spending with no offset or indication of the source of
funding.
H.R. 476 incorporates some Republican suggestions. For
example, it includes provisions that (1) require the Department
of Housing and Urban Development (HUD) to issue regulations
outlining the standards and procedures for the nationwide
testing program; (2) provide accountability and oversight
standards governing how funds are spent by Qualified Fair
Housing Enforcement Organizations (QFHEO); and (3) prohibit
funds available under this act from being used for political
activities. While these provisions improve the bill, H.R. 476
fails to address concerns regarding the creation of a costly
new program that largely duplicates other Federal initiatives
administered by HUD and the Department of Justice (DOJ), and
the authorization of $100 million in new spending at a time
when American taxpayers are demanding greater fiscal discipline
from their elected representatives.
Currently, the Justice Department operates a fair housing
testing program within its Housing and Civil Enforcement
Section to identify unlawful housing discrimination based on
race, national origin, disability, or familial status. Rather
than establishing a new nationwide testing program through HUD,
perhaps a better approach would be to have DOJ work in
consultation with HUD to conduct housing discrimination testing
through the existing DOJ program.
Given the fiscal crisis facing America, it is irresponsible
for Congress to authorize spending on new programs without
offsetting that spending by eliminating or reducing other
Federal programs. Accordingly, we cannot support this very
well-intentioned legislation.
Spencer Bachus.
Randy Neugebauer.
Leonard Lance.
Christopher Lee.
Shelley Moore Capito.
Jeb Hensarling.
Lynn Jenkins.