The U.S. Department of Housing and Urban Development (HUD) has recently issued new regulations applicable to recipients of certain types of HUD funds. The new regulations mandate that recipients of certain funding – Community Development Block Grant funds, Emergency Solutions Grant funds, Home Investment Partnership funds, Housing Opportunities for Persons with AIDS funds, and Public Housing Agencies – engage in a four-step process to set fair housing priorities and goals every five years. The process, known as an Assessment of Fair Housing (AFH), is designed to replace the current “analysis of impediments” process (AI). 

The AFH process includes questions designed to assist participants in better identifying fair housing issues, as well as the contributing factors for those issues. Once completed, HUD reviews the AFH for a determination as to whether the fund-recipient’s programs are consistent with fair housing and civil rights requirements. Unlike the AI process, AFH’s must receive HUD approval. The goals identified in the AFH must then be incorporated into various action plans, which also have extensive regulatory requirements. 

Although it is unclear how the new regulations will be implemented, HUD could use the AFH process to investigate whether municipal housing and land-use regulations have a “disparate impact” on protected classes like race, religion, sex, familial status, national origin, and disability. This type of implementation could affect housing and zoning policies like minimum lot-size requirements, home density requirements, and caps on the number of homes that may be rented in a certain area. HUD’s implementation of the new regulations should be closely tracked. In the meantime, careful consideration should be given to accepting HUD funds.