Secretary Carson’s Department of Housing and Urban Development (HUD) is in the process of revising Affirmatively Furthering Fair Housing (AFFH), an Obama‐era regulation. The idea is to reform the regulation to simplify and streamline it, and encourage local beneficiaries to liberalize zoning regulations in order to qualify for funding. Peter Van Doren and I outline one way of doing this in a public comment, here.
Under the reform scenario, CDBG funding would act as a federal carrot to induce communities to rethink counterproductive local zoning policies that reduce housing affordability. CDBG funds are supposed to improve housing affordability, but they can’t do that when local government policies actively and effectively undermine affordability goals.
In order for AFFH reform to work, CDBG must be a politically popular program with local politicians and policymakers. By all accounts, it is highly popular with politicians and policymakers (for evidence, witness the political reaction to the White House’s proposal to cut CDBG funding the last three years). If politicians and policymakers value CDBG funding as much as they say they do, withholding CDBG or other HUD funding in the absence of local reform may act as a powerful incentive for change.
However, the idea has been challenged in some places, including this Brookings article from last year. The article suggests that 1) many of the HUD jurisdictions that recieve funding are counties, rather than cities, and counties don’t have control over zoning and 2) the most exclusionary jurisdictions don’t receive much CDBG money, so the reform might have minimal impact.
These arguments warrant a second look. First, it is accurate that HUD awards some CDBG money to counties (and states, too). However, this probably constitutes an advantage, rather than a disadvantage under the reform. Indeed, effectively liberalizing zoning regulations likely benefits from aligning pro‐growth city incentives with higher levels of government, including county and state governments.
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