BUSINESS

New HUD rules aim to ease segregation in housing

Communities around the United States seeking federal housing grants will soon be required to grapple with segregation and inequality in housing under new federal rules announced Wednesday.

The rules will require towns and cities to study patterns of segregation and how they are linked to access to jobs, high-quality schools and public transportation. Then, the municipalities must submit goals for improving fair access to housing. Steps could include integrating communities or more evenly distributing services.

"A ZIP Code should never prevent any person from reaching their aspirations," Housing and Urban Development Secretary Julian Castro said in announcing the regulations.

The rules, another instance of the Obama administration using its executive power to take on an entrenched issue, clarify how grant recipients must meet a standard that was set in the Fair Housing Act of 1968 — but has been inconsistently enforced.

Advocates also hope the rules will lead to the building of more affordable housing in wealthier areas.

"Rules like this help us eliminate the still-existing obstacles to full integration in our society," said NAACP Senior Vice President for Advocacy Hillary Shelton.

Experts caution that the rules' ultimate effect will depend on whether local communities actively pursue the goals they set for themselves, and what kind of standards HUD holds them to.

Conservative critics call it federal overreach, and some Republicans in Congress have already made moves to try to block it.

"HUD bureaucrats will be in a position to decide on their own whether your particular town meets their ideal of racial and income distribution," said Hans von Spakovsky of the Heritage Foundation.

But advocates hope the rules will reduce long-standing inequalities tied to patterns of segregation.

"I see this as a helpful tool to address the kinds of challenges that we've seen in Baltimore and Ferguson and other cities," Castro said. In Chicago, for example, he said, a pilot program led to new transportation plans linking low-income areas with jobs.

A recent study found that moving children to a lower-poverty neighborhood while they were young boosted their incomes as adults by almost a third. The same experiment found that adults who moved to lower-poverty neighborhoods had better health outcomes.

"Bundled together with where you live is a whole bunch of other things like where your kids go to school, what kind of transportation is going to serve you, what kinds of jobs you have access to," said Debby Goldberg of the National Fair Housing Alliance.

Some who support the rules' goals are nonetheless concerned that helping families move to higher-opportunity locations could drive some communities to move resources out of areas that need them the most.

Castro said the rules leave it to local partners to strike a balance between investing in low-income neighborhoods and building more affordable housing in high-opportunity areas.

Libby Starling, who piloted a similar planning process at the Metropolitan Council in the Twin Cities, said she found the process useful but noted that it raised some concerns about the best policy prescriptions to deal with inequality among neighborhoods, especially when it comes to race.

"There are people of color who choose to live with other people of color. There are people of color who choose to live in predominantly white neighborhoods," she said. "Both choices are viable."

Skeptics and supporters alike acknowledge that they are waiting to see how vigorously HUD enforces the rules to determine how significant their effect will be.

"It's a very modest first step because there's no content in these rules about what HUD is going to do if jurisdictions don't do something to desegregate," Richard Rothstein, a research associate at the Economic Policy Institute, said ahead of the announcement.

On Wednesday, Castro said he considered withholding grant funds from recipients who do not comply to be a "last resort" but said he anticipated that most communities would participate.

colin.diersing@latimes.com

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