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Wednesday, December 4, 2013

HUD finds Dallas discriminates against minorities in affordable-housing practices

Yesterday, the U.S. Department of Housing and Urban Development (HUD) issued a letter stating that the City of Dallas has violated federal civil rights laws by promoting discrimination against minorities and disabled residents in its affordable-housing practices. As The Dallas Morning News reports:

City Council member Scott Griggs, vice chairman of the council housing committee, said the HUD letter confirms the long-standing image of Dallas as a city divided between a northern sector for better-off people who can pay market-rate rents and a southern sector for low-income people who need rent subsidies.

“It sets up that in southern Dallas, we’re going to continue to put low-income housing, but when you get to the north we’re going to use the money that should be used for low- and moderate-income housing but find a way to create market rate.”

The findings could put the city at risk of losing millions of dollars in federal funds that are supposed to go to developers for low- and moderate-income housing. The letter delves into a complex system of government subsidies that often flow through city government and then to developers.

The money comes with strict civil rights requirements meant to prioritize benefits for lower-income residents throughout the city and prevent or eliminate blight. In Dallas, most of those lower-income residents are black, Hispanic or disabled.

The letter appears to be the opening salvo in a bureaucratic battle between federal officials and the city government, but it does not mean HUD officials intend to take immediate action to alter housing projects.

City spokesman Frank Librio claims that HUD's letter does not tell the whole story.  On December 2, Librio issued the follwoing statement:

The City complies with HUD guidelines and regulations in its work with affordable housing projects. It is important to note that HUD has given final approval of all projects assisted by federal housing funds, either on the local level and/or from the Washington D.C. office. Any proposed projects assisted by federal housing funds must be approved by HUD before they may be implemented.

Now the Fort Worth Office of HUD has issued a letter where it contends that the City has violated HUD guidelines and regulations.  City staff believes that the letter leaves out key facts presented by the City, did not fully evaluate arguments made by city staff, and reaches unfounded legal conclusions.  City staff looks forward to working with HUD to resolve this matter in the best interests of the public.

As for the 1600 Pacific project referenced in the HUD letter, Curtis Lockey and Craig MacKenzie were the former developers.  They sued the City in federal district court when they did not receive their requested large subsidy for their proposed project.  Their case was dismissed and Mr. Lockey and MacKenzie have appealed the ruling of the district court.  Since that case is currently in litigation, it would not be appropriate for the City to comment further at this time.

The city will have an opportunity to respond to HUD's investigation, and it can request a review of its findings. It also can take voluntary action to remedy the violations.

HUD's letter describes the findings of an investigation begun in 2010 when local developers filed a complaint after the city blocked their proposal to build low-income housing. City officials claimed to have been worried about the proposal's provision for financing the project.

CRL&P related posts:

http://lawprofessors.typepad.com/civil_rights/2013/12/yesterday-the-us-department-of-housing-and-urban-development-hud-issued-a-letter-stating-that-the-city-of-dallas-has-vio.html

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