National Housing Law Project Housing Law Bulletin

PHAs May Apply to Substitute Site-Based for Centralized Waiting Lists

HUD recently issued a notice for immediate effect soliciting applications from certain public housing authorities (PHAs) to seek HUD permission to use site-based waiting lists as long as they are consistent with Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the grounds of race, color and national origin in programs receiving federal financial assistance and meet certain other conditions.¹

Public Housing Reform Bill and CLPHA Promote Site-Based Lists

HUD's Notice is much more limited in scope than the site-based waiting list provision included in H.R.2, the Housing Opportunity and Responsibility Act of 1997, now pending before the Housing Opportunity Subcommittee of the House Banking Committee.² Section 224(c) contains a broad directive authorizing PHAs to create procedures to maintain site-based waiting lists for admission to their developments, "notwithstanding any other law, regulation, handbook, or notice to the contrary" (emphasis added). Applicants would be free to apply directly at the location where they wished to reside or otherwise designate their interest in a particular development. As drafted, H.R.2 contains no specific constraints in the site-based waiting list provision against violation of federal anti-discrimination laws.³

HUD's proposal as set out in the notice is narrower than the one advanced by the Council of Large Public Housing Authorities (CLPHA) in its 1997 legislative program. CLPHA suggests as the only condition for site-based waiting lists that each building in a development be required to provide a minimum of 15 percent of its units to persons with incomes below 30 percent of area median.⁴

CLPHA argues that such a system "will enhance fair housing enforcement" and criticizes the existing centralized waiting list system as not promoting integration of public housing. CLPHA also points to the absence of a requirement for centralized waiting lists in other federal and state housing programs as evidence they should not be required for public housing.

CLPHA decries the costliness of centralized waiting lists and forwards the position that it is more humane not to have applicants waiting for units they do not want. CLPHA's final argument in favor of site-based lists is that they provide a barometer for market demand.

The HUD Notice offers some constraints to PHAs' ability to implement site-based waiting lists. Only PHAs managing 1,250 units or more would be eligible to apply. Generally, the application would be comprehensive - that is, site-based waiting lists would have to be available at all of a PHA's developments. However, a PHA could choose to maintain site-based waiting lists only for either all of its family sites, all of its elderly-designated sites or all of its mixed-population sites. In any event, for each of these kinds of developments in the PHA's inventory, the application would have to apply to all developments in the same category. For each site, a minimum of 90 percent of current occupants and 90 percent of applicants on the waiting list would be required to be persons of the same race or ethnicity. Those are the only developments that can have a site-based list. HUD believes racial and ethnic diversity may be increased if location and other factors are more important than the fact that a family might be in an ethnic/racial minority.

Past Civil Rights Violations Would Bar Site-Based Waiting Lists

In addition to failure to meet the above requirements, certain other PHAs would be ineligible to apply. These include PHAs operating under court orders involving civil rights violations, as well as those for which HUD has made a determination of apparent non-compliance with Title VI. PHAs operating under a Voluntary Compliance Agreement or conciliation agreements requiring class-wide relief based on Fair Housing Act violations would also be barred from using site-based waiting lists.

The Notice offers several variations of what constitutes a site. These include the conventional notion of a "site" - one public housing development. A site may also include more than one public housing development if proximity or other geographic characteristics make such characterization reasonable. Even a portion of one or more developments, such as the case of scattered-site housing, may be considered a site.

Origins of Community-wide Waiting Lists

The Notice reviews the origin of existing HUD regulations that have generally required tenant assignment according to "a plan providing for assignment on a community-wide basis."⁵

HUD policies regarding waiting lists are derived from Title VI enforcement strategies reviewed in the Notice. Initially, public housing applicants were afforded "freedom of choice" in deciding where to apply. The notice states that freedom of choice was ineffectual to ameliorate the impact of siting choices that located developments in all-white and all-black neighborhoods and the routine assignment of tenants by race on the basis of the availability of units and their respective place on the waiting list.

Following the failure of the "freedom of choice" policy, HUD required PHAs' use of community-wide waiting lists that used preferences and chronological applications to fill vacancies. This policy, crippled by inconsistent compliance, also failed to ameliorate segregation. Eventually, minority families with limited housing options became the majority in public housing. At the same time, federally assisted private housing, for which each owner maintained his or her own waiting list, became the predominant houser of non-minority families.

HUD contends that tenant "assignment from a single waiting list is not an effective means of furthering desegregation for such PHAs." ⁶In fact, the Department believes the shift to site-based waiting lists may improve racial diversity. Among the rationales offered in the Notice are that site-based waiting lists will provide an incentive for persons interested in a specific location. With location as the critical element, such persons will be more amenable to applying for public housing regardless of whether they would be in the racial minority at the site of choice.

HUD sees community-building - attraction of a more economically diverse population that can both serve as a role model and decrease operating subsidy needs - as among the ancillary benefits of site-based waiting lists. In addition, as PHAs become increasingly local operations as the result of recent enacted and proposed legislation and regulatory changes, site-based waiting lists could better equip PHAs to make effective decisions about issues that are site-based in nature, including "rent levels, income range preferences, [and] the viability of their developments. . . ."⁷

The Notice clearly provides that, despite HUD's role in approving each site-based waiting list plan, PHAs will continue to be subject to Title VI and other relevant civil rights laws. PHA conduct that would merit closer scrutiny would include the "marketing [of] its various developments on a racial or ethnic basis," preference rule revisions or "demolition of a significant portion of the PHA's stock [that] appear to cause the site-based waiting list policy to have an unanticipated discriminatory impact."⁸

Application Process

Both the Assistant Secretaries for Fair Housing and Equal Opportunity (FHEO) and for Public and Indian Housing must approve all site-based waiting list plans. Among the required information to be included for each site in the plan is whether the site was initially occupied on a racially or ethnically segregated basis and its current racial or ethnic composition by bedroom size. The chronology and demographics of the current waiting list must be provided. Similar information must be provided for Section 8.

PHAs are required to justify their plans on the basis of how their programs will be improved through a shift to site-based waiting lists. PHAs must also describe how their proposed plans are consistent with Title VI, as well as disclose any past civil rights violations.

The Notice commits HUD to act on applications within 60 days of a proposed plan's submission to the Assistant Secretary for FHEO for review.

Potential Problems with Site-Based Waiting Lists

Site-based waiting lists, coupled with reforms that make it easier for PHAs to admit higher income households - including repeal of the anti-skipping provisions - will accelerate public housing's transformation away from serving those most in need. Because of the anticipated lower turnover rate in the more desirable developments, the poorest households may be forced to accept units in less desirable developments that have immediate vacancies. Under those circumstances, their "choice" would be a forced one due to the inaccessibility of the more desirable units. Developments in the most desirable neighborhoods would shift more quickly to serve low-to-moderate-income residents, abandoning the needs of the very low-income households with more limited housing options.

Presumably, HUD has sought to avoid such results by including constraints in the Notice that limit the ability of all PHAs to utilize such waiting lists. For example, by conditioning eligibility for a site-based waiting list to any project in which 90 percent of the units are occupied by persons of the same race or ethnicity, and barring PHAs with adjudicated or pending civil rights matters from participation, the Department seeks to mute the potential for racial steering.

Other features of the proposed system also designed to aid in avoiding discrimination are the bifurcation of responsibility for oversight between Public and Indian Housing and the Fair Housing and Equal Opportunity offices at both HUD central and the local level. The requirement that each location where a PHA takes applications - the particular site or a central location - must accept applications for admission at any site operated by the PHA. The requirement that information about all sites be made available at each of the sites at which applications are taken is also designed to address historical problems of PHAs directing applicants to units based on race or ethnicity.

Despite certain features intended to prevent the potential discriminatory effects of site-based waiting lists, some potential problems persist. For example, PHAs would be permitted to seek HUD permission to restrict, in the name of "administrative efficiency," the number of individual sites to which an applicant may apply.⁹ Unless the parameters of "administrative efficiency" are clearly established and implementation carefully monitored, some PHAs may use "efficiency" as a ruse to deny very low-income applicants wider housing choices.

The Notice also requires that refusal without good cause of an offer of a unit at any requested site results in a household being dropped to the bottom of the waiting list at all the sites operated by the PHA. As in the case of "administrative efficiency" above, what constitutes lack of "good cause" must be clearly defined, and procedures should be established and implemented that guarantee their understanding by applicants.

Next Steps

Although the Notice is published for effect, HUD invited comments by March 10 in the event revisions are deemed necessary. Those comments should be available to the public through the office of the Rules Docket Clerk.

Unless the provisions of H.R.2 noted above are drastically revised to include explicit anti-discrimination constraints, the adoption of public housing reform legislation that includes site-based waiting lists will grant PHAs dramatically enhanced powers to serve higher income families at their most desirable sites.

¹Notice on Site-Based Waiting Lists, 62 Fed. Reg. 1,026 (Jan. 7, 1997), hereafter Notice.

²H.R.2, Housing Opportunity and Responsibility Act of 1997 (105th Cong., 1st Sess., Jan. 7, 1997). For background on H.R.2, see House Introduces Low-Income Housing Program Changes, 27 HOUS. L. BULL. 1 (Jan. 1997).

³H.R.2, § 224(c).

⁴For a critique of CLPHA's 1997 legislative proposal, including site-based waiting lists, see CLPHA's Goals for the 105th Congress, 27 HOUS. L. BULL. 5, 9 (Jan. 1997).

⁵24 C.F.R. § 1.4(b)(2)(ii) (1996).

⁶See 62 Fed. Reg. at 1027.

⁷Id.

⁸Id.

⁹Id. at 1029.