2025 is no doubt a time of significant change for our country. The new administration has proposed and already implemented sweeping changes to our federal government that will affect the housing industry (and in reality, just about all industries) in various ways. With new changes being announced almost daily, we’ve been hearing some concerns from professionals and leaders from every corner of the industry, and we want to address these concerns. So, what is the future of fair housing?
Enforcement of Fair Housing Laws Despite DEI Changes
One question we’ve heard is that with the elimination of Diversity, Equity, and Inclusion (DEI) initiatives across the board, does this administration intend to enforce any of the existing laws that relate to equality and discrimination? Is liability under the Fair Housing Act no longer a concern for housing providers?
Obviously, we doubt that it will be a priority under this administration to protect the civil rights guaranteed under the various federal laws, but we can confidently predict that enforcement will continue regardless of this administration’s priorities. It is true that we should anticipate huge staffing cuts at HUD. In fact, an internal memorandum issued by HUD indicates that up to 75% of HUD’s enforcement division (FHEO) will be cut nationwide.
However, the Fair Housing Act, which is one of a variety of Civil Rights Acts, is still a federal statute, and there is no reason to believe that Congress will take the necessary steps to amend or repeal these laws, including the Fair Housing Act. Let’s face it: With the law on the books, there is no likelihood that applicants, residents, or lawyers will suddenly decide to stop seeking to enforce their rights. If filing trends remain on course, fair housing complaints will be filed at the same or even a greater rate than in past years. For reference, 34,150 fair housing complaints were filed in 2023, which was an increase from the previous year. (Numbers for 2024 have not been published.)
Impact of HUD Staffing Cuts on Complaint Investigations
The difference during the next several years is that the number of individuals working at HUD’s FHEO offices will be substantially less, and those employees’ caseloads will inevitably be unmanageable. HUD has always referred many of its complaint investigations to state and local government (FHAP) agencies. Based on the reduction in staffing at HUD, referrals to FHAPs will almost certainly increase, and although these investigations may take more time to complete due to the sheer number of them, they will nonetheless continue.
Increase in State and Local Administrative Actions
We may also see an increase in state and local administrative actions. If applicants and residents lose faith in filing HUD complaints, nearly every state in the country and many local governments have comparable fair housing laws with the ability to investigate and enforce those laws.
Believe it or not, complaints filed with HUD make up a very small percentage of the total number of fair housing complaints filed in the country. In addition to the state and local Fair Housing Assistance Program (FHAP) agencies, there are also non-profit fair housing agencies that conduct testing, investigations, and file lawsuits in state and federal courts. These organizations are known as Fair Housing Initiative Programs (FHIPs). The reality is that these agencies process the vast majority of all fair housing complaints that are filed, significantly more than HUD and the Department of Justice combined.
These FHIP agencies are fair housing advocacy organizations and can receive complaints, do investigations, conduct testing, and even file complaints or lawsuits on their own behalf, or on behalf of a Complainant. These fair housing organizations processed approximately 75% of all complaints filed in 2023, followed by 20% by FHAP agencies, 5% by HUD, and less than 1% by the DOJ.
These advocacy organizations receive both state and federal funds, generally in the form of grants, and like many other organizations, have already begun to experience a reduction in federal funding. However, these groups place a huge focus on being visible and known within their communities, evidenced by the large number of complaints they handle each year, so like HUD and FHAPs, they can expect to continue receiving and processing complaints from residents and applicants.
Rise in Private Fair Housing Litigation
Another likely result of reduced federal employee staffing is an increase in private fair housing litigation. If applicants and residents believe that their administrative case cannot be investigated and resolved in a timely manner, the other means of redress is through a private lawsuit in state or federal court. (This has always been an option, but filing an administrative complaint is free and has generally been a much quicker process than litigation.)
Plaintiff law firms now have more incentive to encourage lawsuits in lieu of a HUD complaint, as the administrative route may no longer be the quicker solution, and plaintiff firms collect up to 40% of any damages awarded or settlement amounts.
Affirmatively Furthering Fair Housing Regulations
For those of you who have noted that HUD removed the regulations pertaining to Affirmatively Furthering Fair Housing, please remember that these regulations pertain to states, cities, and housing authorities and not to either conventional or subsidized housing providers. In other words, the elimination of these regulations has no effect on the existing Fair Housing requirements for conventional or subsidized housing.
Summary of Fair Housing Enforcement
In summary, where there is still a mechanism and legal basis for fair housing complaints to be filed, the Fair Housing Act will still be enforced, albeit even slower than before. While the timing of findings will certainly be impacted by staff cuts, the basic problem is that companies are still at risk of liability.
Budget Cuts and the Importance of Training
The second concern we’ve been hearing from customers is that with the economy on a downturn, there is a legitimate concern about their company’s finances. Should training be part of a company’s budget cuts? Let’s review the statistics.
Value of Fair Housing Training
Let’s be honest, as long-time fair housing attorneys, when it comes to how much we value training, we are definitely biased. Our experience has taught us that training is an important investment for all housing providers, not just from a customer service, employee morale, or ethical standpoint, but also from a risk management perspective.
As an element directly related to the operation of the property, we think fair housing training should never be viewed as an expendable part of the budget. A single complaint or lawsuit can easily exceed your company’s annual training budget, so the benefits of having a well-trained and informed staff cannot be overstated.
Potential Penalties and Costs of Violations
Civil penalties of up to $23,011 for a first violation may be awarded, increasing up to $115,054 for a third violation. Attorney’s fees and other costs may be awarded in addition to these penalties, as well as punitive damages in some cases.
While no company ever expects to find itself as a Defendant in civil litigation, many companies, both large and small, have landed in this position. Even when companies settle a complaint or lawsuit before a determination is made or damages are awarded, the defense costs just to get to that point can often far exceed what that company would have spent on training.
While we would never claim that training insulates a company from fair housing complaints, there is no doubt that the chances are greatly reduced by having an educated team.
Continued Vigilance and Training Encouraged
Training methods can certainly be modified or tailored to fit into a potentially reduced budget, but we strongly encourage all housing providers to continue being vigilant regarding fair housing compliance for all of the reasons discussed above.
Final Thoughts: Fair Housing is Essential
At FHI, we like to say that fair housing isn’t just something you do; it’s a way to be. We understand that with all of the administrative shake-ups at the federal level, cuts to federal spending, and changes to the economy, it is no surprise that companies are feeling uncertain about how their businesses will be impacted.
But even if fair housing isn’t necessarily part of your company’s mantra and it’s just “something you do,” we encourage housing providers to stay the course on managing the risk of liability, because fair housing isn’t going away.
Stay Calm and Train On.
Sources: 2024 Fair Housing Trends Report, National Fair Housing Alliance.
