15 States Sue HUD Over Threat To Withhold Fair Housing Funds

Fifteen states and the District of Columbia are suing the U.S. Department of Housing and Urban Development, arguing it is unfairly threatening to withhold fair housing funding over political differences.

Attorneys general for Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, Rhode Island, Vermont, Washington, and the District of Columbia filed a complaint with the U.S. District Court for the Northern District of California on March 16.

In the filing, which is being led by Illinois Attorney General Kwame Raoul and California Attorney General Rob Bonta, the 16 Democratic attorneys general argue that HUD is trying to "force states to jettison their protections against housing discrimination."

In September, HUD issued guidance to local agencies threatening to decertify them and cut them off from Fair Housing Assistance Program funds unless they stop enforcing fair housing protections beyond HUD's own interpretation.

HUD barred using funds to "promote gender ideology" or for abortions or immigration purposes, states the complaint.

The AGs told the court HUD should lack the authority to restructure the funding scheme that has been in place since 1980. They said HUD's conditions are "unlawful" and go against decades of practice, alleging that the actions "violate the Administrative Procedure Act (APA) and the United States Constitution."

"HUD’s new guidance ignores the states’ right to enact laws that make sense for its residents, and unlawfully attempts to hold hostage federal funding from those who don’t capitulate," said Peter Neronha, attorney general of Rhode Island.

The move could raise the cost of enforcing state and federal fair housing laws, and also create confusion as to which laws are enforceable, Attorney General Kris Mayes of Arizona said.

Raoul noted that "HUD is attempting to impose vague, ideologically motivated, and unlawful conditions on program funding.

"If these actions are left unchallenged, discrimination in housing is almost certain to increase."

HUD didn't immediately respond to a request for comment.

The suit also concerns HUD guidance from February that modifies the kinds of claims that should be recognizable under the Fair Housing Act. That rulemaking pushed agencies from pursuing claims that appear neutral but have a "disparate impact."

The National Association of Realtors® opposed that change.