HUD’s first‑year reset on fair‑housing guidance is reshaping federal housing rules

Terry Gerton You have just done a review of the Housing and Urban Development Administration after one year of the second Trump administration, and you found something really interesting, I think — that HUD withdrew a wide swath of long-standing fair housing guidance in its first year. As you dug in, what did you identify as perhaps motivations for this approach?

Gwen Roy-Harrison So I think some of HUD’s motivation is spelled out in their withdrawal memos. They cite that these documents were sub-regulatory guidance, not binding law, and they were intended to provide a roadmap for stakeholders, but not to be the controlling authority. So this, I think, highlights an overarching theme of this administration, a move towards deregulation, signals that HUD intends to only issue guidance where it’s necessary and where it reduces compliance burdens, but not where it increases compliance burdens. So the takeaway here is that HUD is moving away from being a how-to manual for housing providers and focusing its agency on a more narrow approach.

Terry Gerton That really is a shift in perspective and approach. I mean, some of this guidance had been in use for more than a decade and covered a lot of very important criteria that housing managers and community managers needed to know. How does that removal then of this compliance guidance shape day-to-day decisions for landlords and managers?

Gwen Roy-Harrison So some of this guidance had been in effect for two decades in some cases, and it really became the how-to manual for residential property management. I would say the biggest day-to-day shift for housing providers is that the fair housing obligations don’t disappear. The Fair Housing Act is still in effect. That hasn’t gone away. Nothing has changed there. But it’s really the operation manual that HUD had put out there that has changed in terms of housing providers not being able to rely on that any longer. As an example, fair housing allegations or discrimination claims are really fact-specific. So who said what, when, when was the request made, who responded, was any kind of final determination issued? And without HUD’s playbook, it makes it more difficult for housing providers to know what the guardrails are and what they should do in terms of having a step-by-step standard operating procedure in their offices. In turn, without HUD’s playbook, now housing providers are going to have to rely on state and local jurisdictions. Certain states or even some localities or cities may have more or less restrictive fair housing laws. They could have more aggressive enforcement, or they could have more or less resources applied towards those investigations. So I think it’s gonna become really specific to the individual jurisdiction that you’re operating out of. And I think we’re gonna see a lot of variability across the jurisdictions because it’s going to be left to the courts. And some courts may not agree in terms of their interpretation.

Terry Gerton You highlighted that some of this guidance had been in effect for over two decades. That crosses multiple presidential administrations. So now without that prior guidance, how much uncertainty does this create for the providers and the enforcers in the courts? You mentioned that there will be variability across jurisdictions.

Gwen Roy-Harrison For housing providers is to stay the course. Although HUD has removed its guidance documents, that doesn’t change what the law is. It just changes who housing providers start turning to as the referee. So housing providers felt confident and secure in the fact that they could rely on HUD’s playbook. And now without that playbook, it’s going to be tested by the court system. And that creates risk. So, the rules haven’t changed. It’s just the referee who has changed. And a lot of these fair housing disputes ultimately don’t end up going to trial. A lot of them resolve early. So there isn’t a whole lot of definitive case law in terms of fact-specific scenarios. Obviously overarching big determination, there is case law on what would be permissible or not. But once we get into the nitty gritty of, well, what about this nuance or what about that? I think it’s gonna take a while for the framework to start to develop and for case law, because that doesn’t happen immediately. You know, HUD makes an announcement, they have a rule, it may be a month or a couple months and then we know what the framework is, but with the court system it could be years before we know what the frame work is.

Terry Gerton I’m speaking with Gwen Roy-Harrison. She’s a principal at Offit Kurman. That does sound like a risky proposition then for landlords and community managers. What sort of a risk-based approach should they be taking now that this playbook isn’t the referee, as you name it?

Gwen Roy-Harrison So in terms of housing providers response, ideally, they already have standard operating procedures that they’ve developed over the years from 2007 through 2024, when different guidance documents have come out. And by that, I mean criminal screening, tenant application procedures, and they should stick with what they have in place. Just because there’s been a change or directional shift with this administration. Doesn’t indicate that the law has changed and administrations change. So in a few years, there could be a 180 degree shift back to where things were before. Two other things I think are important to point out is that we’ve had changes in the administration, the presidential administration, over the past couple cycles that have gone from blue to red, blue to red, back and forth. And so you see some of that with the changes to HUD. So it wouldn’t surprise me if things take a different turn in the next couple of years. The other point I wanted to make is that in the housing space, a lot of this is the result of the COVID-19 pandemic. When 2020 hit and there was eviction moratoria, there was freeze on development, there was reductions in cash flow and investment. We’re still seeing the ripple effect repercussions of those now. And I think some of this HUD guidance is in direct response to that in terms of trying to make housing more affordable and easier access, and deregulating housing providers in terms of the restrictions that were previously placed.

Terry Gerton That affordability question is coming up a lot these days. In fact, we’re seeing some legislative movement on efforts to make housing more affordable. But HUD is highlighting that mortgage burdens are lower, rents are declining, that there’s more homebuyer support. How did those priorities interact with the agency’s apparent pullback on some of the civil rights guidance and administrative oversight?

Gwen Roy-Harrison Seems like HUD is presenting a consistent narrative across its program and across its enforcement messaging, that it can reach affordability through deregulation and through closing administrative burdens. So part of the pullback on the civil rights aspect is reducing the burdens. Also, HUD had pretty significant staffing cuts to the Fair Housing Office that enforces and investigates fair housing claims. And it seems as if they’re prioritizing affordability and investing their time, money, and energy in other aspects of HUD’s programs rather than in the civil rights aspect.

Terry Gerton You mentioned that you’ve seen the administrative approach kind of switch back and forth across the parties as the presidential administrations change. Are there significant differences now in how HUD under the Trump administration is approaching its administrative responsibilities compared to where it was under president Biden?

Gwen Roy-Harrison One, I think, enlightening point here is that HUD Secretary Scott Turner made an announcement last year that said that DEI is dead at HUD and any program that doesn’t comply with executive orders will not receive funding. And we’ve seen a whole swath of executive orders and a whole lot of announcements from HUD — even in the month of February, which is the shortest month, there [were] eight announcements from HUD. So that’s two a week. And that signaling to me is clear in terms of what their priorities are gonna be over the next couple of years and where they’re gonna focus their funding, which is a way from providing interpretive guidance and a move towards deregulation and allowing the courts to make the ultimate decision in these cases for housing providers.

Terry Gerton As you think about the trends of 2025 and look ahead to 2026, what should housing providers and developers and even local governments be prepared for? Do you expect more withdrawal of regulations or are they going to settle into sort of a new normal stasis?

Gwen Roy-Harrison With HUD, I think change is the name of the game. I think housing providers should be prepared for continued change. HUD has explicitly said that its withdrawal list is not necessarily final, that the agency may revise or reissue guidance if it decides that it’s necessary or reduce burdens. There’s a big emphasis on identifying fraud, waste and abuse, especially when it comes to federal funds spent on affordable housing. So I would expect more announcements in that regard. HUD has recently announced indications or moves towards citizenship verification for residents living in affordable housing, work requirements for residents living in public housing accommodations, proof of citizenship there as well, and then removal of funding for housing authorities that don’t comply with HUD’s criteria for entrance or eligibility into those programs. So all in all, I would say HUD’s withdrawal of these fair housing guidance changes the map, but it doesn’t change the terrain that we’re on. So the Fair Housing Act still governs. HUD has historically, over the past 10 to 20 years, been kind of the trail guide for housing providers to follow. And without that guide, housing providers are now left to navigate the terrain on their own. We know what safe guardrails are, continuing to follow the same guidance. But for housing providers who seek to step outside of that, I think they’re gonna face risk in the court system and yet to be seen. More change to come, I suspect.