The Federal Department of Housing and Urban Development has published a new regulation mandating that the agency research and publish advanced data on the racial and ethnic makeup of neighborhoods throughout the United States. From the rule's text:

...[The rule] directs HUD's program participants to take steps proactively to overcome historic patterns of segregation, promote fair housing choice, and foster inclusive communities for all. As acknowledged by the U.S. Government Accountability Office (GAO) and many stakeholders, advocates, and program participants, the current practice of affirmatively furthering fair housing carried out by HUD grantees, which involves an analysis of impediments to fair housing choice and a certification that the grantee will affirmatively further fair housing, has not been as effective as had been envisioned. This rule accordingly proposes to refine existing requirements with a fair housing assessment and planning process that will better aid HUD program participants fulfill this statutory obligation and address specific comments the GAO raised. To facilitate this new approach, HUD will provide states, local governments, insular areas, and public housing agencies (PHAs), as well as the communities they serve, with data on patterns of integration and segregation; racially and ethnically concentrated areas of poverty; access to education, employment, low-poverty, transportation, and environmental health, among other critical assets...

As with most regulations, this language is vague, dense, and impossibly obtuse. The only thing that's clear is the federal government's interest in actively influencing the ethnic makeup of local communities. Sure, this is labeled as data collection, but its stated purpose is "to refine existing [housing] requirements." The rule says it "does not mandate specific outcomes," but we all know what tends to happen when federal agencies publish "guidelines" for state and local governments -- de jure guidelines become de facto mandates. With federal funds as the carrot and threats to withold said funds as the stick, federal agencies skirt 10th amendment limits on their authority by making requirements that are technically optional but politically impossible to reject. No Child Left Behind's education requirements for state governments are the epitome of federal overreach disguised as optional guidlines.

Helping minorities move into better neighborhoods may be laudable, but it's not clear that HUD is a sound mechanism for advancing this goal.

Federal forays into this issue can wreak havoc on the housing market -- they played a significant role in precipitating the 2008 financial meltdown. In the late 1990s, the Clinton administration pressured Fannie Mae into easing credit requirements for mortgage lending so that low-income, mostly minority buyers could more easily purchase homes. Of the myriad factors contributing to the sub-prime mortgage crisis that tanked our economy in 2008, reckless lending pushed by the federal government proved to be one of the most debilitating.

The fog of social engineering lurks subtly behind these new regulations. "Data collection" could turn into a weapon the federal government uses to try to alter community demographics. We can improve living conditions for low-income minorities by providing them with a decent education and creating economic conditions in which they can find jobs -- these HUD regulations accomplish neither.


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