Feds: Oakland County’s ‘discriminatory’ housing policies fuel segregation

The U.S. Housing and Urban Development Department is threatening to withhold federal funds from Oakland County unless it ends housing policies it claims are “discriminatory.”

Oakland County’s “discriminatory” housing policies may have exacerbated housing segregation in Metro Detroit that is the worst in the nation, according to a stunning finding by the U.S. Department of Housing and Urban Development.

The federal agency’s Office of Fair Housing and Equal Opportunity wrote a letter to county officials in April, accusing them of steering $171 million in housing aid since 1989 to homeowners at the expense of renters.

HUD claims the county rarely spends money helping rentals and in fact bars communities from spending certain grant money on multi-family homes. Doing so had a “discriminatory effect on non-white households,” who are more likely to be renters, according to the letter.

“The County may be contributing to the perpetuation of segregation within the Detroit region,” according to a 20-page letter addressed to County Executive L. Brooks Patterson.

If Oakland County doesn’t address the issue, HUD says it will find the county out of compliance with federal rules, jeopardizing more than $7 million in annual funding.

Officials for Oakland County, a prosperous suburb of 1.2 million residents just north of Detroit, vigorously deny the accusations.

"We're not racists here," said Keith Lerminiaux, the county’s corporation counsel. “When HUD says we're contributing to segregation in the region, that's flat-out ridiculous."

Related:

Homeowners' top priority

In Oakland County, housing officials have focused millions in federal funds on home owners -- helping them buy homes and keep them with minor repairs. But HUD alleges that policy discriminates against minorities in the county who are more likely to be renters. Here's how communities across the state spend HUD HOME Investment Partnership money from 2011 to 2016.

  Percent spent on:
Community Total HOME spending Homeowners Renters
Detroit $22,218,982 0% 100%
Michigan $66,600,960 18.6 81.4
Washtenaw County $4,171,658 39.9 60.1
Kent County $2,187,442 43.1 56.9
Kalamazoo $1,749,967 48.2 51.8
Grand Rapids $4,568,561 49.9 50.1
Wayne County $7,360,114 54.8 45.2
Flint $1,745,859 61.5 38.5
Genesee County $3,227,169 72.8 27.2
Muskegon $1,403,659 75 25
Macomb County $4,982,576 79.7 20.3
Battle Creek $1,208,928 85.8 14.2
Saginaw $1,793,645 90.9 9.1
Bay City $751,573 100 0
Jackson $1,007,238 100 0
Lansing $3,852,281 99.7 0
Oakland County $11,584,039 100 0
Port Huron $1,109,602 100 0
Warren $1,457,637 100 0
Westland $1,508,572 100 0
Grand Total $144,490,460 37.7 62.3

Source: Bridge analysis of HUD data

The letter is just now coming to light after Bridge Magazine learned of it from community housing leaders. Bridge met Tuesday with Oakland County officials, who say they are fighting HUD’s finding with the help of lawyers, a demographer and U.S. Reps. David Trott, R-Birmingham, and Bill Huizenga, R-Zeeland, who serves on a committee that oversees HUD.

Oakland County officials hope to meet with HUD Secretary Ben Carson, a Detroit native.

“We plan to continuously, vigorously defend our program,” Lerminiaux said.

HUD gave the county a July 1 deadline to respond.

‘HUD is wrong’

At issue is funding for two HUD programs: Community Development Block Grants and the HOME Investment Partnerships program.

Communities can spend CDBG money on a variety of projects, from youth camps and elderly transportation to legal assistance, public works and housing. HOME projects are more targeted at housing, from helping homeowners to home buyers to developers of rental properties.

HUD gives the money to Oakland County and other large counties, which then pass along the money to communities that spend it according to county rules.

In most cases, communities have wide latitude over how the money is spent. In Oakland County, HUD claims the county bars investments in rental assistance.

County officials say there is no such prohibition but acknowledge prioritizing homeowners with minor repairs over fixing rentals. Doing so benefits more residents, rather than a handful of housing complexes, county officials say.

HUD has approved spending plans every year and never questioned funding priorities, said Karry Reith, manager of the county’s community and home improvement division.

In 2015, the Fair Housing Center of Metropolitan Detroit filed a complaint with HUD over the county’s housing policies and made many of the same allegations –  that its focus on homeowners hurt renters who were more likely to be minorities. That complaint was ultimately dismissed, but it appeared to have sparked the current review.

HUD started that review last year, coming to Michigan to talk with county officials and review documentation.

At no point until March did federal officials indicate there was a problem, Oakland County officials said.

“HUD is wrong almost across the board,” said Lerminiaux. “HUD is wrong on the facts, and they’re wrong on the law.”

Black renters, white beneficiaries

The letter comes atop a long history of redlining and housing covenants in Metro Detroit, whose segregation HUD claims in the letter is “more extreme” than any other region.

More than three-fourths of black residents in Oakland County are renters, compared to 40 percent of whites, HUD said.

“The County's choice to use its CDBG- and HOME-funds for housing assistance to homeowners renders these households ineligible for assistance, therefore denying minority households the opportunity to benefit from federally-funded programs," HUD wrote.

In Oakland County, white households were the beneficiaries of 86 percent of CBDG funds from 2011 to 2016, even though they comprised 71 percent of the county’s low-to-moderate income population.

Blacks received 11 percent of the funds over that time, while comprising 20 percent of the county’s low-to-moderate population, according to the letter.

County officials interpret the numbers differently, saying African-Americans received 24 percent of CDBG funds in the county in 2016 even though they comprise just 16 percent of total households.

‘Nothing is going to happen’

A Bridge review of 2016 HUD spending in Michigan showed that of $34 million in CDBG funding, just $2 million was spent on multi-family housing, though none of it in Oakland County.

But of more than $144 million in federal HOME program money spent in Michigan since 2011, $90 million was spent statewide on rental housing, or 63 percent.

None of that was from Oakland County.

“The depth and systemic nature of their violations is really shocking,” said Thomas Silverstein, a Washington, D.C.-base attorney who works on the fair housing project of the Lawyer's Committee for Civil Rights Under Law.

He authored the Fair Housing Center’s complaint in 2015. “There’s ample evidence that the county has recognized there are needs that exist but the money has not followed.”

Lerminiaux said the county should not be penalized for spending its money on homeowners, a valid housing need in the county.

"The fact that other people are doing (different) things with HOME money doesn't mean what we're doing is wrong or illegal," he said.

Bill Mullan, the county spokesman, said the county feels it is on strong ground –  especially with the new HUD secretary. Carson has made home ownership a focus.

“What we’re doing here is what the top person at HUD intends to do with his administration,” Mullan said.

Margaret Brown, the executive director of the Fair Housing Center of Metropolitan Detroit, was not shocked by HUD’s letter and its findings.

She said the issues raised about rental housing affect affordable housing –  and access to work, good schools.

Brown’s not expecting, however, HUD to do much: Under President Trump,  HUD has postponed an Obama-era rule to force communities to address housing segregation.

“In essence, nothing’s going to happen,” Brown said.

If that’s the case, Oakland County said the reason should be that it’s policies weren’t wrong in the first place and they did not adversely affect African-Americans.

"If HUD thought it was such a problem, why did they keep approving our plan? If they thought it was segregationist?" Lerminiaux said.

The county supplied Bridge with an Oct. 19, 2017, letter from HUD about its most recent spending plan that concluded “again, we congratulate you and your staff … We look forward to working with you during the year to accomplish the goals Oakland County has set forth.”

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Comments

Matt
Tue, 06/12/2018 - 7:55pm

"HUD claims the county rarely spends money helping rentals and in fact bars communities from spending certain grant money on multi-family homes. Doing so had a “discriminatory effect on non-white households,” who are more likely to be renters,"

Hmmm wouldn't it be racist to propose that one race is more likely to rent than another?

Charles Buck
Tue, 06/12/2018 - 10:33pm

Observing racial disparity in housing is not racism. Racism is a normative activity where those in a position to distribute goods or services distribute them disparately based on the color of recipient's skin. Making observations about how goods and services are distributed disparately by others based on the color of people's skin is an empirical and objective activity. In this case, it is not HUD who "proposes" one race is more likely to rent because obviously the Census Bureau surveys Oakland County residents every year, as they do every county across the nation, and residents themselves assert who is more likely to rent. To wit, in 2016 in Oakland County:
Race, # owner occupied housing, # renter occupied housing
White, not Hispanic, 292,053, 81,140
Black, 27,395, 43,931
American Indian, 635, 855
Asian, 17,577, 13,481
Some other race alone, 1,814, 1,559
Two or more races, 4,985, 5,323
White, 297,765, 85,397

Cat
Wed, 06/13/2018 - 3:13am

Matt, no, not really, not if its based on numerical/empirical facts, as the article presented.

Matt
Wed, 06/13/2018 - 11:14am

So if a given category of people is concentrated in a given occupation or a given geographic area that is or isn't racism or other ism? Trying to eliminate the feeling that, "it's racism when I want it to be and not when I don't", aspect of this. I notice very few minorities working at Ski resorts, racism?

Bill Mullan, Oa...
Wed, 06/13/2018 - 8:55am

Oakland County is angered by the ridiculous assertion in a findings letter from the U.S. Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity (FHEO) that the county needs to do more to support low-income minority renters to the detriment of low- to moderate-income homeowners who receive loans for much-needed home repairs through the county’s home improvement program. After all, HUD has approved the county’s plan for disseminating federal housing grants every year for 45 years. In addition, there is $70 million of affordable rental housing options in Oakland County. The county’s policy to utilize $7 million in federal housing money every year to support low- and moderate-income and minority home ownership rather than rental assistance conforms to federal law and aligns with the goals of HUD Secretary Dr. Ben Carson.

We are shocked and perplexed. HUD is telling the county to take money away from minority families, individuals with disabilities, and single mothers who want to own or improve a home and give it to renters despite the abundance of affordable rental housing options already available in Oakland County. This is unrestrained government bureaucracy run amuck evidenced by the fact that one division of HUD tells Oakland County ‘excellent job’ while another HUD division, which is wielded as a political hammer, says otherwise.

Oakland County Community & Home Improvement Division (CHI) administers about $5 million in federal Community Development Block Grants, which cannot be diverted to renters, and $2 million in the HOME Investment Partnerships Program (HIPP), which can be utilized for renters, across 57 communities every year. The county, with bipartisan approval from the Oakland County Board of Commissioners, has directed the administration of its funds toward low-income families who wish to own or improve a home.

CHI has submitted its annual plan for administering federal low-income housing grants to HUD’s Community Planning and Development Division (CPDD) which has granted approval every year for 45 years. At the end of each year, CHI has also submitted an annual Consolidated Annual Performance and Evaluation Report to CPDD to demonstrate the county’s compliance with the HUD-approved plan. CPDD has confirmed every year that Oakland County conformed to the HUD-approved plan. The CPDD approval letter for Oakland County’s fiscal year 2018 acknowledged CHI’s excellence in administering federal housing funds to help low-income families:

“We would like to take this opportunity to commend Oakland County on your successful completion of this year’s Annual Plan. We believe that the goals and objectives developed through this process provide the foundation for the formulation of new partnerships at all levels of government and with the private sector including for-profit and non-profit organizations. These partnerships are invaluable as you and your partners address the problems of affordable housing, homelessness, and economic opportunities for all citizens, particularly for very low-income, low-income and moderate-income persons,” the letter dated Oct. 19, 2017 said.

HUD’s confidence in Oakland County was also evident when the department asked CHI to rescue Pontiac’s block grant program which languished while the city was under a state-appointed emergency manager. The county took over the administration of Pontiac’s block grant funds and did so effectively.

It is noteworthy that Oakland County’s focus on home ownership for low- and moderate-income families and minorities aligns with the goals of HUD Secretary Ben Carson. In June of 2017, he emphasized how homeownership is part of the fabric of the country and economy at a forum titled “A New Era of Homeownership.” He said, “The importance of homeownership is apparent to all of us: security, certainty, safety, wealth creation, a path forward, self-sufficiency, a place to live with loved ones, to raise our families, the location of our neighborhood.”

Meanwhile, FHEO based its findings on faulty assumptions and skewed statistics. Oakland County’s programs do not have a disparate impact on African-Americans as FHEO claimed. An analysis of the appropriate demographics and statistics by independent demographers retained by Oakland County shows that African-American households received assistance at levels that exceeded their share of the relevant low- and moderate-income population. For example, 15.7% of low- and moderate-income households in block grant communities were African-American in 2016 while 24% of the households that received block grant funds were African-American. In 2014, 16.3% of low- and moderate-income households in block grant communities were African-American while 19.03% of the households that received block grant funds were African-American.

There are similar results for the HIPP funds Oakland County administers. In 2016, 20.1% of the low- and moderate-income households in HIPP communities were African-American, while 21.48% of households that received HIPP funds were African-American. In 2014, 20.5% of the low- and moderate-income households in the HIPP communities were African-American while 19.7% of households that received HIPP funds were African-American.

Here are further details:
CHI utilizes block grants and HIPP along with leveraged funds to assist eligible households to access and maintain home ownership. Here are some examples of how CHI has assisted households with home ownership and home improvement opportunities. Since 2013, $13 million was invested in HIPP. Of that, $4 million or 30% was invested in the following five communities with a majority minority population. The rest of the funds were shared among 52 other communities:
• Lathrup Village: Of the 11 HIPP projects totaling $202,000 since 2013, seven or 64% were minority households.

• Oak Park: Of the 50 HIPP projects totaling $827,700 since 2013, 23 or 46% were minority households.

• Pontiac: Of the 116 HIPP projects totaling $2.2 million since 2013, 74 or 64% were minority households.

• Royal Oak Township: Of the four HIPP projects totaling $109,600 since 2013, four or 100% were minority households.

• Southfield: The city administers its own HIPP. Under Home Consortium funds, however, of 44 HIPP projects totaling $770,800 since 2013, 25 or 57% were for minority households.

FHEO also insists that Oakland County must do more to ensure its cities, villages, and townships create more multi-family residential zoning. This is absurd because Michigan law does not grant the county the authority to determine zoning.

Oakland County’s administration of federal housing funds complies with federal law and policy. HUD recognizes that local communities have the flexibility to use block grant funds to meet the specific needs of the area. Plus, HUD’s regulations afford local communities discretion to allocate block grant funds to address needs specific to the area. The regulations governing the receipt and distribution of block grant funds expressly permit funds to be dedicated to the rehabilitation and improvement of residential homes.

For more than 40 years, CHI has enhanced the quality of life for Oakland County’s 1.25 million residents by promoting equal opportunity and access to housing, community development and public service programming. In fact, the county, as it does every year, participated in April is Fair Housing Month activities for 2018, including issuing a proclamation stating and supporting the principles behind fair and equal access to housing. CHI administers numerous block grant projects in 57 Oakland County communities with lasting benefits. To learn more about CHI and its programs, go to www.oakgov.com/advantageoakland/communities.

Bill Mullan, Oa...
Wed, 06/13/2018 - 12:02pm

Quick correction: I should have written 43 years instead of 45 years for the approvals from HUD. Apologies for the error.

Barry Visel
Wed, 06/13/2018 - 8:58am

Why isn’t Detroit considered to be discriminating against home owners? Are they purposely discouraging home ownership? What about the other communities with similar numbers to Oakland County?

Ken
Sat, 06/23/2018 - 4:28am

Along that line, are they are going after Port Huron, Jackson, Warren, and Westland since they had the same HUD spending pattern as Oakland County?!?

Arjay
Wed, 06/13/2018 - 9:03am

So why is any federal tax money being spent on housing? Under what authority? Just another scheme to tax the wealthy. The wealthy are being discriminated against.

Susan Bender
Fri, 06/15/2018 - 10:12am

If that were true, then why are the top earners holding increasingly larger amounts of the wealth?

***
Wed, 06/13/2018 - 11:51am

Racial bias against minorities in upper class white areas outside Detroit? Now this is a shocking revelation - not.