The Fair Housing Act: A Barrier to Affordable Housing
Like many government programs, the outcome is often exactly the opposite of the intended result.
Liberal advocates are expressing outrage after the Trump administration’s Department of Housing and Urban Development (HUD) rolled back the enforcement of the 1968 Fair Housing Act (FHA).
Whistleblowers within HUD have accused Trump’s appointees of “dismantling the capacity to protect people’s rights,” according to a recent article from the Guardian.
Ironically, the very progressives who vociferously champion “housing justice” often overlook how their own policies complicate the ability of American families to secure affordable housing.
Initially, the FHA was a crucial response to rampant housing discrimination. However, over the years, it has evolved into a complex and often punitive bureaucratic process that incentivizes litigation and imposes substantial compliance costs on stakeholders across the housing market.
Legal precedents now allow for litigation based on “disparate impact,” meaning defendants do not even need to demonstrate discriminatory intent to be drawn into expensive legal battles, which ultimately stifles market entry and drives up housing costs for everyone.
During the Obama and Biden administrations, enforcement of the FHA hit unprecedented levels, significantly shaping social engineering through housing policies.
The 2015 Affirmatively Furthering Fair Housing rule — which President Biden resurrected in 2023 — mandated jurisdictions receiving federal housing funds to take extensive measures to dismantle segregation and promote inclusivity.
Unfortunately, this well-intentioned rule ultimately discouraged the construction of affordable housing in low-income areas, as developers shied away from projects that could inadvertently be labeled as reinforcing segregation.
As former HUD Secretary Ben Carson highlighted in 2020, low-income neighborhoods were effectively “red-lined” out of housing development plans. Federal resources were instead redirected to wealthier areas, exacerbating the very disparities the FHA sought to eliminate.
Moreover, housing affordability issues extend beyond civil rights enforcement; they are also compounded by liberal immigration policies. Progressives often assert that deporting undocumented workers could devastate the construction industry, yet they frequently ignore the fact that these individuals also contribute to housing demand.
Research has shown that for every 1% increase in immigration, home prices can rise by approximately 3.3%.
In New York City, where an estimated 560,000 undocumented immigrants lived in 2018 — approximately 8% of the population — housing shortages have persisted, compounded by ever-increasing demand.
Removing half a million undocumented residents could lead to a more balanced supply and demand dynamic in the New York housing market, ultimately lowering rents.
Additionally, the significant barriers imposed by “blue tape” regulations primarily contribute to the challenge of housing affordability. Many liberal critics decry private investment firms purchasing single-family homes, arguing that this trend leads to neighborhood takeovers.
However, it’s essential to recognize that these investors are responding to artificial constraints on housing supply that render their acquisitions attractive.
One single-family rental company disclosed in 2021 that it intentionally targets markets with low new supply and strong growth forecasts. This strategy indicates that when housing development is stifled nationally, demand will inevitably outpace supply, pushing prices upward.
Consider the housing landscapes of California and Texas — two vastly different states, yet both serve as case studies for the effects of their distinct political environments on housing markets.
California, under decades of Democratic governance, has seen its housing market deteriorate due to stringent zoning laws and arduous environmental regulations, which have effectively stymied new development.
The state witnessed an alarming 60% increase in the income necessary to afford a typical home during the pandemic, even as hundreds of thousands of residents fled.
In stark contrast, Texas’s permissive zoning laws and streamlined permitting processes have facilitated substantial new housing construction.
Consequently, while Texas saw its population grow by around 1.5 million during the pandemic, its housing prices increased more modestly — less than 26% — the lowest rate in the nation.
The recent emergence of the “Abundance” movement within the Democratic Party, advocating for increased housing construction in blue states, offers a potential solution to this crisis.
However, many proponents remain tethered to their progressive ideologies, insisting on costly environmental regulations that could undermine their goals.
It may necessitate a paradigm shift for many liberals to understand that sentimental policy approaches and preference for expansive government interventions often exacerbate the very problems they aim to solve, including the pressing issue of housing affordability.
But perhaps if they came to this realization, they wouldn’t identify as liberals anymore.
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