Enforcement of the Provisions of the Fair Housing Act

A. Introduction

At the request of the NCD, HUD supplied data concerning Title VIII (Fair Housing Act) complaints received by the agency and by state and local FHAPs. From this information, this report draws a number of general conclusions about HUD and FHAP processing of complaints, but also takes a closer look at how complaints of disability discrimination are handled as compared to other claims.

The efficacy of HUD's enforcement of the FHA can be measured in a number of ways. This section analyzes quantitative data concerning FHA complaints filed between FY 1989 and FY 2000 (the last year for which complete data are available). Five distinct subsections look at the data in different ways:

• The Complaint Intake subsection considers the raw number of complaints filed with HUD and with state and local fair housing enforcement agencies during the 12-year period.
• The subsection on Case Outcomes documents the way in which fair housing complaints are processed and provides details about how cases are closed. Specific attention is given to the number of cases closed by conciliation and by findings of "cause" and "no cause" to believe discrimination has occurred.
• The Case Processing Times subsection compares the actual experience of fair housing complainants with specific time benchmarks crafted by Congress when it passed the FHAA.
• A fourth subsection, dealing with monetary compensation, analyzes the monetary damages made available through conciliation of FHA complaints.
• A final subsection reviews the use of Secretary-initiated complaints and hearings before HUD administrative law judges in an effort to measure whether HUD has used the tools made available to it in the FHAA.

The use of these quantitative benchmarks, and the annual snapshots conveyed by the data, make possible an assessment of HUD's enforcement of the FHA over the past 12 years. Findings and recommendations derived from this data are provided throughout the body of this report and summarized in Section II.

This report evaluates the trends in enforcement activity overall and compares the handling of disability complaints to others based on race, color, religion, national origin, sex, and familial status. The report also analyzes regional differences among HUD enforcement offices and among FHAP agencies.

B. Complaint Intake

1. The Growth (or Stagnation) of Disability Complaints

The number of housing discrimination complaints filed with HUD and FHAP agencies has grown fairly steadily since passage of the FHAA (See Chart IV-1).

[D]

Given the clear evidence that housing discrimination is widespread,⁸⁰ it is surprising that complaints of housing discrimination have barely exceeded 11,000 nationally in any year since 1988.

Finding IV.B.1: The number of discrimination allegations filed with HUD and state and local fair housing enforcement agencies is very low, given statistical and anecdotal evidence that housing discrimination is widespread.

Historically, FHAP agencies have handled roughly 40 percent of the fair housing cases filed (see Chart IV-2).

[D]

2. HUD Has Complicated Its Reporting by Creating a New Category

HUD's case intake procedure (and the raw numbers in Charts IV-1 and IV-2) must be further explained. Prior to FY 1996, HUD accepted complaints of housing discrimination and investigated all of them. Beginning in FY 1996, HUD adopted a new approach, under which allegations of discrimination filed with the agency typically were considered "claims," which were assessed to determine whether they were likely to constitute valid complaints. Between FY 1996 and FY 2000, the vast majority (roughly 75 percent) of these claims were closed without full investigation.⁸¹ HUD, however, continued to report these claims to Congress and to the public as part of its workload.

Finding IV.B.2.a: Three-quarters of all claims (4,210 of 5,924 in FY 2000) are dismissed without being converted to complaints and therefore are not subjected to full investigation.

The difference between a claim and a complaint is outlined in Table IV-1.

Table IV-1: Characteristics of "Claims" and "Complaints"

On first examination, HUD's caseload appears to have stayed relatively level since FY 1991, but it is the growth of "claims" filed with HUD that has accounted for continued growth in HUD receipts. By this method, HUD was able to report an increasing caseload even as the absolute number of cases it was actually investigating dropped dramatically.

Complaints filed with the agency have declined from a high of 6,214 in FY 1993 (prior to HUD's adoption of the claim/complaint dichotomy) to 784 in FY 1996 (the first full fiscal year during which "claims" were accepted) to 274 in FY 2000 (see Chart IV-3).

[D]

Finding IV.B.2.b: From FY 1996 through FY 2000, HUD reported both complaints and claims (whether dismissed or maturing into complaints) to Congress and the public. It is only through creative arithmetic that HUD has made it appear that fair housing receipts have not declined.

Recommendation IV.B.2.a: In reporting to Congress and the public, HUD should be required to distinguish between fair housing complaints and other receipts, such as claims or inquiries, so that a fair assessment of the agency's success can be made.

The dichotomy between claims and complaints can be confusing. It is more instructive to review the number of cases subjected to full-fledged investigation. After reaching a high of 6,578 in FY 1992, total HUD complaints investigated in FY 2000 fell to 1,988, or 30 percent of the FY 1992 level (see Chart IV-4).

After reviewing a draft of this report, HUD suggested that such a head-to-head comparison of complaints was not fair, because the agency had changed the criteria for what constituted a complaint. In essence, HUD said that cases that never got past the claims stage between FY 1996 and FY 2000 were cases it would previously have counted as complaints but that were closed administratively. There are two flaws in that logic, however. First, since FY 1994, administrative closures have not exceeded 29 percent (see Appendix IV-3), and have never approached the 75 percent rate at which claims have been closed (See Appendix IV-1). Second, the percentage of administrative closures of matured complaints remained between 15 percent and 21 percent throughout the five fiscal years HUD employed the claims process, demonstrating that the creation of the claims category did not significantly affect the administrative closure rate.

[D]

Finding IV.B.2.c: After HUD adopted a new intake process in FY 1996, emphasizing the assessment of claims to determine whether they warranted full investigation, the number of HUD complaints filed dropped even further. By FY 2000, complaints (N = 1,988) were at 30 percent of their FY 1992 level.

Finding IV.B.2.d: On February 1, 2001, HUD abandoned its claims assessment process in favor of a system that gives investigators 20 days to process an inquiry to determine whether it will be filed as a complaint. HUD did not supply data by which the effectiveness of this new approach can be gauged.

Recommendation IV.B.2.b: Congress should closely monitor HUD's new intake protocol to ensure that it does not inappropriately discourage the filing of fair housing complaints and does not inappropriately prevent the conversion of inquiries into complaints.

3. HUD Regional Offices Vary Widely in Complaint Intake

Beneath the raw numbers provided by HUD are significant variations in regional offices, or HUBs (see Table IV-2).

Table IV-2: HUD Complaints Filed, by HUB

The Chicago HUB has consistently filed large numbers of complaints, perhaps in part because it covers three very populous statues without FHAP agencies whose combined population is twice the size served by the next largest HUB. Since the certification of the New York FHAP in 2000, complaints filed by the New York HUB have been cut in half. All the states in the Philadelphia region have FHAPs, so the number of complaints processed by HUD has been very low since FY 1995, comprising primarily cases involving a public housing authority or complicated issues. In addition, Secretary-initiated complaints (see Section IV.F.1, below) are included as part of the Philadelphia HUB's caseload.

4. Growth in State and Local Agency Intake

FHAP agencies experienced steady growth in complaints from FY 1989 through FY 1995, notwithstanding the fact that many fewer agencies were deemed substantially equivalent between September 1992 and September 1995. Complaints to FHAP agencies dropped 23 percent from FY 1995 to FY 1999, in part because of the fact that the HUD claims process was eliminating cases that previously would have been referred to FHAPs as complaints (see Chart IV-5).

[D]

The certification of the New York State Division of Human Rights as a "substantially equivalent" agency in FY 2000 and its assumption of complaints previously handled by HUD may account, in part, for the 25 percent increase in FHAP complaints from the previous year.

5. Disability Is the Fastest Growing and Largest Category Among Housing Discrimination Complaints

HUD assumed responsibility for enforcing the disability provisions of the FHAA in March 1989, roughly halfway through FY 1989. That year, 489 complaints filed by the agency cited "handicap" as a basis of discrimination. That number grew each year through FY 1992. For the first time, in FY 1999 and FY 2000, disability complaints topped all others, followed by race and familial status. During those two fiscal years, allegations of disability discrimination appear in 42 percent of complaints filed with HUD (see Table IV-3).

Table IV-3: Complaints Filed with HUD, by Protected Class

The growth of disability complaints cannot be attributed to a single cause, but is undoubtedly influenced by the growing recognition that people with disabilities are entitled to equal housing opportunity under the FHA. HUD has contributed to this effort through its support of private fair housing enforcement agencies under the FHIP program, awarding FHIP grants both to full-service enforcement agencies handling disability complaints and to other advocacy groups focused exclusively on education about, outreach to, and enforcement of the rights of people with disabilities. (See Section VI.) Over the past decade, the country has also experienced a measure of "cultural maturation" concerning disability rights. Increasing acknowledgment of the legitimacy of these rights, especially the right to reasonable accommodation under the FHA, may also have fueled the dramatic increase in disability complaints.

Finding IV.B.5.a: Disability complaints now compose the largest percentage of HUD complaints. Complaints of disability discrimination have composed a growing percentage of HUD and FHAP receipts. In FY 1999 and FY 2000, nearly 42 percent of all HUD complaints included allegations of disability discrimination, more than any other protected class.

Finding IV.B.5.b: The growth of disability complaints cannot be attributed to a single cause but is undoubtedly influenced by the growing recognition that people with disabilities are entitled to equal housing opportunity under the FHA.

Finding IV.B.5.c: HUD has contributed to the growth in disability complaints through its support of private fair housing enforcement agencies under FHIP. HUD has awarded FHIP grants to full-service enforcement agencies handling disability complaints and to other advocacy groups focused exclusively on education about, outreach to, and enforcement of the rights of people with disabilities.

Recommendation IV.B.5: HUD should continue to explore ways that it can use FHIP and contract funds to support collaborative work between full-service fair housing agencies and organizations representing people with disabilities.

6. There Are Wide Regional Variations in HUD Disability Complaints

There are significant differences between the HUBs with respect to the percentage of Title VIII complaints alleging disability discrimination (see Table IV-4). The best consistent performers have been the Boston, New York, and Denver HUBs, which have consistently higher percentages of disability complaints than the national average. The Seattle and San Francisco HUBs rebounded strongly in the past three fiscal years and are now among the leaders in percentage of disability complaints.

Table IV-4: Percentage of HUD Title VIII Complaints That Allege Disability, by HUB and Fiscal Year

(Bold numbers indicate below national average)

While nearly every HUB has fallen below the national average in this category during at least one fiscal year, five of the HUBs are consistently below the national norm, giving rise to a concern that disability issues may not be getting appropriate attention. Despite leading the nation in overall complaints filed, the Chicago HUB has been at or below average for the past 11 fiscal years in terms of disability complaints. Atlanta and Ft. Worth have been below the national average nearly every year. Kansas City had above average disability caseloads in the early 1990s, but has been consistently (and significantly) below average for each of the past six fiscal years. Philadelphia's performance must be explained, in part, by the fact that FHAP agencies serve all the jurisdictions in its region.

HUD has suggested that this variation among its regional offices may reflect the geographic distribution of people with disabilities across the country.⁸³ Data from the 1990 Census (summarized in Appendix IV-2), however, suggest that this may be a factor for only two HUBs. According to the Census, 10.4 percent of Americans report having a serious disability.⁸⁴ The Chicago HUB handles complaints from Illinois (9.3 percent of population reports a disability), Minnesota (8.6 percent), and Wisconsin (8.6 percent), all of which report lower than average incidences of disability. The Kansas City HUB serves a region where 8.7 percent of the population reports having a disability. However, the other two poor performers--Atlanta and Ft. Worth--serve populations that report rates of disability significantly above the national average.

Finding IV.B.6.a: Throughout the 1990s, HUD devolved substantial authority to its HUBs and allowed them great autonomy to structure intake, complaint processing, investigation, and cause determinations.

Finding IV.B.6.b: In the mid- and late 1990s, Headquarters FHEO ceased its close oversight of HUB operations, opting instead for "remote monitoring." The result has been significant differences in practice among HUBs, including markedly different treatment of disability complaints.

Finding IV.B.6.c: There is great variability in numbers of complaints (overall and on the basis of disability) filed by HUD's 10 HUBs and by FHAPs that is not adequately explained by differences in populations served by each HUB.

Finding IV.B.6.d: The management style currently employed by Headquarters FHEO tends to reinforce significant regional variations in enforcement practice, resulting in different treatment of disability (and other) complaints depending on the state in which a complainant lives and whether the complaint is handled by HUD or by an FHAP.

Recommendation IV.B.6.a: HUD should assess the intake process at each HUB and at each FHAP to determine whether the historically low number of complaints (overall or on the basis of disability) reflects impediments for victims of discrimination in using the Title VIII administrative complaint system.

Recommendation IV.B.6.b: HUD should identify best practices among HUBs and FHAPs concerning community outreach, intake, case processing, investigation, and cause determination and require HUBs and FHAPs that do not already do so to use them.

Recommendation IV.B.6.c: Headquarters FHEO should take active steps to deal with these regional differences so that the quality of justice does not depend on place of residence, or should assume greater central authority over the Title VIII complaint process.

7. Disability Caseloads at State and Local Agencies

Disability claims have represented a somewhat smaller percentage of the caseload of state and local FHAPs, as demonstrated by Chart IV-6.⁸⁵

[D]

While no single factor can explain why a smaller percentage of disability complaints is filed with FHAPs than with HUD, NCD believes that a relatively high number of disability complaints are filed against public housing authorities and other entities governed by Section 504 of the Rehabilitation Act, making it more likely that complaints are dually filed as Title VIII and Section 504 complaints, and are therefore more likely to be retained by HUD for investigation under both statutes.

As with HUD, the performance of FHAPs differs widely by region.⁸⁶ From FY 1990 through FY 2000, the strongest performers were San Francisco, Atlanta, and Chicago. This may be explained by the fact that these regions have the largest populations served by FHAPs. The Ft. Worth and Philadelphia FHAP regions have populations with higher than average rates of disability in the population, but similar to their HUD regional counterparts, they have subpar records in terms of disability complaints. The New York region did not have a certified FHAP prior to FY 2000 and represents a relatively small proportion of disability complaints over the 11-year period. The Denver and Seattle regions have the lowest percentage of disability complaints, but also the smallest populations served by FHAPs.

Finding IV.B.7: There are significant differences between the HUBs with respect to the percentage of Title VIII complaints alleging disability discrimination. Five of the HUBs (Chicago, Atlanta, Ft. Worth, Philadelphia, and Kansas City) are consistently below the national norm, giving rise to a concern that disability issues may not be getting appropriate attention. The Chicago HUB, which historically files the greatest number of overall fair housing complaints, has been at or below average for disability complaints every year since the FHAA was passed.

Recommendation IV.B.7.a: HUD should assess the intake process at each HUB and at each FHAP to determine whether the historically low number of complaints (overall or on the basis of disability) reflects impediments for victims of discrimination in using the Title VIII administrative complaint system.

Recommendation IV.B.7.b: Headquarters FHEO should take active steps to deal with these regional differences so that the quality of justice does not depend on place of residence, or should assume greater central authority over the Title VIII complaint process.

8. Issues in Disability Claims and Complaints Filed with HUD and FHAPs

Since the passage of the Civil Rights Act of 1968, HUD has kept data on "issues" in discrimination cases. In its current form (in place since at least 1988), HUD has used a three-digit code and a brief descriptive phrase to classify issues raised in complaints. Obviously, more than one issue may arise in a given complaint or claim. HUD and FHAP staff are asked to code each case with one or more issues (see Table IV-5).

Table IV-5: HUD Case Issue Codes

Allegations of disability discrimination come in many different forms, some of which are similar to other discrimination claims and some of which are unique to disability. In the former category are such frequently cited issues as refusal to rent or sell (Code 300 or 310 below); discrimination in the "terms, conditions or privileges of sale or rental of a dwelling, or in the provisions of services and facilities in connection therewith" (Code 380); or coercion/intimidation (Code 450). As with discrimination on other bases, these allegations can be proven with evidence of intentional discrimination or of disparate impact on a protected class.

With the passage of the FHAA, however, people with disabilities also enjoy protection against other acts and omissions that are specific to disability status. Beginning in 1990, HUD purported to track three categories that are virtually unique to disability: (1) noncompliance with design and construction requirements (handicap)(Code 470); (2) failure to permit reasonable modification (Code 500); and (3) failure to make reasonable accommodation (Code 510). These do not require proof of intentional discrimination or disparate impact and are therefore arguably less complicated to investigate. HUD also uses a fourth category-"Using ordinances to discriminate in zoning and land use" (Code 460)-that often but not always involves disputes affecting group homes for people with disabilities.

Before FY 1996, because of the insufficiency of HUD's data collection systems and lack of oversight concerning how cases were coded at intake, these disability-specific categories were not often cited. Pursuant to HUD guidance, beginning in FY 1996, HUD and FHAPs made greater use of disability-specific categories. It is possible, therefore, to analyze in greater detail the specific types of discrimination claims embedded in these complaints. After HUD adopted its current data collection system-the Title VIII Paperless Office Tracking System (TEAPOTS)-and provided technical assistance and oversight concerning its use, frontline intake staff at HUD and at FHAPs have made much greater use of the disability-specific categories.⁸⁷

The distribution of HUD cases across issue codes is displayed in Table IV-6.

Table IV-6: HUD Cases Involving Disability Claims

Similar changes in FHAP record keeping have yielded similar results, as shown in Table IV-7.

Table IV-7: FHAP Cases Involving Disability Claims

The sudden upsurge in reasonable accommodation claims between FY 1996 and FY 2000 might be attributable to more widespread use of TEAPOTS, closer attention by HUD and FHAP supervisory staff to properly classifying such claims, or the fact that more people with disabilities are effectively articulating requests for reasonable accommodation.

Finding IV.B.8: Among HUD and FHAP disability complaints, reasonable accommodation is the most frequent issue, representing 41.6 percent of HUD cases and 38.5 percent of FHAP cases in FY 2000. Design and construction accessibility issues rank next (9.1 percent of HUD cases and 8.8 percent of FHAP cases).

C. Case Outcomes

HUD and FHAPs use four primary methods of closing fair housing complaints: (1) administrative closure, (2) conciliation, (3) no cause finding, and (4) cause finding.⁸⁸ The following sections analyze HUD data with respect to each type of case outcome.

1. Cases Administratively Closed

Through FY 1993, more than 40 percent of all HUD complaints were ended by administrative closure, a catch-all category used by investigators when they could not complete the investigation of a case. HUD became concerned about the frequent use of this category and in September 1994 issued very explicit guidance discouraging the use of administrative closures.⁸⁹

FHEO subsequently incorporated this guidance into HUD's Title VIII Complaint Intake, Investigation, and Conciliation Handbook (8024.01), which cautions investigators and supervisors as follows: "Administrative closures should be used neither casually nor routinely. It is critical that cases not be closed administratively except under specific circumstances" (Chapter 9, Section 9-1). Those limited circumstances include only situations in which an investigation cannot be completed because the complainant cannot be located or will not cooperate, where the complainant has decided not to proceed, or when a trial has commenced.

HUD reinforced this guidance by incorporating performance measures for rating FHEO managers and supervisors. From 1995 to 1996, supervisory personnel whose offices exceeded an administrative closure rate of 15 percent received lower scores on their performance appraisals. In FY 1997, the target rate dropped to 13 percent.⁹⁰ By enforcing accountability, HUD was able to reduce agencywide administrative closure rates from 48 percent in FY 1993 to 15 percent in FY 1997.⁹¹ When the performance measures were deleted from appraisals in FY 1998, the administrative closure rate went back up to 19 percent. In FY 1999 it was 20 percent and in FY 2000, it had gone up to 21 percent. Throughout the study period, disability complaints are somewhat less likely than other HUD complaints to be coded as administrative closures.⁹²

Staffing, management, and morale problems, which are described in greater detail in Section VI of this report, are the most likely cause of this upsurge in administrative closures. Understaffing also has exacerbated the "aged cases problem"; as cases age, they become more difficult to investigate and are more likely to be closed administratively.

Finding IV.C.1: By enforcing accountability, HUD was able to reduce agencywide administrative closure rates from 48 percent in FY 1993 to 15 percent in FY 1997. When the performance measures were deleted from appraisals in FY 1998, the administrative closure rate went back up to 19 percent. In FY 1999, it was 20 percent, and in FY 2000, it had gone up to 21 percent.

Recommendation IV.C.1: HUD should establish and enforce accountability and job performance standards modeled on those in place during FY 1995 through FY 1997 to ensure that the administrative closure method is not overused.

During the first two fiscal years (FY 1991 and FY 1992) that FHAP agencies handled disability complaints in appreciable numbers,⁹³ these complaints experienced a significantly higher rate of administrative closure than the typical FHAP complaint. FHAPs have been somewhat more successful than HUD in the past three fiscal years in reducing the percentage of cases closed administratively.⁹⁴ Since FY 1993, FHAPs have used administrative closure less often for disability cases than for cases in general, mirroring the practice at HUD.

2. Cases Conciliated

Prior to 1989, conciliation of housing discrimination complaints was one of the very few techniques available to HUD and FHAP agencies.⁹⁵ After passage of the FHAA--and the expansion of enforcement options--conciliation remains the most frequently used method of resolving complaints. By statute, HUD and FHAPs must attempt to bring complainants and respondents together to try to conciliate fair housing complaints (42 U.S.C. §3610(b)). Although such conciliation is voluntary (and either side may refuse to conciliate without prejudicing its case), many parties choose this route because it is comparatively inexpensive and quick compared with an administrative hearing or litigation.⁹⁶ HUD devotes a chapter of its intake manual to the mechanics of conciliation.⁹⁷ If conciliation fails, HUD (or the FHAP) continues its investigation and eventually must determine whether there is reasonable cause to believe that discrimination has occurred.

Chart IV-7 illustrates the extent to which HUD complaints have been closed through conciliation agreements.

[D]

In FY 1989, more than half of all HUD complaints were resolved through conciliation. Conciliation as a means of closing HUD cases dropped below 35 percent in FY 1991, FY 1992, and FY 1993 before rising dramatically in FY 1994 (to 42 percent) and FY 1995 (to 52 percent). During every year since FY 1989, disability cases have been more likely than other cases to be closed by conciliation. During many years, the conciliation rate for disability cases is a full 10 percentage points higher than for all other protected classes.

There is no discernible historical trend showing divergence in conciliation rates among the HUBs. With respect to disability, the San Francisco and Chicago HUBs have had the largest number of conciliated complaints resulting in monetary compensation.

Conciliation is used somewhat less often by FHAPs (inching above 40 percent of all closures only in FY 1994). While FHAP disability complaints are more likely than FHAP nondisability complaints to be resolved by conciliation, FHAPs appear to rely on conciliation somewhat less than HUD, both in terms of disability cases and other cases (see Chart IV-8).

[D]

It is not possible to isolate a single explanation for the greater use of conciliation in disability cases compared with all other cases. It may be that a greater percentage of disability cases involve single issues or a misunderstanding between home seekers with disabilities and housing providers over the scope of the FHA. Where such misunderstandings result in a complaint being filed, conciliation may be the most effective way to educate both parties and resolve disputes quickly and cheaply.

Alternatively, the phenomenon may be explained by the availability of more sophisticated disability advocates who help people with disabilities use the conciliation process to achieve positive solutions to disputes. This theory is borne out in part by reviewing data on conciliated disability complaints that involve monetary compensation to complainants. Aggregating HUD and FHAP complaints demonstrates that the Chicago and San Francisco regions had the highest number of such cases. These regions have large numbers of sophisticated disability advocates. The Kansas City and Ft. Worth regions also have strong disability advocates and a reasonably large number of conciliated disability complaints with monetary compensation but low levels of per-case compensation.⁹⁸ Further investigation of this phenomenon is warranted but is beyond the scope of this report.

Finding IV.C.2: During every year since FY 1989, disability cases have been significantly more likely than other cases to be closed by conciliation. While FHAP disability complaints are more likely than FHAP nondisability complaints to be resolved by conciliation, FHAPs appear to rely on conciliation somewhat less than HUD, in terms of both disability cases and other cases.

3. No Cause Findings

If an allegation survived HUD's claims assessment process and matured into a complaint, it was investigated pursuant to the FHA. If conciliation fails and reasonable cause is found to believe that a violation of the FHA has occurred, HUD (or the FHAP) is required to issue a formal charge of discrimination.⁹⁹ If reasonable cause is not found, the complaint must be dismissed, and HUD is required to issue a public notification of the dismissal.¹⁰⁰ Despite the dismissal, the complainant retains his or her right to pursue the dispute through private litigation, but at substantially greater difficulty and expense than if the agency finds reasonable cause.

Chart IV-9 shows the percentage of "no cause" cases for HUD from FY 1989 through FY 2000, comparing all HUD complaints to disability complaints.

[D]

For the first several years after passage of the FHAA, HUD no cause findings did not exceed 20 percent of all closures. Then they reached 27 percent in FY 1994 and 23 percent in FY 1995. In FY 1996--the very year HUD adopted its claim/complaint dichotomy--no cause findings spiked to 45 percent of all closures, and they remained at 43 percent in FY 1997. This result is counterintuitive, as the claims process was designed to weed out allegations of discrimination that could not be fully documented. One would have expected that weeding out weaker cases would have led to a decline in the percentage of no cause findings. Rather, while HUD complaints dropped dramatically from FY 1995 to FY 1996 (from 3,134 to 2,056), the percentage of no cause closures nearly doubled (from 23 percent to 45 percent).

Two major factors explain the dramatic rise in no cause findings in FY 1996 and FY 1997. First, it was during those fiscal years that the effect of HUD's strict guidance (and related performance measures) concerning administrative closures was first implemented and closely monitored. Investigators could no longer close large numbers of cases under the old method and were required to determine whether cause existed. Second, as the number of FHEO enforcement staff has decreased,¹⁰¹ the average age of HUD cases has increased dramatically, to nearly 500 days.¹⁰² As cases age, it becomes harder to marshal the evidence necessary to support a cause finding. As a result of these two pressures, it is likely that FHEO accepted the spike in no cause findings as a way to clear out its inventory of old cases.

Since FY 1989, disability complaints at HUD have been somewhat less likely than the average complaint to be dismissed as having no cause. That may result from the fact that HUD disability complaints are more likely to be resolved earlier in the process, especially through conciliation, and that fewer nonmeritorious cases are left at the cause/no cause decision point.

FHAPs have had a very different history with respect to no cause findings. From FY 1989 through FY 1992, FHAPs "no caused" more than 45 percent of all cases. The percentage dropped dramatically in the FY 1993 (to 28 percent), but has continued to rise each year since, reaching more than 50 percent during FY 2000 (see Chart IV-10). For some of the reasons discussed above, disability complaints are somewhat less likely than the average complaint to be closed with a no cause finding. By comparison, HUD closes a significantly smaller percentage of complaints with no cause.

[D]

Finding IV.C.3.a: Since FY 1996, HUD has closed at least one-third of its complaints (and FHAPs have closed at least 41 percent) with a finding that no cause existed to believe discrimination had occurred.

Finding IV.C.3.b: Since FY 1996, disability complaints were closed with a finding of no cause at a slightly lower rate. This may result from the fact that HUD disability complaints are more likely to be resolved earlier in the process, especially through conciliation, and that fewer nonmeritorious cases are left at the cause/no cause decision point.

4. Cases in Which HUD Finds Cause to Believe Discrimination Has Occurred

HUD may, after conducting an investigation of a fair housing complaint, find reasonable cause to believe that discrimination has occurred. This threshold finding does not determine liability on the part of the respondent; rather, it invests the complainant with a set of rights to participate in an administrative or judicial hearing to determine liability (and, if relevant, to award monetary damages and other relief). The decision of whether to issue a charge is of critical importance to the complainant. It determines whether the case will proceed to trial or will be dismissed. The number of charges filed also serves as a barometer of HUD's willingness to find and prosecute discrimination.

Chart IV-11 graphically displays the gradual decline in overall cause findings by HUD and FHAPs since FY 1990.

[D]

The absolute number of charges in all HUD cases declined from 213 in FY 1995 to 74 in FY 1997. The number went up to 82 in FY 1998 and to 115 in FY 1999 before declining to 96 in FY 2000.

For a number of years, outside observers have criticized the small number of cause determinations issuing from HUD.¹⁰³ One commentator has said:

What is most remarkable about the surge in complaints received by HUD from 1995 to 1997 is that it has been accompanied by a decrease in the number and percentage of cause findings. ... It appears that HUD investigators and regional counsel have inexplicably raised the bar for complainants to have their case heard by a fact finder, whether it be an administrative law judge or a federal jury.¹⁰⁴

This finding is supported by Chart IV-12.

[D]

During the year immediately following passage of the FHAA, HUD found cause in just 1 percent of all cases and in just under 1 percent of disability cases. Since then, disability complaints have lagged significantly behind the average HUD case in probability of cause finding.

Finding IV.C.4.a: Since FY 1990, complaints of disability discrimination have lagged significantly behind the average HUD case in probability of cause finding.

Finding IV.C.4.b: Of the 12,017 disability complaints filed with HUD from 1990 through 2000, the agency found reasonable cause to believe discrimination had occurred in just 284 cases, or 2.4 percent of all cases.

Finding IV.C.4.c: When HUD finds cause in only 1 out of 40 disability cases, it may be sending a message to the disability community that victims of disability discrimination are unlikely to secure relief through filing a HUD complaint.

Recommendation IV.C.4.a: HUD should take steps to improve its credibility with disability groups and advocates by aggressively pursuing disability discrimination complaints and widely publicizing favorable results.

The number of cause findings varies dramatically from region to region.¹⁰⁵ Table IV-8 demonstrates that variance during the past three fiscal years.

Table IV-8: HUD Cause Findings, All Cases, Fiscal Years 1998-2000

Even with the transfer of New York State's Title VIII complaints to the New York FHAP, the New York HUB has consistently charged more cases than any other HUB. The Chicago HUB, despite the fact that most of its region is served by FHAPs, has also consistently charged a large number of complaints. One would expect the Philadelphia HUB to be low because the region is entirely served by FHAPs. The most troubling findings are with respect to the Boston, Atlanta, Ft. Worth, and San Francisco HUBs, all with very few cause findings. Among other examples, during FY 1999, the San Francisco HUB did not find cause in a single case, and Ft. Worth "caused" only three cases. During FY 2000, the Boston and Ft. Worth HUBs found cause in only three cases each.

Finding IV.C.4.d: HUD cause findings have declined dramatically, from 325 in FY 1994 to 96 in FY 2000.

There are also significant differences among HUBs concerning the number of disability complaints and the percentage of cause findings in disability cases since the passage of the FHAA (see Table IV-9).

Table IV-9: HUD Disability Complaints and Cause Determinations Thereon (1990-2000)

In absolute numbers and in terms of percentage of caseload, the New York HUB ranked highest in disability complaints with cause findings (57 cause findings, or 4.9 percent of cases) and the Kansas City HUB ranked lowest (11 cause findings, or 0.9 percent of cases).

Finding IV.C.4.e: There are significant differences among HUBs concerning the overall number of disability complaints and the percentage of cause findings in disability cases since FY 1990. In absolute numbers and in terms of percentage of caseload, the New York HUB ranked highest in disability complaints with cause findings over the 11-year period (57 cause findings, or 4.9 percent of its disability cases) and the Kansas City HUB ranked lowest (11 cause findings, or 0.9 percent of its disability cases).

Finding IV.C.4.f: Such regional variations are attributable to cultural differences between regions of the country and personnel assigned to the respective HUBs. The management style currently employed by Headquarters FHEO tends to reinforce significant regional variations in enforcement practice, resulting in different treatment of disability (and other) complaints depending on the state in which a complainant lives and whether the complaint is handled by HUD or by an FHAP.

Finding IV.C.4.g: Victims of discrimination are discouraged from using the Title VIII administrative process at HUD and FHAPs for a variety of reasons, including an unwelcoming intake process, inordinate delays in assessing and investigating claims, relatively small monetary awards achieved through HUD and FHAP conciliation, and a generalized sense that the administrative process rarely achieves results that outweigh the personal costs of filing a claim or complaint.

Recommendation IV.C.4.b: Congress should require HUD to conduct a study to determine why the absolute number and percentage of cause findings (especially those in disability cases) have declined so precipitously, and why there are such wide variations on these indicators among the HUBs.

Recommendation IV.C.4.c: Headquarters FHEO should take active steps to deal with these regional differences so that the quality of justice does not depend on place of residence, or should assume greater central authority over the Title VIII complaint process.

As noted, FHAPs essentially handled no disability claims prior to FY 1992. From FY 1992 through FY 2000, FHAPs charged 347 of the 8,683 disability cases they handled, or 4 percent of total complaints (see Chart IV-13). This rate is considerably higher than the 2.4 percent rate for HUD-processed disability complaints for the same period. As shown in Chart IV-13, disability complaints experience a greater relative likelihood of being cause cases at FHAPs than at HUD.

[D]

Finding IV.C.4.g: FHAP cause findings have declined from 545 in FY 1990 to 158 in FY 2000.

Finding IV.C.4.h: From FY 1992 through FY 2000, FHAPs charged 347 of the 8,683 disability cases they handled, or 4 percent of total complaints. This rate is 40 percent higher than the rate for HUD-processed disability complaints for the same period.

Recommendation IV.C.4.d: HUD should conduct an analysis to determine why FHAPs, on average, charge 40 percent more of the disability complaints they handle. HUD should identify and distill the practices that have led to this success and require their use by HUDs and FHAPs that do not already employ them.

This 40 percent figure, however, masks wide variations from region to region. For instance, FHAPs in the Boston region found cause in 8.7 percent of disability complaints, and Philadelphia area FHAPs found cause in 8.0 percent. By contrast, Ft. Worth area FHAPs found cause in just 0.6 percent of all disability complaints, and those in the Seattle and Denver regions found cause in 2.5 percent and 2.7 percent of all disability cases, respectively, as shown in Table IV-10.

Table IV-10: FHAP Disability Complaints and Cause Determinations Thereon (1990-2000)

Finding IV.C.4.i: There are wide and troubling variations from region to region among the FHAPs. For instance, Boston region FHAPs found cause in 8.7 percent of disability complaints, and Philadelphia area FHAPs found cause in 8.0 percent. By contrast, Ft. Worth area FHAPs found cause in 0.6 percent of all disability complaints, and those in the Seattle and Denver regions found cause in 2.5 and 2.7 percent of all disability cases, respectively.

Recommendation IV.C.4.e: Headquarters FHEO should take active steps to deal with these regional differences so that the quality of justice does not depend on place of residence. Alternatively, Headquarters should assume greater central authority over the Title VIII complaint process.

D. Case Processing Times

1. Statutory and Regulatory Constraints

The FHA requires HUD to complete its investigation of fair housing complaints "within 100 days after the filing of the complaint...unless it is impracticable to do so" (42 U.S.C. §3610(a)(1)(B)(iv)). HUD implemented its claims process in FY 1996, apparently in order to ensure better front-end assessment of allegations of discrimination and more efficient use of resources devoted to investigating jurisdictional complaints. In order to work properly, the claims process must adhere to strict time lines, both to ensure that complainants don't have their cases delayed and to achieve the efficiencies HUD sought in the first place.

The claims process was designed to streamline the investigative process and ensure that HUD devoted its scarce resources to cases that merited full investigation. In its first year of operation (FY 1997), the new process had a dramatic impact: 69.5 percent of all closures were dismissed as claims.¹⁰⁶ That pattern has persisted in subsequent years: for FY 1998 through FY 2000, the figures are 77 percent, 74 percent, and 71 percent, respectively.¹⁰⁷

The adoption of the claims procedure has the inherent possibility of delaying resolution of fair housing cases. FHEO makes it clear that time spent processing a claim does not count toward the 100 days in which FHEO is mandated to complete its investigation. As a result of concerns about the timeliness issue, FHEO established a new time frame in May 1997 of 25 days for assessing claims and determining whether they would be converted to complaints or dismissed. Unfortunately, staffing and management reductions at FHEO have meant that many HUBs are failing to complete the assessment process on time.¹⁰⁸

Congress intended the administrative process under the FHA to be "economical and efficient," and to provide unrepresented victims of discrimination with a speedy and comprehensive remedy.¹⁰⁹ In fact, many claimants and complainants experience the system as hostile and unwelcoming.¹¹⁰

In 1998, HUD's inspector general reported on an audit of cases in three HUBs and three FHAPs. The audit sampled 117 complaints (all of which had matured from claims) and found that in 31 percent of cases, the 25-day assess deadline was not met. In 17 percent of cases, HUD had not mailed a perfected complaint to the complainant for signature with 50 days from receipt.¹¹¹ At the close of FY 1997, the inspector general found that the HUBs had 856 open claims with an average age of 62 days and noted that this "inordinate delay" does not even count toward the statutory requirement that HUD make a cause determination within 100 days of filing.¹¹²

Problems with the claims assessment process and with investigation of complaints have arisen, in part, because FHEO has lacked sufficient enforcement staffing and has not replaced the expertise it has lost through retirement and resignations.¹¹³

2. Actual Experience of Complaints and Claims

Significantly, HUD met the 100-day statutory processing goal only in FY 1989, the first year after passage of the FHAA. It came close to meeting the goal in FY 1993, but processing times have climbed exponentially since then, with complaints during FY 2000 taking an average of 500 days to reach closure or cause determinations. The U.S. Commission on Civil Rights identified "aged cases" (those that have exceeded the 100-day threshold) as a significant problem as early as FY 1991.¹¹⁴ The HUD inspector general noted that delays in investigating cases caused serious, and perhaps irreparable, harm to complainants and respondents.¹¹⁵ In 1999, the Citizens' Commission on Civil Rights again drew public attention to the aged case problem.¹¹⁶

HUD data express the time it has taken the agency to process complaints of housing discrimination. Table IV-11 shows the average age of open disability complaints at the end of each fiscal year since passage of the FHAA.

Table IV-11: Average Age (in Days) of Open HUD Disability Complaints, by Year

Finding IV.D.2.a: At the end of FY 2000, a victim of disability discrimination could expect to have waited 13 months since the filing of a complaint and to have no clear indication how soon the complaint might come to a hearing or otherwise be resolved.

The average age of open complaints may vary somewhat from the age of cases that have been closed, especially when the agency has directed its efforts at closing some of the oldest cases in its inventory. The data and charts on the following pages use "closed case" data to demonstrate the growing problem with aged cases. Closed case data from HUD data through FY 2000 indicate that the aged case problem is accelerating (see Chart IV-14).

[D]

HUD responded to this issue by stating that "everywhere that average age is discussed, the direct negative impact of the claims on the age of remaining HUD complaints is not addressed. The report simply states that the average time has increased dramatically; however, if claims were averaged in, the overall case age would be much less. Comparing average age during the claims years to preclaims years is a comparison of apples and oranges, and there is no recognition of this. Additionally, the explanation of not including claims time in complaints aging has never been included in discussions" (FHEO staff comments on National Council on Disability draft report, "Comments Regarding Data," p. 3). The exclusion of claims (also known as "short cases" because they are typically closed before they are considered complaints) would drive up average case processing time, but the brunt of that change would have been felt in FY 1996, the first year the claims process was used and therefore the first year the average would have been inflated by the exclusion of short cases. After the institution of the claims process, average processing time went from 377 days to 497 days, an increase of 30 percent, calling into question HUD's explanation.

Finding IV.D.2.b: The average age of HUD complaints, measured from filing to date of closure, has risen from 96 days in FY 1989 to 137 days in FY 1992 to 497 days in FY 2000.

Finding IV.D.2.c: The aging of complaints has occurred as the number of complaints investigated by HUD has declined by 70 percent.

Recommendation IV.D.2: HUD should analyze its management practices to determine why case handling has become so inefficient, and should report its findings to Congress and the public.

As borne out by Chart IV-13, disability claims, on average, have reached closure or cause determinations somewhat faster during each of the past 12 fiscal years. Even so, during the past four fiscal years, HUD has taken roughly 300 days to investigate such claims, or three times longer than prescribed by Congress.

HUD's Office of Inspector General (OIG) has pointedly said that "FHEO has not achieved its mission under the Fair Housing Act (Act) to investigate and resolve complaints of discrimination promptly."¹¹⁷ The same report went on to make detailed findings about this phenomenon and its causes:

Insufficient supervisory oversight of its investigators and inadequate and inconsistent use of its management systems were the primary reasons that FHEO was unable to fully achieve its mission to promptly investigate and resolve discrimination complaints. ... FHEO has not taken sufficient action to assess failed controls that have allowed at least 70 percent of the [HUB] and FHAP investigations closed in the past two years to exceed 100 days.¹¹⁸

In 1997, the Citizens' Commission on Civil Rights spelled out how a dysfunctional enforcement system undermines public confidence in the Fair Housing Act:

HUD's backlog is again growing....[The backlog] serves as an important indicator to complainants and fair housing advocates of the likelihood of a prompt adjudication of the complainant's grievance. This, in turn, may well determine whether the complainant will decide to make use of the federal enforcement process.¹¹⁹

Two years later, concluding that "...the real problem is HUD's investigators' inability to identify relevant facts, analyze evidence, and apply the law in a reasonably expeditious fashion,"¹²⁰ the Citizens' Commission on Civil Rights describes the effect of an administrative enforcement system that is not functioning within the time frames mandated by Congress:

These [aged case] data are significant, for they serve as an important indicator of the likelihood that a complainant will receive a prompt adjudication. A complainant is entitled to know this information before deciding whether to use the government enforcement process or pursue a Fair Housing Act claim in federal or state court....[S]ince 1988, HUD has routinely allowed complaints