Treasury Department, Office of Comptroller of Currency charged with failing to affirmatively further fair housing

Aug. 26, 2014 — The Inclusive Communities Project has just filed a complaint in Federal District Court in Dallas, Texas alleging that the Treasury Department and the Office of the Comptroller of the Currency have failed to administer the Low Income Housing Tax Credit (LIHTC) program in the city of Dallas in a fashion designed to affirmatively further fair housing. On the contrary, the complaint alleges, the complaint has allowed the LIHTC program to operate to perpetuate segregation.

From the complaint:

The U.S. Department of Treasury (Treasury) administers the LIHTC program which is the largest existing program for the development of low income affordable rental housing in the country. The Office of the Comptroller of the Currency (OCC) administers the program that prohibits national bank ownership of LIHTC projects unless those investments are designed primarily to promote the public welfare, including the welfare of low and moderate-income communities or families (such as by providing housing, services, or jobs). 12 U.S.C. § 24 (Eleventh).

Both defendants have abdicated their duty under 42 U.S.C. § 3608(d) to administer and regulate these housing programs in a manner that does not perpetuate racial segregation in housing and communities and that does overcome discrimination and segregation to the point where the supply of genuinely open housing increases. Treasury does not have a single regulation relating to the perpetuation or elimination of racial segregation in the LIHTC program. OCC does not have a single regulation or other requirement to prevent the perpetuation of racial segregation by taking into account the obligation to eliminate segregation and discrimination in its approvals of bank ownership of LIHTC projects.

Defendants’ willingness to accept and condone racial segregation in their programs is a cause of the racially segregated locations of 19,511 LIHTC non-elderly units in 50% or greater minority census tracts in the City of Dallas (97% of such units in the City).2 Many of the locations of the units are marked by conditions of slum, blight, and distress that include high crime rates, undue concentrations of persons in poverty, low median incomes, high unemployment rates, and adverse environmental conditions (slum, blight, and distress). 91% of the non-elderly LIHTC units in the City of Dallas are in predominantly minority, high distress level census tracts. The racial segregation of the LIHTC units regulated by and administered by defendants equals the extreme level of the past de jure segregation in Dallas public housing. ICP seeks injunctive relief ensuring that the current violations cease and that prevents future violations that would adversely affect ICP and ICP’s clients.

[Complaint paragraphs 2-4]