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Federal Register / Vol. 86, No. 110 / Thursday, June 10, 2021 / Rules and Regulations
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understanding of the AFFH obligation, declined to follow judicial precedent, and suddenly altered the duties and obligations of funding recipients around the country. No judicial authority or HUD guidance exists that would help program participants, communities, and fair housing stakeholders reconcile this newly minted definition with betterestablished understandings of the AFFH
requirement. PCNC acknowledged this lack of judicial or agency precedent supporting its redefinition of the AFFH
requirement. See 85 FR 47902, 47903
FN 54, 62.11 It relied solely on dictionaries, id. at 47901902, but without explaining how this approach justified the redefinition of the term fair housing to include actions that do not constitute fair housing as this term is ordinarily used. HUD relied heavily on a policy-driven conclusion that it is too burdensome for program participants to conduct any fair housing analysis, not just of the sort that was required by the 2015 rule, but of the sort that was required for decades before. Id.
at 47902903. These fundamental changes in how the agency understands and implements a statutory obligation are of the magnitude that should warrant notice and comment.
In this context, this interim final rule is not an attempt to avoid notice and comment obligations; instead, it suspends a rule that is inconsistent with the AFFH statutory mandate, HUDs prior interpretations, and judicial precedent and was improperly promulgated without notice and opportunity for comment in favor of provisions drawn from a rule that assiduously followed that process. HUD
believes that leaving the PCNC rule in placethus causing grant recipients to rely upon a confusing rule that was promulgated in disregard of notice and comment obligationswhile seeking comment prior to publication on a proposal to reinstate provisions from the 2015 rule would subvert rather than honor the purposes of the notice and comment process. Cf. Friends of 11 PCNCs preamble pointed to the Cranston Gonzales National Affordable Housing Act, of 1990, Public Law 101625 102, 105, for the proposition that Congress also broadened national housing policy grants administered by HUD, requiring AFFH certifications, to include goals such as a decent, safe, and sanitary housing for every American and increasing the supply of affordable housing. See 85 FR 47901. But this statute has several purposes. While one of its purposes was to promote decent, safe, and sanitary housing, and it incorporated a requirement that covered entities certify that they would affirmatively further fair housing, the statute does not include a nexus between that purpose and fair housing. As a result, HUDs prior reliance on Cranston Gonzalez to justify this novel definition of fair housing was misplaced.

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Animals v. Bernhardt, 961 F.3d 1197, 1206 D.C. Cir. 2020 But we do not see how a government action that illegally never went through notice and comment gains the same status as a properly promulgated rule such that notice and comment is required to withdraw it. . . we are faced only with the repeal of a rule that illegally never went through notice and commentin other words, a non-rule rule.. The notice-and-comment requirement is intended to serve the public interest by providing a forum for the robust debate of competing and frequently complicated policy considerations.
Nat. Res. Def. Council v. Natl Highway Traffic Safety Admin., 894 F.3d 95, 115
2d Cir. 2018; see also Consumer Energy, Etc. v. F.E.R.C., 673 F.2d 425, 446 D.C. Cir. 1982 The value of notice and comment prior to repeal of a final rule is that it ensures that an agency will not undo all that it accomplished through its rulemaking without giving all parties an opportunity to comment on the wisdom of repeal.. HUD has determined that these salutary purposes are best served by reinstating provisions that have been subject to this robust debate but were undone without notice and comment, particularly as there has been little reliance on the PCNC rules definitions and certifications, which have been in place for only a short period of time.
Consistent with its commitment to principles of notice-and-comment rulemaking, HUD now solicits comments on the provisions it now promulgates on an interim basis and will consider all comments prior to the effective date of this interim final rule.
HUD anticipates separately issuing an NPRM, which unlike this interim final rule will propose provisions that have not previously gone through notice and comment rulemaking. That notice will set forth and seek comment on more detailed proposed implementation of a program participants AFFH obligations and will seek to build on and improve the processes set forth in the 2015 AFFH
rule to further help funding recipients comply with their statutory obligation while reducing the regulatory burden on them. HUD welcomes public participation in these efforts to continue to strengthen fair housing outcomes while reducing burden on program participants.
HUD Believes the PCNC Rule Is Not Based on a Reasonable Construction of the AFFH Requirement as Construed by the Courts and Ratified by Congress While HUD has ample discretion to construe and apply the AFFH
requirement, the PCNC regulation is
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fundamentally inconsistent with the agencys longstanding interpretation of its and funding recipients statutory obligation to AFFH, as well as the decades of authority described above interpreting the scope of this obligation.
The current regulation does not require that program participants take any steps to further any fair housing outcomes as the term fair housing is generally understood, whereas the Housing and Community Development Act of 1974, the Cranston-Gonzalez National Affordable Housing Act, and the Quality Housing and Work Responsibility Act of 1998 all require program participants to certify that they will affirmatively further fair housing as Congress understood and ratified the term. This conflict puts program participants at risk of confusion and violation of a statutory duty. It is in the public interest not to expose program participants to that risk.
As explained above, under the current regulation, a program participants certification of compliance with the AFFH obligation amounts only to a certification that the program participant will take any single action rationally related to promoting one or more of the following attributes:
Housing that is affordable, safe, decent, free of unlawful discrimination, or accessible as required under civil rights laws. Put simply, under PCNC, HUD is not requiring program participants to certify that they are taking actions that meet their actual statutory obligation to AFFH, and HUD risks not fulfilling its own understanding of its statutory obligations.
The PCNC rule thus does not represent a selection among reasonable options within HUDs discretion. Had HUD given notice and taken comment before promulgating it, this substantive infirmity would almost certainly have been pointed out and HUD would have had to address it. The failure to abide by notice-and-comment requirements before promulgating the PCNC rule therefore is closely connected with the failure to put in place regulatory definitions that are consistent with precedent and that foster compliance with the law. HUD believes the public interest is best served by the timely reinstatement, prior to the deadline by which a great number of program participants must certify compliance, of definitions that not only went through notice-and-comment procedures but are familiar to program participants; are consistent with well-established judicial and agency precedent construing the AFFH obligation and certifications incorporating these definitions; and are further elaborated by years of regulatory
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