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

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:

• Michigan’s segregated past – and present (Told in 9 interactive maps)
• School choice producing segregation in districts across the state
• Segregation then and now: Metro Detroit

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.

• Read the original complaint
• Read the HUD finding reported by Oakland County
• Read the HUD approval of block grants to Oakland County

‘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.”