WASHINGTON, D.C., July 14, 2015 – The Lawyers’ Committee for Civil Rights Under Law (Lawyers’ Committee) is disappointed by the Proposed Rule for enforcement of Title VI of the Civil Rights Act of 1964 released by the U.S. Department of the Treasury on Monday, July 13. Title VI is a provision of the Civil Rights Act of 1964 that prohibits discrimination on the basis of race, color and national origin in programs and activities receiving federal financial assistance. It is enforced by each agency that provides such assistance.
The 1964 Civil Rights Act is more than 50 years old, but this is the first Title VI regulation proposed by the Department. While long overdue, it does provide for the first time a much needed system for administrative enforcement of civil rights violations at the Department. Our disappointment in the Proposed Regulation arises from the failure to include the Low-Income Housing Tax Credit (LIHTC) program in the list of programs administered by Treasury that are covered by the protections of Title VI. The LIHTC program is the most important federal financial program for creation of affordable housing. It is administered by the Department of Treasury, through the Internal Revenue Service, and finances the development of the vast majority of the nation’s affordable rental units. Treasury allocates tax credits to state housing finance agencies, which, in turn, award the credits to residential developers. Those developers sell the tax credits to investors in exchange for the financing necessary to complete their projects, and the investors use the credits to reduce their tax liability.
This form of subsidy clearly falls within the types of financial assistance that Congress intended Title VI to cover when it enacted the statute in 1964. Treasury’s historic failure to apply and enforce civil rights requirements with respect to the LIHTC program has led to tax credit allocation patterns at the state level that reinforce and mimic existing patterns of residential racial segregation. Not including LIHTC as one of the federal financial assistance programs that triggers the protections of Title VI would dramatically undermine the effectiveness of the Proposed Rule. The Lawyers’ Committee calls on Treasury to correct this mistake in its final rule by clarifying that Title VI does apply to the LIHTC program. Additionally, Treasury should follow up on the rule with meaningful guidance to state housing finance agencies on how they can comply with Title VI and the Fair Housing Act, including its duty to affirmatively further fair housing, through their administration of LIHTC.
“For far too long, the Treasury Department has allowed the Low Income Housing Tax Credit program to serve as a vehicle for the perpetuation of residential racial segregation,” said Joseph D. Rich, co-director of the Lawyers’ Committee’s Fair Housing & Community Development Project. “The time is now to correct that mistake by acknowledging that key civil rights protections apply to LIHTC.”
The Proposed Rule will now go through a 60-day public comment period. The Lawyers’ Committee and coalition allies in the civil rights movement will use that process to advocate for meaningful civil rights standards and protections in the LIHTC program.