Analysis of Impediments to Fair Housing Choice The State of Arizona 2010 ARIZONA DEPARTMENT OF HOUSING 1110 W. Washington St. Suite 310 Phoenix, AZ 85007 602.771.1000 Contents ACKNOWLEDGEMENTS .......................................................................................................................................... 8 INTRODUCTION ..................................................................................................................................................... 9 PURPOSE ......................................................................................................................................................................9 DEFINITION OF IMPEDIMENTS TO FAIR HOUSING CHOICE .......................................................................................................9 ARIZONA’S FAIR HOUSING GOALS ...................................................................................................................................10 Primary Goals ......................................................................................................................................................10 Intermediate Goals .............................................................................................................................................10 METHODOLOGY ...........................................................................................................................................................11 JURISDICTIONAL BACKGROUND DATA ................................................................................................................. 12 GEOGRAPHY ................................................................................................................................................................12 RACIAL AND ETHNIC HISTORY .........................................................................................................................................13 POPULATION ...............................................................................................................................................................15 RACE AND ETHNICITY ....................................................................................................................................................20 AGE ...........................................................................................................................................................................21 SOCIAL CHARACTERISTICS...............................................................................................................................................22 INCOME CHARACTERISTICS .............................................................................................................................................23 Household Income by Race and Income Category ..............................................................................................25 Poverty by Race and Ethnicity .............................................................................................................................26 Poverty and Disability .........................................................................................................................................27 Income and Poverty: Urban vs. Rural ..................................................................................................................28 EMPLOYMENT .............................................................................................................................................................28 HOUSING....................................................................................................................................................................30 Homeownership and Types of Housing ...............................................................................................................30 Homeownership Rate by Race and Ethnicity ......................................................................................................31 Housing Quality and Affordability .......................................................................................................................31 Housing Affordability ..........................................................................................................................................33 MINORITY CONCENTRATION AREAS AND LANGUAGE BY COUNTY ...........................................................................................39 MEASURES OF RESIDENTIAL SEGREGATION IN ARIZONA .......................................................................................................39 High Minority Census Tracts ...............................................................................................................................39 DEMOGRAPHICS AND FAIR HOUSING CHOICE IN ARIZONA ....................................................................................................40 ARIZONA: FAIR HOUSING LEGAL STATUS ............................................................................................................. 45 HISTORY OF FAIR HOUSING LEGISLATION ..........................................................................................................................45 FAIR HOUSING LAWS AND POLICIES .................................................................................................................................45 IMPEDIMENTS TO FAIR HOUSING CHOICE ........................................................................................................... 47 PUBLIC SECTOR ............................................................................................................................................................47 Changes in the Arizona Housing Market and Economy ......................................................................................47 The Westchester County Decision and Reexamining “Affirmatively Furthering Fair Housing” ..........................47 HUD Neighborhood Stabilization Program (NSP) ...............................................................................................48 The American Recovery and Reinvestment Act ...................................................................................................49 Neighborhood Revitalization and Affordable Housing........................................................................................50 2008 The Consolidated Annual Performance and Evaluation Report (CAPER) Draft ..........................................50 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 2 Arizona Housing Trust Fund ................................................................................................................................52 Zoning and Land Use Codes ................................................................................................................................53 Low Income Housing Tax Credit (LIHTC) .............................................................................................................54 Key Observation ............................................................................................................................................................... 55 Public Housing and Section 8 ..............................................................................................................................55 Community Development Block Grant ................................................................................................................56 Property Tax Policies ...........................................................................................................................................58 Landlord/Tenant Policies ....................................................................................................................................60 Building Codes .....................................................................................................................................................60 Conclusions .........................................................................................................................................................61 Future Action.......................................................................................................................................................62 PRIVATE SECTOR ..........................................................................................................................................................66 The Foreclosure Crisis in Arizona .........................................................................................................................66 Foreclosures in Rural Arizona ..............................................................................................................................67 Non-CDBG Area’s Foreclosure Data: LISC and HUD NSP II ..................................................................................68 The Impact of Foreclosures on Communities ......................................................................................................73 Foreclosures’ Impact on Fair Housing .................................................................................................................75 HOME MORTGAGE DISCLOSURE ACT (HMDA) DATA .........................................................................................................77 Introduction ........................................................................................................................................................77 NCRC 2007 Home Lending Analysis of Arizona and Selected Counties ...............................................................78 What HMDA Data Can Illustrate .........................................................................................................................79 Analysis Summary ...............................................................................................................................................79 Portfolio Share Analysis ......................................................................................................................................81 Cochise, Graham, Greenlee, & Santa Cruz ....................................................................................................................... 81 La Paz, Mohave, & Yuma .................................................................................................................................................. 81 Comparing Regions by Portfolio Share Indicators ...............................................................................................82 Comparing Portfolio Share Indicators between 2004 and 2007 .........................................................................84 Market Share Analysis ........................................................................................................................................84 Apache & Navajo .............................................................................................................................................................. 84 La Paz, Mohave & Yuma ................................................................................................................................................... 85 Comparing Regions by Market Share Disparities ................................................................................................85 Native American Borrowers ............................................................................................................................................. 85 Hispanic Borrowers .......................................................................................................................................................... 85 Low-and Moderate-Income Borrowers ............................................................................................................................ 86 Female Borrowers ............................................................................................................................................................ 86 Comparing Market Share Disparities between 2004 and 2007 ..........................................................................86 Denial Rates ........................................................................................................................................................87 Cochise, Graham, Greenlee & Santa Cruz ........................................................................................................................ 87 La Paz, Mohave & Yuma ................................................................................................................................................... 87 Comparing Regions by Denial Rate Disparities ...................................................................................................87 Native American Borrowers ............................................................................................................................................. 87 Hispanic Borrowers .......................................................................................................................................................... 87 Low-and Moderate-Income Borrowers ............................................................................................................................ 87 Comparing Denial Disparities between 2004 and 2007 ......................................................................................88 ASSESSMENT OF CURRENT PUBLIC AND PRIVATE FAIR HOUSING PROGRAMS & ACTIVITIES IN ARIZONA .......... 89 FAIR HOUSING COMMUNITY SURVEY RESULTS ...................................................................................................................89 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 3 Purpose and Methodology ..................................................................................................................................89 Survey Results .....................................................................................................................................................89 Differences between the 2006 and 2009 Survey Results ....................................................................................92 Conclusions .........................................................................................................................................................93 HOUSING PROFESSIONALS INTERVIEW RESULTS ..................................................................................................................94 Background and Methodology............................................................................................................................94 Findings ...............................................................................................................................................................95 Other Observations .............................................................................................................................................95 Conclusions .........................................................................................................................................................96 SURVEYS OF FAIR HOUSING REFERRALS IN ARIZONA ............................................................................................................96 Introduction ........................................................................................................................................................96 Methodology .......................................................................................................................................................96 Comparison of 2007 and 2009 Survey Results ....................................................................................................98 Survey Results .....................................................................................................................................................98 Survey Conclusions ..............................................................................................................................................99 FAIR HOUSING ENFORCEMENT: COMPLAINTS ..................................................................................................................100 HUD, Arizona Attorney General and FHAPs ......................................................................................................100 Southwest Fair Housing Council ........................................................................................................................100 Conclusions: Evidence of Housing Discrimination in Rural Arizona ...................................................................101 FAIR HOUSING TESTING ...............................................................................................................................................102 SWFHC Fair Housing Tests in Non-metro Arizona .............................................................................................102 Conclusion .........................................................................................................................................................103 FAIR HOUSING EDUCATION AND OUTREACH ....................................................................................................................103 Arizona Attorney General – Civil Rights Division ...............................................................................................103 Arizona Department of Housing .......................................................................................................................104 The Southwest Fair Housing Council .................................................................................................................105 IMPEDIMENTS TO FAIR HOUSING CHOICE AND PLAN OF ACTION ...................................................................... 111 INTRODUCTION ..........................................................................................................................................................111 2006 IMPEDIMENTS AND PLAN OF ACTION .....................................................................................................................111 2006 Plan of Action Results ...............................................................................................................................111 Impediment #1 ..................................................................................................................................................112 Impediment #2 ..................................................................................................................................................112 Impediment #3 ..................................................................................................................................................113 Impediment #4 ..................................................................................................................................................115 Impediment #5 ..................................................................................................................................................115 Impediment #6 ..................................................................................................................................................116 Impediment #7 ..................................................................................................................................................117 Impediment #8 ..................................................................................................................................................117 Impediment #9 ..................................................................................................................................................118 2010 IMPEDIMENTS AND PLAN OF ACTION .....................................................................................................................119 Background .......................................................................................................................................................119 Impediment #1 ..................................................................................................................................................119 Action #1 ...........................................................................................................................................................120 Impediment #2 ..................................................................................................................................................120 Action #2 ...........................................................................................................................................................121 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 4 Impediment #3 ..................................................................................................................................................122 Action #3 ...........................................................................................................................................................122 Impediment #4 ..................................................................................................................................................123 Action #4 ...........................................................................................................................................................123 Impediment #5 ..................................................................................................................................................124 Action #5 ...........................................................................................................................................................124 Impediment #6 ..................................................................................................................................................125 Action #6 ...........................................................................................................................................................125 Impediment #7 ..................................................................................................................................................126 Action #7 ...........................................................................................................................................................127 Impediment #8 ..................................................................................................................................................127 Action #8 ...........................................................................................................................................................127 PLAN OF ACTION SUMMARY TABLE................................................................................................................................129 Conclusion .........................................................................................................................................................133 APPENDIX .......................................................................................................................................................... 134 ADOH CDBG FILE CHECKLIST: AFFIRMATIVELY FURTHERING FAIR HOUSING.........................................................................135 HMDA DATA TABLES .................................................................................................................................................137 HUD FAIR HOUSING ZONING AND LAND USE QUESTIONNAIRE ...........................................................................................144 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 5 TABLES TABLE 1: ARIZONA POPULATION COMPARISON BY COUNTY ......................................................................................................19 TABLE 2: ARIZONA URBAN AND RURAL POPULATION...............................................................................................................19 TABLE 3: ARIZONA POPULATION BY RACE AND ETHNICITY – YEAR 2008 .....................................................................................20 TABLE 4: METROPOLITAN AND NON-METROPOLITAN POPULATION INCLUDING HISPANIC ..............................................................21 TABLE 5: ARIZONA POPULATION BY AGE –2008 ....................................................................................................................21 TABLE 6: SELECTED SOCIAL CHARACTERISTICS ........................................................................................................................22 TABLE 7: INCOME INDICATORS FOR ARIZONA AND U.S. – 2008 ................................................................................................23 TABLE 8: HOUSEHOLD INCOME FOR ARIZONA 2008 ...............................................................................................................24 TABLE 9: MEDIAN HOUSEHOLD INCOME BY INCOME CATEGORY AND BY RACE OR ETHNICITY ..........................................................26 TABLE 10: ARIZONA POVERTY RATE BY RACE AND ETHNICITY – YEAR 2000.................................................................................27 TABLE 11: POVERTY STATUS IN ARIZONA BY DISABILITY STATUS FOR THE CIVILIAN NON-INSTITUTIONALIZED POPULATION, 2000 ..........27 TABLE 12: INCOME AND POVERTY IN ARIZONA: URBAN VS. RURAL ............................................................................................28 TABLE 13: ARIZONA EMPLOYMENT BY INDUSTRY: 2008 ..........................................................................................................29 TABLE 14: EMPLOYMENT: RURAL VS. URBAN ........................................................................................................................29 TABLE 15: ARIZONA AND U.S. HOUSING DISTRIBUTION BY HOUSING TYPE..................................................................................30 TABLE 16: ARIZONA AND U.S. HOMEOWNERSHIP RATE BY RACE AND ETHNICITY - 2000 ...............................................................31 TABLE 17: HOUSING QUALITY CHARACTERISTICS ....................................................................................................................32 TABLE 18: HOUSING AND HOUSING QUALITY ........................................................................................................................32 TABLE 19: ARIZONA FAIR MARKET RENT ..............................................................................................................................38 TABLE 20: PERCENTAGE MINORITY POPULATION AND LANGUAGE BY COUNTY .............................................................................39 TABLE 21: HIGH MINORITY CONCENTRATION CENSUS TRACTS IN RURAL ARIZONA........................................................................40 TABLE 22: ADOH AFFORDABLE HOUSING AND COMMUNITY DEVELOPMENT EFFORTS FY 2008 .....................................................52 TABLE 23: ADOH LIHTC PORTFOLIO – UNIT COUNT BY COUNTY .............................................................................................54 TABLE 24: CDBG ALLOCATION BY COUNCIL OF GOVERNMENT REGION ......................................................................................56 TABLE 25: ARIZONA DEPARTMENT OF HOUSING FAIR HOUSING ANNUAL SURVEY RESULTS 2009 ...................................................57 TABLE 26: PROPORTION OF PROBLEM LOANS BY STATE IN AND OUTSIDE OF CDBG JURISDICTIONS- OCT. 28, 2008 ..........................68 TABLE 27: FORECLOSURE NEEDS SCORES WITHIN STATES BY CDBG JURISDICTION -- OCTOBER 28, 2008 .........................................69 TABLE 28: RACE/ETHNICITY ...............................................................................................................................................89 TABLE 29: SEX .................................................................................................................................................................90 TABLE 30: DISABILITY ........................................................................................................................................................90 TABLE 31: RESPONDENTS ENCOUNTERING DISCRIMINATION .....................................................................................................90 TABLE 32: TYPES OF DISCRIMINATION REPORTED BY RESPONDENTS (PERSONALLY EXPERIENCED OR KNOW SOMEONE WHO HAS**) .......90 TABLE 33: TYPES OF DISCRIMINATION REPORTED BY RESPONDENTS (THAT THEY BELIEVE EXIST IN ARIZONA***) 2009 ONLY ..............91 TABLE 34: HOW INFORMED ARE RESPONDENTS ABOUT HOUSING DISCRIMINATION ......................................................................91 TABLE 35: WHAT SHOULD BE DONE ABOUT HOUSING DISCRIMINATION? ...................................................................................92 TABLE 36: TO WHOM WOULD YOU REPORT SUSPECTED DISCRIMINATION? ................................................................................92 TABLE 37: FAIR HOUSING COMPLAINT REFERRALS MADE BY AGENCIES IN ARIZONA: 2007 AND 2009 RESULTS .................................98 TABLE 38: FAIR HOUSING COMPLAINTS FROM THE 13 RURAL ARIZONA COUNTIES FILED WITH HUD OR AN FHAP AGENCY BETWEEN 1/01/05 TO 4/16/09 ...........................................................................................................................................100 TABLE 39: COMPLAINTS RECEIVED BY SWFHC FROM 1/1/2005 THROUGH 12/31/2008 ..........................................................101 TABLE 40: TESTING BY SWFHC UNDER CONTRACT TO HUD IN RURAL ARIZONA COUNTIES JANUARY 1, 2005 TO DECEMBER 31, 2009 ..........................................................................................................................................................................103 TABLE 41:GEOGRAPHIC DISTRIBUTION OF EDUCATION AND OUTREACH ACTIVITIES CONDUCTED BY SWFHC UNDER CONTRACT TO THE STATE OF ARIZONA FOR FY 2005-2009 ....................................................................................................................107 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 6 TABLE 42: PLAN OF ACTION SUMMARY ..............................................................................................................................129 TABLE 43: TABLE 1A: ARIZONA ALL SINGLE-FAMILY LENDING ANALYSIS - 2007 .........................................................................137 TABLE 44: TABLE 1B: ARIZONA ALL SINGLE-FAMILY LENDING ANALYSIS - 2004 .........................................................................139 TABLE 45: TABLE 2A: ARIZONA ALL SINGLE-FAMILY MARKET SHARE LENDING ANALYSIS - 2007 ...................................................140 TABLE 46: TABLE 2B: ARIZONA ALL SINGLE-FAMILY MARKET SHARE LENDING ANALYSIS - 2004 ...................................................141 TABLE 47: TABLE 3. DISPARITIES IN DENIAL RATES................................................................................................................142 FIGURES FIGURE 1: ARIZONA POPULATION DISTRIBUTION BY COUNTY ....................................................................................................17 FIGURE 2: PERCENT CHANGE IN POPULATION FROM JULY 1, 2007 TO JULY 1, 2008 ....................................................................18 FIGURE 3: AVERAGE WAGE PER JOB IN ARIZONA AS A PERCENTAGE OF THE NATIONAL AVERAGE .....................................................23 FIGURE 4: PER CAPITA PERSONAL INCOME IN 2007 AS A PERCENTAGE OF THE NATIONAL AVERAGE.................................................25 FIGURE 5: RURAL ARIZONA MEDIAN HOME PRICE ..................................................................................................................33 FIGURE 6: HIGH-PRICE HOUSING AREAS ...............................................................................................................................34 FIGURE 7: LOW PRICE HOUSING AREAS ................................................................................................................................34 FIGURE 8: HOUSING AFFORDABILITY FOR POLICE OFFICERS.......................................................................................................35 FIGURE 9: EMPLOYMENT GROWTH AND HOUSING AFFORDABILITY BY INDUSTRY ..........................................................................36 FIGURE 10: RENTING A TWO BEDROOM APARTMENT IN SELECTED COMMUNITIES........................................................................37 FIGURE 11: ARIZONA CONTINUES TO SEE HIGH FORECLOSURE RATE ..........................................................................................66 FIGURE 12: AREAS AFFECTED BY CONCENTRATED FORECLOSURES: JUNE 2007 ............................................................................71 FIGURE 13: AREAS AFFECTED BY CONCENTRATED FORECLOSURES: JUNE 2008 ............................................................................72 FIGURE 14: AREAS AFFECTED BY CONCENTRATED FORECLOSURES: JUNE 2009 ............................................................................73 FIGURE 15: HIGH COST LENDING IN ARIZONA MORE PREVALENT AMONG MINORITY GROUPS, ESPECIALLY LATINOS...........................76 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 7 acknowledgements Recognition for assistance in the development of this document is extended to the following entities:  The staff of ADOH spent time in meetings and cooperated fully with every request SWFHC made for information and data. In particular, Joy Johnson served as point person and spent a great deal of time and effort in pulling together ADOH information and answering questions.  Hundreds of Arizona housing consumers and providers made information for this report available through interviews, surveys and sharing data and information with SWFHC staff.  The National Community Reinvestment Coalition (NCRC) conducted the analysis of the Home Mortgage Disclosure Act data contained in this document.  HUD staff in San Francisco provided much of the data on fair housing complaints by making data from "Teapots" available.  The State of Arizona Attorney General's Office provided information and data regarding their E&O activities throughout the state. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 8 introduction Purpose In order to carry out the intent of Federal Fair Housing legislation, the United States Department of Housing and Urban Development (HUD), Fair Housing and Equal Opportunity (FHEO) division, requires that Community Development Block Grant (CDBG) entitlement jurisdictions comply with regulations to affirmatively further fair housing. This mandate is carried out by the CDBG jurisdictions, in part, by completing an Analysis of Impediments to Fair Housing Choice in their jurisdictions. The State of Arizona is a CDBG Entitlement Jurisdiction and has authorized the Arizona Department of Housing (ADOH) to conduct this analysis. HUD grantees are required to do the following:  Complete or update an “Analysis of Impediments to Fair Housing Choice” (AI) pursuant to HUD’s Fair Housing Planning Guidebook every three to five years in coordination with the Consolidated Planning Process.  Use their comprehensive AI study as the basis to formulate a “Fair Housing Plan” with measurable “actions to be taken to overcome the effects of any impediments” and take those appropriate actions.  Maintain records, including their AI study and records to support actions taken and to be taken in regard to implementing the Fair Housing Plan. This AI will review current information and data available from a number of sources, identify current impediments to fair housing in the state’s jurisdiction, evaluate the efficacy of the 2006 Plan of Action and develop a new Plan of Action to address current impediments. This AI is a supporting document to the 2010 - 2014 State of Arizona Consolidated Plan and should be reviewed and evaluated within the context of that plan. Definition of Impediments to Fair Housing Choice HUD defines impediments to fair housing choice as follows:  Any actions, omissions, or decisions taken because of race, color, religion, sex, disability, familial status, or national origin that restricts housing choices or the availability of housing choice. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 9  Any actions, omissions, or decisions which have the effect of restricting housing choices or the availability of housing choice on the basis of race, color, religion, sex, disability, familial status, or national origin. Arizona‟s Fair Housing Goals Primary Goals The State’s primary goals in developing this AI and implementing the Plan of Action are consistent with HUD objectives in requiring CDBG jurisdictions to affirmatively further fair housing (AFFH) and include the following: 1. Strive to eliminate all forms of illegal housing discrimination in the state of Arizona. 2. Actively promote fair housing choice for all persons in Arizona. 3. Provide opportunities for inclusive patterns of housing occupancy regardless of race, color, religion, sex, familial status, disability and national origin. 4. Actively promote housing that is structurally accessible to, and usable by all persons, particularly persons with disabilities within Arizona. 5. Foster compliance with the nondiscrimination provisions of the Fair Housing Act in Arizona. Intermediate Goals The State of Arizona has established the following intermediate goals to facilitate achieving the five primary goals identified above: 1. Maintain a firm and continued commitment to the analysis, planning, and implementation necessary to achieve fair housing goals. 2. Guarantee oversight by ADOH to ensure an ongoing fair housing program. 3. Create a comprehensive Analysis of Impediments to Fair Housing Choice (AI) document, and devise a carefully structured plan for addressing impediments that are firmly grounded in the AI’s conclusions. 4. Take effective actions based on a realistic assessment of available resources. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 10 5. Increase cooperation between public and private agencies in promoting public awareness of fair housing issues. 6. Educate the public on fair housing issues. 7. Effectively enforce fair housing laws. 8. Increase community awareness and promote equal housing opportunity and fair housing choices statewide. Methodology The Southwest Fair Housing Council (SWFHC) drafted this AI under contract to ADOH. ADOH reserved the right to make final edits and a number of these are contained in this draft. SWFHC collected information and data for this AI from the following sources: 1. Reports and studies conducted and provided on a local, state and national level. 2. The State of Arizona Consolidated Plans for 2005-2009 and 2010-2014. 3. Interviews with 20 individuals informed on housing issues and who were located either in non-metro areas or with agencies whose service area was statewide. The interviews consisted of both structured and open-ended questions. 4. A survey of approximately 500 non-metro residents of the state. 5. Newspaper articles and other publications. 6. Data from public and private agencies including HUD, the State Attorney General’s Office, Civil Rights Division (AG), ADOH and SWFHC. 7. Discussions in the context of training sessions for housing providers by SWFHC staff. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 11 jurisdictional background data Arizona’s current fair housing issues have been shaped in part by its geography, climate, history and demographics. Acknowledging and understanding these dynamics places fair housing issues in perspective and helps to create appropriate and effective responses. Geography Arizona is divided into two distinct geographical areas. Northern Arizona lies on the fringe of the Colorado Plateau, an area of dry plains more than 4,000 feet high with deep canyons - including the Grand Canyon - carved by the Colorado River. Along the little Colorado River, which runs northwest through the plateau to join the large Colorado, lies the Painted Desert, where erosion has left colorful layers of sediment exposed, and the Petrified Forest National Park, one of the world’s most extensive areas of petrified wood. South of the Grand Canyon are the San Francisco Peaks, including Humphrey’s Peak, the highest point (12,655 feet) in the state. An escarpment called the Mogollon Rim marks the southern edge of the Colorado plateau.1 The southern half of the state has desert basins broken up by mountains with rocky peaks extending northwest to southeast across central Arizona. To the south, the Gila River, a major tributary of the Colorado, flows west across the entire state. This area has desert plains separated by mountain chains running north and south. In the west in the region around Yuma, the plains lose altitude and approach sea level moving towards the Colorado River delta and the Sea of Cortez in Mexico.2 Although some mountain peaks receive an annual rainfall of more than thirty inches, annually precipitation in most of the state is low. Since the early 20th century, massive irrigation projects have been built in Arizona’s valleys. The Roosevelt, Horse Mesa, Mormon Flat and Stewart Dams irrigate the Salt River Valley. The Gillespie Dam along the Gila River irrigates the Yuma area. The Coolidge Dam serves the area near Casa Grande in the Southeast. Finally, the Hoover, Glen Canyon, Davis and Parker, Imperial, and Laguna Dams along the Colorado serve California and Arizona. The Parker Dam feeds the Central Arizona Project that diverts water to Phoenix and Tucson via canal.3 1 Moon Handbooks: Arizona, Bill Weir. http://www.arizonahandbook.com/AZ_the_land.htm. Moon Handbooks: Arizona. 3 www.infoplease.com 2 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 12 Much of Arizona’s history has been shaped by a limited water supply and competition for this scarce resource. The economic and residential patterns today are largely the result of political battles and policies to harness power and divert water for agriculture, mining, manufacturing and residential development from the rivers in, or adjacent to, Arizona. The battle has been both between power factions within the state and between states and the disparity between economies in localities today is largely a reflection of who won and who lost.4 Racial and Ethnic History The original residents of Arizona can be traced back more than 15,000 years, and distinct cultures began to emerge between 2000 and 500 B.C. The Spanish conquered Mexico in the 16th century. The first Spanish expedition set foot in Arizona in 1539 only to find hostile villages. It was not for another hundred years before the Spanish came back to Arizona and developed settlements and missions in the 18th century. These events created a Hispanic culture in Arizona that was distinct from Native American culture, and, to an extent, in competition and conflict with it.5 Europeans and Americans trickled into Arizona in the early 1800s, primarily in search of furs and minerals.6 As migration increased, white Anglo Americans began to see the cultural, economic and political domination of Arizona as their “manifest destiny.” The War with Mexico (1846-48) ended with the Treaty of Guadalupe Hidalgo, which ceded all Mexican territory north of the Gila River to the United States. The Gadsden Purchase in 1853 completed the acquisition of Mexican territory and formed the present border with Mexico. The strong Mormon presence in Arizona today began with early Mormon settlements in the late 1840’s and early 1850’s and a larger migration to what are now Apache and Navajo Counties in the early 1870’s7. Asian immigration to Arizona began with Chinese arriving in the mid-1800s. Chinese workers were an integral part of America’s westward expansion8 finding work as miners, railway workers, agriculture labor, fishermen and in manufacturing. Like other nonAnglos, the Chinese experienced racism. By the 1880s, there were Anti-Chinese Leagues in every major city in Arizona, and in 1882, the United States passed the Chinese 4 The Columbia Encyclopedia, Sixth Edition. Columbia University Press. 2004 Moon Handbooks: Arizona. 6 Land, Sky, and People: The Southwest Defined, “The Anglo-American Experience,” Volume 34, Number 3, Autumn 1992. http://digital.library.arizona.edu/jsw/3403/anglo.html 7 http://cpluhna.nau.edu/People/mormons.htm 8 Rhonda Tintle, “A History of Chinese Immigration into Arizona Territory: A Frontier Culture in the American West,” Graduate Dissertation, 2004. 5 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 13 Exclusion Act to ban Chinese immigration that remained in effect from 1882 until 1943. Additionally, in 1901 a law passed in Arizona prohibited Chinese from marrying Anglos.9 The character of white culture and beliefs prevented an amalgamation with other cultures and, instead, asserted a forced cultural assimilation that was resisted by both Hispanic and Native American populations. The result was cultural and residential segregation for Hispanics and the establishment of reservations for Native Americans. The history of white Anglo political, economic and social policies based on cultural beliefs and labor imperatives, particularly in mining and agriculture, has helped shape the impediments to fair housing that are active in Arizona today. In metro areas, this is reflected in residential segregation, a holdover from the barrios and in the rural areas in the economically depressed, underdeveloped and largely Hispanic colonias throughout southern Arizona. In addition, communities in the state near reservations have been zones of fair housing tension between Native Americans and Anglos. African Americans began to move into Arizona on the heels of white control of Mexican territory. This early migration was small and many came to escape slavery. In fact, early political and economic incentives for white control of the Southwest were designed to block the flight of slaves into Mexican territory and to increase the number of slave states. In 1861, Arizona joined the Civil War on the side of the Confederacy. As the war ended in 1865, Arizona was declared a territory independent of New Mexico. After the war, white Southerners who were either displaced or disenfranchised by Reconstruction in the South migrated to the state. This helped to establish the politically conservative base that continued to be bolstered by Mormon settlement and the migration of white collar Midwesterners in the 20th century. The black population in Arizona grew slowly but significantly over the last quarter of the 19th century primarily because of employment opportunities in mining, manufacturing and as domestic help. By 1900, the African American population of Phoenix had grown to 2.7% of the total population. In 1901, Arizona law prohibited “the marriage of a person of Caucasian blood with a Negro or Mongolian,” and in 1909, the Territorial Legislature codified segregation by enabling school districts to segregate based on race and ethnicity. This law remained in force until 1954 when the U.S. Supreme Court declared segregation unconstitutional in the landmark case of Brown v. Board of Education of Topeka. At that time Arizona was one of only four states outside of the South permitting segregated schools. In reality segregation had extended not just to schools, but to every public venue in Arizona including restaurants, theaters, hospitals, hotels, swimming pools, buses, social clubs and housing, for almost a century. Even though the law in Arizona precluded segregation after 1954, 9 “The Promise of Gold Mountain: Tucson‟s Chinese Heritage,” http://parentseyes.arizona.edu/promise/ index.html. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 14 the racial attitudes on which segregation was based did not suddenly end and linger to this day.10 In 1992, by referendum, Arizona was the last of the fifty states to declare a holiday to honor the civil rights efforts of Dr. Martin Luther King, Jr.11 The African American population continued to grow in Arizona, along with other populations, during and after World War II. Many African Americans came to Arizona with the armed forces.12 The black population in Arizona is about 4.2% today, but is substantially higher in communities with manufacturing and military bases like the Phoenix metro area and Sierra Vista.13 More recently, the tragedy of the World Trade Center attacks on September 11, 2001 created new fair housing challenges as a balance is being sought between security and a fair and equitable immigration policy.14 Migration into the United States from Mexico has historically been driven by economic disparities and the need for labor in the U.S. The September 11th attacks highlighted immigration policy, bringing the issue to the forefront of the political landscape. Some of the attitudes expressed in cases of housing discrimination have been the result of stereotypes etched by the fear of terrorism and immigration controls and policies that many believe are not restrictive enough. In the final analysis, it is important to recognize that today’s social, political and economic realities are a result of public policy decisions and private sector actions made over the course of Arizona’s history. Invariably, today’s policy decisions will define tomorrow’s realities. Not only is fair housing something that society strives for, it is the law of the land. A comprehensive AI with a realistic and achievable plan of action is imperative to guide the creation of housing policy that recognizes and overcomes impediments to fair housing choice in Arizona. Population This State of Arizona Analysis of Impediments to Fair Housing Choice (AI) focuses on the parts of the state that receive Community Development Block Grant (CDBG) funding through the State of Arizona. The State of Arizona is itself a CDBG entitlement jurisdiction and allocates CDBG money to areas throughout the state that do not 10 Governor Janet Napolitano, “Brown V. Board of Education 50tht Anniversary Speech”. ASU May 1, 2004. http://www.governor.state.azus/speeches/04_05_01.htm. 11 Frances Romero, “A Brief History of Martin Luther King Jr. Day,” Time, January 19, 2009. http://www.time.com/time/nation/ article/0,8599,1872501,00.html. 12 “In the Steps of Esteban: Tucson‟s African American Heritage,” http://parentseyes.arizona.edu/esteban/abriefhistory.html. 13 http://quickfacts.census.gov/qfd/states/04000.html Jones, Susanne, and Tactaquin, Catherine, 14” Latino Immigration Rights in the Shadow of the National Security State: Responses to Domestic Preemptive Strikes”. Social Justice vol. 31, Issue1-2, 2004. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 15 otherwise receive CDBG funds. Therefore, this report does not cover Maricopa County or jurisdictions in Maricopa County, Pima County or jurisdictions in Pima County, or the cities of Yuma, Prescott or Flagstaff because they are independent CDBG entitlement jurisdictions and receive their own federal CDBG allocations. All CDBG entitlement jurisdictions are required to produce an AI. This report therefore covers the rural areas and small towns of Arizona because the two large urban counties and other CDBG entitlement jurisdictions outside of those counties produce their own AIs. Arizona ranks sixth among states in land area and has the 14th largest population at 6,500,180.15 It is as large as the whole of New England, including New York State. The driving distance from Tucson in Pima County to the Four Corners in Apache County is further than from Washington, DC to Boston. The immense area of Arizona creates an impediment to fair housing because of the expanses that must be covered to provide fair housing services. Many of the remaining thirteen counties outside of Maricopa County and Pima County are underserved and housing discrimination, until recently, has gone largely unchallenged. 15 http://www.census.gov/popest/states/NST-ann-est.html. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 16 Figure 1: Arizona Population Distribution by County Maricopa Co. Pima Co. Figure 1 shows population distribution by county. Pima County and Maricopa County, indicated with arrows on the map, contain 76% of Arizona’s population. Eleven of the remaining thirteen counties have populations under 200,000, and the two remaining, Yavapai and Pinal counties, both have less than 400,000 people. The sheer size and small population of Arizona outside of Pima and Maricopa counties, where this report focuses, poses difficult challenges to fair housing education and outreach and enforcement due in part to the distances that must be traveled to serve isolated populations. During the 1990s, the total population in Arizona increased by 40% (or by 1,465,400 people), from 3,665,228 in 1990 to 5,130,632 in 2000. Between 2000 and 2008, Arizona’s population surged by 29.2%. Between 1990 and 2008, the population of Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 17 Arizona nearly doubled. Between 2007 and 2008, Arizona’s population increased 2.3%, making it the second fastest-growing state behind Utah.16 Figure 2: Percent Change in Population from July 1, 2007 to July 1, 2008 As of 2008, 4,966,616 people, 76% of all Arizonans, lived in Pima County or Maricopa County, where the state’s two largest metro areas, Phoenix and Tucson, are located. Pima County and Maricopa County receive much of the attention when discussing the explosive growth in Arizona. However, as the Table 1 shows, many of the other counties have seen very high growth rates as well. 16 http://www.azcommerce.com/doclib/prop/state_economic_profile.pdf Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 18 Table 1: Arizona Population Comparison by County County Name Apache County Cochise County Coconino County Gila County Graham County Greenlee County La Paz County Maricopa County Mohave County Navajo County Pima County Pinal County Santa Cruz County Yavapai County Yuma County Pop. 2000 69,423 117,732 116,318 51,330 33,489 8,547 19,715 3,072,172 155,032, 97,468 843,752 179,715 38,381 215,503 194,322 Pop. 2008 70,207 129,006 128,558 52,166 36,452 8,002 20,086 3,954,598 196,281 112,757 1,012,018 327,301 42,923 215,503 194,322 % Change 2000 - 08 1.1% 9.6% 10.5% 1.6% 8.8% -6.4% 1.9% 28.7% 26.6% 15.7% 19.9% 82.1% 11.8% 28.6% 21.4% Source: U.S. Census Bureau, 1990 and 2000 Censuses of Population (corrected), and 2008 county estimate files.17 Nearly fifty million Americans live in non-metropolitan (non-metro) areas, as currently defined. The non-metro classification covers approximately 2,000 counties outside the primary daily commuting range of urbanized areas with 50,000 or more people, and is widely used to define "rural" for research and policymaking. Non-metro areas contain 17 percent of the U.S. population but extend across 80 percent of the land area.18 According to Table 2, only about 10% of Arizonans live in non-metro or rural areas. Table 2: Arizona Urban and Rural Population19 Population Year 1980 1990 2000 2008 (latest estimate) Rural Urban Total 365,652 448,668 591,147 667,880 2,350,894 3,216,560 4,539,485 5,832,300 2,716,546 3,665,228 5,130,632 6,500,180 Source: USDA Economic Research Service. The non-metropolitan area of Arizona is much smaller in terms of population and economic activity as compared to Maricopa County and Pima County. It has higher poverty rates, higher housing quality problems, higher concentrations of minority populations, lower job growth and lower median household incomes. Specific demographic, economic, and housing differences between non-metropolitan and 17 USDA Economic Research Service. http://www.ers.usda.gov/Data/Population/PopList.asp?ST=AZ&LongName=Arizona This paragraph is taken directly from the United States Department of Agriculture‟s Economic Research Service website: http://www.ers.usda.gov/Briefing/Population/. 19 http://www.ers.usda.gov/StateFacts/AZ.htm#PIE 18 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 19 metropolitan areas of Arizona are presented throughout the “Jurisdictional Background Data” chapter and are updated from the last State AI where possible. Race and Ethnicity The distribution of state population by race and ethnicity, based on the 2008 Census Bureau American Community Survey, is as follows:  Since the 2006 AI, the Hispanic population increased and now stands at 30.1% of the state’s total.  The minority population was 36.2% in 2004, and has increased to 41.8% (100% minus the 58.2% that identify as “White Alone, Not Hispanic or Latino”) in 2008.  Arizona residents are 80.1% White (Hispanic and Non-Hispanic White). Further details regarding the population of Arizona are presented in Table 3. Table 3: Arizona Population by Race and Ethnicity – Year 2008 Total Population Number 6,500,180 % of Total Population 100% Race or Ethnicity One Race White Black or African American American Indian and Alaska Native Asian Native Hawaiian and Other Pacific Islander Some Other Race Two or More Races Hispanic or Latino* Not Hispanic or Latino 6,332,827 5,203,987 235,758 286,749 154,416 9,340 442,577 167,353 1,959,197 4,540,983 97.4% 80.1% 3.6% 4.4% 2.4% 0.1% 6.8% 2.6% 30.1% 69.9% Source: U.S. Census Bureau, 2008 American Community Survey. * Persons of Hispanic origin may be of any race; Hispanic is not a race, it is an ethnicity. The most current data regarding minority populations in rural areas is from the 2006 State of Arizona AI and is as follows:  Minority population comprises 37.3% of the non-metro area’s total population, as compared to 31.6% for the metro areas.  The share of Hispanic ethnicity as a percent of total population for the nonmetro Arizona is 28.2%, as compared to 25.8% for the metro areas. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 20 Table 4: Metropolitan and Non-Metropolitan Population including Hispanic Selected Indicators 2004 Total Population % of Total State Population in 1990 % of Total State Population in 2000 % of Total State Population in 2004 Total Minority Population (%) Hispanic Ethnicity (%) Non-Metropolitan Arizona 1,378,300 23.9% 23.7% 23.6% 37.3% 28.2% Metropolitan Arizona 4,455,385 76.1% 76.3% 76.4% 31.6% 25.8% Source: 2000 Census, DES and ADOH. Age According to the 2008 American Community Survey (ACS), the median age in Arizona was 35.1 years - lower than the U.S. median age of 36.9 years. Table 5: Arizona Population by Age –2008 Selected Age Category Total Population Under 5 Years Under 18 Years 18 to 64 Years 65 Years and Over 65 to 74 Years 75 to 84 Years 85 Years and Over Number 6,500,180 515,321 1,707,680 3,928,408 864,092 446,195 306,706 111,191 % of Total Arizona Population 100% 7.9% 26.3% 60.4% 13.3% 6.9% 4.7% 1.7% % of Total U.S. Population 100% 6.9% 24.3% 62.9% 12.8% 6.6% 4.4% 1.8% Source: U.S. Census Bureau, 2008 American Community Survey. 20  School-Age Population (Under 18 Years) - Data presented in Table 5 shows the school age population (under 18 years) in Arizona is 26.3% of the total population.  Working-Age Population (18 to 64 Years) - This population group comprises 60.4% of the total population.  Retirement-Age Population (65 Years and Over) – As of 2008, 13.3% of the total state population was 65 years old and over. It is important to note that almost 6% of the total population was 75 years or older in 2004. This increased to 6.4% in 2009. In the United States, the number of people in this age category will explode over the next 20 years, exerting pressure on public resources allocated for services to this population group.20 http://www.census.gov/population/socdemo/statbriefs/agebrief.html Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 21 Social Characteristics  Family Households make up 65.5% of the total population in Arizona.  The average household size is 2.81 and the average family size is 3.46. Table 6: Selected Social Characteristics Social Characteristics Family Households Married-couple family Married couple family with own children under 18 Female householder, no husband present, family Female householder, no husband present with own children under 18 Nonfamily households Avg. Household Size Avg. Family Size Foreign Born Speak language other than English at Home English only spoken at home Total Civilian Noninstitutional Population with a Disability Total Number in Arizona % of Total US Population 1,489,192 1,107,600 % of Total Arizona Population 65.5% 48.7% 458,988 20.2% 21.4% 264,985 11.7% 12.5% 61,375 7.1% 7.4% 784,650 2.81 3.46 932,518 34.5% N/A N/A 14.3% 33.4% 2.61 3.20 12.5% 1,646,654 27.5% 19.6% 4,338,205 72.5% 80.4% 772,963 12.1% N/A 66.6% 49.6% Source: U.S. Census Bureau, 2008 American Community Survey.  The foreign-born population in Arizona totals 14.3% and 72.5% of Arizonans speak only English at home. This differs from the national averages of 12.5% and 80.4% respectively.  According to the 2008 American Community Survey, the disabled population in Arizona represents 12.1% of the total. This number is significantly lower than the 2000 Census data that estimates that 20.1% of Arizonans five years of age and older have one or more disabilities.  The Census also finds that there is an extremely strong relationship between age and disability, with the lowest incidence occurring among children and young adults and the highest among the very elderly. However, babyboomers, ages 35-54 in 2000, have the highest number of people with disabilities because of the large size of this group. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 22 Income Characteristics Arizona’s income statistics have historically lagged behind the United States as a whole as shown in the figure below. Figure 3: Average Wage per Job in Arizona as a Percentage of the National Average This disparity remains true today and is reflected in the lower median family income, lower median household income and lower per capita income. Table 7: Income Indicators for Arizona and U.S. – 2008 Average Income Indicator Median Household Income Median Family Income Per Capita Income Arizona $50,958 $60,547 $25,415 U.S. $52,029 $63,366 $27,589 Source: U.S. Census Bureau, 2008 American Community Survey. Compared to the nation, a greater percentage of Arizonans earn less than $15,000, and smaller percentage of Arizonans earn more than $100,000. Other notable statistics include:  22.5% of households earn less than $25,000 annually in Arizona compared to 23.3% nationally. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 23  48.9% of households in Arizona make less than $50,000 per year, as compared to 47.9% for the U.S.  Nineteen percent of households in Arizona have incomes in the $100,000 plus range, as compared to 21% for the U.S. Further breakdowns on household income by income category are presented in Table 8. Table 8: Household Income for Arizona 2008 Arizona Total Households Household Income Less than $10,000 $10,000 to $14,999 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 $150,000 to $199,999 $200,000 or more Median Household Income U.S. 2,273,842 100.0% 113,101,329 100.0% Number of Households 154,629 111,758 245,259 250,959 350,871 442,062 286,679 272,454 81,417 77,754 % of Total Households 6.8% 4.9% 10.8% 11.0% 15.4% 19.4% 12.6% 12.0% 3.6% 3.4% Number of Households* 8,143,296 6,107,472 12,101,842 11,762,538 16,060,388 21,263,050 14,024,564 13,911,463 4,976,458 4,863,344 % of Total Households 7.2% 5.4% 10.7% 10.4% 14.2% 18.8% 12.4% 12.3% 4.4% 4.3% $50,958 $52,029 Source: U.S. Census Bureau *Found by multiplying “% of Total Households” by “Total Households (113,101,329)” in the U.S. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 24 There is a wide range of per capita personal income among Arizona counties. Eight counties, all of which are eligible for State CDBG money, have per capita personal incomes between 50 and 60% of the national average. Figure 4: Per Capita Personal Income in 2007 as a Percentage of the National Average Household Income by Race and Income Category21 Minorities in Arizona comprise a higher share of the lower income households and a smaller share of the higher income households:  Lowest Income Category - 24.2% of Native Americans, 13.5% of Blacks, and close to 12% of Asians and Hispanics are included in the “less than $10,000” income category, as compared to 7.3% for Whites.  Middle to Low Income Categories – 70.8% of Native Americans, 62.9% of Hispanics, and 58.2% of Blacks are included in the “Less than $40,000” income category, compared to 47.1% for Whites.  High Income Category – Only 2.5% of Native Americans and 3.5% of Hispanics are included in the income category of “More than $100,000” as compared to 6.7% for Blacks, 11.6% for Whites, and 15.7% for Asians. This is the only income category where Asians surpass Whites. For further details, refer to Table 9. 21 This data is the most current data for this category and is found in the 2000 Census. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 25 Table 9: Median Household Income by Income Category and by Race or Ethnicity Arizona Total Pop White Black Less than 8.6% 7.3% 13.5% $10,000 Less than 14.9% 13.3% 21.2% $15,000 Less than 21.7% 19.7% 28.5% $20,000 Less than 35.9% 33.4% 44.2% $30,000 Less than 49.7% 47.1% 58.2% $40,000 Less than 60.8% 58.2% 68.7% $50,000 Less than 80.0% 78.1% 85.4% $75,000 Less than 89.7% 88.4% 93.3% $100,000 More than 10.3% 11.6% 6.7% $100,000 Source: U.S. Census Bureau, Census 2000. Native Americans Asian Hawaiians and Other Pacific Islanders Some Other Race Two or More Races Hispanic Not Hispanic 24.2% 11.9% 8.3% 11.0% 13.3% 11.6% 7.9% 33.9% 16.9% 18.2% 19.1% 20.8% 20.0% 13.9% 42.6% 22.0% 21.9% 28.5% 28.3% 29.2% 20.1% 58.0% 32.8% 34.8% 46.9% 44.3% 46.9% 33.6% 70.8% 44.3% 51.3% 63.1% 59.4% 62.9% 46.9% 79.5% 54.0% 64.8% 75.2% 70.6% 74.3% 57.9% 93.0% 72.6% 82.5% 91.7% 87.2% 90.3% 77.8% 97.5% 84.3% 93.0% 97.3% 95.1% 96.5% 88.2% 2.5% 15.7% 7.0% 2.7% 4.9% 3.5% 11.8% Poverty by Race and Ethnicity The poverty rate in Arizona has increased significantly since the 2006 AI was completed when it was 13.4% for Arizona and 12.4% for the U.S. The rate in Arizona was 14.2% in 2007 and increased to 14.7% in 2008, which was twice as fast as the national rate. The nationwide poverty rate in 2008 stood at 13.2%. The number of Arizonans receiving food stamps increased dramatically from 155,043 (6.9% of the population) in 2007 to 187,331 in 2008 (8.2% of the population). The percentage of Arizonans receiving food stamps in 2008, 8.2%, is lower than the national average of 8.6%.22 The 2000 Census contained the most current data for poverty rates by race and ethnicity at the writing of this report. The rate of poverty for minority populations in Arizona is significantly higher than the white population: 36.5% for American Indian and Alaska Natives, 23.6% for Hispanics, and 19.5% for Blacks, as compared to 9.9% for White. Further details on poverty by race and ethnicity are presented in the table below.23 22 Howard Fisher, “Nearly 21% of Tucsonans are living under the federal level,” Arizona Daily Star, September 29, 2009. Data from the 2000 Census is the most current data for “Poverty Rate by Race and Ethnicity.” As noted in this report, the poverty rate for Arizona his risen since the 2000 Census. 23 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 26 Table 10: Arizona Poverty Rate by Race and Ethnicity – Year 2000 Race or Ethnicity Total Population White Black or African American American Indian and Alaska Native Asian Native Hawaiian and Other Pacific Islander Some Other Race Two or More Races Hispanic or Latino* Not Hispanic or Latino Universe for Poverty 4,634,191 3,549,285 Number in Poverty 619,344 351,871 % in Poverty 131,182 25,516 19.5% 222,428 81,194 36.5% 83,221 10,374 12.5% 5,435 877 16.1% 513,670 128,970 1,116,887 3,517,304 125,416 24,096 263,929 355,415 24.4% 18.7% 23.6% 10.1% 13.4% 9.9% Source: U.S. Census Bureau, Census 2000. * Persons of Hispanic origin may be of any race; Hispanic is not a race, it is an ethnicity. Poverty and Disability24 In general, people with disabilities have higher incidences of poverty than people without. Table 11: Poverty Status in Arizona by Disability Status for the Civilian Non-Institutionalized Population, 2000 Disability Status by Sex and Age Males > 5 years of age with a disability Income in 1999 below poverty level Income in 1999 at or above poverty level Females > 5 years of age with a disability Income in 1999 below poverty level Income in 1999 at or above poverty level Number of Disabled Persons 458,334 73,430 384,904 440,357 83,966 356,391 % of Population With Disability Status 20.1% 16.0% 84.0% 18.7% 19.1% 80.9% Source: U.S. Census Bureau, Census 2000 and ADOH.  According to the 2000 Census, the percentage of the population age five and older with disability status in Arizona was 20.1% for males and 18.7% of 24 The most current data for “Poverty Status in Arizona by Disability Status for the Civilian Non-Institutionalized Population” is contained in the 2000 Census. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 27 females. Comparable numbers at the U.S. level were 19.7% and 19.2% respectively.  Of the persons with a disability in the 2000 Census, 16.0% of males and 19.1% of females in Arizona were in poverty. Comparable numbers at the U.S. level were 15.3% and 19.7%, respectively. Income and Poverty: Urban vs. Rural  The per-capita income and earnings per job in rural areas are significantly lower than in urban areas. Table 12: Income and Poverty in Arizona: Urban vs. Rural25 Income Rural Urban Total Per-capita income (2007 dollars) 2006 2007 Percent change 24,156 24,391 1.9 34,271 33,815 -2.7 33,205 32,833 -2.2 Earnings per job (2007 dollars) 2006 2007 Percent change 35,666 35,296 -2.1 45,863 44,657 -5.3 45,066 43,927 -5.1 21.3 26 21.7 12 14.3 12.9 13.2 15.7 13.9 19.3 13.4 14.1 Poverty rate (percent) 1979 1989 1999 2007 (latest model-based estimates) Source: USDA Economic Research Service  The poverty rate in 2007 was 69% higher in rural areas as compared to urban areas. Employment According to the 2008 American Community Survey, the top three economic sectors in Arizona are educational services, and health care and social assistance; retail trade; and professional scientific, and management, and administrative and waste management services. 25 http://www.ers.usda.gov/StateFacts/AZ.htm#PIE Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 28 Table 13: Arizona Employment by Industry: 2008 Civilian employed population 16 yrs & over Public Administration Professional scientific, and management, and administrative and waste management services Retail Trade Educational services, and health care and social assistance Arts, entertainment, and recreation, and accommodation, and food services Construction Manufacturing Finance and insurance, and real estate and rental and leasing Wholesale Trade Other Services, except public administration Transportation, Warehousing and Utilities Information Agriculture, forestry, fishing and hunting, and mining Employment Number 2,947,910 Percent of Total Employment N/A 157,971 5.4% 319,127 10.8% 374,376 12.7% 581,277 19.7% 310,197 10.5% 284,822 219,360 9.7% 7.4% 235,899 8.0% 75,099 2.5% 147,977 5.0% 146,985 56,598 5.0% 1.9% 38,222 1.3% Source: 2008 American Community Survey Table 14: Employment: Rural vs. Urban26 Employment Total number of jobs 2006 2007 Rural Urban Total 266,726 274,704 3,145,170 3,245,953 3,411,896 3,520,657 3.7 5.3 3.8 5.5 Unemployment rate (percent) 2007 5.2 2008 7.2 Source: USDA Economic Research Service 26  In 2007, only 7.8% of employment in Arizona could be found in rural areas. Urban areas contained 92.2% of all employment.  During the production of this report, the Arizona economy was starting to show signs of recovering from the worst recession since the Great Depression. Unemployment skyrocketed as the collapse of the housing http://www.ers.usda.gov/StateFacts/AZ.htm#PIE Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 29 market sent tremors through the entire economy. Experts predict the unemployment rate will break double digits before declining. The statewide unemployment rate in October 2009 stood at 9.3%27; however, it showed significant improvement in November 2009, falling to 8.9%.28 Housing Homeownership and Types of Housing Single-family dwellings are the primary type of housing both in the state of Arizona and in the U.S. The 2008 American Community Survey data reveals that 67.8% of the total housing units in Arizona are single family homes, 20.6% multifamily, and about 11.1% manufactured or mobile homes. Comparable numbers for the U.S. are 67.6%, 25.8% and 6.6%, respectively. Specific numbers and percentages of housing units by housing type are presented in the table below. Table 15: Arizona and U.S. Housing Distribution by Housing Type Housing Information Indicator Total Number of Units in 2008: Single Family 1-unit detached 1-unit attached Multifamily (2 or more units) Manufactured or Mobile Homes Boat, RV, van, etc. Arizona Number 2,667,550 1,808,040 1,674,315 133,725 549,270 295,972 13,818 % 100% 67.8% 62.8% 5.0% 20.6% 11.1% 0.5% U.S. Number 129,060,383 87,244,819 79,888,377 7,356,442 33,297,579 8,571,985 129,060 % 100% 67.6% 61.9% 5.7% 25.8% 6.6% 0.1% Source: 2008 American Community Survey. The most recent data regarding the differences between rural and metro Arizona in terms of homeownership rate, manufactured housing and mobile homes, and housing quality are from the 2006 State AI and are as follows: 27 28  The homeownership rate in the non-metro areas of the state is 72.3%, which is significantly higher than the 66.8% for the metro areas.  A sizable portion of the housing in the non-metro areas of Arizona is comprised of manufactured housing and mobile homes – 28.8% as compared to only 8.5% for the metro areas. Howard Fischer, “Arizona‟s job picture likely will stay bleak.” Arizona Daily Star, October 2, 2009. Betty Beard, “Arizona‟s unemployment rate falls to 8.9%.” Arizona Republic, December 18, 2009. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 30 Homeownership Rate by Race and Ethnicity The overall homeownership rates for most minorities are higher in Arizona than in the U.S. Table 16: Arizona and U.S. Homeownership Rate by Race and Ethnicity - 200029 Homeownership Rate Homeownership Rate by Race and Ethnicity Arizona U.S. All Households 68.0% 66.2% White Alone 71.3% 71.3% Black or African American Alone 44.1% 46.3% American Indian and Alaska Native Alone 61.2% 55.7% Asian Alone 57.0% 53.2% Native Hawaiian and Other Pacific Islanders Alone 46.8% 45.5% Some Other Race Alone 52.6% 40.4% Hispanic or Latino (of Any Race) 55.0% 45.7% Not Hispanic or Latino 70.8% 68.1% Source: 2000 Census and Census Bureau’s 2004 Homeownership Data. Housing Quality and Affordability Housing quality and affordability is measured by the following three criteria:  Persons or families living in units with physical defects (lacking a complete kitchen or bath).  Persons or families living in overcrowded conditions (greater than 1.01 person/room).  Persons or families are cost burdened (paying more than 30% of their income for housing, including utilities). It is clear using the above criteria that housing quality and affordability problems in Arizona are more severe than the nation as a whole: 29  0.8% of homes in Arizona lack complete plumbing facility, as compared to 0.7% nationally.  50.1% of renters in Arizona pay 30% or more of their incomes for rent, as compared to 37.7% nationally. The problem of cost-burdened households is widespread and most contributes to the inability of lower income households to live adequately with their incomes. Though the 2000 Census data is now quite dated, it is still the most current data for this category. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 31  4.1% of households in Arizona live in overcrowded conditions as opposed to 3.2% nationally. More details on housing quality and affordability criteria are presented in the following table. Table 17: Housing Quality Characteristics Housing Quality Characteristics Lacking Complete Plumbing Facility Lacking Complete Kitchen Facility Paying 30% or More for Housing Cost Owners (Unaffordable) Paying 30% or More for Rent - Renters (Unaffordable) 1.1 to 1.5 Persons Per Room (Overcrowded) 1.51 or More Persons Per Room (Severely Overcrowded) (Number of Housing Units) Arizona 19,053 25,658 454,361 (% of Total Housing Units) Arizona 0.8% 1.1% 41.5% (% of Total Housing Units) U.S. 0.7% 0.9% 37.7% 336,543 50.1% 49.8% 59,727 2.6% 2.1% 35,179 1.5% 1.1% Source: 2008 American Community Survey. Non-metro residents experience more housing quality problems than metro residents. The most recent information regarding housing quality comparisons between urban and rural Arizona is found in the 2006 State AI and is detailed below: Table 18: Housing and Housing Quality Selected Indicators Homeownership Rate (2000) Manufactured Housing/Mobile Homes as % of Total Housing Units % of Homes Lacking Complete Plumbing Facility % of Homes Lacking Complete Kitchen Facility Paying 30% or More for Housing Cost Owners (Unaffordable) Paying 30% or More for Rent - Renters (Unaffordable) 1.1 to 1.5 Persons Per Room (Overcrowded) 1.51 or More Persons Per Room (Severely Overcrowded) Non-Metropolitan Arizona 72.3% Metropolitan Arizona 66.8% 28.8% 8.5% 3.3% 0.5% 2.9% 0.6% 22.0% 22.7% 33.8% 39.8% 5.2% 4.1% 4.9% 4.0% Source: 2000 Census and ADOH. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 32 Housing Affordability The chart below shows the range of median home prices in rural towns throughout the state. Flagstaff, Prescott, Tucson and Yuma are CDBG entitlement jurisdictions and are not covered in this report, but do add perspective to home prices in other parts of the state that are covered in this report. The chart is from the “2009 State of Housing in Arizona” PowerPoint presentation presented at the 2009 Governor’s Housing Forum. Rural Arizona Median Home Price - 2009 $350,000 $250,000 Parker Springerville Show Low Yuma Lake Havasu City Nogales Tucson* Safford PinetopLakeside Payson Sierra Vista Williams Flagstaff $50,000 Prescott $150,000 Figure 5: Rural Arizona Median Home Price Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 33 Figure 6 illustrates the areas that ADOH considers high-price housing areas in Arizona. Figure 6: High-Price Housing Areas30 Figure 7 illustrates the areas that ADOH considers low-price housing areas in Arizona. Figure 7: Low Price Housing Areas31 30 31 “2009 Arizona‟s Housing Market at a Glance,” Arizona Department of Housing. “2009 Arizona‟s Housing Market at a Glance,” Arizona Department of Housing. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 34 Figure 8 demonstrates the affordability of a median priced home for police officers in different parts of the state. Assuming that a police officer is the single earner in the household, she would only be able to afford a home in five out of the thirteen communities covered in the figure. Adding another income earner to the household makes median priced homes affordable in all but two communities. Figure 8: Housing Affordability for Police Officers32 32 “2009 Arizona‟s Housing Market at a Glance,” Arizona Department of Housing. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 35 Figure 9 presents employment and housing affordability statistics for rural Arizona. None of the average worker’s wages in any industry is sufficient to buy a median-priced house, and a two-bedroom apartment at fair market rent is considered unaffordable for 42% of wage earners. Figure 9: Employment Growth and Housing Affordability by Industry Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 36 According to ADOH, renters comprise nearly one-third of occupied homes in Arizona. The figure below compares how much a household must earn to afford a two-bedroom rental at the area’s fair market rent (based on the affordability standard of paying 30% or less of income for housing expenses) to the median hourly wage of retail workers in the corresponding counties. Figure 10: Renting a Two Bedroom Apartment in Selected Communities33 33 “2009 Arizona‟s Housing Market at a Glance,” Arizona Department of Housing. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 37 Table 19 shows fair market rents for Arizona counties in 2010 according to HUD. Table 19: Arizona Fair Market Rent34 County Area name Apache County Cochise County Coconino County Gila County Graham County Greenlee County La Paz County Apache County, AZ Cochise County, AZ Flagstaff, AZ MSA Gila County, AZ Graham County, AZ Greenlee County, AZ La Paz County, AZ PhoenixMesa Scottsdale, AZ MSA Lake Havasu CityKingman, AZ MSA Navajo County, AZ Tucson, AZ MSA PhoenixMesaScottsdale, AZ MSA Maricopa County Mohave County Navajo County Pima County Pinal County Santa Cruz County Yavapai County Yuma County Santa Cruz County, AZ Prescott, AZ MSA Yuma, AZ MSA Efficiency One Bedroom Two Bedroom Three Bedroom Four Bedroom Percent Change from Last Year 433 530 627 870 1102 5.7 508 589 739 1021 1254 5.7 820 975 1102 1417 1787 5.6 554 649 854 1173 1208 5.6 576 621 695 960 1105 5.8 526 585 734 1009 1141 5.6 591 592 710 1005 1034 5.7 654 762 919 1338 1567 4.8 615 676 788 1090 1216 5.6 516 552 728 981 1162 5.7 540 635 815 1174 1240 9.7 654 762 919 1338 1567 4.8 607 608 770 1123 1156 5.6 683 706 891 1298 1337 5.6 574 678 810 1149 1408 5.6 34 http://www.huduser.org/datasets/fmr/fmrs/FY2010_code/2010state_sum.odn?inputname=STTLT*499999999%2BArizona& selection_type=stwide&county_select=yes&state_name=Arizona&data=2010&statefp=4.0&fmrtype=Final Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 38 Housing affordability continues to be a problem throughout Arizona. Some communities have housing that is relatively affordable for most people, but many communities struggle to provide housing that is affordable to lower and moderate income households. Minority Concentration Areas and Language by County The following table shows the percentage of minorities by county and the percentage of languages other than English spoken at home by people over 5 years of age. This information is valuable in determining the need and focusing efforts for fair housing services and materials in languages other than English. Table 20: Percentage Minority Population and Language by County County Apache Cochise Coconino Gila Graham Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Total for Arizona Population Percent Minority 69,423 117,755 116,320 51,335 33,489 8,547 19,715 3,072,149 155,032 97,470 843,746 179,727 38,381 167,517 160,026 5,130,623 82.3% 39.9% 42.4% 31.1% 44.8% 46.1% 36.2% 33.8% 16% 57.7% 38.5% 41.2% 82.2% 13.4% 55.7% 36.2% Percent Language Other Than English* 80.5% 29.5% 28.2% 18.2% 23.7% 26% 21.6% 24.1% 10.7% 39.9% 27.5% 25.2% 80.5% 9.7% 45.5% 26.6% Do not Speak English or not well at all 12% 8% 7% 4% 4% 4% 7% 11% 4% 8% 8% 8% 25% 4% 17% 5% * Percentage of persons five and over who speak another language other than English at home. Measures of Residential Segregation in Arizona High Minority Census Tracts The following table contains a list of census tracts for the non-metro counties of Arizona (off Indian Reservations) that have a minority population concentration ratio of 75% or higher (or the minority population rate of at least 200% of the state minority population rate of 36.2%). The primary minority group in all of the targeted census tracts is Hispanic. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 39 The data presented in the table also reveals that there is a strong relationship between minority population concentration, poverty rate, and income. For example, the majority of the selected census tracts with high concentration of minority populations also had higher poverty rates. Median family incomes in these census tracts were at low and moderate levels. Table 21: High Minority Concentration Census Tracts in Rural Arizona County Cochise Cochise Cochise Cochise Gila Pinal Pinal Santa Cruz Santa Cruz Santa Cruz Santa Cruz Santa Cruz Yuma Yuma Yuma Yuma Yuma Yuma Yuma Yuma Yuma Census Tract 6 7 8 9 13 19 20 9961.02 Census Tract Population 3,375 4,052 4,951 6,759 1,563 2,332 8,990 12,875 Census Tract Minority % 75.0 85.2 85.3 92.6 75.7 83.4 81.4 81.7 White Population 844 600 730 502 380 388 1,670 2,352 Census Tract Minority Population 2,531 3,452 4,221 6,257 1,183 1,944 7,320 10,523 American Indian Population 101 5 23 15 12 123 202 30 Hispanic Population 2,363 3,416 4,123 6,170 1,145 1,567 6,594 10,288 % Below Poverty 36.2 33.8 35.4 40.6 25.6 37.1 27.6 14.0 Tract Median Family Income 62.8 76.0 71.0 59.3 84.1 57.2 60.2 97.5 Census Tract Income Level Moderate Moderate Moderate Moderate Middle Moderate Moderate Middle 9962 4,147 93.3 280 3,867 5 3,815 35.0 68.0 Moderate 9963 7,944 94.5 440 7,504 8 7,442 31.0 62.1 Moderate 9964.01 3,645 95.7 157 3,488 6 3,466 32.3 80.0 Moderate 9964.02 4,999 94.5 276 4,723 19 4,664 38.5 60.1 Moderate 2 3,926 3.01 3,839 3.02 4,713 4.02 3,563 7 4,858 114.01 8,091 115.01 2,705 115.02 7,305 116 5,024 Source: FFIEC and ADOH. 76.9 78.3 85.2 85.8 78.1 99.0 83.1 96.0 98.9 906 832 698 507 1,066 84 457 292 56 3,020 3,007 4,015 3,056 3,792 8,007 2,248 7,013 4,968 75 33 20 26 27 4 475 27 11 2,766 2,768 3,765 2,941 3,567 7,988 1,727 6,939 4,944 17.8 24.5 45.8 29.1 27.4 34.0 40.0 26.4 38.1 96.5 89.7 63.9 86.4 71.3 68.0 70.0 81.0 38.1 Middle Middle Moderate Middle Moderate Moderate Moderate Middle Low Demographics and Fair Housing Choice in Arizona This section discusses how certain demographic factors and indicators affect and reflect impediments to fair housing choice in Arizona. 1. Arizona is a large state with a dispersed rural population. Arizona is the sixth largest state in the nation in terms of area. However, over 75% of the state’s population lives in two counties, Maricopa and Pima.35 The rest of the population is dispersed in the thirteen remaining counties which are comprised 35 Neither is covered in this AI. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 40 mostly of small towns and isolated rural areas. The immense area of Arizona and limited fair housing resources have resulted in most of the thirteen rural counties being underserved since the inception of the Federal Fair Housing Act, and, until recently, housing discrimination has largely gone unchallenged. To overcome this challenge, since 2000, the Arizona Department of Housing has developed a comprehensive strategy to provide education and outreach to all thirteen rural counties in Arizona. Data shows that headway has been made in improving fair housing choice in rural Arizona. Housing discrimination, however, still exists in rural Arizona and distance and the dispersed population constitute an even greater challenge given the economic downturn and fiscal crisis the state is currently facing. The strategy to provide fair housing service to rural Arizona will continue and is incorporated in the Plan of Action presented near the end of this AI. 2. Rapid population growth in areas underserved by fair housing services can create racial and ethnic inequities in residency patterns that, in time, become entrenched and very difficult or impossible to change. Arizona has historically been a high growth state, and this has been true since the turn of this century. With the collapse of the housing market and economic downturn that started in 2007, this growth has virtually halted. A surge of home mortgage defaults and foreclosures caused the financial failure of many of the lenders sustaining the housing market, and caused these markets to tighten to the point that home loans are more difficult to obtain. This downturn has spread like a tidal wave, depressing the economy overall and resulting in large increases in unemployment. Both state and local government have been forced to cut services to attempt to stem the deficits that are occurring due to the loss of tax revenue because of the economy’s slowdown. This situation has dampened the pattern of migration into the state that fostered the unprecedented population growth for the last half century. However, the slowdown or reversal of the population increases has not affected all areas of the state equally. Ironically, because they fueled much of Arizona’s dramatic population increase with their booming housing markets, the two large metro counties of Maricopa and Pima are experiencing the brunt of the downturn, while some of the rural counties have begun to outpace them in population growth. Excluding Pima and Maricopa Counties, eight counties have experienced over eight percent population growth this decade. These areas will continue to present fair housing challenges in coming years. Data shows that Pinal County, in particular, continues to experience rapid population increases and other Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 41 counties such as Graham, Cochise, Yuma, Yavapai and Mohave appear ready to accelerate rapidly once the economy improves. Rapid population growth, particularly in areas that have been underserved with respect to fair housing services, can present a challenge to fair housing. Without the strong presence of fair housing services in such areas, rapid growth can quickly outstrip the ability to monitor for Fair Housing Act (FHAct) compliance and train real estate agents and property owners. Fair housing can be lost or pushed aside in the wake of rapid development and be seen by communities as irrelevant, a hindrance to growth or incorrectly subsumed under the rubric of affordable housing. Fair housing impediments in areas like zoning, design and construction, marketing and issues such as steering, redlining, minority residential concentrations and age restrictions are ignored in the rush of development. History has shown that when attention to fair housing is lacking, and development takes place without the inclusion of fair housing planning in development strategies, housing and residential patterns can be established that create racial and ethnic disparities that become accepted and reinforced in public attitudes, business practices and governmental policies. Once these impediments become established, they can be very difficult and costly to eliminate. ADOH addresses this problem in the Plan of Action of this AI through the continuation of fair housing education and training in rural Arizona including the high growth areas in the state outside of the two largest metro areas. 3. The minority concentrations in several areas of Arizona are red flags signaling the historical legacy of housing discrimination and impediments that maintain these segregated residential patterns. The minority population in Arizona has grown since the 2006 AI and now stands at over 40% of the population. Nearly 42% of the population identifies as Hispanic. In rural Arizona, this population is not evenly distributed and is more heavily concentrated in the four counties that border Mexico. These four counties essentially comprised the area obtained by the United States from Mexico in the Gadsden Purchase in 1854. However, what is more telling about fair housing is the residential concentration of Hispanics within these counties, especially in colonias. The colonias are extreme and vivid examples of the forces of disinvestment and neglect that occur in most areas of minority concentrations. Similar minority concentrations also exist in areas near tribal reservations in rural Arizona. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 42 While these minority concentrations were formed by decades of overt racism and prescriptive segregation, the fact that they remain strongly entrenched today is indicative of both ongoing housing discrimination and the force these residential patterns exert on the assumptions and stereotypes that foster discrimination. The extent and nature of minority concentrations in many parts of rural Arizona are inherently impediments to fair housing. 4. Arizona’s relatively large number of residents with limited English proficiency are being targeted by predatory mortgage, foreclosure rescue and loan modification brokers, agents and consultants. Statewide, 27.5% of the population speaks a language other than English at home. Over 10% of the residents of eleven of the thirteen counties covered in this AI do not speak English at home, and over 18% of residents in eight counties do not speak English at home. Agents prey on people with language barriers by verbally describing a transaction in Spanish while providing a contract in English with provisions that differ from the Spanish explanation. The failure to provide written documents in Spanish (or appropriate language for the consumer) can be disparate treatment and illegal under the Fair Housing Act. 5. The lack of affordable housing has a large impact on fair housing choice in many areas of Arizona because it has a disparate impact on racial and ethnic minorities, persons with disabilities and single parent households with children. While lack of housing affordability is not necessarily regarded as a fair housing issue, it nonetheless becomes one when it has a disparate impact on protected classes as defined by the FHAct.36 The data shows that racial and ethnic minorities, persons with disabilities and single parent households have lower median incomes and higher rates of poverty than white Anglos, non-disabled people and two parent households with children. Despite the dramatic deceases in housing prices because of the housing market bust in Arizona housing, affordability remains a problem for those desiring to buy a home. Unemployment has risen to approximately 10% and, in contrast to the housing market boom days, lenders have become very restrictive in their lending policies. Housing in most communities is unaffordable for low-wage workers. 36 The strategy to increase affordable housing is discussed in the Consolidated Plan, not the AI. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 43 In the rental market, the data shows that the median hourly wage for retail workers in Arizona as a whole was only about 68.5% of the hourly wage needed to rent a twobedroom apartment at fair market rent. Five counties were below 65% (Coconino, Santa Cruz, Cochise, Yuma and Greenlee) and in one (Coconino), the hourly wage needed to rent a two bedroom apartment was over $20 an hour while the median hourly wage paid to retail workers was $8.20, or less than 45% of what was needed. A disparity this great makes it difficult or impossible for many minorities and other protected classes to find affordable housing in many Arizona counties. 6. Arizona has a growing retirement population. A number of age restricted (55+) residential communities have been violating HUD requirements and the FHAct. Arizona is known as a retirement destination. Surprisingly, however, the median age in the state is lower than the nation’s (35.1 years compared to 36.9 years). Arizona has a larger proportion of its population under five years of age and under eighteen years of age as compared to the nation, indicating a higher percentage of families with children. It also has a higher percentage of its population over sixty-five as compared to the nation. This creates potential conflict between the need of families with children for housing and the preference by many retirees to live in age restricted (55+) communities. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 44 arizona: fair housing legal status History of Fair Housing Legislation The Fair Housing Act of 1968 made it illegal to discriminate in the area of housing because of a person’s race, color, religion, or national origin. Gender, as a protected class, was added in the 1970s. In 1988, the Fair Housing Amendments Act added familial status and disability (referred to Handicapped in FHAA) to the list. The familial status provision protects households with children under 18 years of age. Disability covers physical and mental disabilities, including persons with HIV/AIDS or in recovery from substance abuse. Federal protection under FHA does not cover discrimination based on age, income, source of income or sexual orientation, although some local nondiscrimination statutes or ordinances may. Fair Housing Laws and Policies The Arizona Fair Housing Act (AFHA) of 1991 (ARS § 41.1491) provides the same substantive protections as the Federal Fair Housing Act (FHAct); however, it provides different procedures for the administrative complaint processing. The Act also amended the Arizona Landlord and Tenant Act to bring it into compliance with the State Fair Housing Statute. Because AFHA is essentially the same as the FHAct, the State’s law has been federally designated as “substantially equivalent.” As a result, under the Federal Fair Housing Assistance Program (FHAP), the U.S. Department of Housing and Urban Development (HUD) contracts with the Arizona Attorney General’s Civil Rights Division to investigate and rule on fair housing cases on its behalf. Because of this, virtually all complaints that are submitted to HUD and originate within Arizona, except for Phoenix, are processed by the AG’s office. The Phoenix Fair Housing Ordinance is also substantially equivalent to the FHA and, therefore, the City of Phoenix is also an FHAP. Complaints that originate in Phoenix are turned over to the City of Phoenix Equal Opportunity Department Compliance and Enforcement Division for processing. Either FHAP may also receive and process complaints independent of HUD. The State’s Community Development Block Grant (CDBG) jurisdiction covers the entire State of Arizona less the 14 independent CDBG entitlement jurisdictions. These independent jurisdictions have the responsibility for developing their own AI’s and Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 45 conducting planning and reporting separate from the State. Every effort has been made to include information relevant only to the State’s jurisdiction in this AI but in some cases, it is not possible. The Action Plan in this AI, however, is applicable only to the State’s jurisdiction. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 46 impediments to fair housing choice Public Sector Changes in the Arizona Housing Market and Economy The collapse of the housing market in 2007 and the subsequent economic downturn drastically reconfigured the landscape for fair housing. Fair housing issues surrounding mortgage lending, especially subprime and predatory lending, during the real estate boom received much of the attention of fair housing agencies and advocates. New fair housing issues have arisen, especially surrounding the devastation caused by the foreclosure crisis and the drastically different housing market conditions created by the crisis. The federal government has responded to the current crisis with infusions of money through programs like the Neighborhood Stabilization Plan (NSP) to prop up and revive the housing market. This funding presents challenges to fair housing planning since it requires jurisdictions to affirmatively further fair housing (AFFH). Special attention needs to be paid to incorporate fair housing planning, including strategies to reduce and eliminate housing discrimination, in the rush to spend federal funds to stabilize the housing market. Fair housing agencies and advocates are adapting to this new environment to identify and remedy these new issues and impediments.37 The Westchester County Decision and Reexamining “Affirmatively Furthering Fair Housing” The Anti-Discrimination Center in New York sued Westchester County, New York for acting in bad faith by certifying that communities in the county had met the demands of the Fair Housing Act. The county accepted $45 million in federal grants to develop housing over a number of years, yet housing remained as segregated as it was before receiving the grants and affordable units were not being built. It was alleged that Westchester County did too little to promote affordable housing and too little to reduce segregation. A U.S. District Court Judge found that the county falsely claimed that it was meeting its obligation to affirmatively further fair housing (AFFH), concluding that the required analysis of race-based impediments was not completed. Furthermore, the 37 “Fair Housing and the Foreclosure Crisis.” http://www.civilrights.org/publications/reports/fairhousing/foreclosure-crisis.html. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 47 decision stated that the County did not comply with its additional obligation to take the necessary steps to overcome impediments to fair housing choice. The decision highlights that AFFH certification is not a formality, rather a substantive requirement that demands an Analysis of Impediments to Fair Housing Choice (AI) be conducted, appropriate actions taken to further fair housing and the analysis be documented. The court also found that income cannot be used as a proxy for race. Providing housing for low-income minorities may improve the housing stock, but may not do much to change patterns of discrimination or segregation. Analysis of where the housing was placed would need to be completed as well. The County was facing a trial and a potential liability of over $150 million. A judge ruled that the County's Analysis of Impediments to Fair Housing Choice (AI) was deficient in that it lacked a segregation analysis. As part of a settlement, the County must spend $52 million to develop 750 units of affordable housing for working families.38 HUD has also begun to reexamine the meaning and requirements of affirmatively further fair housing (AFFH). This is likely due to the ruling in the Westchester case and a new administration in Washington that has placed new emphasis on HUD and the role that it plays in housing and community development. The concepts and requirements of AFFH have not always been clear. Jurisdictions have often not taken the requirements of AFFH seriously because of the lack of clarity and because HUD has rarely enforced the requirement. Rarely, if ever, have jurisdictions had CDBG funding withheld because of violating AFFH standards, which is why Westchester is a watershed case. HUD has taken public comments about AFFH to begin an effort to clarify what AFFH means, what it requires and how standards will be enforced. The Westchester decision and HUD’s renewed focus on AFFH should serve as a wake-up call to jurisdictions that receive CDBG funding that the days of ignoring AFFH requirements and treating fair housing issues as a formality are likely coming to an end. HUD Neighborhood Stabilization Program (NSP) The Neighborhood Stabilization Program, passed by the federal government in September 2008, allocates $3.92 billion to all states to respond to the foreclosure crisis. Direct grantees in Arizona received over $121 million, of which $38.3 million went to ADOH. The remainder went to the other nine direct grantee jurisdictions. The program targets the areas of the state hardest hit by the foreclosure crisis. Direct Grantees selected from five activities eligible for funding under the NSP Program designed to 38 From the NACCED Alert, “NACCED Executive Committee Holds Wide Ranging Meeting with HUD Senior Staff,” November 12, 2009. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 48 mitigate the effects of foreclosure, blight, abandonment and falling home values. These activities are A) Establishment of a financing mechanism for the purchase of foreclosed homes and residential properties; B) Purchase and rehabilitate abandoned or foreclosed homes and residential properties in order to sell, rent or redevelop such properties; C) Establishment of land banks for foreclosed homes; D) Demolition of blighted structures; and E) Redevelopment of demolished or vacant properties. The ADOH “NSP Substantial Amendment” outlines the following uses for ADOH’s NSP funding: 1. Invest its Direct NSP Allocation into a statewide Soft Second Loan financing program to be directly administered by ADOH. The soft second will be used to assist homebuyers at or below 120% of Area Median Income in the purchase of foreclosed and vacant single-family property located in census tracts with a HUD foreclosure Risk Score of 7 or greater. 2. Invest its Direct NSP Allocation in redevelopment of foreclosed and/or vacant and/or blighted multifamily properties serving those persons at or below 50% of area median income; giving priority to properties in portfolios owned or guaranteed by HUD, Rural Development or other similar federal guarantors, as well as properties identified by Direct Grantees; and directly select for redevelopment foreclosed and/or vacant and/or blighted multifamily properties that are consistent with the preservation strategies outlined in the State’s Fourth Year Annual Action Plan. NSP grantees must submit quarterly reports to HUD and post them on their websites, enabling advocates to monitor the spending of NSP funds and ensure that they are being used to help preserve and create affordable housing and further fair housing.39 The American Recovery and Reinvestment Act The American Recovery and Reinvestment Act (the economic stimulus package) passed by Congress in February 2009 allocates $13.6 billion for housing and community development programs administered by HUD. This infusion of funds is expected to create tens of thousands of jobs, make homes more energy efficient and provide relief to families in communities devastated by the economic crisis. The HUD funding supports three major themes: promotion of energy efficiency and green jobs; help state and local agencies jump-start developments paralyzed by the frozen tax credit markets, accelerate 39 National Housing Law Project, “Neighborhood Stabilization Program (NSP),” http://www.nhlp.org/taxonomy/term/109. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 49 shovel-ready community development and affordable housing projects, and bridge longstanding funding gaps in programs; and reviving neighborhoods hardest hit by the economic crisis and preventing families from becoming homeless. In response to the last theme, HUD is allocating almost $1 billion to state and local governments through the Community Development Block Grant (CDBG) program so that cities can invest in upgrading affordable housing and improving public facilities to shore up communities and create jobs.40 The HUD provisions in the Act give the Secretary of HUD wide-ranging powers to waive legal requirements in the administration of housing programs, but prohibit the Secretary from waiving requirements related to fair housing, nondiscrimination, labor standards, and the environment.41 The week of February 28, 2009, nearly $153 million in federal stimulus funding went to Arizona from HUD for housing programs to bolster employment, construct affordable housing and prevent homelessness. About one third of the money will go to Native American communities. State and local programs would receive $32 million to start affordable rental housing construction, $22 million for homeless prevention and $12 million to build or repair public housing.42 This funding carries fair housing requirements, including AFFH. Neighborhood Revitalization and Affordable Housing The Arizona Department of Housing (ADOH) engages in neighborhood revitalization and affordable housing efforts throughout rural Arizona. Several funding sources, many of which are from the federal government and carry the requirement to affirmatively further fair housing (AFFH), are employed to carry out projects and programs. The ADOH website, azhousing.gov, posts the annual CAPER that contains more detailed information about these activities. 2008 The Consolidated Annual Performance and Evaluation Report (CAPER) Draft The Consolidated Annual Performance and Evaluation Report (CAPER) is a document required yearly by the U.S. Department of Housing and Urban Development (HUD) from Community Development Block Grant jurisdictions. The Arizona CAPER is produced by collaboration between the Arizona Department of Housing (ADOH) and the Arizona 40 http://www.nlc.org/articles/articleItems/NCW32309/DonovanCCC.aspx “How the Economic Stimulus Plan Affects Individuals with Disabilities,” www.margbva.org/html/ Stimulus/2009StimulusAffects.htm. 42 Jahna Berry, “Housing stimulus aid now flowing into Arizona programs,” Arizona Daily Star, February 28, 2009. 41 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 50 Department of Economic Security (DES). The document assesses how well the State of Arizona is meeting its affordable housing and community development goals. According to Arizona’s CAPER, ADOH’s goals include:  Invest in rural areas that have limited funding opportunities.  Invest in projects where the need for funds and the demand for the project is demonstrated.  Invest in areas in decline and those with a disproportionate concentration of low‐income and minority populations. ADOH continues to invest dollars in a variety of activities to support the following types of initiatives43:  Development of permanent supportive housing for homeless persons with disabilities.  Prevention of eviction and foreclosures in order to prevent homelessness.  Provision of down payments, closing cost assistance, and homeownership counseling to assist families to purchase a home.  Construction and rehabilitation of affordable rental units. Resources are invested to fill gaps in financing in order to develop rental units that are affordable to individuals at 60, 50 and 40 percent or less of the area median income.  Rehabilitation of housing through locally managed programs that assist low‐income homeowners with needed home repairs.  Construction or purchase and rehabilitation of single‐family homes for sale to low‐income residents.  Education on fair housing that supports HUD required activities in support of the Fair Housing Act.  Administrative funding is provided to local communities and non‐profits to support the administrative costs for some of the program categories above. ADOH committed over $240 million in Fiscal Year 2008 to affordable housing and community development efforts . 43 The following list is taken directly from the draft of the 2008 Arizona CAPER that is available at housingaz.com. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 51 Table 22: ADOH Affordable Housing and Community Development Efforts FY 2008 Community Development Block Grant (CDBG) HOME HOPWA Shelter Plus Care Supportive Housing Program Section 8 HCVP Project Based Section 8 $11,339,247 Low Income Housing Tax Credits‐4% Low Income Housing Tax Credits‐9% State Housing Trust Fund ESG Mortgage Revenue Bond (MRB) – Single Family Mortgage Revenue Bond (MRB) – Multi Family Mortgage Credit Certificates (MCC) Homes for Arizonans (ADOH) Homes for Arizonans (AzHFA) National Mortgage Foreclosure Counseling Program Total $2,790,680 $7,010,625 $185,270 $7,071,564 $2,340,614 $768,634 $42,358,925 $115,766,720 $26,354,842 $873,061 $6,777,888 $8,515,000 $3,205,410 $4,415,667 $1,418,283 $619,100 $240,938,459 The CAPER describes a number of activities that the state has taken to affirmatively further fair housing. ADOH has collaborated with HUD, the Arizona Fair Housing Partnership, the State Attorney General and others to promote fair housing. ADOH also contracted with the Southwest Fair Housing Council to provide statewide fair housing education and outreach. More information from the CAPER regarding fair housing can be found in the “Community Development Block Grant” section below. Arizona Housing Trust Fund The Arizona Housing Trust Fund (HTF) is a dedicated funding source and is the only state resource that attends to housing related needs. The Arizona Department of Housing does not receive general fund or tax generated revenue and relies heavily on the HTF to support housing initiatives statewide. Due to the lack of federal funding for housing in many rural areas of Arizona, 70% of the HTF goes to these areas to develop and preserve Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 52 housing. The HTF provides numerous benefits in Arizona, including increased economic development by leveraging new dollars into the economy.44 Cities, towns, counties, local housing authorities, tribal housing organizations, and nonprofit organizations receive grants and loans from the HTF for eligible projects including new construction, acquisition, and/or rehabilitation of housing to be used for homeownership, rental, transitional, or emergency shelter. Assistance programs are also eligible for funding like rehabilitation of housing occupied by low-income homeowners, rental subsidies, and operating costs for emergency or special-needs housing. At least 20% of the HTF allocation must go towards projects in rural areas and to households with children. Projects must target Arizonans with household incomes at or below 80% of the area median income and must maintain affordability for a minimum of five to fifteen years.45 The HTF is in jeopardy of being drastically reduced to help plug the huge budget deficit in Arizona. If the HTF takes a big cut, affordable housing will likely take a big hit statewide. Fair housing may also be affected because some of the proposed funding cuts are dedicated for foreclosure counseling, eviction prevention and homeless and domesticviolence shelters.46 Zoning and Land Use Codes County and municipal governments in Arizona have historically controlled land use through power granted by enabling legislation adopted by the State Legislature. On the local level, land use is controlled in many ways, including comprehensive planning, zoning, ordinances and subdivision ordinances.47 ADOH reviews its funding recipients’ zoning and land use laws to ensure that they are not in violation of fair housing laws. ADOH will monitor zoning and land use laws by expanding the fair housing questionnaire already distributed to sub recipients to include zoning and land use questions. Currently, the questionnaire is optional: however, beginning in 2011 it will be required. Results of the questionnaire will be reviewed and included in future CAPERS and AIs beginning in 2011. The appendix includes a detailed zoning and land use questionnaire provided by HUD that focuses on the effect of zoning and land use laws on people with disabilities, a protected class. The survey will be modified to help acquire the necessary data to determine how zoning and land use laws affect any or all protected classes and whether or not the laws complies with fair housing laws. 44 “Housing Trust Fund,” Arizona Department of Housing. www.housingaz.com. Fannie Mae Foundation Issue Brief: Affordable Housing Trust Funds; prepared for Fannie Mae Foundation by Justin Linker, Chris Shay, and Christine Hall of Michigan State University. November 2001. 46 Catherine Reagor, “Housing Department faces budget cuts,” The Arizona Republic, June 10th, 2009. 47 “Arizona Planning and Zoning Handbook,” Arizona Department of Commerce. Third Edition, October 2004. 45 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 53 Low Income Housing Tax Credit (LIHTC) ADOH operates the Low Income Housing Tax Credit (LIHTC) program under Section 42 of the LIHTC code, which is interpreted and enforced by the Internal Revenue Service under the auspices of the U.S Department of the Treasury. Each state is allowed a credit ceiling, depending on population, to provide for the construction of multifamily rental units in “difficult development areas.” Difficult development areas are defined as areas that have high construction, land, or utility costs relative to the area’s median gross income (AMGI). There are currently about 50 census tracts in non-metro Arizona that are eligible. In return for the tax credit, the owners commit to either restrict the rent in 20% of the units to tenants with incomes no higher than 50% of the AMGI or in 40% of the units to tenants with incomes no higher than 60% of the AMGI. The term “rent restricted” means that gross rent, including utilities, cannot exceed 30% of the tenants imputed income limitation. The rent restrictions agreed to by the owner remains in effect for at least 15 years and then the owner(s) are required to enter into agreements to retain the low-income character of the building for at least an additional 15 years.48 ADOH requires LIHTC applications include a “Market Demand Study” and a “Marketing Plan.” According to ADOH staff, the Market Demand Study must include demographic information that may consider a project’s impact on minority concentration areas. Other than Section 8, the Low-Income Housing Tax Credits (LIHTC) program is the largest source of affordable housing for low-income families and individuals in Arizona. Since 1996, there have been over 93 applications creating approximately 5,516 low-income housing units in non-metropolitan areas.49 The Arizona Department of Housing has allocated tax credits valued at nearly $800 million to projects in Arizona since its establishment in 2002.50 The table 23 shows ADOH’s LIHTC units throughout the state. Table 23: ADOH LIHTC Portfolio – Unit Count by County County Elderly Family Senior Tribal & Other All Bond Financed Row Total Apache 32 184 0 0 0 216 Cochise Coconino Gila 313 218 102 855 518 13 0 30 0 0 0 0 0 0 0 1168 766 115 48 LIHTC Application Form http://www.housingaz.com ADOH. Arizona Low-Income Housing Tax Credit Completed Properties list. 50 2009 “Qualified Allocation Plan,” Arizona Department of Housing. 49 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 54 Graham La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Column Total 85 40 880 720 100 675 233 0 40 0 7120 949 575 2792 1288 496 0 0 413 0 0 0 24 0 0 0 36 96 51 194 25 0 31 0 11053 0 0 630 0 128 156 40 19502 1765 726 4291 1570 624 143 144 3685 737 1130 16697 64 26 557 100 0 502 0 0 11842 1044 1300 33283 Key Observation The Marketing Plan is required to meet fair housing requirements and can serve to draw minorities to projects in non-minority areas or to draw non-minorities to projects in minority areas. Requiring LIHTC applications to consider the impact on minority concentrations and other fair housing issues and affirmatively marketing projects in accordance with fair housing requirements helps ADOH’s AFFH efforts. As the impacts of the Westchester Case and HUD’s forthcoming AFFH guidelines become clearer, the Market Demand Study and the Marketing Plan could come under more scrutiny. ADOH should continue its marketing efforts for AFFH compliance. It could also strengthen its analysis of projects’ impact on minority concentration areas in its Market Study Guide. These efforts may receive more scrutiny as AFFH requirements become more important.51 Public Housing and Section 8 Ten Public Housing Authorities (PHA) operate within the CDBG jurisdiction of ADOH, the towns of Douglas, Eloy, Williams, Winslow and Nogales and the Counties of Yuma, Cochise, Pinal, Gila and Mohave.52 In addition, the State of Arizona operates a State Public Housing Authority (APHA). Public and Section 8 housing are limited to low-income families and individuals. The decision to provide public housing or a voucher is made by the PHA based on whether or not they administer both programs, HUD regulations and in consideration of annual gross income, citizenship or immigration status, past rental history and criminal record. 51 2009 Qualified Allocation Plan. This recommendation is subsumed under Action #7 of the Action Plan in the final section of this AI. 52 http://www.hud.gov/local/az/renting/hawebsites.cfm Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 55 Two Section 8 programs are available in Arizona through the Arizona Public Housing Authority: Project-Based Rental Assistance and the Housing Choice Voucher Program (available only in Yavapai County). The APHA oversees the project-based rental assistance that consists of 114 subsidized properties statewide with more than 7,900 units. The properties are affordable housing reserved for households at or below 50% of area median income. Rental subsidies are provided by the Section 8 Program of the U.S. Department of Housing and Urban Development and stay with the property, not the families. APHA staff conducts site visits at least once each year to assess compliance with HUD regulations. Tenant based Section 8 vouchers are portable and although issued by a local PHA or by APHA, can be used for Section 8 housing anywhere in the United States under the jurisdiction of a PHA. The state-administered Housing Choice Voucher Program is available only in Yavapai County and has a waiting list (closed as of the publication of this report) for the state allotment of 124 vouchers. Of the state’s allotment, 35 vouchers are strictly for homeless veterans as determined by the U.S. Department of Veterans Affairs. Community Development Block Grant Community Development Block Grant (CDBG) funding supports community development, infrastructure, affordable housing and other eligible projects. Arizona’s annual CDBG allocation is nearly $13 million and funds projects in over seventy communities statewide. The Councils of Government (COGs) collaborate with ADOH to provide support for project administration and technical assistance.53 Table 24: CDBG Allocation by Council of Government Region54 CDBG Allocation by COG Region NACOG (Apache, Coconino, Navajo, Yavapai) WACOG (Yuma, La Paz, Mohave) Allocation Amount $2,199,425 Allocation Percentage 22.8% $2,836,059 29.4% CAAG (Pinal, Gila) $2,322,992 24.1% SEAGO (Cochise, Graham, Greenlee, Santa Cruz) Total Allocation to Rural COGs $2,279,884 23.7% $9,638,360 100% 53 http://www.azhousing.gov/ShowPage.aspx?ID=21&CID=11. Arizona Department of Housing Information Bulletin No. 09‐08, “CDBG Allocation by COG Region in compliance with Third Program Year Annual Action Plan FY 2007-2008”, March 21, 2008. 54 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 56 The ADOH Community Development and Revitalization division requires CDBG subgrantees to offer a minimum of three opportunities per year to further fair housing that may include an annual adoption of a fair housing resolution or proclamation and displaying fair housing posters in a public area of the community’s administration building or office. Other suggested activities to meet fair housing requirements include distributing a fair housing brochure, sponsoring a fair housing poster, an essay, or poetry contest in the local schools; encouraging the media to promote fair housing awareness with public service announcements; hosting an annual fair housing meeting or forum; conducting a community-wide fair housing opinion survey; encouraging civic organizations to invite speakers to talk about fair housing; or other activities.55 ADOH also distributes a yearly fair housing survey to subgrantees to assist with identifying fair housing impediments. Finally, ADOH distributed a fair housing complaint referral form, a referral list, and procedures to each CDBG recipient.56 Table 25: Arizona Department of Housing Fair Housing Annual Survey Results 2009 1 a b Question Yes No Not Sure Has housing discrimination been reported to your office? Referral? Place? 6.6% 90% 3.4% 2 N/A 0 N/A 0 N/A Numerical or other answer N/A Only one specified where c 2 Copies given to complainant? How many staff have had fair housing training 0 N/A 0 N/A 0 N/A 3 Do you have in-house training that includes fair housing? How often? 20% 77% 3% N/A N/A N/A If no, where do you send your staff for fair housing training? Has your office been instructed on ADOH‟s fair housing referral process? Have you received the Fair Housing Complaint/Referral Form? Do you have the list of the AZ Attorney General‟s Community Services Program Offices? Has the community maintained the Fair Housing Complaint/Referral log as instructed by ADOH? Is there a lack of housing available in your community for persons at or below 80% of the area median N/A N/A N/A 33% 50% 17% N/A 37% 40% 23% N/A 23% 60% 17% N/A 33% 40% 27% N/A 50% 13% 37% N/A a b 4 a b 5 6 55 56 Average is 1.3 people per response… some had 0, some as many as 5. Once a year was average answer, if at all. State of Arizona Consolidated Annual performance and Evaluation Report (CAPER) Federal FY 2008. Azhousing.gov. 2008 CAPER. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 57 a 7 b 8 9 10 a income? What percentage of your police officers, fire fighters, school teachers or other service workers live outside of your city/town‟s limits due to lack of affordable housing? Does your community distribute information on predatory lending? Is literature on predatory lending needed? Is your community faced with NIMBYism (not in my back yard) when affordable housing is discussed Would you be interested in attending a free workshop designed to provide tools and information needed to develop affordable, workforce housing in your community? Are there resources in your community that residents can access to assist them with fair housing issues? Is literature on fair housing needed? N/A N/A N/A Varied answers, but 40% indicated they did not know… 13% 60% 27% N/A 33% 30% 37% N/A 40% 33% 27% N/A 80% 10% 10% N/A 73% 13.5% 13.5% N/A 57% 27% 16% N/A Number of surveys recorded: 30 ADOH conducts site visits to monitor, evaluate and document compliance with HUD guidelines by the State of Arizona’s CDBG subgrantees that includes the requirement to “affirmatively further fair housing” (AFFH). ADOH provides all subgrantees with the CDBG Administrative Handbook (available at azhousing.gov) that includes guidance for compliance and documentation. Site visit documentation remains on file at ADOH for HUD review. CDBG site monitoring visits review general ledgers, program files and DavisBacon Act files and look for posters that must be posted (fair housing, Department of Labor wage posters, etc.) Monitors review the subgrantee’s AFFH folder to see which three required AFFH activities have been completed for the current year. Numerous forms are completed, as well. Furthermore, ADOH provides ongoing technical assistance and regional trainings to subgrantees that touches on AFFH requirements. Property Tax Policies In Arizona, each county has a county assessor that assesses and administers property tax.57 Arizona property taxes on owner-occupied residences are levied based on the assessed value, not current market value. Property tax bills will vary depending on the location of the property because state, county, municipal, school, and special district rates are combined to determine an area’s specific tax rate. The average tax rate on homes in Arizona before exemptions and rebates is approximately 1% of market value or 57 http://www.azdor.gov/PropertyTax.aspx Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 58 10% of assessed value.58 Property tax issues are primarily local and not one that ADOH or state agencies can easily address. However, it is an issue that can have a significant effect on rural Arizona. Before the collapse of the housing market starting in 2007, property values across the state increased and dramatically increased taxes in some areas. Rapidly rising tax rates can be a fair housing issue. As indicated in the demographic data in this report, rates of homeownership do not necessarily coincide with income. Some of the highest rates of ownership were in areas of lowest median income. There are a number of possible reasons for this. First, many homeowners in these areas bought their homes years ago when the price of housing in rural Arizona was low enough that even low-income families could purchase homes. A second reason is that purchases directly from owners through Contracts for Deed or verbal agreements are common in rural Arizona. These practices make it much easier to buy a home than going through a traditional lender. A third possible reason is that a larger number of homes in rural areas are owner-occupied and fewer homes are purchased for investment and then rented. The increase in property values in rural areas in the years leading up to the housing crisis caused by foreclosures was dramatic. The 2006 AI stated that while property values increased, tax rates had not changed to accommodate the increase and homeowners were paying significantly more. Increases had been as much as 20% annually for a few years leading up to 2005. Property tax increases across the board have a disparate impact on lower- and fixed-income owners. While the actual increase may be larger for higher income households, low-and fixed- income households pay a higher proportion of their income for housing and their discretionary budgets are a smaller percentage of their income. Therefore, any increase cuts more deeply. Exact statistics were not available in the 2006 AI, but indications were that a greater number of low- and fixedincome families (including a proportionally large number of persons with disabilities) were either losing their homes, going into default or are on the precipice of foreclosure, in part, because of increased property tax burdens. As noted, the real estate market has changed dramatically since the last AI was written. Foreclosures have skyrocketed and housing values have dropped to differing degrees statewide. Rural parts of the state are seeing declining home values hit later than in Phoenix or Tucson. Generally, property tax changes lag about two years behind changes in home values. Therefore, many areas have likely not yet seen the decline in home values reflected in the property tax revenues, and have not been confronted with the situation. 58 http://phoenix.about.com/od/govtoff/qt/proptax.htm Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 59 This issue can affect fair housing. Due to sagging tax revenues, jurisdictions may cut services, as has already happened in many places. When funding dwindles, cuts in services, infrastructure investments, community and economic development and housing often follow. These reductions in public spending often impact neighborhoods and areas that have the greatest need which frequently have high minority concentrations and concentrations of other protected classes. Schools in high minority concentrations are of particular concern from a fair housing perspective because they are funded largely by local property taxes and any funding reduction has a negative impact on already underfunded schools. Education has an effect on the quality of job and income later in life and that affects housing choice. Landlord/Tenant Policies Many fair housing complaints begin as landlord/tenant issues. For example, SWFHC received a complaint from a Hispanic tenant stating that a landlord would not repair an evaporative cooler. It was not until further inquiry that it became known that the landlord exhibited a pattern of providing less services based on national origin. In another case, a tenant was being evicted for continually being late in paying the rent. What on its face appeared to be a landlord/tenant issue was, in fact, a fair housing issue since the tenant was disabled, on SSI, and did not receive his check each month until after the rent was considered late. As a fair housing issue, accepting a late payment could be considered a “reasonable accommodation” based on the tenant’s disability. Because there is considerable gray area between landlord/tenant and fair housing issues, all public and private agencies that handle housing issues need to train their staff to recognize potential fair housing issues and accurately refer clients to where they can get information and help. As the agency survey that was conducted in non-metro Arizona indicates, this need is pervasive and is an impediment to fair housing in Arizona. Building Codes The Federal Fair Housing Act requires that 100 percent of ground floor units in multifamily housing projects occupied after March 13, 1991 must be accessible for persons with disabilities that require a wheelchair. Common areas in the complex must also be accessible. If any unit is not required to be accessible because of date of occupancy or location then property owners/managers are required to allow tenants, at Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 60 their own expense, to make reasonable modifications to allow access by persons with disabilities.59 On a local level, inspection is more of an issue than is the language in the actual codes, since virtually all local codes include a reference mandating compliance with the accessibility standards of the Federal Fair Housing Act. However, this is one of the areas of the Fair Housing Act that is problematic. SWFHC has filed over fifty design and construction complaints and mediated several others in the last ten years and has come across numerous examples where the architectural plans complied with FHA but the actual construction did not and inspectors missed these discrepancies. As an example, the placement of environmental controls is a notorious problem. While six inches in the height of thermostats and electrical plugs goes unnoticed and seems like a small thing to someone who is not disabled, the variance can make that unit inaccessible for someone who uses a wheel chair. There are at least two things that can be done to reduce noncompliance and prevent expensive retrofitting after occupancy and the unit is tested. The first is for contractors, builders, and property owners to monitor compliance during construction. The second is for builders, contractors, property owners and inspectors to receive proper training to comply with Fair Housing Act requirements. Conclusions ADOH affirmatively furthers fair housing in the following ways: 1. ADOH requires all CDBG sub recipients’ housing programs to affirmatively further fair housing (AFFH). The State’s CDBG Administration Handbook accompanies the contract and contains the AFFH requirements. The following is an excerpt from that manual: “The Community Development and Revitalization division of ADOH requires each recipient of CDBG funds to offer at least three opportunities per year to further fair housing. Those opportunities include an annual adoption of a fair housing resolution or proclamation and displaying fair housing posters in a public area of the community’s administration building or office. Other fair housing activities that communities may wish to participate in for fair housing compliance are the distribution of a fair housing brochure, the sponsoring of a fair housing poster, an essay, or poetry contest in the local schools; encouraging the media to promote fair housing awareness with public service announcements; hosting of an 59 http://new.azhousing.gov/ShowPage.aspx?ID=173. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 61 annual fair housing meeting or forum; conducting a community wide fair housing opinion survey; encourage civic organizations to invite speakers to talk about fair housing; or other activities. ADOH conducts monitoring visits for fair housing compliance on all applicants and recipients of CDBG funding.” 2. ADOH monitors the compliance of subgrantees with AFFH through reviews by phone, site visits and surveys. It flags "concerns" and determines remedial actions. 3. Since 2005, ADOH has provided $150,000 annually in non-HUD state money to conduct a comprehensive fair housing education and outreach and training program throughout its jurisdiction. This program is described in this report under the subheading “Fair Housing Education and Outreach.” ADOH reviews this program several times a year with its provider, currently SWFHC, and revisions are regularly made to improve and enhance the program. 4. ADOH conducts a comprehensive AI by an outside fair housing agency in accordance with HUD guidelines and reports AFFH activities it has undertaken annually in the CAPER. Future Action HUD is revising its policies and enforcement mechanisms regarding AFFH requirements. All indications are that HUD will put new emphasis on AFFH and expanding monitoring of these requirements. ADOH will prepare for these changes and enhance AFFH efforts in the following ways: 1. Expand the annual fair housing survey of CDBG sub recipients and make its completion mandatory. The expanded survey will include information on local zoning and land use, procedures and policies on the referral of housing complaints and information on fair housing activities, including the distribution of fair housing pamphlets and information on the inclusion of fair housing in community events. 2. Incorporate and review fair housing planning into every housing program funded through the State. HUD’s AFFH guidelines will be reviewed and followed. Sub recipients will be notified of deficiencies and required corrective actions. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 62 3. Expand the number of fair housing opportunities required by sub recipients. An excerpt from the State of Kentucky AI is included as an example of how a state may help to clarify what AFFH entails and the types of activities that can be conducted by sub recipients. The excerpt specifically addresses the HOME program but is applicable to any federally funded housing program: The following directions for meeting the requirements of fair housing laws are given to all recipients of HOME funding. Exhibit 10, page 4-6, of the HOME Program Implementation Manual states: When you signed the assurances that are part of your application, you committed your locality to (1) maximizing choice within the community's total housing supply; (2) lessening racial, ethnic and economic concentrations of housing; (3) facilitating desegregation and racially inclusive patterns of occupancy and use of public facilities; and (4) administering the HOME Program in a manner to affirmatively further fair housing. You have also agreed to develop and maintain records of your efforts to ensure fair housing. Just because your community may be small or have no or very few minority residents does not mean you need not be concerned about fair housing requirements. These requirements apply regardless of the size of the community. Moreover, the total absence of, or the presence of very few minority residents may indicate the need for fair housing activity than the lack of a problem. You should understand that fair housing provisions apply to your locality as a whole, not just those activities that are HOME related, and that implementing a fair housing program is an essential part of your HOME responsibilities. The first step in developing a local program is to determine the extent of your fair housing needs. This determination can be made by analyzing answers to the following questions.  Are minorities totally absent as residents of your community? If so, why?  Do all or most of the minorities in your community live in one neighborhood?  Are Realtors hesitant to show minorities rental or ownership units in certain areas of your community or in certain apartment buildings or subdivisions?  Do the financial institutions in your community or in nearby towns consistently fail to provide mortgage money or home improvement loans in certain areas of the community?  Is publicly assisted housing absent in your community? Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 63  Are some public housing projects in the community all minority and/or all white?  Are minorities discouraged from living in your community because public services and facilities located in or serving minority areas are of a lesser quality or quantity than those serving predominantly white areas?  Do minorities work in your community but live elsewhere?  Do landlords fail to rent to female heads of household with children?  Has your community failed to adopt and enforce a fair housing ordinance?  Does your community assist people who believe they have encountered housing discrimination? The specific actions you take as part of your fair housing program will depend on the type and extent of your fair housing needs. You should give consideration to the following examples:  Develop and enact a local fair housing ordinance which is at least equivalent to the federal fair housing law and preferably one with enforcement mechanisms and penalties.  Revise the local housing authority’s formal and informal policies and practices so that public housing units are not assigned to cause or perpetuate racially or ethnically separate treatment of housing opportunities.  Work with developers and residents to ensure new assisted housing is located outside areas of minority or low-income concentration.  Review local zoning and discuss the impacts of existing zoning on multifamily and/or less expensive single-family construction in order to modify zoning to permit or facilitate construction.  Develop a public information program using local newspapers, radio stations, bulletin boards, churches, utility bill mailings, etc., to ensure that all segments of the community are aware of fair housing requirements, especially Realtors, landlords, financial institutions and the minority community.  Develop a fair assistance program to make housing opportunities in nonminority areas known to minorities, to provide escort service, to monitor compliance and to pursue discrimination complaints.  Conduct a meeting with financial institutions serving the community to discuss the implications of the Community Reinvestment Act and their need Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 64 to broaden their lending practices to all geographic locations and support community revitalization efforts.  Survey the special housing needs of minorities and women to determine any effects of discrimination.  Develop or fund a fair housing or human relations organization  Develop a monitoring procedure for compliance with Fair Housing Laws.  All fair housing efforts must be documented. If you do not document your efforts, we can only assume that none exist and that you are not in compliance with the requirements. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 65 Private Sector The Foreclosure Crisis in Arizona The foreclosure crisis began to take hold in late 2007 in Maricopa and Pima Counties, and the devastating impact has spread through Arizona and is now negatively affecting nonCDBG entitlement jurisdictions and rural areas. By the end of the third quarter of 2009, Figure 9 shows that foreclosure rates appear to be peaking but are still at near record levels. Arizona had the second highest foreclosure rate in the nation in 2009.60 Figure 11: Arizona Continues to See High Foreclosure Rate Some of the impacts to Arizona stemming from the foreclosure crisis include:  60 61 Property values in Arizona have declined precipitously. Third quarter 2009 housing figures indicate that housing prices in Arizona declined 17.13% from third quarter 2008. From the second quarter 2009 to the third quarter 2009, the average sales price of a home sold in the U.S. rose two percent, while during that same period in Arizona it declined 2.11 percent.61 This indicates that Arizona’s housing market is lagging behind the nascent recovery happening in other parts of the country. “Arizona second-highest for 2009 foreclosures,” Arizona Daily Star, January 14, 2009. Howard Fischer, “Arizona left behind as US home prices start to strengthen,” Arizona Daily Star, November 25, 2009. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 66  Since the recession began in December 2007, Arizona has lost nearly 265,000, or 9.9% of all jobs, a higher proportion than any other state. The construction sector has been hardest hit, losing 111,200 jobs, or 45% since its peak.62  Investors, including foreign buyers, have been buying deeply discounted real estate in Arizona. Rock bottom prices, a weak dollar and continued longterm confidence in the U.S. real estate market are driving the trend. Nearly half of all foreign investors paid cash in the twelve-month period that ended in May 2009.63  Due to the dramatic decrease in property values, 48% of homeowners statewide (655,540 mortgages) are underwater, the second highest percentage after Nevada. A homeowner is underwater when she owes more than the home is worth. The national average is 25%. Most of the properties that are underwater were bought between 2005 and 2008. There is a danger that underwater mortgages may lead to more foreclosures as more homeowners walk away from their overvalued mortgages.64 Foreclosures in Rural Arizona Many analysts point to the foreclosure crisis as the catalyst for the severe recession that began in 2007. Larger urban markets that have been devastated by foreclosures and seen property values decline precipitously, like Phoenix, Las Vegas and Miami, have received much of the attention. Data for these markets is available from companies like RealtyTrac. Researchers debate the quality of the available data, but it nonetheless provides a baseline to measure how foreclosures are affecting urban areas. Tracking the number of foreclosures and resulting impact in rural areas has proven much more difficult. Since this report focuses on the largely rural areas of Arizona outside of Pima and Maricopa Counties, the fact that rural foreclosures are more difficult to measure and analyze poses a challenge to gathering and analyzing data effectively to guide the crafting of an effective public policy response to mitigate the effects of foreclosure. Estimates of rural foreclosures are difficult to come by, in part, because data sources use different methodologies and data collection methods and some sources do not provide data for rural areas. Furthermore, a false perception exists that rural housing markets are uniform and static when they are actually varied and dynamic. Rural mortgage markets also vary from place to place with differing degrees of access and availability to credit. Due to lack of competition and greater risk to lenders in many rural areas, rural 62 “Over a quarter million jobs lost in Arizona since December 2007,” Arizona Daily Star, November 24, 2009. Adrian Sainz, “Foreign investors snatch up properties,” Arizona Daily Star, November 23, 2009. 64 Josh Brodesky, “One-third of local homeowners are now „underwater,‟ Arizona Daily Star, November 25, 2009. 63 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 67 customers may have more limited access to mortgages than those in urban and suburban areas. Subprime and high cost loans were prevalent in rural areas. Finally, manufactured homes and federally funded affordable loan programs play a large role in rural housing markets. However, most foreclosure estimates omit these important aspects.65 Non-CDBG Area’s Foreclosure Data: LISC and HUD NSP II In response to jurisdictions’ need for quality foreclosure data to make informed policy decisions, the Local Initiatives Support Network (LISC) developed datasets for CDBG jurisdictions and at the ZIP Code level for each state that incorporate measures of subprime lending, foreclosures, delinquency and vacancies. The CDBG jurisdictions dataset is the most useful for analyzing needs on the state level, and the ZIP Code level dataset is useful for state level and local level analysis.66 Table 26: Proportion of Problem Loans by State in and Outside of CDBG Jurisdictions- Oct. 28, 200867 Pct. of Subprime Loans State AZ Pct. of Delinquent Loans Pct. of Foreclosed Loans Pct. of REO Loans CDBG Other CDBG Other CDBG Other CDBG Other 84.0 16.0 83.6 16.4 84.9 15.1 85.6 14.4 Table 26, when compared to population statistics described in the demographic section of this report, gives a good indication that the foreclosure crisis is having a similar impact in rural areas as it is in urban areas. The populations of CDBG entitlement jurisdictions Pima County and Maricopa County and the metro areas of the CDBG entitlement jurisdictions of Prescott, Yuma and Flagstaff68 comprise 84.6%69 of Arizona’s population. Table 26 shows that relative to its percentage of Arizona’s population, non-CDBG entitlement jurisdictions (100% - 84.6% = 15.4% of Arizona’s population) have nearly the same proportion of subprime loans, delinquencies, foreclosed loans and REO loans as the state’s CDBG entitlement jurisdictions. While the population estimates are rough and the comparisons to the data in table 25 are “back-of-the-napkin” calculations, it nonetheless indicates that non-CDBG entitlement jurisdictions (the area covered in this report) have proportionally suffered similar effects from the foreclosure crisis. This also 65 “What is the Housing Foreclosure Situation in Rural America?” Housing Assistance Council, October 2009. “What is the Housing Foreclosure Situation in Rural America?” 67 http://www.foreclosure-response.org/maps_and_data/lisc_data.html#sub1 68 The population estimates for Prescott, Yuma and Flagstaff are from the 2008 American Community Survey. 69 This percentage was derived by adding the population of Pima and Maricopa Counties found in the demographic section, then adding that to the metro populations of Yuma, Prescott and Flagstaff found in the 2008 American Community Survey. Finally, that sum was then divided by the total population of Arizona found in the demographic section of this report. 66 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 68 indicates the lack of readily available clear, precise and local data that is crucial to understanding the foreclosure crisis in specific areas throughout the state. Conditions are likely different in Thatcher than in rural Navajo County than in Kingman, for example. The fact that available data can produce only crude generalizations about the foreclosure crisis in rural Arizona is indicative of the difficulty of producing accurate data analysis to design effective public policy. Furthermore, lack of quality data can be an impediment to fair housing choice since it makes analyzing the effects of the foreclosure crisis on minorities and other protected classes very difficult. Table 27: Foreclosure Needs Scores within States by CDBG Jurisdiction -- October 28, 200870 CDBG Name Arizona Outside CDBG Areas State Total Estimated Total Number of Loans Estimated Number of Subprime Loans Pct. of All Loans: Subprime Estimated Number of Loans Delinquent 30+ Days Pct. of All Loans: 30+ Days Delinquent Estimated Number of Foreclosed Loans Pct. of All Loans: In Foreclosure 221,282 29,420 13.30 14,067 6.36 5,983 2.70 1,245,914 184,266 14.79 85,882 6.89 39,729 3.19 Table 27 continued CDBG Name Arizona Outside CDBG Areas State Total Ratio of Local Vacancy Rate to State Rate Capped Vacancy Ratio Local NSP Allocation Received 0.67 0.90 $38,370,206 Statewide NSP Allocation $121,119,049 Estimated Number of Loans in REO Pct. of All Loans: In REO 3,474 1.57 24,055 1.93 Table 26 further illustrates that many of the indicators and statistics related to Arizona foreclosures show similar proportions when comparing “Arizona Outside CDBG Areas” to “State Total,” indicating that non-CDBG entitlement jurisdictions are likely experiencing similar impacts caused by foreclosures as CDBG entitlement jurisdictions. HUD’s Neighborhood Stabilization Program II (NSP 2) program estimates the following foreclosure rates for what it considers rural Arizona counties:  70 Mohave: 20.6 – 35.4% http://www.foreclosure-response.org/maps_and_data/lisc_data.html#sub1 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 69  La Paz: 7.1 – 10.4%  Navajo: 7.1 – 10.4%  Apache: 10.5 – 14.2%  Gila: 7.1 – 10.4%  Graham: 7.1 – 10.4%  Greenlee: 10.5 – 14.2%  Cochise: 7.1 – 10.4%  Santa Cruz: 10.5 – 14.2% HUD’s foreclosure data use neighborhood characteristics that estimate foreclosures, but do not reflect actual foreclosures. Indicators used include high cost loans, falling home values, above average unemployment, and delinquency and foreclosure estimates from a number of data sources. Nationwide, over the past two years, HUD estimates that 5.3 million mortgages, 10.8% of all active mortgages, began the foreclosure process or were seriously delinquent. For rural areas, HUD puts the number at 738,000 mortgages, or nearly 10% of the total, which is nearly the same as for urban areas.71 The conclusion can be drawn, as Arizona’s statistics show, that rural and urban areas have been similarly hard-hit by the foreclosure crisis. 71 “What is the Housing Foreclosure Situation in Rural America?” Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 70 The three maps below show the dramatic increase in foreclosures from 2007 to 2009. Figure 12: Areas Affected by Concentrated Foreclosures: June 2007 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 71 Figure 13: Areas Affected by Concentrated Foreclosures: June 2008 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 72 Figure 14: Areas Affected by Concentrated Foreclosures: June 2009 The foreclosure concentration maps show the explosion of foreclosures throughout Arizona from June 2007 through June 2009. These maps provide clear evidence that rural areas are being severely impacted by foreclosures and that the problem may continue to worsen. The major urban areas have seen the highest concentrations of foreclosures thus far, but the rural areas have not been spared and have seen big increases, as well. Foreclosures have been increasing statewide and rural areas appear to be lagging behind the higher rates of foreclosure concentration in the urban areas. Rural areas should therefore be closely monitored for worsening foreclosure conditions because foreclosures may yet reach the severity seen in urban areas’ June 2009 concentrations. The Impact of Foreclosures on Communities Foreclosures throughout the state create crises in the communities where they occur by damaging people and families in the following ways: Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 73  Foreclosures damage virtually all residents of foreclosed dwellings whether owner-occupants or renters.  The value of homes that went into foreclosure in Pima County in 2007 is estimated at over $600 million. Though this does not pertain to the area covered in this report, it gives an idea of how damaging the foreclosure crisis is throughout the state. It is difficult, if not impossible, to determine how much equity has been lost to individuals and families statewide, but it likely will reach into the hundreds of millions of dollars before the crisis begins to subside.72  Foreclosures affect home values in communities through the “spillover effect.” When the decline of home values that has already occurred is combined with those that are forecast, it will eliminate the home equity reserve for many families and significantly reduce it for the rest. Some of the consequences include:  Deferred home improvement projects and home maintenance.  Consumer spending will decrease.  Student loans to send children to schools and colleges will become harder to get.  Unexpected expenses like medical bills will become more difficult to pay.  The need for publicly funded social services, particularly for the elderly will increase. Because of the current foreclosure crisis, many families will experience a decline in their standard of living, a reduction in their quality of life and increased insecurity and tension. Foreclosures also damage neighborhoods and communities in the following ways:  72 In Pima County, the financial spillover effect of foreclosures led to a reduction in the property tax base, sales tax collection and other revenue. This will likely hit other jurisdictions throughout Arizona. Since tax assessments lag home market value by about two years, the impact of the decrease in home values on tax revenues is delayed. When tax assessments catch up, tax districts throughout the state will face some very difficult decisions in order to maintain public services, programs, and governmental functions that depend on local taxes. Responses are essentially limited to raising the tax Zillow.com estimates that foreclosures in Metro Tucson are currently selling for an average of 22% under market value. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 74 rate, expanding and increasing fees and penalties and/or cutting back on services and programs. None of these will be politically popular.  Foreclosures cause a reduction in consumer spending which depresses the local economy and reduces revenue from sales taxes that pay for the maintenance of public infrastructure, public services and community programs.  “The American Nightmare” report from which this section draws from was published in September 2008. By December 12, 2008, the Tucson City Council approved $31 million in budget cuts to help deal with the projected budget deficit of $80 million for 2008. Fees for parks and the Tucson Convention Center will increase and new police officers and firefighters will not be hired. Budget conditions have been even worse in 2009. The city is expecting sales taxes to be negative for three consecutive fiscal years.73 Reduction in property tax revenue will combine with the reduction in sales tax revenue to have a severe negative effect on local government.74 Again, even though Tucson is not covered in this report, the affect that the foreclosure crisis has had on Tucson provides an example of what other jurisdictions throughout the state to differing degrees will experience or are experiencing.  Foreclosures have direct costs through increases in law enforcement, lost revenue from utilities, and increased demand for social services. Studies show that the cost of one foreclosure can directly cost a community thousands of dollars depending on the location.  Neighborhoods can be destabilized when investors and speculators buy foreclosed properties that were owner-occupied and turn them into rentals.  Neighborhoods with high foreclosure rates negatively impact nearby businesses, further contributing to the downward economic spiral caused by foreclosures.  Neighborhoods with foreclosures become more vulnerable to “red lining” by lenders and insurance providers who either increase rates and fees or restrict the availability of loans and coverage. Foreclosures’ Impact on Fair Housing The foreclosure crisis has serious fair housing implications. Predominantly minority neighborhoods have historically experienced high levels of housing discrimination. Post- 73 74 Rob O‟Dell, “City Council OKs $32 M in budget cuts,” Arizona Daily Star,” December 10, 2008. Rob O‟Dell, “City must cut $32M more, Hein says,” Arizona Daily Star, December 4, 2008. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 75 World War II suburbanization facilitated by cheap federal mortgages available to whites only stranded many minorities in central cities experiencing disinvestment in favor of new suburbs. Later, urban renewal razed many thriving inner-city minority areas or spliced them with new freeways further favoring suburban expansion. By the 2000s, this pattern was turned on its head. After years of both overt and covert discrimination, the mortgage industry began to target minorities for subprime loans as the demand exploded for securitized mortgages on secondary markets.75 Figure 15: High Cost Lending in Arizona More Prevalent Among Minority Groups, Especially Latinos Minority borrowers received a much higher percentage of subprime loans than did whites. A large percentage of these subprime loans, often with adjustable interest rates, proved toxic for many borrowers resulting in a high default rate. Even more insidious, many minorities qualified for prime loans but were sold subprime loans anyway. The subprime meltdown caused the collapse of the housing market and led to the worst recession since the Great Depression.76 Minority neighborhoods have been hard-hit by the foreclosure crisis because of the high number of subprime loans they received. Insurance companies often effectively redline areas with high foreclosure rates. Owner-occupants are forced out by foreclosures and 75 76 Michael Powell, “Bank Accused of Pushing Mortgage Deals on Blacks,” New York Times, June 6, 2009. “Fair Housing and the Foreclosure Crisis,” www.civilrights.org/publications/reports/fairhousing/foreclosure-crisis.html. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 76 would-be owner-occupants cannot get mortgage loans or insurance. Other owneroccupants leave by choice due to the decline and both public and private disinvestment often follows. Falling government revenues force spending cuts for public infrastructure and social programs. Private businesses become more reluctant to open or expand and others close. Neighborhoods that have often struggled because of historic discrimination are suffering decline and blight as foreclosed houses stand empty and speculators pick up cheap properties and turn them into rentals. These factors can lead to a downward spiral and reinforce traditional patterns of housing segregation. Home Mortgage Disclosure Act (HMDA) Data77 Introduction The Home Mortgage Disclosure Act (HMDA) requires lending institutions to report public loan data. It was enacted by Congress in 1975 and implemented by the Federal Reserve Board's Regulation C. The loan data that is collected can be used to assist:  Determining whether financial institutions are serving the housing needs of their communities.  Public officials distributing public-sector investments to attract private investment to areas where it is needed.  Identifying possible discriminatory lending patterns.78 A major reason that congress originally enacted HMDA was to collect data to see if redlining by banks of certain areas – generally low-income and/or minority areas – was occurring. Since HMDA was enacted in 1975, changes have been made to increase the types of data gathered on originated loans to help show whether minorities and females were being denied at higher rates and to show whether or not some classes of borrowers were getting higher rates on loans. After some years of data analysis, the Community Reinvestment Act (CRA) was enacted in response to data that showed that redlining had been occurring. The CRA essentially forces lenders to show that they will lend in areas where they take deposits so that deposits are not taken from the poor only to fund loans to wealthier people that live elsewhere.79 77 HMDA data tables are found in the Appendix. http://www.ffiec.gov/hmda/ (Home Mortgage Disclosure Act 2009) 79 Bill McBride, “HMDA Data on High Priced Loans,” Calculated Risk, October 11, 2007. http://www.calculatedriskblog.com/ search/label/HMDA. 78 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 77 NCRC 2007 Home Lending Analysis of Arizona and Selected Counties80 The National Community Reinvestment Coalition (NCRC) conducted portfolio share, market share, and denial rate analysis using 2007 HMDA data with the following specifications: all single-family lending (home purchase, home improvement, and refinance loans, combined); conventional and government-insured; single family units; owner-occupied units; first liens; and in the following areas:  State of Arizona  All rural counties in Arizona, as a group81  Cochise, Graham, Greenlee & Santa Cruz, as a group  La Paz, Mohave, & Yuma, as a group  Apache and Navajo, as a group  Coconino and Yavapai, as a group  Gila and Pinal, as a group For the portfolio share analysis (see table 1 in the appendix), NCRC evaluated the prime and subprime share of loans to white borrowers, Hispanic borrowers, Native American borrowers, low- and moderate-income borrowers, middle- and upper-income borrowers, as well as male and female borrowers. Lending patterns were then compared to the demographics of the counties to illustrate potential lending disparities. In the market share analysis (see table 2 in the appendix), NCRC provides the market share percent figure, which compares the portion of subprime loans made to a particular borrower group to all loans (prime and subprime) made to that same borrower group. The disparity ratio illustrates how much more often lenders made subprime loans to one borrower group compared to another borrower group. For example, in Table 2, in the state of Arizona, lenders issued subprime loans to Hispanics almost 2.6 times more often than to white non-Hispanic borrowers. 80 When the HMDA analysis for this AI was initiated, 2008 data was not yet available but now is. In consultation with NCRC it was determined that the analysis of 2007 would be more telling and offer a better perspective on determining trends since at that point there was still “normalcy” and generally a dynamic consistent with prior years. On the other hand, because of the collapse of the housing and home loan markets, 2008 is a likely total aberration and does not help show a trend.. What exactly the 2008 HMDA data tells us about fair lending will not be known for a few years when it can be viewed in the context of subsequent years that are driven by a very different “post collapse” market dynamic. 81 The definition for “Rural Arizona” has changed from 2004 to 2007 resulting in a change in the demographic composition of the area. In 2007, Apache county was classified as rural and Mohave county was not defined as rural. Thus, the 2007 data includes Apache and excludes Mohave, resulting in a substantial increase in the Native American population in the area. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 78 Prime loans are loans made at prevailing interest rates to borrowers with good credit histories. In contrast, subprime loans have higher than prevailing rates and are made to borrowers with credit blemishes. The higher rates compensate lenders for the added risks of lending to borrowers with credit blemishes. While responsible subprime lending serves credit needs, public policy concerns arise when certain groups in the population receive a disproportionate amount of subprime loans. When subprime lending crowds out prime lending in traditionally underserved communities, price discrimination and other predatory and deceptive practices become more likely as residents face fewer product choices. For this analysis, loans are considered subprime if their price is reported per the HMDA regulatory requirements for the 2007 data. What HMDA Data Can Illustrate HMDA data over the years shows that low-income and minority borrowers average higher rates on loans. However, because HMDA data does not include any reliable measure of credit history, analysis cannot conclude that the higher rates are explained by the poorer credit of the borrowers. High priced lending data is collected to try to quantify the number of loans made at a level that will be explainable by either the loan’s risk factor (whether the borrower has good or bad credit) or discrimination.82 Discriminatory lending practices based on the seven protected classes are jurisdictional to the Fair Housing Act (FHAct), and for this reason, monitoring HMDA data on a regular basis can provide evidence of discriminatory lending practices. Many factors that are not necessarily discriminatory can cause lending disparities. Therefore, HMDA data acts as a red flag that can help direct further investigation into discriminatory practices. If borrowers get a loan with a high interest rate (subprime) for good reason (i.e. they have poor credit histories and constitute a higher risk for lenders), then high interest rates do not need explanation. However, subprime loans are often concentrated in low-income and minority borrower groups and there is no basis to assume that these borrowers are more likely to have credit issues that warrant such loans than other borrower groups. This logic, based on HMDA data, helps to underscore how HMDA data can indicate possible discrimination.83 Analysis Summary The analysis of the HMDA data by NCRC shows that lending discrimination is likely occurring throughout Arizona based on the following findings: 82 Bill McBride, “HMDA Data on High Priced Loans,” Calculated Risk, October 11, 2007. http://www.calculatedriskblog.com/ search/label/HMDA. 83 McBride, “HMDA Data on High Priced Loans.” Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 79  Disparities in high-cost lending were significant for Hispanics on a statewide level and in rural counties.  Statewide, minorities and low- and moderate-income people were more likely than whites were to receive a high-cost loan.  Cochise, Graham, Greenlee and Santa Cruz had the largest prime-subprime disparities in lending to Hispanics in both 2004 and 2007 (when comparing the percent of prime and subprime loans to Hispanics).  A between-county comparison shows that Coconino and Yavapai counties have surpassed Apache and Navajo counties in 2007 compared to 2004 in terms of subprime market share disparities between Native Americans and white, as well as Hispanics and whites.  In 2007, Native Americans were 3.17 times and Hispanics were 2 times more likely than white Anglos were to receive subprime loans In Coconino and Yavapai counties.  For Native Americans, a prominent issue is the low level of loans compared to the Native American population, particularly in Apache and Navajo counties. Lenders probably remain hesitant to lend in tribal lands due to peculiarities associated with tribal law. More investigation is needed about whether these legal barriers are real or could be surmounted.  Throughout Arizona, minority and low- and moderate-income borrowers are more likely to be denied a loan than whites are.  Denial rates have increased across the board statewide. The credit crunch affected communities of color in Arizona as shown in the following statistics:  The number of loans to Native Americans almost halved between 2004 and 2007 (from 3,147 loans in 2004 to 1,697 loans in 2007).  Hispanic borrowers received 42,081 loans in 2004 and only 37,087 loans in 2007.  Denial rates for Hispanics and Native Americans also increased during this period, but so did denial rates for Whites. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 80 Portfolio Share Analysis This section will provide a detailed analysis of lending patterns in two counties. It will then compare the seven regions against each other in terms of lending disparities to Hispanics and Native Americans. Cochise, Graham, Greenlee, & Santa Cruz  White non-Hispanic borrowers made up about 60% of the households in these counties and received approximately 51.8% of all prime single-family loans and 33.97% of all subprime loans. Comparatively, Hispanics, which comprised 32.6% of the households in this area, received a little over 30% of all prime loans and 49.6% of all subprime loans. Whites received a portion of prime loans that was 17.87 percentage points greater than subprime loans, while Hispanics received a share of subprime loans that was 19.55 percentage points greater than their portion of prime loans. Native Americans made up 2.3% of the households in these counties and received a little over 1% of all the prime loans and 1.2% of all the subprime loans (Table 1a).  The majority of prime lending went to middle-and upper-income borrowers at 89.87%, while only 10.13% prime loans went to low- and moderateincome borrowers. Similarly, a little over 14% of subprime loans went to lowand moderate-income borrowers, while 85.8% went to middle-and upperincome borrowers. Middle- and upper-income households represent 60.9% of all households compared to the 39.1% of low- and moderate-income households (Table 1a).  Male borrowers received similar proportions of prime and subprime loans, 30.5% and 32.3%, respectively. Female borrowers, on the other hand, received 18.8% of all prime loans and about 24.5% of all subprime loans in the area. Thus, the share of high-cost loans to males in the area was 1.8 percentage points higher than their share of prime loans, and the share of high-cost loans to females was over 5.6 percentage points higher than their share of prime loans. A comparison between lending and demographic data is not performed for male and female borrowers due to the large number of joint borrowers (female and male co-signers on loans) in the lending data that is not comparable to the Census data that identifies a household as either male- or female-headed. La Paz, Mohave, & Yuma  Whites received 56.5% of all prime single-family loans made to all borrowers. Whites also received about 45.8% of all subprime loans. At the same time, Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 81 over 74.6% of all households in the area were headed by a white borrower. In comparison, while 20.6% of households were Hispanic, lenders issued 39.6% of all subprime loans and 29.1% of all prime loans to Hispanic borrowers. Of the prime single-family loans issued in the area in 2007, 2.17% were issued to Native Americans. Meanwhile, 1.92% of all subprime loans were also made to Native Americans, who comprised 2.3% of all households in the area (Table 1a).  While 60.77% of households were middle-to upper-income, lenders made 84.98% of all prime loans and 84.59% of all subprime loans to middle- and upper-income borrowers. Comparatively, 39.23% of all households were low-to moderate income, but lenders only issued 15.02% of their prime loans and 15.41% of their subprime loans to low- and moderate-income borrowers (Table 1a).  In 2007, less than 18.3% of all prime single-family loans were made to women, while female borrowers also received over 25.9% of all subprime loans. Thus, the share of high-cost loans to females was over 7.7 percentage points higher than their share of prime loans. Additionally, men received about 27.7% of all prime loans and 33.7% of all subprime loans, resulting in over 5.9 percentage point difference between their share of high-cost vs. prime loans (Table 1a). Comparing Regions by Portfolio Share Indicators Percent of Hispanic Households Compared to Percent of Subprime Loans  When comparing the proportion of subprime loans made to Hispanic borrowers to the percent of Hispanic households, the state of Arizona performed worst of the seven regions. Hispanics represented about 17.5% of all households in the state of Arizona yet they accounted for almost 40% of all single-family subprime loans. This represented a difference of 22.5 percentage points. Rural counties in Arizona also performed poorly on this indicator, as Hispanics made up 19.8% of all rural households yet received 35.3% of all subprime loans, which made for a difference of 15.5 percentage points (Table 1a). Additionally, geographical areas with large disparities include Cochise, Graham, Greenlee, and Santa Cruz, as well as La Paz, Mohave, and Yuma counties. Conversely, Coconino and Yavapai counties performed best for this indicator, as Hispanics there represented about 7.3% of the households and received a little over 11% of all subprime loans (a difference of only 3.8 percentage points). Difference in Portion of Prime and Subprime Loans for Hispanics Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 82  Once again, the state of Arizona performed worse than the rest of the regions in our analysis with regards to the share of prime vs. subprime loans made to Hispanic borrowers. Hispanic borrowers received almost 40% of all subprime loans while only receiving 17.3% of all prime loans, a difference of 22.7 percentage points. Cochise, Graham, Greenlee, and Santa Cruz counties also performed poorly on this indicator, as Hispanic borrowers received 49.6% of all subprime loans and only a little over 30% of all prime loans, a difference of almost 19.4 percentage points. In contrast, Apache and Navajo counties performed best for this indicator. Yet, even in Apache and Navajo counties, Hispanics borrowers received over 11.9% of all subprime loans and 6.5% of prime loans for a percentage point difference of 5.4 (Table 1a). Percent of Native American Households Compared to Percent of Subprime Loans  The difference between percentage of Native American households and proportion of subprime loans made to Native American borrowers was positive for all seven areas. Therefore, lending disparities were not well reflected from this percentage difference. However, a look into the number of loans issued to Native Americans compared to their demographics reveals a rather low rate of lending to this borrower group. For example, there were 67,858 Native American households in the state of Arizona, yet, this borrower group only received 1,697 single family (i.e. prime and subprime) loans. In addition, in Apache and Navajo counties, Native Americans comprised over 51.6% of the households yet received a total of 2.48% of all single-family loans (a difference of over 45.7 percentage points between this group’s share of loans and demographic composition).  La Paz, Mohave, and Yuma counties comprised the area with the lowest percentage point difference between percent of households that were Native American and share of subprime loans issued to Native American borrowers; 2.3% of the households in the area were headed by Native Americans and accounted for just over 1.9% of all subprime loans, a difference of 0.39 percentage points. Interestingly though, Native Americans in the counties of Apache and Navajo made up over 51.6% of the households but accounted for 5.9% of all subprime loans and 1.7% of all prime loans (Table 1a). The very low percentages of loans to Native Americans in Apache and Navajo counties could be due to tribal trust land restrictions on collateral. Lenders hesitate to make loans on reservations when they cannot seize houses when borrowers are in default. Difference in Portion of Prime and Subprime Loans for Native Americans  Apache and Navajo counties had the largest percentage point difference between the percent of subprime loans made to Native American borrowers Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 83 and the percent of prime loans made to Native American borrowers. As discussed above, Native American borrowers received 5.9% of all subprime loans and only 1.7% of all prime loans, a difference of 4.41 percentage points. However, La Paz, Mohave, and Yuma counties, performed best on this indicator; Native Americans in this area received 2.17% of all prime loans and 1.92% of all subprime loans, a positive difference of 0.26 percentage points (Table 1a). Comparing Portfolio Share Indicators between 2004 and 2007  Generally, the shares of subprime loans received by Native Americans, lowand moderate-income borrowers, as well as males and females have decreased from 2004 to 2007 in all areas included in this analysis. In contrast, the share of subprime loans held by middle- and upper-income borrowers has increased substantially from 2004 to 2007 for all areas included in this analysis. For example, a little over 59% of all loans issued to middle- and upper-income borrowers in Gila and Pinal counties were high-cost in 2004, while this group’s share of high-cost loans increased to over 73% in 2007. The share of high-cost loans to Hispanics has also slightly increased between 2004 and 2007 in all of the areas included in this analysis except Cochise, Graham, Greenlee, and Santa Cruz counties (see Tables 1a & 1b).  Cochise, Graham, Greenlee, and Santa Cruz counties had the largest primesubprime disparities in lending to Hispanics in both 2004 and 2007. Apache and Navajo counties, on the other hand, displayed the largest disparities in prime-subprime lending to low- and moderate-income borrowers for both 2004 and 2007 (Tables 1a & 1b). Market Share Analysis Apache & Navajo  In Apache and Navajo counties, 16.75 % of all single family loans to whites were subprime. In comparison, 29.6% of the loans issued to Hispanics were subprime and, even more strikingly, 43.9% of the loans issued to Native Americans were subprime. Thus, Native Americans were 2.62 times more likely than whites to receive a subprime loan, and Hispanics were 1.77 times more likely to receive a subprime loan, as compared to their white counterparts (Table 2a).  Almost 19.6% of all single-family loans issued to middle- and upper-income borrowers were subprime. In comparison, almost 29.3% of all single-family loans issued to low- and moderate-income borrowers were subprime. Consequently, low- and moderate-income borrowers were 1.5 times more Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 84 likely than middle- and upper-income borrowers to receive a subprime loan (Table 2a).  Lastly, females were just as likely as males to receive a subprime loan, yet, a look into the number of loans issued to females in the area shows the volume of lending to females to be rather small. In particular, while 14,934 of the area’s households were female headed, females received only 321 singlefamily loans in the year 2007 (Table 2a). La Paz, Mohave & Yuma  In the counties of La Paz, Mohave, and Yuma, 14.77% of all single-family loans to Native Americans were subprime compared to 21.27% of all loans to Hispanics that were subprime. Of all single-family loans issued to whites, 14.4% were subprime. These differences in the market share of loans make up for a 1.03 disparity ratio for Native Americans to whites, and a 1.48 disparity ratio for Hispanics to whites. Of all loans to middle- and upperincome borrowers, a little over 17% were subprime, compared to 17.55% of all loans issued to low- and moderate-income borrowers that were subprime (Table 2a). Consequently, low- and moderate-income borrowers were just as likely as middle- and upper-income borrowers to receive a subprime loan. Comparing Regions by Market Share Disparities Native American Borrowers  In the counties of Coconino and Yavapai, 33.8% of all loans to Native Americans were subprime compared to 10.7% of all loans to whites that were subprime. Native Americans were, therefore, 3.17 times more likely than whites to receive a subprime loan. Furthermore, in Apache and Navajo counties, Native Americans were 2.62 times more likely to receive a subprime loan than whites. Conversely, in La Paz, Mohave, and Yuma counties, Native Americans were only 1.03 times more likely to receive a subprime loan than whites (Table 2a). Hispanic Borrowers  In the state of Arizona, 32.6% of all loans to Hispanics were subprime compared to 12.6% of all loans to whites that were subprime. Hispanics were, therefore, 2.59 times more likely to receive a subprime loan than whites (Table 2a). Moreover, in Coconino and Yavapai counties, Hispanics were 2.01 times more likely to receive a subprime loan than whites. Disparities in the likelihood to receive a subprime loan were smallest in La Paz, Mohave, and Yuma counties, still, Hispanics in the area were 1.48 times more likely than whites to receive a subprime loan. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 85 Low-and Moderate-Income Borrowers  In Apache and Navajo counties, 29.28% of all loans to low- and moderateincome borrowers were subprime while 19.55% of all loans to middle- and upper-income borrowers were subprime (Table 2a). Thus, low- and moderate-income borrowers were one-and-a-half times more likely than middle- and upper-income borrowers to receive a subprime loan. Apache and Navajo counties had the largest disparity in market share of subprime loans to low- and moderate-income compared to middle- and upper-income borrowers. In contrast, there was very little disparity in La Paz, Mohave, Yuma, Coconino, Yavapai, Gila, and Pinal counties. Female Borrowers  Among the seven areas, four had greater-than-one disparity ratios, which indicated a slightly higher likelihood for females to get subprime loans. However, all of the remaining areas had disparity ratios smaller than one, which indicated that males, rather than females, were more likely to get subprime loans. Comparing Market Share Disparities between 2004 and 2007  The number of all single-family loans to Native Americans almost halved between 2004 and 2007 in the state of Arizona (from a total of 3,147 loans in 2004 to 1,697 loans in 2007). Similarly, Hispanic borrowers in Arizona received a total of 42,081 single-family loans in 2004 and this number dropped to 37,078 loans in 2007. Moreover, the number of loans to low- and moderate-income borrowers in Arizona was 71,610 in 2004 but dropped to only 38,842 in 2007 (see Tables 2a & 2b).  The shares of subprime loans held by Native Americans, Hispanics, and lowand moderate-income borrowers increased from 2004 to 2007 in both rural Arizona and the state as a whole. For example, Hispanic borrowers in Arizona accounted for 25.7% of the subprime loans in 2004, and their share of subprime loans increased to 32.6% in 2007 (Tables 2a & 2b).  A between-county comparison shows that Coconino and Yavapai counties have surpassed Apache and Navajo counties in 2007 in terms of subprime market share disparities between Native Americans and whites, as well as Hispanics and whites. Subprime market share disparities for Native Americans and Hispanics were greatest in Apache and Navajo counties in 2004 (as compared to all other counties included in the analysis), but by 2007, the area including Coconino and Yavapai counties displayed the greatest subprime market share disparities between Native Americans and whites, and Hispanics and whites. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 86 Denial Rates Cochise, Graham, Greenlee & Santa Cruz  In Cochise, Graham, Greenlee, and Santa Cruz counties, white borrowers were denied a loan about 25% of the time in 2007. In comparison, Hispanics were denied a loan over 39% of the time and the respective number for Native Americans was 43.8%. Thus, when applying for a loan, Hispanics were 1.57 times more likely and Native Americans were 1.74 times more likely to be denied a loan, as compared to white borrowers (Table 3).  Likewise, low- and moderate-income borrowers were 1.44 times more likely to be denied a loan, compared to middle- and upper-income borrowers. La Paz, Mohave & Yuma  The smallest denial disparities among all regions included in this analysis were observed in the area including La Paz, Mohave, and Yuma counties. In this region, Hispanics and Native Americans were almost as likely as white borrowers to receive a loan denial (see Table 3). Comparing Regions by Denial Rate Disparities Native American Borrowers  The area including Apache and Navajo counties displayed the largest denial disparities between Native Americans and whites among all areas included in this analysis. Native Americans in the area were over twice as likely as whites to be denied a loan in 2007. Native Americans were also almost twice as likely as whites to receive a loan denial in Gila and Pinal counties. With the exception of the region including La Paz, Mohave, and Yuma counties, Native Americans were substantially more likely than whites to receive a loan denial in all areas included in our analysis. Hispanic Borrowers  The area including Cochise, Graham, Greenlee, and Santa Cruz counties had the highest denial disparity ratio between Hispanic and white borrowers. Hispanics in this area were 1.57 times more likely than whites to be denied a loan. Once again, the smallest denial disparities were observed in La Paz, Mohave, and Yuma counties (Table 3). Low-and Moderate-Income Borrowers  The highest denial disparities between low- and moderate-income and middle- and upper-income borrowers were observed in Apache and Navajo Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 87 counties. Low- and moderate-income borrowers in this area were denied a loan over 45% of the time. Stated differently, low- and moderate-income borrowers were denied a loan 1.48 times more often than middle- and upper-income borrowers in the area (Table 3). Comparing Denial Disparities between 2004 and 2007  Overall, the share of denials out of all loan applications has increased between 2004 and 2007 in most areas included in this analysis. Moreover, the share of denials out of all loan applications has increased for minorities and whites alike. For example, in the state of Arizona, a little over 14% of white applications resulted in denials in 2004, but this number has increased to 22.5% in 2007. Similarly, Native Americans in Arizona were denied a loan over 27% of the time in 2004 and this share of denials increased to 38.6% in 2007 (Table 3).  At the same time, the denial disparity ratio between minorities and whites, as well as low- and moderate-income and middle- and upper-income borrowers has decreased. For example, Native Americans in Arizona state were 1.89 times more likely than whites to be denied a loan in 2004 and 1.72 times more likely to receive a denial in 2007 (Table 3). This decrease in denial disparity is likely attributable to the increase in the share of denials to whites between 2004 and 2007. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 88 assessment of current public and private fair housing programs & activities in arizona Fair Housing Community Survey Results Purpose and Methodology The Southwest Fair Housing Council designed a survey for the 2006 state AI to understand fair housing issues including patterns of housing discrimination. The survey was used again for the 2009 state AI so that the results can be compared. Though the survey is not scientific or statistically significant, it nonetheless provides significant insight into people’s understanding of and attitudes towards fair housing. It also helps to shed light on the extent to which Arizonans believe that they encounter housing discrimination and which types are most prevalent. The survey was available for completion online and was distributed as hard copy at various fair housing events and other sites throughout the state with the exception of Maricopa and Pima Counties since the AI excludes those counties and the jurisdictions in them. The results below compare the results of 470 surveys collected during the second half of 2009 to the same survey completed by 330 Arizonans in 2006 for the last AI. Survey Results Table 28: Race/Ethnicity Race/Ethnicity Percent (based on number that responded to the question) – 2009 – Percent (based on number that responded to the question) – 2006 – White/Anglo 38% 53.63% Hispanic 45% 31.12% African American 3% 3.03% Native American 3% 5.15% Mixed Race/Other 11% 7.07% Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 89 Table 29: Sex Sex Percent (based on number that responded to the question) – 2009 – Percent (based on number that responded to the question) – 2006 – Male 28% 40% Female 72% 60% Percent (based on number that responded to the question) – 2009 – Percent (based on number that responded to the question) – 2006 – Yes 15% 8.48% No 85% 91.52% Table 30: Disability Disability Table 31: Respondents Encountering Discrimination Have you or someone you know ever encountered housing discrimination? Percent (based on number that responded to the question) – 2009 – Percent (based on number that responded to the question) – 2006 – Yes/May have 42% 27% No 49% 65.5% Don’t Know/NA 9% Not a survey answer in 2006 Table 32: Types of Discrimination Reported by Respondents (personally experienced or know someone who has**) Types of discrimination reported by respondents Percent (based on number of responses) – 2009 – Percent (based on number of responses) – 2006 – Refusing, discouraging, or charging more to rent an apartment or buy a home. 29% 27.20% Discouraging a person from living where they want to live. Steering them to another apartment, complex or neighborhood. 36% 21.20% Refusing, discouraging, making it more difficult or charging more or providing less favorable terms on a home loan to buy, refinance, fix up or use the equity in a home. 16% 10.61% Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 90 Refusing, discouraging or charging more for home insurance. 4% 5.95% Refusing to make reasonable accommodations or allowing a modification to make an apartment more accessible for person with a disability. 20% 12.67% Predatory lending: Unfair, misleading and deceptive loan practices. 27% 9.31% Other 29% 13.06% **Many respondents gave more than one answer. Table 33: Types of Discrimination Reported by Respondents (that they believe exist in Arizona***) 2009 ONLY Types of discrimination reported by respondents Percent (based on number of responses) Refusing, discouraging, or charging more to rent an apartment or buy a home. 44% Discouraging a person from living where they want to live. Steering them to another apartment, complex or neighborhood. 43% Refusing, discouraging, making it more difficult or charging more or providing less favorable terms on a home loan to buy, refinance, fix up or use the equity in a home. 20% Refusing, discouraging or charging more for home insurance. 10% Refusing to make reasonable accommodations or allowing a modification to make an apartment more accessible for person with a disability. 21% Predatory lending: Unfair, misleading and deceptive loan practices. 35% Other 44% **Many respondents gave more than one answer. Table 34: How Informed are Respondents about Housing Discrimination How well informed are you about housing discrimination? Percent (based on number of responses) – 2009 – Percent (based on number of responses) – 2006 – Very informed/informed/somewhat informed 63% 74.39% A little/not enough/not at all 37% 24.5% Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 91 Table 35: What Should be Done about Housing Discrimination? What do you suggest be done about housing discrimination? Percent (based on number of responses)* – 2009 – Percent (based on number of responses) – 2006 – More public education 38% 63.5% More enforcement activity 25% 14.84% Other 38% 21.66% *Some respondents gave more than one answer. Table 36: To Whom Would You Report Suspected Discrimination? To whom would you report suspected discrimination? Percent (based on number of responses)* – 2009 – Percent (based on number of responses) – 2006 – Government or non-profit that may be able to help with fair housing issue 39% 38.87% Southwest Fair Housing Council 26% 19.69% Other agencies that are not connecting with fair housing issues 14% 26.96% Don‟t know or did not answer 21% 14.48% *Some respondents gave more than one answer. Differences between the 2006 and 2009 Survey Results There were significant differences in the demographic characteristics of survey respondents between 2006 and 2009 that may help to explain some of the variations in the results.  In 2009, a higher percentage of survey respondents were housing consumers (over 90%) rather than providers. In 2006, about 75% were consumers.  In 2009, over 45% of survey respondents were Hispanic compared to 31% in 2006. Consequently, 38% were white Anglo in 2009, compared to almost 54% in 2006.  Over 72% of respondents were female compared to about 60% in 2006.  Over 15% of respondents were disabled in 2009 compared to about 8.5% in 2006. The differences in demographic characteristics were the result of a change in the survey methodology. In 2006, many of the surveys were conducted at trainings for housing Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 92 providers. In 2009, more surveys were conducted and the expansion was primarily at events that housing consumers attended. While this change in some ways reduced the ability to compare meaningful changes in fair housing attitudes between 2006 and 2009, it provided very valuable insight into differences in perspectives on housing discrimination. It appears that housing consumers, including Hispanics, women, and persons with disabilities, are much more aware of housing discrimination than housing providers, and are in favor of more vigorous enforcement to eliminate it. This should not be surprising since housing consumers are the victims of discrimination while providers are the perpetrators of alleged discrimination. Other notable survey results include:  In the survey conducted for the 2006 AI, 27% of all respondents reported that they or someone they knew had encountered housing discrimination. This is compared to 42% in the 2009 survey.  There is a significant difference between the 2006 and the 2009 survey regarding what should be done about housing discrimination. While almost the same amount of respondents suggested education in 2009, more than twice as many also pushed for stricter enforcement efforts. Some respondents suggested both approaches in combination.  Overall, the 2009 survey results indicate that housing discrimination still exists in the state of Arizona. About 37% of respondents indicated that they were not adequately informed about fair housing issues.  In 2009, of the people who felt they knew where to report housing discrimination, there was some ambiguity as to where they would report: 39% listed a government or legal entity and 26% listed Southwest Fair Housing Council. Despite the ambiguity of the 2009 answers, the number of recommended referrals to SWFHC increased from 19.69% in 2006. Conclusions The methodological changes between the 2006 and the 2009 survey indicate that the results of polls about housing discrimination largely depend on demographics and a person's position in the market. Housing consumers and particularly minorities, women and persons with disabilities are more aware of housing discrimination and more assertive in their opinions regarding how to address it likely because they are the ones that experience it. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 93 In addition, the State of Arizona has contracted with the Southwest Fair Housing Council to conduct extensive free education and outreach (E&O) throughout the state. For instance, areas of the state with very little, if any, previous fair housing E&O may actually experience more people indicating in 2009 that they have experienced housing discrimination because they now know what housing discrimination is. Regardless, these inconsistencies are not as significant when looking at the major trends that emerge like:  Arizonans continue to experience housing discrimination and/or know some that has.  People believe that education and enforcement are effective ways to combat housing discrimination.  Too many people still do not know what to do or who to contact if they believe that they have experienced housing discrimination.  Too many people are inadequately informed about housing discrimination. The state of Arizona has an effective fair housing education and outreach program that has made great strides in spreading the word about housing discrimination and other issues. However, as the survey indicates, housing discrimination continues to be a problem that needs a sustained commitment and adequate funding to combat. The fair housing issues that are still prevalent in Arizona today took decades to entrench, often with the help of government policy, and will take years to undo. Housing Professionals Interview Results Background and Methodology Twenty phone interviews were conducted to get local and regional perspectives regarding the state of fair housing, affordable housing and community development throughout non-metro areas of Arizona. Most of those interviewed represented the private housing industry, government departments charged with housing and community development and nonprofit agencies. The interviews provide another perspective and balance to the community survey that focused on housing consumers. Before beginning the interview, interviewees received an explanation of the purpose of the interview, and that the interviewees name and organization would remain anonymous. The questions were similar for all interviewees and were open-ended to encourage discussion. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 94 Findings Interviewees overwhelmingly agreed on a number of points including the following:  Housing discrimination exists in rural Arizona with the most pervasive forms being based on race and ethnicity and familial status.  Housing consumers are not well informed about their fair housing rights.  Housing consumers are unlikely to know where to go or who to contact if they have experienced housing discrimination.  Most interviewees felt that their coworkers and colleagues were sufficiently informed about fair housing to know where to refer people with fair housing issues.  Most interviewees stated that the organizations they work for receive very few, if any, fair housing related inquiries.  The most commonly stated housing issues or problems include large numbers of foreclosures, high vacancy rates, substandard housing and families moving in together because of the bad economy.  Public transit is not adequate in rural Arizona.  The recession and job losses have severely impacted all areas of the state. Sierra Vista was the one area that was doing relatively well because of the steady employment base of Fort Huachuca. Other Observations  Several people identified discrimination not related to FHAct.  Each region has unique factors that affect housing. Examples include the Fort Huachuca military base in Sierra Vista keeping rents high, the reliance on mines for employment in Graham and Greenlee Counties, the agricultural sector that draws labor from both sides of the border in the Yuma area, Indian reservations in the Apache and Navajo Counties, and others.  Most real estate professionals did not believe that discrimination occurs or is a problem and were generally more optimistic that housing consumers know their fair housing rights and know where to seek help for a fair housing issue. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 95 Conclusions Despite the fact that a number of real estate professionals did not think that housing discrimination is a problem, the majority of interviewees stated that housing discrimination is occurring in the areas where they live and work. Furthermore, most had little confidence that housing consumers know how to get help if they have been victims of housing discrimination. The recession has severely impacted almost all areas of the state. Based on the responses, fair housing education and outreach and enforcement is still needed throughout Arizona because fair housing discrimination is likely underreported. Surveys of Fair Housing Referrals in Arizona Introduction In January 2007 and again in October 2009, SWFHC conducted tests via telephone to determine how government agencies, nonprofits and other entities handled fair housing complaints and if they knew how and where to refer them. The survey targeted the state of Arizona excluding Maricopa and Pima Counties. The individual respondents are not identified in this report because SWFHC determined it would be counterproductive. The survey is intended not to embarrass agencies and create defensiveness, but instead seeks to identify where education and outreach in fair housing for agencies and organizations needs to be focused to encourage agencies to request the training that their staff needs. This free training is available from SWFHC through funding from the Arizona Department of Housing. Methodology SWFHC selected state, county and city agencies and departments, nonprofit organizations and business organizations that Arizonans would likely call for information regarding fair housing issues or to file a fair housing complaint. In 2007, 111 were identified and called, and in 2009, 112 were identified and called. Public agencies and departments that were called include Section 8 and public housing, housing authorities, WIC offices, community development, sheriff and police departments, libraries and DES offices. Non-profit agencies include human service programs, community action programs, shelters, homebuilders, providers, counselors and religious human services providers. Business organizations include chambers of commerce and better business bureaus. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 96 A SWFHC employee made the calls and identified herself as a single mother with two children (a FHAct protected class) and stated that she was turned down by a landlord who would not rent to her because he did not want children in his complex. She stated that she believed that this might be illegal and asked where she could go for help. Out of the 111 agencies called in 2007, three repeatedly did not answer phone calls and were dropped from the survey, leaving 108 agencies. Out of the 112 agencies called in 2009, twenty could not be contacted by phone (did not answer, phone, phone busy, wrong number, etc.) These were dropped from the survey, leaving ninety-two agencies. The responses gathered in 2007 and 2009 were put into one of six categories as follows84: 1. A reasonably accurate and specific referral was made to an agency that could assist with housing discrimination. 2. The referral alluded to an agency that could assist the caller but was vague and non-specific. It is questionable whether the caller could identify and find this agency with the information provided. 3. There was no referral made or it was made to an agency that did not handle housing discrimination. 4. The caller was incorrectly referred and misinformed. 5. The call was transferred to different sites within the agency and eventually cut off. 6. The caller was told (either in person or by voice recording) to leave a message and number for a callback at a later time. 84 A few agencies fell under more than one category, but the number was not determined to be enough to significantly affect the outcome. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 97 Comparison of 2007 and 2009 Survey Results Table 37: Fair Housing Complaint Referrals made by Agencies in Arizona: 2007 and 2009 Results Correct Referral Vague Referral No/Incorrect Referral Misleading Information Caller Shuffled & Cut Off Leave Message/ Will Call Back Total Number Called 2007 2009 2007 2009 2007 2009 2007 2009 2007 2009 2007 2009 2007 2009 Public Agency: State/County/City 19 (31%) 11 (18%) 5 (8%) 5 (8%) 25 (40%) 33 (53%) 8 (13%) 2 (3%) 2 (3%) 4 (6%) 3 (5%) 7 (11%) 62 62 Nonprofit Agency 8 (27%) 7 (25%) 1 (3%) 4 (14%) 12 (40%) 12 (43%) 5 (17%) 1 (1%) 0 (0%) 0 (0%) 4 (13%) 4 (14%) 30 28 Business Organization 0 (0%) 1 (25%) 1 (6%) 0 (0%) 11 (69%) 2 (50%) 3 (19%) 0 (0%) 0 (0%) 0 (0%) 1 (6%) 1 (25%) 16 4 Total 27 (25%) 19 (20%) 7 (6%) 9 (10%) 48 (44%) 47 (50%) 16 (15%) 3 (3%) 2 (2%) 4 (4%) 8 (8%) 12 (13%) 108 94 Survey Results  In 2007, 27 referrals provided information that should allow a caller to contact an agency that could take the fair housing complaint compared to 19 in 2009. However, of these referrals, only 11 in 2007 and 10 in 2009 provided a phone number.85 In 2007 and 2009, the other referrals provided only a name leaving the caller to find the phone number. In addition, for both years, a number of referrals were equivocal, such as “I think you can call HUD.”  In 2007, seven referrals mentioned a name but were vague, compared to 9 in 2009. Examples include a suggestion to look up a HUD website (no site address was provided), contacting “The Housing Council” (SWFHC?) and contacting Legal Aid when they came to town (but did not know when that would be).  In about 44% of the calls in 2007 and 50% in 2009, the person taking the call did not know where the caller could get help or referred the caller to an agency that did not handle illegal housing discrimination.86  In 2007, about 15% of the referrals provided erroneous and misleading information to the caller. That number dipped to about 3% in 2009. 85 Three provided only a number with no name Some of these agencies were called in this survey. The results of calling an incorrect referral did not differ significantly from the total of responses reported here. 86 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 98 Examples in 2007 included, “I think you have to call the police and go to court or something,” “Anyone can rent to whomever they choose” and “I had this problem myself and there was no place I could go.” In 2009 examples included, “It depends on where you are renting because some landlords are registered and, if so, they can do what they want,” and “My house, my rules is what I say, but I could be wrong.” This kind of response is arguably the most damaging because it not only discourages complainants from pursuing their complaint, but it also creates the perception that illegal discrimination cannot or should not be challenged.  Referrals are critical to achieving fair housing. People need to be able to access the information and assistance that is already available to remedy the housing discrimination problems they are having. The results of a survey of 566 non-metro Arizona residents that was conducted for ADOH in 2005 showed that about one-third of the respondents felt they were well informed on fair housing and therefore presumably would know whom to call if they experienced housing discrimination. If this statistic is factored into the findings that about 31% of callers receive (however cursory) referrals that might lead them to an agency that handles illegal housing discrimination, then it is reasonable to conclude that, at best, only about 1 in 10 people who experience housing discrimination are able to make contact with an agency that can help them.  In 2007 and 2009, referrals identified, either specifically or vaguely, four agencies that handle housing discrimination. In 2007, the caller was referred to a local Legal Aid or a Community Legal Service office in 16 referrals, the Southwest Fair Housing Council in 11, the Arizona Attorney General’s Office in 4 and HUD in 3. In 2009, the caller was referred to a local Legal Aid or Community Legal Service office in 11 referrals, the Southwest Fair Housing Council in 7, the Arizona Attorney General’s Office in 2 and HUD in 1.87 Survey Conclusions Both the 2007 and the 2009 survey results reveal that the knowledge necessary to properly refer fair housing complaints is woefully inadequate. Only one in four calls in 2007 and one in five in 2009 was properly referred. Furthermore, the SWFHC caller frequently received no useful information and even incorrect and misleading information that would likely discourage a caller from further pursuing a legitimate fair housing complaint. This is unacceptable because resources are readily available to assist Arizonans with fair housing issues and complaints. A simple referral of a fair housing complaint to a proper entity could go a long way to combating housing discrimination. 87 Legal AID and Community Legal Service Offices normally requires complainants be income eligible and not exceed certain income caps to receive services. None of the other three providers have income eligibility requirements. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 99 Education and outreach efforts must continue to prepare agencies, departments and other organizations to properly refer fair housing issues and discrimination complaints. Fair Housing Enforcement: Complaints HUD, Arizona Attorney General and FHAPs According to HUD Teapots, from January 1, 2005 to April 16, 2009, 1,129 complaints were filed in Arizona. Fifty-six (56) were directly with HUD and 1,073 were with the two Fair Housing Assistance Program (FHAP) agencies that contract with HUD, the State of Arizona Attorney General’s Office (AG) and the City of Phoenix Equal Opportunity Department. Of the total number of complaints, 807 were filed in Maricopa County and 201 in Pima County for a total of 1,008. The remaining 121 complaints were filed in the 13 rural counties that receive CDBG funds through ADOH. The table below shows a breakout of basis of the complaints for each county. Table 38: Fair Housing Complaints from the 13 Rural Arizona Counties Filed with HUD or an FHAP Agency between 1/01/05 to 4/16/09 Basis of Complaint Total Race Color National Sex Disability Religion Complaints Origin Apache 7 1 6 1 Cochise 7 2 1 1 3 Coconino 14 2 3 3 7 2 Gila 3 1 1 Graham 3 1 1 1 Greenlee 0 La Paz 5 Mohave 16 6 1 4 2 Navajo 12 2 1 9 1 Pinal 21 5 5 1 6 Santa Cruz 1 1 Yavapai 28 4 1 1 16 1 Yuma 4 1 1 2 1 Total 121 23 2 13 7 55 9 Note: The basis exceed complaints because there may be more than one basis for a complaint County Familial Status Retaliation 1 1 1 5 3 1 1 1 4 3 2 14 9 Southwest Fair Housing Council SWFHC received 148 complaints from rural Arizona from January 1, 2005 to December 31, 2008. During this period, SWFHC mediated 38 of these complaints and filed 17 with HUD or a FHAP. Ninety-three were either referred to another agency or administratively closed. The breakdown is as follows: Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 100 Table 39: Complaints Received by SWFHC from 1/1/2005 through 12/31/2008 Basis of Complaint Race National Origin Disability Familial Status Sex Religion Total Number 28 44 49 16 10 1 148 Conclusions: Evidence of Housing Discrimination in Rural Arizona While the data indicates that housing discrimination occurs in rural Arizona, it is important to keep in mind that the number of complaints filed may not accurately reflect the actual pervasiveness of housing discrimination in any area. Several factors impact victims of housing discrimination filing fair housing complaints including the following: 1. The amount of fair housing education and outreach. E&O conducted helps victims of housing discrimination recognize it, know where to go for help and understand the protection that the Fair Housing Act provides against retaliation by property owners, landlords, managers, HOAs and others. 2. The level of fair housing knowledge and training of the staffs of local public and private agencies. Staff knowledgeable about fair housing is better equipped to recognize when clients may have encountered housing discrimination and can properly refer the case to a fair housing agency that can provide further assistance. 3. A system for proper referral. Surveys described in this report reveal that many public and private agencies are not effectively dealing with potential fair housing cases. An effective system for referring people seeking help regarding housing discrimination can lead to more housing discrimination cases being resolved. 4. The availability of a local private source of fair housing assistance. Evidence shows that some are hesitant, for a number of reasons, to contact public or governmental agencies that are not local. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 101 5. Effective enforcement of fair housing laws. People are dissuaded from coming forward with complaints if they believe their case will not be effectively resolved. They may know others who have encountered housing discrimination and filed fair housing complaints that were not resolved, or know housing providers who continually discriminate with impunity. 6. Misperceptions about filing a fair housing complaint. Many people perceive that filing a complaint can be a long, time-consuming effort. People are often reluctant to get involved in the complaint process, and even more so now with the depressed economy causing many families to struggle economically. When these and other factors are taken into consideration, it is likely that the actual number of complaints that are filed represents only a fraction of the actual incidents of housing discrimination. This conclusion is drawn from data from the surveys and interviews conducted for this report and others, as well as information gathered through SWFHC’s work throughout Arizona during interactions with housing consumers and people that work in housing and community development. 1. In the 2009 statewide survey of rural residents, more than 37% of people admitted they were not well informed regarding fair housing. It is likely that the actual number is even higher than this since it is normal for many to either be reluctant to admit a lack of knowledge or be misinformed and not aware of it. 2. In an investigation that SWFHC conducted, less than 25% of call takers in agencies in rural areas that receive calls from people who may need help with housing discrimination were able to accurately refer them to an agency that could properly assist them. 3. Enforcement activities, including testing, is limited in rural areas because of higher costs and limited resources. Fair Housing Testing SWFHC Fair Housing Tests in Non-metro Arizona Systemic testing or auditing is conducted by fair housing agencies and organizations to determine compliance with fair housing laws. If violations are identified, this information can be used as the basis of a complaint or as evidence to support a complaint or legal action. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 102 Auditing is an important component of fair housing enforcement since it can systematically review compliance by providers according to testing plans approved by HUD. Testing conducted under contract to HUD must also comply with procedures and protocols defined by HUD and all participants must be trained in HUD approved trainings SWFHC conducted 95 tests under contract to HUD in non-metro Arizona counties from 2005 through 2009. Fair housing tests conducted for HUD comply with procedures and protocols defined by HUD and all participants are trained in HUD approved trainings. The following are the results of the HUD contracted testing: Table 40: Testing by SWFHC under Contract to HUD in Rural Arizona Counties January 1, 2005 to December 31, 2009 Test Type Total Basis Race Rental Sales Lending Total 28 42 25 95 26 14 40 Results National Origin Disability Familial Status Supports* Does Not Support** Inconclusive*** 10 16 11 37 11 7 11 7 7 3 9 19 9 29 9 47 12 10 7 39 * Supports an allegation of illegal housing discrimination. There is evidence of non-compliance with FHA or disparate treatment unfavorable to the tester with the protected class characteristics. ** Does not support an allegation of illegal housing discrimination. Test shows compliance with FHA and/or substantially similar treatment of the testers. *** The test was inconclusive and while there may be disparities it is not clear that they evidence discrimination. Conclusion The results of testing indicate that housing discrimination is occurring in rural Arizona. Approximately 20% of the testing conducted in rural Arizona by SWFHC evidenced some form of housing discrimination. Another 40% showed differences of treatment by housing providers but it could not be confirmed that these disparities showed illegal discrimination. While the testing that was conducted is valuable as an indicator, to be an effective fair housing tool and deterrent to illegal discrimination, it needs to have a greater presence. Rural Arizona is so large, the population so dispersed and the resources for testing so limited that the impact of testing in rural Arizona has been small relative to the size of the problem. Fair Housing Education and Outreach Arizona Attorney General – Civil Rights Division The foremost participant in activities that enforce fair housing in Arizona is the Office of the Attorney General. The Civil Rights Division has the authority, as a designated Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 103 “substantially equivalent agency,” to actively investigate and litigate fair housing violations throughout the state. The AG’s office reported88 that from January 1, 2005 through April 20, 2009 it conducted 162 education and outreach (E&O) events throughout Arizona, consisting of trainings, presentations, conferences, panels, publications, articles and media products. Approximately twenty of these were events conducted throughout the state, outside of Maricopa and Pima County, and included sites such as Bisbee, Flagstaff, Prescott, Safford, Sedona, Sierra Vista, Somerton and Yuma. The AG reported that over 500 people participated in these activities. In addition to the events the AG conducted in non-metro areas of Arizona, several activities conducted in Maricopa and Pima Counties also drew heavily from rural areas outside these counties or impacted these areas. In February 2008, the AG mailed out fair housing packets containing literature, posters and suggestions for fair housing displays to ninety libraries in Arizona, many of these in rural areas. Also in February 2008, the AG began the distribution of their DVD/Video “Fair Housing for All” to communities in Arizona. This DVD is a dramatic presentation of the impact that housing discrimination can have on victims and provides information for agency staff, housing providers and housing consumers on identifying illegal discrimination and reporting it, as well as complying with fair housing laws. SWFHC continues to assist in the distribution of this DVD as it conducts E&O throughout the state. To date an estimated 85 copies have been distributed in rural areas of the state. Arizona Department of Housing The Arizona Department of Housing (ADOH) has actively worked to affirmatively further fair housing by funding education and outreach (E&O) activities. The 2009 Governor’s Housing Forum attracted housing professionals, activists and community groups from around the state to attend housing related workshops, including fair housing issues. ADOH has also funded fair housing E&O activities for the past several years. These activities include the following:  Southwest Fair Housing Council received $150,000 in 2009 to provide education and training through distribution of materials, participation in seminars and workshops and conducting radio talk shows on fair housing through FY 2010. 88 Written response to SWFHC received April 21, 2009 listing and briefly describing 162 educations and outreach events conducted throughout Arizona from 2005 into 2009. A copy of this listing is available upon request from SWFHC@dakotacom.net Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 104  Southwest Fair Housing Council received $300,000 in 2007 to provide education and training through distribution of materials, participation in seminars and workshops and conducting radio talk shows on fair housing through FY 2009.  Southwest Fair Housing Council received $300,000 in 2005 to provide education and training through distribution of materials, participation in seminars and workshops and conducting radio talk shows on fair housing through FY 2007.  Southwest Fair Housing Council received $265,000 in 2003 to use for education and advocacy programs related to fair housing in the thirteen rural counties of Arizona through FY 2004.  Southwest Fair Housing Council (then the Southern Arizona Housing Center) received $48,633 in 2002 to further fair housing education in several central and southeastern Arizona rural counties through FY 2003.  Arizona Fair Housing Center received $49,225 in 2001 to provide fair housing training in Maricopa, Coconino, Yavapai, Navajo, and Apache counties.  Community Legal Services received $27,558 in 2000 to provide fair housing education in La Paz, Mohave, and Yuma counties. While some ADOH programs are designated solely to serve rural Arizona, in fact, ADOH has programs that assist entities in Maricopa and Pima Counties. Statewide education and outreach activities (including in Maricopa and Pima Counties) by SWFHC from July 2005 through June 18, 2009 reached 9,256 individuals through 323 educational activities and distributed 77,724 pieces of fair housing and fair lending literature in English and Spanish through 621 sites. SWFHC conducted fair housing workshops reaching individuals representing the rental industry, lending industry, advertising companies, construction firms, nonprofit corporations, municipal government staff and the general public, including first time homebuyers, renters and people in transitional housing. The Southwest Fair Housing Council The Southwest Fair Housing Council (SWFHC) had been instrumental in educating Arizona’s consumers and housing providers on fair housing laws. In addition to trainings and workshops, distributing fair housing and fair lending literature in English and Spanish statewide has proven effective in getting relevant education and enforcement information into the hands of Arizonans, particularly, but not solely, to people living in rural counties. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 105 SWFHC is currently under contract to ADOH to conduct fair housing education and outreach (E&O) in the non-metro areas of Arizona. SWFHC has been conducting fair housing education and outreach for the state since 1993, first for the Department of Commerce and then for ADOH. To conduct an analysis of the E&O conducted by SWFHC over the course of the past four fiscal years, the state was divided into four regions in order to determine what activities had been conducted in which regions. The purpose of this analysis is to help planning in order to direct future E&O based on need qualified by the intensity of past activities. Maricopa County and Pima County and a number of jurisdictions in those counties, as well as the cities of Yuma, Prescott and Flagstaff are CDBG entitlement jurisdictions, and are therefore not a part of ADOH’s CDBG jurisdiction. All independent CDBG jurisdictions are responsible for their own fair housing activities and AI reports. The data in this analysis is, to the extent possible, is limited to the 13 counties (excluding the cities of Yuma, Prescott and Flagstaff) that are designated as the State of Arizona’s CDBG jurisdiction. The figures in the table below are solely for the thirteen rural Arizona counties. The four regions of the state that SWFHC used for this study and their constituent counties are as follows: 1. Southeast Arizona Governments Organization (SEAGO): Graham, Santa Cruz Cochise, Greenlee, 2. Western Arizona Council of Governments (WACOG): Yuma, La Paz, Mohave 3. Northern Arizona Council of Governments (NACOG): Apache, Navajo, Coconino, and Yavapai 4. Central Arizona Association of Governments (CAAG): Pinal and Gila The activities conducted by SWFHC were grouped into four categories: A. Planning Sessions and Meetings B. Training/Workshops C. Presentations D. Events Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 106 Table 41:Geographic Distribution of Education and Outreach Activities Conducted by SWFHC under Contract to the State of Arizona for FY 2005-2009 A. Planning B. Training/Workshops C. Presentations Locations Locations Locations D. Events Locations 1 2 3 4 Total 1 2 3 4 Total 1 2 3 4 Total 1 2 3 4 Total 7/056/06 4 2 6 0 12 5 4 4 3 16 3 5 9 4 21 3 5 8 0 16 7/066/07 11 4 11 1 27 7 5 2 4 18 5 3 6 6 20 3 2 4 2 11 7/076/08 2 10 11 4 27 8 9 21 4 42 16 16 13 8 53 6 6 4 6 22 7/086/09 11 6 4 3 24 10 11 8 6 35 24 11 17 15 67 5 6 3 7 21 Total 28 22 42 8 100 30 29 35 17 111 48 35 45 33 161 17 19 19 15 70 This table covers a four fiscal year period and shows:  The highest percentage of planning sessions (42%) occurred in the northern portion of Arizona.  The largest percentage of presentations (30%) occurred in the southeast area of Arizona.  The western and northern regions of Arizona received the largest percentage of events at 27% of the total.  The largest percentage of trainings/workshops was conducted in the northern region (32%).  Trainings/workshops, presentations and events were evenly spread geographically throughout rural Arizona.  Note that region #4 (CAAG) includes only two sparsely populated counties, Pinal and Gila, and therefore has fewer opportunities for E&O. The figures for column #4 are only slightly less than for the other three regions. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 107  There was substantial equity in allocating time and resources throughout areas of rural Arizona. “Planning” leads to “Presentations” and “Events,” which lead to “Training/Workshop” opportunities. SWFHC is a state-certified real estate training school for purposes of fair housing and offers three continuing credits to real estate agents for these three-hour training classes. State certified continuing credits are required every two years for the renewal of an Arizona real estate license. The classes have proven very popular in rural areas of the state since agents might otherwise need to drive to Phoenix or Tucson to obtain the credits they need. For the period, SWFHC conducted forty-three continuing education classes for 1,042 Realtors® in rural Arizona. For all of Arizona, SWFHC conducted sixtyeight continuing education classes that reached 1,285 Realtors®. Areas of high Native American population where substantial numbers of Native Americans look to work and live off the reservation continue to require concentrated E&O efforts. Over six years, less than 10% of E&O conducted in the state by SWFHC was conducted in the Northeast region. Although, if Coconino County is added, the total increases to closer to 25%. Nevertheless, an increase in E&O is warranted and in the last few years, the number of contacts SWFHC has made in Apache and Navajo Counties has grown to the extent that a substantial network has developed to support increasing and improving E&O. The Arizona Attorney General’s Office has reported approximately 780 fair housing complaints throughout Arizona since 2000. Only 44 of these were from rural areas outside of Maricopa and Pima Counties. SWFHC has reported 587 fair housing complaints over the last five years, of which 51 were from rural counties. Many more allegations are received either directly or indirectly through agency staff, housing agents, public officials and residents. The Attorney General’s Office has referred to complaints and allegations as the tip of the iceberg with fully 99% of fair housing violations going unreported. Statements from interviewees, survey respondents, a number of anecdotal reports, discussions with housing agencies, as well as hard data that strongly implies the results of discrimination including demographics and HMDA support this assessment. The question that is continually asked is why the number of complaints would not reflect the pervasiveness of discrimination that is evidenced in so many other ways. One answer is that if people are not adequately informed regarding their fair housing rights and responsibilities, a clear referral procedure is not available to direct complaints to enforcement agencies and effective enforcement and monitoring of compliance is not occurring, complaints will not be filed. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 108 Based on the community survey responses, interviews with knowledgeable informants and the observations that SWFHC has made in working in communities throughout Arizona for over a decade, three things are evident: 1. Housing consumers are not well informed regarding their fair housing rights, identifying housing discrimination, where to go to get help if they think they have encountered housing discrimination and how to file a complaint. Regarding the survey, over 50% of the respondents stated that they were not well informed about fair housing. In addition, 21 out of the 25 interviewed stated they did not feel that residents in the community were adequately informed regarding fair housing. Also about 70% of respondents to the survey stated that they felt that education was the most effective way to combat housing discrimination. 2. Until a few years ago, much of the E&O that had been conducted in rural areas had been spotty and inconsistent with no follow-up and, thus, did not engender the confidence and trust people needed to come forward with complaints. 3. The level of enforcement of legitimate fair housing complaints and the results of enforcement actions affect whether people will file and follow through with a fair housing complaint. If fair housing enforcement is lax and ineffective, people do not believe that filing a complaint is worth the effort. Instead, acts of housing discrimination are accepted as normal and acceptable. In the last few years, enforcement has begun to increase focus on rural areas. The premise that more and better fair housing E&O and enforcement empowers people to file complaints rather than accept housing discrimination is born out in a prima facie relationship between increased fair housing services on the one hand and allegations and complaints on the other. In 2000, SWFHC was not doing E&O statewide and systemic enforcement was very limited in rural areas. About 52 complaints were received that year. In 2005, after SWFHC had been conducting E&O statewide for two years under contract to the State, the number of settlements had increased over 400% (from 2 to 9), the complaints received more than tripled (128) and the complaints filed with HUD more than doubled (52). While the resources exist, many people do not avail themselves of the information that can help them. For example, some builders and contractors choose to remain largely uninformed regarding design and construction requirements of FHAct despite the fact that HUD and SWFHC have focused on this for the last ten years and continue to offer information and trainings at no cost. For example, in May 2007, SWFHC sponsored an accessibility training offered by Accessibility First (HUD contractor based in Washington, Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 109 D.C.). Area architects, builders, contractors, building inspectors and others were invited to the no cost, daylong session. Alarmingly, about 45% of rental units that SWFHC has tested that have been built in the last fifteen years are not totally compliant with the accessibility requirements of FHAct. Some of the reasons suggested for the problems that many property owners or managers have with compliance and indications that the problems can be addressed by education and outreach are as follows: 1. Some property managers do not train their staff adequately and property owners do not monitor their management companies for compliance with FHAct. One problem that many property managers experience is high turnover of staff and carelessness in promptly training new staff. For example, SWFHC had filed three complaints against one property Management Company over a two-year period (2001-2003). The problem was that new staff was not promptly trained, and as a result, some were consistently and egregiously violating FHAct. 2. Some small property owners may not know that they are not exempt from FHAct and need to comply. For example, a four-unit dwelling is only exempt if the owner is living in one of the units and an exemption does not apply to an owner of a single family dwelling if the seller uses a realtor’s services to sell their home. 3. There are many gray areas between such issues as security, health and safety, and liability on the one hand and housing rights on the other. Today, understanding the distinction is more important than ever. Property managers and owners need training in order to make informed decisions involving complex issues. 4. Housing providers in rural areas are often poorly informed and may not be aware of the fair housing training resources available to them in their area. Some believe they need to drive to Phoenix or Tucson to receive the training they need and this can result in delays for them and their staff. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 110 impediments to fair housing choice and plan of action Introduction Achieving a fair and equitable housing market for all Arizonans depends on conducting a comprehensive analysis of factors that impact housing, identifying impediments to free choice in the housing market, developing effective plans of action to eliminate them, implementing them and then evaluating the results. This process is repeated every three to five years. However, the identification of impediments to fair housing choice and implementation of an action plan does not assure their elimination; they can become embedded in the cultural, political and institutional fabric as well as the built environment of communities and very difficult to eliminate. Some impediments are caused by local factors, and others can be influenced by national and global political, social and economic forces at play that are beyond state or community level solutions. Though a jurisdiction might not have direct control to correct certain impediments, it is nonetheless important to note them in the AI. In addition, there are a number of issues developing from the economic, political, and demographic changes that are occurring in Arizona that, while it is problematic to term current impediments, nonetheless warrant action to avert their development into embedded fair housing barriers. 2006 Impediments and Plan of Action 2006 Plan of Action Results There were nine impediments identified in the 2006 Action Plan. Virtually all the action steps that were proposed in the 2006 plan were conducted and in some cases, the results indicate success in reducing particular barriers. However, in other cases, it is difficult to evaluate the extent of the impact or the results appear to be limited or negligible. As a result, a few of these impediments carry over to the 2010 Plan of Action with their wording essentially intact, others are very similar to those in 2006 but have been revised to better define the impediment and in a couple cases the issues were folded into the revised impediments and no longer stand alone. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 111 The State of Arizona has worked hard and has expended considerable resources to identify and eliminate the impediments to fair housing choice since conducting the first State AI in 1996 and many of these carry over into this AI. This does not suggest that real progress has not been made, but it does demonstrate the extent and persistence of the challenge. Impediment #1 Many housing consumers lack knowledge of their fair housing rights, where to go for information, and how to get help if they believe they or someone they know have experienced housing discrimination. The 2006 Plan of Action detailed an extensive list of activities that would be conducted to help eliminate this impediment. Since that time ADOH has provided almost $600,000 in state money for grants to implement a comprehensive plan to provide fair housing education and outreach, which included the activities listed in the 2006 Plan of Action. A full description of these activities is presented in pages 104-108 of this analysis. Despite these efforts, surveys, interviews, audits, complaints, data and observations presented in this analysis indicate this impediment remains. First, housing consumers are not well informed regarding their rights under FHA. Second, many consumers do not know what housing discrimination entails and cannot recognize it when it occurs. Third, most housing consumers do not know where to report housing discrimination, how to file a complaint nor where to go for help if they encounter discrimination. As a result, this impediment will carry over to the 2010 Plan of Action. Impediment #2 Housing providers need to be better informed regarding their responsibilities to comply with the Federal Fair Housing Act. Training for housing providers was included in the Fair Housing Plan implemented by ADOH that was noted in Impediment #1. The training was extensive with over 1,200 providers participating since 2005. Yet problems remain. Complaint and test data show that consumers continue to experience illegal housing discrimination. Interviews, surveys and feedback from trainings showed that a significant number of providers stated that they doubted that housing discrimination occurs or occurred so infrequently it was not a problem. In addition, the investigation showed that many housing providers who believe they are well informed about fair housing laws nevertheless are not as well informed as they need to be. Problems included the following: Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 112  While fair housing training is available, many providers do not obtain the training or information that can help them.  Some property managers do not account for high staff turnover and consequently do not provide training for staff as often as they need to.  Some small property owners may not know that they are not exempt from the Fair Housing Act and need to comply.  There are many gray areas between such issues as security, safety, and liability on the one hand and housing rights on the other. Many providers need up-to-date information in these areas in order to make better-informed decisions.  Housing providers in rural areas often need to drive long distances at considerable expense to receive the training they need. Impediment #3 There is a need throughout the state for more affordable housing. This impediment was included in the 2006 AI because of an increasing gap between the growth of employment and wages and the cost of housing. Jobs and income were lagging and home prices were in an unprecedented upward spiral. While the need for affordable housing is not in itself a fair housing issue, it is closely tied to housing inequities that have a disparate impact on persons protected under the Fair Housing Act. Demographic, employment, and income data show that minorities, families with children (including single parent families), and persons with disabilities are proportionally overrepresented in low-income populations and are most in need of affordable housing. Actually, the most prevalent impediment that affordable housing poses to fair housing appears to be the assumption that creating affordable housing is in itself addressing fair housing. For example, the lack of affirmative marketing, an inequitable distribution of housing resources and an absence of planning as to locating affordable housing so as not to exacerbate the residential concentrations of FHA protected classes are all impediments to fair housing that actually emerge from affordable housing programs that do not explicitly include fair housing planning, monitoring and evaluation. The dramatic decline in the housing market since 2006 has exacerbated the need for affordable housing for different reasons. By 2006, subprime lending with loose qualifying standards was rampant and many people were able to buy homes that they could not qualify for only a few years before. However, the rates, terms and conditions proved unsustainable for many of these loans and defaults and foreclosures burgeoned. The Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 113 housing boom from 2004 through 2006 was, by 2007, exposed as a bubble that was bursting. In its wake, it left unprecedented numbers of homeowners in foreclosure, renters evicted, an economy close to depression, high unemployment and lenders who were either unable or unwilling to lend despite the fact that housing prices had fallen by 30% or more. ADOH has implemented a number of affordable housing programs both before and after the housing market collapse. This includes CDBG programs, Home Investment Partnership Program (HOME), Emergency Shelter Grants (ESG), Housing Opportunities for Persons with AIDs (HOPWA), State Housing Trust Fund (HTF) projects, Low Income Housing Tax Credits (LIHTC), Section 8 Vouchers, Section 8 Tenant Based Contract Administration, National Foreclosure Mortgage Counseling Program, Mortgage Credit Certificates and Mortgage Revenue, and the National Stabilization Program (NSP). The specifics of these programs along with and their results and other data are discussed in detail in the body of the 2010 Consolidated Plan as well the annual CAPERs from 2005 through 2009. The strategies for the geographical distribution of housing projects in non-metro counties and ADOH's directive that projects include affirmative marketing plans are also discussed in the Consolidated Plan. In addition, ADOH conducted the annual “Arizona Housing Forum.” and used that as a venue to promote affordable housing. The following are just a few examples of the topics at breakout sessions:  Making the Case for Affordable Housing  Challenges Facing Public Housing  Non-profit 101: Fundamentals of the Affordable Housing Development Process for a Board of Directors  Tribal Housing Initiative Update  The Business Case for Affordable Housing: Why we Need a Workforce Housing Plan  Preserving Affordability: Strategies and New Ideas The issue of affordable housing will be included as a carry-over impediment in the 2010 AI in a way that clearly links it to fair housing. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 114 Impediment #4 There is a need to improve the process for fair housing complaint referral in many nonmetro communities. ADOH's education and outreach strategy included numerous trainings for the staff of public and private agencies (see pages 104 to 105). In addition, ADOH monitored the referral procedures of sub grantees through regular surveys and provided feedback if these were lacking. ADOH also provided agencies with information materials listing where complaints can be referred and what an effective referral system entails. Despite the training, surveys, interviews and dissemination of information conducted for this AI, analysis indicated that many agencies that work with housing consumers still do not have clear and consistent procedures for reporting or referring people who are experiencing fair housing issues. Staff in a majority of agencies state that they receive few complaints they could identify as fair housing and are generally unsure of where to refer people. If fair housing complaints are not recognized, people do not receive the help they need or get referred to an agency that can help them. In addition, inquiries, allegations and complaints are often not logged and the true prevalence of housing discrimination is obscured. This, in turn, feeds a vicious cycle. A perception is fostered in residents that nothing happens and follow-up does not occur when a complaint is made and this discourages people from calling or making contact. The State's 2010 action plan seeks to break this cycle. Impediment #5 Predatory practices and disparities in lending negatively impact protected classes in non-metro Arizona. Predatory Lending After 2004, the nature of this impediment was transforming and the character and toxicity of this transformation was not fully realized until after the housing bust in 2007. The term “predatory lending” essentially lost its meaning in 2005. Many of the practices, rates, terms and conditions that had been considered predatory became acceptable and subsumed under the term “subprime.” Subprime lenders located both within and outside of Arizona dominated the local housing market. Greed overcame rationality and lenders were making loans they knew were likely to end in default, borrowers were receiving mortgages that they could only hope to afford and bank and loan regulators stepped aside and deferred to a market that was spiraling out of control. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 115 Thus, the bright aura of the housing boom obscured many of the past concerns regarding discrimination in lending and pushed them to the back burner. The focus on denials appeared moot as lending appeared to open up to minorities. However, discrimination through denials was in actuality turned on its head into a form of reverse redlining. Minorities were being targeted for subprime loans even when they would previously have failed to qualify for any loan (or were in fact qualified for a prime loan). Moreover, although every demographic sector is caught up in the defaults and foreclosures that have ensued, the post crash data shows that minorities and minority neighborhoods are being hit the hardest. In compliance with the 2006 AI Action Plan, ADOH conducted the following activities to respond to this impediment: 1. The issue of predatory lending was included in virtually all E&O activities throughout the state. 2. Several E&O sessions were devoted to the issue of abusive lending. These sessions brought in staff from "Don't Borrow Trouble,” SWFHC's predatory lending and foreclosure program. 3. ADOH collaborated with the Arizona Foreclosure Task Force and Don’t Borrow Trouble Pima County to address the foreclosure crisis. 4. Materials on predatory lending, foreclosures and mortgage modification scams have been distributed with the materials noted on pages in the “Fair Housing Education and Outreach” section. 5. In 2008, ADOH sponsored a study of foreclosures to understand the impact they were having and to improve planning to stem the tide and combat the damage they were having. Impediment #6 Information gathering and monitoring fair housing performance needs to be improved. The 2006 AI showed the following: 1. Many communities lack fair housing systematic and comprehensive intake, referral and/or logs to record and track allegations and referrals, as well as determine trends and needs. Without this information, it is difficult to determine Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 116 accurately the type and prevalence of housing discrimination that may be occurring and to conduct effective planning to address it. 2. CDBG sub recipients were not providing ADOH the information it needed to monitor their compliance with AFFH requirements. ADOH responded by having CDBG recipients fill out annual questionnaires that provided some of the information needed. ADOH also collected information in site visits and phone monitoring. Impediment #7 Enforcement needs to be increased in rural areas. In particular, there needs to be greater focus on border areas, colonias and communities surrounding reservations where discrimination has been shown to be particularly high. This impediment was included in the 2006 AI and was a carryover from the 1996 AI for the Arizona Department of Commerce, a precursor to ADOH. The data included here indicates that testing is limited in rural areas primarily because of increased cost, limited funding and the need to focus on more cost effective investigations in urban areas where the population is concentrated. It also showed that because many housing providers and consumers are poorly informed regarding their fair housing responsibilities and rights, many rural communities do not have effective referral procedures in place. There is also a widespread problem in accurately logging and recording inquiries, allegations and complaints, causing the number of complaints coming from rural areas to be inordinately low. ADOH accurately points out that it has no authority in the area of Fair Housing Enforcement and the State agency for this is the State of Arizona Attorney General’s office – Civil Rights Division (AG). Nevertheless, the need for more enforcement in nonmetro areas is acknowledged and is addressed through the E&O activities ADOH conducts to increase awareness and knowledge of fair housing, provide the information people need to get help if they encounter housing discrimination and train staff of public and private agencies to accurately refer and record complaints. Impediment #8 “Not in my Backyard” (NIMBYism) impedes both fair housing and affordable housing. NIMBYism that impedes fair housing is a difficult issue to resolve. It is not unusual for residents to coordinate attendance at public hearings and council meetings to express Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 117 opposition to such things as affordable housing, group homes or transitional housing, and elected officials are often intimidated by the possible political consequences of opposing vocal citizens when they organize. Freedom of speech is rightly valued in our country and as long as speech and actions do not threaten bodily harm, violence or cross the line into becoming illegal slander, defamation or disturbance of the peace it cannot be restricted or prohibited. The only viable response is targeted education and outreach to market the advantages of fair housing to residents. ADOH has acted to combat NIMBYism that impedes fair housing in a number of ways, including the following: 1. Implement the comprehensive strategy to provide fair housing E&O. 2. Provide public hearings throughout the state to provide residents an opportunity to understand and express their concerns regarding affordable housing projects. 3. The Governors Forum has included sessions with NIMBYism as a focus. Impediment #9 Existing fair housing resources are underutilized. The 2006 AI observed that many public and private organizations that offer fair housing resources to their constituents and the public are underutilized, stating, "A better use of the resources that are available may help to improve fair housing compliance." Early in the implementation of the Action Plan for this impediment, it was realized that it was redundant and is really subsumed under Impediments 1, 2 and 4. In other words the best way to utilize effectively existing fair housing resources is: 1. Educate and inform housing consumers regarding their rights and where to go for help. 2. Train public and private agency staff and call takers to recognize housing discrimination in discussions, questions and requests for information from clients or callers and to refer them to fair housing resources that can help them. The education and outreach of housing consumers and training of agency personnel occurred in the comprehensive fair housing E&O and training activities discussed under “Education and Outreach” and Impediments 1, 2 and 4. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 118 In addition, ADOH through its fair housing provider developed a list of agencies that offer fair housing services within Arizona that was distributed to public and private agencies in non-metro Arizona. 2010 Impediments and Plan of Action Background A number of impediments identified in 2010 carry over from past AI’s because they continue to pose barriers to fair housing. Their persistence is indicative of the fact that in some cases, they have become embedded in the social, cultural, political and institutional fabric of certain communities and their eradication will continue to require a long-term commitment to affirmatively furthering fair housing (AFFH). Two events since the 2006 AI had a major impact on fair housing and are reflected in carryover and newly identified impediments. The first was the collapse of the housing market that led to greater scrutiny of home loan applications, a severe economic recession, a dramatic increase in unemployment, an explosion of foreclosures, an increase in predatory mortgage foreclosure rescue and loan modification scams and large tax revenue decreases resulting in dramatic cuts in public services. All of these have hit minorities and other protected classes particularly hard. The second major event was the Westchester Case described in detail in this report that reverberated throughout fair housing circles and is a factor in HUD’s new emphasis on AFFH. Although AFFH has been mandatory for several years, HUD has begun to clarify and more strictly enforce AFFH requirements. This will have a strong impact on future AIs, and in particular, plans of action. Impediment #1 Illegal housing discrimination is occurring in non-metro counties in Arizona. The allegations, complaints, testing, interviews and surveys conducted for this AI provide evidence that housing discrimination is occurring in rural Arizona. However, it is difficult to determine its prevalence overall and in any specific area for the following reasons: 1. Housing consumers do not have a clear understanding of what constitutes housing discrimination or where to seek assistance. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 119 2. Agency staff often lack proper training to recognize housing discrimination. In addition, procedures are frequently inadequate for referring possible housing discrimination victims. 3. Fair housing inquiries, allegations and complaints are often not logged and reported. The need to address housing discrimination in rural Arizona was first identified in the 1996 AI by the Arizona Department of Commerce, a precursor to ADOH, when it stated that more testing was needed in rural areas in order to weed out the discrimination that was occurring. In the 2006 AI, the need for more enforcement in rural areas was carried over as a separate impediment. This need is folded into impediment #1 for this AI. Action #1 As noted in the discussion of the 2006 Plan of Action, ADOH has no authority in the area of fair housing enforcement. The state agency that handles fair housing enforcement is the State of Arizona Attorney General’s Office – Civil Rights Division (AG). Nevertheless, ADOH will continue to address this impediment through the education and outreach it will be conducting in response to this and other impediments including: 1. Train CDBG recipients to recognize housing discrimination when allegations are made or clients encounter housing problems and then to refer them to agencies that can help them remedy the issue or file a complaint with HUD or the AG. 2. Distribute fair housing literature to housing consumers to provide them with the information they need to respond to housing discrimination. Impediment #2 Many housing consumers are unaware of their fair housing rights and available fair housing resources. Therefore, when housing discrimination is encountered, it often goes unreported and unresolved. A community survey about fair housing and discrimination, a phone survey about the accuracy of fair housing referrals and interviews with housing industry professionals were conducted. The complete results and conclusions about these efforts can be found in this report in the section “Assessment of Current Public and Private Fair Housing Programs and Activities in Arizona.” The survey results and the experience of education and outreach providers throughout Arizona show that an unacceptably high number of Arizonans are currently unaware of their fair housing rights and available fair housing Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 120 resources. The physical size and population distribution of Arizona, as well as limited funding exacerbates this impediment by impeding the provision of fair housing education and outreach to many areas that need it most. Action #2 The State of Arizona will continue to fund education and outreach (E&O) throughout non-metro Arizona as it has since 1994. ADOH presently contracts with a fair housing E&O provider to conduct E&O throughout the non-entitlement areas of the state. The activities that were conducted since 2005 are described in the “Education and Outreach” section of this AI. Arizona, like other states, is facing an extreme budget deficit that makes it challenging to maintain the level of nonfederal funding that was previously provided for E&O. ADOH will conduct the following activities with the same levels of frequency it has since 2006:  Conduct fair housing workshops targeting housing consumers in each of the four Councils of Government (COGs) in the state. The objective of the location and marketing of these workshops will be to provide residents in all of the thirteen rural counties in Arizona an opportunity to participate in the training.  Provide a presence (e.g. staff a table) and distribute fair housing materials at community events that serve the thirteen rural counties in Arizona.  Identify and establish sites in each rural county where fair housing literature will be distributed on an on-going basis, and ensure the materials are maintained and the sites are kept stocked. Fair housing materials will also be distributed at meetings, trainings, forums and community events in each of these counties when the opportunity presents itself. These materials will be available in both English and Spanish.  Participate in local radio talks shows to discuss, educate and respond to questions regarding fair housing. The objective will be to conduct these broadcast sessions in each area of the state in order that residents in all thirteen rural counties will have an opportunity to hear them.  Collaborate with public and private agencies, organizations and groups statewide to plan and conduct these activities.  ADOH will support and participate in activities conducted and sponsored by the Arizona Fair Housing Partnership (AFHP).  ADOH will annually request a proclamation from the Governor declaring April as “Fair Housing Month.” This proclamation is helpful in building an Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 121 awareness of fair housing throughout the state and kicks off the fair housing activities that are conducted throughout the state in April.  These activities will be logged, summarized and reported annually in the CAPER. Impediment #3 Many housing providers illegally discriminate because of inadequate knowledge and understanding of their responsibilities under the Fair Housing Act (FHAct). This AI investigation which included interviews, surveys, the results of systemic testing and the observations of fair housing providers conducting E&O over the last several years showed that many real estate agents, property managers, property owners, media advertising agents, home insurance agents, lenders and other providers need to better understand their responsibility to comply with fair housing laws. The following problems are evident:  Many providers do not obtain the free fair housing training and information that is available.  Some property managers experience high staff turnover and do not provide training as often as needed.  Some small property owners mistakenly believe that they do not need to comply with the Fair Housing Act.  There are many gray areas between such issues as security, safety, and liability on the one hand and housing rights on the other. Many providers need up-to-date information in these areas in order to make better decisions.  Housing providers in rural areas often need to drive long distances at considerable expense to receive necessary fair housing training. Action #3 1. ADOH will continue to conduct fair housing training to housing providers throughout the non-metro rural areas of the state (See the “Fair Housing Education and Outreach” section of this report for trainings conducted since 2005). To overcome the barrier of time and distance for providers these trainings will take place in the rural areas themselves. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 122 2. ADOH will continue to offer continuing education units (CEU) to real estate agents in non-metro areas throughout the state. CEUs provide an effective incentive for agents to participate in quality fair housing trainings. 3. ADOH will continue to fund the development and distribution of fair housing instructional materials to housing providers. Presently, ADOH’s contracts with SWFHC for the distribution of 12,000 pieces of literature annually to both housing providers and consumers. Impediment #4 Many public and private agencies in non-metro Arizona lack effective fair housing referral procedures. This impedes people’s access to agencies that provide fair housing information and assistance to victims of housing discrimination. SWFHC conducted a telephone survey in 2007 and in 2009 to determine how accurately government agencies and nonprofits throughout rural Arizona refer callers with fair housing questions or complaints. The survey results are in this report in the section “Assessment of Current Public and Private Fair Housing Programs and Activities in Arizona.” Both surveys revealed that a significant number of calls were not properly referred. Many public and private agencies that were surveyed do not have clear and consistent procedures for referring people with fair housing problems. This creates an impediment to fair housing because many people in rural areas who contact a local government agency or a well-known local nonprofit agency for fair housing assistance do not get the information they need to proceed with their issue or receive misinformation that also impedes them from getting the proper help. In addition, inquiries, allegations and complaints are often not logged and the true prevalence of housing discrimination is obscured. Action #4 1. ADOH will monitor the referral procedures of all CDBG recipients through an annual questionnaire that will require identification of the procedure used to train staff, log contacts, and specify the agencies to which they refer fair housing issues. Agencies that do not have effective referral procedures in place will be referred for training. 2. ADOH will continue to fund fair housing referral training at no cost to public and private agencies. ADOH will also provide all CDBG participants ongoing technical assistance on fair housing. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 123 3. ADOH will provide all CDBG funded agencies with printed materials describing the recommended referral procedures and a list of agencies to which fair housing concerns, allegations and complaints can be referred. These will also be made available to agencies not funded by the state. Impediment #5 Disparities in lending and predatory lending practices are impediments to fair housing choice in Arizona. Data presented in this AI, which included an analysis of HMDA reports and information on the current foreclosure crisis in the state evidenced the following:  Subprime lending targeted minorities prior to the collapse of the housing market in 2007.  Subprime borrowers have been hardest hit by the impact of the market collapse. This includes a precipitous drop in housing prices and a depressed economy with increased unemployment in the face of interest rate increases on adjustable rate mortgages. The result has been unprecedented levels of defaults and foreclosures.  Minority neighborhoods are experiencing a higher proportion of foreclosures and abandonments compared to white neighborhoods. This is resulting in redlining from lenders unwilling to loan in neighborhoods with high rates of foreclosures and insurance companies unwilling to write polices or offering dramatically increased rates.  Foreclosure rescue and mortgage modification scammers are targeting minorities and people with limited English proficiency (LEP). Minorities with similar or better qualifications than non-minorities continue to experience higher rates of loan denials and higher rates of subprime loans from lenders. Action #5 1. ADOH will collaborate with organizations such as the Arizona Foreclosure Prevention Task Force and Don’t Borrow Trouble in Pima County by co-sponsoring trainings for people at risk of foreclosure, promoting counseling efforts to people wanting a loan modification and encouraging enforcement efforts of state and federal agencies to charge and punish agents and companies who perpetrate illegal foreclosure and loan modification scams. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 124 2. ADOH will require that information on predatory and abusive lending practices be included in the education and outreach materials that are distributed on an on-going basis throughout the state.89 3. An annual anti-predatory lending training will be presented in the four state COG areas. This will be marketed to public and private agency staff, housing consumers and housing providers. Impediment #6 “Not in my Backyard” (NIMBYism) can be an impediment to fair housing because it has obstructed plans and policies to provide affordable housing and special needs housing that serves protected classes. NIMBYism that impedes fair housing is a difficult issue to resolve. It is not unusual for residents to coordinate attendance at public hearings and council meetings to express opposition to such things as affordable housing, group homes or transitional housing, and elected officials are often intimidated by the possible political consequences of opposing vocal citizens when they organize. Freedom of speech is rightly valued in our country and as long as speech and actions do not threaten bodily harm, violence or cross the line into becoming illegal slander, defamation or disturbance of the peace it cannot be restricted or prohibited. The only viable response is targeted education and outreach to market the advantages of fair housing to residents. Action #6 ADOH will continue to conduct the following activities to address this impediment: 1. Implement the comprehensive strategy to provide fair housing education and outreach statewide. 2. Provide public hearings throughout the state to provide residents an opportunity to learn about the benefits of affordable housing and diversity in neighborhoods and express their concerns regarding affordable housing projects.90 89 These materials are available through both the Arizona Foreclosure Task Force and Don‟t Borrow Trouble of Pima County. For example, the economic benefits of affordable and diverse neighborhoods to communities is often not emphasized enough. The reduction of crime, gangs, drugs, and graffiti can not only has a positive impact on the safety and appearances of neighborhoods and reducing possible redlining and insurance costs, but also leads to reductions in the cost of law enforcement and city maintenance which is reflected in lower tax rates. More work needs to be done to explain the relationship between affordable housing and neighborhood diversity to the cost of maintaining a healthy community and to get this message across to concerned residents. 90 Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 125 Impediment #7 The issue of affordable housing is a fair housing impediment in two ways:  The lack of affordable housing throughout the state has a disparate negative impact on Fair Housing Act protected classes.  Planning to affirmatively further fair housing will be included/expanded in affordable housing projects funded by ADOH. Affordable housing is an issue that has a broad impact in every area of the state and can have a direct impact on fair housing. The factors affecting the need for affordable housing and its relationship to fair housing can be complex and entail historical, social, cultural, political, economic and geographical considerations. The relationship between affordable and fair housing in Arizona is evidenced, in part, by the following:  The availability of affordable housing has a disparate impact on persons protected under the Fair Housing Act. Demographic, employment, and income data show that minorities, families with children (including single parent families), and persons with disabilities are proportionally overrepresented in low-income data and are most in need of affordable housing.  Because of the connection between affordable housing and the protected classes covered by the Fair Housing Act, the term “affordable” to some has become a metaphor for housing for minorities, families with children and persons with disabilities and is laden with inaccurate stereotypes.91 Thus, affordable housing construction and policies may be opposed by “Not In My Backyard” (NIMBY) groups for a myriad of specious reasons that may obscure the real intent of critics.  The location of affordable housing is a fair housing issue. The accessibility of affordable housing to public transportation, employment, good schools and other amenities is critically important to the financial, educational and social well-being of protected classes. The disparate and less favorable provision of public services to affordable neighborhoods may create safety concerns, lower property values, induce redlining, and facilitate the deterioration of the neighborhood. 91 Sheila Harris, “ „Affordable‟ housing is an asset that can benefit whole community” Op Ed, Arizona Republic. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 126 Action #7 ADOH directly creates affordable housing through a number of programs that are part of the Consolidated Plan. This AI is a component of the Consolidated Plan. Beyond the development of affordable housing itself, each ADOH affordable housing project should affirmatively further fair housing in the following ways: 1. Each ADOH Request for Proposals (RFP) for housing-related projects and funding should include a section where AFFH is addressed by the applicant and scored by ADOH. 2. Each housing project funded by ADOH include a clear AFFH plan as a component of the operational plan. The AFFH plan will include the following:  Demographic data and maps to identify minority residential concentrations in the residential areas impacted by the project.  Specific activities that will be conducted to AFFH (e.g. Affirmative Marketing Plan).  All tax credit, HOME and Housing Trust Fund projects will be monitored to evaluate the performance of the projects fair housing goals. Impediment #8 On-going data gathering from CDBG sub recipients will need to improve to meet evolving AI requirements. The 2006 AI stated, “Information gathering and monitoring fair housing performance needs to be improved.” ADOH responded with improvements in these areas. This impediment carries over to the 2010 Plan of Action. Since its inception, the AI process has been continually evolving. As technology improves the ability of CDBG jurisdictions to plan for fair housing, collect information, organize information, monitor performance, evaluate the effectiveness of the implementation of plans and report on outcomes, results have improved. HUD has been expecting more from CDBG jurisdictions in the development of AIs and in the planning that is entailed. This will continue. Recent legal and complaint action relating to AIs only accelerates this trend. Action #8 While ADOH has complied with the standard information and reporting requirements for AIs to date, ADOH will need to do more in the future to stay ahead of the curve. ADOH Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 127 will require a mandatory comprehensive questionnaire with new questions about local zoning and land use laws’ compliance with fair housing laws be filled out and submitted by all sub recipients. The results of this questionnaire will be summarized and included in the annual CAPER and future AIs beginning in 2011. This questionnaire will include responses to questions regarding the following: 1. The exclusionary nature of zoning and land use codes; policies regarding group homes; changes and decisions regarding zoning made by local boards, councils or commissions; and legal cases or challenges to codes or policies in the last year. The appendix includes a detailed zoning and land use questionnaire provided by HUD that focuses on the effect of zoning and land use laws on people with disabilities, a protected class. The survey can be modified to help acquire the necessary data to determine how zoning and land use laws affect any or all protected classes and whether or not the laws comply with fair housing laws. 2. Patterns of home ownership versus rental, housing density, housing age and/or condition, overcrowding, income, family size, residency tenure, bank loans by type, etc. 3. Demographic overview in terms of race, ethnicity, home ownership, income, poverty, etc. and trends. 4. The nature and extent of fair housing inquiries, allegations, complaints, referrals and outcomes documented by logs. 5. List and describe fair housing activities conducted within the jurisdiction of the sub recipient. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 128 Plan of Action Summary Table Table 42: Plan of Action Summary92 Impediment 1. Plan of Action 1. Train CDBG recipients to recognize housing discrimination when allegations are made or clients encounter housing problems and then to refer them to Illegal housing agencies that can help them remedy the issue or file a discrimination is occurring complaint with HUD or the AG. in non-metro counties in Arizona. 2. Distribute fair housing literature to housing consumers to provide them with the information they need to respond to housing discrimination. * 1. Conduct fair housing workshops targeting housing consumers in each of the four Councils of Government (COGs) in the state. The objective of the location and marketing of these workshops will be to provide residents in all of the thirteen rural counties in Arizona an opportunity to participate in the training. 2. 2. Provide a presence (e.g. staff a table) and distribute fair housing materials at community events that serve the Many housing consumers thirteen rural counties in Arizona. are unaware of their fair housing rights and available 3. Identify and establish sites in each rural county where fair housing resources. fair housing literature will be distributed on an on-going Therefore, when housing basis, and ensure the materials are maintained and the discrimination is sites are kept stocked. Fair housing materials will also be encountered, it often goes distributed at meetings, trainings, forums and unreported and community events in each of these counties when the unresolved. opportunity presents itself. These materials will be available in both English and Spanish. 4. Participate in local radio talk shows to discuss, educate and respond to questions regarding fair housing. The objective will be to conduct these broadcast sessions in each area of the state in order that residents in all thirteen rural counties will have an opportunity to hear them. 5. Collaborate 92 with public and private agencies, Many of the activities described in the Plan of Action will be conducted by a provider or providers under contract to ADOH. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 129 organizations and groups statewide to plan and conduct these activities. 6. ADOH will support and participate in activities conducted and sponsored by the Arizona Fair Housing Partnership (AFHP). 7. ADOH will annually request a proclamation from the Governor declaring April as “Fair Housing Month.” This proclamation is helpful in building an awareness of fair housing throughout the state and kicks off the fair housing activities that are conducted throughout the state in April. 8. These activities will be logged, summarized and reported annually in the CAPER. 3. 1. ADOH will continue to conduct fair housing training for housing providers throughout the non-metro rural areas of the state to overcome the barrier of time and distance for providers. These trainings will take place in the rural Many housing providers areas. illegally discriminate because of inadequate knowledge and 2. ADOH will continue to offer continuing education credits to real estate agents in non-metro areas throughout the understanding of their state. responsibilities under the Fair Housing Act (FHAct). 3. ADOH will continue to fund the development and distribution of fair housing instructional materials to housing providers. 4. 1. ADOH will monitor the referral procedures of all CDBG recipients through an annual questionnaire that will require identification of the procedure used to train staff, log contacts, and specify the agencies to which they refer fair housing issues. Agencies that do not have effective referral procedures in place will be referred for training. Many public and private agencies in non-metro Arizona lack effective fair housing referral procedures. This impedes people’s access to agencies that provide fair housing information and assistance 2. ADOH will continue to fund fair housing referral training at no cost to public and private agencies. ADOH will also to victims of housing provide all CDBG participants ongoing technical discrimination. assistance on fair housing. 3. ADOH will provide all CDBG funded agencies with Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 130 printed materials describing the recommended referral procedures and a list of agencies to which fair housing concerns, allegations and complaints can be referred. These will also be made available to agencies not funded by the state. 5. 1. ADOH will collaborate with organizations such as the Arizona Foreclosure Prevention Task Force and Don’t Borrow Trouble in Pima County by co-sponsoring trainings for people at risk of foreclosure, promoting counseling efforts to people wanting a loan modification and encouraging enforcement efforts of state and federal agencies to charge and punish agents and companies who perpetrate illegal foreclosure and loan Disparities in lending and modification scams. predatory lending practices are impediments 2. ADOH will require that information on predatory and to fair housing choice in abusive lending practices be included in the education Arizona. and outreach materials that are distributed on an ongoing basis throughout the State. 3. An annual anti-predatory lending training will be presented in the four state COG areas. This will be marketed to public and private agency staff, housing consumers and housing providers. 6. 7. “Not in my Backyard” (NIMBYism) can be an impediment to fair housing because it has obstructed plans and policies to provide affordable housing and special needs housing that serves protected classes. Lack of affordable housing is a fair housing impediment in two ways:  1. Implement the comprehensive strategy to provide fair housing education and outreach statewide. 2. Provide public hearings throughout the state to provide residents an opportunity to learn about the benefits of affordable housing and diversity in neighborhoods and express their concerns regarding affordable housing projects. The following will be initiated by ADOH: 1. Each ADOH Request for Proposals (RFP) for housingrelated projects and funding includes a section where AFFH is addressed by the applicant and reviewed by The need for affordable ADOH. housing throughout the state has a disparate 2. Each housing project funded by ADOH include a clear negative impact on Fair AFFH plan as a component of the operational plan. The Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 131 Housing Act protected classes.  AFFH plan will include the following:  Planning to affirmatively further fair housing needs to be included/expanded in  federally funded affordable housing  projects. Demographic data and maps to identify minority residential concentrations in the residential areas impacted by the project. Specific activities that will be conducted to AFFH (e.g. Affirmative Marketing Plan). All tax credit, HOME and Housing Trust Fund projects will be monitored to evaluate the performance of the project’s fair housing goals. While ADOH has complied with the standard information and reporting requirements for AIs to date, ADOH will need to do more in the future to stay ahead of the curve. ADOH will require a mandatory comprehensive questionnaire with new questions about local zoning and land use laws’ compliance with fair housing laws, be filled out and submitted by all sub recipients. ADOH will also summarize and report on the responses to the questionnaire in CAPERS and AI’s beginning in 2011. This questionnaire will include responses to questions regarding the following: 8. 1. The exclusionary nature of zoning and land use codes; policies regarding group homes; changes and decisions regarding zoning made by local boards, councils or On-going data gathering commissions; and legal cases or challenges to codes or from sub recipients will policies in the last year. The appendix includes a need to improve to meet detailed zoning and land use questionnaire provided by evolving AI requirements. HUD that focuses on the effect of zoning and land use laws on people with disabilities, a protected class. The survey can be modified to help acquire the necessary data to determine how zoning and land use laws affect any or all protected classes and whether or not the laws comply with fair housing laws. 2. Patterns of home ownership versus rental, housing density, housing age and/or condition, overcrowding, income, family size, residency tenure, bank loans by type, etc. 3. Demographic overview in terms of race, ethnicity, home ownership, income, poverty, etc. and trends. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 132 4. The nature and extent of fair housing inquiries, allegations, complaints, referrals and outcomes documented by logs. 5. List and describe fair housing activities conducted within the jurisdiction of the sub recipient. * Providing the additional third column allows the table to be printed in a landscape format, the third column headed “ Activities Conducted” and used to report on actual activities as the Plan of Action is implemented. Conclusion The Arizona Department of Housing has limited authority within the State of Arizona’s governmental structure. For example, ADOH has no fair housing enforcement capacity. The State of Arizona Attorney General’s Office has this responsibility. Therefore, the identification of impediments to fair housing choice and Plan of Action was limited to those areas that are within ADOH’s jurisdiction. However, within the parameters that ADOH operates, it will continue to have a significant impact in improving fair housing choice in Arizona. The key points in the Plan of Action include the following:  The continuation of a comprehensive strategy to provide fair housing education and outreach to both housing providers and housing consumers in the non-metro counties of Arizona.  The inclusion of training, information and activities to address the need for foreclosure prevention and the increase in foreclosure rescue and mortgage modification scams that are hitting residents protected under Title VIII particularly hard.  Requiring that all federally funded projects funded by ADOH include a strategy to affirmatively further fair housing and a plan for monitoring and enforcing this requirement.  Requiring that all communities with CDBG funding through ADOH provide ADOH information on zoning and land use to determine the extent that land use provisions and practices may be either exclusionary or inclusionary and to use this information to inform ADOH planning. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 133 appendix Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 134 ADOH CDBG File Checklist: Affirmatively Furthering Fair Housing CDBG FILE CHECKLIST AFFIRMATIVELY FURTHERING FAIR HOUSING (AFFH) Community:______________________________________ Calendar Year:______________ Check/Date Item _________ Resolution or Proclamation (*) __________ Assessment, with information about status of such, committee members, meeting notices or public hearings, minutes/notes and list of attendees __________ Press Releases __________ Brochures and distribution/mailing list __________ Location of Posters and distribution list for same (*) __________ A copy of the State and Federal Fair Housing Law __________ A copy of the section of the Consolidated Plan applicable to AFFH Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 135 __________ Copies of newspaper articles __________ Poster or essay contest information __________ Letters to real estate licensees and a mailing list __________ Letters to housing lenders and a mailing list __________ Notices of AFFH training, public meetings, workshops; a list of attendees __________ PSAs and a mailing list __________ Information about housing discrimination complaints and the disposition of each, e.g., referral to the Attorney General __________ Contacts made (by telephone) with groups interested in providing AFFH training or workshops _________ Other (*) = required action. The other items listed are samples of AFFH activities. You must complete at least three, including the two required actions. A checklist for each calendar year a community is eligible for CDBG funds regardless of if they have any open contracts must be retained. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 136 HMDA Data Tables Table 43: Table 1a: Arizona All Single-Family Lending Analysis - 2007 All Location Prime Prime Subprime Subprime Demographics subprime Demographics Indicators Number Cochise, Graham, Greenlee, Santa Cruz Total Number of Loans Percent Number Percent Number Percent Number Percent 4,635 100.00% 3,690 100.00% 945 100.00% 0.00% 68,968 100.00% 0.00% Whites 2234 48.20% 1913 51.84% 321 33.97% 17.87% 41,614 60.34% 26.37% Hispanics Native Americans 1388 34.00% 995 30.24% 393 49.62% -19.38% 22,506 32.63% -16.99% 43 1.08% 34 1.06% 9 1.20% -0.14% 1,613 2.34% 1.14% LMI Borrowers MUI Borrowers 490 10.96% 360 10.13% 130 14.16% -4.03% 26,968 39.10% 24.94% 3981 89.04% 3193 89.87% 788 85.84% 4.03% 42,000 60.90% -24.94% Male 1356 30.85% 1072 30.49% 284 32.31% -1.82% n/a n/a n/a 877 19.95% 662 18.83% 215 24.46% -5.63% n/a n/a n/a 9,426 100.00% 7,805 100.00% 1,621 100.00% 0.00% 125,092 100.00% 0.00% Whites 5151 54.65% 4409 56.49% 742 45.77% 10.72% 93,375 74.65% 28.87% Hispanics Native Americans 2586 30.81% 2036 29.07% 550 39.57% -10.50% 25,728 20.57% -19.00% 176 2.13% 150 2.17% 26 1.92% 0.26% 2,888 2.31% 0.39% LMI Borrowers MUI Borrowers 1362 15.09% 1123 15.02% 239 15.41% -0.39% 49,075 39.23% 23.82% 7664 84.91% 6352 84.98% 1312 84.59% 0.39% 76,017 60.77% -23.82% Male 2569 28.76% 2051 27.74% 518 33.66% -5.92% n/a n/a n/a Female 1749 19.58% 1350 18.26% 399 25.93% -7.67% n/a n/a n/a 1,958 100.00% 1,550 100.00% 408 100.00% 0.00% 49,987 100.00% 0.00% 1391 71.04% 1158 74.71% 233 57.11% 17.60% 20,482 40.97% -16.13% Hispanics Native Americans 125 7.52% 88 6.51% 37 11.94% -5.43% 2,872 5.75% -6.19% 41 2.48% 23 1.71% 18 5.92% -4.21% 25,810 51.63% 45.71% LMI Borrowers MUI Borrowers 181 9.61% 128 8.54% 53 13.73% -5.19% 23,726 47.46% 33.73% Female La Paz, Mohave, Yuma Total Number of Loans Apache, Navajo Total Number of Loans Whites 1703 90.39% 1370 91.46% 333 86.27% 5.19% 26,261 52.54% -33.73% Male 493 26.81% 379 25.80% 114 30.81% -5.01% n/a n/a n/a Female 321 17.46% 246 16.75% 75 20.27% -3.52% n/a n/a n/a 8488 100.00% 7431 100.00% 1057 100.00% 0.00% 110,455 100.00% 0.00% 6372 75.07% 5693 76.61% 679 64.24% 12.37% 91,033 82.42% 18.18% 439 5.99% 345 5.32% 94 11.05% -5.72% 8,035 7.27% -3.77% Coconino/Yavapai Total Number of Loans Whites Hispanics Native Americans 71 0.97% 47 0.73% 24 2.83% -2.10% 9,027 8.17% 5.35% LMI Borrowers MUI Borrowers 1048 13.01% 930 13.12% 118 12.22% 0.90% 40,066 36.27% 24.06% 7007 86.99% 6159 86.88% 848 87.78% -0.90% 70,389 63.73% -24.06% Male 2036 25.71% 1687 24.29% 349 35.79% -11.50% n/a n/a n/a Female 1741 21.98% 1516 21.83% 225 23.08% -1.25% n/a n/a n/a Gila, Pinal Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 137 Total Number of Loans 14310 100.00% 11606 100.00% 2704 100.00% 0.00% 81,578 100.00% 0.00% Whites 8669 60.58% 7309 62.98% 1360 50.30% 12.68% 59,193 72.56% 22.26% Hispanics Native Americans 2146 17.34% 1544 15.29% 602 26.39% -11.10% 15,518 19.02% -7.37% 128 1.05% 99 1.00% 29 1.31% -0.31% 4,745 5.82% 4.51% LMI Borrowers MUI Borrowers 3495 25.75% 2833 25.56% 662 26.57% -1.00% 38,719 47.46% 20.90% 10079 74.25% 8249 74.44% 1830 73.43% 1.00% 42,859 52.54% -20.90% Male 4113 30.37% 3185 28.94% 928 36.54% -7.59% n/a n/a n/a Female 2967 21.90% 2359 21.44% 608 23.94% -2.50% n/a n/a n/a Total Number of Loans 7802 100.00% 6209 100.00% 1593 100.00% 0.00% 147,512 100.00% 0.00% Whites 4505 57.74% 3795 61.12% 710 44.57% 16.55% 83,879 56.86% 12.29% Hispanics Native Americans 1603 23.58% 1142 20.79% 461 35.33% -14.54% 29,268 19.84% -15.48% Rural AZ* 100 1.50% 68 1.26% 32 2.55% -1.29% 29,865 20.25% 17.70% 796 10.58% 587 9.80% 209 13.66% -3.86% 62,928 42.66% 29.00% 6725 89.42% 5404 90.20% 1321 86.34% 3.86% 84,584 57.34% -29.00% 2137 28.99% 1663 28.16% 474 32.31% -4.15% n/a n/a n/a 1431 19.41% 1094 18.53% 337 22.97% -4.45% n/a n/a n/a Total Number of Loans 198,788 100.00% 163,957 100.00% 34,831 100.00% 0.00% 1,901,625 100.00% 0.00% Whites LMI Borrowers MUI Borrowers Male Female Arizona 118,061 59.39% 103,210 62.95% 14,851 42.64% 20.31% 1,397,040 73.47% 30.83% Hispanics Native Americans 37,078 21.25% 24,987 17.32% 12,091 39.99% -22.67% 331,850 17.45% -22.54% 1,697 0.99% 1,255 0.88% 442 1.50% -0.61% 67,858 3.57% 2.07% LMI Borrowers MUI Borrowers 38,842 20.53% 30,821 19.68% 8,021 24.65% -4.97% 744,693 39.16% 14.52% 150,328 79.47% 125,803 80.32% 24,525 75.35% 4.97% 1,156,932 60.84% -14.52% Male 60,957 32.37% 47,523 30.62% 13,434 40.55% -9.93% n/a n/a n/a Female 45,898 24.37% 37,021 23.86% 8,877 26.80% -2.94% n/a n/a n/a Notes: 1) Demographic data are from Census 2000 2) "Whites" stands for "White Non-Hispanic" 3) There is no between lending to males and females and the demographic composition of households, as lending data singles out male and females only, while the composition of households includes joint households * The definition of "Rural Arizona" has changed from 2004 to 2007. In 2007, Apache county has been classified as rural, while Mohave county was dropped from this classification. This resulted in a difference in the demographic composition of "Rural Arizona" between 2004 and 2007. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 138 Table 44: Table 1b: Arizona All Single-Family Lending Analysis - 2004 Location Indicators Cochise, Graham, Greenlee, Santa Cruz Total Number of Loans All Prime Prime Subprime Subprime Number Percent Number Percent Number Percent Demographics subprime Demographics Number Percent 5,212 100.00% 4,374 100.00% 838 100.00% 0.00% 68,968 100.00% 0.00% Whites 2455 57.62% 2206 61.01% 249 38.60% 22.40% 41614 60.34% 21.73% Hispanics Native Americans 1558 36.31% 1182 32.58% 376 56.71% -24.13% 22506 32.63% -24.08% 87 2.04% 64 1.77% 23 3.57% -1.80% 1613 2.34% -1.23% LMI Borrowers 869 18.10% 692 17.38% 177 21.59% -4.20% 26968 39.10% 17.52% MUI Borrowers 3932 81.90% 3289 82.62% 643 78.41% 4.20% 42000 60.90% -17.52% Male 1300 56.77% 1068 57.61% 232 53.21% 4.39% n/a n/a n/a 990 43.23% 786 42.39% 204 46.79% -4.39% n/a n/a n/a Female La Paz, Mohave, Yuma Total Number of Loans 11,310 100.00% 9,565 100.00% 1,745 100.00% 0.00% 125,092 100.00% 0.00% Whites 6653 70.00% 5777 71.15% 876 63.25% 7.90% 93375 74.65% 11.40% Hispanics Native Americans 2365 24.97% 1905 23.59% 460 32.95% -9.36% 25728 20.57% -12.38% 337 3.55% 264 3.25% 73 5.27% -2.02% 2888 2.31% -2.96% LMI Borrowers 1887 18.13% 1531 17.61% 356 20.81% -3.20% 49075 39.23% 18.42% MUI Borrowers 8519 81.87% 7164 82.39% 1355 79.19% 3.20% 76017 60.77% -18.42% Male 3045 59.96% 2512 60.05% 533 59.55% 0.50% n/a n/a n/a Female 2033 40.04% 1671 39.95% 362 40.45% -0.50% n/a n/a n/a 1,925 100.00% 1,632 100.00% 293 100.00% 0.00% 49,987 100.00% 0.00% 1403 86.07% 1235 88.28% 168 72.73% 15.55% 20482 40.97% -31.75% 79 5.04% 53 3.93% 26 11.87% -7.94% 2872 5.75% -6.13% 23 1.41% 11 0.79% 12 5.19% -4.41% 25810 51.63% 46.44% LMI Borrowers 267 15.04% 208 14.00% 59 20.42% -6.42% 23726 47.46% 27.05% MUI Borrowers 1508 84.96% 1278 86.00% 230 79.58% 6.42% 26261 52.54% -27.05% Male 380 52.92% 308 52.20% 72 56.25% -4.05% n/a n/a n/a Female 338 47.08% 282 47.80% 56 43.75% 4.05% n/a n/a n/a 10924 100.00% 9858 100.00% 1066 100.00% 0.00% 110455 100.00% 0.00% 8090 85.43% 7424 86.28% 666 76.99% 9.28% 91033 82.42% 5.42% 519 5.74% 429 5.23% 90 10.82% -5.59% 8035 7.27% -3.54% Apache, Navajo Total Number of Loans Whites Hispanics Native Americans Coconino/Yavapai Total Number of Loans Whites Hispanics Native Americans 140 1.48% 104 1.21% 36 4.16% -2.95% 9027 8.17% 4.01% LMI Borrowers 1988 20.38% 1756 20.05% 232 23.34% -3.29% 40066 36.27% 12.93% MUI Borrowers 7766 79.62% 7004 79.95% 762 76.66% 3.29% 70389 63.73% -12.93% Male 2476 52.23% 2188 51.96% 288 54.34% -2.38% n/a n/a n/a Female 2265 47.77% 2023 48.04% 242 45.66% 2.38% n/a n/a n/a 0.00% Gila, Pinal Total Number of Loans 11792 100.00% 10028 100.00% 1764 100.00% 0.00% 81578 100.00% Whites 7365 75.79% 6447 77.73% 918 64.51% 13.22% 59193 72.56% 8.05% Hispanics Native Americans 1478 15.62% 1118 13.86% 360 25.81% -11.95% 15518 19.02% -6.78% 143 1.47% 95 1.15% 48 3.37% -2.23% 4745 5.82% 2.44% Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 139 LMI Borrowers 3913 36.98% 3219 36.24% 694 40.85% -4.61% 38719 47.46% 6.61% MUI Borrowers 6668 63.02% 5663 63.76% 1005 59.15% 4.61% 42859 52.54% -6.61% Male 3147 56.64% 2584 56.82% 563 55.85% 0.96% n/a n/a n/a Female 2409 43.36% 1964 43.18% 445 44.15% -0.96% n/a n/a n/a 0.00% Rural AZ Total Number of Loans 14918 100.00% 12559 100.00% 2359 100.00% 0.00% 210308 100.00% Whites 9505 75.78% 8317 77.77% 1188 64.29% 13.48% 139311 66.24% 1.96% Hispanics Native Americans 2174 17.65% 1631 15.57% 543 29.48% -13.91% 34052 16.19% -13.29% 191 1.52% 134 1.25% 57 3.08% -1.83% 31094 14.78% 11.70% LMI Borrowers 2283 16.56% 1807 15.75% 476 20.56% -4.81% 87253 41.49% 20.93% MUI Borrowers 11506 83.44% 9667 84.25% 1839 79.44% 4.81% 123055 58.51% -20.93% Male 3822 57.15% 3140 57.39% 682 56.04% 1.35% n/a n/a n/a Female 2866 42.85% 2331 42.61% 535 43.96% -1.35% n/a n/a n/a Total Number of Loans 264791 100.00% 230331 100.00% 34460 100.00% 0.00% 1901625 100.00% 0.00% Whites Arizona 160726 72.33% 145658 75.03% 15068 53.66% 21.38% 1397040 73.47% 19.81% Hispanics Native Americans 42081 19.13% 31259 16.31% 10822 38.23% -21.92% 331850 17.45% -20.77% 3147 1.42% 2380 1.23% 767 2.73% -1.51% 67858 3.57% 0.84% LMI Borrowers 71610 29.67% 58483 28.14% 13127 39.20% -11.06% 744693 39.16% -0.04% MUI Borrowers 169739 70.33% 149377 71.86% 20362 60.80% 11.06% 1156932 60.84% 0.04% Male 75568 55.61% 63205 55.33% 12363 57.09% -1.76% n/a n/a n/a Female 60329 44.39% 51036 44.67% 9293 42.91% 1.76% n/a n/a n/a Table 45: Table 2a: Arizona All Single-Family Market Share Lending Analysis - 2007 Applicant Race American Indian/ Alaska Native Hispanic or Latino (Ethnicity) Borrower Income White NonHispanic (Minority Status) LMI MUI Gender Male Female State of AZ Subprime Loans Total Loans Market Share % Disparity Ratio 442 12,091 14,851 8,021 24,525 13,434 8,877 1,697 37,078 118,061 38,842 150,328 60,957 45,898 26.05% 32.61% 12.58% 20.65% 16.31% 22.04% 19.34% 2.07 2.59 1.00 1.27 1.00 1.00 0.88 877 Cochise, Graham, Greenlee, Santa Cruz Total Loans 43 1,388 2,234 490 3,981 1,356 Subprime Loans 9 393 321 130 788 284 215 Market Share % 20.93% 28.31% 14.37% 26.53% 19.79% 20.94% 24.52% 1.46 1.97 1.00 1.34 1.00 1.00 1.17 1,749 Disparity Ratio La Paz, Mohave, Yuma Total Loans 176 2,586 5,151 1,362 7,664 2,569 Subprime Loans 26 550 742 239 1,312 518 399 Market Share % 14.77% 21.27% 14.40% 17.55% 17.12% 20.16% 22.81% 1.03 1.48 1.00 1.03 1.00 1.00 1.13 Disparity Ratio Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 140 Apache, Navajo Total Loans 41 125 1,391 181 1,703 493 321 Subprime Loans 18 37 233 53 333 114 75 Market Share % 43.90% 29.60% 16.75% 29.28% 19.55% 23.12% 23.36% 2.62 1.77 1.00 1.50 1.00 1.00 1.01 Total Loans 71 439 6,372 1,048 7,007 2,036 1,741 Subprime Loans 24 94 679 118 848 349 225 Market Share % 33.80% 21.41% 10.66% 11.26% 12.10% 17.14% 12.92% 3.17 2.01 1.00 0.93 1.00 1.00 0.75 2,967 Disparity Ratio Coconino/ Yavapai Disparity Ratio Gila, Pinal Total Loans 128 2,146 8,669 3,495 10,079 4,113 Subprime Loans 29 602 1,360 662 1,830 928 608 Market Share % 22.66% 28.05% 15.69% 18.94% 18.16% 22.56% 20.49% 1.44 1.79 1.00 1.04 1.00 1.00 0.91 100 1,603 4,545 796 6,725 2,137 1,431 Disparity Ratio Rural AZ Total Loans Subprime Loans 32 461 710 209 1,321 474 337 Market Share % 32.00% 28.76% 15.62% 26.26% 19.64% 22.18% 23.55% 2.05 1.84 1.00 1.34 1.00 1.00 1.06 Disparity Ratio Table 46: Table 2b: Arizona All Single-Family Market Share Lending Analysis - 2004 Applicant Race American Indian/ Alaska Native Hispanic or Latino (Ethnicity) Borrower Income White NonHispanic (Minority Status) LMI MUI Gender Male Female State of AZ Subprime Loans 767 10,822 15,068 13,127 20,362 12,363 9,293 3,147 42,081 160,726 71,610 169,739 75,568 60,329 24.37% 25.72% 9.37% 18.33% 12.00% 16.36% 15.40% 2.60 2.74 1.00 1.53 1.00 1.00 0.94 Total Loans 87 1,558 2,455 869 3,932 1,300 990 Subprime Loans 23 376 249 177 643 232 204 Market Share % 26.44% 24.13% 10.14% 20.37% 16.35% 17.85% 20.61% 2.61 2.38 1.00 1.25 1.00 1.00 1.15 337 2,365 6,653 1,887 8,519 3,045 2,033 73 460 876 356 1,355 533 362 Total Loans Market Share % Disparity Ratio Cochise, Graham, Greenlee, Santa Cruz Disparity Ratio La Paz, Mohave, Yuma Total Loans Subprime Loans Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 141 Market Share % 21.66% 19.45% 13.17% 18.87% 15.91% 17.50% 17.81% 1.65 1.48 1.00 1.19 1.00 1.00 1.02 Total Loans 23 79 1,403 267 1,508 380 338 Subprime Loans 12 26 168 59 230 72 56 Market Share % 52.17% 32.91% 11.97% 22.10% 15.25% 18.95% 16.57% 4.36 2.75 1.00 1.45 1.00 1.00 0.87 140 519 8,090 1,988 7,766 2,476 2,265 Disparity Ratio Apache, Navajo Disparity Ratio Coconino/ Yavapai Total Loans Subprime Loans 36 90 666 232 762 288 242 Market Share % 25.71% 17.34% 8.23% 11.67% 9.81% 11.63% 10.68% Disparity Ratio 3.12 2.11 1.00 1.19 1.00 1.00 0.92 Total Loans 143 1,478 7,365 3,913 6,668 3,147 2,409 Gila, Pinal Subprime Loans 48 360 918 694 1,005 563 445 Market Share % 33.57% 24.36% 12.46% 17.74% 15.07% 17.89% 18.47% Disparity Ratio 2.69 1.95 1.00 1.18 1.00 1.00 1.03 Total Loans Rural AZ 191 2,174 9,505 2,283 11,506 3,822 2,866 Subprime Loans 57 543 1,188 476 1,839 682 535 Market Share % 29.84% 24.98% 12.50% 20.85% 15.98% 17.84% 18.67% 2.39 2.00 1.00 1.30 1.00 1.00 1.05 Disparity Ratio Table 47: Table 3. Disparities in Denial Rates Year 2004 Denial Denial Rate Disparity 2007 Denial Denial Rate Disparity Cochise, Graham, Greenlee, Santa Cruz Whites 20.4% 1.00 25.2% 1.00 Hispanics 30.7% 1.51 39.5% 1.57 Native Americans 39.2% 1.92 43.8% 1.74 LMI Borrowers 38.9% 1.60 43.2% 1.44 MUI Borrowers 24.3% 1.00 29.9% 1.00 Male 25.7% 1.00 33.9% 1.00 Female 29.5% 1.15 36.2% 1.07 Whites 18.4% 1.00 26.5% 1.00 Hispanics 25.7% 1.40 28.4% 1.07 Native Americans 23.3% 1.27 28.7% 1.09 LMI Borrowers 33.0% 1.57 35.2% 1.31 La Paz, Mohave, Yuma Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 142 MUI Borrowers 21.0% 1.00 26.9% 1.00 Male 22.2% 1.00 30.9% 1.00 Female 25.6% 1.15 30.6% 0.99 Whites 22.6% 1.00 28.7% 1.00 Hispanics 36.0% 1.59 34.5% 1.20 Native Americans 64.4% 2.85 60.8% 2.12 LMI Borrowers 43.9% 1.74 45.4% 1.48 MUI Borrowers 25.2% 1.00 30.6% 1.00 Male 26.5% 1.00 34.3% 1.00 Female 34.3% 1.29 37.4% 1.09 Whites 17.1% 1.00 22.6% 1.00 Hispanics 21.7% 1.27 30.7% 1.36 Native Americans 27.3% 1.60 40.5% 1.79 LMI Borrowers 29.1% 1.56 31.7% 1.38 MUI Borrowers 18.6% 1.00 22.9% 1.00 Male 20.4% 1.00 27.9% 1.00 Female 21.9% 1.07 25.2% 0.90 Whites 17.7% 1.00 26.4% 1.00 Hispanics 26.9% 1.52 35.4% 1.34 Native Americans 32.5% 1.84 51.4% 1.94 LMI Borrowers 27.5% 1.36 33.1% 1.13 MUI Borrowers 20.3% 1.00 29.3% 1.00 Male 22.0% 1.00 31.3% 1.00 Female 23.2% 1.05 30.7% 0.98 Whites 20.1% 1.00 26.8% 1.00 Hispanics 29.8% 1.48 38.7% 1.44 Native Americans 44.1% 2.19 51.7% 1.93 LMI Borrowers 37.1% 1.63 44.0% 1.48 MUI Borrowers 22.7% 1.00 29.7% 1.00 Male 24.2% 1.00 34.2% 1.00 Female 28.0% 1.16 36.1% 1.06 Whites 14.4% 1.00 22.5% 1.00 Hispanics 23.2% 1.61 34.7% 1.54 Native Americans 27.3% 1.89 38.6% 1.72 LMI Borrowers 25.5% 1.47 32.0% 1.24 MUI Borrowers 17.3% 1.00 25.8% 1.00 Male 19.0% 1.00 29.6% 1.00 Female 20.4% 1.07 27.9% 0.94 Apache, Navajo Coconino, Yavapai Gila, Pinal Rural AZ Arizona Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 143 HUD Fair Housing Zoning and Land Use Questionnaire FAIR HOUSING IMPEDIMENT STUDY Review of Public Policies and Practices (Zoning and Planning Codes) Name of Jurisdiction: ___________________________________ Reviewing Agency: ___________________________________ Reviewer: ___________________________________ Date: ___________________________________ The Fair Housing Impediments Study reviews the Zoning and Planning Code and identifies land use and zoning regulations, practices and procedures that act as barriers to the development, the site and the use of housing for individuals with disabilities. The Study analyzes the Code and other documents related to land use and zoning decision-making provided by the participating jurisdiction. Additional information should be provided through interviews with Planning and Building and Safety Department staff and non-profit developers of special needs housing. In identifying impediments to housing for individuals with disabilities, the Study should distinguish between regulatory impediments based on specific Code provisions and practice impediments, which describe practices by the jurisdiction.  Zoning Regulation Impediment: Does the Code definition of “family” have the effect of discriminating against unrelated individuals with disabilities who reside together in a congregate or group living arrangement? Yes ____ No ____  Zoning Regulation Impediment: Is the Code definition of “disability” the same as the Fair Housing Act? Yes ____ No ____  Practice Impediment: Are personal characteristics of the residents considered? Yes ____ No ____  Practice Impediment: Does the zoning ordinance restrict housing opportunities for individuals with disabilities and mischaracterize such housing as a “boarding or rooming house” or “hotel”? Yes ____ No ____  Practice Impediment: Does the zoning ordinance deny housing opportunities for disability individuals with on site housing supporting services? Yes ____ No ____ Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 144  Does the jurisdiction policy allow any number of unrelated persons to reside together, but restrict such occupancy, if the residents are disabled? Yes ____ No ____  Does the jurisdiction policy not allow disabled persons to make reasonable modifications or provide reasonable accommodation for disabled people who live in municipal-supplied or managed residential housing? Yes ____ No ____  Does the jurisdiction require a public hearing to obtain public input for specific exceptions to zoning and land-use rules for disabled applicants and is the hearing only for disabled applicants rather than for all applicants? Yes ____ No ____  Does the zoning ordinance address mixed uses? Yes ____ No ____ a. How are the residential land uses discussed? __________________________________________________________________ ______________________________________________________ b. What standards apply? __________________________________________________________________ ______________________________________________________  Does the zoning ordinance describe any areas in this jurisdiction as exclusive? Yes ____ No ____ Are there exclusions or discussions of limiting housing to any of the following groups? No ____ If yes, check all of the following that apply: Race ____ Color ____ Sex ____ Religion ____ Age ____ Disability ____ Marital or Familial Status ____ Creed of National Origin ____  Are there any restrictions for Senior Housing in the zoning ordinance? Yes ____ No ____ If yes, do the restrictions comply with Federal law on housing for older persons (i.e., solely occupied by persons 62 years of age or older or at least one person 55 years of age and has significant facilities or services to meet the physical or social needs of older people)? Yes ____ No ____ If No, explain: ________________________________________________________________________ ________________________________________________________________________ ______________________________________________________  Does the zoning ordinance contain any special provisions for making housing accessible to persons with disabilities? Yes ____ No ____  Does the zoning ordinance establish occupancy standards or maximum occupancy limits? Yes ____ No ____ Do the restrictions exceed those imposed by state law? Yes ____ No ____ N/A____ Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 145  Does the zoning ordinance include a discussion of fair housing? Yes ___ No ____ If yes, how does the jurisdiction propose to further fair housing? ___________________________________________________________________________ _________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ _______________________________________________  Describe the minimum standards and amenities required by the ordinance for a multiple family project with respect to handicap parking. ________________________________________________________________________ ________________________________________________________________________ ______________________________________________________  Does the zoning code distinguish senior citizen housing from other single family residential and multifamily residential uses by the application of a conditional use permit (cup).? Yes ____ No ____  Does the zoning code distinguish handicapped housing from other single family residential and multifamily residential uses by the application of a conditional use permit (cup).? Yes ____ No ____  How are “special group residential housing” defined in the jurisdiction zoning code? ____________________________________________________________ ___________________________________________________________________________ _________________________________________________________ ___________________________________________________________________________ _________________________________________________________  Does the jurisdiction’s planning and building codes presently make specific reference to the accessibility requirements contained in the 1988 amendment to the Fair Housing Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 146 Act? Yes ____ No ____ . Is there any provision for monitoring compliance? Yes ____ No ____ The jurisdiction should conduct a study of new housing construction over the last ten years to review compliance with the accessibility guidelines contained in the Fair Housing Act. Arizona Department Of Housing | Arizona Analysis of Impediments to Fair Housing Choice 2010 147