in any program or activity funded in whole or in part with Community Development Block Grant funds. Section 109 is broader in its coverage than Title VI in that it covers discrimination based on sex and a wide range of discriminatory employment practices by recipients than does Title VI. Complaint investigations and compliance reviews under Section 109 will be carried out in the same general fashion as under Title VI. Under Section 109, however, whenever the Secretary determines that a State or unit of general local government which is a recipient of assistance is in apparent noncompliance, the Secretary is required to notify the Governor or Chief Executive Officer of the noncompliance and allow him or her a reasonable period of time to secure compliance. Because activities under the CD Block Grant program are only now commencing, our experience with Section 109 has been limited. We believe that the performance standards and data requirements we have required under the Block Grant regulations will establish a good evidentiary base for measuring compliance with the requirements of Section 109 as we evaluate the results of the first year of the program. SECTION 3 Section 3 of the Housing and Urban Development Act of 1968 provides that in all programs of direct financial assistance, the Secretary shall require: 1. Utilization of lower income project area residents as trainees; 2. Utilization of lower income project area residents as employees; 3. Utilization of business located in, or owned in substantial part by persons residing in, the area; and 4. Recognition of the obligation running with the contract including the recognition that sanctions can be applied by the Department for failure to fulfill the requirements. The Housing and Community Development Act of 1974 made these requirements also applicable to the CD block grant program. Regulations for implementing Section 3 were issued in 1973, but we believe our enforcement efforts can and should be stepped up and we are taking steps to do so. Earlier this year we began developing proceures for more effective enforcement of the requirements of this section. Complaint procedures have been developed and staff training is already under way with respect to the block grant and Section 8 housing assistance programs. VOLUNTARY COMPLIANCE In addition to the compliance activities mandated by statute, we believe that a voluntary compliance program is a vital component of our total "Fair Housing" effort. We will never have fair housing if we depend only on Federal and State enforcement activities. The resources will always be too few and the task too great. We must have the cooperation and assistance of the private sector. To that end, we have vigorously sought to negotiate voluntary affirmative marketing agreements with builders, realtors, and others in the housing industry. So far we have ten agreements, and have endorsed nine voluntary marketing plans. Last December the Department entered an agreement with teh National Association of Realtors which represents local realtors throughout the country. PUBLIC INFORMATION EFFORTS The Department has undertaken a vigorous campaign to inform the public of its rights under Civil Rights law. Under Title VIII, we publish advisory guidelines to aid those subject to the jurisdiction of the law in understanding their responsibilities. We undertake studies of housing practices and collect racial data in all of our housing programs in order to determine areas of noncompliance. We conduct continuing community education programs to inform individuals of their rights under law. We encourage national, State, and local private organizations in undertaking programs designed to expand housing options for minority groups and low-income individuals. We work closely with State and local agencies having fair housing laws which provide rights and remedies substantially equivalent to those provided by Title VIII and refer complaints to these agencies. Our public information efforts include a number of Administrative meetings held to exchange information concerning particular areas of Title VIII enforcement. The six Administrative meetings that have been conducted as of this date dealt with (1) Off-base Housing for Minority Servicemen and their Families; (2) Discrimination in the Financing of Housing (the role of lending institutions with regard to granting of mortgage credit); (3) The Fair Housing enforcement efforts of the State of Maryland Commission on Human Relations and (4) Three meetings relating to housing discrimination against Spanish-Speaking Americans. We have sponsored Regional seminars to provide information to the public, leaders of citizens groups and public officials on the Fair Housing law, its implementation, and equal employment and business opportunity in HUD programs and have also been involved in the production and distribution of radio and television public service announcements that are broadcast across the country at frequent intervals as part of the general committment to public service by the electronic communications media. This concludes my prepared statement. Mr. Blair, Mr. Elliott and I will be happy to answer questions. Mr. RHINELANDER. Good morning. First, I would like to make some introductions. Mr. Blair is on my left. On my right is Mr. Robert R. Elliott, general counsel. Next to him, to his immediate right, is David M. de Wilde, Deputy Assistant Secretary, Housing Priduction and Mortgage Credit, and at the far end is Warren Butler, Deputy Assistant Secretary, Community Planning and Development. It is my understanding that during yesterday's sessions, questions were asked with respect to the new section 109 of the 1974 act-the relationship, particularly, with the housing assistance plan. With these gentlemen present, I think we will be able to provide you with information on this and other programs. Mr. EDWARDS. Very good. Mr. RHINELANDER. I would propose to read through most, if not all, of my prepared statement. Mr. EDWARDS. That is fine. TESTIMONY OF JOHN B. RHINELANDER, UNDERSECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; ACCOMPANIED BY JAMES H. BLAIR, ASSISTANT SECRETARY FOR FAIR HOUSING AND EQUAL OPPORTUNITY; THOMAS 0. JENKINS, ASSISTANT FOR OPERATIONS; ROBERT R. ELLIOTT, GENERAL COUNSEL, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; DAVID M. DeWILDE, DEPUTY ASSISTANT SECRETARY FOR HOUSING PRODUCTION AND MORTGAGE CREDIT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; AND WARREN H. BUTLER, DEPUTY ASSISTANT SECRETARY FOR COMMUNITY DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Mr. RHINELANDER. In its letter of invitation, the subcommittee indicated to us its desire to have this testimony address activities we have undertaken to discharge our responsibilities under title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, section 3 of the Housing and Urban Development Act of 1968 and section 109 of the Housing and Community Development Act of 1974. This testimony will describe briefly our activities under each of these authorities and summarize their application to our principal community development program, the community development block grant. First, title VIII. Title VIII of the Civil Rights Act of 1968, the fair housing title, is the most widely known civil rights statute administered by HUD and probably the one most closely identified with the Department's civil rights enforcement activities. It prohibits discrimination based upon race, color, religion, sex or national origin in connection with the sale or rental of almost every dwelling unit in the United States. Title VIII requires HUD to investigate complaints of housing discrimination and to attempt to resolve such complaints through conference, conciliation or persuasion. We receive over 3,000 title VIII complaints per year, and the number is increasing. While we have a large case backlog, we are making progress in reducing the time it takes to process a complaint. At the end of fiscal year 1975, we held over 574 complaints more than 180 days old. Today this number has been reduced to 485, and we are working to reduce that number to zero. I might add this, Mr. Chairman. Mr. Blair is concerned with the backlog, and he has made it a major point in his administration to improve our record in this regard. While the Department has authority to investigate complaints, to subpoena witnesses and records, and to attempt to conciliate, it has no specific authority to require an individual to end a discriminatory housing practice. The administrative remedy provided under title VIII limits HUD to "the informal methods of conference conciliation and persuasion." Currently, 68 percent of the cases in which we attempt conciliation are successfully conciliated. Mr. DRINAN. When you say that you have processed these, is this just referring them to a State or local organization? Mr. RHINELANDER. It would include one which Mr. DRINAN. I mean Mr. RHINELANDER [continuing]. Are so referred. If the case has not been closed but referred to a State, it will remain in our statistics if it is over 180 days old. Mr. DRINAN. It is not clear to me what has happened here. I will pursue it later. Thank you. You may continue. Mr. RHINELANDER. Until the matter has been resolved, we will continue to include it in our statistics of open cases. We will not drop it from our figures. Continuing with my statement now: When conciliation fails, an individual must vindicate his rights without assistance from HUD. The law provides for private action in local or Federal courts for injunctive relief and damages. Title VIII also authorizes the Attorney General to bring suit in any appropriate U.S. district court seeking injunctive relief or other order when he has reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistance to the rights granted by ttile VIII, or that any group of persons has been denied any of those rights and such denial raises an issue of general public importance. HUD's compliance and conciliation activities and the suits brought by the Department of Justice have opened to nonwhites a great deal of housing previously available only to whites. They also have had a wide impact in stimulating voluntary compliance with the law. In addition, using the authority of section 808 (e) (5) of title VIII, HUD has included fair housing requirements in programs of assistance to developers of private housing. Our site selection standards are intended to assure the availability of subsidized housing in nonsegregated areas. They require HUĎ personnel to evaluate each application for HUD housing to locate projects outside areas of racial concentration. This criterion, along with other site and neighborhood standards, have been incorporated into the regulations implementing the section 8 new construction program authorized by the Housing and Community Development Act of 1974. Our affirmative fair housing marketing regulations require specific efforts to market HUD assisted housing to persons who might not otherwise apply for the units. Each applicant for participation in the FHA subsidized and unsubsidized housing programs is required to pursue affirmative fair housing marketing policies in soliciting buyers and tenants, in determining their eligibility and in conducting sales and rental transactions. Each such applicant must have a program to attract buyers or tenants of all minority and majority groups for initial sale or rental and must carry out such a program during the entire life of the mortgage. Minority media are to be used where appropriate. We require a nondiscriminatory hiring policy and the use of the HUD equal opportunity poster at the project sales or rental office and the EO slogan or logo at the project construction site. The affirmative marketing program adopted by each sponsor is self-imposed. The applicant develops his own plan, but the techniques are specific. They are submitted to HUD's office on forms. Once approved, the plan requirement holds the developer to his own standards of expected results. The actions to be taken are clear. The plans are available for public inspection and monthly occupancy or sales reports must be filed. Our site selection and affirmative marketing requirements are designed to be most effective when applied to newly constructed units. We have developed special marketing requirements to assure that we further fair housing concerns in administering the program of subsidies for low- and moderate-income families in existing housing authorized by section 8. We require of housing authorities administering a program for subsidizing the rentals of low- and moderate-income families in existing rental units under section 8 the development of a plan which must describe the steps to be taken to accomplish several objectives including: participation in the program by a broad range of famalies within the eligible population; participation in the program by owners of units in areas outside minority and low-income concentration; development of a system to provide information on the program to persons expected to reside in the community; and the provision of assistance to families seeking to participate in the program who encounter discrimination during their housing search. The Congress has specifically incorporated fair housing concerns into the community development block grant program. All applicants for block grant assistance are specifically required to certify compliance with title VIII. Congress asserted as a specific objective of the community development block grant program— The reduction of the isolation of income groups within the communities and geographical areas and the promotion of an increase in the diversity and vitality of neighborhood through the spacial deconcentration of housing opportunities for persons of lower income. HUD regulations implementing the block grant program specifically require communities to submit a housing assistance plan, or HAP, which identifies that community's housing needs and which establishes realistic goals for meeting those needs. Revised regulations issued February 19 in the Federal Register by the Department clarify the requirement that a community include in its housing assistance plan an assessment of needs with respect to those expected to reside in the community as well as those already there. Our revised regulations apply to housing assistance plans submitted with second year applications. I would note that we are in the middle of the second funding cycle for the block grants. In addition, these revised regulations clarify the requirements with respect to the data a community must or may rely on to support its housing assistance plan, and require the community to establish 3-year housing goals, in addition to one-year goals, responsive to identified housing needs of various categories of households; for example, elderly, large families, and so forth. We believe these changes will improve the contribution that the block grant program will make in furthering title VIII fair housing policies. Mr. Chairman, we have copies with us today of the regulations as published in the Federal Register on February 19, as well as the revised forms relating to the housing assistance plans; and I would like to offer copies of these to be included in the record. Mr. EDWARDS. Yes. Without objection, they will be included in the record. [The revised HAP regulations, appearing in the Federal Register on February 19, 1976, are as follows:] TITLE 24-HOUSING AND URBAN DEVELOPMENT PLANNING AND CHAPTER V-OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PART 570-COMMUNITY DEVELOPMENT BLOCK GRANTS Housing Assistance Plans On January 15, 1976 ,the Department of Housing and Urban Development published in the Federal Register (41 FR 2348) a notice of proposed rulemaking concerning the submission of housing assistance plans as part of applications for grants under Title I of the Housing and Community Development Act of 1974. Interested persons were given until January 30, 1976, to submit written comments. All comments with respect to the proposed revisions were given due consideration. As a result of the comments received, the following changes are made: 1. A number of comments questioned the general availability of data with respect to HUD-insured subsidized and public housing. Accordingly, § 570.303 (c) (1) is revised to delete these provisions. |