Obama-era mandate slashed after being blamed for 'skyrocketing' housing costs

FIRST ON FOX: In a bid to tackle the nation’s housing affordability crisis, the Trump administration has scrapped a controversial Obama-era mandate blamed for driving up property costs and stifling the affordable housing supply.

The Department of Housing and Urban Development (HUD), alongside the Department of Justice, jointly rescinded an Obama-era policy that allowed third parties to file accessibility-related complaints over original building design flaws indefinitely, putting subsequent building owners on the hook for millions of dollars years after a project is completed, even if they were not the original builders. 

According to internal agency data, the previous policy forced property owners to spend more than $112 million in accessibility retrofits over the last five years just to qualify for Federal Housing Administration (FHA) refinancing—costs that HUD says directly choked off affordable housing supply.

The rule eliminates the ability to hold current property owners indefinitely liable for architectural deviations committed by original builders decades in the past. Under the updated enforcement framework, the clock for filing Fair Housing Act design and construction challenges begins on the exact date a building receives its official certificate of occupancy. 

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Individuals or advocacy groups now have a strict one-year deadline to file administrative complaints directly with HUD. For private civil lawsuits filed in federal court, the statute of limitations caps claims at two years from the completion of construction. 

Once those respective windows close, property owners are shielded from retroactive, building-wide liability for original architectural flaws, though individual tenants retain the right to seek reasonable modifications for their specific housing needs at any time under existing Fair Housing Act protections.

"[The Obama-era regulation] dramatically expanded the scope of the Fair Housing Act by declaring that deviations from HUD’s accessibility guidelines, at the point of initial construction, gave rise to strict liability against the builder in perpetuity," the new guidance says. "That interpretation was egregiously wrong. It exceeded the Department’s statutory authority, failed to increase the supply of accessible housing for individuals with disabilities, and imposed an unwarranted and unduly prejudicial burden on American homebuilders."

According to internal transaction data and industry reports provided to HUD, the financial toll of the previous policy extended far beyond standard compliance fees typically associated with federally-backed refinancing. For example, a single third-party housing inspection firm identified nearly $49 million in required accessibility fixes across almost 500 refinance deals since 2019—averaging over $100,000 in deficiencies per property.

Industry insiders and lenders also report that the Obama-era rules severely choked off financing, with one major affordable multifamily lender attributing more than $1 billion in lost HUD-insured loan volume over the last four years to the guidance, according to internal HUD data. Lenders told the agency that the ongoing uncertainty triggered recurring deal dropouts and discouraged prospective borrowers from pursuing FHA financing altogether.

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"For too long, unnecessary government policies have contributed to the skyrocketing cost of building, buying, and renting a home. Today’s action rescinds unnecessary and expensive liability created by legal theories that have no basis in law," said HUD Secretary Scott Turner. "The Trump Administration is following the law as written by Congress and interpreted by the courts. We will continue to repeal and replace guidance that does not honor these lawful commitments while ensuring Americans can access affordable housing."

At the heart of the administration’s rollback is a fundamental legal principle that federal agencies cannot rewrite laws passed by lawmakers, nor can they ignore rulings by federal judges. When Congress updated the Fair Housing Act in 1988, lawmakers built in a strict one-year deadline to file administrative complaints. HUD officials argue the 2013 Obama-era policy effectively ignored that congressional mandate by allowing property owners to be targeted decades after a project was completed.

The shift also aligns federal enforcement with appellate court rulings, including a decision by the U.S. Court of Appeals for the Ninth Circuit. Judges in that case ruled that the illegal act of failing to properly design a building ends when construction wraps up and an official certificate of occupancy is issued.

"Congress wrote a clear statute of limitations into the Fair Housing Act. That limitation is part of the law, not a suggestion for sly bureaucrats to disregard," said Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor. "We will not allow Obama-era guidance to rewrite the Fair Housing Act, expose American builders to indefinite legal liability, and make housing less affordable for hardworking American families."