The City of Sunnyvale collaborated with the County of Santa Clara and other cities in the County to fund a special assessment of fair housing conditions and programs in Santa Clara County. This study, which was carried out by the Empirical Research Group, UCLA, made a number of findings and recommendations. The City has reviewed and considered these recommendations as part of its Analysis of Impediments and its consideration of strategies and actions for furthering fair housing in the City.

This appendix presents verbatim the conclusions and recommendations portion of Fair Housing in Santa Clara County, An Assessment of Conditions and Programs, 2000-2002. Copies of the study are available for review at the Housing Division, City of Sunnyvale.

Fair housing conditions in Santa Clara County are, as a general matter, very good; in some cases they are outstanding. Although this report does identify important problems that should be addressed, it is important not to overlook Santa Clara County's achievements: an exceptional level of racial integration in most parts of the County; an unusually strong and generally well-funded network of fair housing providers; a generally responsive and concerned group of officials working on land use, housing supply, and fair housing issues; and many signs of tolerance of diversity and support for fair housing across the general public community. These crucial elements provide an excellent foundation for future progress.

Santa Clara County has two fundamental fair housing problems; one of them is largely insoluble, but the second is eminently solvable. The intractable problem is affordability. The region's economic transformation may have reached a plateau, but the County will almost certainly continue to be an extraordinarily difficult place to create affordable housing for some time. There are a number of strategies local governments can pursue to ease the crunch, but the politically feasible steps are unlikely to have more than a modest impact. To the degree that the market remains very expensive, many parts of the County will become less economically integrated, families will frequently encounter restrictive practices, and the County's high levels of racial integration will be threatened.

The second problem is that fair housing programs are largely reactive rather than proactive. This problem is not at all unique to Santa Clara County; it is characteristic of most fair housing programs. But Santa Clara County has enough talent and intelligence in its fair housing community to do much more. Currently, no one who works on fair housing in Santa Clara County has any idea how widespread specific discriminatory practices are in the County, or where they might be concentrated. The only way to determine the incidence of such practices is through systematic, randomized testing; this should be a core component of all the region's fair housing programs, and the information gathered should be digested in a coordinated way. Currently, there are virtually no fair housing services provided to anyone in the home purchase market, even though it is very likely that discrimination and steering are at least as common in this market as in the rental market. One reason for this absence is the tie-in of nearly all the County's fair housing programs to landlord-tenant programs.

The recommendations that follow are built around the idea of making fair housing efforts in Santa Clara County more proactive, building in part on the model of the Fair Housing Law Project but on other designs as well. The recommendations are divided into two parts: (a) structural recommendations – that is, institutional innovations to improve fair housing work; and (b) substantive recommendations – specific initiatives to undertake within the fair housing structure. Within each of these two sections, we have listed recommendations roughly in order of priority.

Structural Recommendation One: Establish a Fair Housing Collaborative Task Force.

Although fair housing activists in Santa Clara County currently meet regularly, it is on an ad hoc basis and usually for the purpose of addressing some specific pressing case or issue, and often without the involvement of the funding jurisdictions. We recommend that a collaborative task force, meeting on a regular basis, be established to address systemic fair housing issues, the collective goals set by funders for the fair housing community, and to foster better information-sharing and familiarity with programs. Members of the task force should include two groups, an "inner core" and an "outer core". The inner core would meet more often (say, every two months), while the "outer core" would participate less often (say, twice a year).

The "inner core" of the task force should be made up of key players in the County’s fair housing organizations: the executive directors of the three fair housing service organizations; the directors of the three funded "specialty" programs (Fair Housing Law Project, Asian Law Alliance and the fair housing component of the Mental Health Advocacy Program), the fair housing director at the Santa Clara County office of Bay Area Legal Aid.

The "outer core" would include at least two representatives from the funding jurisdictions; rotating members from important social service organizations; government enforcement bodies (e.g., HUD, DFEH) and other representatives involved in specific issues before the task force.

Santa Clara County has two model structures for this organization: the Santa Clara Collaborative on Housing and Homeless Issues and the Domestic Violence Task Force. The out-of-pocket costs of this initiative would be minimal; the various jurisdictions within the County could simply incorporate into current fair housing funding contracts the appropriate requirements for participation in the Task Force. However, it would be important to create some administrative infrastructure for the Task Force -- e.g., designate a specific agency to coordinate meetings, send out notices, etc.

The task force could play a lead role in implementing the fair housing program agenda of the combined Santa Clara County CDBG jurisdictions, such as the specific substantive recommendations outlined in this chapter.

Structural Recommendation Two: Continue the Benefits of Coordination at the Local Government Level.

The jurisdictions of Santa Clara County should be commended for pooling resources to administer a joint fair housing study, and for the generally high level of coordinating occurring among the jurisdictions on common CDBG issues. Meaningful fair housing strategies must almost always occur at the regional level, rather than the municipal level. We recommend that the existing CDBG Coordinators Group select representatives who shall have a special oversight responsibility for fair housing activities on a countywide basis. These representatives would participate in the regular Task Force meetings recommended above, would develop coordinated funding recommendations for individual jurisdictions, would conduct site visits at fair housing providers or supervise a contractor hired for that purpose, and would perform other coordinating activities. These two persons would essentially be fair housing specialists representing the interests of the funding jurisdictions. The jurisdictions should also continue to meet on a plenary basis periodically -- perhaps semiannually -- to review progress in establishing and meeting fair housing goals.

One of the responsibilities of these coordinators should be the development of criteria for conducting cost-benefit analyses of fair housing services across jurisdictions. This involves four steps: (a) gathering consistent criteria from CDBG jurisdictions on their primary goals for the fair housing providers; (b) gathering uniform statistics from fair housing providers on their service and work volume; (c) performing occasional random audits to insure the accuracy of the information provided; (d) estimating from the data the average cost of providing various services across jurisdictions; and (e) determining the cost-benefit effectiveness of services within each jurisdiction. A very high cost-benefit ratio suggests either a weak service provider or a high level of funding relative to needs.

We have a number of recommendations concerning the fair housing providers:

a) We recommend that the structure by which the City of San Jose provides funding to the Fair Housing Law Project and the Asian Law Alliance be expanded to include all of the jurisdictions of the County. In other words, we recommend that all of the jurisdictions contribute funding to the "specialty" fair housing efforts, and that the "oversight" exercised by Project Sentinel over the current collaboration be shifted to the Fair Housing Task Force. Since the Task Force (under these recommendations) would play the central role in formulating countywide fair housing goals, the Task Force will be well-placed to give guidance and direction to the specialized agencies on the best ways their efforts can complement the broader fair housing plan.

b) The fair housing monitors should annually retain an outside expert on testing and enforcement strategies (e.g., from the Detroit, Chicago, or Washington fair housing agencies) to conduct site visits at the primary fair housing providers and assess investigation and testing quality. Fair housing funders should use these evaluations in making programmatic and funding decisions

c) Most of the existing fair housing organizations have at least one attorney on staff. This is a strength of the network; however, we think that the fair housing organizations could do significantly more to develop an in-house litigation capacity. The general thrust of many of our recommendations is to increase enforcement and provide relief for persons experiencing discrimination. However, many persons who are identified as victims of discrimination may not have any effective relief if the available options are (i) referrals to DFEH, which rarely pursues meaningful enforcement of fair housing claims; and (ii) referrals to private fair housing attorneys, who usually must be choosy about cases, favoring those with a very high probability of success and a "deep-pocket" defendant. It is important for the network of fair housing agencies to provide an alternative. If the "general" fair housing agencies can improve their capacity to undertake fair housing cases, they can partner in many of these cases with the "specialized" agencies -- particularly the Fair Housing Law Project -- and/or may be able to develop partnerships with private attorneys.

d) The CDBG jurisdictions should find a way to integrate the San Jose office of Bay Area Legal Aid into its long-term funding structure. BALA has done outstanding work in fair housing services, fair housing litigation, and investigation of predatory lending problems in the County. Yet it does this with virtually no support from local governments (a significant amount of recent work was funded by a federal FHIP grant, itself an important sign of BALA’s ability). It is difficult for a new entrant in the region to get CDBG funding without initiating competition with an established provider, which is hard to do and frequently creates divisive bitterness within the fair housing community. The CDBG jurisdictions can, however, constructively engage to find room for BALA in collective funding decisions.

e) After review of all of the operations of the fair housing service providers, it appears that Mid-Peninsula Citizens for Fair Housing operations have been stagnant and unimaginative compared to those of other providers in the region. It’s performance and cost effectiveness could be greatly improved. We encourage the current funders to facilitate competition between fair housing organizations and thereby obtain the highest level of performance from their fair housing service provider. (The original version submitted by the consultant has been edited by Sunnyvale Housing staff.)

Structural Recommendation Four: Develop new sources of fair housing funding.

Current levels of fair housing funding from CDBG jurisdictions in Santa Clara County are high. In the aggregate, these jurisdictions currently spend over 5% of their CDBG allocations on fair housing and/or tenant-landlord funding for the fair housing agencies. This is substantially higher than national averages, and about ten times higher, in relative terms, than fair housing spending in Los Angeles County.

However, there are reasons why the jurisdictions should consider modest further increases in fair housing spending. First, the CDBG jurisdictions are generally getting a good return on their current investment – most fair housing services in Santa Clara County are very good, and some initiatives are truly excellent. It would not be easy to cut existing budgets (aside from that of Mid-Peninsula) without hurting services. We think some new initiatives are very important, and it is much easier to start new services with a small amount of new funding than to cut existing services to create the funding.

At the same time, CDBG jurisdictions and fair housing providers alike should pursue two other sources of funding. The first of these is funding from HUD's Fair Housing Initiatives Program (FHIP), which distributes about $20 million in grants annually across the nation for the development of model fair housing programs. Given HUD's interest in strong, collaborative programs, Santa Clara County's fair housing network should be an outstanding contender for fair housing grants, expanding upon the success Project Sentinel and Bay Area Legal Aid have achieved in the past.

The second promising source of funding is litigation. If the fair housing network seeks attorney fees in successfully litigated cases, or contingent fees in settlements, this can provide a substantial and self-sustaining source of funding for continuing enforcement work.

Substantive Recommendation One: Establish proactive goals for the Fair Housing Community aimed at steadily reducing fair housing problems.

The CDBG jurisdictions should develop specific, comprehensive goals for the fair housing community. The Fair Housing Collaborative Task Force can be an important forum to define these goals and determine the best way for each organization to make specific contributions towards those goals. Initially, the Task Force could review the recommendations in this report and make its own determination of their importance and feasibility.

Because such a tiny proportion of those encountering discrimination in housing searches both know that they have been discriminated against and know where to go for help, complaint-driven testing does not provide adequate information to measure or monitor discrimination levels. We recommend that a program of systematic, randomized housing audits be instituted. A proportion of existing fair housing budgets should be allocated to develop a pool of approximately $40,000 per year available for such testing. We estimate that the actual cost of performing the tests is under $400 per test; therefore, this pool of funding would make feasible approximately one hundred tests per year. Over time, this would generate a robust source of information on discrimination levels, variations across the County, and trends over time. We would suggest, provisionally, that tests initially focus on the rental market, and be divided among black/white, Hispanic/white, and family/non-family tests. However, it would be important to broaden the tests over time to include testing of real estate agents and homesellers.

Substantive Recommendation Three: Better public education.

We recommend that the Fair Housing Task Force take a lead role in developing public outreach campaigns that have a countywide orientation and that jointly publicize the services of the various fair housing organizations. Such public education efforts ought to reflect actual and unique conditions that exist in Santa Clara County. Fair housing outreach typically focuses on generic problems that exist nationwide and warns of the harms of discrimination in a very undifferentiated way. Santa Clara County is hardly typical of national patterns, however. It would be desirable for outreach to reflect the achievements the region has achieved and focus criticism on specific problems documented in this area. This will help to make fair housing more relevant, and outreach more engaging, for local residents.

There are good existing programs to serve as models. The Fair Housing Law Project, for example, conducts systematic educational presentations in a wide range of community settings, and measures the fair housing awareness of audiences before and after the trainings.

Some specific outreach strategies could include:

Substantive Recommendation Four: Negotiate more responsive behavior from problem banks.

The findings in Chapter Two strongly imply that some financial institutions in Santa Clara County are pursuing underwriting standards or other practices which have the effect of denying credits to Blacks (and to a lesser extent, Hispanics) at a disproportionate rate. The Task Force would be an excellent vehicle to implement a strategy for improving bank performance. We would recommend that, initially, one bank with particularly severe problems, and a high public profile, be singled out. Additional research is needed, such as an examination of actual underwriting standards and the identification of persons who have been denied credit. Once successful negotiations have occurred with one bank, it will be much easier to persuade other financial institutions to adopt similar reforms. HMDA data, of course, provides an excellent vehicle for monitoring improvements.

The flip side of lower access to conventional loans by Hispanics and blacks in Santa Clara County is higher targeting at these groups by "predatory" or "subprime" lenders. As discussed in Chapter Two, Bay Area Legal Aid, the Fair Housing Law Project, and a coalition of other organizations have been working to assess the scope of regional predatory lending. Local jurisdictions should support these efforts, and should create a $50,000 "seed" fund that fair housing agencies could apply for to represent victims of predatory lending in stopping foreclosures or putting predatory lenders out of business.

Substantive Recommendation Six: Monitoring Compliance with protections for the disabled.

Currently, compliance with the fair housing laws concerning persons with disabilities is haphazard, though much good work is being done. We recommend that the Task Force be charged with developing a strategy for periodically monitoring individual cities for compliance. This would include the following:

2. Determination of whether individual cities are properly monitoring the construction of multifamily housing to comply with requirements of fair housing laws;
3. Meetings with land use officials from individual cities to identify areas of existing land use regulations that should be revised to come into conformity with current standards.
4. Training of land use officials on the fair housing accessibility requirements.

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