The Obama administration announced on Wednesday new requirements designed to aggressively reduce racial segregation in residential neighborhoods.

Congress passed the Fair Housing Act (FHA) in 1968 to address the problem of systemic discrimination, especially on the basis of race, in housing. FHA prohibits racial discrimination in housing and requires that the federal government take steps to actively dismantle segregation and promote integration.

For decades the FHA has fumbled with implementing the affirmative desegregation portion of its mandate. Wednesday’s rule change is designed to provide clarity for how the administration plans to move ahead.

Department of Housing and Urban Development (HUD) Secretary Julian Castro explained that under the new requirements, cities and localities must account for how they use federal housing funds to reduce racial disparities in housing. The rules will require cities and localities across the country to scrutinize their housing patterns for racial bias. Those municipalities will then publicly report the results of these studies every three to five years.

Communities will also have to set desegregation goals, which HUD will track over time. Those municipalities that fail to reduce segregation will face penalties, including the loss of federal fair housing dollars.

HUD issued the rules in response to recommendations from a 2010 Government Accountability Office report and input from HUD program participants. The rules clarify and simplify fair housing obligations and, Castro said, create a streamlined Assessment of Fair Housing planning process, which will help communities analyze challenges to fair housing choices.

The rules are designed to promote local control, with cities and localities establishing their own goals and priorities to address the fair housing barriers in their respective communities.

While the requirements will take effect in about a month, they will not be fully implemented immediately. Castro said HUD will provide support to program participants that need to complete an Assessment of Fair Housing to ensure they understand the process and to identify best practices across a diverse group of communities.

“As a former mayor, I know firsthand that strong communities are vital to the well-being and prosperity of families,” Castro said in a statement. “This important step will give local leaders the tools they need to provide all Americans with access to safe, affordable housing in communities that are rich with opportunity.”

Asking cities and localities to detail how they plan to use funds to reduce segregation will foster cooperation with the federal government, according to the administration. HUD, as part of that effort, will make available a database with a trove of geographic data compiled from Census data and other government sources. The data covers every community in the country, including their racial makeup, poverty rate, concentration of housing vouchers and public housing, as well as the quality of schools and public transit. And while much of this data is already publicly available, HUD hopes centralizing the data will enable cities and municipalities to better map racial segregation in their communities.

The rules are also part of the administration’s anti-poverty efforts that include overhauling overtime pay and classifications, and are designed to address broader structural racism that the administration attributes to the unrest in cities like Ferguson, Missouri, and Baltimore.

The administration announced the rules just weeks after the United States Supreme Court ruled the 1968 Fair Housing Act can be used to target housing policies or practices that may appear racially neutral but when implemented have the effect of perpetuating racial discrimination in housing.