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Fair Housing Defense

Information on and Compliance with the FHA

What To Do About Residents Who Make More Than The Affordable Housing Limits

Posted in Articles, FHA Basics

As apartment owners and managers, from time to time, we get investigated by the U.S. Department of Housing and Urban Development (HUD).  Which is fine.  Every once in a while, however, HUD gets investigated as well.  Just recently, HUD’s Inspector General (its internal watchdog) released a report which severely criticized HUD’s current policy which permits individuals who are designated as “over income” to remain in public housing.

Following a torrent of criticism, HUD has now reversed course and is providing new guidance, urging Housing Authorities to evict residents who no longer qualify for subsidized housing. The report found that more than 25,000 residents make more than the maximum income allowed to qualify for public housing.  Now, while many of the “over income” residents exceeded the limit by a small amount, the audit revealed that nearly half were over the threshold by $10,000 to $70,000.  And what really drove the findings were that a few residents were glaringly over the limits:  such as a family of four in New York City with an income of just under $500,000 who is paying under $1,600 for a three-bedroom subsidized unit.

When the report was first made public, HUD harshly objected to the findings and asserted that “income diversity” in public housing was a good thing and that people should strive to earn more money, but not lose their eligibility for affordable housing.  HUD also stated that the number of over income families was less than three percent of those in public housing.  After hearing from many other voices (to put it mildly) following its initial comments (particularly when the most egregious examples were publicized and are so much harder to defend), HUD is changing its policy to now support removing over income individuals, particularly when affordable housing waiting lists continue to grow, from affordable housing.

I don’t suspect HUD (through various Housing Authorities and private landlords) will actively start evicting very many residents, but it was interesting to watch this debate continue to play out.  Indeed, nobody enjoys the investigative process.  Not even HUD.

Just A Thought.

DOJ Settles Design and Construction Fair Housing Case for $205,000 — Plus the Cost of Building a New Community

Posted in Disability

Last month, the U.S. Department of Justice (DOJ) announced another Fair Housing Act (FHA) settlement, this time with a developer (and several related companies) from West Virginia.  To resolve the DOJ’s complaint filed in U.S. District Court, the defendants agreed to pay $205,000 and make substantial retrofits to remove barriers to accessibility at various multifamily apartment communities.  In the lawsuit, DOJ asserted that the developers constructed 23 apartment communities in West Virginia and Pennsylvania with a number of features that made them inaccessible to individuals with disabilities.

Pursuant to the terms of the settlement, the defendants agreed to take extensive actions to make the communities accessible to individuals with disabilities, including for those who use wheelchairs.  These retrofits include replacing excessively sloped portions of sidewalks, installing properly sloped curb walkways, replacing bathroom and kitchen cabinets to provide sufficient room for wheelchair users, widening doorways, and reducing door threshold heights.  In addition to establishing a settlement fund of $180,000 to be used to compensate disabled individuals who have been impacted by the accessibility violations as well as paying a $25,000 civil money penalty, the agreement further provides that the defendants are to construct a new apartment complex in West Virginia with 100 accessible units.

While I always know there are two sides to every story, the settlement here is significant as the retrofits are extensive and the cost of building an entirely new community (with 100 accessible units) demonstrates what the DOJ thought were the strengths of its case.  As management companies, owners, and developers in the multifamily housing arena know, there are design and construction requirements embedded in the law which must be followed.  As we see from this case, if they are not, they you will need to speak with a lawyer like me.

Just A Thought.

Fair Housing Training at the Maintenance Matters Conference

Posted in FHA Basics

I want to give a shout out to the Pennsylvania-Delaware Affordable Housing Management Association and IREM Delaware Valley Chapter for inviting your humble Fair Housing Defense Blog editor to the Maintenance Matters conference held last week at the Valley Forge Casino Resort in King of Prussia, PA.  We spent a good part of the morning reviewing important fair housing training points as well as discussing how service and leasing office apartment professionals can assist in avoiding fair housing complaints.  For me, the best part of these training sessions is when I get questions from the audience to hear what issues are on the minds of our team members.  Sure, it takes a few minutes for that first question to be asked, but once the dam breaks — the session takes off.  I never know exactly where these events are going to turn.  Last week, we spent quite a bit of time dealing with parking, including the number of handicapped spots that must be in a given lot, the number of van accessible spots, access to community doors, parking fees, verifications for handicapped parking placards, and designated handicapped spots.

Service and leasing office professionals are literally on the front lines for us each and every day.  They have the most direct interaction with our residents.  While those interactions are almost always good for resident relations purposes, from time to time residents make reasonable accommodation and/or reasonable modification requests directly to our service team members.  And while formally responding to those requests is not typically in a service manager’s job description, the service team members need to know what information to give to the community manager.

Again, I appreciate the opportunity to speak to apartment management professionals.  Indeed, the point of fair housing training is to do our best to get it right and to avoid formal complaints.  However, as complaints are indeed filed to time to time, training also helps me defend each and every case.

Just A Thought.

 

HUD Settles Fair Housing Disability Discrimination Case for $167,000

Posted in Discrimination, FHA Basics

Two weeks ago it was the U.S. Department of Justice (DOJ) announcing the large settlement of a housing discrimination case.   Last week, it was the U.S. Department of Housing and Urban Development (HUD) issuing a press release in which it confirmed an agreement with a Virginia property owner resolving allegations of housing discrimination raised on behalf of residents with disabilities in two of the company’s rental properties.  The agreement mandated that the property owners pay $167,500 in damages.

The case came to HUD’s attention when two residents and a local fair housing group filed complaints asserting that management required residents who used motorized wheelchairs or scooters to pay a $1,500 security deposit, acquire a minimum of $100,000 in liability insurance, and sign an agreement providing that approval of the scooters could be withdrawn if payments to maintain the required insurance policies were not made.  Guidance from both DOJ and HUD make clear that the Fair Housing Act prohibits requiring individuals with disabilities to pay additional security deposits or to buy liability insurance because they use motorized wheelchairs.  In addition, HUD’s investigation concluded that the policies (requiring both additional security deposits and buying extra liability insurance) were also applied to other properties and to other residents.

In addition to appropriate fair housing training and permanent changes to its policies going forward, the property owner agreed to pay a total of $107,500 to the complainants and other aggrieved individuals.  Furthermore, the property owner will donate $30,000 to the local fair housing group involved with the case in support of “advocacy” for people with disabilities as well as donate an additional $30,000 to a different Virginia agency (approved by HUD) that promotes education and assistance to individuals with disabilities.

Now, I was not involved with this case and as loyal Fair Housing Defense blog readers understand, I know there are two sides to every case.  And I always wait to hear the other side before making a judgment concerning what may (or may not) have taken place.  That being said, professional apartment management needs to know that we cannot charge our disabled residents additional security deposits or require extra liability insurance.  If you do, you will really need to talk to a lawyer like me.

Just a Thought.

DOJ Settles Race Discrimination Case for $251,500

Posted in Discrimination, FHA Basics

If we needed another reminder that the U.S. Department of Justice (DOJ) continues to look for housing discrimination cases, DOJ issued a press release last week in which it announced a settlement with the owners and operators of a mobile home park in Illinois to resolve allegations of race and familial status discrimination.  Under the terms of the agreement, the defendants will pay $217,500 to victims (and their lawyers) as well as an additional $34,000 to the government as a civil penalty.

The DOJ’s complaint contended the site manager refused to let an African American individual be added as a resident when he moved in with his white girlfriend and her uncle.  There were additional allegations, including that the African American man was harassed by the son of the site manager.  Ultimately, the residents vacated their home after management threatened them with eviction if the African American resident did not move out.

Next, a fair housing testing group and the U.S. Department of Housing and Urban Development joined DOJ’s efforts and sent in various testers.  According to DOJ, the testing concluded that the site manager treated prospective residents differently based on their race by, for example, requiring African American testers to fill out applications while not requiring white testers to do so.  DOJ also contended that the manager asked African American testers if they had felonies but did not ask the same question of white testers.  DOJ also asserted that there had been no African American residents at the mobile home park since at least 2007.  Finally, the complaint alleged that management discriminated on the basis of familial status (families having hildren under the age of 18) by prohibiting families from living on one of the four rows of lots at the mobile home park.

This case (with admittedly strong alleged facts) reminds all of us in the professional apartment business that we must remain vigilant and apply our non-discriminatory resident selection criteria evenly across the board.  Ask the same questions to all your applicants.  Show everyone the same available units.  Let applicants choose from available units for which they qualify.  If you do not do it right, then you may need to speak with a lawyer like me.

Just A Thought.

HUD Announces New Fair Housing Regulations

Posted in FHA Basics

The U.S Department of Housing and Urban Development (HUD) just announced its intention to publish some new regulations which will impact housing providers who receive federal funds.  While much of our work involving the Fair Housing Act (FHA) concerns efforts to prevent housing discrimination, another feature of the law is to promote fair housing such that barriers to housing are reduced and underserved populations can better find quality housing in whatever local area in which someone in need resides.  Although the effective date of these new regulations is not precisely known (typically 30 days after the regulations are published in the Federal Register), the goal of the Affirmatively Furthering Fair Housing (AFFH) regulations will be to:

 

  1. Replace the analysis of housing impediments with a more effective and standardized assessment of fair housing through which program participants identify and evaluate fair housing issues;
  2. Improve fair housing assessment, planning, and decision making by providing data that housing providers must consider in their assessments of fair housing;
  3. Explicitly incorporate fair housing planning into existing processes to more effectively assist community development decision making;
  4. Encourage and facilitate regional approaches to address fair housing issues, including collaboration across jurisdictions and various housing authorities; and
  5. Provide an opportunity for the public, including individuals historically excluded because of characteristics protected by the FHA, to provide input about fair housing issues, goals, priorities, and the most appropriate uses of HUD funds and other investments, through a requirement to conduct community participation as an integral part of the new assessment of fair housing process.

 

According to HUD, this new approach will be designed to empower program participants and to foster the diversity and strength of communities by overcoming historic patterns of segregation, reducing racial or ethnic concentrations of poverty, and responding to identified disproportionate housing needs consistent with the policies and protections of the FHA.  The rule also seeks to assist program participants in reducing disparities in housing choice and access to housing and opportunity based on race, color, religion, sex, familial status, national origin, or disability, thereby expanding economic opportunity and enhancing the quality of life.  Additionally, HUD concludes these new rules “aim to provide all HUD program participants with clear guidelines and data they can use to achieve those goals.”

 

While it is too soon to exactly know what HUD is going to expect of those who receive federal funds, I will stay on it and report back as I learn more.  Finally, to the extent program recipients will require additional tools to adopt to these new rules, these new regulations will be phased in over time.

 

Just A Thought.

Here Are Examples of Individuals Not Covered by the Fair Housing Act

Posted in FHA Basics

For most of us involved in the professional apartment management and housing world, we begin with the assumption that each property and person is covered by the federal Fair Housing Act (“FHA”) and/or state, city, county, or local anti-housing discrimination law.  Much of the time that is an absolute correct place to start.  But, not always.  Here are some people NOT covered by our FHA:

 

  1. Juvenile offenders and sex offenders are not persons with disabilities recognized under the law;
  2. Neither are current users of illegal controlled substances; and
  3. Individuals (even those with a disability) whose residency would constitute a “direct threat” to the health or safety of other individuals or whose continued residency might result in substantial physical damage to the property or injury to other persons, unless the direct threat can be eliminated or reduced by a requested reasonable accommodation.

 

Remember that the FHA does not permit the exclusion of people based on fear, speculation, or stereotype about a particular disability.  The determination must rely on an individual assessment based on reliable and objective evidence.

 

Again, most of our applicants, residents, guests, and apartment communities are certainly covered (and indeed should be covered) by the fair housing laws.  But, given the circumstance, you might want to think about if the FHA does not apply.

 

Just A Thought.

“Disparate Impact” Claims Survive Fair Housing Act Challenge

Posted in Discrimination, FHA Basics

In a case closely watched by many in the housing and civil rights communities, the U.S. Supreme Court yesterday validated a tool that the federal government and housing advocates have used for the past 40 years in an effort to combat housing discrimination.  In a 5-4 decision that surprised many of us (including me) who follow the Fair Housing Act (FHA) and related issues, the Court concluded that “disparate impact” claims are cognizable under the FHA, even though the words “disparate impact” do not appear anywhere in the statute.

What made the ruling surprising is that this is the third time in five years that the Supreme Court had accepted a case to answer the question.  The first two cases (one from Minnesota and one from New Jersey) both settled shortly before oral argument.  It was perceived by many (including me) that those cases settled because neither the Administration nor civil rights groups wanted the current nine justices to opine on this issue of law.  I suspected the Court would not try to answer the question three times in five years if it was going to keep the law as is.  Nevertheless, the Supreme Court decision provides that federal fair housing law permits individuals to challenge lending rules, zoning laws and other housing practices that have a disparate (legalese for “harmful”) impact on protected classes (legalese for “minority groups”), even if there is no proof that the property owner or bank intended to discriminate.

Now, the ruling is a win for the Obama Administration and fair housing advocates who argued that the FHA encompasses challenges to race-neutral policies that have negative effects on minorities.  Although the decision essentially validates current practice, it is a step back for banks, property owners, and insurance companies who believed such claims – which are based solely on statistical evidence – were not explicitly permitted under the FHA.  In upholding the tactic, the justices let stand a legal strategy that has been used for decades to challenge discrimination in housing, zoning, occupancy standards, mortgage lending, and insurance underwriting.  Importantly, as I believe every federal appeals court to consider disparate impact had upheld the practice, this ruling will not mean any change in current law, although the practice certainly has received more publicity in the media as the challenges have wound though the various courts.

In the case decided yesterday, the fair housing group argued that even if there were no motive to discriminate, the Texas policy still unfairly hurt African American residents.  Specifically, it was contended that the effect of the policy was to perpetuate segregated neighborhoods and to deny African Americans a fair chance to relocate into areas with better schools and lower crime.  Texas argued that it was simply unfair to have to justify or change policies that don’t intentionally discriminate and, in fact, would mandate that they start making race conscious decisions to avoid liability.

In his majority opinion, Justice Anthony Kennedy concluded that language in the FHA prohibiting discrimination “because of race” permits the disparate impact cases.  He wrote that these challenges “may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.”  In his dissent, Justice Samuel Alito warned that the tactic can result in unwanted outcomes, noting a case from Minnesota in which a landlord used the law to sue city officials who forced him to combat rat infestation and unsanitary conditions in low income housing.

So, does this decide the issue once and for all?  Perhaps.  But, perhaps not.

Earlier this month the U.S. House of Representatives adopted an amendment to one of the fiscal year 2016 federal appropriations bills by a 232-196 vote.  The amendment would prohibit the Department of Justice from using funds to prosecute and obtain settlements from lenders, landlords, and insurers in discrimination cases based on the disparate impact theory.  Now, it is too soon to know if this amendment will survive the balance of the legislative process, but I will keep a watchful eye to see if “disparate impact” survives yet again.

So, what was my prediction as to the outcome of this case?  I had it 5-4 the other way.  Yet another reminder that it is close to impossible to predict with certainty what a court is going to do.

Just A Thought.

Arizona Court Finds City Bound by Arizona Fair Housing Act

Posted in FHA Basics

Thanks to Fair Housing Defense blog reader (and fellow management counsel Mark Zinman) for calling my attention to a new state court decision from Arizona.  I have written many times in this space that everyone in the professional apartment management business must comply with our federal Fair Housing Act (FHA) as well as applicable state, city, county or other local laws.  And that includes cities (at least in Arizona).

In an opinion issued earlier this month, the Arizona Court of Appeals held that the City of Tempe must comply with the Arizona Fair Housing Act (AFHA).  Even though the city does not actually rent apartments or homes, it does administer a housing voucher program.  This decision is consistent with other fair housing cases that a municipality can be liable for violations of the AFHA.   Again, everyone (including entities and municipalities) must be aware of the scope of the fair housing laws when dealing with the rental of apartment homes or units.

In the new case, a person filed a fair housing complaint alleging that the City of Tempe wrongfully denied his application for a housing voucher. The complaint was filed with the Arizona Attorney General’s office.  While the case was being investigated, the City filed a lawsuit seeking a judicial declaration that it was not bound by the AFHA because it doesn’t rent units – the City only administers the housing assistance voucher program.  In a nutshell, the argument was that the Attorney General’s office was prohibited from investigating the city.  The trial court ruled against Tempe.  Tempe then appealed that determination to a higher court.

In its decision, the appellate court concluded that “when the AFHA was enacted, it was well-established under federal case law that municipalities are included in the FHA definition of ‘person.’” This holding reiterated the long standing principle that all persons, entities and municipalities are bound by the AFHA. The Court of Appeals ultimately concluded that even though the city does not itself rent apartment homes or dwellings, as the whole point of the Housing Choice Voucher Program is to help eligible individuals obtain housing that they might otherwise not be able to afford, the practical impact of denying an application to participate in the program has the ultimate effect of making certain dwellings “otherwise unavailable” to applicants.  As such, because Tempe administered the voucher program, it was bound by the AFHA because it could make rental units unavailable to applicants.

And finally, in addition to providing useful guidance as to Arizona fair housing law, the Court of Appeals upheld an award of $108,090 in attorneys’ fees to the Attorney General and against the city.   And remember, the issue here was not if a fair housing violation took place – this case concerned whether the Attorney General had the authority to investigate if a violation of the AFHA took place.  Yet another cautionary tale as to the significant scope of the state and federal fair housing laws.  Again, thanks to Mark for the details and content on this new case.

Just A Thought.

Responding to Readers Concerning “Disparate Impact” and the Fair Housing Act

Posted in Discrimination, FHA Basics

Guess I need to add “disparate impact” to the list of topics that interest Fair Housing Defense blog readers.  My last post dealing with a vote by the U.S. House of Representatives to limit the way “disparate impact” is used in various case and investigations generated quite a response.  First, a housekeeping note.  A couple of readers noted I made an identification error concerning which side of a discrimination case uses disparate impact.  Let me clear that up:  Various plaintiffs (and/or HUD or the Department of Justice) may attempt to use statistical data to show that a decision by a defendant (owner of housing and/or a professional apartment management company) has a “disparate impact” on a protected class and, as such, violates the Fair Housing Act (FHA).  Defendants (owners and/or managers) will contend that the FHA requires intentional conduct by someone to discriminate and that an otherwise benign policy should not impose liability.  Hope that clears it up.

Another reader thought I was unclear concerning the vote in the House.  Earlier this month the House voted 231-195 to include the language which would prevent “disparate impact” from being used.  Then, just last week, the House voted 216-210 to adopt the Transportation, Housing and Urban Development and Related Agencies Appropriations Act for Fiscal Year 2016 (H.R. 2577), which contained essentially the same amendment.  Generally, the Republicans are voting to essentially remove “disparate impact” from the law while generally the Democrats are voting to keep “disparate impact” in the FHA.  Now, the U.S. Senate will need to speak on the topic as well.  And it is likely that a House-Senate conference committee could well get involved.  As such, it is fair to report we have a ways to go before knowing what the final legislation will look like.

Your humble editor appreciates that you read this space and care enough to work with me to get it right.

Now, I also got a few responses concerning the merits of “disparate impact.”  It is clear that this issue has struck a responsive chord.  Trust me, I heard from both sides.  Some readers view the efforts to strip “disparate impact” from our laws as an assault on the civil rights legislation that was passed over 40 years ago.  Others view it as textbook governmental overreaching in that the language is not in the law and, as such, should not be permitted unless and until Congress changes the statute.  Some of the comments (on both sides of the issue) were appropriately written and reflected respect for the opposing view.  Others, less so.

To be sure, the U.S. Supreme Court will weigh in on “disparate impact” and our FHA, likely before the end of the month when it issues a decision on a case from Texas.   I will report back.  And duck when the comments come flying in.

Just A Thought.