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.