Earlier this month, the U.S. Department of Justice (DOJ) settled a Fair Housing Act (FHA) case filed in Massachusetts for $70,000 in which the Complainants asserted discrimination based on race and national origin.

As a part of its investigation, DOJ concluded that the Defendants discriminated against residents of South Asian descent in violation of the FHA. Specifically, the allegations were that, for over a five year period, ownership steered (legalese for directed) native South Asian residents to certain buildings in the 224 unit multi-family housing community. The Defendants, who DOJ noted cooperated with the inquiry, agreed to establish a settlement fund of $70,000 to compensate victims of the alleged discriminatory practices. As is typical in these cases, the Defendants also agreed to FHA training for their new employees.

In addition to the settlement fund, the Defendants also agreed to make changes in its rental practices to ensure that families with children are not similarly been steered to certain buildings and units in violation of the FHA.

The takeaway for professional apartment management? Ensure that your leasing office staff members permit qualified applicants choose from the available units at your communities. Management must not be in a situation in which it is directing (or steering) residents wish to reside. Indeed, there are times when it appears benign – a leasing specialist will think he or she is promoting safety by not permitting families with children to live in upstairs units or avoiding a busy parking lot or street. Similarly, a management office might think they are doing the right thing by placing people who are from certain countries in the same building or on the same floor. We simply cannot steer our applicants to certain buildings or units inside buildings and be in compliance with the letter and spirit of the FHA.

Just A Thought.

While I always try to avoid political commentary here at the Fair Housing Defense Blog (as the reader comments can be, shall we say, colorful), I wanted to note a couple of housing related points with the Trump Administration in place now for just under six months. First, Dr. Ben Carson was confirmed by the U.S. Senate as Secretary of the Department of Housing & Urban Development (HUD) back in the Spring. While Dr. Carson admittedly did not have experience in federal housing policy, the fact that he is literally a brain surgeon (in other words, he is an exceptionally smart man) has to be a good thing.  Secretary Carson undertook a listening tour as he visited various HUD supported affordable housing communities to learn more about HUD’s mission (at one building, Secretary Carson did get stuck in an elevator, which was slightly amusing). Those of us who follow housing policy remain alert for any substantive changes that the administration proposes – whether concerning criminal background screens, disparate impact, affirmatively promoting fair housing, occupancy standards, or anything else. The answer on the policy side, at least to date, has been not much has been changed. Similarly, while it is too early to see if there are any fair housing enforcement priority changes, it feels as if the number of cases settled by HUD (at least with respect to the number of HUD press releases) is a little down. As soon as more detailed numbers get released, I will report back.

Next, while the Administration proposed a budget for HUD in fiscal 2018 which contained significant dollar reductions, those possible changes come with two important caveats: (1) Congress has the final say on HUD’s budget as the Administration’s proposal is only a recommendation; and (2) the Administration’s budget seeks $65.3 million to support HUD’s fair housing mission, the same funding level provided in the prior three years. Indeed, for those of us involved in fair housing – this is the number that remains important. At the end of the day, I suspect HUD’s budget for the next fiscal year will ultimately get included in what is known as a Continuing Resolution and that the funding levels will be close to those in place for the current year. And even if HUD’s fair housing budget gets cut, management would still need to ensure we comply with applicable state, city, and county fair housing laws. I would also expect local fair housing advocacy groups to file additional complaints/lawsuits related to information compiled by fair housing testers.

What does it all mean? Professional apartment management must continue to follow the important fair housing laws as we do each and every day.

Just A Thought.

A friend reached out to me to ask questions about HUD’s Smoke Free public housing initiative and for some general thoughts on smoking in apartment homes. So, here goes.

There is no “right” to smoke in a rental home. Smokers are not a protected class under the federal Fair Housing Act (FHA) or its state law counterparts. While some have tried to argue smoking is addictive and, as such, should qualify as a disability, to my knowledge no court has so ruled (and the tobacco companies have strongly objected to any such label). Accordingly, I am aware of no requirement for a reasonable accommodation or reasonable modification because of smoking under the FHA. Indeed, I believe the state of the law would be that smokers would benefit from quitting in that stopping smoking has been found to decrease depression, anxiety, and/or stress. Similarly, the federal government has not concluded that smoking is a legitimate or proven treatment for any recognized medical condition.

Apartment communities can prohibit smoking in individual units as a part of the lease or by means of a separate lease addendum. If your property decides to go smoke free, I recommend using a lease addendum at the time of each renewal in addition to using the addendum for new applicants. Yes, it will take a number of months to capture all of your residents, but if smoking is not addressed in your current lease, simply banning it in individual units during a lease term will be more difficult to defend before a judge.

With respect to affordable (government assisted) housing, the Department of Housing & Urban Development (HUD) issued a Smoke Free Public Housing Rule on November 5, 2016 (and which became effective as of February 3, 2017). Under this initiative, all public housing authorities must comply with the rules and implement smoke free policies within 18 months of the date of the rule (or not later than August 3, 2018). HUD’s rule is not mandating that people stop smoking. It does, however, make clear that public housing authorities must go smoke free by August 2018 such that smoking will not be permitted in apartment homes after that date. Make no mistake, there will be pushback and housing authorities are already working on policies to implement this initiative. Should someone lose their home for one violation? What if a guest lights up? What about someone who is disabled with a mobility impairment and has trouble leaving his or her home? What if someone just cannot or will not quit? What if someone has a medical marijuana permit? And I know there will be more questions than answers as affordable housing owners go through the implementation process.

Again, this rule is only mandatory for affordable communities. But affordable community property managers will likely want to reach out to a lawyer like me to get started on this process.

Just A Thought.

Occupancy standards are an issue which come up from time to time. On the one hand, a family certainly should have the right to decide the size of the apartment home they need and/or can afford.  On the other hand, management has a legitimate health and safety right to put a reasonable limit in place.  We do not want, and the law will not support, eight people living in a one bedroom unit.  The issue, of course, is where those two points intersect in 2017.

Going back as far as 1992, the U.S. Department of Housing & Urban Development issued guidance (known as the Keating Memorandum) which provided that a limit of two people per bedroom was presumptively reasonable. Since that time, however, there has been a shift away from a rigid “two people per bedroom” standard. Some states and localities have passed laws concluding that three people per bedroom is now reasonable, particularly when affordable housing is in limited supply and if rents are perceived to be high. Other localities (and the prevailing view) is that occupancy standards should be judged on a sliding scale based on the size of the apartment home. To illustrate, does the home have a den? Are the rooms large? If so, then three heartbeats per bedroom could well be reasonable. If the apartment is tiny, then perhaps two people per bedroom is appropriate.

To be sure, from a leasing office perspective, the old standard was easier to apply. As management’s lawyer, I always prefer when my employees have less discretion.

Also, here is a related issue that regularly comes up: a married couple rents a one bedroom unit. The woman gets pregnant. All good. But now there are going to be three people in the apartment. And what if it is a small home? In addition to occupancy standards, management needs to be cognizant of the protection for “familial status” in the Fair Housing Act (FHA). Management will not look good attempting to evict a family with an infant out of a one bedroom unit. The best advice is to talk with a lawyer like to ensure your property has policies in place to address these situations.

Just A Thought.

As all of us in the property ownership/management business know, communities get bought and sold from time to time. Indeed, a property can be sold many years (even decades) after it was first designed and constructed. Effective in properties designed and/or constructed from 1991 on, the Fair Housing Act (FHA) requires that all multifamily construction meet a specified level of accessibility for individuals with disabilities. As a part of the law, the FHA has seven “safe harbors” that design and construction firms must follow.  Notably, while the Americans With Disability Act (ADA) and the FHA share some elements, simply following the ADA may not be enough to ensure your project is in compliance with the FHA.

So, what happens to a subsequent owner or purchaser of a property built after the effective date of the statute? Are they on the hook for deficiencies in the design and/or construction that took place long before they bought the property? Most likely not.

There is a very strong appellate opinion from the 11^th Circuit Court of Appeals as well as guidance from the U.S. Department of Justice and the U.S. Department of Housing & Urban Development noting that a subsequent property owner who had no involvement in the initial design and construction should not have liability arising from the improper design and/or constructions. That is the good news. The less good news is that in the event the property faces a FHA accessibility lawsuit, the new owner will most likely be named as a nominal defendant required to provide access to the property for what can be costly repairs and/or retrofits.  Even if those repairs are funded by someone else.

What should an individual or entity contemplating buying a community built after 1991 do? My recommendation is to do a FHA accessibility review as a part of your due diligence process. And if you are buying from the original owner/developer, check on the status of their insurance for these types of claims. You will be glad you did.

Just A Thought.

While many apartment communities are “pet friendly” and welcome animals, almost every community has restrictions concerning, for example, certain breeds and/or weight limits for pets. In addition to the community policy on animals, many local jurisdictions similarly ban some dog breeds pursuant to a county or city ordinance. The question that comes to my desk is what happens when a resident submits a request for a service or companion animal as a reasonable accommodation pursuant to the federal Fair Housing Act (FHA) that would otherwise run afoul of the county or city ordinance because of the breed of the dog? Courts have answered this question by concluding that enforcing a city or county ordinance banning certain breeds would violate the FHA by permitting a discriminatory housing practice. In short, the federal statute controls.

Now, there is another step for management to take. We can undertake an analysis to determine if the animal at issue poses a “direct threat” to other residents, to the property, and/or to the leasing office staff. A “direct threat” must be particularized to the specific animal and not based on a generalized stereotype. For example, management could not simply conclude that because pit bulls are generally restricted by a county ordinance, all pit bulls are therefore a “direct threat” and are banned from our property, even as a companion animal. In order to make such a conclusion, management needs to have objective evidence that the specific animal in question has behaved in such a manner to be a “direct threat” (and such behavior likely cannot be remedied) before making such a determination.

You might want to reach out to a lawyer like me if this issue comes up at your property so you can review the appropriate analysis in an effort to avoid needing to defend against a discrimination complaint.

Just A Thought.

Advertising your property is a good way to get apartments filled. But marketing a community can create a handful of fair housing challenges concerning the use of advertising.  First, remember that advertising is covered under the Fair Housing Act (FHA). When you advertise, do it in a way to reach as many demographic groups as possible. For example, when using people, be certain your advertising copy contains individuals of multiple races. Does that mean you cannot show a family of a single race in one shot? Of course not. But it does mean that management will want to avoid the situation of only having one race in all of your advertising photographs. I have no issue with you including shots of individuals, couples, and families.  In short, mix it up.

Particularly if your property is located in an area with a diverse mix of potential applicants, look to advertise (for example, local newspapers or radio stations that reach certain demographic groups) in places that have the chance to reach individuals of different backgrounds who might not see an ad in a traditional news outlet.

Next, I recommend avoiding using religious landmarks (such as churches, mosques, or synagogues) in your ad. Writing that your property is “near Christ the King Church” could be read as favoring one religion over another. If you want to use some type of landmark, try a park, a shopping center, or perhaps a local train/subway line. To be sure, you can absolutely note that the property is conveniently located near public transportation, shopping, and local schools.

If you decide to run a discounted rent special in an effort to drive new residents, remember to offer that incentive to everyone who applies during the time of the promotion. You could well need to speak with a lawyer like me if your leasing office picks and chooses which applicants get offered the promotion.

Finally, put the “Equal Housing Opportunity” logo on your ad. It is easy to find and is a best practice.

Just A Thought.

Back-to-back posts concerning the Fair Housing Act (FHA) and federal courts. Last week, in what I believe is another decision of first impression, a federal district court judge in Colorado concluded that the FHA prohibits discrimination against LGBT individuals. While the FHA prohibits discrimination because of sex (added as a protected class in 1974), familial status (1988), and/or national origin (1968), the statute says nothing about sexual orientation or gender identity and the issue had been in question for some time.

The facts here involved a lesbian couple (one of the women is transgender) with two children who, because of their “unique relationship,” had their application for a rental townhouse denied. They continued to engage with the landlord and were told their family was not welcome to rent because another family was concerned about noise and kids. In a further reply, the landlord allegedly reported that the “status” of the couple “would be the talk of the town” and there would be no opportunity to “keep a low profile.”

The legal question involved in the case was whether “sex” (as written in the FHA) included sexual orientation and gender identity. In answering the question in the affirmative, the Colorado court looked to various employment statutes and cases interpreting those laws and concluded “stereotypical norms are no different from other stereotypes associated with women, such as the way she should dress or act…and are products of sex stereotyping.”

While this is one judge in one district court, given the trend in the law, this decision should not come as a surprise. The FHA (like the laws against employment discrimination) are intended to be applied broadly and courts will look to fill in the gaps when the statute is silent. Such is the case here.

So, what is the impact for professional apartment management? Not that much. My hope is that in 2017 the vast majority of our management offices with apartments or townhomes to rent are certainly not evaluating sexual orientation when determining if an applicant can rent a home. Nevertheless, if we do, there is now at least one judge who has specifically found that LGBT individuals are covered under the FHA.

Just A Thought.