Overarching Federal Requirements: Key Issues and Emerging Trends

1. Overarching Federal Requirements: Key Issues and Emerging Trends Harry J. Kelly, Esq. May 11, 2007

2. Overarching Federal Requirements • Fair housing, accessible design and other Federal laws present critical issues for the ownership and management issues • Impact involves everyone – owner, manager, investors and tenants – and all should be aware of compliance obligations

3. Overarching Federal Requirements • The Fair Housing Act • Section 504 of the Rehabilitation Act of 1973 • The Americans with Disabilities Act • Lead-Based Paint Prevention Act • Title VI of the Civil Rights Act of 1964

4. Overarching Federal Requirements Fair Housing Act prohibits discrimination on the basis of • Race • Color • Religion • National origin • Sex • Familial status • Handicap (or disability) • Owners need to consult state, local rules that may impose additional prohibitions (e.g., age, sexual orientation, source of income, etc.)

5. Overarching Federal Requirements Under the Fair Housing Act, properties built for initial occupancy after March 13, 1991 must satisfy certain design requirements: • Public/common areas must be readily accessible to persons with disabilities • All doors designed to allow passage into and within the units must be sufficiently wide to allow passage by a person in a wheelchair • Accessible routes into and through the units must be provided • Electrical and environmental controls must be in accessible locations • Bathroom walls must have reinforcements to allow later installation of grab bars • Bedrooms and bathrooms must be accessible to persons in wheelchair

6. Overarching Federal Requirements Section 504 imposes additional accessibility requirements on multifamily housing properties that receive “federal financial assistance” • Reasonable accommodation • Accessible design for • new construction • 5% must be accessible • substantial alterations • alterations = 75% of replacement value of property • other alterations • goal: over time, as elements replaced, 5% of units will be accessible

7. Overarching Federal Requirements Section 504 • Exceptions: • Undue financial and administrative burdens • Structural elements

8. Overarching Federal Requirements 1. “Elderly Housing” v. “Housing for Older Persons” • “Housing for Older Persons” (“HOPA”) • Housing specifically designated by HUD • Properties that are intended for and solely occupied by persons 62 years and older • Properties at which at least 80 percent of the units are occupied by at least one person age 55 or older; must show intent to operate as housing for older persons

9. Overarching Federal Requirements “Elderly Housing” is a term applied to certain housing that operates under one or more HUD programs, such as: • Section 8 elderly housing • Section 221(d)(3)/221(d)(4) elderly housing • Section 202 • These programs predate the HOPA rules; generally, this is housing intended for persons 62 years or older • But may also include “elderly families,” meaning that at least one person may be younger than 62 years

10. Overarching Federal Requirements The distinctions between HOPA and elderly housing can cause unexpected problems • For example, HUD insured housing that may comply with the Fair Housing Act’s HOPA rules may not be able to exclude families with children • Current HUD policy is that most HUD insured housing cannot exclude families with children • Policy appears to be regulatory, not statutory, and may be clarified by the agency

11. Overarching Federal Requirements • Discriminating Among Disabilities • Fair Housing Act prohibits discrimination against people with disabilities, but… • What if you want to provide services to certain disabled persons and not to others (e.g., assistance focused on persons with AIDS)? • Generally, such housing is not permitted • Some HUD-subsidized housing may cater to specific groups of disabled, but difficult to get HUD authorization • Example: would allocating Section 8 vouchers to assisted living facility constitute discrimination against disabled persons who may want those vouchers?

12. Overarching Federal Requirements • Reasonable Accommodations • Both the Fair Housing Act and Section 504 require owners to make reasonable accommodations for persons with disabilities, • But the nature of those duties is not identical and owners need to understand the distinctions • Under Fair Housing Act, owners must permit: • Reasonable Accommodations: a change in policy or practice to accommodate disabled person (e.g., allowing seeing eye dogs or other assistance animals) • Reasonable Modifications: a physical modification to a property made at the disabled tenant’s expense

13. Overarching Federal Requirements Under Section 504, one term – reasonable accommodation – covers both concepts • The major distinction is that under Section 504, owners must pay the cost of making modifications requested by tenants • Additionally, Section 504 has been interpreted as imposing an affirmative duty on owners to make properties readily accessible to persons with disabilities • Under both Fair Housing Act and Section 504, owners need to adopt clear policies to guide both tenants and staff concerning when reasonable accommodations/modifications are appropriate

14. Overarching Federal Requirements What is “reasonable”? • An owner may not ask a tenant/applicant if s/he has a disability • But you may ask whether the requested accommodation is reasonable in light of the disability asserted.

15. Overarching Federal Requirements Owner/Manager must create a written reasonable accommodation policy • Staff/tenants/applicants need a clear statement of what the rules are • Allows training/adaptation as situation requires • Demonstrates intent to comply with legal obligations

16. Overarching Federal Requirements All properties must • Keep a written log of reasonable accommodation requests • Communicate results with tenants/applicants in writing • Permit some form of appeal

17. Overarching Federal Requirements • Managing Preferences • Owners/managers adopt preferences for marketing/regulatory reasons • HUD rules allow preferences in Section 8 units • Residency preferences (but not requirements!) • Working families • Persons with disabilities • Victims of domestic violence • Single persons who are elderly, disabled, etc. vs. other singles • Caution: listed preferences may be deemed discriminatory!

18. Overarching Federal Requirements • Workforce housing • Increasingly popular way to build affordable housing for police, firefighters, EMTs, teachers • But recent IRS guidance suggests that housing intended for a single occupation does not meet general public use requirement, not eligible for tax credits

19. Overarching Federal Requirements • Lead-Based Paint • HUD has adopted lengthy LBP assessment, control, remediation and notification rules (24 CFR Part 35) • Keyed to age of property, and type of subsidy it receives • Some housing may fit into more than one category; most protective level applies

20. Overarching Federal Requirements 6. Limited English Proficiency (LEP) • HUD: failure to provide LEP serves may constitute violation of Title VI of ’64 Civil Rights Act, national origin discrimination • Issue final guidance in January 2007 • Rules dictate LEP assistance by all recipients of “federal financial assistance” (Section 8, IRP, not HUD mortgage insurance)

21. Overarching Federal Requirements Four-factor test: • Number or proportion of population with LEP needs • Frequency of contact with LEP persons • Nature and importance of program, activity or service to people’s lives • Resources available to recipient/cost • But cost will not excuse compliance!!!

22. Overarching Federal Requirements Based on four-factor test, develop language assistance plan (“LAP”), including • Determine nature of contacts with LEP persons • Hire/train staff • Identify key documents

23. Overarching Federal Requirements Next, implement LAP • Hire bilingual staff • Obtain interpretation assistance • Translate key documents

24. Overarching Federal Requirements Owners’ Response: • Owners/managers have long objected that these requirements are too burdensome, require them to perform translation/interpretation services in excess of what LEP population really needs • Argue that at a minimum, HUD should translate model documents into other languages

25. Overarching Federal Requirements • Fair Housing Enforcement • Administrative complaints • Federal complaints • State equivalence enforcement • DOJ jurisdiction