Fair Housing for New Construction

Since the provisions of the Fair Housing Act Design Manual have been virtually untouched for more than 20 years, most developers and builders are familiar with the requirements for new construction—still, lawsuits do arise. For those who are unfamiliar with the design manual, HUD provides information on other codes and standards that meet the guidelines’ requirements and is considered a safe harbor.

For new construction, the most important rule is that any property being built today must include specific design features to ensure accessibility for disabled residents. While the requirements are numerous and rigorous, in a nutshell, the Fair Housing Act requires that apartment buildings be built in a manner that allows a person in a wheelchair to approach the entrance, enter the unit and move about it with ease, and use kitchen, bathroom facilities and common areas.

“This means close attention must be paid to sidewalk slopes, door widths, space between walls, the placement of environmental controls and outlets, and kitchen and bathroom space,” Jeanne McGlynn Delgado, the National Multi Housing Council’s (NMHC) V.P. of business operations and risk management policy, says. “It should be noted that these requirements are in effect for properties built after March 1991. If the property has an elevator, all units must be in compliance. If it is a garden-style and [has] no elevator, then only the ground floor units must meet the requirements.”

In addition to the Fair Housing Act, apartment property owners must also pay close attention to the Americans with Disabilities Act (ADA). Much broader in its application, the ADA prohibits discrimination in the areas of employment, state and local government commercial facilities, transportation, telecommunications, and public accommodations.

Multifamily property owner compliance for ADA would be found in the public accommodations section, which are those areas of the apartment community that are “open to the public.” This generally includes the leasing office, parking lots and sidewalks.

While the accessibility features are generally the same as those found in the Fair Housing Act, there are some important distinctions. The Fair Housing Act applies to properties built for first occupancy after March 13, 1991. Properties built prior to then have no obligation to come into compliance with some exceptions for reasonable modification requests made by residents.

The ADA covers properties that were built after January 26, 1993. However, for properties built before then, the owner must comply with an ongoing barrier removal obligation subject to a certain level of difficulty and expense threshold (i.e. readily achievable). The law also requires alterations made after the 1993 effective date to be in compliance with the accessibility provisions.

“In 2010, the DOJ issued revised regulations to the ADA. This is the first comprehensive revision since the ADA was passed two decades ago, and although many of the changes are substantial, most do not apply to apartments,” Delgado says. “Key changes include revised reach ranges and pathway running and cross slopes. While revised in ADA, these changes are consistent with the design and construction elements of the Fair Housing Act and are therefore familiar to our industry.”

If an apartment community gets state or local funding, it automatically triggers the 2010 ADA standards and requires a different unit type that must be provided in five percent of all apartments.

Changes and Congress

According to Steve Orlowski, NAHB’s director of construction, codes and standards, the current 2009 ICC A117.1 standard is being revised by the International Code Council.

“The first meeting was held in August of 2012, where the consensus committee began reviewing more than 275 proposed changes to the 2009 standard. There are several significant changes being considered by the committee that will have an impact on the design and cost of new construction,” Orlowski says. “Some items up for discussion by the committee include increases in the required clear floor space for wheeled mobility devices, increasing the turning space in circular areas, increasing widths for maneuvering around corners along the accessible route, and raising the minimum reach ranges to operable devices.”

While the committee has not completed its review, nor have any ballots been cast on these proposed changes, NAHB is urging the members of the committee to weigh these proposed changes carefully. In the last several Congresses, legislation was introduced to stem what appeared to be a growing trend in what have been dubbed “drive by” lawsuits. These are ADA complaints filed against businesses alleging failure to remove a structural barrier to entry in areas of public accommodations (i.e. steps). In most cases, the plaintiff demands settlement money in lieu of filing a lawsuit.

Delgado says that legislation under consideration in past Congresses provides a business owner the opportunity to cure a deficiency prior to the initiation of a civil action, which can be helpful to the multifamily industry and would be supported by NMHC if re-introduced in the next Congress.

Pitfalls and tricky situations

Dominic Marinelli, vice president of the United Spinal Association’s accessibility services program, who worked on the National Accessibility Standard, says that the provision was designed to benefit disabled people—not as the litigious monster it has become.

“Litigation on fair housing is really off the charts, and we’ve tried to work with developers and architects and builders with complying with these requirements,” he says. “What developers have to understand is that they need to comply with the federal law, even if there’s no federal funds involved.”

The No. 1 area where apartment communities run into trouble concerns creating a safe accessible route from the sidewalk to public streets and different amenities on the site.

“Inside the buildings, the big problem we see involves the toilet next to the wall, which has to be 18 inches from the wall and if you don’t do that, it will cause problems,” Marinelli says. “Another huge issue inside the units are the electrical receptacles behind the kitchen counters. The center line has to be 46 inches and 12 inches away from any obstruction, and we are not getting this done.”

According to Jeff Augello, a staff counsel at NAHB’s legal advocacy department, one of the biggest mistakes that apartment builders make is confusing the Fair Housing Act with the American Disabilities Act.

“The Fair Housing Act has specific design standards for multifamily housing, and they are two separate and distinct laws,” he says. “We see a lot of builders rely on their engineers or architects, and you should be able to, but you just can’t. What happens is a builder will get sued and try to go after the architects, but the responsibility falls on them.”

Plus, the reputation of the builder will take a huge hit when Fair Housing Act violations occur.

“This is an emotionally charged issue, and if you don’t design and construct in accordance, you’re discriminating. And when you get tagged with that, you lose your good will, and that’s difficult to recover from,” Augello says. “You also become a future target.”

The bottom line

The cost of legal representation and building retrofits can be very costly. In a report on retrofitting that the NAHB conducted, looking at Fair Housing Act cases between 1997 to 2004, typically the average unit retrofit cost anywhere from $2,000 to $5,000.

“For example, in one case where 300 apartment units needed to be changed, it costs $5,000 per unit so it ran into $1,500,000,” Augello says. “That doesn’t even consider cost of legal fees, civil damages and claims against the engineer or architect.”

Even if a property owner believes the property is in compliance, the cost to defend against a complaint can zap resources that are badly needed elsewhere and cause reputational damage.

“We encourage our members to become educated about the laws and to make sure their development partners are educated and consider hiring an accessibility expert to help navigate these complex requirements,” Delgado says.

In response to the large number of lawsuits filed against member companies alleging non-compliance with the FHA/ADA accessibility requirements, NMHC/NAA commissioned a study in 2010 to evaluate the scientific basis for the accessibility standards, such as the safe harbors identified by HUD. This study set out to determine if these standards are the only means of achieving compliance in certain areas.

The study, “Accessibility Standards for Multifamily Housing: Report on Approaches with Focus on Slope, Reach, Tolerance and Measurement,” rejected the notion that accessibility can only be achieved by strict adherence to a stated standard and supports the adoption of construction tolerance for certain elements of design such as slope and reach ranges.

“This study can be helpful to companies facing complaints alleging violations for failure to build to the HUD Design Manual’s strict standards,” Delgado says. “The Design Manual and other government safe harbors do not allow for construction tolerances and creates the impression that strict adherence to these standards is the only means to achieve accessibility. This report calls that into question and may be helpful to members either defending against claims or in settlement negotiations.”