Mission From God

For the next 15 years, Kahn worked on on fair housing matters while serving his constituency as a rabbi. Then, in 1999, the Fair Housing Council of Greater Washington joined with the Fair Employment Council of Greater Washington to form the ERC. Until 2003, he served as chair of the ERC’s personnel committee and was charged with finding a replacement for outgoing executive director Veralee Liban. But the board had other ideas. “The board felt that it was critical for someone on the inside to take over,” Kahn says. “I was in the best position. I had already taken early retirement from pulpit.”

EMBOLDENED BY A SETTLEMENT So after more than 20 years of working quietly for fair housing, Kahn stepped into the limelight at the ERC. No one noticed—that is, not until Dec. 20, 2004. On that day, the ERC filed a sweeping lawsuit against Archstone-Smith that raised the industry’s collective eyebrow. “The Archstone case came out of nowhere,” says Terry Kitay, an attorney based in Marina del Rey, Calif., who has had five of her multifamily clients sued by ERC and similar groups. “It surprised me. Private enforcement surprised me because there is [already] a mechanism for government enforcement.”

It’s not as if the apartment industry hadn’t seen accessibility suits before then. Until that point, multifamily firms were cited by government agencies such as the U.S. Department of Justice for problems at a limited number of units or properties. There hadn’t been a precedent for expansive suits from the private sector covering thousands of units.

The ERC changed that. And their first target—a respected public REIT—got even more attention. “Because it was against Archstone, everyone sat up and took notice,” Kitay says. “I had a lot of my clients ask, ‘Where did this come from?’”

Where indeed? Kahn says that when he took over the ERC in 2003, he had heard about issues at the apartment giant’s units. But it was up to ERC’s testers—people who visit homes, businesses, and public spaces to check for civil rights violations—to uncover what he calls “real” problems. “We felt compelled to do a larger investigation,” he says. “We checked out Archstone properties in 16 states. Every one was in serious violation of the FHA.”

Armed with that knowledge, Kahn met with leaders of a number of disability groups and asked how important accessible housing was to them. When they told him that it was the No. 1 problem facing people with disabilities, he says he had no choice but to go after Archstone.

According to Kahn, the ERC first went to Archstone in 2004 asking for changes, but the company ignored him. So Kahn took what he says is the next logical step and filed suit. Fewer than six months after the suit, on June 8, 2005, Archstone settled with the ERC. The settlement required 71 apartment complexes developed by the company (located in 16 states) to be surveyed. The complexes housed about 36,000 apartment units, 12,000 of which were to be retrofitted at Archstone’s expense. Kahn calls the company’s decision to settle “heroic.” Archstone declined to comment for this story.

Industry observers have another opinion. They think Archstone was too quick to settle. “Because Archstone was such an easy victory, it emboldened [the ERC],” says Chris Hanback, an attorney for Holland & Knight, a Washington, D.C.-based law firm that has seen five of its clients sued by the ERC. “From an industry perspective, the Archstone folks didn’t raise any of the legal or factual issues or put up a fight. They entered into a settlement that many of the companies in the industry said they would never do.”

David Fitch, CEO of Gables Residential, an Atlanta-based apartment owner and builder who was sued by the ERC a year ago, thinks Archstone—and the industry as a whole—should have defended itself better. “I think it was somewhat unfortunate that there was not more time and more of an industry-level response and process taken to resolve the claim when it was brought up initially,” he says. Gables’ lawsuit, meanwhile, is still pending.

NO SUCH THING AS NEGOTIATION Archstone got the industry’s attention. And after that victory, the ERC took on steam. By mid-September 2005, the suits were being filed at a fast and furious pace. As if Kahn was reading a phone book listing of apartment companies, ERC sued two highly respected apartment owners and East Coast operators: AvalonBay Communities and The Bozzuto Group.