Since 2004, one such organization, a Washington, D.C.-based nonprofit, the Equal Rights Center (ERC), has been particularly active doing just that, bringing lawsuits against multifamily firms that they feel do not embrace the letter of federal accessibility laws. [See “Mission From God,” on page 44.] Their involvement has created a ripple effect in the industry, beginning in 2005 when Denver-based REIT Archstone-Smith reached a settlement with the ERC to pay more than $20 million in damages, attorney’s fees, and remediation expenses for 12,000 units, a whopping third of the firm’s entire portfolio.
“A lot of people in the industry were upset with that settlement,” says Mike Skojec, Evelius & Jones, who is familiar with the Archstone proceedings. “They feel it set an unreasonable precedent and expectation from advocacy groups regarding what they could gain from allegations and the threat of litigation. Archstone settled very quickly for a number of business reasons, but it ended up costing them around $48 million to $50 million to 3 x 71 properties, according to public [records].”
Those who thought the Archstone settlement was the wrong move at the wrong time might have been right. Following the Archstone settlement, ERC filed lawsuits against 10 major multifamily firms, including industry stalwarts such as Atlanta-based Trammel Crow Residential and Bethesda, Md.-based The Bozzuto Group.
In the case of Bozzuto, after two years of negotiations, the firm agreed to retrofit more than 2,000 apartments and condos at 27 properties and also pledged to extend accessibility features into many of its townhome and single-family units that are not covered under fair housing laws.
ERC’s litigation success has the industry wary of similar advocacy groups with the potential to be a new thorn in the side of real estate developers. Consider what happened in April when an advocacy consortium comprising the Dayton, Ohio-based Miami Valley Fair Housing Center, the Metropolitan Milwaukee Fair Housing Council, and the Washington, D.C.-based National Fair Housing Alliance filed suit against Columbus, Ohio-based developer Steiner + Associates, alleging accessibility violations at 272 apartments across three properties in Ohio, Missouri, and Wisconsin. The lawsuit also alleges a pattern and practice of discrimination against people with disabilities—that allegation acts as a clear trigger for DoJ involvement.
UNIVERSAL DESIGN MAKES GOOD BUSINESS SENSE Ultimately, it will take more than enforcement to give power to both the spirit and the letter of fair housing accessibility laws. It will take a meeting of the minds among industry leaders. Even within the enforcement community, there is a growing emphasis on consensus building as opposed to gotcha inspections and strong-arm tactics. Kendrick points to the Texas Apartment Association, which approached HUD in 2007 looking for guidance. “This is a liability statute, and ultimately [developers] will always be held liable,” Kendrick says. “So what can we do? We can educate you. With the Texas Apartment Association, we agreed to give them technical assistance and provide some training so that they can police themselves.”
Industry ire could be further minimized as companies such as Bozzuto take a lead role in over-accommodating the requests of the enforcement and advocacy communities. “I think there has been a lack of trust on both sides,” Skojec says. “I hope that will change over time. If we are engaged in discussions and not in the courthouse battling tooth and nail, we might make progress.”
Interestingly, multifamily professionals may find some relief from liability in federal court. In May, the 9th U.S. Circuit Court of Appeals upheld a decision in Garcia v. Brockway that a lawsuit for design and construction discrimination under the FHA must be brought within two years of the issuance of a certificate of occupancy. That statute of limitations will take effect in the Western states under that court’s jurisdiction—including Arizona, California, Nevada, and Oregon—pending appeal to the U.S. Supreme Court.
And the standards continue to be reevaluated. Take DoJ, which is considering adopting revised rules to the ADA that will provide greater latitude in construction formulations. For example, the changes will allow for center line distances from water closets to walls of between 17 inches and 19 inches, compared to the current requirement of an exact 18 inches.
Advocates of accessible housing also argue that there is an economic incentive for apartment developers to embrace universal design, which provides accessibility for all persons and does not stigmatize the disabled with separate entrances or facilities. “Universal design has this stigma of being ugly, but I challenge anyone to come into my home and think that a person in a wheelchair lives there,” Disaboom.com’s House says. “That is the beauty of universal design—it applies to everyone. There are millions of disabled persons who are struggling to find adequate housing for rent. Have you ever had a vacancy issue or problems leasing up a property? Make a unit accessible, and I promise that unit will be occupied.”
