A fair housing non-profit organization is suing two DeWitt, New York apartment complexes, alleging that they discriminate against foreign-born residents by refusing to rent to anyone who does not have someone who speaks English fluently living with them.
CNY Fair Housing filed the lawsuit in U.S. District Court in Syracuse, asking the Court to declare that Swiss Village Apartments and the Alps at Swiss Village are violating the federal Fair Housing Act with their policy of not renting to individuals or families with a limited ability to speak English.
The lawsuit was filed in November 2021, and also seeks an order barring the complexes from continuing their policy and asks the court to award the organization unspecified compensatory and punitive damages.
CNY Fair Housing conducted a test of the properties after being alerted to the policy by a local housing services provider. In June 2019 and August 2020, two CNY staff posed as representatives of prospective tenants who speak only limited English. When the testers called the complexes, they were told by a leasing agent that tenants must be able to read and speak English so they could communicate with the site’s managers about any issues relating to their apartments.
When the testers said they would serve as translators for the applicants, they were told that someone living in the apartment had to be able to speak English.
The Landlord has asked that the court dismiss the case, arguing that (1) a prospective tenant’s language or Limited English Proficiency (LEP) status was not a protected class under federal or state fair housing law, and (2) the complaint failed to otherwise identify the prospective tenant’s race or national origin.
CNY Fair Housing has responded that consistent with HUD guidance and case law, a prospective tenant may adequately plead discrimination based on race or national origin using proof of a housing policy employing language-related criteria. The federal government submitted a statement of interest supporting the group's position.
The court has ruled against the Landlord and will not dismiss the case. The court gave deference to a 2016 HUD Guidance that concluded that LEP was often used as a pretext for national origin discrimination and that the FHA may be violated by "selective application of a language-related policy, or use of LEP as a pretext for unequal treatment of individuals based on race, national origin, or other protected characteristics." The court also found that nothing in the language of the FHA or related regulations prohibited the use of proof of LEP criteria as a pretext for race or national origin discrimination. Also, the group did not need to identify the specific national origin or race of particular tenants in order to state an initial case of discrimination under the FHA.
Unless the two parties settle the case, it now appears that the suit will be heard in federal court.
This case serves as a reminder that landlords should never have a policy requiring that applicants or residents speak English as a condition of occupancy.
Meta (formerly Facebook) Settles Fair Housing Complaint with DOJ
The Department of Justice (DOJ) has entered into a Settlement Agreement resolving allegations that Meta Platforms, Inc., formerly known as Facebook, Inc., has engaged in discriminatory advertising in violation of the Fair Housing Act (FHA). The proposed agreement resolves a federal lawsuit alleging that Meta s housing advertising system discriminates against Facebook users based on their race, color, religion, sex, disability, familial status, and national origin. Meta uses algorithms in determining which Facebook users receive housing ads, and these algorithms rely, in part, on characteristics protected under the FHA. Under the settlement, which still must be approved by the federal court, Meta will stop using an advertising tool for housing ads (known as the "Special Ad Audience tool) that relies on a discriminatory algorithm. Meta will also develop a new system to address racial and other disparities caused by its use of personalization algorithms in its housing ad delivery system. The settlement marks the first time that Meta will be subject to court oversight for its ad targeting and delivery system. The DOJ lawsuit alleged both disparate treatment and disparate impact discrimination. Disparate treatment because it intentionally classifies users on the basis of FHA-protected characteristics and disparate impact because the algorithms affect Facebook users differently on the basis of their membership in protected classes.
HUD Finalizes New MOR Scheduling Protocol
Section 8 properties are subject to audits and inspections known as Management & Occupancy Reviews (MORs). HUD has recently introduced a new risk-based management and occupancy review schedule. The new schedule is designed to streamline and reduce the number of MOR reviews. The final rule implementing this new schedule comes seven years after the proposed rule and goes into effect on September 26. Based on HUD data, most sites have historically received "satisfactory, "above average, or "superior MOR scores. Therefore, there is no need to review properties as frequently as in the past. The new MOR schedule establishes a frequency for completion of MORs based on a site s previous MOR score and the site s rating or classification under a risk-based model. The frequency of MORs described here will begin with the first MOR scheduled on or after September 26. The final rule changes MOR scheduling for the following Section 8 Programs: New Construction;Substantial Rehabilitation;State Housing Agencies;New Construction financed under Section 515 of the Housing Act of 1949;Loan Management Set-Aside;HAP Program for the Disposition of HUD-Owned Projects; andSection 202/8 Program The schedule does not apply to restructured Mark-Market properties. Classifications The new MOR schedule establishes a frequency for the completion of MORs based on a site s previous MOR score and its risk classification. The risk classifications are: Not Troubled;Potentially Troubled; orTroubled The risk rating considers the site s financial characteristics such as low debt service coverage ratio, recent defaults, excessive vacancies, low REAC scores, tenant input provided directly to HUD, and pending foreclosure or partial claim payments. The New Schedule Section 8 sites that are "Potentially Troubled or "Troubled will automatically be reviewed annually. The new scheduling changes apply only to sites with a risk classification of "Not Troubled. If a site s risk classification is "Not Troubled and the MOR review conducted on September 26 or later is "Unsatisfactory or "Below Average, the next MOR will be conducted within 12 months.If a site s risk classification is "Not Troubled and the MOR review conducted on September 26 or later is "Satisfactory, the next MOR will be conducted within 24 months.If a site s risk classification is "Not Troubled and the MOR review conducted on September 26 or later is "Above Average or "Superior, the next MOR will be conducted within 36 months. Implementation Owners and managers will know the timeframe for the site s next review at the first MOR following September 26. In addition to the noted schedule change, the final rule states that a MOR must be conducted within six months of a management or ownership change regardless of the results of the previous MOR. It should be noted that MORs are not the same as REAC physical inspections, which are not affected by the new rule.
A. J. Johnson to Host Live Webinar on Interviewing Skills for Affordable Housing Managers
A. J. Johnson will be conducting a webinar on September 29, 2022, on Interviewing Skills for Affordable Housing Managers. The Webinar will be held from 1:00 PM to 4:00 PM Eastern time. One of the most important skills any affordable housing manager can possess is the ability to interview applicants and residents and obtain the information required to determine eligibility - this is also one of the greatest weaknesses of most affordable housing managers. This training has been developed to address that weakness. This three-hour session focuses on the interview process and provides concepts and tools that will aid managers as they conduct their interviews. Techniques apply to all interview settings including initial eligibility interviews, interim certifications, and annual recertifications. The primary emphasis is on the initial eligibility interview since it is so critical to the housing process. The skills taught during this session will also assist managers in detecting fraud and in dealing with third parties when resolving discrepancies. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule.
IRS Final Regulation on Average Income Set-Aside Nearing Release
The IRS has sent final regulations relating to the Average Income (AI) test to the U.S. Office of Management & Budget for review. The final regulations were received by OMB on September 12, 2022. This is the final step before the publication of the regulation by the IRS. The Treasury Department and IRS first proposed these regulations in October 2020, and parts of the proposed reg faced harsh criticism from the LIHTC industry. It is hoped that the industry recommendations relative to the rule will be incorporated in the final regulation. OMB has provided no timeframe for their review, but it is hoped that the final regulation will be published shortly, and we can move forward with more certainty on exactly what will be required relative to AI compliance. OMB typically reviews proposed regulations within 60 days, which would mean final publication sometime in November. However, since the Biden Administration has committed to finalizing the proposed rules for the AI set aside as part of its Housing Supply Action Plan, a shorter timeframe is possible.