Senior Housing – What the Law Requires to Exclude Families with Children from Multifamily Housing

person A.J. Johnson today 05/04/2019

When the Fair Housing Amendments Act of 1988 passed, amending the Fair Housing Act, it added protections for families with children as well as for the disabled. The familial status provisions made it unlawful to discriminate against applicants or residents because they have, or expect to have, a child under 18 in the household. The children may live with (1) a parent; (2) an individual with legal custody; or (3) an individual who has the written permission of the parent or custodian.

The protections also apply to pregnant women and anyone in the process of securing legal custody of children under 18.

Congress did permit one exception to the protection for families with children - senior housing or housing for older persons.

There are three types of communities that are eligible for the senior housing exemption:

  1. Publicly funded senior housing communities: These are communities where HUD has determined that the dwelling is specifically designed for and occupied by elderly persons under a federal, state, or local government program;
  2. 62 and older communities: Every resident in the community must be 62 or older; or
  3. 55 and over communities: At least one person age 55 or older must live in at least 80% of the occupied units and it must be clear that the intent of the property is to serve only people age 55 and older.

Basic Rules for Qualifying as Senior Housing

  1. Comply with the technical requirements for the senior housing exemption - complying with the law governing the 62+ exemption is easy; everyone living in the community must be 62 or older. For example,  a 62 year old man with a 59 year old wife would not be eligible. The 55+ rule is more difficult to understand and comply with. To qualify, a property must meet each of the following requirements: (1)at least 80% of the occupied units must have at least one occupant who is 55 or older; (2) the community must publish and adhere to policies and procedures that demonstrate the intent to operate as "55 or older" housing; and (3) the community must comply with HUD’s regulatory requirements for age verification of residents. Each of these three requirements must be fully understood in order to ensure compliance with the law.
    1. The 80% Rule: at least one person age 55+ must live in 80% of the occupied units. The law does not restrict the age of the other occupants in those units. The "occupied" rule applies to temporarily vacant units if the primary occupant has resided in the unit in the past year and intends to return on a periodic basis. It is a good idea to always have more than 80% of units occupied by someone 55+ so that if an older person with a younger spouse dies, the surviving spouse will not have to move.
    2. Intent to operate as senior housing: a community must publish and adhere to policies and procedures that demonstrate its intent to operate as housing for older persons. For example, (1) written rules, regulations, lease provisions, etc., are clearly intended for seniors; (2) the actual practices of the community enforce the rules; (3)the advertising should be clearly intended to attract only seniors; and (4)the community must have age verification procedures and be able to prove required occupancy.
    3. Verification of occupancy: through the use of reliable surveys and affidavits, owners must be able to produce verification of compliance with the 80% rule. The age verification procedure should be part of the move-in process and then once every two years. While HUD will accept a certification signed by any household member age 18+ that at least one person in the unit is 55+, it is best to have actual verification of age in the file (e.g., birth certificate, driver’s license, passport, immigration card, etc.).
  2. Market the community as senior housing - advertising and marketing are a critical element of a property’s ability to qualify as senior housing. The property must demonstrate a clear intent to provide housing for older persons. Using the wrong words to describe the property could undercut a property’s ability to demonstrate an intent to operate as "55 or older" housing. For example, properties should avoid terms such as "active adult," "empty nester," or "adult only." However, the use of one of these terms, by itself, does not destroy the community’s ability to meet the intent requirement. All the elements of the project’s marketing and operation are taken into consideration. However, better terms are "senior housing," "55 and older community," "retirement community."
  3. Don’t discriminate based on race or other protected characteristics - e.g., a senior facility that gives preference to applicants of a certain religion would be in violation of the law.
  4. Enforce rules to prevent harassment by or against residents - bullying or any other form of harassment based on protected characteristics should not be tolerated. The following case is instructive in this area:
    1. Wetzel v. Glen Street Andrews Living Community, August 2018.
      1. Facts:
        1. The resident alleged that she endured months of physical and verbal abuse by other residents at an Illinois retirement community due to her sexual orientation.
        2. Despite her complaints, the community did nothing to stop it, and in fact retaliated against her because of her complaints.
        3. The resident was able to prove that (1) she had endured unwelcome harassment based on a protected characteristic, and (2) the harassment was severe or pervasive enough to interfere with her tenancy.
      2. Ruling: A federal court has reinstated the case, ruling that employment discrimination based on sexual orientation qualifies as discrimination based on sex and the same is true for housing claims. The court also ruled that the harassment was severe and pervasive - it lasted for 15 months and involved threats, slurs, derisive comments about her family, physical violence, and spit. If the court determines that management knew of the harassment and was indifferent to it, the Fair Housing Act will have been violated.

It should be noted that this court ruling applies in Illinois, Indiana, and Wisconsin. Another federal court in Missouri found that discrimination based on sexual orientation is not sex discrimination (Walsh v. Friendship Village of South County, January 2019).

Ultimately, unless a senior housing community rents only to persons age 62 or older, great care must be taken with regard to advertising, programs, and procedures to ensure that the property clearly intends only to rent to older persons.

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Village of Stratton (2002) case, highlighting how requirements to obtain permits before engaging in door-to-door advocacy fundamentally conflicts with our conception of a free society. This case built upon decades of precedent established in cases like Lovell v. City of Griffin (1938), Schneider v. State(1939), and Cantwell v. Connecticut (1940), where the Court consistently struck down ordinances requiring permits for door-to-door solicitations, particularly those involving religious expression. Private Property Considerations The application of these constitutional principles becomes more nuanced in the context of private property, such as apartment communities. While public spaces must generally respect constitutional freedoms of expression, private property owners maintain certain rights to control access and activities on their premises. Key factors affecting an apartment community s ability to restrict canvassing include: 1. Property Access Structure: Communities with truly private roads and gated access may have greater latitude in restricting entry than those with public access points. 2. Local and State Regulations: Regulations vary significantly by jurisdiction. Some municipalities specifically exempt religious and political canvassers from solicitation restrictions, while others include them in "no solicitation ordinances. 3. Reasonable Time, Place, and Manner Restrictions: Even when canvassing must be permitted, property owners may implement reasonable restrictions regarding when and how such activities occur, provided these restrictions don t effectively eliminate the ability to canvas. Best Practices for Property Managers Property managers seeking to balance resident privacy with legal compliance should consider these approaches: 1. Review Local Laws: Understand specific municipal and state regulations governing solicitation and canvassing in your jurisdiction, as these vary widely. 2. 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Property managers should ensure residents understand they can: Post individual "No Soliciting signs on their specific units Verbally decline conversations with canvassers Report harassment or persistent unwanted contact to management Conclusion The tension between solicitation bans and constitutional protections for religious and political expression creates an ongoing challenge for apartment community management. While complete prohibition of noncommercial canvassing likely exceeds legal boundaries, thoughtful policies can balance resident privacy concerns with constitutional requirements. Property managers should approach this issue with careful consideration of local regulations, the physical structure of their communities, and the important distinction between commercial solicitation and constitutionally protected expression. 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Multifamily Housing Projects Subject to Section 504 of the Rehabilitation Act of 1973

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Only those properties that receive federal financial assistance whether directly from a federal agency or indirectly through a state or local government are subject to its requirements. The following types of multifamily housing projects are covered: 1. HUD-Assisted Multifamily Housing Multifamily projects that receive funding through programs administered by the U.S. Department of Housing and Urban Development (HUD) are unequivocally subject to Section 504. This includes: Project-Based Section 8 Housing Assistance Payments Section 202 Supportive Housing for the Elderly Section 811 Supportive Housing for Persons with Disabilities HOME Investment Partnerships Program (HOME) Community Development Block Grant Program (CDBG) Housing Opportunities for Persons With AIDS (HOPWA) Projects under these programs must comply with both physical accessibility standards and operational nondiscrimination requirements. 2. Mortgage Insurance Programs Section 504 applies to programs and activities that receive federal financial assistance, including housing programs administered by the Department of Housing and Urban Development (HUD). FHA-insured multifamily properties fall under this category because the Federal Housing Administration provides federal financial assistance through mortgage insurance. FHA insured programs subject to Section 504 include: Section 207 Rental Housing Insurance Section 213 Cooperative Housing Insurance Section 220 Rehabilitation and Neighborhood Conservation Housing Section 221(d)(3) and (d)(4) Mortgage Insurance for Rental and Cooperative Housing Section 231 Housing for Elderly Persons Section 232 Mortgage Insurance for Nursing Homes, Intermediate Care Facilities, and Board and Care Homes Section 234 Mortgage Insurance for Condominiums Section 236 Rental Housing 3. USDA Rural Development (RD) Properties Multifamily properties financed through the U.S. Department of Agriculture's Rural Development programs such as the Section 515 Rural Rental Housing Program also fall within the scope of Section 504. These properties must meet physical accessibility standards, ensure non-discriminatory policies and practices, and provide reasonable accommodations to applicants and residents with disabilities. 4. Low-Income Housing Tax Credit (LIHTC) Projects (Under Specific Conditions) The LIHTC program itself does not constitute federal financial assistance under Section 504. However, when LIHTC developments are combined with other sources of federal funding (such as HOME or CDBG), the portion of the property funded with such assistance or potentially the entire development becomes subject to Section 504 requirements. 5. Public Housing Agencies (PHAs) Section 504 covers public housing developments and programs administered by PHAs, including the Housing Choice Voucher (HCV) program. PHAs are responsible for ensuring that sufficient accessible units are available and that reasonable accommodations are provided to individuals with disabilities. Under the Housing Choice Voucher (HCV) program, when a tenant with a disability requires a modification to a unit to make it accessible, the responsibility for the cost depends on several factors: If the landlord is not receiving federal financial assistance directly (which is typical under the HCV program), they are not subject to Section 504 of the Rehabilitation Act. In this case: The landlord is not required to pay for modifications, but must allow reasonable modifications at the tenant s expense under the Fair Housing Act, unless doing so would pose an undue administrative or financial burden. The PHA may use funds (if available and if policy allows) to pay for modifications as a reasonable accommodation. Other sources, such as state or local programs, nonprofits, or disability advocacy organizations, may also assist with funding. So, unless the PHA steps in or there s an alternative funding source, the cost of a reasonable modification typically falls on the tenant but the landlord cannot legally prohibit the modification if it is reasonable and necessary for the tenant s disability. 6. State and Local Government-Funded Projects Using Federal Pass-Through Funds Any multifamily housing project funded through state or local entities utilizing federal grant programs must comply with Section 504. This includes housing initiatives financed through state housing finance agencies or municipal governments administering federal housing resources. Core Requirements of Section 504 Compliance Multifamily housing projects covered under Section 504 must adhere to various physical, operational, and programmatic accessibility requirements. These include: Accessible Units A minimum of 5% of total units must be fully accessible to individuals with mobility impairments. A minimum of 2% must be accessible to individuals with hearing or visual impairments. Design and Construction Standards New construction and substantial rehabilitation must comply with the Uniform Federal Accessibility Standards (UFAS) or other approved standards. Reasonable Accommodations Housing providers must make reasonable policy and procedural modifications to allow individuals with disabilities equal access to housing and services. Effective Communication Providers must take steps to ensure effective communication with applicants and residents with disabilities, including the provision of auxiliary aids and services when necessary. Conclusion Compliance with Section 504 of the Rehabilitation Act is not optional for multifamily housing providers receiving federal financial assistance. It is a legal obligation and a moral imperative that helps ensure equal access to housing opportunities for individuals with disabilities. Owners, developers, and managers of covered properties must proactively meet physical and programmatic requirements.

Understanding Tariffs and Their Impact on Construction Costs

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The tax burden fell disproportionately on lower-income individuals who spend more of their income on basic necessities. They couldn t generate sufficient revenue to fund modern government operations. When the global economy faltered in 1930, many nations, including the U.S., implemented protective tariffs with the Smoot-Hawley Act. Most economists view this wave of protectionism as a contributing factor to the severity of the Great Depression. Learning from this experience, the U.S. and other advanced economies gradually reduced trade barriers during the postwar period to foster economic cooperation and peace. Current Tariff Landscape Even during periods of free trade enthusiasm, tariffs never disappeared entirely. They remained relatively low in recent years, dropping to 1.5% in 2017 after decades of bipartisan efforts to establish global trade agreements. The Trump administration increased rates to approximately 3% during his previous term, which President Biden largely maintained. According to the Yale Budget Lab, the Trump administration s announced policies would raise the average tariff to 22.5% higher than during the Smoot-Hawley era and roughly equivalent to 1909 levels. Implementation Authority The scale of newly announced tariffs is significantly larger than previous ones. They affect nearly all goods from every country worldwide and invoke emergency authority not previously used for this purpose. Tariffs Impact on Construction Costs Tariffs increase construction costs through several key mechanisms: Direct price increases on imported construction materials like steel, aluminum, lumber, and other building products. These higher costs are typically passed along to developers and ultimately to end consumers. The specific impact depends on several factors: Which materials are targeted The tariff rate percentages Availability of domestic alternatives Proportion of imported versus domestic materials used The recent tariffs on imports from China (20%), Mexico, and Canada (25%) have significant implications for construction. According to the National Association of Home Builders, these tariffs could increase builder costs by approximately $7,500 to $10,000 per home for residential construction. This impact is substantial because approximately 7% of all goods used in new residential construction are imported. Critical materials like softwood lumber come predominantly from Canada (72% of imports), while gypsum for drywall is mainly sourced from Mexico (74% of imports). Multifamily Construction Impact For multifamily construction specifically, with 46% of materials sourced from these countries and 35-50% of project costs tied to finished materials, tariffs could increase material costs by 7.5%, potentially raising total construction budgets by 3-4%. Broader Effects Beyond core construction materials, reciprocal tariffs may also influence other building-related imports, such as carpeting, electrical outlets, security equipment, furniture, and tools. Projects that have already been awarded but are not yet started are likely to experience the most significant impact. Industry forecasts suggest the construction industry will feel the brunt of tariff policy changes in late 2025 and early 2026. Meanwhile, due to tariff-related inflation concerns, the Federal Reserve is expected to maintain stable interest rates through most of 2025. Recent Developments Homebuilders have been relieved, as Canada and Mexico were exempted from the latest round of tariffs, protecting key lumber and drywall component imports. Additionally, a carveout exists for lumber and copper imports. These tariff developments are challenging the U.S. housing market, which is already struggling with supply constraints and affordability issues. Developers with affordable multifamily housing projects in the pipeline or underway but for which materials have not yet been purchased should prepare for these possible increases. Developers facing this uncertainty should take a proactive, strategic approach. Here are some of the steps they should consider: 1. Lock in Pricing Where Possible Negotiate Early Procurement Contracts: Secure pricing and delivery timelines now for materials that may be subject to tariffs. Bulk Purchasing: If financially feasible and storage is available, purchase critical materials before the tariff is implemented. 2. Revisit and Update Budgets Include Contingency Allowances: Adjust budgets to account for a potential spike in material costs (e.g., steel, aluminum, electrical components). Run Revised Pro Formas: Model project feasibility under different tariff scenarios to understand the margin of financial risk. 3. Communicate with Key Stakeholders Inform Lenders and Syndicators: Ensure your financial partners know potential cost escalations and any resulting impact on project viability or timelines. Coordinate with HFAs and Local Agencies: If the deal includes LIHTCs or public funding, discuss possible adjustments or relief options (e.g., basis boosts, revised gap financing). 4. Evaluate Alternative Materials and Suppliers Source Domestic Alternatives: Tariffs often target imported materials. Switching to local or tariff-exempt sources could mitigate cost hikes. Value Engineering: Reassess design specs to identify non-critical elements where substitutions could reduce costs. 5. Monitor Policy and Industry Updates Stay Informed: Watch for updates on tariff decisions and industry responses through trade associations (e.g., NAHB, NMHC). Engage in Advocacy: Support efforts to exempt affordable housing materials from tariffs or seek policy carve-outs. 6. Build Schedule Flexibility Buffer Time for Delays: Tariffs often disrupt supply chains, so build in extra time for procurement and delivery to avoid construction slowdowns. 7. Document Impacts Track Cost Changes: Keep records showing cost increases due to tariffs this can be useful when requesting additional funding or extensions from oversight bodies. Being proactive can help developers manage risk rather than be blindsided by rising costs. In this environment, a smart developer remains nimble, communicates clearly, and plans for the worst while hoping for the best.

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