Despite a landmark fair housing settlement between the National Fair Housing Alliance and the A.G. Spanos Cos. announced earlier this month, the pace of fair housing lawsuits levied against multifamily developers is likely to continue unabated, said a panel of experts at the International Builder Show (IBS) in Las Vegas earlier this week.
Speaking before a sparse audience during an educational panel called “Fair Housing Accessibility: The Building Inspector Approved Occupancy, but We’re Still Getting Sued,” Department of Justice Deputy Chief Timothy Moran of the Civil Rights Division, Housing and Civil Enforcement Section warned that the DOJ will continue to actively pursue multifamily violators of the Fair Housing Act, whether those violators are brought to the attention of the Justice Department via private litigators, internal departmental investigations, or via referral from the U.S. Department of Housing and Urban Development (HUD).
“The bottom line is that there is federal law caused the Fair Housing Act (FHA) that requires multifamily housing to meet certain accessibility requirements, and that law is independent of the local building code and enforcement structure,” Moran said. “Even if you get a permit, someone can still charge that you did not comply with the FHA, and if they win, you need to fix the things that are wrong.”
On January 13, the Washington D.C.-based National Fair Housing Alliance (NFHA) announced that it had reached a settlement with Stockton, Calif.-based multifamily builder A.G. Spanos Cos. resolving Fair Housing infraction allegations at 123 multifamily buildings in 14 states. Under the agreement, the nation’s fifth-largest builder of residential real estate will retrofit properties in Arizona, California, Colorado, Georgia, Kansas, Missouri, Nevada, New York, North Carolina, and Texas at an estimated cost of $7.4 million. The agreement also establishes a $4.2 million national fund to provide retrofitting grants to people with disabilities across the country.
“If you have not been involved in a lawsuit of this kind yet, consider yourself lucky,” Theresa Kitay of Marina del Rey, Calif.-based Kitay Law told the IBS panel attendees. “And you may be lucky, but don’t consider yourself immune. These suits are happening and will continue to happen.” Kitay and fellow panelists—including Moran, president of multifamily development firm Monument Construction Miles Haber and NAHB director of codes and standards Lawrence Brown—walked attendees through notable FHA cases, settlements, and safe harbor construction documents and manuals, which are at times overlapping and contradictory.
“I don’t mean to sound doom and gloom, but many times there is no clear-cut defense to a fair housing allegation,” Kitay said. “Different courts are interpreting the statute of limitations and standing established in landmark cases like Garcia v. Brockway differently, and the stakes continue to get higher. Ultimately I think this is something that is going to go to the Supreme Court for a major decision.” Though often on different sides of the issue, Kitay and Moran did agree on one thing: statutes of limitation and standings from previous court cases have no impact on the DOJ, which can still bring suit against developers for fair housing infractions.
Moran described the preponderance of fair housing violations that he has seen as instances where developers were either ignorant of requirements under the Fair Housing Act or ignored early warning signs and inquiries for Fair Housing advocates that eventually snowballed into serious lawsuits. “I’ve really never seen a situation where someone who knew the law and tried to do the right thing still got into trouble,” Moran said. “Choose a safe harbor, then plan, plan, plan, and you will be OK.”
Moran’s statement, while a conciliatory gesture, is likely not one that rings true given comments made as part of the A.G. Spanos/NFHA settlement. “At our very first meeting, Michael Spanos, executive vice president of the A.G. Spanos Cos., made it clear that he wanted to be in compliance with the Fair Housing Act,” NFHA president and CEO Shanna Smith said in a statement announcing the agreement. “Indeed, the wide-ranging relief described in this agreement is a testament to Mr. Spanos’ commitment not only to comply with the Fair Housing Act but to provide comprehensive remedies guaranteed to increase the availability of accessible housing to thousands of people across the country, whether they live in Spanos-built properties or not.”