Compliance first

The current state of compliance — or noncompliance — with the Fair Housing Act leads to some basic conclusions. For example, it seems many developers and architects do not avoid accessibility compliance intentionally, but rather as a result of a belief that compliance with local building codes incorporates the requirements of the act. Unfortunately, most local building codes did not include Fair Housing accessibility requirements until sometime after it was passed.

As a practical matter, many in the industry would concede that designing the project with wider doors, accessible exterior access and enough space for wheelchair maneuvering at the onset would be negligible in cost and likely unobservable to the tenant.

On the other hand, retrofitting units at a later stage can be expensive and disruptive to the resident, and may affect marketability. For example, to provide enough space for wheelchair access in the bathroom post-construction, below-sink cabinet space likely will be eliminated. These and other modifications are certain to elicit complaints from a tenant when moved into the converted unit.

A middle ground may be to require enough reserves to retrofit units not in compliance with the act at some future time, as opposed to requiring every ground-floor unit, or all units in an elevator structure, meet accessibility standards — especially if the census does not support the creation of accessible units at present. This seemingly reasonable solution has yet to find traction, however.

In 2006, the Fair Housing Justice Center conducted an investigation to determine if new multifamily rental developments in Manhattan were being designed and constructed in compliance with the accessibility requirements of the Fair Housing Act. In October 2010, the U.S. Attorney’s Office announced a resolution to the lawsuit that included more than $2 million in compensation to victims harmed by a lack of accessible features, a penalty of $90,000 and a $72,000 accessibility project fund to increase the accessibility of  apartment kitchens.

Because of the increase in funding to advocacy groups, it’s clear that the Fair Housing Act is receiving more attention lately. These groups are more than willing to challenge developers who may have ignored the requirements of the act in the past, and these challenges can lead not only to costly legal battles but also significant penalties. If the past is any indication of the future, it may be unwise to ignore these requirements any longer. Commercial mortgage brokers working to secure financing or refinancing for these projects can help ensure their deal’s viability by bringing Fair Housing Act guidelines to their clients’ attention. 

Tom Bernaciak is the chief Federal Housing Administration (FHA) underwriter for First Housing Development Corp., a mortgage banking organization based in Tampa, Fla., specializing in FHA-insured transactions. He has been involved with FHA mortgage insurance programs for the past 20 years. Bernaciak is a Certified Mortgage Banker and holds a J.D. degree. He practiced real estate law for 15 years while living in Pittsburgh. Reach Bernaciak at (239)596-4248 or tbernaciak@firsthousingfl.com.

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