Law Tightened on Adults-Only Rentals

Signed into law in September and due to become effective next March, the Fair Housing Amendments Act of 1988 will extend protection against housing discrimination to handicapped persons and families with children. Also, the new law strengthens the enforcement mechanisms by protecting the rights of all parties to a trial by jury in case of a dispute over the law.

However, this legislation threw a scare, mostly unwarranted, into this nation’s booming adult/retirement community development business.

Fundamentally, the new law was intended to extend protection of the 1968 Fair Housing Act to families with children and handicapped persons. But before the legislation was passed, someone discovered that the status of adults-only communities would be threatened, legally if not pragmatically.

So amendments were made to exempt communities catering specifically to older persons. Age 55 was specified as the minimum age allowable. But that’s not all.

Now adult/retirement communities wanting to make sure that their complexes will not be accused of discrimination must also provide:

--Significant services and facilities designed to meet the needs of older persons.

--Eighty percent of the units must be occupied by at least one person 55 or older.

--The owner or manager of the communities must follow general policies showing specific intent to provide housing for persons 55 or older.

As a result, scores of the thousands of adults-only communities catering to aging persons must now amend their bylaws (if the age cut-off was less than 55) to conform to the new legislation.

Real estate authorities regard it unlikely that families with children would seek to live in a fairly expensive community occupied by a preponderance of older persons--unless the young parents want to make sure of having lots of surrogate grandparents.

But there are other serious aspects to this new law that gives the U.S. Department of Housing and Urban Development (HUD) authority to penalize persons who discriminate in the sale or rental of housing and prohibits discrimination against handicapped persons and families with young children. However, both the complainants and those charged now also have the right to redress in court.

Frankly, the impact of this anti-discrimination legislation is expected to fall heaviest on apartment rentals. It is known that a significant number of rental properties (one survey said 25% nationwide) discriminate against families with children or discourage such occupancy.

That’s why Sen. John C. Danforth (R-Mo.) said the legislation “addresses a pervasive problem facing families with children.” However, the new law will not affect any local, state or federal laws restricting the number of persons permitted to occupy one rental unit.

Bruce Campbell, head of a property management firm in Baltimore, said that compliance with the new law will force adjustments for owners, managers and residents of buildings that now exclude children.

He said costs of maintaining the grounds of adult rental buildings will likely increase and may require screening of areas in which children could suffer falls. He estimated the cost of operating and maintaining formerly all-adult rental buildings could increase 5% to 10%.

Campbell also said criticism of the new law is likely to come from young and old residents of adults-only rental buildings because many are single persons or young couples who have chosen to delay child bearing. Other likely-to-complain tenants are so-called “empty nesters” who have raised their children and now choose to reside in a quiet, child-free ambiance. They no longer will be able to choose such a rental living arrangement unless they move into over-55 communities, some of which have many residents over 70 and quite a few over 80.

Meanwhile, the Department of Housing and Urban Development now must issue regulations regarding the new anti-discrimination-in-housing laws, and HUD also must provide interpretations for specific parts of the new law before it becomes effective.