The Road to Fair Housing Violations is Paved with Good Intentions

THE ISSUES

Kelsey has managed rental property for many years. For the last 10 years, she has been with a small apartment community with 28 units. The property has two buildings, one in the front and one in the back of the property. During Kelsey's early years at the property, she had several residents complain that cars were speeding in the parking lot. Apparently, several of the offenders had nearly hit some children playing near the front building. Kelsey followed up on the complaints and did her best to identify the speeding vehicles, but she could never pin the offense on any particular residents.

Similarly, Kelsey received frequent complaints about noise disturbances on the property. Typically, these “disturbances” weren’t loud parties, but rather were incidents when a child was jumping or running in an upstairs unit, a baby was crying during the night, or kids were playing loudly in the hallway. Kelsey dutifully investigated each complaint, but usually concluded that the disturbances were merely the reasonable inconveniences that go along with living in a building with others. There were days when Kelsey felt like she’d rather be a hostage negotiator than have another conversation with a disgruntled resident because he had heard more footsteps upstairs than he preferred.

THE STRATEGY

Over time, Kelsey decided to be more proactive in addressing these issues. After speaking with her owner, she decided that she would try to keep families with children in the rear building. She reasoned that since most of the complaints about speeding cars involved people leaving the property in a rush, the kids would be safer near the back. Also, she figured that, since people with children were more understanding of the higher noise levels generated by children, that she’d have more satisfied residents by keeping the families in the same building, while keeping those without children in the front building.

It took some time to implement, but Kelsey’s strategy was pretty effective. She ended up dealing with fewer complaints over trivial noise issues, and while there were still occasional complaints of speeders in the parking lot, there were no incidents where the children’s safety was at issue.

THE RESULT

Last fall, Kelsey had three vacant units, two in the rear building and one in the front. She took out an advertisement in the local paper and invited people to visit the property, which she described as a “quiet community”. The local Fair Housing office noticed one of Kelsey’s advertisements, and was intrigued by the phrase “quiet community”, as this language has historically been used as code for “no children”. As a result, the Fair Housing office put together a group of testers to visit Kelsey’s property to determine if she was compliant with Fair Housing law.

The first group of testers consisted of two adults who visited the property and inquired about residency for them and their two children. The second group was two adults who inquired about residency for themselves only. Kelsey met with the first group and told them about two vacant units in the rear building and showed them both units. She assured them that her property was family-friendly. She did not mention the rental unit available in the front building.

Kelsey then met with the second group. They were basically identical in their rental profile to the first group, except that they had no children. Kelsey showed them the vacant rental unit in the front building. She also told the second group about the two vacant units in the rear building, but told them that she likes to keep the families with children in the back, and those without in the front to keep the children safer and to make the front building quieter.

After subsequent visits by testers from the Fair Housing office revealed similar interactions, the office filed a Housing Discrimination Complaint against Kelsey and her owner, alleging that she had discriminated based on familial status by not making units available equally to families with children and thereby restricting their housing choices.

All Kelsey had wanted to do was to make the property safe for the children of her residents and to give each resident the most satisfying housing possible. Her reward? A hefty settlement payment and plenty of attorney’s fees.

As usual, I’m not making this up. This fact pattern was derived from a case out of Denver in which HUD issued a charge of housing discrimination this past fall. You can find HUD’s press release on the case here, the charge here, and the complaint filed by HUD in federal court here. HUD is seeking that the federal court award it money for the local Fair Housing office that had to deal with the issue, as well as any other person harmed by the discriminatory policies, and is also seeking a civil penalty (basically, a fine) against the manager and owner to deter others from adopting similar policies.

There are a few things for us to learn from this case.

Be careful about your choice of words in advertising. While advertising a property as a “quiet community” is certainly not discriminatory, those were the words that triggered the investigation in this case. Fair Housing advocates look for words and phrases that can be interpreted as code words for discriminatory practices. In this case, the local office worried that “quiet community” = “no children”. So, choose your wording carefully, considering whether the wording could be construed to discriminate against any protected class.

“Steering” is not legal. Kelsey’s practice of putting families with children in a certain area of the property is commonly referred to as steering, and it’s a violation of Fair Housing law. Your intentions here, while important, are not the only factor. Kelsey had good intentions; she was simply trying to keep children safe and create compatibility by pairing neighbors with similar preferences. Steering applies to all protected classes, and the law requires that you give every interested party the full array of options and allow them to choose the unit they prefer.

Don’t refer to certain units or areas of the property as “family friendly” or “kid friendly”. While there’s nothing wrong with describing the entire community as “family friendly”, make sure that you don’t reference certain units or parts of the property using such terms.

Avoid recommending any particular unit or area of the property, unless the person has stated a preference for such unit or area.

When discussing certain units or areas, discuss all of the good and bad facts about each. Omitting relevant facts about a unit can be viewed as a latent attempt to steer to or away from the unit. There’s no doubt that some units are better than others, so you don’t have to make a lesser unit sound just as good as a better unit, but you must describe both accurately and fairly. Again, pay attention to your choice of words and make sure you note the same facts to each interested party.

Fair Housing testing is real, often recorded, and admissible in court. Fair Housing advocates use testers. Every person who calls or visits your property is probably not genuinely interesting in renting a unit; some are likely hired by the local Fair Housing office to pose as interested renters to see if you are compliant with Fair Housing law. They will likely record your conversations and/or take pictures or video of your property. Their testimony is admissible in court if they have first-hand knowledge of something that was said or done. The fact that the tester is not an actual renter will not prevent a landlord from being sanctioned for discriminatory acts.

Remember these guidelines and make sure your entire team is aware of them. For more information, contact your friendly local attorney.