Appraisers and the Fair Housing Law: Accessibility Requirements for the Disabled
Hoyt, Richard W, Aalberts, Robert J, The Journal of Real Estate Research
Richard W Hoyt*
Robert J Aalberts*
Abstract. In 1988 the Fair Housing Act of 1968 was amended to include the "handicapped" as being protected from discrimination in multiunit housing. The three general categories of discriminatory acts are refusal to make or allow reasonable physical modifications to a covered multiunit dwelling, refusal to make reasonable accommodations in rules and practices, and failure to follow certain design and construction standards. The U.S. Department of Housing and Urban Development has issued Fair Housing Accessibililty Guidelines, which provide technical guidance on multiunit dwelling design and construction standards. This study examines these guidelines and the impact the Act may have upon value when discriminatory practices are observed.
Until the Fair Housing Act (hereafter FHA) was passed in 1968, discrimination in housing was possible in the United States. However, it was not until 1988, with the passage of sweeping amendments to the 1968 FHA, that a housing discrimination law came to the aid of those with physical and mental disabilities.' Those amendments, among other things, mandate that new multifamily housing must be made accessible and adaptable to the handicapped. Although its potential magnitude has not been fully realized by the real estate industry, Cardoza (1995) indicates the amendments truly signal a major legal change. And it could conceivably be very expensive and disruptive for those in the industry who have not prepared adequately for it. They allow, for example, unlimited actual and punitive damages, and even criminal sanctions in certain circumstances. As reported by Cardoza (1995, p. 12), attorney Stephen Durham has observed, "It's (the FHA 1988 amendments protecting the disabled) a monstrous problem for defendants . . . [a]ll it takes is a lawsuit and a landlord has a major problem." And, as Aalberts (1996) reports, noncompliance may be widespread. Indeed, in the Las Vegas area alone, over a ten-month period from October 1994 to July 1995, seventeen formal complaints had been filed with the Department of Housing and Urban Development (HUD) concerning alleged noncompliance with design and construction requirements. The National Fair Housing Advocate (1996), has reported that in Chicago, the Justice Department recently settled an inaccessibility claim against a partially completed twenty-eight-building rental condominium development that does not have wide enough doors and reachable lighting and heating controls for wheelchair users. Furthermore, the bathrooms are not equipped with suitable reinforcements for grab bars. The condominium designers and builders were required to reconstruct a ground floor unit to make it accessible and to pay $35,000 into a fund that can be used by tenants who wish to make their units accessible.
The purpose of this study is first to trace briefly the history of events leading up to the creation of fair housing laws in this country, and in particular those laws that apply to the disabled. Next, the statutory and regulatory provisions requiring that certain new multifamily housing be made accessible to the disabled are examined and discussed. Third, a demonstration is made as to how failure to abide by these laws will not only result in legal repercussions but also in expensive construction alterations to real estate owners. And lastly, the negative implications to value that may occur when appraisers fail to recognize the existence and cost of complying with these laws is presented.
Fair Housing Legislation and the Disabled
The ultimate creation of fair housing legislation can be traced to social, economic and legal developments commencing after World War I. These advances provided the foundation for the protection of a number of traditionally victimized groups of housing discrimination, with the eventual inclusion of the disabled.
Segregation was institutionalized legally in housing, as well as in public accommodations and transportation, as a result of the late l9th century decision of Plessy v. …