Fair Housing at 50: Emerging Trends That Could Affect Your Community

This month, the Coach takes a look at emerging trends that have the potential to significantly change the legal landscape in fair housing law. With the help of our fair housing experts, Doug Chasick and Kathelene Williams, we’ll highlight these trends, explaining what’s happening and how it might affect your community.

A prime example is the wave of state laws legalizing marijuana—for medical and recreational use—even though federal law still considers it to be an illegal drug. These conflicting rules affect communities in different ways, depending on where they're located and whether they receive federal funding.

Next, we’ll discuss the developing trend to extend fair housing protection to cover discrimination based on sexual orientation and gender identity. In light of recent court decisions, our fair housing experts weigh the chances that the definition of sex discrimination under the federal Fair Housing Act (FHA) could be expanded to cover discrimination claims based on sexual orientation.

We’ll also review the growing number of local nuisance and crime-free ordinances aimed at reducing criminal activity. The laws vary widely in how they work and what they cover, but our experts explain how complying with these local laws could lead to fair housing trouble. 

Finally, we’ll explain what you need to know about web accessibility—and the wave of lawsuits against retailers and other businesses alleging that their websites aren’t accessible by people with vision impairments. It hasn’t yet affected the multifamily housing industry, but our experts explain why it’s important to get out ahead of the trend.

MARIJUANA—MEDICAL AND RECREATIONAL

Marijuana is still illegal under federal law, but momentum continues to build in efforts to legalize marijuana for medical as well as recreational use under state law.

Legal Landscape

At last count, 29 states and the District of Columbia allow use of marijuana for medical purposes in varying degrees. Nine states and the District of Columbia have gone further to legalize possession of small amounts of marijuana for recreational use. Even if your community isn’t currently affected by these measures, that could change: Each year, proposals to legalize marijuana for medical and recreational use are introduced in states across the country—and there’s no reason to believe that will change anytime soon.

These state laws are at odds with longstanding federal law, which still classifies marijuana as an illegal drug with no accepted medical use. Under the federal Controlled Substances Act, it’s illegal to manufacture, distribute, or possess marijuana, which may not be legally prescribed by a physician for any reason.

Federal officials have long insisted that state marijuana laws don’t change the fact that using marijuana continues to be an offense under federal law, though the previous administration had pulled back on enforcement against seriously ill individuals using medical marijuana in states where it’s legal. That changed in January 2018, when Attorney General Jeff Sessions gave prosecutors the go-ahead to enforce the law, but current budgetary restrictions ban the use of federal funds to pursue enforcement actions that interfere with state medical marijuana programs, at least through September 2018.

What Does It Mean for You?

Fair housing law bans discrimination based on disability, including refusing to grant reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability an equal opportunity to use and enjoy his home. Nevertheless, there are limits: You don’t have to grant an accommodation request if it’s unreasonable—that is, it would impose an undue financial and administrative burden on the community or fundamentally alter the nature of your operations.

If you’re located in a state where marijuana remains an illegal drug under both federal and state law, you don’t have to allow use of marijuana, whether it’s for medical or recreational use, explains fair housing attorney Kathelene Williams. Most communities ban illegal activities on the premises, including the use of illegal drugs, and it’s a federal criminal offense to possess, manufacture, or distribute marijuana. Just be sure to stay on top of developments in your state, says fair housing expert Doug Chasick, as momentum to legalize medical and recreational marijuana continues to build in states across the country.

Even in states where recreational marijuana has been legalized, the same rules should apply—though there’s little guidance from state officials still grappling with all the ramifications of these new laws. One thing you shouldn’t have to worry about: a fair housing complaint for banning anyone from using or growing recreational marijuana on your property—as long as you apply the ban consistently, without regard to race, color, religion, sex, national origin, disability, familial status, and any characteristics protected under state or local law.

Be careful when addressing requests to use or grow medical marijuana in states where it’s legal. Williams says it’s a confusing area of the law, which depends on a variety of factors, including the law in your state and the nature of your funding.

In general, public and federally funded housing providers are not required to permit the use of medical marijuana—even in states where’s it legal. In fact, Williams points out that the law requires federally assisted housing providers to deny admission to applicants based on the illegal use of controlled substances, including state-legalized medical marijuana. Federally funded housing providers have more leeway in dealing with current residents who are using medical marijuana in states where it’s legal. Though possession of medical marijuana is a lease violation, these providers have discretion whether to evict a current resident using medical marijuana, she says.

HUD has long maintained that disability-related requests to permit residents to use or grow medical marijuana in federal public and assisted housing are not reasonable under federal fair housing law. There have been very few court cases involving medical marijuana, but so far, they’ve been in line with HUD’s position.

Example: In December 2014, a court ruled that a federally assisted housing community in Michigan was not required to allow use of medical marijuana as a reasonable accommodation under fair housing law. The case was filed by the resident of a project-based Section 8 federally assisted housing community; her lease stated that the management company “may” terminate the agreement for drug-related activity or criminal activity.

Despite state law permitting use of medical marijuana, the court ruled that neither the FHA nor Section 504 of the Rehabilitation Act requires federally assisted communities to grant reasonable accommodations to permit residents to use medical marijuana in their units. The court reasoned that requiring the community to allow medical marijuana use would compel the community to violate federal law, which classifies marijuana as an illegal drug with no medically acceptable uses. Nevertheless, the court declined to rule that the resident’s use of medical marijuana was cause to evict her, saying it was up to the state courts to decide [Forest City Residential Management Inc. v. Beasley, Michigan, 2014].

Example: In April 2017, a court refused a Michigan resident’s request for a court order to prevent her eviction from a federally assisted community for violating lease provisions specifically barring use of marijuana on the property. The community had not yet initiated eviction proceedings, and if it did, it would be up to the state court to decide whether she should be evicted [Thompson v. Eenhoorn, LLC, Michigan, April 2017].

Example: In August 2017, Maryland’s highest court ruled that state courts had the discretion to decide whether a disabled resident living in a project-based Section 8 housing community should be evicted because of a single marijuana plant, despite mandatory lease terms that made any drug-related criminal activity on the premises cause for termination of tenancy.

Problems began when exterminators treating a bedbug infestation discovered a single marijuana plant growing in a pot in the resident’s tub. Police were called, and the resident was charged with marijuana possession. Though the charges were later dropped, the community initiated eviction proceedings.

The lower court ordered his eviction, ruling that federal law prevented the court from exercising its discretion under state law to determine whether his breach of the lease was substantial and warranted eviction. An appeals court reversed, ruling that federal law did not prevent state courts from exercising discretion under state law to determine whether the resident’s violation of the lease justified his eviction. On appeal, the state’s high court affirmed, and the U.S. Supreme Court declined to disturb the ruling [Chateau Foghorn v. Hosford, Maryland, August 2017].

The rules are much less clear for conventional communities. Though HUD is unlikely to pursue a federal fair housing claim for refusal to grant an accommodation request to permit the use of medical marijuana, you should find out whether state officials have weighed in on the subject. Few have taken a formal position on whether limiting medical marijuana use on rental property could trigger a disability discrimination claim, but there have been some court rulings and legislative developments involving employment discrimination claims, which could shed light on how housing claims would be treated.

You’ll also need details about the law in your state. In Rhode Island, for example, state law bans landlords from refusing to lease to an applicant simply because he has a medical marijuana card, though landlords have discretion, based on health and safety concerns, whether to lease, or continue to lease, to someone who grows marijuana on the premises. In contrast, Michigan law allows landlords to ban renters from cultivating or smoking medical marijuana on their property, as long as the restriction is in the written lease.

Most standard leases ban use of the premises for criminal activity, but you can consider adding lease terms explicitly stating any restrictions on possession, use, and cultivation of marijuana at your community. And if your community has a no-smoking policy, you could update your policy to ban smoking of marijuana as well as cigarettes and other tobacco products.

DISCRIMINATION BASED ON SEXUAL ORIENTATION AND GENDER IDENTITY

Based on recent court rulings involving employment discrimination claims, there may be a developing trend that could lead to expansion of the FHA’s ban on sex discrimination to cover sexual orientation or gender identity.

Legal Landscape

The FHA bans discrimination because of sex, though the law doesn’t explicitly mention sexual orientation or gender identity. For much of the law’s history, courts have refused to interpret the ban on sex discrimination to cover claims based on sexual orientation, though courts have been willing to consider claims involving sexual stereotyping—that is, discrimination against an individual whose personal characteristics do not conform to gender stereotypes.

For years, these same principles generally applied to employment discrimination claims under federal law. Like the FHA, federal law bans employment discrimination because of sex, but it does not explicitly prohibit discrimination based on sexual orientation and gender identity. And until recently, the general belief has been that the ban on sex discrimination in employment did not cover claims based on sexual orientation, though it may cover claims for failure to conform to gender stereotypes. In the past few months, however, several courts have ruled otherwise, permitting employees to sue under federal law for sex discrimination based on their sexual orientation or transgender status.

Example: In February 2018, a federal appeals court ruled that a skydiving instructor could pursue a sex discrimination claim against his former employer for allegedly firing him because of his sexual orientation. The court ruled that the law’s ban on sex discrimination applied to any practice in which sex is a motivating factor. Sexual orientation is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, so it was impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account [Zarda v. Altitude Express, Inc., New York, February 2018].

Editor’s Note: This ruling is binding on states within the court’s jurisdiction: Connecticut, New York, and Vermont.

Example: In March 2018, a federal appeals court ruled that a funeral director could sue her former employer for sex discrimination for allegedly firing her because of her transgender status. The complaint alleged that the employee, who was born biologically male, was living and presenting as a man at work, but that she was fired after disclosing her plans to transition from male to female and to represent herself and dress as a woman while at work. The court ruled that discrimination on the basis of transgender and transitioning status violated the ban on sex discrimination under federal law. According to the court, it was impossible to fire an employee based on that employee’s status as a transgender person without being motivated, at least in part, by the employee’s sex [EEOC v. R.G., Michigan, March 2018].

Editor’s Note: The ruling is binding on states within the court’s jurisdiction: Kentucky, Michigan, and Ohio.

Other federal courts have ruled otherwise. In 2017, for example, the federal appeals court with jurisdiction over Alabama, Florida, and Georgia, adhered to the longstanding view that the federal law banning sex discrimination in employment does not cover claims based on sexual orientation. These rulings set up a split among federal appeals courts, which may not be resolved unless—and until—the U.S. Supreme Court agrees to take up the issue.

What Does It Mean for You?

Though these developments have the potential to affect your fair housing efforts, it doesn’t alter your obligation to comply with current federal, state, and local rules banning discrimination against LGBT individuals.

Currently, 22 states and the District of Columbia have adopted fair housing protections based on sexual orientation—all but four also cover gender identity, gender expression, or transgender status. In addition, hundreds of county, city, and municipal governments have expanded fair housing protections to ban discrimination based on sexual orientation or gender identity.

Although the FHA doesn’t specifically list sexual orientation and gender identity as protected classes, discrimination against people based on their sexual orientation or gender identity could trigger a sex discrimination claim under federal fair housing law.

Example: In the first ruling of its kind, a court held that a Colorado landlord’s refusal to rent to a lesbian couple, one of whom is transgender, amounted to discrimination because of sex under the FHA.

The case began when the married couple responded to a Craigslist ad for a townhome for themselves and their two minor children. After viewing the home, they alleged that the landlord refused to rent to them, saying that, among other things, the couple’s “unique relationship” would become a town focus and would jeopardize the landlord’s “low profile.” The couple sued the landlord for violating the FHA’s ban on discrimination based on sex and family status, and for discrimination based on sexual orientation under state law.

Siding with the couple, the judge explained that courts generally look to cases involving employment discrimination in housing discrimination cases. Though most courts have rejected sex discrimination claims based on sexual orientation or transgender status, the couple’s claim was based on gender stereotyping—which courts have allowed in claims of employment discrimination based on sex under federal law.

In this case, the judge agreed with the couple’s claim that discrimination against women (like them) for failure to conform to stereotype norms concerning whom a woman should marry and/or have children with is discrimination on the basis of sex under the FHA. “Such stereotypical norms are no different from other stereotypes associated with women, such as the way she should dress or act (e.g., that a woman should not be overly aggressive, or should not act macho), and are products of sex stereotyping” [Smith v. Avanti, April 2017].

For years, HUD has recognized that discrimination against a lesbian, gay, bisexual, or transgender person may be covered by the FHA if it’s based on nonconformity with gender stereotypes. As an example, HUD says that if a housing provider refuses to rent to an LGBT person because he believes the person acts in a manner that does not conform to his notion of how a person of a particular sex should act, then the person may pursue a claim for sex discrimination under federal fair housing law. Other examples from HUD’s website:

• A transgender woman is asked by the owner of her apartment building not to dress in women’s clothing in the common areas of the property. This is a violation of the FHA’s ban on sex discrimination.
• A property manager refuses to rent an apartment to a prospect who is transgender. If the housing denial is because of the prospect’s nonconformity with gender stereotypes, then it amounts to illegal discrimination on the basis of sex under the FHA.
• A female prospect claims that a landlord refused to rent to her because she wears masculine clothes and engages in other physical expressions that are stereotypically male. If true, this may violate the FHA’s ban on discrimination based on sex.

Coach’s Tip: Public and federally assisted housing providers must comply with HUD’s Equal Access Rule, which requires equal access to HUD programs without regard to a person’s actual or perceived sexual orientation, gender identity, or marital status.

CRIME-FREE RENTAL HOUSING AND NUISANCE PROPERTY ORDINANCES

Across the country, hundreds of local governments have adopted nuisance or crime-free ordinances, but complying with these rules could lead to a fair housing trouble.

Legal Landscape

Across the country, a growing number of local governments have adopted nuisance or “crime-free” ordinances aimed at reducing criminal activity in the community. In its 2016 guidance on nuisance ordinances, HUD warned that these nuisance ordinances can affect housing in potentially discriminatory ways.

Though the details vary, nuisance ordinances generally label certain conduct related to the property—whether committed by a resident, guest, or other person—as a nuisance and require housing providers to take action to make it stop under threat of a variety of penalties. In defining what conduct constitutes a nuisance, the ordinances often include not only the violation of federal, state, or local laws, but also calls for emergency services that exceed a specified number within a given time frame. In defining “excessive” calls for police or emergency services, some ordinances specifically include, while others specifically exclude, calls from the victims of domestic violence or other crimes. 

In general, nuisance ordinances require housing providers either to take action to end the alleged nuisance or risk penalties, such as fines, loss of their rental permits, and even condemnation of their properties. Some may require housing providers to evict residents and their households after a specified number of alleged nuisance violations—often quite low—within a specific time frame, HUD noted.

Meanwhile, a number of local governments have adopted crime-free ordinances or promote crime-free housing programs that include the use of a crime-free lease addendum. Some of these measures operate like nuisance ordinances and penalize housing providers who fail to evict residents when they or another person has allegedly engaged in a violation of federal, state, or local law, regardless of whether the resident was a victim of the crime at issue. Often, they allow housing providers to evict residents when a guest or other person allowed onto the property by a resident engages in criminal activity on or near the property, regardless of whether the resident is a party to the crime or a victim of it.

The HUD guidance acknowledged that the FHA doesn’t prohibit local governments from appropriately considering nuisance or criminal conduct when enacting laws related to housing, but it warned that governments should ensure these measures don’t discriminate in violation of fair housing law. Where the enforcement of an ordinance penalizes individuals for use of emergency services or for being a victim of domestic violence or other crime, for example, HUD said that local governments must have a legally sufficient reason to justify any discriminatory effect on women, who represent 80 percent of domestic violence victims, and racial and ethnic minorities, who may be disproportionately victimized by crime in some communities. HUD also warned that selective use of nuisance or criminal conduct as an excuse for unequal treatment of individuals based on protected characteristics violates fair housing law.

In the courts, local governments have been called to defend against lawsuits stemming from enforcement of nuisance and crime-free ordinances. Only a handful have been filed, often involving constitutional as well as fair housing claims. 

Example: In December 2017, a federal court issued the latest in a series of lawsuits against the city of Maplewood, Mo., for enforcement of its nuisance ordinance. Under local law, residents of rental housing were required to obtain occupancy permits from the city, but city officials could revoke a resident’s occupancy permit because of conduct that amounts to a nuisance. In one of the lawsuits, the victim of domestic violence claimed that the city revoked her occupancy permit based on multiple calls for police and emergency services after being assaulted by her former boyfriend. The court dismissed some claims against the city and individual officials, but allowed her to pursue claims that enforcement of the ordinance violated her constitutional rights [Watson v. City of Maplewood, Mo., October 2017]. In a separate case, the court dismissed fair housing claims that enforcement of the ordinance discriminated against domestic violence victims, African Americans, and individuals with mental disabilities [Metropolitan St. Louis Equal Housing & Opportunity Council v. City of Maplewood, Mo., December 2017].

Example: In October 2017, a state court sided with the owner of rental property who sued the city of Rochester, N.Y., based on its enforcement of a nuisance ordinance. The owner claimed that the city declared the property to be a nuisance based on police reports about marijuana being hidden there by unknown drug dealers working from a boarded-up building next door. As a result, the city ordered the building closed for a year, which required the owner to evict the current residents. The court declared the nuisance ordinance unconstitutional and issued a court order to prevent the city from enforcing it against innocent parties like the owner and his tenants [Alcorn v. Muhammad, New York, October 2017].

What Does This Mean for You?

With so many local nuisance and crime-free ordinances on the books throughout the country, Williams says it’s important for communities to be aware that complying with these local laws could lead to fair housing trouble.

So far, the focus has been on local governments to justify enforcement of nuisance and crime-free ordinances, with scant attention on communities caught in the middle between complying with the ordinances and satisfying their obligations under fair housing law.

An obvious example would be a fair housing claim against a community that’s required by the local crime-free or nuisance ordinance to evict a victim of domestic violence or other crime because of calls for police or emergency services. But there’s more to it than that, Williams says, because complying with local ordinances could negatively affect racial or ethnic minorities and other protected groups.

And there are other potential problems, Williams says, particularly with respect to ordinances that require communities to conduct criminal background screenings, but don’t specify the standards for denying housing based on a negative report. In complying with the ordinances, she says, communities must take care that they don’t run afoul of recent HUD rules on criminal background screenings. Furthermore, some ordinances require communities to submit the results of required criminal background checks to local officials or the police, raising potential privacy concerns.

WEBSITE ACCESSIBILITY

It’s yet to hit the multifamily housing industry, but litigation over the accessibility of community websites to people with disabilities may be just around the corner.

Legal Landscape

Over the past few years, businesses have been hit with hundreds of lawsuits over website accessibility under the Americans with Disabilities Act (ADA). The ADA provides that no person shall be discriminated against in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of public accommodation. In a nutshell, that means that public accommodations—like grocery store chains and other retailers—must be accessible to people with disabilities.

The lawsuits involving website accessibility take it a step further by alleging that these businesses violate the ADA because their websites aren’t accessible to people with visual impairments. To access information on the Internet, people with visual impairments rely on screen-reading technology, which reads aloud the information on a website. But it works only if the website has been coded in a way that allows the information to be rendered into meaningful text. If not, the website is largely inaccessible to people with vision impairments.

To address these claims, courts have wrestled with various issues, but one stands out: Whether the ADA even applies to commercial websites. Businesses have argued that the ADA imposes accessibility requirements only at physical locations, like grocery stores, but not their websites. Results have been mixed, but in several recent cases, courts have ruled against retailers, refusing to dismiss ADA claims that their websites are inaccessible to people with visual impairments.

Example: In February 2018, a court refused to dismiss an ADA website accessibility lawsuit against a national retailer that sells fabric and other merchandise in its stores and through its website. In her lawsuit, a blind woman alleged that she was unable to access information though the company’s website because it wasn’t compatible with screen-reading technology. The court refused the company’s request to dismiss the case, rejecting its claims that the ADA applied only to physical locations, such as its stores, but not its website [Castillo v. Jo-Ann Stores LLC, Ohio, February 2018].

Example: In December 2017, a court approved a settlement in an ADA website accessibility case against a retailer that sold art supplies online and in its stores. In his complaint, a shopper, who was legally blind, alleged that the retailer discriminated against him based on his disability because he was unable to use the company’s website to buy art supplies. In an earlier ruling, the court refused to dismiss the shopper’s claims that the website was inaccessible to people with visual impairments [Andrews v. Blick Art Materials LLC, New York, December 2017].

What Does It Mean for You?

Last year, businesses faced hundreds of lawsuits over website accessibility, and there are no signs of litigation slowing down any time soon. Though the multifamily industry has yet to be targeted, Chasick calls it a ticking time bomb and says that communities should get out ahead of the trend.

It’s far from settled, but communities could face an ADA claim based on website accessibility. The ADA applies to public accommodations, which include community leasing offices because they are open to the public. These days, community websites may provide the public with a great deal of information, including pricing information, floor plans, maps identifying the location of available units, photos or videos showing the interior of units, and other features of the community. Unless the website meets accessibility standards, this information may be inaccessible to individuals with vision impairments—giving rise to a potential ADA claim.

It’s unclear whether such a lawsuit would be successful, but Chasick says that communities should focus on prevention—by learning about the issue and what it would take to ensure that their websites are accessible.

Coach’s Tip: Since 2010, the Justice Department has pledged to issue ADA guidelines on website accessibility, but so far, it’s issued guidelines that apply only to government entities. The department recently backed away from planned rulemaking on website accessibility guidelines for public accommodations, so it’s unclear whether—or when—there will be any official government standards on website accessibility for businesses that are open to the public. In the meantime, many have turned to what’s become the industry standard—the Web Content Accessibility Guidelines 2.0 (WCAG 2.0). The WCAG 2.0 standards, published by a working group of experts, have been widely accepted as providing full and equal access to people with disabilities by a long list of countries, state and local governments, and companies.

• Fair Housing Act: 42 USC §3601 et seq.

COACH SOURCES

Douglas D. Chasick, CPM, CAPS, CAS, ADV. RAM, CLP, SLE, CDEI: President, The Fair Housing Institute, Inc.; (321) 956-2188; doug.chasick@fairhousinginstitute.com.

Kathelene Williams, Esq.: The Law Firm of Williams & Edelstein, P.C.; The Fair Housing Institute, Inc.; (770) 840-8483; kathi@fairhouse.net.