What are the odds you can market the 20%?
Have you heard of the “80/20” requirement of the Federal Fair Housing Act? It is also part of New Jersey’s Law Against Discrimination.
The law prohibits discrimination against families with children. That is called “familial status” discrimination. Under the Federal Fair Housing Act (and the New Jersey State Law Against Discrimination) it is the equivalent of discriminating against someone because of their race or religion. However, both governments have recognized that there should be an exception to that prohibition and it is called “Housing For Older Persons.” There are two tests for maintaining a valid age restriction which is justified as being part of a program for “Housing For Older Persons.”
- The first is that eighty percent of residences must be occupied by one person 55 years of age or older. (“The 80% requirement”).
- The second is a Housing Provider must “. . .publish and adhere to policies and procedures that demonstrate its intent to operate as housing for persons 55 years of age or older.” (The “Policies and Procedures Requirement”).
HUD amended its regulations in 1999 which will allow a housing provider who maintains Housing For Older Persons to flexibly use the twenty percent of the homes not required to be occupied by one person 55 years of age or older. A housing provider can set whatever age restriction it wants (even one which otherwise might be deemed to discriminate against families with children) if it wants to market that twenty percent to consumers who do not satisfy the 55 year old requirement.
This is based upon the April 1999 adoption by HUD of Amendments to the Regulations related to operating your property in conjunction with a legal age restriction as Housing For Older Persons.
The regulation adopted on that date indicates specifically in Section 100.305:
“Each housing facility or community may determine the age restriction, if any, for units that are not occupied by at least one person 55 years of age or older so long as the housing facility or community complies with the provisions of Section 100.306.”
In its comments to these regulations, HUD indicates:
“There is no requirement that the remaining twenty percent of the occupied units be occupied by persons under the age of 55, nor is there a requirement that those units be used only for persons where at least one member of the household is 55 years of age or older. Communities may require that one hundred percent of the units have at least one occupant who is 55 years of age or older, may permit up to twenty percent of the occupied units to be occupied by persons who are younger than 55 years of age, or set whatever requirements they wish, as long as “at least eighty percent” of the occupied units are occupied by one person 55 years of age or older, and so long as such requirements are not inconsistent with the overall intent to be housing for older persons. (Emphasis added).
HUD believes that the appropriate use of the twenty percent, if any, is at the discretion of the community or facility and does not intend to impose more specific requirements in this area. For example, a community could allow some percentage of the units, up to twenty percent, to be made available to persons over the age of fifty, and, as long as the overall intent to be senior housing remains clear, HUD would not have an objection.”
The citation for that is 64 Fed. Reg. 16327.
What a housing provider cannot lose sight of is the Policies and Procedures Requirement that it maintain and demonstrate an intent to be Housing For Older Persons by publishing and adhering to rules which indicate the same.
HUD has listed a series of considerations that it will make in determining whether a housing provider is publishing and adhering to policies and procedures which demonstrate an intent to be Housing For Older Persons. It will consider:
- The manner in which the housing facility or community is described to prospective residents (it should use “housing for older persons”).
- Any advertising designed to attract prospective residents.
- Lease provisions.
- Written rules, regulations, covenants, deeds or other restrictions.
- The maintenance and consistent applications of the relevant procedures.
- Actual practices of the housing facility or community;
- Public posting in common areas of statements describing the facility or community as housing for persons 55 years of age or older.
HUD expressly discourages the use of the word “adult” in describing your facility. Don’t use it.
These criteria are why a housing provider cannot allow any exceptions from its written policies.
If a housing provider is going to formulate this policy of allowing persons under 55 in “the twenty percent” put it in writing, date it and keep it in a policy folder. That way if you are ever investigated and HUD ever asks you for this policy you can show your documented consideration of and adherence to the policy. It should be made part of your screening policy. That way it is handed out to applicants and that way it will be “published.” The relaxation of the 55 year old restriction in the twenty percent portion of your spaces need not be made part of your lease – at least not for all tenants. However, that age restriction for the 20% (whatever a housing provider chooses it to be) should be made part of any lease entered into with anyone who the housing provider is going to make the exception for in the twenty percent.
By Christopher J. Hanlon, Esq., a NJ Landlord Attorney
Should you have the need for legal counsel in this area, please contact firstname.lastname@example.org or call toll-free (855) 376-5291.