Legal Briefs

Fair Housing

The federal Fair Housing Act, as amended, makes it unlawful to discriminate in the sale or rental of a dwelling to any prospective purchaser or tenant. This prohibition includes making a dwelling unavailable to the prospective purchaser or tenant. Obviously, persons discriminated against because of race, national origin, sex, age, and numerous other factors clearly have the right to sue under the act. However, the courts have made it clear that the ability to bring a Fair Housing Act claim is not limited to the actual victims of discrimination.

Unlike actions brought under other provisions of federal civil rights laws, Fair Housing Act plaintiffs are not required to allege that they were victims of discrimination. The only requirement is that plaintiffs have a "minima of injury in fact." Based on this liberal test, the Supreme Court has held that Caucasian residents can challenge racial discrimination against African-Americans in their neighborhood (Gladstone Realtors v. Village of Bellwood, 1979).

Financial Injury
Lower federal and appellate court rulings highlight the breadth of the concept of standing under the Fair Housing Act. For example, the owners of a Los Angeles hotel brought a fair housing claim against the city and a city council member, even though the owners were not the parties against whom discrimination occurred (San Pedro Hotel Co., Inc. v. City of Los Angeles, 1998). The owners had contracted to sell their hotel to a nonprofit developer who intended to convert it into housing for the mentally disabled. To begin with, the city failed to recommend approval for a $1.3 million loan the developer needed for acquisition and rehabilitation. Several weeks after the hotel owners announced publicly that they planned to sue the city for fair housing violations, the building and safety commissioner and several members of the city’s Slumhouse Task Force inspected the hotel and cited it for numerous building code violations. The hotel owners spent $40,000 to correct the noted violations. Nevertheless, nine days after their Fair Housing Act complaint was filed, the city charged the owners with criminal slum offenses.

Ultimately, the city approved the necessary financing and the hotel was sold to the developer for conversion. Nevertheless, the 9th Circuit Court of Appeals found that the hotel owners had standing to sue under the Fair Housing Act, since they alleged actual financial injury from the fair housing violations. More importantly, the court noted that there was no need for the hotel owners to be connected with the persons discriminated against.

Zoning and Other Issues
A federal district court in Pennsylvania reached a similar decision. In this case, a town refused to grant a zoning variance for a hotel that was to be sold for conversion into disabled living facilities. The court found that the refusal to issue the zoning variance violated the Fair Housing Act’s requirement that "reasonable accommodations" be made for handicapped individuals. The court also found that the town’s mayor might be liable for violating the act for soliciting citizen opposition to the proposed handicapped facility (Judy B. and Debra T. v. Borough of Tiago, 1995).

Fair Housing Act issues also arise in other areas. For example, in a 1996 federal district court case in Illinois, condominium unit owners were found to have standing to sue their condominium association for prohibiting sales to buyers with children under the age of 18. The owners claimed that the prohibition caused them financial injury, both from delays incurred in selling their unit and in a lower ultimate selling price. The court not only awarded compensatory damages to the owners, but it also awarded both the owners and the local housing agency substantial punitive damages (Simovits v. Chanticleer Condominium Association, 1996).

Numerous similar instances exist. A federal district court in Wisconsin held that an elder-care facility could sue the county for a permit for a drug and alcohol rehabilitation facility, since denying the permit prevented the sale of the facility (Oak Ridge Care Center v. Racine County, 1995). The 2nd Circuit Court of Appeals has held that a local NAACP branch can bring a fair housing challenge to a town’s single-family, one-acre zoning ordinance as discriminatory against potential tenants of an as-yet unbuilt low- and moderate-income housing project (Huntington Branch, NAACP v. Town of Huntington, 1982). A federal district court in Kansas determined that subdivision residents may have violated the Fair Housing Act by interference — bringing suit to enforce a protective covenant — with the sale of a neighbor’s home to the operator of a group home for the handicapped (United States v. Scott, 1992).

The lesson of the Fair Housing Act cases is clear. Almost anyone who directly or indirectly affects who may or may not buy or rent a dwelling cannot take discriminatory action. Any person who suffers any harm from unlawful housing discrimination, no matter how theoretically remote and regardless of whether that person is the one discriminated against, may have standing to bring suit under the Fair Housing Act.

Samuel H. Weissbard, JD, and Camellia K. Schuk, JD

Samuel H. Weissbard, JD, is senior counsel and Camellia K. Schuk, JD, is an associate in the Irvine, Calif., office of Cox, Castle, & Nicholson, LLP. Contact them at (949) 260-4600 or sweissbard@ccnlaw.com and cschuk@ccnlaw.com.The discussion of legal issues in this column is for informational purposes only. Results may vary depending on state laws and individual circumstances.

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