Why are developments and buildings for persons aged 55 and older exempt from restrictions and seem so privileged?

A brief review of this country’s housing laws, and the reasons for their enactment, would be a logical place to begin that explanation. The Fair Housing Act of 1968 was crafted from the Civil Rights Act of 1964 and prohibits a broad range of practices that discriminate against individuals on the basis of race, color, religion, sex, national origin, familial status and disability. The act applies to municipalities and other local government entities, and prohibits them from making zoning or land-use decisions or implementing land-use policies that exclude or otherwise discriminate against protected persons.

In 1988, the Fair Housing Act was amended to prohibit discrimination based upon disability or family status. The focus quickly targeted children under the age of 18 and pregnant women. The formation of families as a protected category suddenly collided with the operation of retirement or adult communities, so the 1988 amendments included exemptions for housing developments that qualified as housing for persons over the age of 55.

Congress countered with the Housing for Older Persons Act of 1995 (“HOPA”) in an effort to resolve the conflict between protected family status and the exemption for older persons. HOPA reconditioned the exemptions for elders and has become the guideline for developers and owners of elder housing.

HOPA maintained the requirement that at least 80 percent of exempt housing must have one occupant who is 55 years of age or older. It also still required that the exempt housing publish and follow policies and procedures that demonstrate “an intent” to be housing for persons 55 and older. The new law also abolished the requirement that 55-and-older housing had to maintain “significant facilities and services” designed for the elderly. Communities that are occupied solely by persons who are 62 or older are also exempt from the prohibition against family discrimination under a different section of the law.

At first glance, the 80 percent requirement appears to give a developer, owner or builder a cushion against 100 percent compliance. HOPA allows a 55-and-older community to be “exempt” from the preference for families if (after Sept. 13, 1988) 80 percent of the units are occupied by at least one person age 55 or older.

The 80 percent requirement does not mean that the developer or owner can utilize the remaining 20 percent of units with any age person he or she chooses. There is an additional “intent” provision that is scrutinized. The 80 percent occupancy requirement is coupled with a condition that the building or community adheres to policies and procedures that demonstrate the intent to be a 55-or-older place. A developer cannot merely choose to sell to qualified non-seniors or families just because the facility is greater than 80 percent senior occupied. That is HOPA’s most often-debated and discussed provision. The law provides that each housing community may determine the age guidelines for units that are not occupied by at least one person 55 years of age or older.

While the stipulation appears to allow a community to set any age requirement it deems fit for the 20 percent of spaces that are not required to be occupied by a person 55 years of age or older (including requiring the occupants of the remaining 20 percent of spaces to be adults), in reality it appears to be contrary to the general intent of the FHA to prohibit discrimination on the basis of “family status.” So, rather than set specific age rules, what some communities have done is allow 20 percent of the units to be occupied by persons who do not otherwise satisfy the community’s minimum-age requirements.

A challenge then could surface when an older tenant dies or moves out and the building already has used up its 20 percent quota and subsequently finds itself below the 80 percent requirement. When called into question about dropping below stated age guidelines, builders, developers and housing officials have relied on the all-encompassing “intent” provision, which has come to the rescue in more than a few communities. They also have pointed to the fact that no party deliberately allowed more under-age occupants into the community than the threshold permits.

Conversely, would an owner or manager violate the Fair Housing Act if the community excluded families with children after the 80 percent threshold is met? HUD says the answer is “no” because the property is under the over-55 exemption umbrella. Many states require owners and managers to diligently and consistently enforce all age rules so that 20 percent guideline for persons under 55 is rarely even a factor. And, in addition to age occupancy ratios, HOPA requires that the community “publish and adhere to policies and procedures that demonstrate its intent” to qualify for the 55-or-older exemption.

Tom Kelly’s book “The New Reverse Mortgage Formula” (John Wiley & Sons, New York) is available in local libraries, bookstores and on amazon.com. Tom can be reached at news@tomkelly.com


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