The U.S. Department of Housing and Urban Development Friday said it has settled a Secretary-initiated investigation into the City of Falls Church, Va., Waterford Development LLC, Waterford Development-Falls Church LLC, and Nova-Habitat Inc., for alleged discrimination against families with children, a violation of the Fair Housing Act.

Based on information received in January 2004, HUD began an investigation into the development of The Broadway, a high-rise building with 80 luxury condominiums in Falls Church. To have the property rezoned for the construction of condominiums, the developers proposed a term sheet that calculated school-impact contributions based on the number of children who would move into the property instead of on to the number units developed. The City of Falls Church initially approved of this arrangement.

Because of concerns regarding the arrangement, HUD commenced a Secretary-initiated investigation against the developers of the property and Falls Church. The Virginia Fair Housing Office, which receives funding from HUD, also reviewed the matter.

The city determined that should the escrow account be funded, it would possibly create the appearance that the City condoned discrimination against families with school-age children. In January 2004, the Falls Church City Council amended the term sheet to remove the school impact fee arrangement and reaffirmed its commitment to fair housing.

On May 17, 2004, the Equal Rights Center, a non-profit fair housing group based in Washington, D.C., filed a complaint against Waterford Development, Waterford Development Falls Church, Nova-Habitat, McWilliams/Ballard, and the City of Falls Church. ERC’s complaint alleged that the respondents had violated the Fair Housing Act by discriminating against families with children.

HUD worked to conciliate both the ERC complaint and resolve the issues raised in the investigation. All the parties agreed to enter into a conciliation agreement to resolve the investigation and the ERC complaint.

As part of the conciliation agreement:

  • Falls Church agreed not to assess school impact contributions in the manner in which it assessed school impact contributions for “The Broadway.”

  • Falls Church and ERC entered into a partnership to further fair housing in Falls Church.

  • Waterford Development, Waterford Development Falls Church, Nova-Habitat, and McWilliams/Ballard will contribute $120,000 to ERC to support the partnership, and the ERC will provide training to the respondents that will focus, in part on discrimination against families with children.

  • ERC and Falls Church will co-host the Northern Virginia Fair Housing Conference that will include a workshop on how localities may calculate and assess development-related fees that follow the letter and the spirit of the Act.

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