|
SECTION III
The Fair Housing Act and Section 504: What Congress
Intended
A. The Fair Housing Act
1. Passage of the Law
While Congress did not prohibit disability discrimination
in housing until 1988, it is important to understand the genesis
of the antidiscrimination effort that resulted in the passage of
the FHA in 1968. The structure and limitations of the FHA provided
important lessons to Congress as it substantially revised the law
in 1988.
Responding to the African-American civil rights struggle,
the urban riots of 1967, and the release of the Kerner Commission
report, the 90th Congress considered legislation that would extend
the protections of the Civil Rights Act of 1964 to the realm of
housing. The assassination of Dr. Martin Luther King Jr. on April
4, 1968, provided the final impetus to move the legislation forward.
Final congressional approval came on April 11, 1968, and President
Lyndon Johnson signed the bill into law on April 22, 1968. The FHA,
also known as Title VIII of the Civil Rights Act of 1968, prohibited
discrimination on the basis of race, color, religion, and national
origin.
The FHA provides that "[i]t is the policy of the United
States to provide, within constitutional limitations, for fair housing
throughout the United States."1
President Johnson reiterated this theme during the bill signing
ceremony when he said, "Now, with this bill, the voice of justice
speaks again. It proclaims that fair housing for all--all human
beings who live in this country--is now part of the American way
of life." Despite this lofty prose, it would be 20 years before
Congress extended protection to people with disabilities.
By its terms, the FHA applied to a broad range of
discriminatory behavior, including the following:
- Refusing to sell, rent, negotiate for, "or otherwise
make unavailable or deny" a dwelling.
- Discriminating in the "term, conditions, or privileges
of a sale or rental" of a dwelling or in the "provision of services
or facilities in connection therewith."
- Making or publishing any discriminatory statement
in regard to a sale or rental.
- Misrepresenting the availability of a dwelling.
- Inducing a person to sell or rent any dwelling
by representations about the presence of members of a protected
class in the neighborhood.
- Discriminating in the access to real estate services.
- Discriminating in housing financing or in financing-related
transactions. 42 U.S.C. §3604.
But the FHA's original enforcement scheme was weak.
While HUD, state, and local human rights agencies were given the
power to hold administrative hearings, they had the power only to
investigate and seek to conciliate differences between the parties.
Private litigation was authorized in federal courts,2
but the relief was limited. Parties could only receive injunctive
relief, actual damages, and not more than $1,000 in punitive damages.
An award of attorney's fees was permitted only where the court determined
that a plaintiff was unable to hire an attorney. As a consequence,
individual victims of discrimination often found it difficult to
stop discriminatory practices and to collect damages.
2. Legislative History of the Fair Housing Amendments
Act of 1988
Soon after passage of the FHA, efforts began in Congress
to strengthen its enforcement provisions and to expand its coverage
to other "protected classes." After hearing significant testimony
about discrimination on the basis of gender, Congress amended the
FHA in 1972 to include "sex" as a protected class. Also beginning
in the early 1970s, Congressional oversight hearings highlighted
how the FHA's weak enforcement mechanism frustrated its lofty purposes.3
In 1978, Congress considered legislation to give HUD
greater enforcement power under the FHA, and in 1980, a bill toughening
enforcement and expanding coverage to people with disabilities passed
in the House of Representatives, but fell prey to a filibuster in
the Senate. For most of the next decade, the Administration and
Senate leadership opposed comprehensive overhaul of the FHA and
no legislation moved forward.
As early as 1983, bipartisan agreement began to form
that HUD needed greater powers to enforce the FHA. In his message
transmitting fair housing legislation to the Congress, President
Ronald Reagan said:
Since its passage, however, a consensus has developed
that the Fair Housing Act has delivered short of its promise because
of a gap in its enforcement mechanism.
The gap in enforcement is the lack of a forceful
backup mechanism which provides an incentive to bring the parties
to the conciliation table with serious intent to resolve the dispute
then and there. When conciliation fails, the Secretary has no
place to go. In those few cases where good will is absent, the
exclusive reliance upon voluntary resolution is, in the words
of former Secretary Carla Hills, an "invitation to intransigence."
Reform of the Fair Housing Act is a necessity acknowledged
by all.4
In early 1987, with bipartisan support, the Fair Housing
Amendments Act of 1987 was introduced in the House (H.R. 1158) and
Senate (S. 558). After hearings, the House Judiciary Committee approved
an amended version of the legislation on April 27, 1988.5
The chief obstacle to passage concerned the expansive use of HUD
administrative hearings as a means of enforcing the rights protected
under the FHA. Some scholars believed that such administrative hearings
would deny the Seventh Amendment right to a jury trial.6
On the House floor, Rep. Hamilton Fish (R-NY), one
of the bill's chief sponsors, offered a compromise on the enforcement
issue that had been agreed to by civil rights leaders and the National
Association of Realtors.7
Under the amendment, complainants and respondents in the HUD administrative
process would have the option of removing a case to federal court,
thereby preserving the right to jury trial. With this obstacle cleared,
the bill passed on June 29, 1988, by a vote of 376-23. The Senate
passed a similar version of the legislation on August 2, 1988, by
a vote of 94-3. By September 13, 1988, with final differences reconciled,
the Fair Housing Amendments Act was signed into law by President
Reagan.
3. Expanding the Fair Housing Act to Cover Disability
and Familial Status
After nearly 20 years of debate, the FHAA expanded
the original law to prohibit discrimination on the basis of disability8
and "familial status."9
These new "protected classes" are entitled to the same level of
protection from discrimination as race, color, religion, national
origin, and sex.
The FHAA's substantive additions are meant to protect
people with disabilities from pervasive discriminatory practices
that excluded them from large segments of the residential housing
markets. The FHAA was "a clear pronouncement of a national commitment
to end the unnecessary exclusion of persons with handicaps from
the American mainstream."10
The FHAA's definition of disability is quite broad:
"(h) 'Handicap' means, with respect to a person--
(1) a physical or mental impairment which substantially
limits one or more of such person's major life activities,
(2) a record of having such an impairment, or
(3) being regarded as having such an impairment,but
such term does not include current, illegal use or addiction to
a controlled substance as defined in section 802 of Title 21."
42 U.S.C. §3602.
This definition includes mental illness, developmental
disabilities, physical impairments, persons who test positive for
HIV, persons who have AIDS, alcoholics, and persons recovering from
addiction to an illegal drug as long as they are not currently using
illegal drugs.
In addition to prohibiting discrimination on the basis
of disability, the FHAA imposes three other obligations: reasonable
accommodation, reasonable modification and design, and construction
accessibility requirements.
The FHAA requires housing providers to make reasonable
changes, or accommodations, in rules, policies, practices, or services
so that a person with a disability will have an equal opportunity
to use and enjoy a dwelling unit or common space. Reasonable accommodations
may be necessary when someone is applying for housing, during tenancy,
or to prevent eviction.
An accommodation can be requested at any time and
is considered reasonable if it is practical and feasible and granting
it will not impose an undue financial and administrative burden
on the housing provider.11
It is clear, however, that providers may have to absorb some cost
or administrative inconvenience in providing accommodations.12
Accommodations that would result in a "fundamental alteration,"
however, are not required.13
The FHAA also requires owners to permit, at the expense
of the disabled person, reasonable modifications of existing premises
occupied or to be occupied by such person if such modification may
be necessary to afford the person full enjoyment of the premises.
A landlord may, where it is reasonable to do so, make permission
for a modification conditional on the renter agreeing to restore
the interior of the premises to the condition that existed before
the modification, reasonable wear and tear excepted.14
Finally, the FHAA requires that most multifamily buildings
that are first occupied after March 15, 1991, meet certain adaptability
and accessibility requirements.15
Covered buildings (ground floor units in a building without an elevator
and all units in a building served by an elevator) must include
the following:
- A building entrance that is wide enough for a wheelchair
and accessed via a route without steps.
- Accessible public and common-use areas.
- Doors that allow passage by a person using a wheelchair.
- An accessible route into and through all covered
units.
- Light switches, thermostats, and other environmental
controls in accessible locations.
- Reinforcements in bathroom walls for later installation
of grab bars.
- Kitchens and bathrooms that allow a wheelchair
to maneuver about the space.
4. The Administrative Enforcement Process
A victim can file an administrative complaint with
HUD;16 these
complaints must be filed within one year of the alleged violation.
Under the FHA, HUD can delegate its enforcement authority to a state
or local agency whose laws are "substantially equivalent" to the
FHA. As a result, HUD refers most administrative complaints to such
entities, which are also known as FHAPs, because they are recipients
of federal enforcement funding under the Fair Housing Assistance
Program.17 The
time frames for filing complaints with FHAP agencies may be as short
as 180 days.
As amended in 1988, the FHA provides that any person
aggrieved by a discriminatory housing practice may file a complaint
with HUD. The HUD Secretary is required to complete an investigation
of such complaints "within 100 days after the filing of the complaint...unless
it is impracticable to do so."18
Once these complaints are deemed filed and "perfected,"19
an investigation ensues and the complaint is processed to conclusion
in one of several ways: (1) administrative closure; (2) pursuant
to a conciliation or settlement between the complainant and respondent;
(3) a finding that no reasonable cause existed to believe discrimination
occurred (hereafter, a "no cause" case); or (4) a finding of reasonable
cause to believe discrimination had occurred (hereafter, a "cause"
case).
By statute, HUD and FHAPs must attempt to bring complainants
and respondents together in an attempt to conciliate fair housing
complaints.20
Although such conciliation is voluntary (and either side may refuse
to conciliate without prejudicing its case), many parties choose
this route because it is comparatively inexpensive and quick compared
with an administrative hearing or litigation. HUD devotes a chapter
of its intake manual to the mechanics of conciliation.21
If conciliation fails, HUD (or the FHAP) continues
its investigation and eventually must determine whether there is
reasonable cause to believe that discrimination has occurred.
If HUD finds cause, the Secretary "shall...immediately
issue a charge on behalf of the aggrieved person_,"22
who then has the option to have the matter decided by an administrative
law judge or by a federal court. In either setting, the complainant
is entitled to representation by a government lawyer.
After a contested hearing (before an administrative
law judge or a federal court), a respondent who is found liable
for discrimination can be ordered to stop illegal activity, pay
compensatory damages, and pay punitive damages (in a court proceeding)
or a civil penalty of up to $55,000 (in a proceeding before an administrative
law judge).
5. Other Enforcement Options
In addition to strengthening administrative enforcement
by HUD and FHAPs, Congress provided "an improved system for civil
action by private parties and the Attorney General."23
The FHAA extended the statute of limitations from 180 days to two
years and made it clear that victims of discrimination were not
required to go through the administrative complaint process or to
exhaust administrative remedies. The FHAA also removed the $1,000
limit on the award of punitive damages because Congress "believe[d]
that the limit on punitive damages served as a major impediment
to imposing an effective deterrent on violators and a disincentive
for private persons to bring suits under existing law."24
The FHAA, while continuing the Justice Department's
"pattern and practice" jurisdiction, also gave the Attorney General
authority to commence zoning or other land-use cases referred by
HUD, to commence breach-of-conciliation cases referred by HUD, and
to enforce subpoenas. Congress also gave the Attorney General the
power to seek monetary damages for aggrieved parties and to seek
civil penalties up to $100,000.
6. Private Fair Housing Enforcement Agencies
Private fair housing enforcement agencies have played
an increasingly important role in vindicating the rights protected
by the Fair Housing Act. Some, but not all, of these groups are
supported financially through the Fair Housing Initiatives Program
(FHIP), which was established in 1987 to provide funding to public
and private entities formulating or carrying out programs to prevent
or eliminate discriminatory housing practices. Through four distinct
categories of funding, FHIP supports projects and activities designed
to enhance compliance with the FHA and substantially equivalent
state and local laws prohibiting housing discrimination. These activities
include programs of enforcement, voluntary compliance, and education
and outreach.
The day-to-day work of private fair housing groups
involves education and outreach, complaint intake, assessment, investigation,
testing, conciliation, and, in some cases, litigation. The existence
of such organizations and their willingness to engage in aggressive
advocacy has been a significant factor in protecting the rights
of people affected by discriminatory practices. One measure of their
effectiveness is the amount of compensation won for victims of discrimination.
During the 1990s, these groups secured well over $160 million in
compensation through FHA litigation.25
B. Section 504 of the Rehabilitation Act of 1973
1. Initial Passage of the Law
In 1973, Congress reenacted the Rehabilitation Act,26
which had been the federal legislative vehicle for providing rehabilitation
services to people with disabilities. The law was first enacted
to help veterans returning from World War I, and Congress continued
to expand and amend the law to address more than the health care
needs of disabled veterans.27
People with disabilities had engaged in civil disobedience during
the Depression; they had established self-help groups during the
1950s; and organizations of parents created diagnosis-identified
organizations, such as the United Cerebral Palsy Association, and
the Muscular Dystrophy Association, in the 1940s and 1950s. Pressure
from these groups resulted in the creation of a Federal Bureau for
the Handicapped, which, in 1970, began providing funds to train
special education teachers.28
During the civil rights activity of the 1960s and
1970s, disability activists adopted and adapted civil rights philosophy
to their own lives and began an independent living movement that
identified barriers as civil rights violations rather than medical
problems. In 1973, Congress decided to address negative public attitudes
toward people with disabilities by adding civil rights protections
to the Rehabilitation Act. They modeled the protections on the 1964
Civil Rights Act.29
The notion wasn't entirely new because, in the previous year, Senator
Hubert Humphrey and Representative Charlie Vanik had tried to convince
their colleagues to include the word "handicapped" in Title VI of
the 1964 Civil Rights Act.30
President Gerald Ford finally agreed to a revised
version of the bill after several failed attempts to win support
from his as well as Richard Nixon's Administration, although he
remained convinced that the cost of the programs would be excessive.
The 1973 Rehabilitation Act included language that was nearly identical
to that in the Civil Rights Act: "No otherwise qualified handicapped
individual in the United States shall, solely by reason of his handicap,
be excluded from participation in, be denied the benefits of, or
be subjected to discrimination under any program or activity receiving
federal financial assistance."
2. Congressional Intent
After Congress had added civil rights language to
the Rehabilitation Act in 1973, it held hearings and amended the
Act extensively in 1974. One of the most important amendments was
to expand the definition of those covered by the law from those
whose condition caused "a substantial handicap to employment" to
a much broader definition of disability that was not limited to
employment.31
That definition was reflected in Health, Education, and Welfare's
(HEW's) regulations:
Handicapped persons means any person who (i) has
a physical or mental impairment which substantially limits one
or more major life activities, (ii) has a record of such an impairment,
or (iii) is regarded as having such an impairment.32
Another amendment resulted from the New York City
Welfare Department's refusal to make its buildings and programs
accessible and usable by welfare beneficiaries with disabilities.
The Welfare Department said it had followed HEW's advice and modeled
itself on the Social Security Administration. Both agencies were
in buildings with stairs, had no materials in braille or on tape,
and did not provide clients with sign language interpreters.
The Social Security Administration's position was
that Section 504 applied only to recipients of federal funds, not
to the Federal Government itself. President Jimmy Carter responded
by submitting legislation to Congress that resulted in the 1978
amendment to Section 504,33
making its prohibitions equally applicable to entities that were
"assisted by federal financial assistance" and that were "conducted
by an Executive agency or by the United States Postal Service."
The 1978 amendments also responded to critics who
complained that Section 504 went too far. As a result, the 1978
amendments preclude coverage of those whose current use of alcohol
or drugs prevents the person from performing the duties of the job
in question or whose employment would constitute a threat to the
property or safety of others.
In addition, the 1978 amendments added several sections
to the Rehabilitation Act. Section 505 makes the enforcement provisions
of Title VI of the Civil Rights Act of 1964 applicable to Section
504. It permits attorneys' fees in court proceedings. Section 506
makes technical assistance for the removal of architectural, transportation,
and communication barriers available, as well as making federal
funds available for the removal of such barriers. Section 507 creates
the Interagency Coordinating Council to oversee and coordinate federal
agency activities. The agencies named are Education, Health and
Human Services, Labor, Department of Justice, Office of Personnel
Management, Equal Employment Opportunity Commission, and the Access
Board.
Congress amended Section 504 again in 1985 to clarify
that, contrary to the Supreme Court decision in Atascadero v.
Scanlon,34
Congress did intend that states could be sued under the Rehabilitation
Act, and that they were not protected by 11th Amendment immunity.
In 1987, Congress amended the law once again through the Civil Rights
Restoration Act.35
This amendment, also in response to a Supreme Court decision,36
clarified that the definition of a "recipient of federal funds"
included more than the business offices that handled the funds;
rather, all the offices and programs of the recipient entity had
to comply with the law. Thus, a mayor's Office of Housing that received
federal funds would be required to comply with Section 504 through
its housing development, redevelopment, code inspection, and other
activities.
3. History of HUD's Section 504 Regulations
In spite of Section 504's passage in 1973, HEW's publication
of model regulations in 1977, and the NCD's repeated recommendations
to HUD that it issue its own Section 504 regulations,37
HUD did not issue final regulations until June 1988. HUD was the
last Executive agency to issue final regulations, and its ability
to enforce the rights of individuals with disabilities in the housing
and community development fields was compromised by their absence.
The history of the regulations began simply enough, but quickly
became mired in politics and philosophical disputes.
Pursuant to Executive Order 11914, HEW published its
model Section 504 regulations in 1977. The Executive Order not only
required HEW to publish the regulations, but it required all federal
agencies to issue their own regulations expeditiously. HUD acted
quickly and published its proposed rule for public comment in 1978.
The regulations were still in their proposed form when President
Reagan entered office in 1980.
One of the Reagan Administration's first acts was
to require all agencies whose Section 504 regulations were pending
to withdraw them. In July 1981, HUD published a Notice in the Federal
Register notifying all recipients of HUD funds that they were
to comply with Section 504. Because HUD had no regulations, the
Notice advised recipients to rely on HEW's regulations for guidance.38
In August 1981, HUD published a Notice in the Federal Register
announcing that it was revising the proposed rules and they would
be published soon.39
HUD published this Notice because Paralyzed Veterans of America
had sued Secretary Samuel Pierce for HUD's failure to issue regulations.
Neither of these Notices helped HUD enforce Section
504. In fact, some field offices told complainants that HUD could
not investigate their complaints because of the absence of regulations,
while other offices conducted investigations and negotiated relief
for complainants. FHEO ceased conducting compliance reviews when
HUD's Office of General Counsel advised it not to because the Department
would not enforce the findings from complaint investigations without
final regulations.40
FHEO urged the Office of General Counsel to request an opinion from
the Department of Justice as to HUD's authority to enforce Section
504. By a letter dated February 5, 1987, the Department of Justice
confirmed that HUD did have the authority to conduct and enforce
the findings resulting from both complaint investigations and compliance
reviews, by relying on HUD's Title VI regulations for administrative
hearings; by referring cases to the Department of Justice when the
parties were unwilling to participate in administrative hearings;
and by relying on the Health and Human Services (HHS, formerly HEW)
Section 504 regulations.41
Meanwhile, HUD drafted and attempted to publish revised
Section 504 regulations. On May 6, 1983, HUD published Interim Final
504 Regulations, which it republished on May 18, to become final
on June 15. These regulations drew immediate and vociferous criticism
for insulting people with disabilities, for being inconsistent with
the model regulations, and for skirting the public comment requirements
of the Administrative Procedures Act. A group of twenty public interest,
religious, labor, and civil rights organizations met with HUD representatives
and described the most egregious problems they found with the regulations.
The groups also complained to the White House, and HUD announced
on June 15, 1983, that the regulations would be treated as proposed
rules and that it would accept public comments until September 6.42
Of the 1,258 comments that HUD received, only 11 were
favorable. HUD sent a revised version of the rules to the Department
of Justice, where the Civil Rights Division raised further questions.43
Finally, five years later, after Congress had revised the FHA to
prohibit discrimination based on disability (among other changes)
and after HUD had begun drafting regulations to implement the law,
HUD published final Section 504 regulations on June 2, 1988.
Among the most contentious of the proposed regulations
was one that permitted housing providers and managers to ask medical
and social service staff whether a housing applicant with disabilities
would be likely to diminish other tenants' enjoyment of the premises
by adversely affecting their health, safety, or welfare or the physical
environment or financial stability of the assisted housing. These
questions did not apply to applicants without disabilities. Another
section announced that HUD would prohibit only intentional discrimination,
in spite of HEW, Department of Justice, and Supreme Court44
guidance that Section 504 prohibited unintentional discrimination
as well. Finally, while HUD officials were still insisting that
5 percent accessibility for new construction was adequate, Congress
had already required 100 percent adaptability in new construction
in the FHA.45
4. HUD's Final Section 504 Regulations
While HUD's final Section 504 regulations differ from
HEW's model regulations, they are more similar than different. HUD
removed many of the provisions from the proposed rule that caused
the loudest uproar. The final regulations do not permit housing
providers to determine if applicants or tenants are capable of "independent
living."46 Further,
the regulations prohibit both intentional discrimination and discrimination
by effect.
Unfortunately, HUD retained the 5 percent accessibility
standard for new construction and imposed only limited responsibility
on recipients who contract with others for the provision of housing.
Thus, for example, public housing authorities were not required
to ensure that their rental subsidies entitle tenants in private
housing to the same level of accommodation as tenants living in
public housing property. This created an internal inconsistency
in the regulation, because the provision that HUD adopted from the
HEW model prohibited recipients, such as housing authorities, from
entering into contracts that have the effect of "subjecting qualified
handicapped persons to discrimination on the basis of handicap."47
5. The Administrative Enforcement Process
HUD adopted the Title VI administrative enforcement
process, as the HEW regulations had also done. Section 8.56 describes
the method by which HUD may review a recipient's compliance with
the regulations. HUD may initiate compliance reviews without reason,
on a periodic basis, or because of a complaint or any evidence that
the recipient is not following the regulations. HUD must notify
the recipient of the compliance review, the timing of the on-site
visit, which programs will be reviewed, and when the recipient will
have an opportunity to respond to any findings. In addition to FHEO
investigations, Section 8.56 requires program grant officials to
review the recipient's compliance with Section 504 in the normal
course of the grant management. If the compliance review is prompted
by information of noncompliance, the review shall be conducted promptly.
In 1996, HUD published regulations (24 CFR Part 180)
that describe the agency's consolidated hearing procedures for all
civil rights matters, including Section 504. Any person who believes
that she or he has been subjected to discrimination may file a complaint
or may ask a representative to file a complaint. Such a person is
not a party in the proceeding but may file a motion to intervene
within 50 days of the filing of a charge. Members of a class of
people who believe they have been subjected to discrimination may
file a complaint for the class. The complaint must be filed within
180 days of the act of discrimination, although this time limit
may be waived for good cause, and the contents of the complaint,
according to Section 8.56 8(5), may be minimal. Recent changes in
the complaint intake system have retitled such complaints "claims,"
and complaints will be accepted only after FHEO conducts an initial
interview with the "claimant." (See Fair Housing Act discussion
in Section III for a fuller description of the intake process.)
HUD is to notify complainants and recipients within
10 days of its receipt of the complaint. Twenty days thereafter,
HUD is to determine whether the agency will accept the complaint.
FHEO is to notify both the respondent and the HUD award official
of the allegations, so that the respondent may reply within 30 days
after service of the charge. Whenever possible, HUD officials are
to attempt to resolve complaints informally. Within 120 days of
the receipt of the complaint and failure to resolve the complaint
informally, FHEO is to issue a Letter of Findings (LOF). The LOF
must describe the violation, the remedy, a notice that the final
investigative report is available, and a right to respond to the
LOF by any party within 30 days. HUD is to respond to comments by
parties within 20 days, and the reviewing civil rights official
has 60 days in which to sustain or modify the LOF.
If neither party requests that HUD review the LOF,
HUD must send a letter of compliance or noncompliance to the parties
and to the HUD award official within 14 days after the respondent
has been notified of his or her right to review. HUD shall continue
efforts to resolve the complaint informally, and any agreements
that this process produces shall be memorialized in a Voluntary
Compliance Agreement (VCA). The regulations also prohibit retaliation
and intimidation against complainants. HUD will treat complaints
about either as new complaints.
If a VCA is not possible, an administrative hearing
must commence 120 days after the issuance of a charge. Federal rules
of evidence apply at the hearing. The hearing is held before an
administrative law judge (ALJ), who must issue his or her initial
decision within 60 days of the hearing. An ALJ may award a range
of benefits, which include the following:
- Ordering the respondent to pay damages (including
damages caused by humiliation and embarrassment).
- Injunctive relief.
- A civil penalty to vindicate the public interest
for each separate and distinct discriminatory housing practice.
Civil penalties may not exceed $11,000 for a first offense, $27,500
for a second offense, and $55,000 if the respondent has two or
more prior offenses.
If the ALJ finds that the respondent is responsible
for a housing-related hate act, the ALJ takes this into account
in favor of imposing the maximum penalty. Such an act is described
in Section 818 of the FHA as a discriminatory housing practice that
constitutes or is accompanied and characterized by actual violence,
assault, bodily harm, or harm to property; intimidation or coercion
that has such elements, or the threat or commission of any action
intended to assist or be a part of any such act. Of course, if the
ALJ determines that the respondent did not violate the law, he or
she must dismiss the charge.
The ALJ's initial decision becomes the final agency
decision if the Secretary does not alter it within 30 days. The
Secretary may affirm, modify, or set aside in whole or in part the
ALJ's initial decision or remand the case for further proceedings.
Any adversely affected party may file a motion with the Secretary
asking for modification or for setting aside the ALJ's initial decision
within 15 days after the ALJ issues it. A statement of opposition
to such a petition for review is due 22 days after the ALJ's initial
decision. If the Secretary chooses to remand the case, the ALJ must
issue another initial decision on remand within 6 days of the Secretary's
remand. HUD must publicly disclose each final agency decision.
If the ALJ's initial decision provides for suspension
of, termination of, refusal to grant, or refusal to continue federal
financial assistance, it must be approved by the Secretary. Reasonable
attorney fees and costs may be awarded to the prevailing party (except
that no such award may be made to HUD if the agency is the prevailing
party). Any party adversely affected by a final decision may file
a petition for review in the U.S. Court of Appeals under 42 U.S.
Code section 3612(i) within 30 days. Termination of or refusal to
grant or to continue federal financial assistance is subject to
judicial review.
If voluntary compliance is not possible, HUD may follow
the procedures for terminating federal financial assistance. Other
compliance methods, however, include referral to the Department
of Justice with recommendations to proceed to litigation, initiation
of debarment proceedings (which may result in a recipient becoming
temporarily or permanently ineligible to receive HUD grants or contracts),
and proceedings under state and local law (see Section 8.57).
As with all other civil rights statutes dependent
on a link to federal funding, HUD may not terminate funding before
a final attempt to resolve the complaint informally is exhausted;
an express finding is made on the record, after a hearing; the Secretary
has approved the termination; and the Secretary has notified the
relevant House and Senate committees and has given them 30 days
to review the proposed termination of funds.48
Special rules apply when HUD proposes to terminate
Community Development Block Grant funds. In that case, HUD must
notify the governor or the executive of the local government and
ask him or her to attempt to secure compliance. HUD must provide
this notice at least 60 days before suspending, refusing to grant,
or terminating the HUD funds.
Either HUD or the recipient may request a hearing
(see Section 8.58). Hearings will be held in Washington, D.C., by
an ALJ. The respondent has the right to be represented by counsel.
Title V controls the conduct of the hearing (see 29 U.S.C. Sections
554-557). Technical rules of evidence do not apply, but the parties
may be required to produce documents, including exhibits, affidavits,
depositions, and admissions (see 24 CFR Section 8.67).
The ALJ issues a recommended decision to the Secretary.
Either party may file objections to the judge's decision with the
Secretary. The Secretary then issues a final decision (see Section
8.69). The Secretary's final decision may require termination or
denial of federal financial assistance or may impose other penalties.
At any time, the Secretary may restore the recipient to full eligibility
to receive federal funds if the Secretary is satisfied that the
recipient has brought or will bring itself into compliance (see
Section 8.59).
Subpart E of the regulations elaborates on the practice
and procedure for the hearings. All records are to be public. The
general counsel is to be a party to all proceedings. The ALJ will
accept amicus curiae participation, but not as a party. Complainants
are not allowed to be parties but may participate as amici curiae
and may, in all events, be present at the hearing (see Section 8.628).
C. The Role of Federal, State, and Local Agencies in
the Fair Housing Act Enforcement Process
1. Introduction
From passage of the FHAA in 1988 through FY 1993,
the number of HUD Title VIII complaints more than doubled, but the
average age to closure of HUD cases rose only slightly, from 96
days in FY 1989 to 113 days in FY 1993. During the next two years,
even as fewer complaints were being received, processing times skyrocketed.
By FY 1995, the average age to closure of a HUD case was 269 days.
During FY 1996, HUD modified the way in which housing
discrimination complaints were received by the agency. Acting on
recommendations from PriceWaterhouse,49
the agency instituted a new procedure, by which it accepts "claims"
of discrimination from aggrieved parties. These claims do not mature
into "complaints" until they contain sufficient information to allow
HUD to commence an investigation. While some claims of discrimination
are determined to be complete upon receipt, and therefore are accepted
as complaints, beginning in FY 1996, the number of complaints received
by HUD declined precipitously as the number of claims rose dramatically.
In the spring of 2001, acknowledging that the claims
process had failed to improve quality or case processing times,
HUD scrapped the claims process altogether.50
In its place, HUD appears to be reverting to an older process of
determining initial jurisdiction and developing allegations of discrimination
into complaints.51
Because the change in policy is relatively new and HUD has not provided
Title VIII data beyond FY 2000, it is impossible to gauge the effect
of this new approach.
2. The Claims Process
In its 1996 Report to Congress, HUD described the
claims process as follows:
For purposes of this report, the key change is that
FHEO no longer regards every inquiry made as a "complaint" triggering
a full-fledged investigation....[Initially], the case is considered
a "claim" and undergoes some preliminary investigation involving
only the complainant and independent sources of information. Many
cases drop out at this "claim" stage for a variety of reasons.
For instance, the complainant may provide information indicating
that the matter is really a landlord-tenant dispute rather than
a fair housing dispute. Cases which survive this "claim" stage
are considered "complaints" and receive full investigations, which
result in a determination by FHEO as to whether there is or is
not reasonable cause to believe the [Act] was violated.52
The claims process was designed to streamline intake
and to ensure that HUD devoted its scarce resources to cases that
merited full investigation.53
In addition to eliminating allegations that weren't covered by Title
VIII, the claims process also screens out cases in which a claimant
alleges discrimination but cannot establish one of the elements
of jurisdiction.54
In its first full year of operation (FY 1997), the new process had
a dramatic impact: 69.5 percent of all closures were dismissed as
claims.55 That
pattern has persisted in subsequent years: for FY 1998 through FY
2000, closures of claims represented 77 percent, 74 percent, and
71 percent, respectively, of all HUD closures.56
The claims procedure had the inherent possibility
of delaying resolution of fair housing cases. Time spent processing
a claim did not count toward the 100 days in which FHEO is mandated
to complete its investigation.57
As a result of concerns about the timeliness issue, in May 1997,
FHEO established a new time frame of 25 days for assessing claims
and determining whether they would be converted to complaints or
dismissed. Unfortunately, staffing and management reductions at
FHEO have meant that many housing field offices (HUBs), or regional
offices created by HUD, are failing to complete the assess process
on time.58
3. HUD Conducts Its Fair Housing Act Responsibilities
Through 10 Regional Offices
For purposes of administering its responsibilities
under the FHA, HUD has designated 10 HUBs, or regional offices:
Region 1: Boston
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island,
and Vermont
Region 2: New York
New Jersey and New York
Region 3: Philadelphia
Delaware, District of Columbia, Maryland, Pennsylvania, Virginia,
and West Virginia
Region 4: Atlanta
Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina,
South Carolina, Tennessee, and Puerto Rico
Region 5: Chicago
Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin
Region 6: Ft. Worth
Arkansas, Louisiana, New Mexico, Oklahoma, and Texas
Region 7: Kansas City
Iowa, Kansas, Missouri, and Nebraska
Region 8: Denver
Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming
Region 9: San Francisco
Arizona, California, Hawaii, and Nevada
Region 10: Seattle
Alaska, Idaho, Oregon, and Washington
4. Recent History of HUD Enforcement of Title VIII
Throughout the 1990s, numerous reorganizations and
special initiatives at FHEO complicated the task of enforcing fair
housing rights through the Title VIII complaint process. Three of
these deserve special mention: (1) the devolution of decision making
from Headquarters FHEO to HUB directors; (2) HUD's reallocation
of resources in FY 1997 and FY 1999 to emphasize "hot cases"; and
(3) HUD's preoccupation from FY 1997 through FY 2000 with "doubling
enforcement actions."
a. Devolution of Authority to HUBs
From FY 1989 until FY 1992, although HUBs conducted
Title VIII investigations, HUD's Office of General Counsel (OGC)
retained the authority to make determinations about whether cause
existed to believe that discrimination had occurred. Thereafter,
authority was transferred to Headquarters FHEO, with OGC concurrence
required for every cause finding. This arrangement resulted in significant
tension between FHEO and OGC staff, which has existed almost to
the present time.59
By FY 1994, HUBs were invested with authority to make recommendations
for cause or no cause findings in most cases, but all these decisions
were reviewed by Headquarters FHEO.
In early FY 1996, Deputy Assistant Secretary Susan
Forward began to devolve full authority over cause and no cause
decisions to the HUBs, and the HUBs have retained this authority
up to the present.
In the early stages of devolution, Headquarters FHEO
maintained strict performance standards for HUB directors. By FY
1997 and FY 1998, however, FHEO had lost some of its most capable
managers and with them the ability to ensure quality control and
a modicum of uniformity in practice among the 10 HUBs. As a consequence,
significant differences among HUBs have emerged on such critical
areas as numbers of complaints processed, proportion of cases with
cause findings, and age of cases.60
As a result of HUD's most recent reorganization (See Section VI)
and the general devolution of authority to the HUBs, Headquarters
FHEO has effectively divested itself of responsibility for oversight
of the HUBs. The purported benefits of this devolution have been
outweighed by the absence of a Headquarters FHEO office charged
with reviewing the national enforcement landscape and assessing
whether individual HUBs are doing their part to reach the goals
outlined in HUD's Strategic Plan and Business Operation Plan (see
Section VI).
One of the major findings of this report is that HUD
has been slow to understand the ill effects of devolution and even
slower to attempt to remedy them.
b. Hot Cases
As part of its effort to raise the visibility of the
agency, HUD embarked in FY 1997 on a campaign to identify and publicize
fair housing cases where HUD intervention resulted in visible and
newsworthy relief to victims of discrimination. As a consequence,
resources in many HUBs and at Headquarters were diverted to such
"hot cases." Secretary Andrew Cuomo took a keen personal interest
in this campaign, directing his staff to review HUB complaint logs
regularly to identify hot cases and personally participating in
many press conferences announcing the filing or settlement of complaints.
During the initiative, HUB staff were required to send weekly hot
case reports to Headquarters, to expedite investigations, and to
participate in regular conference calls and media events. Known
at Headquarters as "the drumbeat," Secretary Cuomo's effort resulted
in almost daily press releases designed to portray the agency as
very active in fighting discrimination. While most of these cases
involved individuals who had been subjected to outrageous behavior
by landlords or neighbors, a small number of the hot cases also
dealt with systemic issues, such as alleged lending discrimination.
HUD's March 1998 settlement with Texas-based AccuBanc is one such
example.61A
principal result of the hot case initiative was the diversion of
the most skilled intake workers and investigators from existing
cases to hot cases. During more than three years of the campaign,
FHEO enforcement staff actually declined by 9 percent,62
and the average age of HUD cases increased from 350 to 497 days.63
The hot case approach produced some major public victories, especially
in the lending industry, which FHEO had not targeted before. But
it also had a measurably negative impact on the routine enforcement
business of HUD because of its decision to supplant the day-to-day
enforcement rather than to supplement it with additional resources
for hot cases.
c. Doubling Enforcement Actions
Beginning in FY 1997, as part of the President's Initiative
on Race, HUD committed itself to "doubling enforcement actions"
by FY 2000.64
HUD defined enforcement actions as "issuance of a charge by HUD
or referral by HUD to the Department of Justice for enforcement."65
By early in FY 1998, HUD was actively soliciting comments about
how its funding programs could incorporate incentives to support
the doubling initiative.66
Later in the same year, evidence began to emerge that the enforcement
strategies of FHIP-funded agencies were being affected by the initiative.67
HUD reported early success for the initiative.68
The National Council on Disability issued a cautiously optimistic
note in responding to the initiative:
Also as part of [the President's Initiative on Race],
the President proposed and Congress approved a significant expansion
in the Department of Housing and Urban Development's (HUD's) fair
housing enforcement budget for Fiscal Year (FY) 1999. The approved
budget for fair housing programs was $40 million, up from $30
million in FY 1998. NCD commends the President and Congress for
recognizing the need to expand fair housing enforcement. NCD recommends
that HUD use the increase in appropriations for fair housing to
expand its enforcement of the Fair Housing Act and Section 504
of the Rehabilitation Act on behalf of people with disabilities.
To the extent that HUD will be doubling enforcement efforts under
the Fair Housing Act, for example, NCD recommends that HUD's efforts
under Section 504 also be doubled."69
By 1999, however, critics such as the Citizens' Commission
on Civil Rights began to express concern about the initiative, particularly
with respect to its impact on HUD's ability to process Title VIII
complaints.70
As part of the review of HUD's enforcement of Title
VIII, NCD requested information from HUD about the doubling initiative.
While HUD did not provide detailed data, it supplied a summary chart
purporting to show that the agency had not only doubled its enforcement
actions but had actually increased them by 135 percent. On its chart,
HUD displays the following caption: "2,922 Enforcement Actions (135
percent of goal attained) after 51 months (100 percent of time)
as of December 31, 2000." Chart III-1 summarizes HUD's data from
its doubling effort:
Chart III-1
[D]
Even a quick analysis indicates that HUD was
not comparing apples to apples when it made its claim that it had
exceeded its doubling objective. During the base period (FY 1993-FY
1996), HUD counted only charges and referrals to the Department
of Justice, which totaled 1,085 "enforcement actions." Had it used
only these two categories for the comparison period (FY 1997-December
31, 2000, a total of 51 months, or 3 months longer than the base
period), it would have had only 885 enforcement actions, a reduction
of 18 percent compared with the base period figure.
Only by counting other categories, such as temporary
restraining orders (TROs), agreements, nonclaimants, and unfiled
criminal--none of which fit the agency's initial definition of enforcement
actions,71--could
HUD have concluded that it had met or exceeded its target.
NCD interviewed several senior HUD staff members about
the effect of the doubling effort on routine intake and investigation
of Title VIII and Section 504 complaints and compliance reviews.
They were very frank in their response that the doubling initiative
had diverted resources away from the agency's core enforcement functions
and that Section 504 work had essentially ground to a halt during
the initiative.72
5. State and Local Fair Housing Agencies
Even before the FHAA, Congress had directed that states
and localities with fair housing laws deemed "substantially equivalent"
to the FHA, in terms of substantive coverage and enforcement provisions,
were to handle their own administrative hearings. The Fair Housing
Assistance Program (FHAP) is authorized by the FHA,73
which permits the Secretary to use the services of responsible state
and local agencies in the enforcement of fair housing laws and to
reimburse these agencies for services rendered to assist HUD in
carrying out the FHA.
Eligible grantees are state and local enforcement
agencies administering statutes that HUD has certified as substantially
equivalent to the federal statute. Funding is provided to substantially
equivalent state and local agencies under FHAP to assist them in
carrying out activities related to the administration and enforcement
of their fair housing laws and ordinances. Such activities include
complaint processing, training, implementation of data and information
systems, and other special projects specifically designed to enhance
the agency's administration and enforcement of its fair housing
law or ordinance.
When Congress amended the FHA in 1988, 36 states and
76 local agencies had been certified by HUD as being "substantially
equivalent."74
Recognizing that a transition period was necessary to allow these
jurisdictions to amend their laws to conform to the FHAA changes,
Congress extended the authority of then-certified agencies to continue
to handle housing discrimination complaints, but Congress directed
HUD to retain jurisdiction over complaints involving handicap and
familial status where state and local laws did not provide protection
on those bases. By September 13,1992, the end of the transition
period, the number of certified agencies declined dramatically,
as states and localities failed or refused to modify their laws
to conform to the FHAA.75
As of March 2001, HUD had certified 32 states,76
the District of Columbia, and 53 localities77
as having substantially equivalent laws.
Since FY 1980, HUD has provided financial assistance
to state and local "substantially equivalent" agencies through FHAP
to support complaint processing, training, technical assistance,
data, and information systems and to provide incentives for states
and localities to assume greater responsibility for administering
fair housing laws. State and local agencies (often referred to as
FHAPs) are reimbursed on a formula based on the number of fair housing
complaints they handle.78
Except under unusual circumstances,79
a complaint filed with HUD will be routinely referred to a state
or local agency that HUD has certified as substantially equivalent.
A complainant has little or no influence over this decision, and
his or her complaint is effectively confined within the state or
local FHAP system, with all the advantages and disadvantages of
the track record of that particular FHAP agency. In states or localities
that do not have FHAPs, HUD retains responsibility for processing
claims and complaints.
Table III-1 provides information about where a complaint
is likely to be processed. It demonstrates that FHAP agencies have
processing authority for complaints in states and localities covering
roughly 79 percent of the U.S. population and that HUD has processing
authority over approximately 21 percent. These relative responsibilities
should be borne in mind as the reader reviews the data, findings,
and recommendations in this report.
Table III-1: FHAP Regional Agencies
Region |
FHAP Agencies [STATEWIDE
AGENCIES IN CAPS;
Local Agencies in Initial Caps]
(as of March 2001) |
Population Served by
FHAPs
(2000 CENSUS) |
States in Region Without a
Statewide Fair
Housing Agency |
Population Served by HUD (2000
Census) |
1
Boston |
CONNECTICUT
MASSACHUSETTS: Boston, Cambridge
RHODE ISLAND
VERMONT |
11,411,808 |
MAINE
NEW HAMPSHIRE |
2,510,709 |
2
New York |
NEW YORK: Rockland County |
18,976,457 |
NEW JERSEY |
8,414,350 |
3
Phila-
delphia |
MARYLAND
DELAWARE
DISTRICT OF COLUMBIA
PENNSYLVANIA: Pittsburgh, Reading, York
VIRGINIA
WEST VIRGINIA: Charleston, Huntington |
27,036,458 |
|
|
4
Atlanta |
FLORIDA: Hillsborough County, Jacksonville, Orlando,
Palm Beach County, Pinellas County, St. Petersburg, Tampa
GEORGIA
KENTUCKY: Lexington/Fayette County, Louisville/Jefferson County
NORTH CAROLINA: Asheville/Buncombe County, Charlotte/Mecklenburg
County, Durham, Greensboro, New Hanover County, Orange County,
Winston-Salem
SOUTH CAROLINA
TENNESSEE: Knoxville |
45,961,208 |
ALABAMA
MISSISSIPPI
PUERTO RICO |
11,100,368 |
5
Chicago |
ILLINOIS: Springfield
INDIANA: Elkhart, Fort Wayne, Gary, Hammond, South Bend
MICHIGAN
OHIO: Dayton, Parma, Shaker Heights |
27,499,945 |
ILLINOIS
MINNESOTA
WISCONSIN |
22,574,571 |
6
Ft. Worth |
LOUISIANA
OKLAHOMA
TEXAS: Austin, Dallas, Fort Worth, Garland |
28,771,450 |
ARKANSAS
NEW MEXICO |
4,492,446 |
7
Kansas City |
IOWA: Cedar Rapids, Davenport, Des Moines, Dubuque,
Mason City, Waterloo
MISSOURI: Kansas City
NEBRASKA: Omaha
Lawrence, Olathe, Salina (all in Kansas) |
10,451,537 |
KANSAS |
2,469,679 |
8
Denver |
COLORADO
NORTH DAKOTA
UTAH |
7,176,630 |
MONTANA
SOUTH DAKOTA
WYOMING |
2,150,821 |
9
San Francisco |
ARIZONA: Phoenix
CALIFORNIA
HAWAII |
40,213,817 |
NEVADA |
1,988,257 |
10
Seattle |
WASHINGTON: King County, Seattle, Tacoma |
5,894,121 |
ALASKA
IDAHO
OREGON |
5,342,284 |
United States |
|
223,393,431 |
|
61,043,485 |
|