Despite their obvious importance to any new apartment property, building codes and standards have never been one of the multifamily industry's most engaging issues. When industry leaders gather, their conversations usually involve topics such as capital sources or new technology applications. Rarely does the talk turn to the latest code requirements - until recently. As the U.S. Department of Housing and Urban Development (HUD) steps up its efforts to enforce the federal Fair Housing Act accessibility requirements, developers and owners are suddenly talking about codes and standards. For the most part, their discussions center on how to comply with the various layers of complicated, sometimes vague and often conflicting requirements concerning accessible housing in this country. As many have discovered, either firsthand or through colleagues, compliance is far from a straightforward matter.
The lack of clarity on this issue has not been missed by HUD Secretary Andrew Cuomo, who has spearheaded the department's new compliance efforts. Speaking at a Senate hearing in March, the Secretary acknowledged the considerable difficulty multifamily housing developers face in trying to comply with the various state, local and federal accessibility requirements.
At the same time, however, he further complicated the industry's compliance dilemma by withdrawing HUD's Fair Housing ActManual, essentially the only substantive guidance available to the industry, because of ambiguities contained within the publication. While the agency was expected to reissue the manual as "definitive guidance" by late April or early May, for multifamily housing owners, this represents yet another addition to an already complicated body of guidance.
The problem In 1988, Congress amended the Fair Housing Act (Act) to prohibit discrimination against the disabled in the sale or rental of housing. As expanded, the Act requires multifamily buildings with four or more units, built for first occupancy after March 13, 1991, to be handicapped-accessible. In elevator-equipped buildings, this requirement applies to all units, and in nonelevator properties the requirements apply only to ground floor units.
The legislation also directed HUD to provide technical assistance to states, local governments and other persons tasked with implementing the Act. In 1991, HUD met this Congressional mandate by promulgating the Fair Housing Act Design andRequirements and the Fair Housing Act Accessibility Guidelines, collectively known as the Guidelines. The Department supplemented the Guidelines in 1994 by publishing a set of questions and answers. Finally, in 1996, HUD issued the now-rescinded Fair Housing Act Design Manual "to assist designers, builders, and developers in understanding and conforming with the design requirements of the Fair Housing Act."
Many multifamily owners have undertaken substantial efforts to comply with the Guidelines and the ever-evolving guidance, while others have been less responsive. Among the defenses offered by the owners who haven't fully complied:
* I was unaware of the new requirements.
* I assumed my architect designed my buildings in compliance with all applicable accessibility requirements.
* My buildings were constructed in compliance with the Americans with Disabilities Act (ADA). I assumed that meant they comply with the Fair Housing Act requirements as well.
* I obtained a local building permit and assumed that meant my property met the Fair Housing Accessibility requirements.
While many readers might consider these reasonable assumptions, none is considered a valid justification by HUD or the U.S. Department of Justice (DOJ) for failure to comply. What these rationales highlight, however, are the major problems owners face in trying to comply. First, there are a myriad of accessible design requirements. Second, these requirements are found in a variety of statutes and guidance
* The reissue of HUD's Fair Housing Act Design Manual should be available by late April or early May.
* HUD officials say this edition will be a "definitive guidance," replacing the ambiguous 1996 manual.
* For more information, contact the Fair Housing Information Clearinghouse at 1-800-795 7915.
To prevent severe economic dislocation and upheaval, the following transition rules for commercial properties owned before tax reform are absolutely essential:
* Deductions for interest paid and depreciation must be allowed to continue for a reasonable period of time, e.g., 10 years.
* Concurrent with deductions, present tax rates could apply for these property investments.
* Only capital gain after deducting basis and the amount of any outstanding debt should be taxed if not reinvested.