A common question related to senior housing, particularly senior housing that has minimum age requirements, asks whether that violates anti-discrimination laws.  The short answer is usually no, but there remains reason for senior housing owners and operators to proceed cautiously and ensure consultation with appropriate attorneys and governmental authorities.

The main federal law that is relevant to this issue is the Fair Housing Act (“FHA”).  While the Fair Housing Actdoesn’t specifically prohibit discrimination based on age, it does prohibit discrimination based on “familial status,” or a parent occupying a home with their child.  In other words, housing providers cannot discriminate against those with children.

Exemptions Under the FHA

Many senior housing facilities that target those over 55 actually prohibit live-in relatives under the age of majority.  It would seem that these facilities would be in violation of the FHA’s prohibition on familial status discrimination, right?  Fortunately, the FHA carves out an exception specifically aimed at permitting such facilities and housing projects to continue operating with age restrictions.  The exception provides that “housing for older persons” (HOP) is exempted from the familial status rule.

What exactly is HOP?  Under the FHA, Sect. 3607, it refers to three different types of housing: (1) government provided housing “designed and operated to assist elderly persons”; (2) housing “intended for and solely occupied by” individuals 62 or older; and (3) housing that is “intended and operated for occupancy by at least one person 55 years of age or older per unit.”  Almost all HOP litigation arising under the FHA relates to this third category.  The statute itself leaves a lot of open questions; for example, what does “intended and operated for” mean?  Can there be no one under 55 residing in the project?

Federal regulations clarify these issues.  In short the issue is mostly based on an 80/20 rule, meaning 80% or more of the units must meet the third criteria above.  As for the other 20%?  The government’s official position is that it doesn’t really care who lives in those units.  Though, we’ll admit, its wording is more official: see the federal regulations here.  In addition to complying with the 80/20 rule, to fall within the HOP 55+ exception, the community/housing provider must also have procedures in place for age verification and have policies and procedures that support its contention that its goal is to occupy units with persons age 55 and older.

After the federal hurdle, there are still state laws to which must be adhered.  The FHA, in fact, expressly notes that the HOP exception applies only in so far as it doesn’t circumvent state and local regulations.  Fortunately, if providers comply with the FHA, they will usually find themselves naturally in compliance with state rules as well.

Age Restrictions and Financing

Age restrictions are not only relevant to potential legal liability, but can be relevant to financing as well.  For example, for eligibility under HUD Lean 232, certain senior housing facilities must maintain a certain portion of residents age 55 or older.  For additional detail on this requirement and other restrictions related to HUD Lean 232 financing, contact Cambridge Realty Capital today.

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