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Media Alerts - Fair Housing Rights Center v. Post Goldtex GP, LLC - Third Circuit
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May 23, 2016
  Fair Housing Rights Center v. Post Goldtex GP, LLC - Third Circuit
Headline: Fair Housing Act Accessibility Requirements Do Not Apply to Commercial Buildings Originally Constructed Before the Act's Effective Date but Converted into Residential Units After that Date

Area of Law: Housing Law

Issue(s) Presented: Do the design and accessibility requirements of the Fair Housing Act (FHA), apply to a commercial building that was originally constructed before the requirements' effective date, but converted into residential units after that date?

Brief Summary: A warehouse in Philadelphia, built in 1912 and originally used for manufacturing, was converted into an apartment building starting in 2010 by Post Goldtex and KlingStubbins. The Fair Housing Rights Center in Southeastern Pennsylvania (FHRC) conducted a site visit which revealed violations of the FHA design and construction accessibility requirements, e.g., units with kitchen counters too high for persons in wheelchairs. FHRC brought claims of housing discrimination. The District Court granted Goldtex's motion to dismiss based on the Department of Housing and Urban Development's (HUD) interpretation of the FHA, which exempts converted buildings built before March 13, 1991, the effective date of the design and construction requirements.

The Third Circuit agreed. The Court found that first, the design and construction provision was ambiguous on the issue of whether converted buildings are exempted; second, that the HUD interpretations on point were reasonable, not inconsistent with the statute, and reflected legitimate policy choices by the agency; and third, that those HUD interpretations consistently conclude that the accessibility requirements do not apply to buildings like the Goldtex apartments that are not newly constructed and not first occupied after the effective date of the requirements.

Extended Summary: In 2010, Post Goldtex bought what was originally the Smaltz Building, built in Philadelphia in 1912 and used as a factory and later for manufacturing and other business pursuits. By the end of the 1990s, the Smaltz Building had fallen into disrepair. After purchasing the building, Post Goldtex gutted it and converted it to a 163-unit apartment building, designed by KlingStubbins. The building began accepting tenants in 2013. FHRC, a non-profit corporation that investigates potentially discriminatory housing practices, conducted a site visit of the Goldtex Apartment Building in April 2014. The visit revealed numerous violations of FHA design and construction requirements, including entrance doors that were too heavy, door thresholds that were too high, and units with kitchen counters too high for persons in wheelchairs.

FHRC sued under the FHA, claiming housing discrimination against persons with disabilities. The District Court dismissed FHRC's action. The Court agreed with Goldtex's argument that the plain language of the FHA and the HUD's interpretive guidance clearly exempt converted buildings like the Goldtex Apartment Building built before March 13, 1991, the effective date of the design and construction requirements.

On appeal, FHRC argued that the HUD regulation exempting converted buildings should be found invalid because it is contrary to the unambiguous language of the FHA. The provision in question states that FHA requirements apply "in connection with the design and construction of covered multifamily dwellings for first occupancy after [March 13, 1991]." FHRC argued that this language clearly reveals Congress' intention that the accessibility requirements apply to any dwellings constructed and occupied after the provision's effective date, regardless of when the actual building was originally constructed. On the other hand, Goldtex argued that the FHA plain language clearly shows that Congress did not mean to limit "first occupancy" to a residential context, meaning that any kind of occupancy - residential, commercial, or otherwise - before the effective date would exempt the building from the requirements.

As evidenced by the parties' conflicting interpretations, the Third Circuit determined that the provision's plain language does not clearly answer whether Congress intended to limit access requirements to residential occupancy, commercial occupancy, or both. Nor does the language clearly show whether Congress intended to require buildings constructed before March 13, 1991 but remodeled after that date to comply with the accessibility requirements. Because the plain language of the statute is not clear, the Third Circuit turned to the HUD interpretations and the FHA's implementation regulations. The Court gave HUD's interpretation weight because it is not inconsistent with or forbidden by the FHA statutory requirements and the FHA's general policy of access for persons with disabilities.

HUD defines "first occupancy" as a building never before used for any purpose. This, the Third Circuit concluded, clearly exempts the Goldtex Apartment Building, which was used for several purposes since 1912, and thus "first occup[ied]" before March 13, 1991. The Court also looked to similar HUD guidance on conflicts between accessibility requirements and local historic preservation codes for support. HUD has clearly stated that in neighborhoods subject to historic codes, existing facilities converted to dwelling units are not subject to FHA's accessibility requirements, nor are alterations, rehabilitations, or repairs of covered multifamily dwellings. Lastly, the Court pointed to a U.S. Department of Justice and HUD joint statement noting that the FHA does not apply to alterations or renovations of nonresidential buildings into residential buildings.

In sum, based on clear HUD interpretative regulations and other guidance, the Third Circuit held that the FHA accessibility requirements do not apply to buildings like the Goldtex Apartment Building that are converted from existing buildings and first occupied, for residential or commercial purposes, before the effective date of the requirements.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/151366p.pdf.

Panel: Fuentes, Smith, and Nygaard, Circuit Judges

Argument Date: October 6, 2015

Date of Issued Opinion: May 17, 2016

Docket Number: No. 15-1366

Decided: Affirmed

Case Alert Author: Elizabeth C. Dolce

Counsel: Stephen F. Gold, Esquire and Rocco J. Iacullo, Esquire, Counsel for Appellant; Walter S. Zimolong, III, Esquire, Counsel for Appellee Post Goldtex; Anthony W. Hinkle, Esquire, Kathryn E. Pettit, Esquire, Kevin B. Watson, Esquire, and Barbara W. Mather, Esquire, Counsel for Appellee KlingStubbins.

Author of Opinion: Circuit Judge Nygaard

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 05/23/2016 02:59 PM     3rd Circuit  

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