Mission From God

Rabbi Bruce Kahn's attire is unassuming, his office unadorned. Dressed casually in kakhis and a button-down shirt sans tie, Kahn stands in his office near DuPont Circle in Washington, D.C. The walls are sparsely decorated with baseball memorabilia and Navy hats. His desk is stacked with papers and religious books. You would never guess that the 62-year-old Kahn has faced off against some of the wealthiest, most influential men in real estate.

But that doesn't mean Kahn is the John Q. Citizen he appears to be. As Kahn steps down from the executive director role at the Equal Rights Center (ERC)—an organization whose predecessor he helped found 25 years ago—the multifamily industry is holding its breath, unsure what will happen next. For many of the industry's biggest and best firms, the ERC has been a divisive, antagonistic foe. That's what happens when a little nonprofit has the audacity to sue some of the most respected companies in the business for alleged violations of the Americans With Disabilities Act (ADA) and Federal Housing Administration (FHA). And at the center of it all is Kahn.

“We're casting a question mark on the good feeling that [apartment owners] want to have about themselves,” Kahn says. “Developers want to feel that they've done the right thing, and here's this little upstart civil rights agency telling them that they've made these blunders and haven't been paying close enough attention. Who are we to do that?”

Indeed. The ERC has sued companies such as Archstone-Smith, a large, formerly public REIT based in Englewood, Colo.; Trammell Crow Co., a Dallas-based apartment owner and builder; and The Bozzuto Group, a Greenbelt, Md.-based developer long considered one of the most ethical firms in the industry. It has forced each firm to settle—and those settlements weren't cheap. Archstone, for one, spent more than $20 million to fix 12,000 units, and also paid $1.4 million in legal fees.

But that isn't all that makes Kahn controversial. Although his religious-like fervor for fair housing isn't disputed, his methods certainly are. On one hand, he expresses a desire to come together and have “the industry rush toward us as we rush toward them.” On the other hand, many people who have dealt with him say his organization won't back off of demands of total accessibility and sincerely compromise during the litigation process. This is a story of a how a one-man act has changed the face of real estate in America—it's a story that began with a rabbi.

If it seems like Kahn has a zealot-like approach to fair housing and accessibility, it's because he does. “I think he's very passionate and committed to providing accessible housing,” says Sharon Dworkin Bell, senior staff vice president for multifamily housing at the Washington, D.C.-based National Association of Home Builders. “He truly believes it's an area in which he [can] make a significant impact.”

Spend five minutes with Kahn and you'll soon see why. In one breath, Kahn admonishes Americans for their treatment of people with disabilities as the “most flagrant, in-your-face discrimination in the country today.” In the next, he says that putting stairs in front of an apartment community is equivalent to placing a “blacks not allowed” sign in front of a restaurant. The comparison seems outrageous, but the passion seems sincere.

Kahn says it was his rabbinical training that taught him the importance of fighting injustice. “When I look at the anti-Semitism, bigotry, and violence that have been upon us for 2,000 years, you cannot miss the point that we have a responsibility to all of us to restore the broken fragments of our world to wholeness,” Kahn says. “Discrimination is a fragmented force. We want to move the world to wholeness, prevent illegal discrimination before it happens, and repair the damage caused by it.”

Kahn, who has five degrees ranging from a bachelor's in English literature to a master of arts in Hebrew letters (none are in law), was in the Navy in the early '70s when the military “was getting serious about discrimination.” Those 28 years, during which he advised commands about eliminating discrimination, made a big impact. Discrimination in housing, in particular, intrigued the rabbi. “Housing is the portal to better work, better opportunities for employment, and more choices for education,” he says.

Kahn first made fair housing his calling in 1976, when, fresh from active duty as a Navy chaplain, he met a congregation member named Barbara Wurtzel (now Rabin). She was the executive director of Housing Opportunities Made Equal (HOME), a Richmond, Va.-based non-profit focused on fighting discrimination in housing. “I was enamored with the work she was doing,” he says. “She recruited me to be a volunteer tester.”

When Kahn arrived in the capital in 1980, he settled in as the rabbi of Temple Shalom in Chevy Chase, Md., and began advocating for fair housing. Three years later, he joined forces with clergymen from six different dominations to form the Fair Housing Council (three of those original members, including Kahn, are still active). Its mission was to educate the public on all forms of discrimination in housing and fight against acts of discrimination.

“The board felt that it was critical for someone on the inside to take over,” Kahn says. “I was in the best position. I had already taken early retirement from pulpit.”

So after more than 20 years of working quietly for fair housing, Kahn stepped into the limelight at the ERC. No one noticed—that is, not until Dec. 20, 2004. On that day, the ERC filed a sweeping lawsuit against Archstone-Smith that raised the industry's collective eyebrow. “The Archstone case came out of nowhere,” says Terry Kitay, an attorney based in Marina del Rey, Calif., who has had five of her multifamily clients sued by ERC and similar groups. “It surprised me. Private enforcement surprised me because there is [already] a mechanism for government enforcement.”

It's not as if the apartment industry hadn't seen accessibility suits before then. Until that point, multifamily firms were cited by government agencies such as the U.S. Department of Justice for problems at a limited number of units or properties. There hadn't been a precedent for expansive suits from the private sector covering thousands of units.

The ERC changed that. And their first target—a respected public REIT—got even more attention. “Because it was against Archstone, everyone sat up and took notice,” Kitay says. “I had a lot of my clients ask, ‘Where did this come from?'”

Where indeed? Kahn says that when he took over the ERC in 2003, he had heard about issues at the apartment giant's units. But it was up to ERC's testers—people who visit homes, businesses, and public spaces to check for civil rights violations—to uncover what he calls “real” problems. “We felt compelled to do a larger investigation,” he says. “We checked out Archstone properties in 16 states. Every one was in serious violation of the FHA.”

Armed with that knowledge, Kahn met with leaders of a number of disability groups and asked how important accessible housing was to them. When they told him that it was the No. 1 problem facing people with disabilities, he says he had no choice but to go after Archstone.

According to Kahn, the ERC first went to Archstone in 2004 asking for changes, but the company ignored him. So Kahn took what he says is the next logical step and filed suit. Fewer than six months after the suit, on June 8, 2005, Archstone settled with the ERC. The settlement required 71 apartment complexes developed by the company (located in 16 states) to be surveyed. The complexes housed about 36,000 apartment units, 12,000 of which were to be retrofitted at Archstone's expense. Kahn calls the company's decision to settle “heroic.” Archstone declined to comment for this story.

Industry observers have another opinion. They think Archstone was too quick to settle. “Because Archstone was such an easy victory, it emboldened [the ERC],” says Chris Hanback, an attorney for Holland & Knight, a Washington, D.C.-based law firm that has seen five of its clients sued by the ERC. “From an industry perspective, the Archstone folks didn't raise any of the legal or factual issues or put up a fight. They entered into a settlement that many of the companies in the industry said they would never do.”

David Fitch, CEO of Gables Residential, an Atlanta-based apartment owner and builder who was sued by the ERC a year ago, thinks Archstone—and the industry as a whole—should have defended itself better. “I think it was somewhat unfortunate that there was not more time and more of an industry-level response and process taken to resolve the claim when it was brought up initially,” he says. Gables' lawsuit, meanwhile, is still pending.

Archstone got the industry's attention. And after that victory, the ERC took on steam. By mid-September 2005, the suits were being filed at a fast and furious pace. As if Kahn was reading a phone book listing of apartment companies, ERC sued two highly respected apartment owners and East Coast operators: AvalonBay Communities and The Bozzuto Group.

The suit against Bozzuto came as a particular surprise. The ERC had actually acted as a compliance consultant for several years to help keep the company's portfolio of 71 properties on the accessibility straight and narrow.

“We hired the ERC to come in and make sure that things are done right,” explains Mike Skojec, a partner with Baltimore, Md.-based Gallagher Evelius & Jones, which counseled Archstone during its settlement proceedings and also acts as counsel for Bozzuto. “Because of the complexity of the legal requirements, some things were not done right, and so, in 2005, the ERC comes along and sues them without notice. The first thing we did was sit down with the ERC lawyers and remind them of our history. We asked for something reasonable. They said, ‘No. We want everything corrected.'”

Tom Bozzuto, the firm's CEO and one of the industry's most respected leaders, was floored when he got wind of the suit. “After Archstone and the settlement, if they would have approached us one on one with a telephone call, that would have worked just as well,” he says. “Yes, I believe that Rabbi Kahn is absolutely committed to the cause of accessibility. Do I think he's going about it the way I would? No. But I do believe he's committed to it.”

Others say they've seen similar strong-arm tactics from the ERC. With no warning, Fitch says he was just presented with a suit. Kitay says that's what happened with her clients. And Hanback has seen it go both ways. “I'm aware of instances where they contacted developers in advance of suits; I'm also aware where they just dropped lawsuits on people,” he says.

For its part, the ERC says it would much rather approach companies and work out a settlement before it sues. “Often, we will really bend over backwards not to take legal action,” Kahn says. “We are typically ignored.” People who've dealt with the ERC have a different take on the organization's spirit of compromise. They say much like a hard-headed child, the nonprofit holds it ground until it gets everything it wants—every single thing. “Their idea of negotiation is ‘We won't sue you if you concede we're right on every point,'” Hanback says.

Not so, Kahn says. The ERC simply doesn't want to risk losing any unit to the darkness of inaccessibility. “They're permitting the crisis to linger instead of getting it done,” says Donald L. Kahl, then-chief operating officer of the ERC and one of its lead litigators, who took over for Kahn as executive director on Aug. 30. “Unfortunately, there are some who think money is better spent fighting issues through litigation process than remedying the accessibility issue.”

Jeanne McGlynn Delgado vehemently disagrees. The vice president of business and risk management policy for the National Multi Housing Council, a Washington, D.C.-based association representing the apartment industry, believes that to say firms would rather litigate than remedy accessibility issues is absurd. “We are unaware of any of the companies targeted by the ERC that have pursued litigation instead of trying to negotiate reasonable remedies,” she says. “The apartment industry is committed to meeting the needs of the disabled, but for several years after the law took effect, there was no reliable safe harbor standard for developers. This resulted in inadvertent noncompliance.”

The counterarguments don't matter to Kahn. “They have this cost/benefit analysis where it's not a question of where can I do the most good, but where can I spend the least money?” he says. “By doing that, they're driving me crazy with all of the obstacles they're putting up to doing the right thing.”

And he seems legitimately puzzled as to why apartment owners won't retrofit their own properties. “It would be a badge of honor they could wear for generations,” he says. “They would be the ones to face [the lack of accessibility] and get rid of it. They should be jumping through hoops to get that accomplished—not doing some of the things they're doing.”

While no one in the industry noticed when Kahn took over the ERC, the industry is bound to take note as he steps down. After all, he certainly made his mark, suing 10 major companies in less than four years. And a quick tally of the results are impressive, however questionable the tactics. When Bozzuto, for instance, settled with the ERC in July 2007, the firm agreed to retrofit 2,000 units. In an unexpected move, Tom Bozzuto also went out on speaking engagements with Kahn. Between Bozzuto and the Archstone settlement, Kahn's ERC has turned 14,000 units accessible. And a September 2007 settlement with Trammell Crow Co. (not Trammell Crow Residential, which currently has an ongoing suit with the ERC) will ensure that future apartments are also.

Still, Kahn, who plans to continue his work by serving on various committees for the ERC board of directors, doesn't believe he's been successful. In fact, he says his biggest failure is the seven apartment firms that have dug in their heels against the ERC. “The greatest disappointment I've had is the failure to convince the industry to work together with us,” he says.

Today, it's up to Kahn's successor to see those cases through to conclusion. And from the looks of things, Kahl will follow the same approach. In fact, he wants more settlements to follow the Archstone model. “If there are people like Archstone who will step forward upon being confronted with issues, those issues go away quickly,” Kahl says.

Kahn's legacy, however, will remain—not only in the firm, but in the broader real estate community. At the very least, the ERC has spurred other nonprofits to file similar accessible housing lawsuits. Take the Washington, D.C.-based National Fair Housing Alliance, a national nonprofit founded in 1988, that joined a consortium of similar groups in April to file a lawsuit against Columbus, Ohio-based architect Steiner + Associates alleging that 272 units it built in three states failed to meet FHA requirements.

Kahl doesn't mind. “What we know from our experience of testing, research, and surveys is that the United States has an entire generation of multifamily housing that is supposed to be compliant with accessibility laws and simply isn't,” he says. “Those properties are off limits to the disability community. And that's just unacceptable.”

It's also why the ERC—and the methods Kahn pioneered—won't be going away any time soon.

Years the Equal Rights Center has existed:
25

No. of units made accessible by Archstone:
12,000

No. of units made accessible by The Bozzuto Group:
2,000

Amount Archstone spent on remediation:
$20 million+

Amount Archstone spent on legal fees:
$1.4 million

No. of multifamily firms sued by the ERC since 2004:
10

No. of multifamily firms that settled with the ERC:
3

No. of properties the ERC has tested in the past four years:
Nearly 400

Size of the ERC staff:
15

No. of ERC testers:
100+

EQUAL RIGHTS CENTER: A TIME LINE

June 24, 2004: Rabbi Bruce E. Kahn (left) becomes interim executive director of the Equal Rights Center (ERC).

Dec. 20, 2004: ERC sues Archstone-Smith.

June 8, 2005: ERC and Archstone reach a hefty $20 million settlement.

Sept. 15, 2005: ERC sues The Bozzuto Group.

Sept. 22, 2005: ERC sues AvalonBay Communities.

April 27, 2006: ERC sues Equity Residential.

Nov. 22, 2006: ERC sues Post Properties.

June 5, 2007: ERC sues CB Richard Ellis Group/ Trammell Crow Co.

July 17, 2007: ERC settles with Bozzuto.

Sept. 6, 2007: ERC sues Camden Property Trust and Lion Gables Realty Limited Partnership (Gables).

Sept. 26, 2007: ERC settles with CB Richard Ellis Group/Trammell Crow Co.

June 2008: ERC sues Kettler and Trammell Crow Residential.

August 2008: Kahn steps down; Donald L. Kahl takes over as ERC's executive director.

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