First, there was Archstone-Smith, a REIT in Englewood, Colo. Then it was AvalonBay Communities, a REIT in Alexandria, Va., and Bozzuto and Associates, an apartment owner in Greenbelt, Md. But on April 27, the nonprofit Equal Rights Center (ERC) filed suit against its biggest apartment owner to date: Equity Residential, a Chicago-based REIT and No. 1 on this year's MFE Top 50 owners list.
ERC alleges "continuous and systematic civil rights violations against persons with disabilities in the design and construction of at least 300 apartment complexes in 21 states and the District of Columbia." In all, that covers about 80,000 units. Equity had no comment on the lawsuit as of press time.
"We found hundreds of violations with Equity," says Rabbi Bruce Kahn, executive director of ERC, a Washington, D.C.-based group that targets discrimination in housing, among other causes.
While industry watchers have wondered if ERC was targeting only bigger firms, Kahn says that's not the case. The suits stem from the organization's ongoing investigation of the industry and resident complaints, he says, and they include both old and newer buildings.
"We did some preliminary investigation in recent years of places in the greater Washington area and came upon places we thought weren't in compliance," Kahn says. "Then we did a more thorough investigation of them."
ERC is finding problems with older construction, which can create a quandary for apartment owners, says Jeanne Delgado, vice president of property management for the National Multi Housing Council. "Some of the suits that are coming out [are focusing on] properties that were built when there was little guidance out there or confusing guidance by HUD," Delgado says. "That's been the problem from the beginning."
To avoid such suits, apartment owners may want to double-check their properties and make sure they're in compliance. Delgado suggests owners examine their properties with an eye toward complying with current HUD guidelines. "It certainly would be proactive," Delgado says, and might make the courts and HUD look more favorably upon them.
Kahn says he has found over the years that informing companies of violations doesn't always work. That's why, he says, he had no conversation with Equity before the last suit was filed. "Sometimes people would listen and sometimes they wouldn't," he recalls. "But very rarely will it lead to a change in behavior."
More publicity, however, will lead to changes, Kahn says. "This discussion is important," he says. "If you're out of compliance, retrofit and bring things into compliance. When you're building, be very careful and make sure you're in compliance with [the Fair Housing Act and the Americans With Disabilities Act]. Our hope is that the industry can do more policing itself than having us and others do it for them."
If that doesn't happen, he says apartment owners can expect more suits. "We're not going to [drop] this matter until we feel the problem is solved," Kahn says. "I have no idea how many [violations] exist, but the number we've found so far is compelling and appalling."
Delgado is aware that more suits may be coming. "We're concerned that this may be the beginning of something that might get bigger," she says.