The Fair Housing Act (FHA) protects seven specific classifications against discrimination in the terms, conditions, and privileges of sale or rental of a dwelling and the provision of related services or facilities. These classifications are race, color, religion, sex, disability, familial status, and national origin. The FHA prohibits discrimination based upon a person’s status within these classifications. (42 U.S.C. § 3604.) While the FHA does not explicitly prohibit discrimination based upon sexual orientation, HUD states that a person who identifies as LBGTQ and has experienced (or is about to experience) discrimination because of his/her status in one of the protected classifications may file a complaint. HUD investigates FHA violations against all persons regardless of their sexual orientation or gender identity. Moreover, sometimes local ordinances explicitly protect persons who identify as LBGTQ. For example, the City of Indianapolis prohibits discrimination based on sexual orientation, gender identity or transgender behavior, and veteran status.

The classification of “familial status” indicates that a person under 18 is present within a household. A couple with children, a single parent with a child, an adult with a foster child, a pregnant single woman, and a couple attempting to adopt a child, each has “familial status.” Further, the FHA defines disability very broadly. To be disabled, a person must: 1.) have a physical or mental impairment that substantially limits one or more of that person’s major life activities; 2.) have a record of having such an impairment, or; 3.) be regarded as having such an impairment.  The FHA considers it unlawfully discriminative for an owner or operator to refuse to sell/rent a property after a person has made a bona fide offer, simply because of the person’s status in a protected class. Likewise, it is unlawful discrimination for an owner or operator to refuse to negotiate the sale or rental of a property due to the customer’s status in a protected class.  The FHA also prohibits an owner or operator from setting different terms, conditions, or privileges for renting a dwelling based on a protected classification. The FHA prohibits panic peddling (meaning the illegal practice of inducing people in a neighborhood to sell their homes), blockbusting, steering, and zoning for the sake of excluding a group within a protected class from accessing housing. It also prohibits policies geared toward maintaining a certain pattern of housing among groups within protected classes.

Federal regulations explicitly provide that liability may be established under the FHA based on a practice’s discriminatory effect, even if the practice was not motivated by a discriminatory intent. See 24 CFR § 100.500. “A practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin.”

The law can easily identify an owner or operator’s actions or policies that treat protected classifications differently. However, an owner or operator may unintentionally create a policy or decision that has a disparate impact upon one or more protected groups, even though the policy/decision appears neutral at face value.  Facially neutral policies having a disparate impact upon one or more protected groups are unlawful, just as if they were discriminatory on their face. Imagine, for example, that an owner or operator imposed a rule that residents of apartments must be at least five feet tall. Height, of course, is not a protected classification, so the policy is facially neutral. However, its impact on families with children would be adverse. Consequently, it would violate the FHA because of its disparate impact.

Under the familial status classification of the FHA, owners and operators must make housing available to families with children on the same basis as they make housing available to adults without children. The FHA, however, does not define the limits an owner or operator may place on the number of residents permitted to live within a dwelling, regardless of whether such residents are children. Nor does the FHA address whether an owner or operator may allow varying numbers of residents based upon the presence of children. HUD has suggested in an internal memorandum that an occupancy standard limiting two persons per bedroom as a general rule is reasonable under the Fair Housing Act. However, blindly applying a two person per bedroom standard without consideration to other physical features at the property has resulted in cases prosecuted for discrimination.

HUD’s regulations indicate that it will accept an owner or operator’s reasonable restrictions on occupancy. (24 C.F.R. § 100.10.) HUD gauges the reasonableness of an owner or operator’s occupancy standards against the business, sanitary, and convenience interests underlying the standards. As such, all occupancy standards should be based upon the owner or operator’s needs and those of the residents or prospective residents. The residential unit’s size, the facilities available for cooking and hygiene, and the available parking are among the concerns an owner and operator may reasonably consider when determining occupancy standards. An occupancy standard, for example, likely would be upheld if the owner or operator could demonstrate that his/her restriction is in place because the hot water facilities will not service a greater number of residents and the cost to increase the hot water capacity is prohibitive.

The FHA does not limit the applicability of any reasonable local, state, or federal regulations regarding the maximum number of occupants permitted to occupy a dwelling. An Indiana statute provides that an owner or operator is not prohibited from refusing to rent on the basis of a reasonable occupancy standard. (Ind. Code § 32-31-8-7.) Any occupancy standard is presumed reasonable in Indiana if (1) it permits two persons per bedroom and (2) if owners or operators (a) do not include children under one year of age in their count and (b) increase the number of individuals per unit when there is a den, library, finished basement or loft that reasonably could be used as a sleeping area, unless doing so would violate applicable state or local codes. (Ind. Code § 32-31-8-7.) Owners and operators are not required to consider a kitchen, dining room, living room, bath, hallway, or closet as a sleeping area.

Those categories are: 1.) housing provided under a federal or state program that the HUD Secretary determines is specifically designed and operated to assist elderly persons (as defined in the state or federal program involved); 2.) housing intended for and solely occupied by persons age 62 or older, and; 3.) housing intended and operated for occupancy by at least one person 55 years of age or older per unit. If a community satisfies one of these categories, it may exclude families with children.

To qualify for the third exemption, a housing community must meet the following criteria: 1.) the housing must be intended for older persons; 2.) at least 80% of the occupied units must be occupied by at least one person who is 55 or older; and 3.) the owner or operator must demonstrate compliance with rules issued by the Secretary for verification of occupancy, “which shall . . . provide for age verification by reliable surveys and affidavits.”

A “55 or older” housing owner or operator should conduct an initial occupancy survey of the community to verify compliance with the “80% occupancy” requirement and should maintain such compliance by periodically reviewing and updating existing age verification records for each occupied dwelling unit (at least once every two years). The owner or operator of a senior living home must also summarize the occupancy survey results and make that summary available for public inspection and HUD. No individual resident information is required; the summary may simply indicate the total number of dwelling units actually occupied by persons age 55+. An owner or operator may be required to show information on individual households only in the case of a familial status discrimination charge. In such cases, only HUD will be entitled to the information.

An owner or operator of housing for older persons has a good faith reliance defense or exemption against monetary damages for persons who illegally act in good faith to exclude children based on a legitimate belief that the community was entitled to the exemption.

Quid Pro Quo Harassment and Hostile Environment Harassment

Federal law explicitly recognized that “quid pro quo harassment” and “hostile environment harassment” because of race, color, religion, sex, familial status, national origin or handicap may violate the FHA, depending on the conduct. See 24 C.F.R. § 100.600.

“Quid pro quo harassment” refers to an unwelcome request or demand to engage in conduct where submission to the request or demand, either explicitly or implicitly, is made a condition related to: The sale, rental or availability of a dwelling; the terms, conditions, or privileges of the sale or rental, or the provision of services or facilities in connection therewith; or the availability, terms, or conditions of a residential real estate-related transaction.

“Hostile environment harassment” refers to unwelcome conduct that is sufficiently severe or pervasive as to interfere with: The availability, sale, rental, or use or enjoyment of a dwelling; the terms, conditions, or privileges of the sale or rental, or the provision or enjoyment of services or facilities in connection therewith; or the availability, terms, or conditions of a residential real estate-related transaction. Hostile environment harassment does not require a change in the economic benefits, terms, or conditions of the dwelling or housing-related services or facilities, or of the residential real-estate transaction.