November 23, 2014

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November 20, 2014

With Many Hurricane Sandy Victims Still Unable to Secure Temporary Housing, Will New Jersey’s Age-Restricted Communities Offer Up Vacant Units?

In New Jersey, there is a significant shortage of temporary housing for Hurricane Sandy victims.  Currently, about 2,790 households are living in hotel and motel rooms, rented for them by the Federal Emergency Management Agency ("FEMA"), through its "temporary shelter assistance" program ("TSAP").  When the TSAP expires at the end of January, about 1,100 of these households will not be able to secure temporary housing.

Temporary housing options for Sandy victims are limited.  According to FEMA, about 70 long-term rental units will become available at Fort Monmouth by the end of the month, to supplement the 45 units that have already been refurbished and rented there.  Still, with the TSAP's January 26th deadline looming, many displaced families are running out of time.

A recent pronouncement by the U.S. Department of Housing and Urban Development ("HUD") may be of assistance to some of these displaced families – if New Jersey's over-55 communities take advantage.  On November 9, 2012, HUD announced that age-restricted communities may offer vacant units to Hurricane Sandy evacuees even if they do not meet the communities' strict age requirements.  This was the agency's official interpretation of the U.S. Fair Housing Act ("FHA"), which provides age-restricted communities an exemption from the prohibition against familial status discrimination.  On November 27, 2012, the New Jersey Department of Community Affairs ("DCA") followed suit, announcing in a press release that it would follow HUD's guidance.

Under this guidance, age-restricted communities may make vacant units available to Sandy evacuees, even those under age 55, without fear of losing their FHA-imposed discrimination exemption.  Anyone who has lived in a county that has been declared a federal "disaster area" and who has been designated for individual assistance from FEMA is considered an "evacuee" eligible for this program.  The program applies to all age-restricted communities across the country, and applies equally to rental and for-sale units.

But will New Jersey's age-restricted communities take advantage?  Before they do, there are two important legal questions that deserve some consideration and remain unanswered:  (1) Will municipalities agree to waive zoning restrictions that define age-restricted communities more restrictively than the FHA, or will a variance be required each time a vacant unit is offered to an "underage" Hurricane Sandy evacuee?  (2)  Will age-restricted communities be required to amend their governing documents to reflect HUD's guidance?

With regard to the first question, under the FHA, all age-restricted communities must satisfy the "80/20 rule."  That is, 80% of the units in the community must be occupied solely by persons age 55 and over.  In some municipalities, over-55 communities are located in special zoning districts, where the community itself is defined according to even stricter limits.  For instance, a municipality could define an age-restricted community as one in which 100% of the units are owned by persons over 55.

In such a case, a variance would technically be required if a vacant unit was made available to an "underage" evacuee.  This would necessitate an application to and an approval from the appropriate local land use board.

With regard to the second question, in some cases, a community’s governing documents may define the community as "age-restricted" according to the FHA, with little flexibility.  There, it is quite possible that the governing documents (i.e., the community’s master deed and bylaws) must be amended before a vacant unit may be offered to an "underage" evacuee.

Certainly, the program is designed to aid the victims of Hurricane Sandy, not to impose additional legal responsibility on age-restricted communities.  Still, before taking advantage of this opportunity, eligible communities will have to weigh the potential legal ramifications of its actions.  The communities would be well-advised to (a) contact local officials to inquire about the need for variance relief and (b) review their governing documents to determine whether an amendment is necessary.

No community is required to provide housing to evacuees younger than 55 – that decision is completely voluntary.  But if a community decides to participate, it must make sure not to discriminate on the basis of race, color, religion, sex, national origin, or disability.  In fact, any community taking advantage of the program should have a consistent, nondiscriminatory admittance process in place.

Of the program, DCA Commissioner Richard E. Constable, III stated, "We at the Department of Community Affairs are in full support of federal efforts to address the immediate housing needs of those impacted by Hurricane Sandy."  He went on to say, "As housing for storm displaced residents continues to be a concern, we encourage managers and residents of 55 and older communities to welcome people of all ages displaced by this storm."

Hopefully, the program provides evacuees some much-needed relief, while, at the same time, providing age-restricted communities the opportunity to fill vacant units.  Unfortunately, with some very serious legal issues still unresolved, it is unclear whether New Jersey's age-restricted communities will take advantage of this program.  While we certainly need to solve the problem of displaced Sandy victims, it is unclear whether this program is a viable solution.

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About this Author

Steven P. Gouin, Giordano Law Firm, Real Estate Attorney
Associate

Steve Gouin, an associate in the Real Estate, Land Use & Development and Planned Real Estate Development departments devotes his practice to the representation of developers, landlords, and other business interests. Mr. Gouin's practice focuses on land use approvals, redevelopment projects, commercial real estate transactions, landlord and tenant disputes, community association law, and real estate litigation. Mr. Gouin is a member of the New Jersey State Bar Association, Land Use Section and Community Associations Institute - New Jersey.

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Michael A. Bruno, Giordano Law Firm, Real Estate Attorney
Shareholder

Mr. Bruno, shareholder in Giordano, Halleran & Ciesla's Real Estate, Land Use & Development practice area, focuses his practice area on real estate transactions and approvals with an emphasis on redevelopment, planned residential development, affordable housing, and mixed use development. Mr. Bruno represents and counsels companies and developers in every phase of real estate acquisitions, financing and development including redevelopment agreements and long and short term financial agreements and other state, regional and local agency financing programs available in connection...

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J. Scott Anderson, Real Estate Development Attorney, Giordano Law Firm
Shareholder

Mr. Anderson, chair of the Planned Real Estate Development Law Practice Area, focuses primarily on the development of residential, commercial and mixed use developments in both condominium and fee-simple formats. He prepares the governing documents for these planned real estate developments and supervises the registration of public offering plans as regulated by the New Jersey Department of Community Affairs.

In addition to Planned Real Estate Development law, Mr. Anderson counsels his clients with regard to general Land Use matters such as determining the suitability of land...

732-741-3900