[Senate Report 104-172]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 231
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-172
_______________________________________________________________________


 
                 HOUSING FOR OLDER PERSONS ACT OF 1995

                                _______


                November 9, 1995.--Ordered to be printed

_______________________________________________________________________


Mr. Hatch, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                        [To accompany H.R. 660]

    The Committee on the Judiciary, to which was referred the 
bill (H.R. 660) to amend the Fair Housing Act to modify the 
exemption from certain familial status discrimination 
prohibitions granted to housing for older persons, having 
considered the same, reports favorably thereon with an 
amendment in the nature of a substitute and recommends that the 
bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose..........................................................2
 II. Legislative history..............................................2
III. Section-by-section analysis......................................3
 IV. Discussion.......................................................5
  V. Subcommittee action..............................................6
 VI. Committee action.................................................7
VII. Regulatory impact statement......................................7
VIII.Cost estimate....................................................7

 IX. Additional views of Senator Kyl..................................9
  X. Additional views of Senators Simon, Kennedy, and Feingold.......12
 XI. Minority views of Senator Biden.................................15
XII. Changes in existing law.........................................18

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Housing for Older Persons Act of 
1995''.

SEC. 2. DEFINITION OF HOUSING FOR OLDER PERSONS.

  Section 807(b)(2)(C) of the Fair Housing Act (42 U.S.C. 
3607(b)(2)(C)) is amended to read as follows:
          ``(C) intended and operated for occupancy by persons 55 years 
        of age or older, and--
                  ``(i) at least 80 percent of the occupied units are 
                occupied by at least one person who is 55 years of age 
                or older;
                  ``(ii) the housing facility or community publishes 
                and adheres to policies and procedures that demonstrate 
                the intent required under this subparagraph; and
                  ``(iii) the housing facility or community complies 
                with rules issued by the Secretary for verification of 
                occupancy, which shall--
                          ``(I) provide for verification by reliable 
                        surveys and affidavits; and
                          ``(II) include examples of the types of 
                        policies and procedures relevant to a 
                        determination of compliance with the 
                        requirement of clause (ii). Such surveys and 
                        affidavits shall be admissible in 
                        administrative and judicial proceedings for the 
                        purposes of such verification.''.

SEC. 3. GOOD FAITH ATTEMPT AT COMPLIANCE; DEFENSE AGAINST CIVIL MONEY 
                    DAMAGES.

  Section 807(b) of the Fair Housing Act (42 U.S.C. 3607(b)) is amended 
by adding at the end the following new paragraph:
  ``(5)(A) A person shall not be held personally liable for monetary 
damages for a violation of this title if such person reasonably relied, 
in good faith, on the application of the exemption under this 
subsection relating to housing for older persons.
  ``(B) For the purposes of this paragraph, a person may only show good 
faith reliance on the application of the exemption by showing that--
          ``(i) such person has no actual knowledge that the facility 
        or community is not, or will not be, eligible for such 
        exemption; and
          ``(ii) the facility or community has stated formally, in 
        writing, that the facility or community complies with the 
        requirements for such exemption.''

                               I. Purpose

    The purpose of H.R. 660 is to eliminate the burden of the 
``significant facilities and services'' requirement in the 
seniors housing exemption of the Fair Housing Act. This 
legislation is needed to provide a clear, bright-line standard 
of when a seniors housing community is in fact ``housing for 
older persons'' for purposes of the Fair Housing Act. H.R. 660 
is intended to clear up this problem and return to the original 
intent of the Fair Housing Act exemption Congress created for 
seniors housing in 1988. H.R. 660 is designed to make it easier 
for a housing community of older persons to determine whether 
they qualify for the fair Housing Act exemption.

                        II. Legislative History

    The Civil Rights Act of 1968 was passed to prohibit 
discrimination on the basis of race. Title VIII of the act was 
called the Fair Housing Act. It prohibited discrimination on 
the basis of ``race, color, religion, or national origin'' for 
any sale of housing, rental of housing, financing of housing, 
or provision of brokerage services.
    The housing practices for which discrimination is 
prohibited include the following:
          Sale or rental of dwelling;
          Provision of services or facilities in connection 
        with sale or rental of a dwelling;
          Steering any person to or away from a dwelling;
          Misrepresenting availability of dwelling;
        Discriminatory advertisements; and,
          Charging different fees or providing different 
        benefits.
    In 1974, the Fair Housing Act was amended to prohibit 
discrimination on the basis of sex. In 1988, the Fair Housing 
Act was amended again, and changes thereto included a 
prohibition against discrimination on the basis of handicap and 
on the basis of ``familial status,'' which means living with 
children under the age of 18. At the same time Congress 
extended the Fair Housing Act to prohibit discrimination 
against families with children, it added (at 42 U.S.C. 3607(b)) 
an exemption for three categories of housing for older persons. 
Such housing included State and Federal programs specifically 
designed and operated to assist elderly persons (42 U.S.C. 
3606(b)(2)(A)) and housing intended for, and solely occupied 
by, persons 62 years of age or older. Id. at 3607(b)(2)(B).
    The third category of exemption was for housing ``intended 
or operated for occupancy by at least one person 55 years of 
age or older per unit.'' The Secretary of HUD was directed to 
develop regulations for determining whether housing qualified 
for the exemption, including as one of the factors ``the 
existence of significant facilities and services specifically 
designed to met the physical or social needs of older persons. 
* * * '' Id. at 3607(b)(2)(C)(i).
    Interpreting and implementing the ``significant facilities 
and services'' standard has been very troublesome. For the last 
7 years, it has been unclear what the phrase ``significant 
facilities and services'' means. The Department of Housing and 
Urban Development (HUD) regulations have not been sufficiently 
clear or helpful. There have been so many lawsuits that the 
exemption Congress intended is now being revoked as a practical 
matter by threat of litigation.
    In 1992, Congress set out to solve the problem with 
``significant facilities and services'' by passing the Housing 
and Community Development Act of 1992 which required HUD to 
issue a revised rule defining the phrase ``significant 
facilities and services.'' Two years later, in 1994, HUD 
finally issued proposed rules to define the phrase. A few 
months later, in response to overwhelming disapproval, HUD 
withdrew the proposed regulations.
    In 1995, the House of Representatives passed H.R. 660, the 
Housing for Older Persons Act of 1995, by a margin of 424 to 5.

                    III. Section-by-Section Analysis

Section 1

    This section sets forth the short title for the 
legislation, the ``Housing for Older Persons Act of 1995.''

Section 2

    This section amends subparagraph (C) of section 807(b)(2) 
of the Fair Housing Act (42 U.S.C. 3607(b)(2)). This section 
deletes the ``significant facilities and services'' requirement 
for housing for older persons. The major inquiry that H.R. 660 
requires in order to determine whether a facility or community 
qualifies for housing for older persons is whether, in fact, 
the community is comprised of eligible individuals. The housing 
provider can demonstrate its intent to providing housing for 
persons 55 years or older, even if it allows persons under age 
55 to continue to occupy dwelling units or move into the 
housing facility and occupy dwelling units, as long as the 
housing facility maintains the 80-percent occupancy threshold.
    Subsection (C) retains the exemption for housing that is 
``intended and operated for occupancy by persons 55 years of 
age or older,'' but does not require a showing of the existence 
of ``significant facilities and services.'' Subsection (C)(i) 
creates a bright-line test that 80 percent of the occupied 
units must be occupied by at least one person 55 years of age 
or older. Subsection (C)(ii) requires the housing facility or 
community to publish and adhere to ``policies and procedures'' 
demonstrating the intent to provide housing for occupancy of at 
least 80 percent of the occupied units by at least one person 
55 years of age or older per unit. This subsection specifically 
states that such policies and procedures need not be set forth 
in the governing documents of such facility or community.
    Subsection (C)(iii) requires the housing facility or 
community to comply with rules made by the Secretary of HUD for 
the verification of occupancy. The rules issued by the 
Secretary must allow for verification by reliable surveys and 
affidavits and ``shall include examples of the types of 
policies and procedures relevant to a determination of 
compliance with the requirement of clause (ii).'' In addition, 
this section specifically allows such surveys and affidavits to 
be admissible in administrative and judicial proceedings for 
the purposes of such verification.

Section 3

    This section creates a defense against the imposition of 
money damages for compliance where a person has relied in good 
faith on the application of the exemption relating to housing 
for older persons. A person who wishes to establish the good-
faith reliance under this subsection has to make a showing of 
no actual knowledge that the facility or community is not 
eligible for the exemption and the facility or community has 
certified to such person, in writing, that it complies with the 
requirements for such exemption. Such a writing need not be 
notarized or otherwise witnessed, but it must contain indicia 
of authenticity, such as being on stationary with the 
letterhead of the facility or its operator and signed by an 
individual identified as a responsible officer, employee, 
agent, of the facility or its operator.
    This section allows an individual to raise a defense which 
will prevent the imposition of money damages where he or she 
relies, in good faith, on the existence of an exemption for 
``housing for older persons'' and it is later found that the 
exemption did not apply. This section will preclude an award of 
money damages, but does not shield a person from injunctive 
relief.
    This exemption is necessary because the housing for older 
persons exemption contemplates a fact-intensive showing that 
the community meets the age and occupancy requirements. It is 
not practical to expect someone who inherited a home or other 
housing unit from their parents to conduct this inquiry. 
Similarly, real estate agents should not have to perform a 
census of a housing community every time they list a home or 
other housing unit. Nevertheless, if, after inquiring of the 
community manager, a person seeking this good-faith reliance 
has ``actual knowledge'' that the facility or community is not 
eligible for the exemption, the good-faith exemption does not 
apply.

                             IV. Discussion

    H.R. 660 removes the troublesome ``significant facilities 
and services'' requirement from the definition of ``Housing for 
Older Persons'' and replaces it with a simple four-part test. 
The ``significant facilities and services'' requirement has 
been a disaster since the housing for older persons exemption 
was passed as an exception to the general rule prohibiting 
discrimination against families with children in 1988. Nobody, 
including the Government, can figure out what the phrase 
``significant facilities and services'' means. Further, the 
requirement discriminates against low-income senior citizens. 
As a result, seniors housing, particularly low-income seniors 
housing, is faced with the uncertainty and unfairness of a 
confusing Government policy, the threat of litigation and the 
resulting limitation on the availability of affordable housing 
for older persons.
    In 1992, Congress recognized this problem and passed a law 
instructing HUD to reissue the regulations for ``significant 
facilities and services.'' Even with direction from Congress, 
HUD failed to establish what the phrase ``significant 
facilities and services'' means and the regulations were 
withdrawn in response to widespread disapproval. New 
regulations are now available, but they will not solve the 
problem either. There will be inherent ambiguity in enforcing 
any regulation under this exemption. Requiring ``significant 
facilities and services'' operates to discriminate against 
lower-income seniors. They cannot afford the lavish services 
contemplated by HUD and others.
    As Mr. Bill Williams, president of the Federation of Mobile 
Home Owners of Florida, Inc., stated in his testimony before 
the subcommittee, ``this issue is not about discrimination 
against families.'' We all oppose that. But Congress recognized 
in 1988, and we recognize in 1995, that seniors should be 
allowed to live in safe, quiet communities congenial to them. 
Most importantly, they should be able to do so regardless of 
their income. As Mr. Williams said, the problem is ``finding 
adequate affordable housing for all seniors.'' As long as 
``significant facilities and services'' is a part of the law, 
only well-to-do seniors will be able to enjoy safe seniors 
communities.
    According to Mr. Williams, HUD had received 20,000 
complaints by October 1992. Of the 20,000 complaints, 17,0000 
were closed that year resulting in over $7 million in 
penalties. Mr. Jensen, the CEO of Jensen's Residential 
Communities, stated in his testimony that ``[if] a complaint 
were to be filed, I would have to decide whether or not to 
conciliate or to go to court to defend my exemption. Both are 
costly options.'' To make matters worse, according to Mr. 
Jensen, ``[t]here is no definitive source for me to go to as a 
businessperson to determine my compliance. * * * I cannot find 
guidelines to comply with the facilities and services 
requirements.''
    H.R. 660 clears up these problems and establishes a bright-
line rule for housing for older persons. This is more fair to 
both older persons and families with children since it makes 
the law understandable.
    H.R. 660 has three sections: section 1 is the title; 
section 2 removes the significant facilities and services test 
and replaces it with the simple, fact-based definition of 
housing for older persons; section 3 includes a good-faith 
reliance provision.
    The new definition of Housing for Older Persons is a four-
part test: (a) intended and operated for older persons, (b) of 
the occupied units, 80 percent are actually occupied by at 
least one person 55 years of age or older, (c) the community 
has policies and procedures that demonstrate the intent, (d) 
the community complies with HUD rules.
    In addition, the bill provides a good-faith defense if (1) 
there is no actual knowledge that the community is not eligible 
as housing for older persons, and (2) the facility or community 
has stated formally, in writing, that the facility or community 
complies with the requirements for such exemption.
    This is a confused area of law that demands a legislative 
solution. Low-income seniors deserve the same protection as 
wealthy seniors. The original act is intended to allow this 
exemption, but litigation, confusion, and poorly drafted 
regulations have discouraged or outright denied seniors 
housing. H.R. 660 had bipartisan support in the house and in 
the subcommittee and it has been changed to reflect bipartisan 
discussions. We need to preserve housing for older persons. 
This bill offers that protection by creating a bright-line test 
for housing for older persons without provoking litigation.

                         V. Subcommittee Action

    The Senate Subcommittee on Constitution, Federalism, and 
Property Rights of the Committee on the Judiciary held a 
hearing on H.R. 660 and the issue of housing for older persons. 
The hearing was held on Tuesday, August 1, 1995, at 9 a.m. 
Testimony was taken from Senator Jon Kyl; Stuart Ishimaru, 
counsel to the Assistant Attorney General on Civil Rights; Bill 
Williams, president of the Federation of Mobile Home Owners of 
Florida; Kristian Jensen, CEO of Jensen's Residential 
Communities; James Morales, staff attorney, National Center for 
Youth Law; and Lori Van Arsdale, council member, city of Hemet, 
California.
    The Senate Subcommittee on Constitution, Federalism, and 
Property Rights of the Committee on the Judiciary, with a 
quorum present, met on Wednesday, August 2, 1995, at 10 a.m., 
to mark up H.R. 660. Senators Brown, Hatch, Kyl, DeWine, and 
Simon were present.
    One amendment was offered by Senator Simon and adopted by 
voice vote. The amendment clarified the requirement that at 
least 80 percent of the occupied units in a senior citizens' 
community are occupied by at least one person 55 years of age 
or older. This reflects the intent of H.R. 660 as introduced. 
H.R. 660 as introduced referred to ``intended and operated'' 
for the occupancy of at least 80 percent by older persons. This 
reference to ``intended'' suggested that the 80-percent 
requirement might be interpreted to be less than 80 percent. To 
remove that ambiguity, language suggested by Senator Simon was 
adopted to make the 80-percent occupancy of occupied units a 
bright-line standard.
    Senator Simon also offered, then withdrew, an amendment 
which would have stricken the good-faith defense section.
    The subcommittee then passed H.R. 660, as amended, by voice 
vote. All Senators present voted in favor of the measure.

                          VI. Committee Action

    The Senate Committee on the Judiciary, with a quorum 
present, met on Thursday, October 26, 1995, at 9 a.m., to mark 
up H.R. 660, as reported by the Subcommittee on Constitution, 
Federalism, and Property Rights.
    Senator Hatch brought up for consideration H.R. 660 as it 
passed the House.
    Senator Kyl, on behalf of himself and Senator Brown, 
offered a substitute amendment. The substitute amendment 
included the change to section 2 that was agreed to in 
subcommittee as well as a change to section 3. The change to 
section 2, which was agreed to in subcommittee, clarified that 
80 percent of the occupied units must be occupied by at least 
one person 55 years of age or older. The change to section 3 
narrowed the good-faith reliance section. As amended, a person 
may only show good-faith reliance under this section by meeting 
the standard set out in section 3(B). That is, the person must 
show no actual knowledge and that the community has stated, in 
writing, that the community complies with the exemption for 
housing for older persons. The substitute amendment was 
accepted by unanimous consent.
    The Committee on the Judiciary then passed H.R. 660, as 
amended by the substitute amendment, by unanimous consent.

                    VII. Regulatory Impact Statement

    Pursuant to paragraph 11(b), rule XXVI of the Standing 
Rules of the Senate, the Committee, after due consideration, 
concludes that House Resolution 660 will not have direct 
regulatory impact.

                          VIII. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 2, 1995.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 660, the Housing for Older Persons Act of 1995, 
as ordered reported by the Senate Committee on the Judiciary on 
October 26, 1995. CBO estimates that enacting H.R. 660 would 
result in no significant cost to the federal government or to 
state and local governments. Because enacting H.R. 660 would 
not affect direct spending or receipts, pay-as-you-go 
procedures would not apply to this legislation.
    Under the Fair Housing Act, it is unlawful to discriminate 
based on family status in the sale or rental of a dwelling. 
However, current law affords an exemption for ``housing for 
older persons'' (age-restricted communities), generally defined 
as housing that includes significant facilities and services 
specifically designed to meet the physical or social needs of 
older persons. H.R. 660 would define this exemption to apply to 
housing where at least 80 percent of the units are occupied by 
at least one person 55 years of age or older. In addition, the 
act would exempt persons who acted in good faith from liability 
for monetary damages in suits stemming from the seniors-only 
provision.
    The intent of H.R. 660 is to clarify the meaning of 
``housing for older persons.'' This issue has been a source of 
housing discrimination lawsuits for a number of years, 
involving both the Department of Justice (DOJ) and the 
Department of Housing and Urban Development (HUD). It is 
possible that the legislation could lead to a reduction in the 
number of these lawsuits and thus lower the caseload of DOJ and 
HUD. Based on information from these agencies, however, we do 
not expect that enacting H.R. 660 would have a significant 
effect on the costs incurred by DOJ or HUD.
    On March 27, 1995, CBO provided a cost estimate for H.R. 
660 as ordered reported by the House Committee on the Judiciary 
on March 22, 1995. This version of the bill is nearly identical 
to the House version, and CBO's estimate of costs is unchanged 
from the previous estimate.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                         June E. O'Neill, Director.
                  IX. ADDITIONAL VIEWS OF SENATOR KYL

    H.R. 660 will eliminate many of the problems that senior 
communities have experienced over the last decade. The Fair 
Housing Act of 1988 was designed to protect families with 
children from discrimination in housing. H.R. 660 repeals HUD's 
``significant facilities'' requirement, which is the primary 
test senior communities have to meet to qualify for an 
exemption from the 1988 anti-discrimination statute. Only 
developments designed to house the elderly as evaluated and 
approved by the Department of Housing and Urban Development 
(HUD) are exempt from that statute.
    Many of my constituents argue that the federally imposed 
definition of ``significant facilities'' and services increases 
the cost of their housing and tells them how to live. They say 
that some senior housing complexes are being hit with unfair 
discrimination lawsuits because of confusion about which 
housing qualifies for the exemption from the anti-family 
discrimination statute.
    David S. Schless, executive director of the American 
Seniors Housing Association, stated that HUD's rules for 
significant facilities and services would ``have a devastating 
effect on keeping a community's costs down, particularly in the 
mobile home communities.''
    Apart from the larger question of whether the government 
should be in the business of regulating individuals freedom of 
association in the first place, surely this government can get 
along quite well without imposing what the investigative 
scholar James Bovard calls ``federal bingo mandates for senior 
citizens.''
    Only developments designed to house the elderly are exempt 
from the anti-discrimination statute. Although the statute was 
well-intended, it has made the lives of seniors unnecessarily 
difficult. Fewer regulations and restrictions would allow 
senior communities to operate more efficiently and freely. Is 
it too much to ask that the seniors of our country be allowed 
to live without intrusion from the federal government?
    Most senior citizens I know are independent and highly 
capable. They don't want to pay extra to have someone read to 
them. They don't want or need to be told by the federal 
government how to live.
    Not only has it been difficult to comply with the 
regulations, it has been impossible for senior communities to 
regain their exemption once it is lifted. According to an 
April, 1995 article in the Orlando Sentinel, ``lawyers could 
not find a single instance in which a senior community was able 
to defend successfully against a challenge to its exempt status 
* * * [t]his was not supposed to be an impossible test but to 
sort out the facilities that were really for older persons from 
those that merely wanted to exclude children.''
    Some argue that with the reining in of the federal 
government's control, health and safety regulations could be 
compromised. There is, I believe, a consensus that some of the 
government's regulatory burden--estimated to cost the U.S. 
economy more than a half-trillion dollars a year--ought to be 
prudently and carefully retracted where possible. We tried to 
accomplish that goal with regulatory reform. A good place to 
renew these efforts would be HUD's published regulations for 
senior citizen housing. Even Clinton administration officials 
have changed their position, relaxing the interpretation to 
allow plenty of room for communities to meet the facilities and 
services standards.
    Some put forward the objection that this bill discriminates 
against families. H.R. 660 does not discriminate against any 
party. It does not change how families are treated under the 
Fair Housing Act. The exemption already exists for senior 
communities. H.R. 660 eliminates the regulatory ambiguity and 
makes it easier to determine which communities qualify for the 
anti-discrimination exemption.
    If the argument is about discrimination, then HUD's 
regulations are a perfect example of discrimination--against 
seniors. These regulations increase the price of rent in senior 
facilities and, therefore, effectively discriminate against 
low-income seniors. It's hard to explain the federal 
government's aggressive prosecution of the owners of senior 
citizen mobile home parks for alleged violations of the Fair 
Housing Act. Surely, we have better things to do than 
criminalizing trivial senior housing violations. But that is 
precisely how HUD has applied the Fair Housing Act. It's 
difficult to make a case that senior housing is such a national 
problem.
    HUD's latest argument is that H.R. 660 is unnecessary due 
to HUD's recent revision of its rule regarding significant 
facilities and services. This is not true. Susan Brenton and 
the 25,000 members of Arizona Association Manufactured Home 
Owners say that the new rule ``is still very nebulous and 
leaves a lot of areas open to court decisions (and each court 
case costs the residents of a community thousands of 
dollars).''
    The new HUD regulations state that communities that provide 
at least two services each from five of 12 categories--all 
defined by HUD--qualify for the exemption. The HUD-approved 
services include: bingo clubs, bowling trips, tai-chi classes, 
seminars on how to get more government benefits, and pet 
therapy for residents' animals. Some improvement.
    To be sure, wealthier senior communities can probably live 
with these new regulations. But the lower-income communities 
will have a difficult time adding any extra cost. Why should 
anyone be forced to play bingo, and pay for it? I would like to 
insert into the record a letter Chairman Hatch received from 
AARP outlining the urgent need to pass H.R. 660, the Housing 
for Older Persons Act of 1995.
    Even the wealthier senior communities will be affected in 
the long run. Many development companies have expressed 
reluctance to build senior communities because they believe the 
regulations hinder demand for these communities.
    The House of Representatives passed the bill by an 
overwhelming vote of 424 to 5 earlier this year. The Senate 
should do the same.

                   American Association of Retired Persons,
                                  Washington, DC, October 23, 1995.
Hon. Orrin Hatch,
Chairman, Committee on the Judiciary,
Senate Dirksen Office Building, Washington, DC.
    Dear Mr. Chairman: I am writing on behalf of the American 
Association of Retired Persons (AARP) to express our continuing 
support for the Housing for Older Persons Act of 1995 (H.R. 
660) and to urge its immediate consideration and passage.
    AARP believes that age-specific housing should be preserved 
as an important service to many older persons. Congress 
recognized at the time the Fair Housing Amendments Act was 
passed that the standards established to meet the statute's 
exemption for housing for older persons would have to be clear, 
workable, and flexible enough to be applicable to the wide 
array of housing, residents, and abilities to pay in the 
elderly housing market. Unfortunately, promulgating and 
enforcing clear and workable standards has proven to be nearly 
impossible. Efforts to clarify the statute's requirement of 
``significant facilities and services'' have been undertaken in 
three rulemakings under two Administrations.
    While AARP applauds HUD's most recently issued rule--a 
significant improvement over its proposed rule of July 1994--
the Association has come to the conclusion that the complex and 
seemingly contradictory statutory provisions defining housing 
for older persons have made equitable enforcement very 
difficult, if not impossible. Our Legal Counsel for the Elderly 
office was unable to find any successful defense of a claim of 
exemption for housing for older persons among cases receiving 
judicial review. When coupled with significant anecdotal 
evidence of rather arbitrary decisions by fair housing 
investigators, the conclusion is inescapable that 
implementation of the law has not been consistent with the 
flexibility intended by Congress. Indeed, widespread 
dissatisfaction with the statute's enforcement threatens the 
very viability of the important new protections provided in the 
Act.
    AARP appreciates the leadership of your Committee and the 
work of Senators Gorton and Kyl in addressing this issue. If we 
can be of any further assistance, please do not hesitate to 
have your staff contact Don Redfoot of our Federal Affairs 
staff at 434-3800.
            Sincerely,
                                              Martin Corry,
                                         Director, Federal Affairs.

                                                           Jon Kyl.
      X. ADDITIONAL VIEWS OF SENATORS SIMON, KENNEDY, AND FEINGOLD

    In 1988, Congress included familial status as a protected 
class under the Fair Housing Act because of evidence that 
housing discrimination against families was pervasive and often 
affected minority families disproportionately. According to the 
legislative history of the 1988 Act, the housing for older 
persons exemption was included in the Act to accommodate some 
seniors's desire to live in retirement communities. Two kinds 
of exemptions were created: first, a bright line, age-based 
exemption for retirement communities in which all residents are 
62 years of age or older; and second, a conditional exemption 
for retirement communities that provide significant facilities 
and services designed to meet the physical and social needs of 
older residents.
    This bill amends the Fair Housing Act to expand the ability 
of seniors communities to exclude families with children. It 
does this, in part, by eliminating the requirement that 
communities seeking the older persons housing exemption must 
provide ``significant facilities services'' for the elderly and 
creating a good faith defense for defendants in lawsuits 
challenging the exclusion of families with children.
    We agreed to these changes to the 1988 Act because many in 
the seniors community, particularly those with lower incomes, 
who expressed concerns that the interpretation of the 
significant facilities and services requirements unduly 
burdened their ability to create and live in legitimate 
retirement communities. Nonetheless, we must express our 
reservations about the possible unintended effects of these 
changes.

                  significant facilities and services

    Section 919 of the Housing and Community Development Act of 
1992 required the Secretary of the Department of Housing and 
Urban Development (HUD) to issue rules defining the scope of 
``significant facilities and services designed to meet the 
physical or social needs of older persons.'' Congress called 
for these regulations in order to provide much-needed clarity 
to determinations of whether a facility qualifies for this 
exemption. On July 7, 1994, HUD issued its first proposed rule 
to implement section 919. After commentators expressed concern 
that the rule did not provide the needed clarity, HUD withdrew 
it. On March 14, 1995, HUD issued a second proposed rule which 
addressed the legitimate concerns and criticisms raised about 
the first proposed rule. HUD reports that the vast majority of 
commentators praised the March 14 proposed rule and urged its 
adoption without additional changes. In the background 
discussion of the final rule as published in the Federal 
Register, HUD notes that sixty-one percent of the total 
comments received on the March 14 proposed rule consisted of a 
form letter which read is part:

          I support the newly proposed rule on Significant 
        Facilities and Services for Housing for Older Persons 
        under the Fair Housing Act. I believe the needs of 
        seniors in senor housing are fairly reflected and 
        supported in the flexibility of the new amendments. The 
        new regulations are simple, clear and realistic. I 
        appreciate HUD staff's willingness to travel across the 
        country and listen compassionately to testimony. Thank 
        you for responding positively to the valid concerns of 
        seniors and community leaders expressed in the 
        hearings.

    On August 18, 1995, during the pendency of H.R. 660 before 
this committee, HUD issued its final regulations interpreting 
the significant facilities and services provisions. The final 
rule, effective September 18, 1995, includes few changes from 
the March 14 proposed rule. The final rule creates a broad 
checklist of potential facilities and services a seniors 
community may provide in order to qualify for the exemption and 
allows communities to self-certify that they qualify for the 
exemption. We believe that the regulation could finally provide 
the clarity and certainty that has been absent in the 
interpretation and enforcement of the significant facilities 
provision.
    We note with concern that the elimination of the 
significant facilities and services provisions of the 1988 Act 
subverts the justification for allowing certain seniors 
communities to discriminate against families with children. 
That is, that the exception is necessary in order to facilitate 
senior's ability to live in environments that are, in the words 
of the House Judiciary Committee report on the 1988 Act 
discussing the need for the exception, ``tailored to their 
specific needs.'' In other words, the requirement was intended 
to ensure that housing communities claiming this exemption were 
indeed legitimate retirement communities designed to meet the 
specific needs of senior citizens not just communities of 
seniors united by their preference to not live around children. 
By eliminating such a requirement, this bill may have the 
unintended effect of increasing discrimination against families 
with children.
    As a result, we believe oversight of the effects of this 
bill, if enacted, is critical. We have not agreed to this 
change to our nation's civil rights laws to merely accommodate 
the desire of some seniors to live only amongst older persons 
if the price is the promotion of discrimination and the 
decrease of decent, affordable housing for families with 
children. We agreed to the changes so that legitimate 
retirement communities, whether rich or poor, could qualify for 
the exemption. If there is evidence that the effect of this 
legislation is to rebuild the environment that led to the 
inclusion of familial status in the coverage of the Fair 
Housing Act in the first place, we believe that reinstatement 
of the significant facilities and services requirements will be 
warranted.

                          GOOD FAITH EXCEPTION

    The good faith defense established by this bill would 
shield individuals accused of familial status housing 
discrimination from personal liability for monetary damages if 
they reasonably relied, in good faith, on a belief that the 
housing community was a seniors community permitted to 
discriminate against families with children. As with the other 
provisions of this bill, we believe that oversight of the 
effects of the codification of this defense is critical to 
ensure that it does not have the unintended effect of allowing 
willful lawbreakers to escape the payment of monetary damages 
as otherwise authorized under the law. Toward that end, we 
believe that the defense should be available only to those who 
can show both that he or she did not know that the facility did 
not qualify for an exemption and that he or she actually relied 
on a formal statement, in writing as described in this 
committee report. We believe that establishing such a reliance 
must include a showing that the individual, at a minimum, 
actually saw the facility's formal statement of compliance.
                                   Paul Simon.
                                   Edward M. Kennedy.
                                   Russell D. Feingold.
                  XI. Minority Views of Senator Biden

    The bill is a retreat from a commitment we made to families 
with children.\1\
    \1\ I regret that I was unable to attend the committee's markup of 
the legislation on October 26, 1995. I therefore was not part of the 
quorum which reported the bill out of committee.
---------------------------------------------------------------------------
    In 1988, Congress extended the protections of the Fair 
Housing Act to cover familial status. In the face of widespread 
evidence of discrimination against families, and a countrywide 
proliferation of ``all adult'' housing, we said--94 to 3--that 
enough was enough. America's housing providers shouldn't be 
able to arbitrarily hang a ``No Kids Allowed'' sign on their 
doors.
    At the same time that we passed the new law, we also carved 
out an exception for legitimate retirement communities which 
catered to the special needs and requirements of the elderly. 
The distinction that we made then--and which I stand by now--is 
this: you can't just keep kids away because you don't like 
them, or because you don't want them around. If you're going to 
exclude children, you must be an organized community providing 
``significant facilities and services'' designed to meet the 
physical and social needs of the elderly.
    This requirement for significant facilities and services 
was included to distinguish senior lifestyle communities from 
run-in-the-mill housing complexes. We recognized that 
something--something other than an animus against children--
must set these communities apart in order to merit an exemption 
from the Fair Housing Act.
    I understand that what constitutes ``significant facilities 
and services'' has been a matter of much controversy and 
uncertainty over the years. And I also understand that the 
Department of Housing and Urban Development has made several 
different attempts to craft a definition--which has led to 
confusion, and has made it difficult for those trying to comply 
with the law.
    But none of that, in my view, should lead us to abandon the 
basic principle: if you're going to be able to discriminate 
against families, you should be special--and you should be 
serving the special needs of seniors.
    This principle should remain our guidepost now more than 
ever--especially since HUD has just recently promulgated 
completely revised regulations which resolve the confusion and 
make it much easier and clearer for senior housing communities 
to take advantage of the exemption. HUD, many now agree, has 
gotten it right.
    Under the new regulations, which went into effect on 
September 18 of this year, a housing facility can ``self-
certify'' that it falls under the Fair Housing Act exemption--
by simply filling out a straight forward, easy-to-understand 
checklist of facilities and services designed for older folks. 
This checklist contains a ``menu'' of some 114 facilities and 
services in eleven categories; if a facility provides 10 among 
them--like wheelchair accessibility, communal recreational 
facilities, periodic vision or hearing tests, or fellowship 
meetings--it qualifies as senior housing, and may exclude 
families. If the facility's status is challenged, it need only 
show that the certification was accurate at the time of the 
alleged violation.
    The list of facilities and services included in the new 
rule was drawn from amenities actually provided by a wide cross 
section of senior housing developments across the country--
large and small, affluent and less well-off, manufactured 
housing communities, condominiums, and single family 
communities. (Written testimony of Sara K. Pratt, Director of 
the Office of Investigations, Office of Fair Housing and Equal 
Opportunity, Department of Housing and Urban Development, 
before the Subcommittee on the Constitution, Federalism, and 
Property Rights, August 1, 1995 at 4.).
    Ms. Pratt also testified to the extreme flexibility--and 
cost-consciousness--built into the new guidelines:

          [The rule] does not assume that people living in 
        housing for older persons are frail, disabled or 
        require nursing home care. It does not require 
        congregate dining or on-site medical care. * * * The 
        facilities and services may be provided on or off the 
        premises of the housing. They may be provided by staff, 
        volunteers (including residents and neighbors), or by 
        third parties, such as civic groups or existing 
        organizations in the community. Id.

    The new regulations do not require lavish services, as the 
majority would have us believe; nor do they mandate facilities 
affordable only by the well-heeled. Rather, they simply embody 
what's already being offered in bona fide senior communities--
of all sorts--across the map. And if a facility is providing at 
least 10 of the 114 facilities or services on the list, it 
qualifies for the exemption.
    Proponents of H.R. 660 say that it will make it easier, and 
surer, for a housing community to determine whether it 
qualifies for the Fair Housing Act exemption. I ask: what could 
be easier than a one-page checklist? What could be surer than 
self-certification? This, in my view, is a bare bones set of 
requirements for getting out from under the anti-discrimination 
provisions of the Act.
    The ``bright line'' standard for which H.R. 660 trades away 
the ``significant facilities and services'' requirement is 
this: at least one 55-year-old must live in 80 percent of the 
units. Let's look at what that really means. Say, for example, 
that a complex contains 100 units, all of which are occupied by 
two people, and 80 percent of which are occupied by someone 
over 55. In this hypothetical community--which will be able to 
lawfully discriminate against families under H.R. 660--as few 
as 80 residents of the 200 could be 55 or over, while 120 could 
be under 55. More than half the residents of this community--
which need not provide a single special amenity--can be under 
55 to qualify for the exemption, and legally keep families out.
    To my mind, the math just doesn't add up to fairness for 
families and children. I believe this bill will give a green 
light to the very kind of ``all adult'' housing facilities that 
we in 1988 sought to proscribe. I cannot support it.

                                                         Joe Biden.
                      XII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the changes in existing law made 
by the bill, as reported by the committee, are shown as follows 
(existing law proposed to be omitted is enclosed in bold 
brackets, new matter is printed in italic, and existing law 
with no changes is printed in roman):

                  SECTION 807 OF THE FAIR HOUSING ACT

                               exemption

    Sec. 807. (a) * * *
    (b)(1) Nothing in this title limits the applicability of 
any reasonable local, State, or Federal restrictions regarding 
the maximum number of occupants permitted to occupy a dwelling. 
Nor does any provision in this title regarding familial status 
apply with respect to housing for older persons.
    (2) As used in this section, ``housing for older persons'' 
means housing--
          (A) provided under any State or Federal program that 
        the Secretary determines is specifically designed and 
        operated to assist elderly persons (as defined in the 
        State or Federal program); or,
          (B) intended for, and solely occupied by, persons 62 
        years of age or older; or
          [(C) intended and operated for occupancy by at least 
        one person 55 years of age or older per unit. In 
        determining whether housing qualifies as housing for 
        older persons under this subsection, the Secretary 
        shall develop regulations which require at least the 
        following factors:
                  [(i) the existence of significant facilities 
                and services specifically designed to meet the 
                physical or social needs of older persons, or 
                if the provision of such facilities and 
                services is not practicable, that such housing 
                is necessary to provide important housing 
                opportunities for older persons; and
                  [(ii) that at least 80 percent of the units 
                are occupied by at least one person 55 years of 
                age or older per unit; and
                  [(iii) the publication of, and adherence to, 
                policies and procedures which demonstrate an 
                intent by the owner or manager to provide 
                housing for persons 55 years of age or older.]
          (C) intended and operated for occupancy by persons 55 
        years of age or older, and--
                  (i) at least 80 percent of the occupied units 
                are occupied by at least one person who is 55 
                years of age or older;
                  (ii) the housing facility or community 
                publishes and adheres to policies and 
                procedures that demonstrate the intent required 
                under this subparagraph; and
                  (iii) the housing facility or community 
                complies with rules issued by the Secretary for 
                verification of occupancy, which shall--
                          (I) provide for verification by 
                        reliable surveys and affidavits; and
                          (II) include examples of the types of 
                        policies and procedures relevant to a 
                        determination of compliance with the 
                        requirement of clause (ii). Such 
                        surveys and affidavits shall be 
                        admissible in administrative and 
                        judicial proceedings for the purposes 
                        of such verification.
          * * * * * * *
    (5)(A) A person shall not be held personally liable for 
monetary damages for a violation of this title if such person 
reasonably relied, in good faith, on the application of the 
exemption under this subsection relating to housing for older 
persons.
    (B) For the purposes of this paragraph, a person may only 
show good faith reliance on the application of the exemption by 
showing that--
          (i) such person has no actual knowledge that the 
        facility or community is not, or will not be, eligible 
        for such exemption; and
          (ii) the facility or community has stated formally, 
        in writing, that the facility or community complies 
        with the requirements for such exemption.

                                
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