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Note: This case is not published in an official reporter and may not be cited as authority. Consult with counsel before relying on this case.
In 1996 the district court addressed allegations by a developer against a town under the Fair Housing Act (FHA). The court granted summary judgment for the town, as it found that the "housing for older persons" exemption precluded a claim of familial-status discrimination.
In 1987, Sipio purchased a parcel of land in Springfield (Town) and formed a joint venture to build a golf course community "for people who wish[ed] to live in a smaller home with a minimum of ground maintenance." Because the parcel was located in a "Special Use" zone, the Town insisted that Sipio limit occupancy to persons "of or nearing retirement age." The parties discussed several possible age restrictions. In the meanwhile, Congress amended the FHA to prohibit discrimination based on familial status. Both parties were aware of the amendments when they became effective in March 1989. In April 1989, Sipio and the Town executed a Declaration of Covenants, Conditions, and Restrictions (Declaration) which generally required that at least one occupant of each unit be at least 55 years old. The Declaration prohibited children under the age of 18.
Construction began in 1989 and in 1990, the joint venture experienced financial
difficulties. In February 1991, Goss Realty, Inc. (GRI) was enlisted to market the residential units and informed the Town that the age restriction was a "potential violation" of state and federal law. In May 1991, Sipio's counsel informed the Town that the age restriction violated the prohibition against familial-status discrimination and advised Sipio to disregard the restriction and market to people of all ages. The Town notified Sipio of its intent to enforce the age restriction, sought injunctive relief in state court and attached notices to certificates of occupancy alerting buyers to the age restriction. Sipio sued the Town to enjoin enforcement of the restriction and for damages stemming from its economic losses. Both parties moved for summary judgment.
The district court noted that a party may be granted summary judgment if it can show that there is "no genuine issue as to any material fact and ... that it is entitled to judgment as a matter of law." Sipio moved for summary judgment on the basis that the age restriction had a "disparate impact" on familial status, which is defined as "one or more individuals [under the age of 18] being domiciled with ... [a parent or legal custodian]." The Town countered that the planned community met the FHA exemption for "housing for older persons." The court stated that if the "age restriction contained in the Declaration falls within this exemption, that age restriction will not violate the FHA regardless of any discriminatory effect caused by its enforcement."
The district court noted that under 42 U.S.C. § 3607(b)(1), "housing for older persons" includes housing: "... (C) intended and operated for occupancy by at least one person 55 years of age or older per unit." This exemption has three further requirements. First, "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 is not practicable, that such housing is necessary to provide important housing opportunities for older persons." Second, "that at least 80 percent of the units are occupied by at least one person 55 years or older per unit." Third, "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."
The district court rejected Sipio's argument that this case was controlled by Cedar Hills Developers, Inc. v. Township of Wycko (unpublished) Civ. A. No. 89-5391, (D.N.J. Dec. 11, 1990) and Mobile Home Village, Inc. v. Township of Jackson (P-H): Fair Housing -- Fair Lending Rptr. P 16,018 (D.N.J. 1995). Both cases held that a town could not force compliance with the housing for older persons exemption. In both cases, the passage of the FHA amendments eradicated a pre-existing age restriction, thus reestablishing the developer/manager's discretion to determine how to comply with the FHA. The court distinguished the present case, as both parties agreed to the age restrictions with full knowledge of the FHA amendments.
The district court also noted that the Town presented evidence on each requirement of the "housing for older persons" exemption. First, the Declaration required that over 80% of the units be occupied by at least one person 55 or older. Second, it showed that the second alternative under the "significant facilities" element was met, as the provision of such facilities was impracticable due to the budget of the developer and the size and topography of the land. Third, the developer not only published its intention to provide housing for older persons via the Declaration, but also had its listing agents market the property to and verify the ages of potential occupants. In light of this evidence, the court found that the Town required Sipio to develop the parcel as a "residential retirement community," and that Sipio did so consistently with the 5-year-old exemption. Thus, the court found no genuine issues of material fact for trial and granted the Town summary judgment.
Sipio v. Township of Springfield, 1996 WL 479670 (E.D. Pa. 1996). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]