Condo Media - November 2013 - 46

LEGAL
(new property tax revenue) without
the burden on local resources (mainly
schools) created by housing for families
with children, are unwilling to open a
door they thought they had closed.
Condominium boards often find
themselves caught in the middle, as owners who want to maintain the age restrictions threaten to sue if they are lifted, and
owners who can't find buyers for their
units threaten to sue if they are not.
Even in communities that have

argue, with some likelihood of success,
that a waiver of the age restrictions is
required as an accommodation under
the Fair Housing law.

Hardship Provisions

Condominium associations (and
developers) can avoid at least some
of these conflicts by taking advantage
of the flexibility the federal rules allow and even encourage. Although
HUD's regulations allow 55-and-older

Residents of existing communities should be realistic.
Their dismay at seeing the adult-only community they
expected transformed into something else is understandable, but their concerns may be misplaced.
dodged the direct financial impact of
the downturn (limited marketability)
and its collateral damage (adult children returning to previously empty
nests), boards must cope with emergency situations: Grandparents, like
those in the example cited earlier, who
are forced to assume responsibility for
young children; the younger-than-55
occupant who no longer meets the occupancy requirement when her olderthan-55 spouse dies; the elderly owner
in a community where all residents
must be 62 or older who needs fulltime care from a younger child or aide.
The emergency situations can be
easier to address than the economic
pressures. Regulations adopted by the
Department of Housing and Urban
Development provide one possible
solution to the ineligible caregiver.
They specify that caregivers would not
be counted as non-qualified residents
under the federal law, so the community would not be at risk of losing
its Fair Housing exemption. If the
municipality's rules are stricter, the
owner's caregiver might be subject to
an eviction order, and if the terms of
the permit require it, the association
might be obligated to initiate it. However, the owner in need of care could
46

Condo Media * November 2013

communities to bar children entirely,
agency guidance advises "some flexibility where the exemption would not be
destroyed by that flexibility."
Hardship provisions can soften strict
requirements enough to prevent them
from being unreasonable. For example,
an association rule requiring one occupant to meet the 55-or-older age
restriction might also specify that if a
spouse dies, the non-eligible survivor
will have 120 days or 180 days to leave.
This provision might also extend the
temporary age waiver for a survivor
who will meet the age requirement
within a year after his/her spouse dies.
Similarly, a provision making it clear
that the definition of "occupant" does
not include anyone who resides in the
community for fewer than 120 days
(or 120 consecutive days) in a year
would accommodate extended stays by
children or grandchildren. Associations
should also consider special provisions
for adult children who inherit agerestricted units and want to occupy or
rent them instead of selling them.
Hardship provisions can address
special needs and emergencies, but they
can't offset the economic problems
that are troubling many communities
and threatening the financial viabil-

ity of some of them. The economic
downturn and weak housing market
are aptly blamed for some of those
problems, but others reflect what may
be overly optimistic assumptions about
the nature and size of the market for
age-restricted housing.

CHAPA's Warnings

Initial projections for this market
seemed open-ended as the first wave of
the nation's 78 million baby boomers
approached retirement age in the early
2000s. And the first projects coming
on line were hugely successful, encouraging other developers to follow. Local
policies favoring age-targeted developments over other housing alternatives
added momentum to that trend. But
demand in some communities has
fallen short of projections - a risk the
Citizens Housing and Planning Agency
(CHAPA) identified in a 2005 report.
The report tallied more than 150
age-restricted projects in place or
under construction at the time in 93
communities, projected to add more
than 10,000 units to the market, with
another 14,000 units in 172 developments in the planning stages. Even recognizing that not all of those planned
developments would go forward, the
report noted, "the sheer volume of new
units coming onto the market in the
next 24-36 months means there will
be much greater competition [in the
future] ... developments that are not
well-located, well-designed, and wellpriced are unlikely to succeed," the
report cautioned, "and even the most
attractive units may experience anemic
sales if they are the third or fourth entry into an already saturated market ...
The extraordinary number of units proposed, and their concentration, exceeds
what is likely to be absorbed in the near
term, even under the most optimistic
assumptions," the report added.
The report did not anticipate the additional strains the economic downturn
would create. But it did question the
assumption that the outsized babyboomer population will create equally
outsized demand for age-targeted

Condo Media - November 2013

Table of Contents for the Digital Edition of Condo Media - November 2013