Housing for Older Persons; Defining Significant Facilities and Services; Amendments

SUMMARY: This final rule implements section 919 of the Housing and

Community Development Act of 1992. Section 919 requires the Secretary

of HUD to issue ``rules defining what are `significant facilities and

services especially designed to meet the physical or social needs of

older persons' required under section 807(b)(2) of the Fair Housing Act

to meet the definition of the term `housing for older persons' in such

section.'' This final rule amends HUD's regulations governing ``housing

for older persons'', to provide the definitions required by section

919.

EFFECTIVE DATE: September 18, 1995.

FOR FURTHER INFORMATION CONTACT: Sara K. Pratt, Office of

Investigations, Office of Fair Housing and Equal Opportunity, Room

5204, U.S. Department of Housing and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410-0500, telephone (202) 708-0836.

Hearing or speech-impaired individuals may call HUD's TDD number (202)

708-0113, or 1-800-877-8399 (Federal Information Relay Service TDD).

(Other than the ``800'' number, these are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

I. Background

A. The March 14, 1995 Proposed Rule

On March 14, 1995 (60 FR 13840), HUD published a rule which

proposed to implement section 919 of the Housing and Community

Development Act of 1992 (Pub. L. 102-550, approved October 28, 1992).

The Fair Housing Act (Title VIII of the Civil Right Act of 1968, as

amended by the Fair Housing Amendments Act of 1988, 42 U.S.C. 3601-19)

(the Act) exempts ``housing for older persons'' from the prohibitions

against discrimination because of familial status. Specifically,

section 807(b)(2)(C) of the Act exempts housing intended and operated

for occupancy by at least one person 55 years of age or older per unit

that satisfies certain criteria. The Act requires that the housing

facility provide ``significant facilities and services especially

designed to meet the physical or social needs of older persons.'' HUD

has implemented the ``housing for older persons'' exemption at 24 CFR

part 100, subpart E.

Section 919 of the Housing and Community Development Act of 1992,

requires the Secretary of HUD to issue rules further defining what are

``significant facilities and services especially designed to meet the

physical or social needs of older persons'' required under section

807(b)(2) of the Fair Housing Act to meet the definition of the term

``housing for older persons.'' The March 14, 1995 rule proposed to

amend subpart E to provide the definitions required by section 919.

Specifically, the rule proposed to create a new section establishing

the criteria for determining whether a facility or service is

``significant'' or ``specifically designed to meet the physical or

social needs of older persons.'' 1 This proposed section set forth

a ``menu'' of facilities and services which a housing provider could

choose to furnish. Another proposed section permitted communities

selecting a requisite number and type of facilities and services from

the ``menu'' to ``self-certify'' their compliance with the Act. The

preamble to the March 14, 1995 proposed rule described in detail the

amendments to 24 CFR part 100, subpart E.

\1\ The language of section 919 contains the word

``especially'': ``* * * rules defining what are `significant

facilities and services especially designed to meet the physical or

social needs of older persons' required under section 807(b)(2) of

the Fair Housing Act to meet the definition of the term `housing for

older person' in such section.'' (emphasis added) This final rule

uses the word ``specifically'' rather than the word ``especially''

to comply with congressional intent and reflect the actual language

of section 807(b)(2) of the Fair Housing Act.

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The March 14, 1995 proposed rule was HUD's second attempt at

implementing the requirements of section 919. An earlier rule,

published on July 7, 1994 (59 FR 34902), also proposed to define

``significant facilities and services.'' The July 7, 1994 proposed rule

was of great interest to many seniors. By close of business on November

30, 1994, 15,219 comments had been received. Based on the written

comments received on the proposed rule, and the comments received at

five public meetings held across the country, HUD decided to make

significant changes to the July 7, 1994 proposed rule.

On December 12, 1994 (59 FR 64104), HUD announced it would not

proceed to final rulemaking on the July 7, 1994 proposed rule. Instead,

HUD issued the March 14, 1995 proposed rule, which addressed the issues

raised by the commenters and solicited additional public comment.

B. Discussion of Public Comments on the March 14, 1995 Proposed Rule

The March 14, 1995 proposed rule was of significant interest to the

public. By the expiration of the public comment period on May 15, 1995,

1,080 comments had been received. The majority of commenters expressed

support for the proposed rule and urged its adoption without further

change. Most of these commenters thanked HUD for taking time to listen

to the concerns expressed by seniors over the July 7, 1995 proposed

rule. An extremely popular form letter, which comprised approximately

61% of the total comments received, read:

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 senior 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.

As a result of the positive public response, HUD has made very few

changes to the March 14, 1995 proposed rule. The following section of

the preamble presents a summary of the significant issues raised by the

public commenters on the proposed rule, and HUD's responses to these

comments.

Preamble's Comparative Analysis Language

Comment. Several commenters were opposed to the language in the

preamble to the proposed rule stating that in order to qualify as 55-

or-over housing, ``the evidence must show that the housing in question

is clearly distinguished from the bulk of other housing (except for

other older persons housing) in a particular area.'' (60 FR 13840,

13841). These commenters felt the language would make the proposed

self-certification mechanism meaningless. The commenters interpreted

this preamble language to mean that the existence of similar facilities

and services at family communities in the area would deny 55-or-over

status to a community which otherwise meets the

[[Page 43323]]

``menu'' requirements of proposed Sec. 100.306.

HUD Response. HUD agrees that this preamble language may be

interpreted to negate the effectiveness of self-certification.

Accordingly, HUD wishes to emphasize that it is the existence, in the

aggregate, of at least ten requisite facilities and services from the

``menu'' set forth in Sec. 100.306 which establishes a community as 55-

or-over housing. This is true even if a particular facility or service

is also locally available at other types of housing.

The Proposed Definition of ``Occupied By'' Was Unfair

Comment. The definition of ``occupied by'' set forth in proposed

Sec. 100.306(e) required that units be occupied by a person 55 years of

age or over, not only at the time of the alleged violation, but ``at

least 60 days in the preceding year.'' Several commenters believed that

this proposed definition would impose unfair burdens on 55-or-over

communities in meeting the Act's 80 percent occupancy requirement. The

commenters pointed out that it is administratively difficult to

determine when property occupants come and go.

HUD Response. HUD concurs with these commenters. HUD has revised

the definition of ``occupied by'' set forth in the March 14, 1995

proposed rule by eliminating the 60-day requirement. This final rule

defines ``occupied by'' to mean actual occupancy of a unit by one or

more persons over 55 years of age or older.

Necessity of Age Verification Procedures

Comment. Several commenters believed that the proposed rule

contained contradictory statements regarding the requirement of age

verification procedures. The preamble stated that HUD would ``not

require the use of age verification procedures.'' (60 FR 13840, 13842).

However, proposed Sec. 100.316, which discussed a provider's intent to

provide housing for older persons, included age verification procedures

in the non-exclusive list of factors HUD will utilize in determining

the existence of such intent. One commenter went so far as to suggest

that the final rule make age-verification procedures a requirement for

establishing intent.

HUD Response. HUD has decided not to impose yet another federal

obligation on senior communities by requiring the use of age

verification procedures. The Act does not require that age verification

procedures be used. Proposed Sec. 100.316 merely stated that routine

use of age verification procedures is one way which a community may

indicate that it intends to be ``housing for older persons.''

If a community decides to utilize age verification procedures, they

must comply with court established requirements. Specifically, the

procedures must be enforceable, objective, and consistently applied.

Age-verification records must be accurately maintained by the housing

provider. The age verification mechanism must provide for a review of

current residents, as well as of potential new residents. Furthermore,

the age verification procedures must require some form of independent

proof to confirm the age of the residents. Driver's licenses or copies

of birth certificates are two acceptable methods to confirm age.

In sum, lease applications or other preliminary resident

documentation should include a request for age verification data.

Housing providers should make it clear to potential residents that the

request is made to ensure conformity with the community's policy of

maintaining the reliable records necessary for qualifying for the

``housing for older persons'' exemption. Age verification data must be

confirmed through objective reliable means that at least one person who

will be occupying the property will be 55 years of age or older.

Mandatory Continuation of Terminated Volunteer Services

Comment. Several senior commenters, while supporting the proposed

rule's authorization of the use of off-site or volunteer services,

expressed worry that housing providers might not take steps to assure

the continued availability of these services. These seniors wish

housing providers to be required to locate an alternate means of

providing the volunteer services, if for some reason the current

services are discontinued.

HUD Response. The March 14, 1995 proposed rule, and this final

rule, make the housing provider ultimately responsible for providing

the significant facilities and services. If volunteer provided

facilities and services are discontinued, the housing provider is

responsible for ensuring that replacement facilities or services are

provided, or the community will no longer qualify for the exemption.

HUD does not agree with the commenters that it should require housing

providers to continue specific volunteer services which have been

terminated. The particular volunteer facilities and services to be

provided are best determined by the housing provider and the residents.

Definition of Housing Provider Not Sufficiently Broad

Comment. Two commenters wrote to express their belief that the

proposed rule's definition of the term ``housing provider'' was not

broad enough to cover unincorporated communities comprised of

individual homeowners.

HUD Response. The definition of ``housing provider'' set forth in

the March 14, 1995 proposed rule was intended to cover unincorporated

communities. This final rule contains a revised definition which

clarifies that single family communities may qualify for the exemption

through community groups which effectively represent the interests of

the residents. Specifically, the revised definition of ``housing

provider'' reads: ``The term housing provider includes any person or

entity which represents the property owners of a community in their

housing interests, including homeowners or resident associations,

whether or not there is common ownership or operation of any portion of

a community.''

Revision of Impracticability Provisions

Comment. Several commenters believed the impracticability

provisions set forth in proposed Sec. 100.310 should be revised. The

commenters objected to the statement in proposed Sec. 100.310(b)(1)

that ``[d]emonstrating that . . . services and facilities are expensive

to provide is not alone sufficient to demonstrate'' impracticability.

The commenters believed that this provision unfairly implied that

``true'' senior communities are those that can afford to have a lot of

amenities.

HUD Response. HUD does not agree with the commenters. The ``menu''

established by Sec. 100.306(d) and the provisions of Sec. 100.306(e),

which permit volunteers to provide facilities and services, effectively

address the issue of cost, and will enable properties without large

financial resources to qualify for the exemption. It has never been

HUD's intention to require communities to provide expensive amenities

in order to meet the ``significant facilities and services''

requirement. Moreover, Sec. 100.310(b)(4) lists the income range of the

residents as a factor in determining impracticability, allowing

evidence of lack of affordability of facilities or services to be

considered as part of an impracticability review.

[[Page 43324]]

Proposed Rule's Impact on Small Entities

Comment. Two commenters believed the March 14, 1995 proposed rule

reflected a harsh attitude toward small 55-or-over communities.

Specifically, the commenters felt that the ``menu'' set forth in

proposed Sec. 100.306 demonstrated a bias toward larger parks with

clubhouses and resident organizations. One of the commenters suggested

that communities with fewer than ``40 or 50 spaces'' be exempted from

the requirements of the final rule.

HUD Response. HUD does not believe that any special exemptions are

required for small 55-or-over communities. The ``menu'' set forth in

Sec. 100.306 is sufficiently broad to ensure that small communities may

satisfy the ``significant facilities and services'' requirement without

undue burden or expense. HUD prepared the list of ``menu'' items by

reviewing suggestions made by the public commenters to the July 7, 1994

proposed rule, including the commenters at the five public hearings, as

well as by carefully reviewing court decisions dealing with this issue.

The ``menu'' is adequately diverse to cover all types of senior

properties.

Proposed Rule Imposed an ``Accessibility'' Requirement

Comment. One of the reasons for the strong opposition to the July

7, 1994 proposed rule was the belief among seniors that it erroneously

depicted all seniors as physically frail. In developing the March 14,

1995 proposed rule, HUD wished to correct this impression. Accordingly,

the preamble to the proposed rule stated that a facility or service

does not need to be ``accessible to the disabled in order to be

classified as `significant' or `specifically designed to meet the

physical or social needs of older persons'.'' (60 FR 13840, 13841).

However, many senior commenters believed that the rule imposed an

accessibility requirement.

Specifically, the commenters objected to the preamble language

stating that ``[t]he Department believes that the Act imposes a strict

burden upon a person claiming the exemption to provide credible and

objective evidence showing that the facilities and services offered by

the housing provider were designed, constructed or adapted to meet the

particularized needs of older persons.'' (60 FR 13840, 13841). The

commenters believed that the requirement that housing providers select

two items from category 11, Health/Safety Needs, from the ``menu'' set

forth in proposed Sec. 100.306, was further proof of an accessibility

criterion for qualification as 55-or-over housing.

HUD Response. The commenters misinterpret the language of the

preamble and the proposed rule. It is the existence of the requisite

number and type of ``menu'' items, in the aggregate, which qualifies a

community for the ``housing for older persons'' exemption. Elimination

of category 11 of the ``menu'' would unfairly discriminate against

communities which have chosen to provide any of the health/safety

related items listed in this category. Inclusion of such a category in

the ``menu'' does not imply that all seniors have difficulty with

mobility. It simply reflects the fact that some residents of 55-or-over

communities may desire the provision of several category 11 items to

facilitate their use and enjoyment of the property.

Proposed Sec. 100.306(f) Undermined Self-Certification

Comment. Proposed Sec. 100.306(f) listed the criteria by which HUD

will determine if, in the aggregate, the facilities and services

provided by a housing provider are ``significant.'' Several commenters

objected to this provision, claiming that a housing provider's self-

certification would be undermined by the uncertainty of its compliance

with proposed Sec. 100.306(f).

HUD Response. HUD does not believe that Sec. 100.306(f) subverts

the self-certification procedures set forth in Sec. 100.307. Rather,

the criteria listed in Sec. 100.306(f) provide assurance that housing

providers will not claim that they are eligible for the exemption based

on facilities or services which are virtually non-existent, non-

functional or unused. Paragraph (f) of Sec. 100.306 is necessary to

assure that the facilities and services are truly available in a

meaningful way to residents.

Self-Certification Should Not Be Made Under Penalty of Perjury

Comment. Proposed Sec. 100.307(e) stated that a housing provider

shall sign a self-certification notice ``under penalty of perjury of

the laws of the United States.'' Several commenters believed that the

imposition of civil penalties was sufficient to penalize housing

providers posting false self-certification notices.

HUD Response. HUD does not agree that Sec. 100.307(e) imposes an

unjust sanction on housing providers who falsify their self-

certification notices. Absent evidence indicating that the housing

provider has not met the ``menu'' requirements of Sec. 100.306(c), a

housing provider who chooses to self-certify will be deemed by HUD to

be in compliance with the requirements of the Act. Given the force of a

posted self-certification notice, HUD believes it is justified in

requiring the high measure of certainty provided by the imposition of

perjury sanctions. Paragraph (f) of Sec. 100.307 obligates a housing

provider who has posted a self-certification notice to ensure that the

listed facilities and services are indeed available.

The Self-Certification Posting Requirements Should Be Revised

Comment. One commenter believed the posting requirements for the

self-certification notice should be clarified. Proposed Sec. 100.307(e)

required that a copy of the self-certification notice be posted ``in

every public or common area where housing transactions are conducted.''

The commenter felt that some housing providers might have difficulty

complying with this requirement. For example, in the case of homeowner

associations where all developer sales have been completed, the only

sales are by individuals, not by the association or a developer. In

these instances, there are no common areas where ``housing

transactions'' occur.

HUD Response. HUD has not revised Sec. 100.307(e). Paragraph (e) of

Sec. 100.307 simply requires that the self-certification notice be

posted in every area where housing transactions are conducted. In some

instances, this may require that the notice be posted in the unit

itself, or at the real estate office handling the listing of the

property.

Revision of the Self-Certification Notice

Comment. One commenter suggested several revisions to the posted

self-certification notice in order to make it more comprehensible. For

example, the commenter suggested that a larger typeface notice might be

easier to read for those seniors requiring eye-glasses.

HUD Response. HUD will consider formatting suggestions from the

public before printing copies of the self-certification notice for

distribution. However, nothing prevents a housing provider from

enlarging the self-certification notice and posting the larger version,

or otherwise making it available to residents and the public in

alternative formats.

Proposed Sec. 100.307(f) Undermined Self-Certification

Comment. Many commenters objected to proposed Sec. 100.307(f),

which stated that self-certification notices will not be considered

``conclusive evidence of eligibility for the housing for older persons

exemption.'' To many commenters this provision eliminated the main

reason for self-certification,

[[Page 43325]]

which is to relieve the anxiety older persons feel that they may be

violating the law. One of the commenters suggested slightly revising

proposed Sec. 100.307(f) so as to make the provision less offensive to

seniors. According to this commenter, the ``not conclusive'' phrase

should be replaced by a reiteration of HUD's authority to investigate

fair housing complaints.

Other commenters urged the elimination of the ``not conclusive''

phrase and the insertion of new language strengthening the effect of

the self-certification notice. Specifically, these commenters believed

the self-certification notice should shift the burden of proof to

complainants during fair housing investigations regarding 55-or-over

status.

HUD Response. HUD agrees with the commenters that the ``not

conclusive'' phrase may be misinterpreted by the public so as to

undermine the certainty provided by a self-certification notice.

Accordingly, HUD has revised Sec. 100.307(f) by removing the ``not

conclusive'' phrase and replacing it with the statement that ``the

posting of a self-certification notice will not preclude the Department

from investigating a complaint of alleged housing discrimination where

there is evidence that the housing provider fails to comply with the

self-certification.''

HUD wishes to emphasize that the purpose of the self-certification

mechanism is to provide certainty to 55-or-over communities, not to

insulate them from legitimate HUD fair housing investigations. HUD may

receive information which suggests that a community does not meet the

Act's 80 percent occupancy requirements, or that the self-certification

notice is incorrect. In these situations, HUD's investigation will

focus initially on the housing provider's own assurances, through the

posted self-certification notice, that the requisite facilities and

services are provided. If the significant facilities and services

listed in the self-certification notice are actually provided and

serving the community, the housing provider should not anticipate any

difficulties in qualifying for that portion of the exemption.

Additionally, if the provider furnishes facilities and services which

are not listed on the a self-certification notice (or if no self-

certification notice is posted) HUD will still consider all available

evidence regarding what facilities and services were available at the

time of the alleged discriminatory incident.

HUD wishes to emphasize that nothing in this regulation changes the

requirement, set forth by the courts and administrative law judges,

that in a judicial or administrative proceeding, the housing provider

bears the burden of ultimately proving its eligibility for any

exemption under the Act by a preponderance of the evidence.

Proposed Exemptions to 80% Occupancy Requirement Exceed Legal Authority

Comment. Section 807(b)(2)(C)(ii) of the Act, which HUD is

implementing in Sec. 100.315, requires ``that at least 80 percent of

the units are occupied by at least one person 55 years or older per

unit.'' Paragraph (b)(2) of proposed Sec. 100.315 permitted housing

with unoccupied units to meet the 80 percent occupancy test, so long as

``at least 80 percent of the occupied units [were] occupied by at least

one person 55 years of age or over.'' One commenter believed this

provision contradicted the explicit language of the Act and suggested

that providers claiming the exemption based on Sec. 100.315(b)(2) be

required to reserve all units for occupancy by a person 55 years of age

or older.

Furthermore, paragraph (b)(4) of proposed Sec. 100.315(b)(4)

permitted housing with an insufficient percentage of units occupied by

older persons to meet the 80 percent test, so long as the housing

``reserve[d] all unoccupied units for occupancy by at least one person

55 years of age or older until at least 80 percent of the units [were]

occupied'' by older persons. Another commenter objected to this

provision, as well as to proposed Sec. 100.315(b)(2), on the grounds

that the Act's 80 percent occupancy requirements should be strictly

construed. The commenter believed that any exceptions to the 80 percent

occupancy requirements set forth in the Act were meant by Congress to

apply solely to housing occupied before the Act's effective date.

HUD Response. The Act provides that a property ``shall not fail to

meet the requirements for housing for older persons by reason of * * *

(B) unoccupied units. * * *'' (42 U.S.C 3607). HUD believes it is

justified in interpreting the Act to allow a community which, although

it does not currently meet the 80 percent occupancy requirement,

reserves all unoccupied units for occupancy by a person 55 years of age

or older. This may be the only way for a community which believed that

it was ineligible for ``housing for older persons'' status, and which

has therefore permitted occupancy by families, to qualify for the

exemption. There is no support for the commenter's assertion that this

provision of the Act is limited to situations occurring before the

Act's effective date. HUD believes that housing which seeks to qualify

as ``housing for older persons'' should be able to do so, even if its

occupied units do not meet the 80 percent occupancy test. Furthermore,

HUD believes such housing should be protected against claims of

unlawful discrimination during the qualification process, so long as it

provides significant facilities and services, has the requisite intent,

and has reserved all unoccupied units for at least one resident 55

years of age or older.

Proposed Sec. 100.310(b)(7) Violated Statutory Authority

Comment. Section 100.310 permitted the granting of a waiver to

housing providers in cases where it would be impracticable to furnish

``significant facilities and services.'' Proposed Sec. 100.310(a)

required that the persons seeking a waiver also demonstrate ``that such

housing is necessary to provide important housing opportunities for

older persons.'' Proposed Sec. 100.310(b)(7) would have accorded

residents' preferences a weight in the waiver determination. If ``90

percent of the residents of the housing'' had stated that a facility or

service was ``not necessary or desired'', this certification would have

been relevant as to whether the provider could have claimed an

impracticability waiver to the Act's requirements. One commenter felt

proposed Sec. 100.310(b)(7) would have exceeded HUD's authority under

the Act. The commenter pointed out that the proposed rule would have

permitted residents to legitimize discriminatory preferences.

HUD Response: HUD agrees with the commenter. Upon further analysis,

HUD has determined that individual residents should not be authorized

by regulation to waive the rights of future residents, or the rights of

families with children, by voting on the necessity or desirability of a

facility or service. Accordingly, proposed Sec. 100.310(b)(7) has been

eliminated.

Items Listed in Proposed Sec. 100.306 Were Not Significant

Comment. Many of the commenters believed that the ``menu'' set

forth in proposed Sec. 100.306 did not list facilities and services

that were ``significant'' or ``specifically designed for the physical

or social needs of older persons.'' One of these commenters believed

that with almost no effort, most properties could qualify under the

March 14, 1995 proposed rule. Since the commenters believed that the

requirements of Sec. 100.306 could be easily met, they feared that

unscrupulous housing

[[Page 43326]]

providers would utilize the rule to disguise their unlawfully

discriminatory policies against families with children. These

commenters also believed that proposed Sec. 100.306 could possibly be

in violation of existing case law, which states that the ``significant

facilities and services'' requirement is not met by merely adding minor

amenities to a traditional development.

HUD Response. The commenters erroneously focus on the individual

items listed in Sec. 100.306(d). It is the existence, in the aggregate,

of the requisite number and type of ``menu'' items that satisfies the

``significant facilities and services'' requirement. However, in the

development of this final rule, HUD made the determination that some

minor revisions to the list of ``menu'' items were necessary. This

final rule includes these changes.

Self-Certification May Violate Existing Law

Comment. Proposed Sec. 100.307 permitted housing providers which

met the requirements of proposed Sec. 100.306 to self-certify their

compliance with the Act's requirements. Several commenters expressed

doubts as to the legality of this self-certification mechanism. Some

commenters believed proposed Sec. 100.307 established a licensing

procedure unauthorized by Congress.

These commenters also noted an apparent inconsistency in the

proposed rule's language regarding self-certification. The language of

proposed Sec. 100.307 suggested a limited effect for the self-

certification, namely the authorization of ``the publication of

advertisements, notices or the making of other statements'' necessary

to establish the property as 55-or-over housing. The preamble, on the

other hand, indicated greater significance for the self- certification,

stating that ``absent evidence to the contrary, the Department will

assume that those communities which have chosen to self-certify are in

compliance with the Act's requirements.'' (60 FR 13840, 13841). The

commenters feared that this inconsistency meant HUD intended to shift

the burden of proof to complainants to show that the housing met the

exemption requirements. In such a case, the preamble language would

have exceeded statutory authority, the Act's legislative history, and

case-law.

These commenters believed that as an alternative to self-

certification, HUD should certify the 55-or-over housing. The

commenters believed that only HUD or substantially equivalent state

agencies could provide meaningful certification of a community's exempt

status. These commenters suggested that at the very least HUD require

periodic updates of the self-certification notices.

HUD Response. HUD has not revised the proposed rule as a result of

these comments. The rule's self-certification mechanism allows

communities to determine with certainty whether they comply with the

``significant facilities and services'' requirement. The posting of a

self-certification notice merely identifies for the public those

facilities and services on which the provider bases its claim of

eligibility for that portion of the ``housing for older persons''

exemption. Self-certification is not, nor was it intended to be, a de-

facto licensing procedure.

There was no inconsistency between the language of the proposed

rule and the preamble. Absent evidence that the posted self-

certification notice is incorrect, HUD will assume that housing

providers which have chosen to self-certify are in compliance with the

Act. However, HUD will still be required to conduct an investigation

when it is provided with information which indicates that the

assertions in the self-certification are incorrect or that the property

otherwise does not qualify for the ``housing for older persons''

exemption. This rule does not modify in any way the fact that housing

providers bear the burden of proving their compliance with the Act's

requirements during a judicial or administrative enforcement

proceeding.

HUD rejects the commenters' suggestion that HUD certify each

property seeking to qualify as housing for older persons. In addition

to the fact that such a procedure would be intrusive and involve HUD in

the day to day operations of non-federal housing, HUD neither has the

resources nor the desire to inspect the many properties which might

claim the exemption. Moreover, a HUD-certification procedure might be

construed as a de-facto licensing mechanism, which is beyond the scope

of HUD's authority under the Act.

While this final rule does not require periodic reviews of self-

certification notices, HUD agrees that it is both sensible and

necessary for housing providers to periodically update such notices.

These reviews would prevent the filing of fair housing complaints from

persons claiming the assertions in the posted self-certification notice

are false.

Self-Certification Is Misleading and Will Deter Legitimate Complaints

Comment. Some commenters noted that the posting of a self-

certification notice would not preclude a legal challenge to the

housing community's status as 55-or-over housing. However, these

commenters believed that the language of proposed Sec. 100.307 would

lead some communities to believe that self-certification immunizes them

from such complaints. The commenters felt that the proposed rule's

language was misleading and could fuel anti-government sentiment. These

commenters felt that self-certification was ``bad public policy.''

The commenters found another possibility for confusion in the

language of proposed Sec. 100.307(f), which permitted housing providers

which have self-certified to advertise, post notices, or make other

statements ``evidencing the operation of the property in question . . .

as excluding families with children as described in section 807(b)(2)of

the Act.'' The commenters pointed out that this language might be

incorrectly interpreted to suggest that the exclusion of children is

required by the ``housing for older persons'' exemption.

Furthermore, these commenters feared that a prominently displayed,

``official looking'' self-certification notice would deter families

from pursuing legitimate fair housing complaints.

HUD Response. The easy answer to the commenters' ``self

certification is bad public policy'' argument is the fact that the vast

majority of the commenters applauded HUD's inclusion of a self-

certification mechanism in the March 14, 1995 proposed rule. HUD

rejects the notion that self-certification will lead housing providers

to believe they are ``immunized'' from legitimate fair housing

complaints.

HUD reiterates that the purpose of the self-certification

provisions is to permit communities to ascertain with confidence

whether they comply with the Act's requirements, not to insulate them

from HUD investigations of legitimate complaints. A posted self-

certification notice is only as good as the facts which underlie it. It

is necessary for 55-or-over communities to periodically update the

self-certification notices in order for them to have the desired

certainty in case a complaint is filed.

The commenters were correct in asserting that the Act does not

require the exclusion of children from housing for older persons.

Additionally, the Act does not mandate that 100 percent of senior-

housing residents be 55 years of age or older. HUD wishes to emphasize

that a qualified 55-or-over community may permit the remaining 20

percent of units to be occupied by persons under 55; allow some small

number of families

[[Page 43327]]

with children to reside in the property; and allow some number of units

to be occupied by surviving spouses, or heirs of a senior resident.

However, the general intent to be classified as ``housing for older

persons'' must be continued, as should careful record keeping, to

ensure that the community does not drop below the 80 percent occupancy

requirement and to ensure that the requisite intent to be housing for

older persons is indicated.

Self-Certification Has Federalism Implications

Comment. One commenter wrote that the easily met requirements of

proposed Sec. 100.306 posed a danger to individual property rights. The

commenter believed that the proposed rule would allow some, but not

all, of the homeowners of a tract or development, without any common

interests or privity, to organize an association and restrict free

alienation of the property of the nonmembers.

HUD Response. HUD does not agree with the commenter. The courts

have upheld the constitutionality of the ``housing for senior persons''

exemption against claims that it amounted to a deprivation of property

rights. See Senior Civil Liberties Association v. Kemp, 965 F.2d 1030

(11th Cir. 1992). This final rule merely authorizes a housing provider

to undertake certain actions in order to qualify for the exemption. The

rule's self-certification provision has no more impact on Federalism

issues than does the exemption itself.

II. Other Matters

A. Environmental Impact

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50,

which implements section 102(2)(C) of the National Environmental Policy

Act of 1969 (NEPA). This Finding of No Significant Impact is available

for public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the

Office of the Rules Docket Clerk, Office of the General Counsel,

Department of Housing and Urban Development Room 10276, 451 Seventh

Street, SW, Washington, DC 20410-0500.

B. Executive Order 12866

This final rule was reviewed by the Office of Management and Budget

(OMB) under Executive Order 12866 on Regulatory Planning and Review,

issued by the President on September 30, 1993. Any changes made in this

final rule as a result of that review are clearly identified in the

docket file, which is available for public inspection in the office of

the Department's Rules Docket Clerk, Room 10276, 451 Seventh Street,

SW, Washington, DC 20410-0500.

C. Impact on Small Entities

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this final rule before publication and, by

approving it, certifies that the final rule will not have a significant

impact on a substantial number of small entities.

D. Executive Order 12606, the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this final rule does not

have potential for significant impact on family-formation, maintenance,

and general well-being, and, thus is not subject to review under the

Order.

E. Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that this final

rule will not have substantial, direct effects on States, on their

political subdivisions, or on their relationship with the Federal

government, or on the distribution of power and responsibilities among

the various levels of government. The Fair Housing Act, and section 919

of the Housing and Community Development Act of 1992 direct HUD to

provide further guidance on the meaning of significant facilities and

services so that States, local governments, and housing providers will

have a better understanding of what housing is exempt from the Fair

Housing Act's prohibition against discrimination on the basis of

familial status.

F. Regulatory Agenda

This final rule was listed as sequence number 1504 in the

Department's Semiannual Regulatory Agenda, published on May 8, 1995 (60

FR 23368, 23373) under Executive Order 12866 and the Regulatory

Flexibility Act.

List of Subjects in 24 CFR Part 100

Aged, Fair Housing, Individuals with disabilities, Mortgages,

Reporting and recordkeeping requirements.

Accordingly, 24 CFR part 100 is amended as follows:

PART 100--DISCRIMINATORY CONDUCT UNDER THE FAIR HOUSING ACT

1. The authority citation for part 100 is revised to read as

follows:

Authority: 42 U.S.C. 3535(d) and 3600-3620.

Subpart E--Housing for Older Persons

2. In subpart E, Sec. 100.304 is revised, and new Secs. 100.305,

100.306, 100.307, 100.310, 100.315 and 100.316 are added, to read as

follows:

Sec. 100.304 55 or over housing.

(a) The provisions regarding familial status in this part shall not

apply to housing intended and operated for occupancy by at least one

person 55 years of age or older per unit, provided that, at the time of

an alleged violation of the Act, the housing satisfies the requirements

of:

(1) Sections 100.304, 100.305, 100.306, 100.315 and 100.316; or

(2) Sections 100.310, 100.315 and 100.316.

(b) With reference to complaints filed pursuant to the Act, this

means that the person or entity claiming the exemption must

affirmatively prove by a preponderance of evidence as of the date of an

alleged violation of the Act that the housing meets the requirements of

paragraph (a) of this section.

(c) For purposes of this part, older persons means persons 55 years

of age or older.

(d) For purposes of this part, housing provider means:

(1) The owner or manager of a housing facility; or

(2) The owner or manager of the common and public use areas of a

housing facility, where the dwelling units are individually owned.

(3) The term ``housing provider'' may include any person or entity

which operates a housing facility. The term ``housing provider''

includes any person or entity which represents the property owners of a

community in their housing interests, including homeowners or resident

associations, whether or not there is common ownership or operation of

any portion of a community.

(e) For purposes of this part, occupied by means one or more

persons over the age of 55 actually occupying a unit at the time of an

alleged violation of the Act.

(f) With reference to self-certifications of compliance with the

provisions of this part, the housing provider claiming the exemption

for 55 and older housing may demonstrate publicly, by the posting of

one of the notices described in Sec. 100.307, compliance with the

provisions of this part.

Sec. 100.305 Criteria.

(a) The provisions regarding familial status in this part shall not

apply to

[[Page 43328]]

housing intended and operated for occupancy by at least one person 55

years of age or older per unit, pursuant to this part.

(b) The housing shall have significant facilities and services

specifically designed to meet the physical or social needs of older

persons as described in Sec. 100.306.

(c) At least 80 percent of the units in the housing shall be

occupied by at least one person who is at least 55 years of age or

older as described in Sec. 100.315.

(d) The housing provider shall publish and adhere to policies and

procedures which demonstrate an intent by the housing provider to

provide housing for older persons as described in Sec. 100.316. The

publication of policies and procedures describing an intent to provide

housing as ``adult housing'' shall not suffice for this purpose.

Sec. 100.306 Significant facilities and services specifically designed

for older persons.

(a) The provisions regarding familial status in this part shall not

apply to housing intended and operated for occupancy by at least one

person 55 years of age or older per unit, provided that the person or

entity asserting the exemption affirmatively demonstrates through

credible and objective evidence that facilities and services

specifically designed to meet the needs of older persons are

``significant''. Significant facilities and services which are

specifically designed for older persons are those which actually or

predictably benefit the health, safety, social, educational or leisure

needs of older persons.

(b) The facilities and services provided by a housing provider are

significant and specifically designed to meet the housing needs of

older persons when the housing provider meets the criteria found in

paragraphs (c), (d), and (e) of this section and complies with the

criteria found in paragraph (f) of this section.

(c) A housing provider provides significant facilities and services

if it makes available, directly or indirectly, at least 2 facilities or

services in at least five categories described in paragraph (d) of this

section, including at least 2 of the facilities described in paragraph

(d)(10) of this section (category 10) or in paragraph (d)(11) of this

section (category 11).

(d) Facilities and services which may be considered for purposes of

qualifying for the 55 and older housing exemption are the following:

(1) Category #1 (Social Needs)

Social and Recreational Services provided on a regular, organized

basis:

--softball, golf, shuffleboard tournaments, lawn bowling, billiards or

similar team activity

--bridge club, card games, organized chess or checkers

--exercise classes-- low-impact, stretching, t'ai-chi, swim-therapy

--bingo

--fellowship meetings

--musical theater group

--dances, square dancing, polka, ballroom dancing,

--at least weekly potluck dinners, breakfasts, luncheons, or coffees

--coordinated holiday parties for residents

--Lions club, clubs or classes for sewing, needlepoint, art, gardening,

music, books, golf, bowling, photography, travel, etc.

--cooking classes

--crafts classes: ceramics, macrame, woodworking, jewelry, quilting,

painting

--field trips--bowling, sightseeing, concerts, plays, hiking, shopping

outlets

--fashion shows

--on-site movies or other theatrical events

--liaison/coordination with activities at community-wide senior centers

and activities

--emergency meal service for residents who are ill or in need

--organized travel opportunities

(2) Category #2 (Educational Needs)

Continuing education activities:

--at least monthly presentations on subjects such as health care,

nutrition, stress management, medicare, insurance, social security, tax

preparation, vacation planning, gardening, crime prevention

--consumer protection education

--regularly offered CPR classes

--regularly offered language study classes

--regularly offered videotapes on health care

--courses available at local educational institutions

--library with magazines designed for older persons and material

available in large print

(3) Category #3 (Educational Needs)

Information and counseling services:

--providing new residents with package of information about local

services of interest to seniors

--bulletin board for exchange of information or services

--printed resident directory provided to each resident

--free information on cable TV programs for residents--internal or

external support groups for residents

--seminars on the aging process

--seminars on estate planning, dealing with death or other issues

affecting older persons

--on-site legal services

--informational sessions on fire safety, mental health issues,

political and environmental issues

--seminars on governmental benefits programs

(4) Category #4 (Physical Needs)

Homemaker services:

--employees assist with housework or yardwork

--organized committee of residents to perform light household tasks or

yard work for those who cannot do them themselves

--referrals to housecleaning services

--bill-paying services

--pet care/pet therapy services

--minor home repair service

--tool loan service

(5) Category #5 (Safety Needs)

Outside maintenance/health and safety services:

--on-staff medical personnel with first aid/CPR training

--on-staff repair, maintenance and painting services

--meals on wheels

--snow shoveling and plowing

--system for referrals to doctors or other health care professionals

--regular system to contact residents who are house-bound to make sure

they are o.k.

--system for referrals for transportation services for residents

--referrals to income tax preparers

--referrals to repair and maintenance services

--security guards/patrols, organizing neighborhood or block watch

--organizing committee of residents to do household repairs and yard

work for those who cannot do them themselves

--exterior lighting and alarm systems monitoring

--vacation house watch

--limited access to property by controlled access gate or similar

system

(6) Category #6 (Health Needs)

Emergency and preventative health care programs:

--meetings about nutrition, back care, breast cancer/self-examination/

mammogram, prostate cancer screening, vision care, or other health care

topics (see continuing education)

[[Page 43329]]

--monthly blood pressure checks

--annual flu vaccine shots available

--periodic vision or hearing tests

--staff or volunteers pick up food from social services for mobility

impaired seniors

--organizing committee or buddy system of residents to do errands for

people who become ill and/or to stay with sick persons while their

spouses do errands

--emergency telephone network, staff or volunteers monitor people who

have serious medical problems

--doctor/medical facilities located within two miles of facility

--health care equipment pool for resident use

(7) Category #7 (Social/Health Needs)

Congregate dining:

--available congregate dining for at least one meal each day

--sit-down meal service

--special menus for dietary needs

--activities conducted in conjunction with congregate dining

(8) Category #8 (Transportation)

Transportation to facilitate access to social services:

--transportation provided to doctors' offices, shopping, religious

services, outside social or recreational activities

--public bus stop or train station within walking distance and bus

schedules and maps available

--organized system to provide transportation for residents who cannot

drive

--sign-up board for shared transportation needs

--shared ride services to social events, functions, medical care,

shopping

(9) Category #9 (Social Needs)

Services to encourage and assist residents to use available

facilities and services:

--volunteer or staff activity planner

--swimming or water aerobics instructors

--dance or exercise instructors

--crafts instructors

--newsletters, newspapers or flyers informing residents of activities,

trips, clubs, etc.

--monthly calendar of events

--resident council or committees to encourage participation in

activities

(10) Category #10 (Leisure Needs)

Social and Recreational Facilities:

--clubhouse, communal kitchen, or communal dining area

--library with large print books or subscriptions to publications

targeted to older persons

--sauna, jacuzzi or whirlpool

--recreation or game room, arts and crafts room, community room or

meeting room

--television room for communal use with VCR

--ping pong, pool or billiard tables, shuffleboard courts, horseshoe

pits or bocce ball (with functional equipment)

--golf course

--stage, piano and dance floor

--woodworking shop

--restaurant for resident use

--bank

--legal assistance

--travel agency

--convenience store

--barber shop

--dry cleaners

--hair salon

--lapidary

--kiln

--fishing pond

(11) Category #11 (Health/Safety Needs)

Accessible physical environment:

--accessible clubhouse

--at least one accessible bathroom facility in public and common use

areas

--ramps (curbs or drainage ditches are cut or ramped to allow

wheelchair/walker access)

--ramped sidewalks in public and common use areas; stairs at a minimum

--benches in all public and common use areas

--assigned and designated parking spaces, including handicapped parking

--accessible swimming pool (i.e., ramped entrance to pool area)

--accessible management office

--accessible dining area or activity area

--vans, buses available with wheelchair lifts or easy access for

persons with mobility difficulties

--lift to assist in swimming pool use

--Amplifiers provided on at least 25% of public phones

(12) Category #12 (Social, Leisure, Health, Safety or Educational

Needs)

Other:

--Any facility or service which is not listed above but which is

designed to meet the health, safety, social or leisure needs of persons

who are 55 and older and which is actually available to and used by

residents of the property.

(e) A housing provider provides significant facilities and services

if the facilities and services are provided on the premises by paid

staff, resident volunteers, or by agencies, entities or persons other

than the housing provider. A housing provider provides significant

facilities and services if the facilities or services are provided off

the premises by paid staff, resident volunteers, or by agencies,

entities or persons other than the housing provider, provided that if

facilities or services are made available off the premises, the housing

provider, through paid staff, resident volunteers, or by agencies,

entities or persons other than the housing provider, shall make

available transportation services or coordination of information and

transportation resources which ensure that residents are aware of and

have ready access to such facilities or services.

(f) In determining whether a housing provider provides significant

facilities and services, the Department will evaluate the facilities or

services that meet the requirements of Sec. 100.305 by the following

criteria to determine whether the facilities in the aggregate and the

services in the aggregate are ``significant'':

(1) The extent to which a facility or service can accommodate the

older population of the housing facility. The capacity of each facility

or service specifically designed to meet the physical or social needs

of older persons depends upon but is not limited to such factors as:

(i) The size of the facility in relationship to the scope of the

service offered;

(ii) The length of time during which the facility or service is

made available or the service is offered;

(iii) The frequency with which the facility or service is made

available or the service is offered; and

(iv) Whether the facility or service is offered only at one

location or there are a number of locations at which the facility is

made available or at which the service is offered.

(2) The extent to which the facility or service will be of benefit

to older persons, given the climate and physical setting of the housing

facility.

(3) The extent to which the facility or service is actually usable

by and regularly available to residents on a day-to-day basis.

Sec. 100.307 Self-Certification.

(a) A housing provider may indicate, by display of a notice

complying with this part, its intent to provide housing for older

persons in substantially the same form as the self-certification form

which will be made available by the Office of Fair Housing and Equal

Opportunity.

[[Page 43330]]

(b) Such a notice shall be provided by the Department, and shall

include, at a minimum, a certification of compliance with Sec. 100.315

and an indication of the housing provider's intent to provide, and its

certification that it does in fact provide, facilities and services

which comply with Sec. 100.306.

(c) Such a notice shall be signed by one or more housing providers,

with authority to sign.

(d) Such a notice shall be signed under penalty of perjury of the

laws of the United States.

(e) Such a notice shall be posted in every public or common area

where housing transactions are conducted.

(f) A copy of a current self-certification shall be considered by

the Department to be sufficient evidence of compliance with the Act to

allow the publication of advertisements, notices or the making of other

statements as evidencing the operation of the property in question as

housing for older persons and as excluding families with children as

described in section 807(b)(2) of the Act. However, the posting of a

self-certification notice will not preclude the Department from

investigating a complaint of alleged housing discrimination where there

is evidence that the housing provider fails to comply with the self-

certification.

Sec. 100.310 Impracticability.

(a) The provisions regarding familial status in this part shall not

apply to housing intended and operated for occupancy by at least one

person 55 years of age or older per unit, provided that the person or

entity affirmatively demonstrates through credible and objective

evidence that the housing satisfies the requirements of Secs. 100.305,

100.306, 100.315 and 100.316 or Secs. 100.310, 100.315 and 100.316.

Housing satisfies the requirements of Sec. 100.310 if it is not

practicable to provide significant facilities and services designed to

meet the physical or social needs of older persons and the housing

facility is necessary to provide important housing opportunities for

older persons.

(b) In order to satisfy the requirements of Sec. 100.310 the

housing provider must affirmatively demonstrate through credible and

objective evidence that the provision of significant facilities and

services designed to meet the physical or social needs of older persons

would result in depriving older persons in the relevant geographic area

of needed and desired housing. The following factors, among others, are

relevant in meeting the requirements of Sec. 100.310:

(1) Whether the owner or manager of the housing facility has

endeavored to provide significant facilities and services designed to

meet the physical or social needs of older persons either by the owner

or by some other entity. Demonstrating that such services and

facilities are expensive to provide is not alone sufficient to

demonstrate that the provision of such services is not practicable.

(2) The amount of rent charged, if the dwellings are rented, or the

price of the dwellings, if they are offered for sale.

(3) The geographical or other physical limitations inherent in the

property which makes the provisions of facilities or services

impracticable.

(4) The income range of the residents of the housing facility.

(5) The demand for housing for older persons in the relevant

geographic area.

(6) The vacancy rate of the housing facility.

(7) The availability of other similarly priced housing for older

persons in the relevant geographic area. If similarly priced housing

for older persons with significant facilities and services is

reasonably available in the relevant geographic area then the housing

facility does not meet the requirements of Sec. 100.310.

Sec. 100.315 80 percent occupancy.

(a) The provisions regarding familial status in this part shall not

apply to housing intended and operated for occupancy by at least one

person 55 years of age or older per unit, provided that the person or

entity demonstrates through credible and objective evidence that

housing satisfies the requirements of Secs. 100.305, 100.306, 100.315

and 100.316 or Secs. 100.310, 100.315 and 100.316. Housing satisfies

the requirements of Sec. 100.315 if at least 80 percent of the units in

the housing facility are occupied by at least one person 55 years of

age or older per unit except that a newly constructed housing facility

for first occupancy after March 12, 1989 need not comply with

Sec. 100.315 until 25 percent of the units in the facility are

occupied.

(b) Housing satisfies the requirements of this section even though:

(1) On September 13, 1988, under 80 percent of the occupied units

in the housing facility are occupied by at least one person 55 years of

age or older per unit, provided that at least 80 percent of the units

that are occupied by new occupants after September 13, 1988 are

occupied by at least one person 55 years of age or older.

(2) There are unoccupied units, provided that at least 80 percent

of the occupied units are occupied by at least one person 55 years of

age or over.

(3) There are units occupied by employees of the housing provider

(and family members residing in the same unit) who are under 55 years

of age provided they perform substantial duties directly related to the

management or maintenance of the housing.

(4) There are insufficient units occupied by at least one person 55

years of age or over to meet the 80 percent requirement, but the

housing provider, at the time the exemption is asserted:

(i) Reserves all unoccupied units for occupancy by at least one

person 55 years of age or older until at least 80 percent of the units

are occupied by at least one person who is 55 and older; and

(ii) Meets the requirements of:

(A) Secs. 100.305, 100.306 100.307 and 100.316; or

(B) Secs. 100.310, 100.315, and 100.316.

(iii) Where application of the 80 percent rule results in a

fraction of a unit, that unit shall be considered to be included in the

units which must be occupied by at least one person who is 55 or older.

Sec. 100.316 Intent to provide housing for older persons.

(a) The provisions regarding familial status in this part shall not

apply to housing intended and operated for occupancy by at least one

person 55 years of age or older per unit, provided that the person or

entity proves that the housing satisfies the requirements of

Secs. 100.305, 100.306, 100.315 and 100.316 or Secs. 100.310, 100.315

and 100.316. Housing satisfies the requirements of Sec. 100.316 if the

owner or manager of a housing facility publishes and adheres to

policies and procedures which demonstrate an intent by the housing

provider to provide housing for persons 55 years of age or older.

(b) The following factors, among others, are relevant in

determining whether the owner or manager of a housing facility has

complied with the requirements of Sec. 100.316:

(1) The manner in which the housing facility is described to

prospective residents.

(2) The nature of any advertising designed to attract prospective

residents.

(3) The use of age verification procedures.

(4) Lease provisions.

(5) Written rules and regulations.

(6) Actual practices of the owner or manager in enforcing relevant

lease provisions and relevant rules or regulations.

(7) The public posting of the self-certification described in this

part.

[[Page 43331]]

Note: The following appendix, ``Housing for Older Persons--Self-

Certification,'' will not be codified in title 24 of the Code of

Federal Regulations.

Dated: July 31, 1995.

Susan Forward,

Deputy Assistant Secretary for Enforcement and Investigations.

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