by Gary Taylor
Federal 8th Circuit Court of Appeals, April 10, 2023
Suellen Klossner has lived in a mobile-home park in Dubuque, Iowa, since 2009. The park is owned by IADU Table Mound MHP, LLC, which is controlled by Impact MHC Management, LLC (Impact). Tenants in the park pay rent for a lot where they can situate a mobile home. Klossner receives income from government programs that she used to pay her rent for ten years. She is unable to work full-time due to psychiatric and physical disabilities.
In 2019, the City of Dubuque approved a measure allowing the local public housing authority to provide residents of mobile-home parks with housing choice vouchers that could be used to supplement their rent payments. Under this voucher program, the federal government provides funds to local public housing agencies, which in turn may distribute them to low-income tenants. As the rent on Klossner’s lot increased, she received a voucher and sought to use it to supplement her rent payments, but the companies declined to accept the voucher. Federal law does not require landlords to accept housing choice vouchers, and Impact declines to do so except (1) where state law requires acceptance, or (2) where the company has purchased property where a prior owner accepted vouchers from a holdover tenant—a total of approximately forty tenants out of more than twenty thousand under Impact’s management. Impact cited the administrative burdens of accepting vouchers.
The FHAA makes it unlawful to discriminate in housing or make unavailable a dwelling “because of a handicap of [a] buyer or renter.” “Handicap” is a “physical or mental impairment which substantially limits one or more of such person’s major life activities.” “Major life activities” means “functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working.” The statute prohibits “a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford [a handicapped] person equal opportunity to use and enjoy a dwelling.” Klossner sued Impact and IADU Table Mound, alleging that the companies violated the Fair Housing Amendments Act by refusing to accept her voucher. Her theory was that she is a person with a “handicap” under the FHAA, and that the law required the companies to accept the housing voucher as a “reasonable accommodation” that was “necessary” to afford her “equal opportunity to use and enjoy a dwelling.”
The companies argued that although the FHAA calls for reasonable accommodations that directly ameliorate the effect of a handicap, the statute does not require a landlord to accommodate a tenant’s economic circumstances by accepting housing vouchers, and cited similar cases from the Federal 2nd and 7th Circuits in support of their defense. In the 2nd Circuit case the court reasoned that “the duty to make reasonable accommodations is framed by the nature of the particular handicap,” for example, providing a preferred parking space for tenants with difficulty walking, or lifting a no-pets rule to allow the use of a service dog by a blind person. The court concluded, however, that economic discrimination “… is practiced without regard to handicap,” and that the accommodation sought was not “necessary” to afford handicapped persons an “equal opportunity” to use and enjoy a dwelling. The court emphasized that the FHAA “does not elevate the rights of the handicapped poor over the non-handicapped poor,” and that “economic discrimination” is “not cognizable as a failure to make a reasonable accommodation” under the FHAA. In the 7th Circuit case a developer of a community designed for tenants using wheelchairs asked a municipality to grant a zoning variance to allow the construction of more structures on a plot of land, arguing that the proposed variance was necessary as a “reasonable accommodation” under the FHAA because it would reduce the cost of each housing unit, and thereby alleviate the economic impact of handicaps on prospective tenants who needed inexpensive housing. In rejecting the developer’s argument the 7th Circuit pointed out that if the reasonable accommodation provision required consideration of a tenant’s financial situation, then the statute would allow developers not only to ignore zoning laws, but also to obtain a “reasonable accommodation” that suspended a local building code that increased the cost of construction, or a minimum wage law, or regulations for the safety of construction workers. The statute did not call for these results, the court explained, because the duty of “reasonable accommodation” is limited to modifying rules or policies that hurt handicapped people by reason of their handicap, rather than by virtue of circumstances that they share with others, such as limited economic means.
The 8th Circuit found these cases persuasive in the present situation and ruled against Klossner. In interpreting the predecesor statute to the FHAA courts called for accommodations that provided the “direct amelioration of a disability’s effect,” but nothing in the law suggested that the duty of “reasonable accommodation” “extended to … alleviating downstream economic effects of a handicap.”