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Twenty years of the Americans with Disabilities Act
By Mark S. Alper, RHM, vice president of Compliance
Two decades ago, President George H. W. Bush signed into law the Americans with Disabilities Act (ADA). The passage of this law was a landmark success for advocates of civil rights for persons with disabilities as it extended into the private sector protections that had previously been limited to government and programs receiving federal funds (the Architectural Barriers Act of 1968 and Section 504 of the Rehabilitation Act, respectively.
Within one year, however, the US Government Accountability Office, the investigative arm of Congress, issued a critical report noting that there was widespread confusion about the then new law and its accessibility components. Within fifteen years, the Supreme Court took issue with the "broad and vague" definition of "individual with a disability" and suggested the Congress reconsider this issue ... something the Congress has yet to do.
Notwithstanding these criticisms, however, the ADA is an important milestone for individuals with disabilities. The three Titles of the ADA are enforced by two different agencies: Title I (Employment) is enforced by the US Equal Employment Opportunity Commission (EEOC), while Titles II and III (State and Municipal facilities; Public Accommodations) are enforced by the US Department of Justice.
The ADA places a particular burden on Public Housing Authorities, which come under the law's Title II and were already subject to the provisions of HUD regulations on Section 504 (24 CFR Part 8). Whereas Section 504 requires buildings built prior to 1989 to have a self-evaluation and transition plan that could involve making substantial modifications for accessibility, the ADA addresses itself to physical modifications that took place after January 26, 1992 -- the date Title II became effective. This could mean a PHA being mindful of the requirements of the two laws, which have two different sets of accessibility standards (Section 504 uses the Uniform Federal Accessibility Standars [UFAS] while the ADA has the ADA Accessibility Guidelines [ADAAG], and this might require decisions about which standard is more stringently protective of the rights of persons with disabilities.
Section 42 Low Income Housing Tax Credit (LIHTC) buildings that do not receive any federal assistance from HUD or Rural Development are also subject to the ADA, since the absence of federal financial assistance excludes them from any Section 504-related responsibility.
If this sounds complicated, it can be. Keep in mind, however, that as we grow older and live longer, it is highly likely all of us will be considered individuals with disabilities at some point in our lives. This makes "individual with a disability" the least exclusive protected class in federal civil rights laws.
Exploring the implications of Multiple Building Election
By Jo Ikelheimer, MPA, RHM
For those of you who missed our recent Spotlight On webinar looking at the impact of the Multiple Building Election on compliance, I have decided to revisit the topic over the next few issues of Housing Management Update. I found that the deeper that I delved into this topic, the more I discovered—particularly in tegards to the implications of the timing of the election; i.e., whether or not the election was taken at the end of the first year of the credit period. But before I confuse anyone, let me backtrack a little and give you the basics
Under Part II of the IRS Form 8609 which is completed by the owner with respect to the first year of the credit period, item 8(b) asks: “Are you treating this building as part of a multiple building project for purposes of section 42?” The two options are a straightforward Yes or No. So, on the surface, this seems to be a fairly simple election and is probably often not given much thought.
That is where the danger lies, especially from a management perspective. Now, I will attempt to explain why the answer to this question is so critical and why every LIHTC manager should know the answer to this question for their properties.
The first area of concern actually lies within the same IRS form, just a few items down from question 8(b). Question 10(c) is where the owner is given the opportunity, again, at the end of the first year of the credit period to elect the project’s minimum set-aside. This critical election determines whether the project is to have 20 percent of its units set-aside and qualified by households having at or below 50 percent of Area Median Income (AMI) or 40 percent of its units set-aside and qualified by households having at or below 60 percent AMI. (The third option is 25-60, but only applicable in New York City.) Notice that it references 20 or 40 percent of the project. That’s the kicker when it relates back to the election made in item 8(b).
If the multiple building election has been taken, meaning that the owner answered “yes” to the question, then the minimum set-aside must be met and maintained on the project level to include multiple buildings. If the multiple building election was not taken and the answer was “no”, then it must be met in every single building individually which represent individual projects. The purpose of the minimum set-aside is to act as firewall of sorts in terms of when the credits can be claimed – not before the minimum set-aside is met – and as threshold requirement in order to continue claiming any credits for the project after the first year of the credit period.
For this to play out in practical terms, let’s consider an example. If Property A has 420 units and the owner has taken the multiple-building election and chosen the 40/60 minimum set-aside then 168 units would have to be appropriately tax credit qualified in order to meet the minimum set-aside and begin claiming credits. (This is determined by multiplying 420 by 40 percent.) If Property B, however, has the same number of units represented by 10 buildings having 42 units apiece and the same minimum set-aside election, if the owner did not take the multiple-building election then 16.8 units per building would have to be qualified to meet the minimum set-aside. This, of course, would translate into a 17 unit per building minimum, which multiplied out by 10 buildings would equal 170 units overall that would need to be qualified for the entire property. Even though it is only a difference of two units, that can make a definite difference in the credit availability and the compliance status of the property.
Next month: Unit transfers and multiple building election.
