Are "Active Adult" and "Empty Nester" Communities Making a Comeback?

Use caution and ensure that your community meets the FHA's criteria before excluding children

In an effort to attract the nation's growing population of senior citizens, many of whom want to live in child-free communities, an increasing number of housing developments appear to be marketing themselves as "Active Adult" or "Empty Nester" communities, despite the fact that "Adult Only" housing was outlawed in 1988 when President Ronald Reagan signed the Fair Housing Amendments Act (FHAA) into law.

As we all know, the FHAA made a number of important changes to the original Fair Housing Act. Among the changes was the addition of "familial status" as a protected class. At the same time, the FHAA of 1988 provided an exemption to the familial status rules for properties that are able to qualify as "Housing for Older Persons." The result is that exempt properties are immune from complaints of familial status discrimination. Still, nearly two decades later, many communities that want to exclude children seem unaware - or perhaps ignore - the fact that they first must qualify for the exemption before they can legally restrict or limit the number of families with children under the age of 18 on their property.

To meet the exemption housing providers must be able to verify that at least 80 percent of its units are occupied by at least one person 55 years of age or older, which is usually just a matter of mathematics. However, properties are also required to demonstrate their "intent" to be "Housing for Older Persons." To determine whether a property has the required intent, federal, state and local enforcement agencies will look at the “totality of facts.” This would include the property’s policies, procedures, leases, advertising and so on. In contrast to the eighty percent requirement, whether a property has the required intent is purely a subjective opinion. And in at least one state, Florida, properties must certify their compliance with the state agency before they are considered exempt.
So when is it permissible for a property to advertise itself as being an "Active Adult" or "Empty Nester" community?

While such terms clearly are illegal if the community does not qualify for the exemption, advocacy groups and even some state and local enforcement agencies will argue that using phrases such as ''Adult Living'' or ''Adult Community'' are always illegal, even when the property qualifies for the exemption. According to these organizations, using such terms is incompatible with the intent requirement, thereby nullifying the property’s claim to the exemption. If that’s true, then the property is leaving itself open to a fair housing complaint based on familial status discrimination. But, in our view at least, it’s not true.

While HUD has cautioned properties to avoid terms like “active adult” because they are inconsistent with the intent requirement, HUD is also on record as saying that such terms – standing alone – “do not destroy the intent requirement.”

“If a community or facility has clearly shown its intent in other ways, and meets the 80% requirement, then the intent requirement has been met even if the phrase ‘all adult’ or similar terminology is occasionally used.”

Implementation of the Housing for Older Persons Act of 1995; Final Rule, May 3, 1999.
Although we’ve established that under the right circumstances an otherwise exempt property may advertise itself as being an “all adult” or “active adult” community, this is not to say that exempt properties should use such terms; in fact we recommend that our clients not advertise themselves in that way, unless they want to be caught up in an expensive investigation or enforcement action.

So what terms should your property use? Well, if your property is not exempt, then terms like “active adult” and “empty nester” should never be used. Even if your property welcomes families, the use of such terms by a non-exempt property could be viewed as an attempt to limit or exclude other families from renting. If your property wishes to become exempt, or wishes to keep its exempt status, then HUD (and we) recommend you use terms such as “senior housing,” “housing for older persons,” “55 and older community'' or “retirement community.'' We recently came across a sign that said “a 55 and better community.”