Posted by: Patricia Salkin | January 15, 2013

Federal District Court Says Variances to Allow More Economical Construction of Housing for the Mentally Ill are Not Necessary Accommodations under the ADA

Daveri Development Group LLC sought to construct a 30-unit apartment building, to be called Boeger Place, which would provide housing space for individuals suffering from mental illness. DDG Boeger, LP, is an Illinois limited partnership between developer Daveri and an investor in the housing project. The developers planned to purchase land owned by Aleks and Dejan Nikolich in the Village of Arlington Heights, Illinois, and to work with two not-for-profits on developing and administering the facility: North/Northwest Suburban Task Force on Supportive Housing for Individuals with Mental Illness (Task Force) and Thresholds, Inc., a service provider that would have provided services to the individual residents. DDG Boeger is managed by partners Daveri and Thresholds. C.S. is an adult suffering from acute anxiety and schizoaffective disorder who lives with her parents in Park Ridge, Illinois, and who cannot live independently. All of the above parties are plaintiffs in this case.

Arlington Heights amended its zoning code in 1991 to allow for group homes for up to eight mentally disabled residents. Since the amendment, 13 such housing units have been established there for mentally ill patients and 13 housing units designed to house 19 additional mentally ill persons in the near future. A five-year consolidated plan for 2010-14 estimated that Arlington Heights had an unmet need for up to 180 additional housing units for mentally disabled individuals.

In December 2009, Daveri submitted a proposal for the Boeger Place housing development. Plans for this permanent supportive housing environment included a three-story building with 30 housing units and 15 parking spaces, to be located on a 0.93 acre parcel. Arlington Heights indicated in January 2010 that the project would require eight amendments or variances from the village’s zoning code. Daveri had originally planned to request a zoning change from a business zone to a multi-family residential zone, but the village advised that, because on-site counseling and services would be provided at the facility, a change to institutional zoning designation was a better fit. The developer took that advice and pursued a zoning change to institutional.

Based on these discussions, Daveri signed a contract with the Nikoliches, which was contingent upon Daveri exercising due diligence and Arlington Heights issuing certain zoning variances for the Boeger Place project. Daveri then filed an application for the development, requesting nine variances and amendments, including reductions in minimum required parking spaces, lot size, unit size, zoning designation changes, and amendment to the Arlington Heights Comprehensive Plan. In April, the Planning Department provided its Plan Commission with a report detailing numerous concerns with the proposal, including the fact that the unit density would be almost twice what ordinances permitted, the property was surrounded by commercial lots and not easily accessible by public transportation, and the proposed parking was much smaller than typically required for an institutional or residential development. Despite these concerns, the Planning Department ultimately supported and endorsed the project, which it felt furthered Arlington Heights’ goal of providing housing opportunities for the disabled. The Planning Department told the Commission that the size of the property, the parking issues, and other matters were sufficient and would properly accommodate the project. Based on this advice, the Plan Commission voted 4 to 3 in favor of recommending that the Village Board approve the Boeger Place project.

While the Village Board normally relies “very heavily” on the recommendations of the Plan Commission, the Board voted 4 to 3 against the project after a May 2010 public hearing. Those who opposed the project cited concerns about density, public transportation, and the fact that numerous variances were required for the project, as well as the proposed facility’s proximity to schools, the alleged failure of Daveri and its partners to reach out to the community to address concerns about the project, and Threshold’s finances. Neighbors who spoke at the public hearing had expressed concerns about the safety of children, the fact that a daycare center and High School were located in close proximity, and the fact that parents had not been notified about the project’s possible location so close to their children’s schools.

Daveri discussed but did not follow through on amending the plan and resubmitting the proposal. The group of plaintiffs then decided to file this lawsuit against the Village in the U.S. District Court for the Northern District of Illinois claiming a violation of the Fair Housing Act (FHA), the Americans with Disabilities Act (ADA), and the Rehabilitation Act. Plaintiffs claimed the village’s denial constituted three types of actionable discrimination under the FHA, ADA and Rehabilitation Act—disparate treatment, disparate impact, and failure to accommodate. By the time the case was heard, Daveri no longer had access to the public funds it had been offered, and had lost its contract to purchase the land, investors, and agreements necessary to move forward.

On the question of disparate treatment, the court found any direct evidence of intentional discrimination to be insufficient. Plaintiff claimed that the fact that Arlington Heights’ only available residential housing in institutional zones was for senior citizens, and not for the mentally ill or disabled, was evidence of disparate treatment. However, the court rejected the argument that this fact evinced any bias against the mentally handicapped, as well as plaintiffs’ assertion that the zoning ordinances from which Boeger Place required variance relief were unreasonable. The court pointed out that Arlington Heights would most likely have rejected the project even if the residents were not mentally ill, since it has never approved a project requiring this magnitude of variances regardless of the intended tenants. The evidence, as well as the fact that the village was home to several existing and planned housing facilities for the mentally ill, indicated that the Board had denied the Boeger Place application based on numerous legitimate zoning interests, and not because of bias against the mentally ill.

To prove disparate impact, the plaintiffs attempted to attack a single zoning decision, rather than a facially neutral village policy. However, the court underscored that the intended purpose of the FHA, ADA or Rehabilitation Act was not to give plaintiffs an opportunity to challenge each individual zoning denial, since all denials would impact one group of people and not others. Since the plaintiffs failed to make an argument about Arlington Heights’ zoning policies and their disparate impact on the disabled, the court also rejected this theory.

On the matter of failure to accommodate, the court pointed out that there was no evidence that mentally ill residents would benefit more from living in a 30-unit facility, as compared with a 16-unit facility permitted under existing village law without a variance. Because Daveri had obtained financing for the project, and because of Thresholds’ cost concerns, building a facility that complied with existing zoning was not financially feasible, unless a higher rent was charged. Yet the effectiveness of the residents’ treatment would not have been diminished by a smaller facility, or higher rent. Thus, the court concluded that the need for the numerous variances was founded not in the developers’ efforts to treat or accommodate the prospective tenants’ disabilities, but rather because Daveri wanted to provide more affordable housing options in a larger, more cost-effective facility. The project was not denied because the prospective residents of Boeger Place were mentally ill, but because zoning ordinances were uniformly applied to the project, the court held. Further, the court held that none of the variances requested by Daveri would have assisted in ameliorating the effects of any plaintiffs’ disability—the variances simply would have allowed Daveri to build a bigger building and charge lower rents. Such financial benefits do not qualify as a necessary accommodation, the court said.

For all of those reasons, the court rejected all of the plaintiffs’ claims and granted the village’s motion to dismiss with prejudice.

Nikolich v. Village of Arlington Heights, Ill., 870 F.Supp.2d 556 (N.D. Ill. 6/20/12)

The opinion can be accessed at: http://docs.justia.com/cases/federal/district-courts/illinois/ilndce/1:2010cv07395/249655/45/0.pdf?1340276234

 


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