Accessibility Requirements vs Housing Affordability

A tradeoff perhaps we didn't know we were already making.

A lot of folks out there are asking where all the affordable housing is, wondering why we aren’t—as a country—building more of it. Construction costs and bureaucratic red tape are often cited as reasons. But that’s not overly helpful. Specific examples are.

I already talked about the difficulties in getting 501 Main approved by Fairlee’s Development Review Board, leading to a month of delays and thousands of dollars in added design and holding costs (see posts from October 1st and November 11th).

A second example is accessibility requirements.

Before I jump in—and even though this should be taken for granted—I feel I need to explicitly call out that am I in no way advocating for the broad removal of accessibility requirements. Accessibility is a critical piece of establishing an inclusionary environment and more welcoming community for all. My only goal here is to shed some light on the cost drivers of small-scale development and perhaps offer some recommendations for improvement.

One more caveat—I am not an attorney or architect. The following is based on my own research and conversations with people more knowledgeable than I am.

OK. So, with that, let’s jump in.

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In Vermont, there are three sets of legislation that govern accessibility requirements: the Americans with Disabilities Act (ADA), the Fair Housing Act (FHA), and Vermont’s very own Access Rules. Each has a different scope of applicability and design standards but, as you’ll see, they all kind of get wrapped into one heaping lump in Vermont.

I’ll give you a little spoiler. It’s not the ADA or FHA that cause issues for small-scale development. It’s really Vermont’s over-eager and ideological expansion of the ADA and FHA’s intended scope that is at the root of it.

And, although part of this post is specific to Vermont, each state typically adopts their own version of accessibility requirements beyond the two federal statutes. My guess is that there might be overlap across state lines as far as challenges and opportunities go.

Americans with Disabilities Act (ADA)

ADA is a federal civil rights law enacted in 1990 that prohibits discrimination against people with disabilities. It covers employment (Title I), state and government services (Title II), public accommodations (Title III), telecommunications (Title IV), and a few miscellaneous provisions (Title V).

Title III is what we care about here which defines a public accommodation as a facility whose operations:

1. Affect commerce; and

2. Fall within at least one of the following 12 categories:

Courtesy of ADA.gov

Note that privately-funded residential housing—whether rentals or condos—does not fall into any of the above categories. (Although subsidized rental housing does fall under Title II whereby 5% of units, but at least one, must be ADA-compliant)

Are retail spaces governed by the ADA? Absolutely. The rental office at your decked-out apartment complex? 100%. How about the private pool on your condo building’s roof? No, because access is restricted and it’s not open to the public.

Still seem a bit ambiguous?

The definition of scope pertaining to residential uses has been misinterpreted so frequently that the US Department of Housing & Urban Development (HUD) released an official Q&A that clarified:

"The Department has received a number of questions regarding applicability of the ADA to residential housing, particularly with respect to title III of the ADA, which addresses accessibility requirements for public accommodations. Strictly residential facilities are not considered places of public accommodation and therefore would not be subject to title III of the ADA, nor would amenities provided for the exclusive use of residents and their guests.”

Great. This seems like a clear line drawn in the sand: the ADA does not pertain to private residential buildings. Keep this in the back of your head as we push forward.

Now, for public accommodations that are subject to the ADA, the 279-page design bible must be followed to a T. Here’s where we start to get into head-spinning territory.

I won’t get into the details (partly because I just don’t know most of them), but the gist is that everything from entry and interior routes, to bathroom layouts, to shelving and cabinet dimensions, to appliance selection becomes strictly regulated when ADA design is introduced.

This ultimately adds complexity and, therefore, cost to any project.

Fair Housing Act (FHA)

The Fair Housing Act of 1968 (also the Civil Rights Act) is another federal civil rights law that makes it illegal to discriminate in the sale or rental of housing. It seeks to prevent all sorts of discriminatory practices, including those related to: mortgage lending, race, families with children, sexual orientation, non-English speakers, advertising and marketing, and people with disabilities.

Specifically, for the purposes of this exercise around building design, we’re focused on the rules established to support people with disabilities.

In 1991, the 334-page FHA design manual was released. And if your head wasn’t spinning from the ADA guidelines, then it will once you open the FHA one. It’s certainly not your average bedside reading fodder.

The FHA design specs follow seven requirements: accessible building entrances, accessible common areas, usable doors, accessible routes, light switches, reinforced walls, and usable kitchens and bathrooms. Not as onerous as ADA compliance, but still a lot to digest and plan for.

According to the FHA, these design specs apply to all covered multifamily dwellings in buildings built for first occupancy after March 13, 1991. “Covered” is defined as:

1. All dwelling units in buildings containing four or more dwelling units if such buildings have one or more elevators; or

2. All ground floor dwelling units in other buildings containing four or more units

This also pertains to renovations and alterations of existing buildings put into use after 1991. But, similar to the ADA, there has been a lot of confusion around the applicability of FHA rules, too. So much in fact that the Department of Justice (DOJ) teamed up with HUD to issue another formal Q&A.

Here’s one of the questions (keep this in mind for later):

Q: Do the Fair Housing Act’s design and construction requirements apply to the alteration or renovation of residential properties designed and constructed for first occupancy on or before March 13, 1991?

A: No. “First occupancy” as defined in the Regulations implementing the Act means a building that has never before been used for any purpose. Therefore, alterations, rehabilitation, or repair of pre-existing residential buildings are not covered because first occupancy occurred before the effective date of the Act’s design and construction requirements.

Pretty definitive, right? The FHA does not apply to residential buildings occupied before 1991.

Well, “hold my beer” said Vermont. Not so definitive for long.

Vermont Access Rules

You just got a quick primer on the two federal laws concerning accessibility. So let’s turn to what Vermont passed in 2012.

Keep in mind that the federal laws still apply as well. But:

“When local codes differ from the national standard, either in scope or technical specification, the general rule is that the more stringent requirement should be followed.” — (Directly from HUD)

And, man, are Vermont’s rules more stringent.

The state’s Access Rules effectively just expand the scope of the ADA and FHA by:

1. Redefining public accommodations in the ADA to encompass every single building except farms (obviously because, ya know, it’s Vermont) and multi-family buildings with three units or less

2. Scrapping the post-1991 age requirement of a building for the FHA accessibility requirements to be triggered

I probably should have said wildly expand.

All of a sudden, both the ADA and FHA design guidelines apply to all multi-family buildings with four or more units. Regardless of whether we’re talking new construction or renovation of a historic building from 1850.

Every. Single. Multi-family. Building. (With four or more units).

Remember, the original intent for ADA and FHA were to govern non-residential public accommodations (ADA) and buildings put in use after 1991 (FHA). The exact opposite of what the Vermont Access Rules set forth.

Does this make sense for new construction? For the most part, I’d actually say so. It’s a lot easier when building ground up to plan for all the details, nuances, and space requirements that are imposed by ADA and FHA design guidelines. The one exception I can think of is infill new construction in downtowns and village centers where space is inherently constrained. But I won’t get into that now.

My biggest concern is that both sets of War & Peace-length federal design guidelines now apply to renovations of existing buildings constructed prior to 1991. The instant a renovation permit is submitted, the developer becomes responsible for bringing the in-scope units up to ADA and FHA standards.

The thing is—most of these old buildings were constructed without accessibility in mind. Rectifying that can require massive amounts of work: moving load-bearing walls, re-plumbing entire apartments, constructing custom access ramps that fit in with the architecture of a historic building. The list goes on.

Most anything is doable in the development world, it just comes down to how much you’re willing to pay. And how much the tenant can afford. Because let’s not pretend—real estate rent rolls are really just a function of costs plus some margin. By definition, any cost incurred by a landlord is paid out of the tenant’s pocket (the same way I pay for higher shipping costs when I buy an avocado from the supermarket).

Take 61 N Pleasant as an example. Built in 1900.

Although I’m still pending the decision from the Bradford Planning Commission on site plan approval to convert the property from a 3-family to a 7-unit (9 weeks and counting since I submitted my application), I’ve already started preliminary conversations with the state on permitting.

Here are the first-floor plans, both as-is and proposed:

61 N Pleasant - 1st floor today.

61 N Pleasant - 1st floor (hopefully) by 2023.

The plans include four units on the ground floor and three units on the second floor. According to Vermont’s Access rules, I need one ADA-compliant unit and two “adaptable” (i.e. FHA-compliant) units on the ground floor (Apt 1 is occupied and not in scope for renovations so can remain as-is).

Keep in mind neither the ADA or FHA require any accessibility upgrades for 61 N Pleasant. This is exclusively coming from the Vermont Access Rules.

Anyhow—an ADA-complaint unit? No problem. The 1st-floor of the unfinished barn on the left has that covered.

But two adaptable units? That’s a different story for two reasons: access routes and bathroom sizes. Neither can realistically be accommodated, although more from a physical perspective than a financial one.

1. Accessible ramps require a 1:12 pitch. With the front porch being 30” off of the ground, that would mean a 30-foot ramp is needed to access the porch (and front door). Not only that but the hallway to Apt 2 will never be able accommodate the turning radius and width required by FHA guidelines without demo-ing the staircase and a few load-bearing walls.

2. The bathroom in Apt 2 currently exists and simply cannot be widened without significant structural work. The bathroom in Apt 5 is a little more flexible and likely could be made adaptable, but that still doesn’t solve the issue of access.

My hope is that we’ll be able to get a waiver for Apt 2 and 5. The idea being that the construction of a fully ADA-compliant Apt 6 will help with our request. I don’t have much hope, just barely enough to potentially pursue it further.

Ultimately, if the fire marshal (state fire marshals are the de facto building inspectors in Vermont) mandates that both Apt 2 and 5 become adaptable, then there’s little recourse. Although there will be serious cost implications that ultimately affect the affordability of the units.

What kind of implications? I’m not sure yet. But generally what I’ve found is that every $10,000 spent will necessitate a corresponding rent increase of around $100 per month to cover the added debt, property taxes, insurance, and property management fees. That can materially add up when you consider our target rents for the project average $950/mo.

But there’s more!

I’ve even saved the best for last.

As if out of a big F you to all the people in need of affordable housing, here’s an insight right out of the Vermont Access Rule’s FAQ section:

Q: When renovating, when must I comply with ADA standards?

A: During alterations or renovations 20% of the project cost must be applied to access. Access begins with an accessible entrance and route to the altered area. ADA §35.151 (4) (iii)(Disproportionate) (page 8)

Nowhere in the actual rulebook itself is this 20% requirement mentioned. Almost mischievously, it’s only buried on the second to last page of the manual as an answer to an FAQ.

And, although buried, it’s heavily enforced. Just ask any Vermont contractor and they’ll tell you the general rule of thumb is that at least 20% of overall project costs be put towards accessibility. Confirmed by the fire marshal himself. And that’s total project cost, not just costs associated with the ADA-compliant or adaptable units.

But, wait. It gets better.

You noticed that ADA §35.151 (4) (iii)(Disproportionate) (page 8) reference above? That’s a section of the federal ADA design manual. Here’s what it says:

Alterations made to provide an accessible path of travel to the altered area will be deemed disproportionate to the overall alteration when the cost exceeds 20% of the cost of the alteration to the primary function area.

It then goes on to say that modifications beyond that which are deemed disproportionate are not required. Yes, you read that correctly. NOT REQUIRED.

The Vermont Access Rules cites a paragraph in the federal statute that literally refutes the entire premise of the intended rule. Folks, we’re looking at the world’s worst metaphorical re-enactment of the Robert Durst trials.

So just to put this in perspective, the federal government placed a maximum threshold for accessibility spend at 20% of the cost to alter the primary function area (i.e. the unit). Yet then Vermont steps in, expands the reach of the ADA to include small multi-family renovations and modifies the federal threshold to make it a minimum of 20% spend when compared to total costs across all units.

You can probably guess where I’m going with this.

No frickin’ wonder there’s a shortage of affordable housing!

If I want to renovate a vacant four-plex, I effectively need to add 20% to my construction budget to satisfy Vermont’s accessibility requirement. Automatically out of the gate. This really just leaves me with two options: 1) pass on doing any renovations and rent it out as-is, or 2) move forward with the renovations and add 20% to the rent when complete to cover my added expenses.

It’s also not much of a surprise that Vermont doesn’t have many small-scale developers. How can you expect to compete when burdened by such artificial cost pressures?

Small-time slumlords who let their properties decay yet still keep them rented are castigated incessantly (behind their backs, of course). But, after deep diving on these accessibility requirements over the past few weeks, I’m sure a good portion do that out of necessity rather than greed. The required upgrades that the ADA and FHA design manuals call for can be monstrously expensive in an old building, likely to the point where many small-time landlords can’t afford to do anything.

I get that we need more accessible housing, but forcing it down the throats of small property owners just doesn’t feel like the right solution.

So, getting back to the main topic, here are my takeaways.

• ADA and FHA design guidelines as originally scoped: Valuable drivers of ensuring equal opportunities for housing and a necessary cost incurred by developers to level the playing field for all

• Vermont’s Access Rules: A well-intentioned attempt to expedite the process of leveling the playing field with severe, unintended consequences tied to housing affordability for the masses

I don’t know why Vermont decided to one-up the ADA and FHA to institute such draconian accessibility requirements. For new construction, I’m on board. But I fundamentally disagree with Vermont’s decision to apply both FHA and ADA design guidelines to older buildings. Especially given the massive housing shortage across the state. Ultimately, all this does is impede the creation of new housing stock from existing buildings while making the apartments that do get renovated more expensive.

My feeling is that we should just leave the accessibility requirements to the newer residential buildings as the FHA originally intended. Or at least come up with some sort of expedited waiver process for the countless units that are ill-suited for accessibility upgrades.

When I asked the fire marshal about the current variance process, I was told verbatim:

“Variances really never happen. It’s a federal standard. The access board won’t give variances out. However, you can apply.”

Fantastic. Like I said before, not much hope. Also, mixed messages, but whatever. After learning the process could take up to three months, we’ll see if it’s even worth pursuing. Vacant buildings hemorrhage money, so a lot of these decisions ultimately boil down to opportunity costs.

What’s almost comical is that, as a response to the added cost pressures, the state is kicking off the Vermont Housing Improvement Program in 2022 to give landlords $30,000 for each vacant unit they bring online. The grants are tied to code improvement projects, a big component of which revolves around accessibility requirements.

To me, that’s a bit like smoking a pack of cigarettes a day but thinking all is well because you run a mile in the morning. All said and done, you’re not really addressing the problem at hand. Only further perpetuating it through blissful ignorance.

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That’s it for today. Thanks for reading. If you haven’t yet, go ahead and subscribe here:

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About me: I’m Jonah Richard, a small-scale real estate developer in Vermont. With my company, Village Ventures, I’m currently getting my hands dirty redeveloping mixed-use buildings along Main Street while trying to pick apart and replicate what makes other communities thrive.

Want to learn more about my projects and incremental real estate development? Connect with me on LinkedIn, Instagram, or Twitter.