Chicago Liable for Private Developers Who Build Affordable Housing

On December 12, 2023, the Justice Department (DOJ) filed a Statement of Interest in the United States District Court for the Northern District of Illinois in a private lawsuit challenging the accessibility of Chicago’s affordable rental housing activities for individuals with disabilities. The Statement of Interest clarifies the correct interpretation of whether Chicago's affordable rental housing activities are a covered service, program, or activity under Section 504 of the Rehabilitation Act and Title II of the Americans with Disabilities Act (ADA). The Statement of Interest explains that Chicago is liable for the accessibility of its program or activity even when it contracts with private developers to build affordable housing.

The matter is covered in Northern District of Illinois Eastern Division Civil Action No. 1:18-cv-03399, Access Living of Metropolitan Chicago, INC., an Illinois non-profit corporation, (Plaintiff) versus City of Chicago (City), regarding the City of Chicago’s use of third parties to provide affordable housing opportunities for its residents.

Access Living of Metropolitan Chicago, Inc. brought this action against Chicago under Section 504, ADA Title II, and the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-19, alleging the City discriminates against individuals with disabilities by failing to ensure its “affordable rental housing program” is accessible.

This Statement of Interest clarifies the correct interpretation of whether Chicago’s affordable housing activities constitute a covered service, program, or activity under Section 504 and Title II, the benefits of which must be accessible to individuals with disabilities, as follows:

• First, it explains that Section 504 and ADA Title II cover all programs or activities of a public entity, and the law and undisputed facts support that providing affordable rental housing opportunities is a program or activity of the City.

• Second, Section 504 and ADA Title II govern a public entity whether it provides a benefit directly or through contractual or other arrangements. Thus, Chicago is liable for the accessibility of its program or activity even when it contracts with private developers to build the affordable housing.

• Third, Chicago has the authority, obligation, and ability to ensure the private developers it contracts with provide housing that is both affordable and accessible.

• Fourth, Section 504 obligations extend to the entire “program or activity” of a recipient of federal funding.

The United States, through DOJ, has a strong interest in the proper and uniform application of Section 504, ADA Title II, and FHA, in furthering Congress’s intent to create “clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities” and reserve a “central role” for the federal government in enforcing these standards [42 U.S.C.§ 12101(b)(2)-(3)]. The City of Chicago is a public entity subject to Title II of the ADA [42 U.S.C. § 12131(1)(B); 28 C.F.R. § 35.104].

Section 504, ADA Title II, and FHA regulations require that a public entity operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with disabilities.

One self-described mission of the City is to develop and administer programs and policies to encourage and promote the availability of adequate and affordable housing in the City. As part of this mission, the City helps to build, rehabilitate, and preserve rental housing to ensure that it is available to residents throughout Chicago. To accomplish its mission, the Chicago Department of Housing (“DOH”) is tasked to work with private developers to increase the supply of affordable housing in every Chicago neighborhood through a litany of targeted programs.

The City of Chicago is a recipient of $100 million annually, on average, of HUD funds, including Home Investment Partnerships Program (HOME) and Community Development Block Grant (CDBG) funds. The City enters into standardized written agreements with developers when it provides funds or tax credits.

Under Section 504 and ADA Title II, a program or activity is anything the public entity does, covers all the normal functions of a government entity, and includes those activities that are carried out through contractual, licensing, or other arrangements.

The City’s own municipal code makes clear that one function of the city is to “develop and administer programs and policies to encourage and promote the availability of adequate and affordable housing in the City.”

SUMMARY: Chicago cannot contract away its Section 504, ADA Title II, and FHA obligations. Section 504 and Title II cover all programs and activities of a public entity, and do not distinguish between a program provided directly by the public entity and a program provided through a contractual or other arrangement. Chicago, and all other municipalities, have the obligation to ensure that the private developers with whom it/they contract(s) provide housing and programs that is/are both affordable and accessible to individuals with disabilities. One way municipalities can ensure contractual work is compliant with Section 504, the ADA, and the FHA, is to have the work performed by a contractor inspected for compliance before payment is made for services rendered.