Senior Discounts: Not Worth the Risk

Senior discounts in housing are controversial.  The law is not clear on senior discounts in rental housing.  Society’s allowance of other senior discounts (restaurants, bus, movies) makes the senior discount in housing issue more confusing.  The senior discount in rental housing centers on a) whether you can allow senior discounts at your community or property and b) if you have a senior discount, whether you can advertise the senior discount.

The Fair Housing Act (“FHA”) prevents any advertisement that states a preference, limitation, or discrimination based on protected class status.  The legal limitations on advertising apply both to preferences for and against.  Some argue that the words “senior discount” state a preference against persons with families (familial status protected class).  So much so, in fact, that the internet is now loaded with websites that list the words “senior discount” as prohibited words under the FHA’s advertising restrictions.  However, other websites specifically list “senior discounts” as allowable advertising.  The difference of opinions illustrates the FHA’s lack of clarity on the senior discount issue and only serves to further promote confusion on this issue.

In the end, the advertising issue is a diversion.  The fundamental issue is whether or not senior discounts are permissible or allowable under the FHA period.  If senior discounts are allowable under the FHA, then senior discounts may be advertised under the FHA. No statutes, regulations, or reported court decisions directly address the legality of senior discounts under the FHA.  The concept of showing seniors or the elderly any monetary preferences is mentioned just a single time in the Fair Housing regulations, and even then not directly in the regulation, but rather in the comment to the regulation.

Specifically, HUD’s comments to the final rule implementing the Fair Housing act regulations (24 CFR 100.65 – Discrimination in terms, conditions and privileges and in services and facilities) discussed the issue as follows:  “A number of commenters indicated that they customarily provided for reduced security deposits for elderly persons renting units and asked whether continuing such practice would place them in violation of the Fair Housing Act. As long as such a policy is based solely on age, is available to persons if there are children in the family, and is not otherwise operated in a manner that results in the exclusion of families with children, such a practice would not be unlawful.”

HUD’s foregoing statements support the conclusion that senior rental discounts are allowable and “would not be unlawful” under the FHA.  Of course, based on HUD’s comments, any senior discount would only be legal as long as such senior discounts were a) based on age, b) were available to seniors with children, and b) were not operated in a manner that results in the exclusion of families with children.  This last requirement makes senior discounts very problematic.  How will you know if your senior discount operates to exclude families with children?  When HUD or some court tells you so—that is when.  Thus, you will never be sure if your policy is legal until HUD or the courts tell you that your senior discount program is legal.

We cannot and do not advise our clients to adopt policies that may or may not be determined legal at some point in the future.  Senior discounts are not worth the risk and uncertainty.  Accordingly, the firm advises clients not to give them or advertise them.

Several other key points regarding senior discounts are worth mentioning.  Offering senior discounts at HOPA properties (Housing for Older Persons Act of 1995) may be less of a risk.  The ADA (“Age Discrimination Act”) prohibits discrimination on the basis of age in programs or activities receiving federal financial assistance.  If your community or property falls under the ADA, senior discounts would be barred by the ADA.  Finally, if your community or property is located in Aspen, Boulder, Crested Butte, or Telluride, you may not offer senior discounts because these jurisdictions make age a protected class.

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