Cost of compliance: as the Justice Department considers proposed changes to the Americans with...

As the Americans with Disabilities Act of 1990 reaches its 15th anniversary, the United States Justice Department is working on the first major overhaul of the act, which requires public facilities be built or altered to provide easier access for the physically disabled.

The act initially

mandated owners of commercial buildings to design and develop restrooms, lobbies and public entrances and exits, among other things, with the physically disabled in mind. But proposed changes will affect everything from the width of entranceways and the height of support rails to the amount of wheelchair space required in assembly areas.

Although the Justice Department may not finalize the proposed changes for a few more years, property owners are already feeling their impact. Building owners embarking on new construction or renovation projects must decide if they want to apply the new standards now, before they are finalized, or use the existing rules until the proposed changes become law.

"[Property owners] have a legal obligation to observe the current standard," said Lois Thibault, coordinator of research for the Access Board, the federal agency responsible for drafting the updated Americans with Disabilities Act rules. "The new guidelines could be called a best practice, and one would encourage them to look to the future and perhaps begin implementing them now."

EMBRACE the future now

Many property managers have already taken Thibault's suggestion to heart and have begun implementing the proposed standards.

"I think if we're going to be spending the money today, the prudent thing to do would be anticipate these regulations will come into play and start making those adjustments," said Linda Aronson, vice president of property management services at Dallas-based Trammell Crow Company, AMO. "It's prudent to start budgeting for them so there are no surprises down the road."

Steven W. Nourse, an Americans with Disabilities Act consultant in Washington state, said he advises his clients to address the new proposals now instead of waiting for finalization. A proactive approach will serve them better in the end, he said.

"If you only build to the existing code, it seems to me you're always running behind," Nourse said. "You're always going to be chasing something; you're always going to be remodeling something. It seems to me that the proactive way of doing it is [to] build to a little stricter design. Build to a more accessible design, and I think you're going to have [fewer] problems down the road."

However, updating existing design and construction projects is not easy. Many real estate industry members are concerned about how much time the Justice Department will allow to revise development plans and implement the proposed changes once they are finalized.

The Justice Department is currently proposing the possible changes be made within 18 months of officially being adopted. But to many industry leaders, 18 months is not a reasonable time period, said Chuck Achilles, vice president of legislation and research for the Institute of Real Estate Management.

He said a 24- to 36-month adoption period is much more reasonable considering lengthy permit processes, construction costs and other factors going into designing new buildings or revamping old ones.

"The Department of Justice needs to be cognizant there is a time period when adapting properties [to these standards]," Achilles said. "It's very costly and not something you can do easily. This isn't sewing buttons on a shirt. Twenty-four to 36 months is more realistic."

Existing buildings face CHANGE

In addition to potential tight deadlines, property managers and owners must consider cost. The Access Board estimates the proposed regulations will add $26.7 million a year to the cost of new construction. Whether the new regulations will apply only to new construction or whether they will one day apply to all existing buildings is a consideration still before the Justice Department.

Kurt Padavano, chief operating officer of New Jersey-based Advance Realty Management, is one of many industry members calling for the government department to exempt existing buildings from any new standards until those buildings undergo major alterations or renovations.

"This is a huge issue for the industry in terms of cost and in terms of implementation and compliance," he said. "There needs to be a grandfathering or a safe harbor exception for all of the buildings [for which owners] have taken the steps to comply with the current act's rulings. They have invested the time and invested the money to go through the process of surveying their buildings, developing a plan and implementing changes to the access and features of the building under the old rules, so they shouldn't now have to re-spend that time and money to bring them to some new standard."

Property owners are concerned about retroactivity and the scope of the proposed changes when it comes to buying existing housing right now, said Mike Beirne, executive vice president of New Jersey-based management and investment firm, the Kamson Corporation.

"We would hope the Department of Justice understands the enormous expense that would be thrust upon [owners] who otherwise purchased totally compliant buildings in good faith," he said.

Beirne said retrofitting an existing building is far more complicated than applying changes to new construction. He said mass retrofitting or mass modifying existing structures requires considering all other existing regulatory pressures like code and environmental issues--lead-based paint and asbestos, among others--as they apply to housing. These other issues are extremely costly in and of themselves, he said.

"If you imagine an existing building akin to a used car, once you start working on it, one repair leads to another," Beirne said. "The chain reaction that could be set off is wide ranging and extremely expensive."

Adoption likely, in spite of PROTESTS

Because of the costs and implications being considered, it could be a couple of years before the Justice Department rules on these issues, said the Access Board's Thibault.

"There are a whole range of cost and administrative issues that the Justice Department is investigating, and the Justice Department has indicated that it may be a few years before their work is done," Thibault said.

While the department is dealing with administrative issues, another hurdle facing the new rules has arisen in the form of a lawsuit.

Filed by the National Federation of Independent Business in July 2005, the suit claims the Access Board violated the Regulatory Flexibility Act, a federal law requiring agencies to look for less burdensome alternatives when proposing rules posing potentially significant economic impacts on small businesses. The government has responded to the suit, and it is in a holding pattern right now, waiting on the court's ruling.

"Congress passed the [act] to require agencies to consider in a meaningful way the impact of regulations on small entities and to consider less burdensome alternatives," said Elizabeth Gaudio, senior attorney for the federation. "And we are just contending that in passing these new [Americans with Disabilities Act] rules ... the Access Board did not comply with the Regulatory Flexibility Act."

The federation's suit notwithstanding, Thibault said the new proposals will prevail and be law in the near future.

"Our work at the Access Board is completed, and the United States Department of Justice and the United States Department of Transportation, which are the two rule-making agencies under the Americans with Disabilities Act, are considering and in fact have given notice of their intent to adopt," she said.

Using NEW standards makes good sense

Lawsuits and timetables aside, disabilities act consultant Nourse said the real estate industry would be wise to embrace the new standards because the elderly population, often in need of special access, will soon dominate residential building owners' customer market.

"If you start looking at some of the demographics in the United States, and if you look at who's moving into condominiums, it's the elderly," Nourse said. "Disability comes with age, and there are a lot more folks out there that are living into their seventies, eighties and nineties that have money and can buy these condominiums, if they can find some that are accessible. So I think that it is good business for the condo owners to look a little ahead and be a little proactive on some of the laws."

In the long run, property owners will only benefit from the regulations being brought into the 21st century, said Charlie Edwards, a partner at law firm Womble Carlyle Sandridge & Rice, which has represented property owners involved in disabilities act litigation.

"I think anything that is 15 years old is technologically obsolete," he said. "Construction methods keep changing, what the public wants keeps changing, and so that which might have been acceptable ten or 15 years ago, may not be enough to satisfy the public today."

Darnell Little is a contributing writer for JPM. Questions regarding this article can be sent to kgunderson@irem.org.

RELATED ARTICLE: Americans with Disabilities Act Background

The Americans with Disabilities Act, a major civil rights law prohibiting discrimination on the basis of disability, establishes design requirements for the construction or alteration of facilities. It covers facilities in the private sector and the public sector.

Under the act, the Access Board is responsible for accessibility guidelines covering newly built and altered facilities. In 1991, the board published the act's Accessibility Guidelines which serve as the basis for standards used to enforce the law. The new guidelines overhaul the original guidelines.

Source: U.S. Access Board's guide to new accessibility guidelines

RELATED ARTICLE: Special needs met

Wisconsin development caters to hearing- and visually-impaired senior community

While many real estate owners and managers struggle to address suggested new provisions to the Americans with Disabilities Act, other industry professionals have begun catering exclusively to residents and tenants with disabilities.

In September 2005, Cardinal Capital Management opened Water Tower View, a multi-family facility in Wisconsin, meeting the needs of deaf and hard-of-hearing residents, as well as visually impaired residents. The first residents have moved in, occupying 100 percent of the 43-unit development.

Particularly noteworthy are the building's design features and technology--features not available in any other multi-family buildings in Wisconsin. The exclusive design features and technology include:

Videophones

In each apartment, videophones--camera/microphone/Internet devices using a high bandwidth pipeline and a standard television to communicate with other videophones--allow residents to connect with one another and show both parties conversing.

They also let residents talk to and admit visitors contacting the apartments. A traditional teletypewriter supplements the video link for entry. The resident triggers a door release to admit visitors.

Loop hearing aid system

Meeting rooms employ a built-in hearing aid loop system: A wire embedded in the ceiling transmits sound from a microphone to a hearing aid without additional receivers or equipment. The system can tie into a television's audio so hearing-impaired individuals can enjoy watching movies with sound.

Lighted switches

Lighted switches for garbage disposals and bathroom fans indicate the devices are on. A single switch in the stove hood turns on both the fan and light.

Within each apartment, interconnected smoke detectors activate simultaneously if one is triggered. Bright strobe lights supplement smoke detector horns and fire alarms.

Light panels

No commercially available signaling device exists to tell a hearing-impaired person the front door, videophone or unit doorbell is ringing. Water Tower View's construction manager and Simplex Grinnell Corporation invented and are patenting a visual signaling device.

Tactile and visual navigation references

In public areas, color differentiation of carpet aids those with limited sight in detecting building levels and determining location.

Apartment doors are recessed about 12 inches. The recessed area is a different, darker color than the hallway walls. The tonal variation helps a person with limited sight locate a doorway and navigate safely.

Handrails on both sides of hallways and Braille supplements on apartment numbers and signage assist visually impaired individuals.

Line of sight communications

Open apartment designs allow a person in the kitchen to communicate with another in the living room. Low-hanging lights over counters provide low-intensity, diffused light sources and reduce glare.

This is a follow-up to the Special Needs Met article in the May/June 2005 issue.

Joseph Thomae, CPM, ARM and 2006 JPM advisory board member (jthomae@cardinalcapital.us) is an asset manager for Cardinal Capital Management.

by Joseph Thomae, CPM, ARM

RELATED ARTICLE: Americans with Disabilities Act Resources

Copies of the new Americans with Disabilities Act and Architectural Barriers Act accessibility guidelines, along with technical assistance and training are available from the Access Board. The board also enforces design requirements of the ABA which apply to federally funded facilities.

Contact the U.S. Access Board at (800) 872-2253 (voice); (800) 993-2822 (TTY); www.access-board.gov