CRA/LA Agrees to Pay $3.1 Million to Resolve Alleged Misuse of Federal Funds for Inaccessible Housing

WASHINGTON, D.C. – RealEstateRama – CRA/LA agreed to pay $3.1 million to resolve allegations that its predecessor violated the False Claims Act by knowingly failing to comply with federal accessibility laws when it financed and assisted in the development of affordable housing in the City of Los Angeles supported by federal funds, the Department of Justice announced.

CRA/LA is the successor of the Community Redevelopment Agency of the City of Los Angeles, a local redevelopment agency that financed and assisted in the development of multifamily affordable housing using local tax monies and federal community development grants.  In June 2011, the State of California dissolved all redevelopment agencies.  CRA/LA is winding down the affairs of its predecessor.

“Today’s settlement demonstrates our continuing vigilance to ensure that developers receiving federal grant money for affordable housing satisfy their legal obligations to make such  housing accessible to people with disabilities,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division.  “Grant recipients who knowingly discriminate against people with disabilities using taxpayer money will face serious consequences.”

“Despite millions of dollars of federal taxpayer money sent to Los Angeles to create affordable housing over many years, the CRA opted to lie about its failure to ensure that these projects were accessible to everyone,” said U.S. Attorney Nick Hanna for the Central District of California.  “This settlement resolves only a small portion of this case, and we are prepared to litigate additional allegations that the City of Los Angeles covered up its failure to comply with federal laws enacted to protect the civil rights of all citizens.”

“The basic tenant of fair housing translates into the premise of equal access for all, this is to include those citizens that face physical and functional challenges,” said Inspector General Rae Oliver Davis of the U.S. Department of Housing and Urban Development.  “This settlement reaffirms this office’s steadfast resolve to ensure those who receive federal housing funds abide by this fundamental principle.”

“This case demonstrates HUD’s commitment to holding recipients of federal funds accountable for their failure to comply with HUD’s accessibility requirements,” said General Counsel Paul Compton of the U.S. Department of Housing and Urban Development.  “We will continue to collaborate with our partners at the Department of Justice to ensure that HUD participants provide accessible housing to individuals with disabilities.”

Recipients of federal housing development funds must comply with federal accessibility laws, including Section 504 of the Rehabilitation Act, the Americans with Disabilities Act, and the Fair Housing Act.  These laws prohibit discrimination against people with disabilities in activities receiving federal financial assistance.  For example, they require five percent of all units in certain federally-assisted multifamily housing be accessible for people with mobility impairments and an additional two percent be accessible for people with visual and auditory impairments.  Recipients of federal funds must likewise implement accessible programs related to housing, including maintaining a publicly-available list of accessible units with a description of their accessibility features, adopting policies and procedures to ensure that people who need the accessibility features of particular units occupy them, and designating at least one individual to coordinate accessibility efforts.

The settlement resolves claims against CRA/LA in a lawsuit alleging that the CRA/LA’s predecessor, along with the City of Los Angeles, received money from the U.S. Department of Housing & Urban Development based on false claims they were complying with federal accessibility laws.  As to the CRA/LA’s predecessor, the United States’ lawsuit alleged at least nine multifamily housing properties fell significantly short of federal accessibility laws since 2005.  Examples of alleged defects included:

• slopes and ramps too steep for people in wheelchairs;
• tall thresholds restricting wheelchair access;
• kitchen cabinets, shelves, and surfaces outside the accessible reach range of people in wheelchairs;

• sinks, grab bars, and mailboxes mounted outside the accessible reach range of people in wheelchairs;

• uninsulated pipes below sinks and lavatories;
• a lack of accessible parking spaces; and
• insufficient visual alarms and tactile signs for people with hearing and visual impairments.

The United States’ claims against the City of Los Angeles have not been resolved and are still pending in the litigation.

The agreement announced today partially resolves a lawsuit filed in U.S. District Court in Los Angeles by Mei Ling, a Los Angeles resident who uses a wheelchair, and the Fair Housing Council of San Fernando Valley, a nonprofit civil rights advocacy group.  The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery.  The False Claims Act permits the government to intervene in such a lawsuit, as it has done in this case.

These matters were investigated and litigated by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Central District of California.  HUD’s Office of Inspector General and Office of General Counsel also participated in the investigation.

The claims asserted against the CRA/LA and the City of Los Angeles are allegations only; there has been no determination of liability.  The case is captioned United States ex rel. Ling, et al. v. City of Los Angeles, et al., No. CV11-00974-PSG (C.D. Cal.).

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.