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Building a Future for Distributors and Dealers of Building Products

January/February 2006                                Volume 45,  Issue 1

Builders' Block

Recent News in Homebuilding
LAWSUITS
Arizona Takes William Lyon Homes to Court

The State of Arizona is suing California-based William Lyon Homes (WLH) for alleged racial discrimination and violation of the Arizona Fair Housing Act (AFHA).

According to the initial complaint asking for damages and injunctive relief, the availability of housing within a gated community in the City of Surprise, Ariz., was allegedly misrepresented because of the couple’s race to a couple interested in buying a house or having a house built in the community.

The suit was filed by the Civil Rights Division of the Arizona Department of Law on behalf of Henry Gates and S. Marie Gates, a married black couple who were allegedly told by WLH employees that there were no houses or land lots available for sale in the gated community though additional lots had just become available, an action they felt was based on their race. According to the complaint, the Gates alleged that they visited the community on the last day of February, and, upon inquiring about the availability of a particular model house or land lots for sale, were told that none were available but that they could be put on the waiting list for the model home, which was to go on sale in September. 

The day after their visit, the Gates learned that lots were available for sale and, when they called to complain, were allegedly told by Holly Addison that there was a waiting list for lots in the subdivision and that their names were not on it.

The complaint further alleges that, a few days later when Addison, who was scheduled to be out of the office for a few days, “learned that the prospective purchase for lot 46 (one of the lots released on February 28) would not be able to buy the home,” she requested that Andrews inform the Gates of the opening. The complaint alleges that call did not happen for three days, during which the base price of the home increased by $65,000.

At that time, the Gates turned down the opportunity to purchase the house, according to the complaint, citing that Andrews allegedly “misrepresented the availability of homes on February 28 and their suspicion that her reason for doing so was because of their race.” 

The Civil Rights Division of the Arizona Department of Law investigated the situation, issuing its Cause Finding on October 11, 2005; at that time, no Conciliation Agreement had been entered upon between the Civil Rights Division of the Arizona Department of Law, the Gates and WLH. 

The State cites A.R.S.§ 41-1491.14(A) and (B) of the AFHA, which state that “a person may not refuse to sell a dwelling after a bona fide offer has been made, or refuse to negotiate for the sale of a dwelling, or otherwise make unavailable or deny a dwelling to any person because of race or color” and “a person may not discriminate against any person in the terms, conditions or privileges of sale of a dwelling, or in providing services or facilities in connection with the sale, because of race.” 

The State argues that by allegedly misrepresenting the availability of housing in the subdivision, that the defendants inflicted “actual and monetary damages, including damages for mental anguish, pain, suffering, emotional distress, humiliation, embarrassment, inconvenience, loss of the right to an equal opportunity to enjoy his dwelling and loss of their rights under the AFHA, and is entitled to and should be compensated ...”

As plaintiff, the State is asking for an injunction against William Lyons Homes prohibiting the company “its successors, assigns and all persons in active concert or participation with the Defendant, from engaging in any housing practice that discriminates on the basis of disability in violation of the AFHA,” and that the state be allowed to monitor the company’s compliance with the AFHA. 

Additionally, the State is asking that the Gates be awarded actual and punitive damages in the amounts to be determined at trial, including prejudgment interest and attorney fees, as well as a statutory civil penalty up to $50,000 be levied against William Lyons Homes to vindicate the public interest.

INDUSTRY NEWS

High-End Home Show Gets Extreme Makeover

After 24 years of spotlighting million-dollar homes in suburbia, the Tidewater Builders Association’s (TBA) Annual Homes Showcase in Norfolk, Va., is getting an extreme makeover. And, for the first time in its history, the host developer is the city’s redevelopment and housing authority.

Fifteen of Virginia’s best builders finished up 18 custom homes that were showcased in Homearama 2005, including the event’s first-ever townhomes. In keeping with the host neighborhood’s mixed-income motif, four of the homes were designated for income-qualified buyers to purchase with financial subsidies. 

These amenity-laden homes, priced from the mid $100,000s to the low $500,000s, were a far cry from the dilapidated barracks-style public housing that used to occupy the site. In 2001, a $35 million HOPE VI grant from the U.S. Department of Housing and Urban Development launched the site’s redevelopment. Since then, the effort has evolved into a $250 million public/private partnership, and three phases of rental housing, both market-rate and subsidized, are already complete and occupied. 

That didn’t dampen the builders’ enthusiasm, though. Not only did they jump at the opportunity, when given the chance to build out Broad Creek’s first phase of for-sale homes, TBA builders jumped at that, too.

“We knew we’d have to think differently in this neighborhood,” said David DeBord, owner of DeBord Custom Homes. “But we all really wanted to do this for the community.”

TBA president Jeffrey J. Wermers agrees. 

“Diversity and innovation have evolved into Homearama themes for us this year,” he said. “I think the builders have had a lot of fun with it.” 

Each of the 17 show homes featured a theme. The diversity Wermers refers to can be found in the Universal Living Home’s handicap accessibility, the Esther-Hannah House Celebrating Adoption, and the Great Neighbor Home’s tribute to the Salvation Army. 


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