Group home operators receive $530,334 settlement from city of Sedona, AZ in fair housing case

By Tracey McCartney
National Fair Housing Advocate Online

(SEDONA, Ariz., July 14, 2003) -- Operators of a group home in Sedona, Ariz., will receive more than half a million dollars from the city in a settlement their attorney calls a "bittersweet victory."

It's "bittersweet" because, while the settlement gets the operators out of debt and out of a situation that was draining their resources, it also means that they will abandon the site they were hoping to use for a group home for individuals recovering from substance abuse.

In late 2002, Recovery Alternatives, an organization that provides housing for people in recovery from substance abuse, acquired a home in Sedona's Kachina subdivision for a group of its clients.  The organization obtained licensing and completed renovations of the property only to be told by the city that it had to get a "conditional use permit" before it could open.

The process for getting a conditional use permit in Sedona involves notification of neighbors and public hearings.  After angry neighbors in the hearings convinced the city to turn down the application for the permit, Recovery Alternatives sought legal help from the Arizona Center for Disability Law, a federally funded non-profit organization.

ACDL filed a discrimination complaint with the Arizona Attorney General's office on Recovery Alternatives' behalf in January 2003.  Under the Fair Housing Act and similar Arizona law, housing discrimination against people with disabilities is illegal.  Individuals in recovery from substance abuse are considered disabled under the law, although those currently using controlled substances are not.

In response to the complaint, the city reversed itself and re-classified the home, removing any obstacles to its opening.  This, however, led the neighbors to threaten their own lawsuit against the city.

The city then threatened to simply delay any action until a judge could sort out everyone's rights, said Diana Chen, an attorney with the ACDL.

Meanwhile, Recovery Alternatives was paying interest on a line of credit it had taken out to operate the home and was running into problems with agencies that had given it grants to provide housing, she said.

Even though Recovery Alternatives' decision to abandon the site might appear to be a victory for the neighbors who didn't want the home there, the settlement was in her clients' best interest under the circumstances, Ms. Chen said.

"It was just too poisonous a situation," she said.

For three months, neighbors displayed brightly colored signs in their front yards expressing their opposition to the home, and the operators had to look at those signs every day when they visited the site, she said. 

Neighbors also expressed concern that the residents would be allowed off the grounds and wondered whether their children would be safe outside, Ms. Chen said.

"They (Recovery Alternatives) decided their residents weren't going to feel free to even walk through the neighborhood," Ms. Chen said.

The organization will try to find a site in a neighboring city, but there's no guarantee it won't face obstacles elsewhere, she said.

Under the settlement, the city agreed to:

  • permanently post a disclaimer in Sedona City Hall which states that discrimination on the basis of race, color, religion, sex, national origin, familial status, or disability is prohibited;
  • offer a Fair Housing training session to City staff working on housing issues;
  • purchase complainant’s property intended for the group home for a sum of $382,000.00;
  • pay a settlement amount of $148,334.00, which included attorneys fees and costs to the Center; and
  • convene a study session of its Planning Commission in consultation with the Center within 120 days of the agreement to consider revisions and amendments to the Land Development Code and other City codes regarding placement of group homes and the City’s obligation and duties under the federal and state Fair Housing Acts and other laws applicable to people with disabilities.

The revisions to the city's codes will probably involve language that will remove barriers for housing with people with disabilities to locating in residential neighborhoods, said G. Eugene Neil, Sedona's assistant city attorney.

"I think with the change of the ordinance we will be better able to adress the applications when they come in," he said.

The city will probably dispose of the property at public auction, he said.

Asked if the settlement represents a victory for the hostile neighbors, Mr. Neil characterized it as "a resolution of the situation."