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$2-million housing discrimination suit ends in city's favor

A federal judge rules that the city treated a halfway house operator fairly.

By NICK JOHNSON, Times Staff Writer
Published October 7, 2007

TREASURE ISLAND- A federal case against the city seeking $2-million for housing discrimination ended with a win for the city last week.

Matthew Schwarz, president of Gulf Coast Recovery Inc., sued the city two years ago when the code enforcement board fined him for running a halfway house for recovering addicts at 12305 Third St. E.

Schwarz was renting half a dozen homes in residential neighborhoods to people in his treatment program.

"He was renting out residential homes like a hotel, to house his clients," Maura Kiefer, Treasure Island's city attorney, said. "That's just not fair to the neighbors; it's a lot of disruption and that's not why people settle down in a single-family neighborhood."

The code ordinances allowed for the rentals with a turnover of six tenants a year. The code enforcement board found that Schwarz had an average turnover of about five tenants per month at his Third Street E home.

Schwarz responded to the city's fines with a lawsuit seeking $2-million in damages to the reputation of his company.

He claimed that his clients were handicapped due to their addictions and that the city was discriminating against them, in violation of the Fair Housing Act.

The federal judge who decided the case, James Moody Jr., felt differently.

"The city's zoning regulations treat handicapped persons the same as nonhandicapped persons," Moody stated in his conclusion. "This suit is more Gulf Coast wanting to buy less expensive property in residential areas for its uses than it is about a failure to accommodate the handicapped."

As a result of the judgment, Schwarz will have to pay accumulated fines totaling $182,000 from when the code enforcement board initially cited him, until the Third Street E property burned down in April. Before the house burned, Schwarz was said to be dodging attempts from the city to bring his properties into compliance.

Schwarz did not return calls seeking comment.

"We think this was, at least in part, intentional delay to prolong business," Kiefer said.

She has also filled a case at the state level to make Schwarz pay up, and noted the importance in differentiating between real discrimination and sneaky business practices.

"We're not the only city that this is happening in so the precedent really is significant," Kiefer said.

Nick Johnson can be reached at nickjohnson@sptimes.com or 893-8361.

[Last modified October 6, 2007, 20:28:54]