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Delray agrees to settle Caron lawsuit over transient housing

Matthew Mandel, Delray's outside counsel for the Caron Foundation lawsuit, explains terms of the settlement for commissioners Tuesday evening.

By Palm Beach Business.com

DELRAY BEACH — That lawsuit the Caron Foundation filed challenging Delray Beach’s transient housing restrictions is now history. Faced with the prospect of paying out millions in legal fees and a high probability of losing, city commissioners on Tuesday agreed to settle the suit.

The settlement allows Caron, an operator of drug and alcohol rehabilitation centers, to maintain two so-called sober houses on Ocean Boulevard in the city. It also allows Caron to rent spaces a maximum of six times a year, twice what’s allowed under a city ordinance commissioners adopted earlier this year. That ordinance prompted the lawsuit.

On the positive side for the city, Caron, although exempt as a nonprofit, agreed to pay property taxes on the two houses, minus the slice that normally would go to the school board. The deal also keeps the ordinance on the books.

“We have run into an immovable object, from what I see,” Mayor Woodie McDuffie said. “To me, to pursue this any further would be fiscally irresponsible.”

The problem of transient housing in residential neighborhoods, particularly sober houses where rehabilitation patients live while undergoing treatment, has been a problem particularly in Delray Beach for years.  Several years ago, commissioners passed a series of ordinances that limited the number of times a house could be rented in a year to six.

After receiving complaints from residents, commissioners took the restriction further, limiting the number of rental turnovers to three and specified that the restriction applied not just to the house but individual rooms.

Caron responded immediately by suing, alleging the restrictions violated the Fair Housing Act and the Americans with Disabilities Act. Federal Judge William Dimitrouleas issued a preliminary injunction in favor of Caron.

Matthew Mandel, the attorney commissioners hired to handle the case, said Dimitrouleas in his ruling signaled that there was a pretty good chance that the city would lose the suit. If that happened, the city would be on the hook for legal and court fees that could reach into the seven figures.

Commissioners didn’t exactly like the position they were in, essentially conceding defeat at least in this instance, but they had no choice.

“Whether you agree with it or disagree with it, that’s the law,” Commissioner Adam Frankel said. “I have to follow the law. I see no other choice than to settle this.”

And short of a change in federal law, there’s not a whole lot the city can do. “It’s so complex, for anyone to suggest that there is a simple action the city can take, that’s not the case,” Frankel said.

Mandel said that settlement keeps the ordinance in place, calling it a stand alone agreement with Caron, based on the facts of that specific case.

Taxes on the two properties should amount to about $60,000 annually based on the latest county appraisal.