Housing Law Bulletin

Housing Law BulletinVolume 42 • November–December 2012

Published by the National Housing Law Project

Court Rules on Police Actions in Public Housing —see page 225

Landmark Settlement Proposed in Baltimore Class Action —see page 236

Housing Law Bulletin • Volume 42

NHLP’s HUD Housing Programs: Tenants’ Rights is the essential reference for every law practice and for housing professionals across the broad spectrum of community development and affordable housing. It is the cornerstone of every clinical housing law program. Cited by prominent scholars, practitioners, and students in top law reviews and academic journals including:

University of Chicago Law Review Yale Journal of Law and Policy

University of Pennsylvania Law Review Cornell Journal of Law and Public Policy

Harvard Civil Rights Civil Liberties Law Review ...and many, many others!

THE MOST AUTHORITATIVE GUIDE – NOW UPDATED AND IMPROVED

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HUD Housing Programs: Tenants’ RightsHUD Housing Programs: Tenants’ Rights 4th edition: The definitive treatise on the laws governing HUD’s housing programs. Be secure in your knowledge of federal policies, emergent case law, and important regulatory changes affecting tenants’ rights in federally-assisted housing, with this indispensable tool.

With a user-friendly format and clear, concise explanations of a complex area of the law, HUD Housing Programs: Tenants’ Rights 4th edition is the quintessential guide to understanding HUD’s housing programs, containing unpublished court opinions, hard-to-find memos and other useful information.

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Housing Law Bulletin • Volume 42 Page 225

Housing Law Bulletin

Volume 42 • November–December 2012

The Housing Law Bulletin is published 10 times per year by the National Housing Law Project, a California nonprofit corporation. Opinions expressed in the Bulletin are those of the authors and should not be construed as representing the opinions or policy of any funding source.

A one-year subscription to the Bulletin is $175.Inquiries or comments should be directed to Meliah Schul-

tzman, Editor, Housing Law Bulletin, at the National Housing Law Project, 703 Market Street, Suite 2000, San Francisco, CA 94103, Tel: (415) 546-7000 or via e-mail to [email protected].

Cover: In the wake of Hurricane Sandy, the Legal Aid Society and Congressman Hakeem Jeffries organized a disaster assistance outreach event in Coney Island. The Legal Aid Society’s mobile justice unit met with hundreds of residents and assisted with replacement food stamp and Federal Emergency Management Agency applications. At the time, public housing residents and HUD tenants were without power, water and heat, and no government agency had reached out to them. Photo by Ellen Davidson, staff attorney, Legal Aid Society.

Table of Contents Page

Court: Case Challenging Police Actions in New York City Public Housing Can Proceed ..... 225

From Urban Renewal and Displacement to Economic Inclusion ................................................. 228

HUD Notice Addresses Steps PHAs May Take to Reduce Costs in the Voucher Program ............ 232

HUD Office Issues Letter Regarding Flexible Benefit Plans and Tenant Income ........... 234

Landmark Settlement Seeks to Increase Access to Communities of Opportunity in Baltimore Region ................................................ 236

Court Overturns Zoning Board’s Refusal to Approve Proposed Domestic Violence Shelter ... 239

Recent Cases ............................................................... 241Recent Housing-Related Regulations and Notices.. 245

AnnouncementsPublication List/Order Form ................................... 248

Published by the National Housing Law Project 703 Market Street, Suite 2000, San Francisco, CA 94103

Telephone (415) 546-7000 • Fax (415) 546-7007

www.nhlp.org • [email protected]

Court: Case Challenging Police Actions in New York City Public

Housing Can Proceed*A federal district court has ruled that public housing

residents and their guests can proceed to trial in a class action alleging that the New York Police Department (NYPD) unlawfully stopped, questioned, searched and arrested public housing residents and guests for trespass-ing. In Davis v. City of New York,1 residents and visitors of New York City Housing Authority (NYCHA) public housing filed a class action challenging NYPD’s practice of stopping individuals in or around public housing com-mon areas without individualized suspicion. The court framed the central issue as whether NYPD acted within constitutional limits in its efforts to provide a safe envi-ronment for public housing residents, or whether, in its zeal to provide that protection, NYPD violated the rights of the very residents and guests it sought to protect.2 The parties agreed to brief their motions in two parts: the first part, adjudicated in the instant decision, addressed the individual circumstances of each plaintiff’s stops and arrests. The second part, involving NYPD’s practices and policies, will be addressed by the court at a later date.

In response to the city’s motion to dismiss, the court examined several causes of action brought under fed-eral and state laws, as well as the U.S. and state consti-tutions. The court determined whether each tenant’s or guest’s claims could survive summary judgment. All of the claims arose when officers approached individuals in public areas of the properties and requested that they identify themselves and establish whether they were resi-dents of the complexes.

Fourth Amendment Claims

The court began by discussing the legal standard under the Fourth Amendment for analyzing a police offi-cer’s stop of a person. Police may stop and briefly detain a person for investigative purposes if the officer has a reasonable suspicion supported by articulable facts that establish that criminal activity may be afoot, even if the officer lacks probable cause.3 The officer must be able to articulate facts establishing an objectively reason-able suspicion that led to making the stop. The subjec-

*The author of this article is Sebastian A.J. Davies, a 2012 graduate of Golden Gate University School of Law and a Bridge Fellow with the National Housing Law Project. 1Davis v. City of New York, __F. Supp. 2d__, 2012 WL 4761494, *1 (Oct. 4, 2012). The plaintiffs are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP, NAACP Legal Defense & Educational Fund, and the Legal Aid Society of New York.2Davis, 2012 WL 4761494, at *1.3Id. at *2

Housing Law Bulletin • Volume 42Page 226

tive intentions or motives of the officer making the stop are irrelevant. Additionally, the officer may observe “a series of acts, each of them perhaps innocent in itself, but which taken together warrant further investigation.”4 A court must examine the totality of the circumstances to see whether the detaining officer had a particularized and objective basis for suspecting legal wrongdoing.5 The Davis court noted that the location of the arrest can be considered along with other facts to support a reasonable suspicion of wrongdoing.

The court next established the proper standard for analyzing whether an officer made a lawful arrest. The Fourth Amendment prohibits arrests in the absence of probable cause. No probable cause exists where a sus-pect’s actions are too ambiguous to raise more than a gen-eralized suspicion of involvement in criminal activity.6

The court then turned to analyzing the facts sur-rounding the stops and arrests of the individual plaintiffs at NYCHA properties. The court first analyzed NYPD’s actions in approaching each plaintiff, asking each plain-tiff to identify himself or herself, and asking each plaintiff why he or she was at the property. For example, officers approached one plaintiff who was visiting her aunt at a NYCHA property and asked her to identify the apart-ment in which her aunt lived. Officers arrested her when she refused to respond to the questions or provide iden-tification. Because a lack of privilege or license is an ele-ment of the crime of trespass, officers must have probable cause to believe that a person does not have permission to be on the premises before making an arrest.7 Although police may consider a person’s lies when assessing prob-able cause, the Supreme Court strongly suggests that the Fifth Amendment prohibits police from arresting an indi-vidual for refusing to provide “testimonial” evidence.8 Accordingly, the court denied the city’s motion for sum-mary judgment as to this plaintiff, concluding that the plaintiff’s testimony, if true, demonstrated that NYPD acted unlawfully in arresting her solely on the basis of her refusal to identify the resident who had given her permis-sion to be in the building.9

The court next examined NYPD’s enforcement of loitering policies in NYCHA properties. A sign in one NYCHA complex stated that “loitering and trespass-ing in lobby, roof, hallway and stairs is not permitted.” As a result of this policy, officers arrested two plaintiffs, a resident of the complex and his guest, for sitting in a stairwell. The court acknowledged that prohibiting tres-passing and loitering on PHA property by uninvited strangers is understandably important to many residents. However, the court concluded that a blanket prohibition

4Id. at *35Id.6Id.7Id.8Id. 9Id.

on “loitering” by a resident is unconstitutionally vague.10 This vagueness was illustrated by questions posed by the court, including, “According to that sign, may two neigh-bors, meeting each other in the hallway outside their apartments, talk for fifteen minutes about the American League pennant race? Or would doing so subject them to lawful arrest? If it is cold outside, may an elderly woman wait in the lobby of her building for ten minutes while her son hails a cab?”11 Because NYCHA’s loitering poli-cies failed to clearly distinguish between harmful and innocuous activity, the court concluded that a reasonable jury could find that there was no probable cause to arrest the two plaintiffs. Accordingly, the court denied the city’s motion for summary judgment as to the Fourth Amend-ment claims.

Equal Protection Claims

The court next turned to the plaintiffs’ equal protec-tion claims. To survive a summary judgment motion, the plaintiffs had to prove that there existed a citywide sta-tistically significant racial disparity in stops and arrests on NYCHA property.12 The court denied the city’s motion for summary judgment with leave to renew, subject to further briefing by the residents and guests, because the court’s ruling was intended to address only the individual plaintiffs’ claims, rather than the broader claims regard-ing NYPD’s policies. However, NYCHA’s motion for summary judgment was granted on the equal protection claims because the residents’ and guests’ claims focused on NYPD’s unlawful seizures and arrests. NYCHA itself had no involvement and, therefore, no liability.

Title VI Claim

Title VI of the Civil Rights Act of 1964 provides that “[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from par-ticipation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”13 The residents alleged that they were unable to use and enjoy their federally assisted dwellings because NYPD’s practices were conducted in such a manner that residents were not free to come and go as they wished. However, the city argued that Title VI creates a cause of action only for discrimination by fed-eral fund recipients, not for discrimination by third par-ties. According to the city, NYCHA was the federal fund recipient, and the city merely provided policing services to NYCHA. The court decided it was premature to decide this claim, because the parties had not submitted evi-dence regarding the nature of NYCHA’s contract with

10Id. at *9.11Id. at *10.12Id. at *16.1342 U.S.C.A. § 2000d (Westlaw 2012).


NYPD. Accordingly the court denied the city’s motion for summary judgment with leave to renew at the second round of summary judgment briefing.

Section 1981 Claim

The court noted that the Civil Rights Act of 1866, codi-fied as 42 U.S.C. § 1981, protects the rights of all persons “to make and enforce contracts” free from discrimination on the basis of race.14 The plaintiff-residents alleged that their lease with NYCHA was impaired because of racial discrimination. In determining that two of the residents had provided concrete evidence in support of their Section 1981 claims, the court relied on testimony that the resi-dents felt less free to come and go from their buildings and to have visitors. Additionally, the residents’ allegations that arresting officers used racial epithets targeted at them and their guests helped to bolster their Section 1981 claim. The court rejected the city’s argument that the residents were required to demonstrate that they had completely lost their ability to enter and exit their homes and receive guests. Accordingly, the court denied the city’s motion for summary judgment as to the Section 1981 claim.

Fair Housing Act Claim

The city sought summary judgment on the plaintiffs’ Fair Housing Act (FHA) claims, arguing that 42 U.S.C. § 3604(b) does not reach post-acquisition conduct. This section of the FHA makes it unlawful to “discriminate against any person in the terms, conditions, or privi-leges of sale or rental of a dwelling, or in the provision of services of facilities in collection therewith.”15 The court rejected the city’s argument, finding that the FHA should be given broad and liberal construction, and that the city’s reading was inconsistent with the interpretations of the Department of Housing and Urban Development and the Department of Justice. The court denied the city’s motion for summary judgment with leave to renew, because it could not fully adjudicate the Fair Housing Act claim without examining evidence regarding the city’s alleg-edly discriminatory provision of police services.

United States Housing Act Claims

The residents alleged that NYCHA violated the United States Housing Act (USHA), 42 U.S.C. § 1437d(l)(2), by including unreasonable terms and conditions in a document that accompanied its leases.16 The document mandated that all residents cooperate with inquiries from the police regarding their conduct in any NYCHA build-ing. The document also prohibited tenants from loitering in common areas.

14Davis, 2012 WL 4761494, at *18.15Id. at *19.16See 42 U.S.C.A. § 1437d(l) (Westlaw 2012).

The city first argued that Section 1437d(l)(2) does not provide the residents individual rights enforce-able via 42 U.S.C. § 1983. The court rejected this argu-ment, finding that Section 1437d(l)(2) establishes an individual right to a reasonable lease when it is read in context with its surrounding statutory provisions. Section 1437d(l)(l) requires that leases be automatically renewed and “that nothing in this title shall prevent a resident from seeking timely redress in court for fail-ure to renew.” Section 1437d(l)(4) requires that public housing agencies give notice a specific number of days prior to the termination of leases. Section 1437d(k) pro-vides procedural protections for tenants who are being evicted for violations of the lease provisions governed by Section 1437d(l)(2). The court found that “it would make little sense for Congress to give tenants federal rights to procedural protections before they are evicted but no substantive right not to be evicted on unreason-able grounds.” As a result, the court found that “the text of these subsections is most reasonably read as pro-viding tenants of public housing important substantive and procedural rights.” Ultimately, the court concluded that because Section 1437d(l)(2) gave the residents a right to a lease free from unreasonable terms and con-ditions, their suit alleged an infringement of a federal right actionable under Section 1983.

The court next examined NYCHA’s argument that the document requiring residents to cooperate with police and prohibiting loitering did not constitute part of the lease. The court determined that there were ques-tions of fact relating to whether or not the document constituted a lease addendum, as well as to whether the terms of the document were reasonable and unambigu-ous as required by the USHA. Therefore, the residents’ USHA claims survived summary judgment.

Injunctive Relief

NYCHA argued that the plaintiffs lacked standing to seek injunctive relief because there was no indica-tion that they were threatened with real and immediate future injury. The court rejected this argument, finding that the plaintiffs had standing to seek injunctive relief regarding unlawful stops and arrests. The court noted that the possibility of recurring injury ceases to be spec-ulative when actual repeated incidents are documented, and that one of the plaintiffs had been stopped in a NYCHA building twice and arrested once. The court also noted that the policies at issue were targeted at NYCHA residents and people present on NYCHA property, and the fact that the plaintiffs were members of that narrow community was relevant to the standing inquiry. The court concluded that the plaintiffs who already had been stopped or arrested and regularly return to NYCHA property alleged sufficient risk of injury to satisfy stand-ing requirements.


Conclusion

Davis v. City of New York provides helpful guidance on a variety of issues affecting public housing residents, including the right to be free from unreasonable searches and seizures, the illegality of vague loitering policies, public housing tenants’ rights to enforce portions of the United States Housing Act, and standing for purposes of pursuing injunctive relief. Now that the court has exam-ined the claims asserted by the individual residents and guests, the plaintiffs must defend against the city’s efforts to seek summary judgment on the plaintiffs’ claims chal-lenging the legality of NYPD’s policies and procedures. n

From Urban Renewal and Displacement to Economic Inclusion:

San Francisco Affordable Housing Policy 1978-2012*

Once notorious for urban renewal that diminished housing affordability and displaced residents, the City of San Francisco is now renowned nationally for its best practices in housing and community development. How did this “hot market” city with limited land for devel-opment, extremely low rental vacancy rates and high demand for housing move from archaic urban renewal practices to thoughtful policies designed to preserve and enhance housing opportunities for low-income families, prevent displacement of low-income families, and create inclusive communities?

The answer is not simple. In a city that consistently places among the highest in the nation for its housing costs and is largely built out, production and preservation of homes affordable to its residents are ongoing challenges. The successful evolution of affordable housing programs in San Francisco cannot be understood by simply looking at the local codes and ordinances, policies, development requirements and restrictions. While certain programs have been more beneficial than others, the overall success of the housing system and policies employed is the result of an interaction of four key factors: dedicated commu-nity advocacy and strong coalitions; development of and access to substantial funding sources; a holistic vision of building “not just housing, but communities”; and con-stantly evolving housing programs that meet new chal-lenges and opportunities. The interaction of these factors has allowed the City to take advantage of ever-changing markets and political forces to maintain and develop strong local communities. This report describes the devel-opment and interaction of each of these four key compo-nents of housing program and policy development since the late 1960s and how they have resulted in the current dynamic affordable housing system in San Francisco.

San Francisco’s Affordable Housing Movement

San Francisco’s affordable housing and commu-nity development policies largely evolved during the late 1960s through the present day, spanning periods of rapid economic and demographic change, wide scale

*The authors of this article are Marcia Rosen, executive director of the National Housing Law Project (NHLP), and Wendy Sullivan, an attor-ney and planning consultant. This article is also being published in the Nov.-Dec. 2012 Poverty & Race and is adapted from a longer report published by the Poverty & Race Research Action Council and NHLP.


commercial development, dramatic changes in land use, and exploding housing costs, which continue to threaten displacement of low-income residents. Prior to 1968, San Francisco’s affordable housing stock was limited to pub-lic housing and other federally-funded housing that was developed as part of the City’s urban renewal program. While there was private market-rate housing affordable to low-income families, thousands of such units had been lost to urban renewal. No state or local funding sources were available for housing rehabilitation or development and no community-based infrastructure existed to under-take this work.

Geographic limitations further exacerbated the hous-ing problem. San Francisco has severely constrained development potential: it has limited land capacity; is roughly 47 square miles on the tip of a peninsula; and has no ability to expand through bay infill or annexation. It is “built out,” with almost all its available land developed. Consequently, as stated by Calvin Welch, San Francisco housing activist, lecturer in development politics, and former co-director of the Council of Community Housing Organizations, “development in the City is a zero-sum game, with winners and losers. [With minor exceptions], new development in San Francisco, residential or com-mercial, means the demolition and displacement of what was there.” With each new development in San Francisco being a battle between competing land uses, a strong community movement was needed to protect low-income residents from displacement and enhance neighborhoods as urban renewal, private development and market inter-ests sought to transform the City.

Extensive changes in the economic base and escalating housing prices in the City during the 1970s spurred for-mation of neighborhood and tenant organizations, bring-ing resident housing needs to the City’s attention. These groups were originally focused on maintaining housing affordability in their communities and preventing the displacement of families from neighborhoods disrupted by the City’s urban renewal programs and private devel-opment interests. Their focus later expanded to include a community development mission—the preservation and development of affordable community housing and resi-dent services to meet the changing demographic needs of families, maintain the City’s diversity and mitigate the exclusive effects of the rising cost of market housing within the City.

Funding of San Francisco’s Affordable Housing

Pivotal to the efforts and effectiveness of the commu-nity housing movement was access to significant financial resources. In San Francisco, affordable housing is primar-ily produced by three sectors: nonprofit housing develop-ers who are funded in part by the (former) San Francisco Redevelopment Agency (SFRA) and the Mayor’s Office of Housing; the San Francisco Housing Authority; and

market-rate developers operating in accordance with the inclusionary housing program or the jobs-housing link-age program. Spurred on by, and in partnership with, nonprofit developers and housing advocates, the City has implemented revenue strategies that have provided sig-nificant funding for the preservation, rehabilitation and development of affordable housing.

Between FY 2002-03 and FY 2010-11, more than $725 million was applied to affordable housing from City and locally controlled funding sources, over $356 million from state sources and over $829 million from federal sources, totaling just under $2 billion. Community orga-nizations were also instrumental in ensuring that, since 1990, up to 50% of local tax increment revenues and bond proceeds were allocated by SFRA to affordable housing. As a result, over $600 million of tax increment financing has contributed to the development of more than 10,000 units of affordable housing for low- and moderate-income households throughout San Francisco. Other local initia-tives established additional funding streams: changes to CDBG allocations ensured community development organizations and other creators of new affordable hous-ing opportunities received their fair share; a permanent City hotel tax was instituted to help fund housing; and San Francisco voters passed Proposition A in 1996, a $100 million general obligation bond dedicated for affordable housing. In total, almost 40% of housing funding in San Francisco has come from local sources. This exemplifies the impact that local advocacy can have on the develop-ment of housing policy and on the creation of available funding streams necessary to put policies into action.

San Francisco’s Affordable Housing Programs and Policies

Zealous community advocacy, strategic develop-ment and allocation of funding sources, and respon-siveness to market changes and political opportunities have resulted in a system of strong housing preservation and production policies, programs and organizations in San Francisco. By ensuring the creation and retention of a range of housing to serve diverse resident and com-munity needs within the City, these forces have coun-teracted the detrimental effects of gentrification caused by market forces and have kept affordable community housing in the forefront of the City’s development and redevelopment decisions.

In fact, by 2012, the housing and community develop-ment corporations that were formed in the early decades have developed, rehabilitated and preserved more than 26,000 permanently affordable housing units, mainly for families and seniors earning less than 50% of the City’s median income. The community housing movement also influenced the adoption of key affordable housing policy and financing legislation, including the enactment of San Francisco’s Rent Stabilization and Arbitration Ordinance


in 1979 that now covers some 170,000 rental units. The movement also served as a catalyst to the City’s inclusion-ary zoning ordinance, which has resulted in over 1,500 units of permanently affordable ownership and rental housing, as well as the Jobs-Housing Linkage program, which has contributed to the development of an addi-tional 1,100 units. The more than 200,000 units of “price controlled” housing constitute approximately 53% of San Francisco’s entire housing stock. Other substantive achievements include:

• Rejection by the City and the State of outmoded models of early federal urban renewal policies that targeted slum eradication and displaced low-income residents in response to relentless advocacy by com-munity and housing organizations. Such efforts suc-cessfully pressed the City and the State to require redevelopment agencies to develop, preserve and revitalize new and existing housing affordable for low- and moderate-income households and prevent displacement. San Francisco advocates also influ-

State of California SFRA

Affordable Housing Unit replacement requirement One-for-one One-for-one

Term of Affordability for units assisted with tax increment monies

55 years (rental);45 years (owner)

55 years (rental);45 years (owner)

Inclusionary requirement 15% (non-agency developed)30% (agency developed)

20% to 40%

Occupancy Preference to displaced residents Yes Yes

% Tax Increment dedicated to Housing 20% Up to 50%

Residential condemnation powers Yes No—too controversial in development areas

Table 2. Comparison of California and San Francisco Redevelopment Agency Requirements

Table 1. City, State and Federal Financing of San Francisco’s Affordable Housing Projects: FY 2002-03 to FY 2010-11

Source of Financing Total Financing FY 2002-03 to FY 2010-11

Percent of Total

Tax Increment Revenues and Bond Proceeds $460,130,116 24%

City Affordable Housing Fund $95,961,640 5%

Developer Contributions and Housing Income $73,371,353 4%

City Hotel Tax or Contributions in Lieu of Tax $47,623,208 2%

City General Fund $30,000,000 2%

Proposition A Affordable Housing Bonds $18,053,081 1%

City and Local Sources $725,139,398 38%

State Propositions 46 and 1C Affordable Housing Bonds $286,129,994 15%

State Tax Credits $57,654,092 3%

California Dept. of Housing and Community Development $8,190,000 0%

California Housing Finance Agency $4,100,000 0%

State Sources $356,074,086 19%

Federal Tax Credits $634,609,090 33%

Federal CDBG, HOME and HOPWA Grants $194,768,626 10%

Federal Sources $829,377,716 43%

TOTAL $1,910,591,200 100%


enced changes at the federal level, resulting in the Uniform Relocation Assistance and Real Property Acquisition Act of 1970, requiring federally funded projects to ensure adequate relocation assistance and other protections are available for displaced persons.

• Adoption of a Residential Hotel Demolition and Con-version Ordinance in 1980 to stave off the signifi-cant loss of these affordable housing units that had occurred during the late 1960s through the 1970s. Thanks to this policy and replacement requirements, San Francisco has about 500 residential hotels with 19,120 rooms, about one-fourth of which are main-tained with a guaranteed level of affordability.

• Adoption of a Condominium Conversion Ordinance in 1979 that retains larger occupied rental properties for the housing purposes for which they were intended, helping protect units covered by the Rent Stabilization and Arbitration Ordinance adopted in 1979.

• Passage by voters of a groundbreaking ballot measure in 1986 (Proposition M), which capped the amount of office development that could be approved each year and established planning priorities that incorporated the development and preservation of affordable hous-ing for residents in downtown.

• Adoption of a Downtown Plan policy and corre-sponding Planning Code amendment in the mid-1980s prohibiting the demolition of housing units in the downtown area without conditional use approval. Community-based neighborhood plans and zoning provisions for neighborhoods surrounding the down-town area also were developed, aimed at protecting existing housing from demolition or conversion and protecting and enhancing the residential quality and scale of the neighborhoods.

• Adoption of enhanced redevelopment plans in col-laboration with residents, small business owners and community organizations for the South of Market, Mission Bay and Hunters Point Shipyard redevelop-ment areas in the 1990s (with later modifications) to improve the neighborhoods without gentrification and displacement. Developments include perma-nently affordable housing and housing for a diverse range of needs, as well as services such as child care, health and social services, and amenities including retail, parks, libraries and schools. Hunters Point in particular will be a transformative project to rebuild the community and a true test of inclusive gentrifica-tion.

• Creation and adoption of a groundbreaking Housing Preservation Program in 1997 to preserve 8,000 units in 88 HUD-assisted housing developments in the City threatened with conversion to market-rate units as a

result of changes in federal budget and policy priori-ties. At a time when the nation lost over 100,000 units of federally assisted housing, San Francisco did not lose even one.

• Adoption of SB 2113 and SB 211 in 2000 and 2001, requiring the City to replace the 6,709 net loss of units that occurred during the early urban renewal period—i.e., before a one-for-one replacement requirement was placed on SFRA. These bills permit tax increment revenues to be collected from some redevelopment areas for low- and moderate-income housing activities until all 6,709 units have been replaced. Significantly, these bills ensure that, even after the demise of SFRA in 2012 (discussed below), the City will continue to receive some tax increment funds to replace the housing that was lost during the early urban renewal period.

Conclusion

San Francisco continues to face tough challenges in providing the affordable, quality housing that its resi-dents and workforce need, but the City is demonstrating a solid commitment to addressing those challenges. A significant blow to financing opportunities occurred this year when California dissolved all 400 of its redevelop-ment agencies, including SFRA, to redirect redevelopment revenues away from housing and toward the $25 billion state budget deficit. An assessment of housing needs in San Francisco by the regional planning association, Asso-ciation of Bay Area Governments (ABAG), also shows that the City did a good job meeting its very low-income and market-rate housing needs between 1999 and 2006, but fell woefully short in meeting its housing needs for low- and moderate-income households—those earning between about 50% and 120% AMI. In response to these obstacles, in November 2012, voters approved a Housing Trust Fund, which will more than replace the lost rede-velopment revenues. Also, the Mayor’s Office of Housing has been exploring options to produce housing for low- to moderate-income households through various programs and funding modifications. Despite the quick response, however, it is evident that San Francisco will continue to need to be inventive and its housing advocates strong to meet the challenges ahead.

San Francisco must continue to evolve its policy to fill in the gaps in its housing needs and find creative and substantial sources of funding to develop and maintain affordable housing in what is one of the most expensive housing markets in the nation. By also ensuring that the needs of local residents are heard, San Francisco is dem-onstrating that the early urban renewal and displacement days are gone and have been replaced with a vision of cre-ating the housing, jobs and services required to maintain and build thriving, diverse and inclusive communities within the City. n


HUD Notice Addresses Steps PHAs May Take to Reduce Costs

in the Voucher Program*In fiscal year (FY) 2012, Congress provided substan-

tially less funding than needed to administer the Section 8 voucher program. The continuing resolution for fiscal year 2013 is designed to maintain government spending for the next six months at the fiscal year 2012 levels, and it does not provide adequate administrative fees for the voucher program.1 The Department of Housing and Urban Devel-opment (HUD) issued Notice PIH 2012-15, which provides guidance on actions public housing agencies (PHAs) may take to streamline administrative practices and reduce administrative costs.2 If adopted, some of the suggested actions could benefit tenants and applicants, while others may have mixed results.

Background

For the voucher program, PHAs receive funding to make housing assistance payments (HAP) to landlords and to administer the voucher program. HAP funds can-not be used for administrative costs. The authority for administrative fees is set forth in the authorizing statute for the voucher program.3 In recent years, appropriations acts have specified the formula by which HUD calculates administrative fees. The funding for administrative fees has been less than this formula required.4 For example, the FY 2012 appropriations funded PHAs for the voucher program at 75% of what the formula required.5 To help address the shortfall, HUD issued guidance to PHAs on how to reduce administrative costs.6 These suggested changes are in addition to cost-cutting proposals that HUD has suggested to reduce the HAP payments for the voucher program.7

HUD’s website contains information regarding administrative fees for the voucher program. For each PHA, HUD posts the administrative fee, which varies by

*The author of this article is Sebastian A.J. Davies, a 2012 graduate of Golden Gate University School of Law and a Bridge Fellow with the National Housing Law Project. 1See H.J. Res. 117, 112 Cong. 2d Sess. (Sept. 19, 2012).2Streamlining Administrative Practices in the Housing Choice Voucher Program, PIH 2012-15 (Feb. 27, 2012).342 U.S.C.A. § 1437f(q) (West 2012); see also 24 C.F.R. § 982.152 (2012).4PIH Notice 2012-15, supra note 2, at 1.5See also Implementation of the Federal Fiscal Year 2012 Funding Provisions for the Housing Choice Voucher Program, PIH 2012-9 (Feb. 2, 2012).6PIH 2012-15, supra note 2. 7Cost Saving Measures in Housing Choice Voucher (HCV) Program, PIH 2009-44 (Oct. 23, 2009); see also Possible PHA Strategies to Respond to a Funding Shortfall in 2005, www.nhlp.org/files/Possible PHAStrategiesChart.pdf.

geographic area.8 The posted fee is multiplied by the num-ber of vouchers in use at the first of each month. Thus, a PHA receives more administrative fees if more families are leased up with a voucher. The number of vouchers in use at the first of each month is available in the Voucher Management System (VMS).9 The VMS data/reports also show the amounts by which a PHA has drawn down its administrative fee.10 These reports show the amount by which a PHA has drawn down HAP funds and admin-istrative fees, the number of voucher families that are served, the amount of the PHA’s reserves and the number of vouchers issued that are not leased up.11

Unused administrative fees are held in an adminis-trative fee reserve, also known as unrestricted net assets (UNA). Use of these funds is restricted to voucher pro-gram purposes, except for funds in the reserves that were accumulated before 2004.12 Advocates can determine the amount of a PHA’s UNA from the VMS reports.13 Addi-tional information that may impact a PHA’s response to the funding shortfall is the designation of the PHA as a high, standard or troubled performer. This information is available for 2001 through 2011.14

Changes that Would Benefit Tenants and Applicants

Eliminating Interim ReexaminationsHUD PIH Notice 2012-15 suggests that PHAs no lon-

ger process interim increases in income. Alternatively, a PHA could require the family to report an increase in income only above a set threshold.15 The notice gives an example of setting a threshold annual increase of at least $5,00016 before requiring the family to report the increase and conducting an interim reexamination.17 Eliminating

8See http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv (calendar year (CY) 2012 Administrative Fee Rates Description and CY 2012 Administrative Fee Rate Tables). For CY 2012, the fees range from $48.38 to $106.74 for the first 7,200 unit months. See also PIH 2012-9, supra note 5. There are special rules for PHAs that serve more than one area or multiple counties.9See http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv/psd. PHAs file reports with HUD monthly. Adjustments are made quarterly. The reports are posted with a delay of several months. 10Id. 11These fees also apply to the Moderate Rehabilitation and 5 Year Mainstream Program. PIH Notice 2012-9, supra note 5. 12PIH 2012-9, supra note 5; see, e.g., H. Rpt. 10, 108 Cong., 1st Sess., at 477-478 (Feb 13, 2003) (Conference Report to Accompany H.J. Res. 2). See also 24 C.F.R. § 982.155 (2012). As with the formula for the administrative fees, use and accumulation of unused administrative fees may be affected by annual appropriations.13PHAs’ reserves vary dramatically. Some PHAs have several million dollars in the UNA, while others have no reserves, and a few report deficits of several million dollars.14http://www.hud.gov/offices/pih/programs/hcv/ogddata.cfm.15PIH 2012-15, supra note 2, at 3.16Id.17Id. at 3. PHAs must conduct an interim reexamination if requested by the family due to a change in income or family composition pursuant


interim processing of income changes may support fam-ily efforts to increase earned income.18

Eliminating PHA Screening of Families for Tenant Suitability

Currently PHAs must screen voucher applicants to determine if they previously engaged in certain criminal activity.19 PHAs also have an option to screen voucher applicants for suitability.20 HUD suggests that PHAs eliminate any discretionary screening. The rationale is that voucher owners are also responsible for screening families.21 Relying upon owners to conduct screening and eliminating the PHAs’ screening for tenant suitability reduces costs and redundancy.

Absorbing Portability VouchersWhen a tenant moves (ports) from the jurisdiction of

one PHA to another, the receiving PHA has the option of absorbing the initial PHA’s voucher or entering into a billing arrangement. A PHA may absorb incoming por-tability families as long as it is financially able to do so22 and such action will not result in the PHA exceeding its authorized number of vouchers.23 Having PHAs routinely absorb portability vouchers facilitates moves by eliminat-ing the tenant burden and possible confusion of dealing with two separate PHAs.

Streamlining the Reexamination ProcessThe notice advises PHAs to remove unnecessary

steps from their procedures for conducting annual reex-aminations of income.24 HUD’s suggestions include the following:

Limiting the collection of certain documents to initial occu-pancy: The notice states that tenant files often contain mul-tiple copies of documents such as birth certificates and declarations of U.S. citizenship.25 Copies of such docu-ments should be collected only once. Tenants should not be burdened with repeatedly producing such documents.

Accepting tenant-provided documents: In the past, HUD required written third-party verification to come directly from the source.26 Now, HUD takes the position that such documents are acceptable even if they are provided by the

to 24 C.F.R. § 982.516(b)(2) within a reasonable time after the family request.18Id. Prior to making such a change, HUD suggests that PHAs may wish to compare their administrative costs of processing interim increases in income compared to the reduction in Housing Assistance Payments expenses. 1924 C.F.R. § 982.553(a)(1), (2) (2012).20Id. § 982.307.21PIH 2012-15, supra note 2, at 4.22Id.23HUD has posted the number of authorized vouchers by PHA at http://www.hud.gov/offices/pih/programs/hcv/ogddata.cfm.24Id. PIH 2012-15, supra note 2, at 5.25Id.26Id.

tenant.27 Examples of acceptable tenant-provided docu-mentation (generated by a third-party source) include, but are not limited to, pay stubs, payroll summary reports, bank statements and child support payment stubs. Allow-ing tenants to provide such documents will speed up the process of income verification and also may increase the level of trust between staff and residents.

Eliminating third-party verification for assets and expenses: Verifying assets is often burdensome for PHAs, especially when the asset is a small bank account. HUD makes an exception to obtaining third-party verification for assets and expenses when the asset or expense to be verified is not a significant amount, would have minimum impact on the total tenant payment, and the PHA is able to verify the asset or expense through review of original docu-ments provided by the tenant.28 Unfortunately, HUD does not give an example of what is an insignificant amount. At a minimum, advocates could suggest that $5,000 is a reasonable amount for an asset, since HUD has suggested that increases in annual income of $5,000 or less should be exempt from interim recertifications. A higher threshold also could be justified because it is only the interest on the asset that is included in income, and thus the impact on the total tenant payment is minimal.29

Increase the Success Rate of Voucher HoldersThe voucher success rate measures the ability of house-

holds to lease units using their vouchers. For example, if a PHA issues 100 vouchers and 100 families lease units, the success rate is 100%, whereas if the PHA must issue two vouchers for every unit that is leased, the success rate is 50%. High success rates reduce a PHA’s administrative burden by reducing the number of briefing sessions and hence the eligibility determinations. To increase the suc-cess rate, Notice PIH 2012-15 suggests extending search times. The current search time is a minimum of 60 days, with extensions as set forth in each PHA’s Administrative Plan.30 PHAs should consider initially issuing a voucher for a period in excess of 60 days and routinely extending search times for at least an additional 60 days and further if necessary.

Notice PIH 2012-15 also recognizes that inadequate payment standards may interfere with success rates.31 A low payment standard reduces the number of available units and units that meet the housing quality standards (HQS). PHAs that have reduced their payment standards

27Id. The notice further notes that PHAs may accept or reject tenant-provided documents at their discretion. Upon rejection of a tenant-provided document, the PHA may follow up directly with the source to obtain the necessary verification.28Administrative Guidance for Effective and Mandated Use of the Enterprise Income Verification (EIV) System, PIH 2010-19 (May 17, 2010).29For example, 2% interest on a bank account of $10,000 generates $200 annually or $17 monthly, 30% of which is $5. 3024 C.F.R § 982.303 (2012). 31PIH 2012-15, supra note 2, at 6.


in recent years should evaluate the impact of the reduced payment standard on voucher holders. An increased pay-ment standard may minimize a PHA’s administrative expenses by reducing the time spent on HQS inspections and re-inspections.32 Higher success rates also result in fewer briefing sessions and fewer vouchers that need to be issued to achieve the same leasing goal.33

Verifying HQS Deficiencies Remotely for InspectionsPHAs must initially and annually inspect units to

determine if they meet the Housing Quality Standards (HQS).34 HUD’s position is that if a unit fails an initial

32Id.33Id.3442 U.S.C.A. § 1437f(o)(8) (West 2012); 24 C.F.R. § 982.401 (2012).

onsite HQS inspection, the reinspection also must be an onsite inspection.35 However, in the case of subsequent annual or interim inspections, an onsite reinspection is not required. Proof that the deficiencies have been rem-edied can include owner certification, receipt from a vendor, photographs or tenant confirmation.36 It is help-ful that HUD has emphasized flexibility regarding the annual and interim reinspections.

35PIH 2012-15, supra note 2, at 2; see also HQS Inspections for the Housing Choice Voucher Program and Guidance Related to Electrical Outlets, PIH 2011-29 (June 3, 2011).36PIH 2012-15, supra note 2, at 2 (PHAs must verify the correction of deficiencies, but they are not required to do so by any particular method); see also HQS Inspections for the Housing Choice Voucher Program and Guidance Related to Electrical Outlets, PIH Notice 2011-29 (June 3, 2011); 24 C.F.R. § 982.404(a)(3) (2012).

HUD Office Issues Letter Regarding Flexible Benefit Plans and Tenant Income*

For several federally subsidized housing programs, monthly rent payments are 30% of the resident’s income, and the local public housing agency (PHA) assists in funding the rest of the rent payment. A resident family’s income is calculated by including all household income minus deductions that are delineated by the Department of Housing and Urban Development (HUD) in 24 C.F.R. § 5.609. The HUD Office of Public Housing, Boston Hub, issued a letter interpreting how to apply a resident’s employer-offered flexible medical credits in calculating income for purposes of subsidizing rent.1

Some employers provide employees with the option of enrolling in a benefit program that allows employees flexibility in allocating their total benefits according to the individual employee’s preference. The name of these programs usually includes terms such as “flexible” and “credit.” Employers offer these credits to offset the costs of an employee’s health insurance, which the employee then uses to purchase insurance. These benefits are generally identified separately on pay stubs as “credits,” but are added to the employee’s gross income. There has been confu-sion over how these credits are counted toward annual income for the purpose of calculating the housing subsidy amounts available to residents.

Because a resident’s health insurance credits can be used only to purchase or offset the cost of insurance, they should not be counted toward a tenant’s annual income. The applicable regulation is 24 C.F.R. § 5.609(c)(4), which states that “annual income does not include . . . [a]mounts received by the family that are specifically for, or in reim-bursement of, the cost of medical expenses for any family member.” Accordingly, when completing Form HUD-50058, the dollar value of the health insurance credits should be reflected as an income exclusion on line 7e of the form. The letter from HUD’s Boston office urges PHAs and advocates to reference pages 24-32 of the Form 50058 Instruction booklet for guidance on allowable Income and Exclusions. If there is uncertainty regarding the nature of a resident’s credit allowance, HUD states that the resident’s employer should be contacted to verify the flexible credit program.

The letter from HUD’s Boston office was addressed to PHA directors. However, its interpretation should apply to all residents subject to 24 C.F.R § 5.609, including project-based Section 8 tenants and participants in other housing programs that use the same definition of family income.2 Advocates should urge other HUD regional offices to issue similar letters or offer guidance to PHAs and owners if health insurance credits are offered to employees locally. Finally, advocates should share the letter with their local PHAs and project-based Section 8 owners.

*The author of this article is Lindsay Frank, a J.D. candidate at Golden Gate University School of Law and an intern with the National Housing Law Project. 1Letter from Marilyn B. O’Sullivan, Director of HUD Office of Public Housing Boston Hub, to Public Housing Agency Executive Directors (Aug. 27, 2012). 2For example the Low-Income Housing Tax Credit program follows the HUD definition of income. See Guide for Completing Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition, Rev. 01-2011, Chapter 4.


Changes that Could Have Mixed Results for Tenants and Applicants

Conducting Group Briefing SessionsThe voucher regulations require PHAs to conduct a

briefing for families selected for the program.37 HUD sug-gests that conducting group briefings instead of individ-ual family briefings can reduce the amount of time PHA staff members spend on the voucher briefing and issuance process. Any group briefing sessions should continue to be sufficiently tailored to the needs of individual fami-lies and include information for applicants regarding the advantages of moving to areas with good schools that do not have high concentrations of poverty.38

Limiting Portability and Moves Within the PHA Jurisdiction

To reduce administrative costs, HUD suggests limit-ing the number and timing of moves that a voucher tenant may make. However, a PHA may not deny a move that is required because the unit fails to pass HQS or because the tenant needs to move due to domestic violence, dating vio-lence or stalking. The voucher regulations list other cases where a tenant may be required to move and should be offered a voucher, such as where the PHA has terminated the HAP contract because of the owner’s breach or where the lease has terminated.39 Any attempt to limit moves may harm tenants and should be fully discussed prior to adoption and described in the Administrative Plan.

Use of Upfront Income Verification (UIV) ToolsNotice PIH 2012-15 states that the use of Upfront

Income Verification (UIV) tools can reduce expenditure of time and money by reviewing multiple cases at one time.40 However, many tenants and applicants have had problems with the UIV because the information provided is inaccurate or out of date. In addition, some PHAs tend to rely upon the information even if residents and appli-cants provide more accurate information.

Closing the Waiting ListHUD suggests that if a PHA has sufficient appli-

cants on its waiting list to house families for a reason-able period of time, the PHA may close the waiting list to reduce the administrative burden associated with accepting and processing applications.41 In doing so, the PHA must comply with the requirements42 for opening and closing a waiting list.

3724 C.F.R. § 982.301 (2012).38Id. § 982.301(a)(3).39Id. § 982.314(a).40PIH 2012-15, supra note 2, at 2.41Id. at 4.4224 C.F.R. § 982.206 (2012).

Eliminating Waiting List PreferencesHUD suggests that PHAs eliminate waiting list pref-

erences and select applicants by date and time of applica-tion or by lottery.43 This suggestion may be troublesome for advocates who have persuaded PHAs to adopt prefer-ences for applicants with special needs, such as applicants who are homeless, disabled, or survivors of domestic vio-lence. If a PHA opts to eliminate preferences and instead seeks to adopt a lottery or date and time system, the PHA, residents and advocates should carefully consider the cir-cumstances in choosing one method over the other. If a date and time system is adopted, there must be accom-modation of applicants with disabilities, who may be disadvantaged by such a system if it is not implemented properly.

Conclusion

Advocates who are concerned about the impact of budget cuts on voucher applicants and residents should request a meeting with the PHA to discuss cost-saving measures. Any measures that would result in policy changes constituting significant amendments or modifi-cations44 are subject to additional requirements, including a public hearing and comment period.45 HUD notes that not all cost-saving measures constitute significant amend-ments. The PHA must make that determination based on the PHA’s definition of “significant amendment” as pro-vided in the PHA plan.46 n

43PIH 2012-15, supra note 2, at 4.4424 C.F.R. § 903.7(r)(2) (2012).45Id. §§ 903.13, 903.15, 903.17, and 903.21.46PIH 2012-15, supra note 2, at 7; see also Public Housing Agency [PHA] Plan Desk Guide (Sept. 20, 2001) ¶ 7.1, which defines “significant amendment.”


Landmark Settlement Seeks to Increase Access to

Communities of Opportunity in Baltimore Region

Filed in 1995, Thompson v. HUD involved a class of African-American public housing residents in Baltimore, Maryland, who alleged that Department of Housing and Urban Development (HUD) and local officials adopted policies that reinforced long-existing housing segregation patterns within the city. According to the residents, such practices led to the concentration of poverty throughout African-American neighborhoods in Baltimore that were historically underserved. In 2005, a federal district court found that HUD did not meet its obligations under the federal Fair Housing Act (FHA) and that HUD failed to affirmatively further fair housing by inadequately tack-ling longstanding segregation within Baltimore City.1 In August 2012, the parties proposed a landmark settle-ment agreement designed to benefit the class by increas-ing affordable housing opportunities available in racially mixed areas with better economic opportunities and infrastructure across the greater Baltimore region.2 The court preliminarily approved the agreement and sched-uled a fairness hearing for November 20, 2012.3 This arti-cle describes some of the major terms of the agreement.

Prior Case History4

In 1995, African-American public housing residents in Baltimore City filed a class action lawsuit against the city, the Housing Authority of Baltimore (HABC), and HUD for allegedly violating the Equal Protection Clause, Title VI of the Civil Rights Act of 1964, and the FHA, among other federal statutes. The residents claimed that the defendants adopted policies that perpetuated public housing segregation by concentrating African-American residents in segregated neighborhoods within the city. Such policies included, but were not limited to, preventing

1See generally Thompson v. HUD, 348 F. Supp. 2d 398 (D. Md. 2005). The residents are represented by ACLU of Maryland, NAACP Legal Defense & Educational Fund, Brown, Goldstein & Levy, LLP, Morgan, Lewis & Bockius LLP, and Levy Ratner, P.C.2See Settlement Agreement, Thompson v. HUD, No. 1:95-cv-00309-MJG (D. Md. Aug. 24, 2012) [hereinafter Agreement].3See Order Preliminarily Approving Class Settlement, Thompson v. HUD, No. 95cv309 (D. Md. Sept. 12, 2012).4This section presents a brief overview of the issues and procedural history in Thompson before the parties reached the settlement agree-ment. For more detailed analyses of previous rulings in the litigation, see NHLP, District Court Concludes HUD May Be Liable for Baltimore Seg-regation, 36 Hous. L. BuLL. 35, 35 (Feb. 2006); NHLP, HUD Liable for Failing to Address Baltimore’s Segregated Housing System, 35 Hous. L. BuLL. 71, 71 (Mar. 2005).

African-American public housing residents from moving into integrated neighborhoods;5 demolishing African-American public housing near white areas and referring the displaced African-American residents to segregated parts of Baltimore;6 and limiting placement of African-American public housing units to minority areas due to pressure from Baltimore’s white community.7

In 1996, the parties entered into a partial consent decree8 to provide housing alternatives for families living in the public housing units being demolished. The partial consent decree provided that several public housing devel-opments in Baltimore would be demolished and redevel-oped, and that the displaced residents would be provided with alternative housing. One-third of the demolished units would be rebuilt on the same sites. 9 To replace the remaining two-thirds, the partial consent decree adopted an approach involving the construction of replacement sites in racially mixed areas, as well as the establishment of a voucher program for displaced residents.10 As part of the voucher program, some affected residents would be given vouchers allowing to them to rent units on the private market; other residents would receive project-based vouchers; and a relatively small third group would receive a subsidy to purchase a home.11 These vouchers provided African-American residents opportunities to move out of Baltimore’s segregated neighborhoods and into neighborhoods with better opportunities and mixed racial compositions.

After a trial, in 2005 the district court found that the city and HABC were not liable, but that HUD had violated the FHA.12 Furthermore, the court postponed ruling on the equal protection claim against HUD until after con-clusion of a trial on the remedies.13 In its liability holding, the court specifically found that HUD failed to comply with Section 3608(e)(5) of the FHA,14 a provision requir-ing HUD to affirmatively further fair housing policies.15 The district court concluded that HUD wore “blinders” by concentrating desegregation efforts almost exclusively within Baltimore City limits,16 an approach which had proven to be unsuccessful, and by not adopting a regional approach to desegregate Baltimore.17

5Complaint at 14, Thompson v. HUD, No. 95cv309 (D. Md. Jan. 31, 1995).6Id. at 24.7Id. at 43-44.8Partial Consent Decree, Thompson v. HUD, No. 95cv309 (Docket No. 55) (D. Md. Jun. 25, 1996).9Lora EngdaHL, PovErty & racE rEsEarcH action counciL, nEw HomEs, nEw nEigHBorHoods, nEw scHooLs: a ProgrEss rEPort on tHE BaLtimorE Housing moBiLity Program 12 (2009).10Id.11Id.12See Thompson v. HUD, 2006 WL 581260, at *1 (D. Md. Jan. 10, 2006) (summarizing the district court’s earlier liability decision).13Id.14Thompson v. HUD, 348 F. Supp. 2d 398, 464 (D. Md. 2005).1542 U.S.C.A. § 3608(e)(5) (West 2012).16Thompson, 348 F. Supp. 2d. at 462-63.17Id. at 459-62.


In response to the court’s finding of liability, in 2005 HUD filed a motion for summary judgment contending that because it merely funded, and did not build, pub-lic housing in Baltimore, the agency had no obligations under the FHA to place affordable housing sites outside the city itself. The court rejected this argument, stating that HUD need not build public housing to fulfill its obli-gations under the FHA. Instead, “[w]hat HUD must do is consider, in good faith, regional approaches to desegrega-tion in public housing in the Baltimore Region.”18 How-ever, the court reopened the record and allowed HUD to present additional evidence to demonstrate that the agency did not in fact violate the FHA by failing to affir-matively further fair housing in Baltimore.19 A year later, in 2006, the parties went to trial before the district court on whether HUD violated the plaintiffs’ equal protection rights and for reconsideration of HUD’s liability under the FHA. At the time of the agreement, the court had yet to render an opinion on these issues.

Select Terms of the Settlement AgreementWhile the agreement is quite detailed, the follow-

ing is a brief description of certain notable terms. HUD assumed no liability in entering the agreement.20

Ensuring Funding for VouchersThe agreement continues the voucher program origi-

nating under the partial consent decree. Under the agree-ment, any current or future African-American residents of Baltimore public housing during the period of Janu-ary 31, 1995, through January 1, 2027, could participate in the voucher program established by the settlement.21 Like the partial consent decree, the agreement provides for vouchers allowing recipients to find housing on the private market, as well as project-based vouchers. The agreement further reduces the number of the subsidized homeownership units required under the partial consent decree.22 The settlement agreement is conditioned upon amending HUD and HABC’s Moving to Work Agree-ment, which governs how HUD calculates its voucher funding to Baltimore.23 The amended MTW agreement outlines, among other items, how HUD will continue to fund vouchers under the partial consent decree as well as fund additional vouchers for the Thompson plaintiffs under the settlement agreement.24

18Thompson, 2006 WL 581260, at *2.19Id. at *12.20Agreement, supra note 2, at 42-43.21Id. at 47.22Id. at 17.23The existing agreement, called the Moving to Work Agreement, is an agreement that HABC and HUD jointly entered in 2008. Public hous-ing agencies such as HABC that are part of HUD’s Moving to Work demonstration are permitted to waive certain regulatory requirements and have greater flexibility in using funds for their voucher and public housing programs. 24Agreement, supra note 2, at 8.

The vouchers provide plaintiffs with the opportunity to move out of their historically segregated neighbor-hoods to communities of opportunity, which are charac-terized by better employment, better schools and access to services such as healthcare.25 Residents receiving either a tenant-based voucher pursuant to the agreement or a voucher arising out of the partial consent decree must use the voucher in a community of opportunity for the first two years, after which residents can apply for a hardship exception to move outside of a designated community of opportunity.26 Thompson voucher recipients will con-tinue to enjoy increased search time before their vouchers expire, as they had under the partial consent decree.27

The Regional AdministratorAnother component of the agreement’s implementa-

tion is the creation of the regional administrator position. Under the agreement, the plaintiffs will work in consul-tation with HABC to select the new regional administra-tor, who is tasked with administering all of the vouchers created as a result of the Thompson litigation—including vouchers mandated by the partial consent decree, as well as vouchers now receiving funding as a result of the cur-rent agreement. Additionally, the agreement requires the regional administrator to use Census and other data to identify communities of opportunity within the Baltimore region, and to work with HUD to update a listing of these communities.28 The regional administrator also will estab-lish a system that provides a means of accepting housing applicants, maintains an applicant waitlist, and applies screening and eligibility criteria for these vouchers.29

In addition to program administration and data col-lection, the regional administrator will take steps to engage the wider community. First, the regional admin-istrator will conduct outreach to recruit developers and owners to participate in expanding the affordable hous-ing stock within communities of opportunity.30 Addition-ally, the regional administrator will also provide mobility counseling to voucher recipients, including services such as offering information about communities of opportu-nity and household budget counseling.31 Funding will be available to the regional administrator to assist voucher holders with one-time expenses such as application fees and other moving costs.32

Civil Rights ReviewsWithin 30 days of court approval of the agreement,

HUD will create a Baltimore region working group, com-

25See generally id. at 11-12.26Id. at 11.27Id. at 12.28Id. at 11-12.29Id. at 14.30Id. at 10.31Id. 32Id. at 10-11.


prised of four full-time HUD employees.33 The work-ing group will conduct civil rights reviews of what the agreement classifies as “significant decisions or plans” submitted to HUD by public housing agencies (PHAs) and jurisdictions within the Baltimore region. The agree-ment considers “significant decisions or plans” to include, among other items, submissions such as PHA plans, requests to establish site-based waiting lists, and requests to establish residency preferences.34 The working group will engage in a review of HUD’s analysis of significant decisions or plans—paying special attention to the overall impact a given significant decision or plan would have on the desegregation of affordable housing opportunities.35 The working group will last for three years, and must examine at least one significant decision or plan from each PHA or jurisdiction that is required to make such submissions to HUD.36

The agreement requires HUD to submit quarterly reports to plaintiffs’ counsel detailing all significant deci-sions or plans considered by—and ultimately approved or rejected by—HUD. This quarterly report must include a statement affirming that HUD conducted a civil rights review of every significant decision or plan submitted for approval.37 HUD must submit these quarterly reports for three years, and must review at least one significant deci-sion or plan from each PHA or jurisdiction in the Balti-more region. Plaintiffs can submit written comments to HUD within 30 days of receiving each quarterly report.38

Incentives to Baltimore Area Owners and DevelopersThe agreement requires HUD to provide incentives to

Baltimore-area developers and owners. These incentives aim to increase the availability of affordable housing in the region, specifically within communities of opportu-nity, by making the construction and rental of affordable housing units in the Baltimore region more attractive for owners and developers.39 Such incentives include reduc-ing mortgage insurance premiums for developers look-ing to build affordable units and providing more cash distributions to developments with a certain number of affordable units.40 Under the agreement, HUD will offer financial incentives to developers and owners in the Bal-timore region with the goal of creating 300 affordable

33Id. at 22.34The agreement states that the following items constitute significant decisions or plans: (1) PHA plans; (2) requests establishing residency preferences; (3) requests to establish site-based waitlists; (4) relocation plans; (5) consolidated plans; (6) Annual Action Plans; (7) affirmative fair housing market plans; (8) demolition/disposition applications; and (9) proposals for the new construction or rehabilitation of housing proj-ects. See id. at 21-22.35Id. at 23.36Id. at 24.37Id. 38Id.39Id. at 26.40Id.

units each year over a seven-year period.41 If 300 units are not created in a given year, then the remaining units can roll over to the next year, so long as no more than 500 incentive-based units are created in the span of one year.42 HUD has agreed to submit immediately an Office of Management and Budget notice detailing the available incentives.43

In addition, these incentives can be utilized by own-ers and developers of multifamily housing who agree to reserve a portion—but no less than 10%—of new or reha-bilitated two- and three-bedroom units for non-elderly families with vouchers.44 If owners and developers want to take advantage of these incentives, they must, among other obligations, work with the regional administrator to market affordable housing units affirmatively to the plaintiffs and other voucher holders.45 The owners and developers receiving incentives may not establish pref-erences for local residents with respect to properties or units receiving incentives.46

Online Housing LocatorWithin 60 days of court approval of the agreement,

HUD has agreed to begin work on a web-based listing of all public and federally assisted housing in the Baltimore region.47 This listing can also include private housing that accepts Section 8 vouchers. The agreement requires that the online system be “substantially complete” within one year of the agreement, meaning that the system is ready for public use and that the listing be a “reasonably com-prehensive” representation of the Baltimore region’s fed-erally assisted or insured housing.48

HUD Opportunity Study for the Baltimore RegionThe agreement requires HUD to direct the comple-

tion of a multi-phase study concerning affordable housing in the Baltimore region, with a focus on locating commu-nities of opportunity. This study will commence within 60 days of court approval of the agreement, with HUD conducting an initial review of the methodologies to be employed. Within one year of the agreement’s effective date, HUD will select an independent researcher, who will be tasked with conducting a study with several major components, including:

(1) an analysis of racial and ethnic patterns of housing units receiving project-based assistance or with tenants receiving vouchers throughout the Baltimore region;49

(2) a listing of federally assisted or insured non-elderly

41Id. at 27.42Id. 43Id. at 26.44Id. 45Id. at 27.46Id.47Id. at 25.48Id.49Id. at 28.


family housing in the Baltimore region, with a focus on analyzing the risk of losing such units in communities of opportunity;50

(3) an analysis of applications for and occupancy of Baltimore-region federally assisted non-elderly housing;51

(4) an examination of difficulties that voucher hold-ers face when attempting to locate affordable units out-side of Baltimore City, as well as any solutions to these problems;52

(5) an analysis of the location of “quality of life related infrastructure” such as schools and healthcare providers throughout the Baltimore region;53 and

(6) an analysis of potential regulatory obstacles to developing affordable housing within communities of opportunity.54

While the plaintiffs’ counsel will have access to pre-publication drafts of the report, HUD may choose to withhold public disclosure of the report for up to one year after the study’s completion.55 Furthermore, HUD is not required to release the underlying data obtained for the purposes of completing the study.56

Conclusion

Assuming that the court approves the agreement, the proposed remedies could have a considerable positive impact on the state of affordable housing in the Baltimore region. Furthermore, Thompson can serve as a model for potential litigation in other metropolitan areas where government entities have failed to comply with their obli-gations to affirmatively further fair housing. n

50Id.51Id. at 28.52Id.53Id. at 29.54Id. 55Id. 56Id.

Court Overturns Zoning Board’s Refusal to Approve Proposed Domestic Violence Shelter

An appellate court recently found that a local zoning board imposed overly restrictive conditions on a non-profit seeking to build a domestic violence shelter for 12 families. The case, 180 Turning Lives Around, Inc. v. Zon-ing Board of Adjustment,1 addressed a proposal to build a 13,457-square-foot shelter in Middleton, New Jersey. In finding that the zoning board failed to consider the unmet need that the shelter would serve, the court noted that domestic violence shelters are “inherently beneficial.”2 The opinion may be helpful for advocates who are seeking to build domestic violence shelters or transitional housing but are facing community or municipal opposition.

Background

180 Turning Lives Around is a nonprofit that pro-vides a variety of services to survivors of domestic and sexual violence, including crisis support, counseling and advocacy. The agency purchased a lot to build a domes-tic violence shelter for 12 families. The proposed shelter included 12 family-size bedrooms capable of housing up to 42 residents, and a basement with features such as offices, meeting areas, a dining room, a kitchen, an art room and a computer room.

The nonprofit filed an application with the city zon-ing board, which held public hearings on the proposal. The nonprofit sought a zoning variance, or exception, because the proposal did not include a locally required 50-foot buffer area between the shelter and adjoining resi-dential property. A buffer is a tract of undeveloped land that typically uses landscaping to separate two areas. The agency’s architect testified that the proposed shelter incorporated design elements that would give the struc-ture a residential character. A traffic engineer testified that the proposed shelter would not generate a significant increase in traffic.

A citizen’s group opposed the proposed shelter. A planner testified that the proposed shelter was not inher-ently beneficial, and characterized it as “a transient resi-dential facility.”3 He also testified that the shelter was “out of character with the neighborhood.”4 Other attendees raised concerns regarding safety, traffic, noise, dimin-ished property values and general aesthetics.

The zoning board denied the application, stating that the nonprofit failed to prove that the shelter would

12012 WL 4009102 (N.J. Super. Ct. App. Div. Sept. 13, 2012).2Id. at *5.3Id. at *2.4Id.


not be a substantial detriment to the public good. The board stated that a shelter in a residential area should not exceed 15 residents, while the project sought to serve 12 families. The board also found that the project was “akin to a hotel or motel” and was accompanied by traffic and security concerns.5

Trial Court’s Decision

The nonprofit filed a complaint in state court challeng-ing the board’s denial of its application. The trial judge held that the proposed use as a domestic violence shelter was “in the upper category of beneficial uses,” and that the board was required to identify the detrimental effect that would result from the project.6 Because the board failed to properly weigh “the positive and negative crite-ria,” the court reversed the denial and directed the board to identify reasonable conditions that could be imposed in order to allow the proposed shelter to proceed.7

After the trial court’s opinion, the nonprofit revised its proposal and resubmitted it to the board. In response to safety concerns, the nonprofit added a perimeter fence. However, the nonprofit refused to reduce the width of the building in order to implement the required 50-foot buffer. In response, the zoning board imposed several conditions that the nonprofit would be required to meet before the board would approve the shelter. One of the conditions required the nonprofit to submit revised plans reducing the shelter width by 21 feet and providing the 50-foot buffer. The shelter again filed a state court com-plaint to challenge the board’s decision, and a trial court held that the board’s requirement of a 50-foot buffer was unreasonable. The board appealed the trial court’s deci-sion, arguing that its refusal to approve the project was not arbitrary.

The Appellate Court’s Decision

The appellate court first examined whether the non-profit established “special reasons” for receiving a vari-ance. The court noted that a domestic violence shelter, by its nature, is considered “inherently beneficial.” It cited a New Jersey statute requiring municipalities to treat “com-munity shelters for victims of domestic violence” as single- family dwelling units that are permitted in residential areas.8 The court acknowledged that the statute’s defini-tion of a community shelter is limited to shelters provid-ing services to 15 people or fewer. However, despite the size of the proposed shelter, the court found that the pub-lic interest made the shelter compelling and beneficial, justifying a variance from the 50-foot buffer requirement.

5Id.6Id. at *3.7Id.8n.J. stat. ann. § 40:55D-66.1 (West 2012).

The appellate court next examined the potential det-rimental effects of granting the variance. It found that in denying the variance, the zoning board ignored the sig-nificant community need that the shelter would serve. Specifically, the nonprofit’s director stated that existing shelters were turning away almost twice as many fami-lies as they were able to serve. Further, the zoning board ignored the residential design of the shelter and the fact that the zone at issue already included a variety of com-mercial structures. The court also noted that the proposed structure was actually smaller than what was permitted in the zone, and that it blended aspects of commercial and residential uses. Additionally, no expert testimony sup-ported the board’s concerns that the shelter would result in increased traffic and noise.

In addressing the shelter’s failure to conform to the 50-foot buffer requirement, the court noted that the nonprofit tried to address this shortcoming by using enhanced landscaping, fenced screens, and locating the delivery area to the corner of the property farthest away from the residential zone. As a result, the court found no evidence of a negative impact that would arise from granting an exception to the buffer requirement. Accord-ingly, the court found that the board’s denial of the zon-ing variance was arbitrary and unreasonable, and that the trial court correctly granted the variance after finding no substantial detrimental effect.

Conclusion

The court’s opinion helps address the common mis-conception that domestic violence shelters may somehow disrupt the character of residential neighborhoods, or that shelters are akin to hotels or motels. The decision also demonstrates that, in considering a plan to build a shel-ter, a zoning board’s or community members’ general-ized concerns regarding traffic, noise, or security should not automatically outweigh the vital public purpose that domestic violence shelters serve. n


Recent CasesThe following are brief summaries of recently

reported federal and state cases that should be of interest to housing advocates. Copies of these opinions may be obtained from sources such as the cited reporter, Westlaw, Lexis, Google Scholar,1 FindLaw,2 or, in some instances, the court’s website. NHLP does not archive copies of these cases.

Public Housing: Grievance Hearings; Extra Charges

Bennington Hous. Auth. v. Lake, __A.3d__, 2012 WL 4748088 (Vt. 2012). A public housing agency (PHA) appealed the dismissal of two eviction actions involving public hous-ing tenants, as well as the trial court’s grant of summary judgment to the tenants on two of their counterclaims. The first claim alleged that the PHA failed to properly advise the tenants of their right to request a grievance hearing when it billed them for repairs and fines. The sec-ond claim alleged that the PHA’s policy of fining tenants for leaving their windows open in the winter was pro-hibited under federal regulations. Upon review, the state supreme court held that the PHA violated federal regula-tions by failing to provide sufficient notice of the grievance procedure in its lease termination notices and in its bills for repair costs. The court rejected the PHA’s claim that it fulfilled its notice obligations simply by having a griev-ance procedure in place, referencing the procedure in the tenant’s lease and providing a copy of the procedure with the lease. The court noted that the PHA could have simply and directly stated that tenants have a right to a grievance hearing, but instead it made a circuitous and confusing reference to the grievance procedure that failed to notify tenants of their rights. Additionally, the court held that federal law prohibited the PHA’s window-fine policy. Fed-eral law permits PHAs to charge tenants for excess utility consumption attributable to resident-owned appliances or optional functions of PHA-furnished equipment. The court found that “windows” are neither appliances nor PHA-furnished equipment. Therefore, the supreme court affirmed the trial court’s grant of summary judgment on the tenants’ counterclaims and dismissal of the PHA’s eviction actions.

Public Housing: Adequacy of Eviction Notice

Major v. Hous. Auth. of the City of Greenville, 2012 WL 4479090 (D.S.C. Sept. 28, 2012). A public housing tenant filed a 42 U.S.C. § 1983 action against a public housing

1scholar.google.com. 2www.findlaw.com.

agency (PHA) for violating his due process rights after he was evicted for failure to pay rent. The tenant alleged that he received inadequate notice of eviction proceed-ings because all of the eviction notices that the PHA sent to his public housing unit came back to the PHA as undeliverable. The court found that even though the tenant alleged that he did not receive the notices, all that is required is that the notice be reasonably calculated to inform the tenant of the lease termination. Because the only address the PHA had on file for the tenant was his public housing unit, the notices were sent in a way that was reasonably calculated to let the tenant know his lease was being terminated. The court also noted that once the PHA determined that the tenant’s apartment appeared to be abandoned, the PHA made several attempts to serve the tenant with notice of the ejectment proceeding. Addi-tionally, the court found that the tenant’s lease provided notice to him that eviction proceedings could begin if he failed to pay rent. Accordingly, the court found that the tenant was afforded due process in his eviction proceed-ings and dismissed the tenant’s claims.

Public Housing: Qualified Immunity

Ford v. Donovan, __F. Supp. 2d__, 2012 WL 4076133 (D.D.C. 2012). A tenant of a public housing development owned by the District of Columbia Housing Authority (DCHA) filed a pro se action against eight DCHA officials alleging improprieties relating to the resident council, particularly the election process for council president. Several officials filed a motion for judgment on the pleadings, claiming qualified immunity, which the court granted. The court first examined the tenant’s due process claim, and found that the tenant had not articulated a cognizable property interest in the office of council president. Further, the ten-ant failed to establish a due process violation, because the officials’ failures to respond to the tenant’s complaints regarding the council election did not rise to the level of a constitutional violation. The court next examined the tenant’s claims that the officials violated HUD regula-tions. The court noted that it is not clear whether a vio-lation of HUD regulations can be the basis of a Section 1983 claim. However, for purposes of ruling on DCHA’s motion, the court assumed, without deciding, that the regulations could create rights enforceable under Section 1983. Despite this, the court found that the tenant failed to make particularized allegations asserting actual and specific regulatory violations, and found that the officials were entitled to qualified immunity on the regulatory claims. The resident’s official-capacity claim also failed. Such a claim must demonstrate that a “policy or custom” caused constitutional injury. However, the tenant only alleged that the officials inadequately managed employ-ees, “not that DHCA has been deliberately indifferent to people’s constitutional rights or that it has mismanaged previous elections at [DHCA managed facilities].” Accord-


ingly, the court granted the officials’ motion for judgment on the pleadings.

Housing Choice Voucher Program: Evidentiary Requirements

Jamal v. Rice Cnty. Hous. & Redev. Auth., 2012 WL 4329006 (Minn. Ct. App. Sept. 24, 2012). In her application for assis-tance, a voucher tenant listed her nephew’s daughter as a minor household member, and the public housing agency (PHA) issued her a two-bedroom voucher based on this information. The PHA subsequently received informa-tion that the daughter was not living with the voucher tenant and instead was living with her father. The PHA terminated the voucher holder’s subsidy for failing to provide complete and accurate information. The tenant filed a state court action challenging the termination. The tenant argued that the PHA hearing officer’s deci-sion failed to reference any of the testimony supporting the tenant’s claim that the daughter lived with the tenant. The court rejected this argument, noting that the hearing officer explained why he chose to disregard the testimony of the tenants’ witnesses. The court further noted that it was within the hearing officer’s authority to make cred-ibility determinations regarding the testimony, which he did. The tenant also argued that the hearing officer based his decision substantially on unreliable hearsay evidence. The court rejected this argument, finding that the school records that the hearing officer relied on in establishing the daughter’s address were reliable. The court also noted that the hearing officer considered other evidence, includ-ing a letter confirming that the daughter was listed both on the tenant’s lease and on her father’s lease and testi-mony from witnesses saying that they saw no indication that a child lived in the tenant’s home. Accordingly, the court affirmed the termination decision.

Housing Choice Voucher Program: Due Process Requirements

Anderson v. Lowell Hous. Auth., 2012 WL 3965112 (D. Mass. Aug. 24, 2012). A voucher tenant filed an action in federal court after a public housing agency (PHA) terminated her voucher. The PHA filed a motion for summary judgment. The PHA terminated the tenant based on allegations that she had allowed her landlord, an unauthorized occupant, to reside in her unit in violation of the PHA’s guest policy. The termination was based in part on a police report that the tenant gave to her case worker after the tenant told the case worker that her landlord had moved in, she could not get him out, and she wanted to move to another unit. The police report, which stated that the landlord lived in the unit, was filed after an incident where the landlord allegedly damaged the tenant’s personal possessions and pushed and shoved her. At the termination hearing, the

tenant alleged that the landlord was violent, and she was fearful that he would remove her belongings or lock her out of the home if she reported his conduct to the PHA. Her attorney also requested a reasonable accommoda-tion and presented evidence that the tenant suffered from post-traumatic stress disorder (PTSD) from a prior abusive relationship, which made it difficult for her to confront the landlord and ask him to leave. The tenant challenged the termination on grounds that the PHA failed to com-ply with due process requirements and violated the Fair Housing Act (FHA) by failing to provide a reasonable accommodation. The tenant first argued that the voucher termination notice was insufficient because it failed to pro-vide her with details necessary to prepare a defense. The court rejected this argument, finding that the notice was sufficient because it recited the obligation that the tenant allegedly violated, stated the relevant allegations (that her landlord had been residing at the apartment), and identi-fied a source of the allegations (a police report). The court found that neither due process nor the voucher regulations require a PHA “to list on the termination notice every source of evidence to be presented at the termination hearing where the notice adequately describes the alleged facts on which the proposed decision was based.” The ten-ant next argued that the hearing officer was not impar-tial because she oversaw the PHA’s voucher program in a supervisory capacity, and because she conducted a pre-hearing investigation by consulting with PHA staff famil-iar with the termination. The court rejected this argument, finding neither due process nor HUD regulations prohibit the supervisor of the original decisionmaker from serv-ing as the decisionmaker at the termination hearing. The court also found that due process does not preclude a PHA’s use of a decisionmaker who has inquired about the grounds for termination prior to a hearing on the termina-tion. The tenant next challenged the adequacy of the writ-ten hearing decision. The decision stated that the reason for termination was that the tenant allowed her landlord to reside with her, and that the tenant was not allowed to have unauthorized persons living with her. The court found that this sufficiently explained how the determi-nation was made in accordance with the voucher regula-tions. However, the court found that the written decision raised an additional ground that was not adduced at the hearing. The court noted that the hearing officer relied on research that she conducted after the hearing regard-ing allegations that the tenant fraudulently registered her car in another jurisdiction. The court found that the post-hearing investigation contributed to the hearing officer’s termination decision. Because the tenant was never given an opportunity to respond to the investigation, the court granted the tenant summary judgment on her due process claim challenging the written hearing decision. Finally, the tenant argued that the PHA denied her a reasonable accommodation in violation of the FHA. The court found that the tenant failed to establish that she had a disability


for purposes of the FHA, because “she did not describe a substantial limit to any major life activity.” Ultimately, the court granted in part and denied in part the PHA’s motion for summary judgment, and ordered the PHA to conduct a new termination hearing before a hearing officer who was not a defendant in the action.

Housing Choice Voucher Program: Refusal to Accept Voucher and Economic Accommodation

Murphy v. Fullbright, 2012 WL 4754730 (S.D. Cal. Oct. 4, 2012). A disabled Section 8 voucher holder filed a federal court action against a real estate broker for violations of the Fair Housing Act (FHA) and various state laws. The broker filed a motion to strike under Federal Rule of Civil Procedure 12(f). The voucher holder alleged that in refus-ing to rent an apartment to her, the broker stated that she believed that most people receiving Section 8 vouchers were disabled and that she did not want to rent to any-one who had “a mental impairment or emotional prob-lems.” She also alleged that the broker violated the FHA and state law by establishing a policy against accepting vouchers and by failing to reasonably accommodate her. The broker sought to strike the paragraphs from the com-plaint regarding her alleged refusal to accept the plaintiff’s Section 8 voucher. The broker argued that her refusal to accept the vouchers presented a purely legal issue that could be resolved through a motion to strike. The court noted that the Ninth Circuit’s decision in Giebeler v. M & B Associates, 343 F.3d 1143 (9th Cir. 2003), expressly allows courts to examine economic accommodations under the FHA. The court also noted that Rule 12(f) motions are dis-favored. Accordingly the court found that the motion to strike was inappropriate to resolve the dispute even if the requested economic accommodation was unreasonable under the FHA.

Housing Choice Voucher Program: Housing Quality Standards

Landico Realty, Inc. v. Dep’t of Cmty. Affairs, 2012 WL 3930381 (N.J. Super. Ct. App. Div. 2012 Sept. 11, 2012). A voucher landlord filed an action against a public housing agency (PHA), seeking to recover rental assistance pay-ments for a three-month period. The trial court dismissed the landlord’s action, and he appealed. The landlord had entered into a housing assistance payment (HAP) con-tract with the PHA, which required him to maintain the voucher holder tenant’s unit in accordance with federal housing quality standards (HQS). The contract stated that if the landlord failed to maintain the unit according to HQS, the PHA could terminate HAP payments. The PHA conducted inspections of the voucher holder’s unit that revealed HQS violations. The landlord corrected some violations, but not others, so the PHA suspended HAP

payments. The landlord stated that he had not received notice of the violations, but the trial court noted that the landlord’s testimony was “confused” and his “recol-lection was seriously flawed.” Accordingly, the court of appeal found no reason to disturb the lower court’s find-ings because they were supported by credible evidence.

Veterans Affairs Supportive Housing Program: Jurisdiction

Bluestein v. Levenson, 2012 WL 4472015 (D.N.H. Sept 26, 2012). A veteran was a participant in the Veterans Affairs Supportive Housing (VASH) program, which limits eli-gibility to veterans who are willing to engage in clinical case management. The veteran received a notice from VA officials stating that his participation in VASH would be terminated for failure to comply with the case manage-ment requirement. The veteran filed a federal court action challenging the termination. The VA filed a motion to dismiss, arguing that under federal law, judicial review of a veteran’s entitlement to benefits may be had only by appealing to the Board of Veterans’ Appeals. The court agreed, finding that all of the veteran’s claims arose out of the VA’s decision to terminate him from the VASH pro-gram or the VA’s insistence that he pursue case manage-ment services. Accordingly, the court granted the VA’s motion to dismiss.

Section 221(d)(3) and Section 236: Mortgage Prepayment

Anaheim Gardens v. United States, __ Fed.Cl.__, 2012 WL 4461479 (Fed. Cl. Sept. 26, 2012). Owners participating in the Section 221(d)(3) and Section 236 programs sought to prepay their government-insured mortgages, thereby terminating affordability restrictions for their develop-ments. The issue before the court was whether the own-ers’ takings claims were ripe. The government moved for summary judgment, arguing that the owners had failed to exhaust administrative remedies because they failed to seek prepayment approval from the Department of Housing and Urban Development (HUD). The owners also moved for summary judgment, arguing that their requests to prepay would have been futile because they knew that they could not meet the prepayment condi-tions. The court denied summary judgment as to both parties, finding that there was a genuine issue of material fact as to whether the owners could satisfy the prepay-ment criteria contained in the preservation statutes.

Section 221(d)(3) and Section 236: Mortgage Prepayment

Anaheim Gardens v. United States, __Fed. Cl.__, 2012 WL 4458645 (Fed. Cl. Sept. 26, 2012). Owners of properties with


mortgages insured by the Department of Housing and Urban Development (HUD) filed an action alleging a tak-ing of their contractual right to prepay the mortgages. The government filed a motion for summary judgment, argu-ing that the owners lacked any contractual right to prepay at the time of the alleged taking. The court noted that as to five of the properties at issue, it was undisputed that the deeds of trust and mortgage notes did not provide the owners a contractual right to prepay the mortgages with-out HUD’s consent. Accordingly, the court granted the government’s motion for summary judgment as to these five properties. However, with regard to a sixth property, the court found that pursuant to the mortgage note, the owner was contractually entitled to prepayment, and denied the government’s motion for summary judgment.

Section 811: Extension of Recertification Deadline as a Reasonable Accommodation

Robbins v. Conn. Inst. for the Blind, 2012 WL 3940133 (D. Conn. Sept. 10, 2012). A blind tenant filed an action alleg-ing that the owner of a Section 811 development discrimi-nated against him on the basis of disability in violation of the Fair Housing Act (FHA) and Section 504 of the Reha-bilitation Act. Both parties moved for summary judgment. The tenant alleged that the owner refused to grant his rea-sonable accommodation request for an extension of time to complete his annual income recertification. The tenant requested verbal notification of the recertification process, but the owner sent only written information regarding the tenant’s upcoming recertification. The owner issued the tenant two notices to quit, one stating that the tenant had been verbally abusive toward his roommate, and a second notice stating that the tenant had failed to recer-tify. The court found that the tenant established a prima facie case of failure to make a reasonable accommodation. The tenant showed that an extension of time was neces-sary because the owner failed to send the recertification notices in an accessible format. Additionally, the tenant alleged that the owner had given another blind tenant extra time to recertify, showing that the requested accom-modation was feasible. However, the court did not grant summary judgment to the tenant because the owner alleged that the tenant was a direct threat to the health and safety of other tenants. The court found disputed facts regarding whether the owner’s allegations regard-ing the tenant’s behavior were a post-hoc rationalization for the termination of his tenancy, due to the conflicting reasons for filing the notice to quit. Accordingly, the court denied summary judgment to both parties.

Fair Housing Act: Coverage of Emergency Shelters; Disparate Impact Based on Race

Boykin v. Gray, __F. Supp. 2d__, 2012 WL 4713012 (D.D.C.

Oct. 4, 2012). Former residents of La Casa, an emergency shelter for homeless individuals, filed an action against the District of Columbia after the District closed the shel-ter. The District said that La Casa’s closure was part of its efforts to expand its permanent supportive housing pro-gram. However, the residents argued that the District used the permanent supportive housing program as an excuse for closing shelters in predominantly white areas. The resi-dents filed an FHA action alleging that the District system-atically removed disabled, indigent, and predominantly minority individuals from areas inhabited by “affluent, white populations” and placed these individuals in poorer neighborhoods. The District argued that low-barrier emer-gency shelters such as La Casa are not “dwellings” cov-ered by the FHA, and that the residents’ claims should be dismissed. The District argued that low-barrier shelters constitute “transient” housing similar to hotels. However, the court noted that under a local ordinance, low-barrier facilities offered shelter without time limits. The court found that this undermined the District’s argument that La Casa was not intended for long-term stay. The court further noted that the residents attested to their regular stay at La Casa. The District argued that other courts have held that emergency shelters are not “dwellings” under the FHA. However, the court noted that the District only cited two decisions, and only one of those courts conclu-sively held that the FHA did not apply to the emergency shelter at issue. Additionally, the court noted that several other courts have applied the FHA to homeless shelters. The court next examined the plausibility of residents’ dis-parate treatment and disparate impact claims. Regarding the disparate treatment claims, the court found that while evidence showed that all of the plaintiffs were African American or Hispanic, this demographic information, standing alone, failed to supply evidence of discrimina-tory intent. Regarding the disparate impact claims, the D.C. Circuit has yet to decide whether disparate impact claims are cognizable under the FHA, but as noted by the court, every other circuit has concluded that they are. The court found that the residents alleged sufficient facts to survive a motion to dismiss. Specifically, the residents alleged that the city’s actions had the effect of closing shel-ters in predominantly white areas and concentrating the predominantly minority homeless population into the areas of the city with the highest minority populations. Accordingly, the court denied the District’s motion to dis-miss as to the disparate impact claim.

Fair Housing Act: Qualified Immunity; Discrimination Against Sober Homes

Safe Haven Sober Houses, LLC. v. Good, 2012 WL 3930121 (Mass. App. Ct. Sept. 11, 2012). Owners of sober homes filed a Fair Housing Act (FHA) action against the commis-sioner of Boston’s inspection services department, alleg-ing that the department interfered with operation of the


Recent Housing-Related Regulations and Notices

The following are significant affordable housing-related regulations and notices recently issued by the Department of Housing and Urban Development (HUD), the Department of Agriculture (USDA’s Rural Hous-ing Service/Rural Development (RD)), Federal Housing Finance Agency (FHFA), Federal Emergency Management Agency (FEMA) and the Department of Veterans Affairs. For the most part, the summaries are taken directly from the summary of the regulation in the Federal Register or each notice’s introductory paragraphs.

Copies of the cited documents may be secured from various sources, including the Government Printing Office’s website,1 bound volumes of the Federal Register, HUD Clips,2 HUD,3 and USDA’s Rural Development web-site.4

Federal Housing Finance Agency Final Rule

77 Fed. Reg. 67,535-67,557 (Nov. 13, 2012)2012-2014 Enterprise Housing Goals

Summary: The Federal Housing Enterprises Finan-cial Safety and Soundness Act of 1992 (Safety and Sound-ness Act) requires the Federal Housing Finance Agency (FHFA) to establish annual housing goals for mortgages purchased by the Federal National Mortgage Associa-tion (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). FHFA previously established housing goals for Fannie Mae and Freddie Mac through 2011. This final rule establishes new levels for the housing goals for 2012 through 2014, consistent with the require-ments of the Safety and Soundness Act.

Effective Date: December 13, 2012.

Federal Housing Finance Agency Proposed Rule

77 Fed. Reg. 66,566 (Nov. 6, 2012)Stress Testing of Regulated Entities

Summary: On October 5, 2012, the Federal Housing Finance Agency (FHFA) published in the Federal Regis-ter a notice of proposed rulemaking for public comment concerning stress testing of the Federal National Mort-gage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and 12 federal home loan banks as required by Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protec-tion Act. The comment period was to end on November 4,

1http://www.gpoaccess.gov/index.html.2http://www.hud.gov/hudclips.3To order notices and handbooks from HUD, call (800) 767-7468.4http://www.rurdev.usda.gov/Home.html.

homes. A lower court denied the commissioner’s motion for summary judgment, and the commissioner appealed, asserting that he was entitled to qualified immunity. The appellate court examined whether a reasonable similarly situated official would have understood that his conduct violated clearly established law. The court found evidence suggesting that the commissioner intended to discriminate against the operation of sober homes, including the com-missioner’s awareness of community pressure to close the homes, the fact that a reporter and photographer accompa-nied inspectors during the sober home inspections and a letter in which the commissioner credited his department with “bringing about a reduction in the number of sober homes.” The court also noted that FHA regulations and case law have clearly established that recovering addicts are a legally protected class of individuals, and that inten-tional discrimination against group housing for individu-als with disabilities is prohibited. Accordingly, the court held that a reasonable official similarly situated to the com-missioner would have understood that his actions violated the FHA, and it affirmed the denial of the commissioner’s motion for summary judgment.

Fair Housing Act: Standing

Rocky Top, LLC. v. City of South Amboy, 2012 WL 3930371 (N.J. Super. Ct. App. Div. Sept. 11, 2012). A developer filed a state court action alleging that a city violated the Fair Housing Act (FHA) by refusing to allow him to lease his property for use as a drug and alcohol rehabilitation facil-ity. On appeal, the appellate court held that the lower court erred in finding that the owner lacked standing, stating that developers can be aggrieved persons under the FHA. The appellate court remanded the FHA claim to the trial court in order to determine whether the pro-posed rehabilitation facility would constitute a “dwell-ing” for purposes of the FHA. n

Housing Law Bulletin • Volume 426

2012. This document extends the comment period to December 4, 2012.

Dated: October 31, 21012.

HUD Federal Register Notices

77 Fed. Reg. 61,157-61,227 (Oct. 5, 2012)Final Fair Market Rents for the Housing Choice Voucher Program and Moderate Rehabilitation Single Room Occupancy Program Fiscal Year 2013

Summary: This notice publishes the Fair Market Rents (FMRs) for the Housing Choice Voucher, the mod-erate rehabilitation, the project-based voucher, and any other programs requiring their use. The notice provides final fiscal year (FY) 2013 FMRs for all areas that reflect the estimated 40th and 50th percentile rent levels trended to April 1, 2013. The FY 2013 FMRs are based on 2006-2010 data collected by the American Community Survey (ACS). The final FY 2013 FMR areas are based on current Office of Management and Budget metropolitan area defi-nitions and include Department of Housing and Urban Development (HUD) modifications that were first used in the determination of FY 2006 FMR areas. Changes to the OMB metropolitan area definitions through December 2009 are incorporated; there have been no further changes to metropolitan area definitions. OMB has announced that new metropolitan area definitions will be released in 2013. HUD will incorporate these changes during the process to calculate proposed FMRs following the release of the new definitions.

Effective Date: October 1, 2012.

77 Fed. Reg. 60,712-60,714 (Oct. 4, 2012)Request for Information on Adopting Smoke-Free Policies in PHAs and Multifamily Housing

Summary: This notice seeks information and invites public comment regarding how the Department of Hous-ing and Urban Development (HUD) can best continue to support the implementation of smoke-free policies for both public housing and multifamily housing. In this regard, HUD is seeking information from the general public and stakeholders, including resident councils, advocacy groups, and housing providers, directly impacted by or involved with the implementation of smoke-free policies. Specifically, HUD is seeking information on best practices from housing providers who have implemented smoke-free policies and methods for supporting residents and housing providers in transitioning to smoke-free housing. Additionally, this notice requests input from housing pro-viders that have decided not to implement a smoke-free policy and those impacted by that decision. This infor-mation will assist HUD to develop and disseminate addi-tional guidance and resources to support public housing agencies and owners who wish to implement smoke-free policies.

Dated: September 26, 2012.

77 Fed. Reg. 59,629-59,639 (Sept. 28, 2012)Statutorily Mandated Designation of Difficult Development Areas for 2013

Summary: This notice designates Difficult Devel-opment Areas (DDAs) for purposes of the Low-Income Housing Tax Credit (LIHTC) under Section 42 of the Inter-nal Revenue Code of 1986. The Department of Housing and Urban Development (HUD) makes DDA designations annually. In addition to announcing the 2013 DDA desig-nations, this notice responds to public comment received in response to the proposed use of Small Area Fair Mar-ket Rents (FMRs) for designating DDAs. After consider-ing the public comments, HUD has decided to delay by one year the adoption of small area DDAs. The 2014 DDAs will be published in a separate notice at a later date after further consideration of the Small DDA concept.

Dated: September 24, 2012.

77 Fed. Reg. 59,628-59,629 (Sept. 28, 2012)Rental Assistance Demonstration: Processing of Conversion Requests Submitted Under the Partial Rental Assistance Demonstration Notice

Summary: On March 8, 2012, at 77 Federal Register 14,029, the Department of Housing and Urban Develop-ment (HUD) published a notice announcing the Rental Assistance Demonstration (RAD) program and the pub-lication of PIH Notice 2012-18. RAD provides the oppor-tunity to test the conversion of public housing and other HUD-assisted properties to long-term, project-based Sec-tion 8 rental assistance. PIH Notice 2012-18 announced partial implementation of the demonstration under the second component of RAD for properties assisted through the Rent Supplement and Rental Assistance Payment (RAP) programs. This notice provides additional instruc-tion for RAD program participants that submitted con-version requests under the partial implementation notice.

Effective Date: September 28, 2012.

HUD Notices

Notice PIH 2012-42 (HA) (Oct. 25, 2012)Housing Choice Voucher Family Moves with Continued Assistance

Summary: This notice provides guidance on public housing agency (PHA) responsibilities related to family moves with continued assistance both within a PHA’s jurisdiction and portability moves, and restates Notice PIH 2011-3, which has expired. Notwithstanding any other provision of this notice, when a request to move is due to a disability of a family member, even if a family might otherwise be restricted from moving (e.g., under a “one move per year” policy or because of insufficient funding), PHAs must consider requests for reasonable accommodations that are necessary for a qualified indi-vidual with a disability to benefit from the program. In cases where the limitation on portability is a discretion-


ary policy of the PHA, the PHA must grant the accommo-dation unless doing so would impose an undue financial and administrative burden. In cases where the limita-tion on portability is compelled by regulation, the PHA must first assess whether the requested accommodation would impose an undue financial and administrative burden. If the answer to this question is “no,” the PHA must forward the request to HUD so the relevant regula-tory provision can be waived by the Assistant Secretary. In cases where a PHA believes it has insufficient funding to allow a move under this notice, a PHA must nonethe-less consider a request for a reasonable accommodation, but may, where the individual facts warrant, determine that allowing the move would pose an undue financial and administrative burden to the PHA. Such determina-tion is subject to review by the local Department of Hous-ing and Urban Development (HUD) office, as well as by the HUD Office of Fair Housing and Equal Opportunity. With respect to extensions of voucher search time, both receiving and initial PHAs should consider that individu-als with disabilities and families that include a member with a disability may require additional time to locate a suitable unit. Additionally, a PHA must not establish a policy that restricts families from moving only at the time of the families’ annual reexamination. HUD regulations state that PHAs may establish policies on two specific issues: (1) prohibiting moves during the initial lease term and; (2) a policy that may prohibit more than one move by the family during any one-year period. PHAs cannot establish more restrictive criteria than allowed by current regulatory language.

Notice H 2012-21 (Oct. 17, 2012)Implementation of Tenant Participation Requirements

Summary: The Department of Housing and Urban Development’s (HUD) regulations governing tenant par-ticipation in multifamily housing projects are found at 24 C.F.R. Part 245. This notice addresses available sanctions and the use of civil money penalties as tools to enforce HUD’s commitment to tenant participation. A tenant or tenant organization may file a written complaint with the local HUD office alleging a consistent pattern of viola-tions of HUD program requirements, or a single violation that causes serious injury to the public or tenants. This notice also contains a link to a brochure titled “Resident Rights & Responsibilities,” which addresses tenant rights to organize. Owners are required to provide the head of household with a copy of this brochure at move-in and annually at recertification.

Notice PIH 2012-40 (HA) (Sept. 28, 2012)Assisted Living Units in the Housing Choice Voucher (HCV) Program

Summary: This notice applies to all public housing agencies (PHAs) that administer the Housing Choice Voucher Program for families that live in, or wish to

live in, assisted living facilities. This notice describes the Department of Housing and Urban Development’s (HUD) implementation of Section 302 of the Section 202 Sup-portive Housing for the Elderly Act of 2010. Section 302 amends Section 8(o)(18)(B) of the United States Housing Act of 1937 (42 U.S.C. § 1437f(o)(18)(B)(iii)) to allow a PHA to require a family to pay more than 40% of its monthly adjusted income for a unit in an assisted living facility if the amount or percentage is reasonable given the services and amenities provided by the assisted living. A PHA may submit a request for a waiver of 24 C.F.R. § 982.508 and § 982.305(a)(5) through the waiver process under 24 C.F.R. § 5.110 to require a family to pay more than 40% of its monthly adjusted income for an assisted unit, in order to allow the family to lease an assisted living unit that would otherwise be disapproved because the family share would exceed 40% of monthly adjusted income. HUD will review such requests on a case-by-case basis and may grant the waiver if HUD determines the request demonstrates good cause. The PHA must submit with its waiver request verification that the unit meets the definition of assisted living set forth in this notice and a description of the services and amenities provided that would warrant a higher family share. Generally the Department would expect that such requests would not result in the family share exceeding 70% of the family’s adjusted income.

Rural Housing Service Unnumbered Letters

Results of the 2012 Multi-Family Housing Annual Fair Housing Occupancy Report (Aug. 1, 2012)

Summary: The 2012 Rural Development Multi-Family Housing (MFH) Annual Occupancy Report includes both rural rental housing Section 515 and farm labor housing (FLH) Section 514 demographics. These results are based on April 2012 data from the Multi-Family Information System (MFIS). This report presents data from the past three years, comparing information from year 2010 to 2012. Highlights of this year’s data include:

The total number of rental properties has decreased by 1.42% since last year or a decrease of 203 Section 515 properties and a decrease of 18 FLH properties.

The current population shows an overall reduction in the white population. The breakdown now consists of 62.98% white, non-Hispanic households; 18.45% black non-Hispanic households; 10.65% Hispanic households; 0.52% Asian Pacific Islander households; 1.69% American Indian/Alaskan Native households; and 0.71% multiracial households.

There was a slight decrease in very-low income house-holds, which represent 93.87% of all households.

Average household incomes are up to $11,628 from $11,425 (a 1.78% increase).

Female-headed households continue to represent the majority of households (71.6%). n


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