Summary
In English Woods, the court cited to Concerned Tenants,Tinsley, Henry Horner, Gomez, and Velez — all cases decided after the Edwards case and the 1988 amendment, but before the 1998 amendment — for the proposition that "the law is clear that Plaintiff can pursue a cause of action for violation of 42 U.S.C. § 1437p."
Summary of this case from Arroyo Vista Tenants Association v. City of DublinOpinion
Civil Case No. 1:03-cv-186.
December 17, 2004
MEMORANDUM OF OPINION UPON TRIAL WITH FINDINGS OF FACT AND CONCLUSIONS OF LAW GRANTING JUDGMENT AGAINST PLAINTIFF
This civil action for equitable relief came on for trial to the Court for eight days. Plaintiff presented the testimony of eleven witnesses, and Defendants presented the testimony of ten witnesses. Five three-inch binders of documentary exhibits were admitted into evidence. Upon careful review, the Court finds, under the facts and law as detailed infra, that Plaintiff did not prove at trial that Defendants have acted unlawfully, and, accordingly, judgment shall be entered against the Plaintiff on its complaint.
STATEMENT OF THE CASE
Plaintiff English Woods Civic Association/Resident Community Council ("Plaintiff") is a membership organization of the residents of the English Woods public housing development ("English Woods") which is owned and managed by Defendant Cincinnati Metropolitan Housing Authority ("CMHA").
Plaintiff brings this action seeking declaratory and injunctive relief to prevent CMHA from demolishing or abandoning English Woods as a residential site. CMHA responds that it is not demolishing English Woods, but, instead, is engaged in "occupancy consolidation" as specifically permitted by law (citing 42 U.S.C. § 1437p(e)).
This is a case of first impression in the federal courts.
Plaintiff further alleges that CMHA's conduct is unlawful because it reflects a racially discriminatory purpose or effect, and/or intentional racial discrimination, in violation of: (1) the Fair Housing Act, 42 U.S.C. §§ 3604 and 3608(d); (2) Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d; and (3) the due process and equal protection clauses of the Fourteenth Amendment to the United States Constitution. Defendants vehemently deny the Plaintiff's allegations of racial discrimination.
FINDINGS OF FACT
Plaintiff English Woods Civic Association/Resident Community Council ("Plaintiff") is an Ohio nonprofit corporation and a membership organization of the residents of the English Woods public housing development ("English Woods"). Plaintiff is also the Community Council of the English Woods Neighborhood recognized as such by the City of Cincinnati.
Defendant Cincinnati Metropolitan Housing Authority ("CMHA") is a public housing authority established under the laws of the State of Ohio (Ohio Rev. Code Ann. § 3735.27 et seq.). CMHA has the responsibility and authority to provide public housing in Hamilton County, Ohio. CMHA is the seventeenth largest public housing authority in the United States and has been frequently recognized by the United States Department of Housing and Urban Development ("HUD") as a "high performing agency."
Donald J. Troendle is a Defendant in his official capacity as the Executive Director of CMHA. He manages all aspects of CMHA's housing programs. CMHA is led by Troendle and an uncompensated five-member Board of Commissioners, two of whom are African-American. SAt present, CMHA serves nearly 13,000 families in Cincinnati and Hamilton County through the public housing and housing choice voucher programs.
The purpose of the public housing program is to provide decent, safe, sanitary and affordable housing for low-income households. The federal legislation creating the public housing program provides for federal financial subsidies to public housing authorities, such as CMHA, to assist in the development and operation of public housing.
As a public housing agency, CMHA receives funds from HUD each year pursuant to an annual contribution contract and pursuant to budgets that CMHA submits to HUD for approval each year. CMHA also receives separate funds from HUD under various programs for revitalization and modernization.
CMHA's annual Capital Fund Budget is allocated by HUD to maintain and update all properties in Cincinnati that CMHA owns and manages. The Capital Fund allocation from HUD had been substantially reduced each of the last several years, and is now down to approximately $12 million per year. Any significant use of that limited fund for one property reduces the amount available for the other properties.
CMHA owns approximately 5,500 dwelling units of public housing in Hamilton County, including English Woods.
CMHA built English Woods during 1940-1941 in the Western Hills area of Cincinnati, Ohio. English Woods proper consists of approximately 82 buildings. Each building is two stories in height. There are approximately 700 dwelling units, consisting of one, two and three-bedroom units, all with private entrances. The two and threebedroom units are within two-story townhouses units. CMHA also owns two public housing developments associated with English Woods proper: the Marquette Manor, a single high rise building, which has about 140 apartments for senior citizens, and is located in the center of English Woods proper; and the English Woods Addition, which has about 120 townhouse units for families, and is adjacent to English Woods proper.
In the 1980's and early 1990's, CMHA completed a series of modernization projects at English Woods. In 1994, English Woods was recognized as a model of public housing modernization by the National Association of Housing Redevelopment Officials.
By 1994, approximately 95% of the occupants of English Woods were African-American, and the percentage of African-American residents has remained approximately at that level to the present.
In 1999, CMHA prepared a Comprehensive Grant Program Updated Five Year Action Plan and Annual Statement for itself and HUD. This Report includes CMHA's own projections for the five years immediately following the year of the report, including projections about viability. In the report, CMHA stated that English Woods has long term Physical and Social Viability. CMHA also stated that Physical Improvements will result in structural/system soundness at a reasonable cost. CMHA stated the cost of necessary renovations to be $18,837.00 per dwelling unit.
However, English Woods was built more than 60 years ago, and despite having served the community well for many decades, English Woods has sustained enormous wear and degeneration over time.
Today, in December 2004, all of English Woods' most basic infrastructure needs are in need of replacement. The electrical systems and boiler systems are outdated and obsolete. The heating system needs complete replacement as does the roofing. Abatement of asbestos, lead-based paint, and mold is required. The work necessary inside the walls and ceilings means that nearly every aspect of the interior of the units would need replacement. There is virtually no aspect of English Woods that does not require outright replacement or major renovation, the cost of which is astronomical. Defendants' experts estimate the costs to be about 89 million dollars ($89,000,000.00); and plaintiff's experts admit a projected cost of 36 million dollars ($36,000,000.00).
In 2002, CMHA retained Gemini Architectural Services, Inc. to do an assessment of the Renovation Costs for English Woods using HUD's formulas for calculating the Total Development Costs and HUD's guidelines for preparing a Physical Needs Assessment. As a result of this assessment, Denise Ryan of Gemini estimated at trial that the cost of the complete renovation of English Woods would be $89,125,748, which comes to approximately $134,000 per unit.
Ryan's analysis entailed the methodology recommended by HUD and includes such cost items as architectural fees, contractors' profit, site development costs, environmental abatement costs and phasing costs. Plaintiff's expert's report did not include these expenses. Other than these differences, the reports agree that every major system at English Woods requires complete replacement except for the superstructure.
CMHA's environmental expert, Michele Paraniuk, examined the lead-based paint, asbestos and mold in several units and buildings. She reports that the cost of environmental remediation upon renovation would be $2,827,082. Plaintiff provided no contrary data.
By taking the total cost for a complete renovation as estimated by Ryan to be $89,125,748 and: (i) deducting her estimate for all environmental costs of $9,986,376; (ii) adding Paraniuk's estimate for all environmental costs of $2,827,082; (iii) deducting Ryan's estimate for adding a sprinkler system classified as optional of $3,374,570; and (iv) deducting 37% of the difference to remove contingency, architects', engineers' and contractors' overhead and profit attributable to net deductions, yielding $3,527,530; (v) all then adjusted by 5% per year for inflation over 2 years, Ryan's estimated cost for a total renovation, including the costs for items omitted by Plaintiff's experts, becomes $83,860,950.
This $83,860,950 is a highly credible and current estimate of the cost of a complete renovation of all of the residential buildings at English Woods proper, plus the cost of renovation of the other non-residential buildings on the site, site improvements, architectural and engineering fees, contractors' overhead and profit, construction contingency, and costs for phasing the project over more than one year. Allocating the cost among the 702 dwelling units, the total renovation cost per unit is $119,460.
The Court finds CMHA's estimate to be more credible that Plaintiff's because the former reflects a comprehensive needs assessment rather than simply a structural needs assessment.
Moreover, modern trends in public housing have yielded a great number of changes over the last several years. Principally, the concept of concentrated public housing developments has given way to new and different configurations, such as socalled "scattered sites" options. Scattered sites are individual homes and multi-family homes purchased by public housing authorities in neighborhoods, as opposed to multiple units contained within a single, concentrated public housing "project." Since 2001, CMHA has newly acquired more than 100 scattered sites for public housing.
Furthermore, under now-current programs like the Housing Choice Voucher Program, 24 C.F.R. Pt. 982 (2004) (formerly Section 8 of the Housing Act of 1937, 42 U.S.C. § 1437f), qualified residents can receive tenant-based assistance vouchers. This option permits citizens to acquire individual public housing units in various neighborhoods within Cincinnati and Hamilton County and relieves them of being limited to living in a concentrated public housing project.
With housing choice vouchers, an increasing number of residents are qualifying for and choosing to avail themselves of housing options outside of the traditional large public housing developments. A strong trend has developed where residents of centralized public housing are moving to voucher housing. Many public housing residents no longer wish to live in traditional family housing developments and do not like the stigma of living in a large project that suffers from high crime. As a result, across the country, large family developments suffer from substantially declining vacancy rates.
In 2000, CMHA instituted a Site-Based Waiting List. Thus, since July of 2000, applicants to CMHA for public housing have been able to choose where they would like to reside. Most choose a scattered site option or a housing choice voucher option, if eligible. Of those selecting a CMHA large family development as one of their top three choices, applicants chose English Woods at a significantly lower rate than the others: Millvale, Findlater Gardens, and Winton Terrace. These other large family developments are either newer or have been renovated recently.
Resident survey results, gathered in 2002, reveal that the residents of English Woods believe that there is a stigma associated with living there. Residents said that crime and the stigma associated with it were major problems. Many residents also reported that the buildings were in need of major repair. Today, most potential residents want larger rooms, washer/dryer hook ups, and modern electrical and plumbing conveniences.
The truth is that fewer and fewer people want to live at large family developments like English Woods. CMHA employees responsible for leasing and marketing English Woods proper have found it more and more difficult to attract new residents to English Woods since the Site-Based Waiting List was instituted in 2000.
During 1998 and 1999, English Woods had occupancy rates of more that 90%. By 2003, the occupancy rate had fallen to below 60%.
The marketability of English Woods proper is very low based upon the experience of the CMHA's leasing department as well as a 2004 Marketability Study performed by S. Huffman and Associates for CMHA. At trial, Huffman testified credibly that even with complete renovation to enlarge the rooms and add more amenities, English Woods would still be difficult to market due to its physical isolation.
By 2001, in view of the age of the buildings at English Woods, infrastructure needs, the difficulty in renting units, and the decline in CMHA's funding from HUD, CMHA undertook a comprehensive review of the conditions at English Woods and the possibility of obtaining HOPE VI funding from HUD for redevelopment of the site. This review involved exceedingly substantial consultation with English Woods residents.
In 1992, Congress passed a new public housing funding program called HOPE VI, an acronym for "Homeownership and Opportunity for People Everywhere." 42 U.S.C. § 14371 (note).
In 2001, CMHA held a series of meetings with the Plaintiff to discuss the possibility that CMHA would apply for HOPE VI program grants from HUD. CMHA hoped to obtain between twenty and thirty million dollars to demolish all buildings at English Woods proper, and, thereafter, build new construction at English Woods and at sites other than English Woods.
On January 25, 2002, after dozens of meetings and the exchange of between six and nine versions of a written agreement, CMHA and Plaintiff memorialized these plans in a Memorandum of Understanding ("MOU"). The MOU called for CMHA to seek funding from HUD to demolish English Woods proper, and, thereafter, to build new construction at English Woods and at sites other than English Woods.
Under the MOU, if the HOPE VI grants were obtained, English Woods residents who wanted to remain at English Woods would have the right to remain at or return to English Woods following the redevelopment. However, under the plan in the MOU, three or fewer families then at English Woods had sufficient income to purchase any of the homes to be built on the site. The Legal Aid attorney, Susan Watts, who assisted the Plaintiff in the negotiations for the MOU, recommended against acceptance of the MOU because it did not do enough for residents.
Unfortunately, in August 2002, CMHA decided not apply to HUD for HOPE VI funds to revitalize English Woods, as CMHA had originally intended, because the criteria for the award, published by HUD after the MOU was signed, rendered CMHA ineligible to receive an award. (This unexpected development ultimately led to the filing of this lawsuit.)
The Plaintiff did not dispute that CMHA was not eligible for the Hope VI grant. See Final Pre-Trial Order, Uncontroverted Fact No. 11 ("CMHA did not apply for the Hope VI Revitalization Grant for English Woods as it had intended, because the criteria for [the] award published by HUD after the MOU was signed rendered CMHA ineligible to receive an award."). The failure to apply for the HOPE VI grant, however, caused the Plaintiff to no longer trust CMHA.
Given the inability to submit a successful application for revitalization funding at that time, CMHA decided to proceed with an application for approval to demolish English Woods and an application for a HOPE VI — Demolition Grant.
In the fall of 2002, CMHA told Plaintiff and English Woods residents that CMHA would be applying to HUD for permission to demolish English Woods and that all residents would have to move.
CMHA told Plaintiff and the English Woods residents that CMHA intended to demolish English Woods and then attempt to get funding from the City of Cincinnati and/or HUD to build some of the public housing called for in the MOU. There was the possibility that if demolition occurred, CMHA could get funding in future years for revitalization of English Woods under the HOPE VI program.
In 2003, CMHA applied to HUD for permission to demolish English Woods.
The Plaintiff and its members actively campaigned against CMHA and its plan to get permission and funding from HUD to pay for demolishing English Woods. The Plaintiff and its members contacted the Mayor of Cincinnati, members of the City of Cincinnati Council, U.S. Congressman Steve Chabot, officials at U.S. Department of Housing and Urban Development, and the news media. The City of Cincinnati Council responded by adopting and publishing formal resolutions opposing the closing and demolition of English Woods. Residents of surrounding neighborhoods also protested against demolition, concerned that a large number of low-income residents would flood their neighborhoods by using vouchers for housing. At one point, 1,200 housing activists staged "a hit" by showing up unannounced on a weekend at the home of Mel Martinez, Secretary of HUD, to complain generally.
In October 2003, HUD denied CMHA's application to demolish English Woods.
HUD denied the application because it "was not developed in consultation with appropriate government officials" and would require "a consensus between CMHA and the relevant governmental and community leaders." Pl. Ex. 18. The law merely requires "consultation" — not "consensus." See 42 U.S.C. § 1437p(b).
As a result, CMHA developed and implemented an alternative plan: occupancy consolidation. Where significant vacancies persist throughout a development, "occupancy consolidation" is a process of relocating the remaining residents to units that are closer together, and closing off the vacant areas, so as to have a smaller, wellinhabited area. Consolidation may also involve relocating residents to other developments or housing.
Several key factors guided this planning: the high rate of vacancy, with more than 55% of the development empty in July of 2003; the outdated infrastructure, especially the boilers, electrical systems and plumbing; the high cost of maintaining all the buildings over 70 plus acres; vandalism and other crime occurring in the vacant areas; the difficulty of providing security over an extensive area where many buildings are vacant; the low marketability due to out-dated amenities and old-fashion "project" design features; and the lack of funding from HUD for revitalization. Based on all these factors, CMHA decided to consolidate the remaining occupants into fewer buildings in order to improve safety and provide services to the residents in a smaller area that was in somewhat better condition.
By the summer of 2003, CMHA began to consolidate occupancy at English Woods to address its high cost of maintenance, the generally poor condition of the buildings, low marketability, rising vacancy rate, vandalism and high crime rate. By closing some sections of English Woods, CMHA improved the overall conditions at English Woods by increasing CMHA's ability to provide safety and to maintain the occupied units and buildings.
One of the infrastructure features that specifically weighed heavily in favor of consolidation was the fact that a series of single boiler systems serves differing sets of numerous buildings at English Woods. When a boiler broke down, which happened frequently during winter months, every building served by that boiler would lose heat and hot water. Further, when only one of the buildings was occupied, CMHA would have to heat vacant units in order to heat the occupied units.
During the winter months, especially the winter of 2002-2003, disruption in heat and water had become a major problem. By increasing the occupancy in the less deteriorated buildings, CMHA improved the living conditions of the residents by reducing the loss of heat and water during the winter months and by increasing security in the smaller sized community. By closing many of the buildings at English Woods, CMHA has been able to offer more efficient services to the residents of English Wood and to improve the living conditions of the residents in the occupied buildings.
By closing some areas, CMHA is now focusing maintenance efforts on a smaller area and fewer buildings that are both in better condition and nearly full in occupancy. Security is less of a concern with a smaller, well-inhabited area. Consequently, CMHA has been able to improve overall conditions at English Woods and provide services more efficiently to residents.
CMHA had no feasible alternative to occupancy consolidation. No funds for revitalization or demolition had been granted by HUD, and CMHA did not possess sufficient capital money to cover the enormous cost of renovation. Maintaining the entire development, with large swaths of vacant units, was economically imprudent and was already resulting in major problems with winter heating. Not only did the entire infrastructure of plumbing, electrical and heating need replacement, but these new systems would have to be retrofitted into old structures at huge expense. Spending even half of the entire annual capital budget of about $12,000,000 on English Woods would barely scratch the surface of the work needed to renovate English Woods — and would deprive other housing developments in Cincinnati of sorely needed capital replacements and improvements. The only feasible option was to consolidate the residents at English Woods into the better buildings and then keep those buildings maintained, while offering better housing choices to those affected by the consolidation.
CMHA is not "evicting" residents by implementing occupancy consolidation. All those affected by the occupancy consolidation have been provided several options, including moving within English Woods proper, moving to Marquette Manor, moving to Sutter View (formerly English Woods Addition), utilizing a Section 8 voucher if eligible, or moving to other CMHA-owned property.
For purposes of occupancy consolidation, English Woods has been delineated into five areas. Areas 1 and 2 have already been vacated, and Areas 3 and 5 are currently undergoing occupancy consolidation.
After Areas 3 and 5 are closed, with 170 units remaining in Area 4, 140 units remaining in Marquette Manor (within English Woods proper), and 120 units remaining in the adjacent English Woods Addition (now known as Sutter View), the English Woods community will still be among CMHA's five largest developments.
CONCLUSIONS OF LAW
A. Plaintiff Enjoys Standing to Bring Its Complaint.Tenant groups, such as the Plaintiff, have standing to sue to protect rights under 42 U.S.C. § 1437p and other federal laws. Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982); Hunt v. Washington Apple Growers Comm'n, 432 U.S. 333 (1977); Resident Advisory Bd. v. Rizzo, 564 F.2d 126, 138 (3d Cir. 1977), cert. denied, 435 U.S. 908 (1978).
Since 1987, virtually all reported decisions have held that tenants do have a private cause of action. See, e.g., Velez v. Cisneros, 850 F. Supp. 1257, 1270 (E.D. Pa. 1994) ("There is a private right of action to enforce § 1437p"); Gomez v. Housing Auth. of City of El Paso, 805 F. Supp. 1363, 1367-1368 (W.D. Tex. 1992), aff'd, 20 F.3d 1169 (5th Cir.), cert. denied, 513 U.S. 873 (1994) ("Section 1437p . . . held to create privately enforceable federal rights"); Henry Horner Mothers Guild v. Chicago Hous. Auth., 780 F. Supp. 511, 514-15 (N.D. Ill. 1991) ("[T]here can be no doubt that Congress intended that § 1437p create enforceable rights"); Tinsley v. Kemp, 750 F. Supp. 1001, 1009 (W.D. Mo. 1990) ("[T]his court also finds a private right of action under Section 1437p"); Concerned Tenants Ass'n of Father Panik Village v. Pierce 685 F. Supp. 316, 320 (D. Conn. 1988) ("[T]he creation of a right is clear").
Thus, the law is clear that Plaintiff can pursue a cause of action for violation of 42 U.S.C. § 1437(p).
B. The Theory of De Facto Demolition.
HUD approval is required before a public housing project can be demolished. See 42 U.S.C. § 1437(p). Most expressly, HUD regulation 24 C.F.R. § 970.12 states that:
A PHA may not take any action to demolish or dispose of a public housing project or a portion of a public housing project without obtaining HUD approval under this part. Until such time as HUD approval may be obtained, the PHA shall continue to meet is ACC obligations to maintain and operate the property as housing for low-income families. This does not, however, mean that HUD approval under this part is required for planning activities, analysis, or consultations, such as project viability studies, comprehensive modernization planning or comprehensive occupancy planning.
In the mid-1990's, a line of cases arose in which tenants of large public housing developments brought suit against the public housing authority and/or HUD under a theory of de facto demolition. See Concerned Tenants Ass'n v. Pierce, 685 F. Supp. 316 (D. Conn. 1988); Tinsley v. Kemp, 750 F. Supp. 1001 (W.D. Mo. 1990); Henry Horner Mothers Guild v. Chicago Housing Authority, 780 F. Supp. 511 (N.D. Ill. 1991); Gomez v. Housing Authority of El Paso, 805 F. Supp. 1363 (W.D. Texas 1992) ; Velez v. Cisneros, 850 F.Supp. 1257 (E.D. Pa. 1994).
Under this theory, tenants claimed that as result of neglect, and by failing to maintain the property, the development had the effect of being demolished without HUD approval in violation of 42 U.S.C § 1437p. The facts alleged in these cases are entirely different than the evidence adduced in the present case.
In Concerned Tenants Ass'n v. Pierce, 685 F. Supp. 316 (D. Conn. 1998), plaintiffs alleged that the housing authority had allowed vacant units to become dangerous, indecent, unsanitary and completely uninhabitable. The facts alleged indicated extreme neglect — that vacant units were left open due to broken windows and doors, resulting in use by drug addicts and drug dealers, that units were filled with rodents and insects, that there was inadequate hallway light and lack of stair railings, that electrical fixtures and basic appliances were broken, that walls and ceilings were broken, that hallways and stairs were filled with garbage, and many other serious conditions. No such allegations are made in the present case.
In Tinsley v. Kemp, 750 F. Supp. 1001 (W.D. Mo 1990), plaintiffs alleged that vacant units were completely uninhabitable. Vacant units lacked appliances, windows and doors. Units were open to trespassers, arsonists, and drug dealers. Vermin-infested units were full of garbage. Plaintiffs claimed that the housing authority ignored common areas filled with broken glass, garbage and human waste. When more units were closed, the housing authority developed no relocation plan for residents who were displaced nor did it offer adequate relocation assistance. No such allegations are made in the present case.
In Henry Horner Mothers Guild v. Chicago Housing Authority, 824 F. Supp. 808 (N.D. Ill. 1993), a high-rise project in Chicago was described as "one of the most distressed public housing properties in the nation." Id. at 812. Building inspectors found dangerous and hazardous code violation in every building, including occupied units. The complaint alleged significant health hazards, significant fire hazards, and significant danger from crime. No such allegations are made in the present case.
In Velez v. Cisneros, 850 F.Supp. 1257 (E.D. Pa. 1994), every vacant unit on the first floor in one of the developments had been entered despite having been boarded up. Windows were broken throughout, and units were open to rain and vandalism. Garbage was strewn throughout the site with no indication of recent trash collection. The HUD inspector had even refused to walk through the development on account of risk to his personal safety. Of the vacant units he could observe, half were not secured, and there were broken windows on the second and third floors. No such allegations are made in the present case.
Following this spate of cases involving claims of de facto demolition, however, Congress amended § 1437p, adding subsection (e) to permit occupancy consolidation without approval by HUD. The only requirement imposed by Congress is that the consolidation must result in an improvement of living conditions or increased efficiency in providing services to residents.
B. The New and Express Right of Occupancy Consolidation Pursuant to The United States Housing Act, 42 U.S.C. 1437p.
In 1995, Congress amended parts of the United States Housing Act, including 42 U.S.C. § 1437p, to state explicitly that a public agency is not precluded from consolidating occupancy for purposes of improving living conditions of or providing more efficient services to its tenants.
This consolidation provision was codified at § 1437p(d), stating:
"Nothing herein shall prevent a housing authority from consolidating occupancy within or among buildings, or developments, if done to improve the living conditions of, or offer more efficient services to, the residents."
In 1998, Congress passed the Quality Housing and Work Responsibility Act ("QHWRA"), which significantly amended many different parts of the United States Housing Act, and provided a new subsection to 1437p that allowed for occupancy consolidation, moving the consolidation provision added in 1995 to a new, separate subsection, where it is now codified at § 1437p(e).
Specifically, 42 U.S.C. § 1437p(e) states:
Consolidation of occupancy within or among buildings.
Nothing in this section may be construed to prevent a public housing agency from consolidating occupancy within or among buildings of a public housing project, or among projects, or with other housing for the purpose of improving living conditions of, or providing more efficient services to, residents.
Where a statutory provision is plain and unambiguous, as here, legislative intent need not be scrutinized. However, Congress' intent is clearly evident in its plain language that "nothing" in § 1437p prohibits a housing authority from implementing an occupancy consolidation.
Congress' intent in passing the Quality Housing and Work Responsibility Act is reflected in its published purposes, including, inter alia: (1) deregulating and decontrolling public housing agencies . . . (2) providing for more flexible use of Federal assistance to public housing agencies . . . (3) facilitating mixed income communities and decreasing concentrations of poverty in public housing . . . (6) . . . increasing choice for low income families; and (7) remedying the problems of troubled public housing agencies and replacing or revitalizing severely distressed public housing projects. Quality Housing and Work Responsibility Act of 1998, Pub.L. No. 105-276, Title V, § 502(b). Permitting a public housing agency to engage in occupancy consolidation implements these purposes.
Moreover, in enacting the Quality Housing and Work Responsibility Act in 1998, Congress also removed from § 1437p(d) the former statutory language which prohibited a public housing agency from taking "any action to demolish" without HUD approval. This now deleted language had been the basis for the courts finding that neglect of a development could rise to the level of de facto demolition.
Furthermore, the question of "viability" is not an issue with respect to consolidation under § 1437p(e). That is, § 1437p(e) governing consolidations does not require a consideration of viability; it does not matter whether the closed areas are viable or not. The only requirement that Congress imposed for consolidation was that it be done "for the purpose of improving the living conditions of, or providing more efficient services to, residents." C. Defendants Are Engaged in Lawful Occupancy Consolidation; and Defendants Have Not Engaged in Unlawful De Facto Demolition.
"Viability" is an issue with respect to CMHA's application to HUD to demolish English Woods. To qualify, CMHA must certify that English Woods proper is "obsolete." CMHA has done that; and upon the voluminous record herein, and the Court's findings of fact, it is evident that English Woods proper is: "obsolete . . . making it unsuitable for housing . . . and that no reasonable program of modifications is cost-effective to return the public housing project . . . to useful life"; and that "the revitalization costs are not reasonable"; and that "the cost of revitalization grossly exceeds the cost of a Section 8 voucher program." Because English Woods proper cannot be reasonably revitalized, it may be demolished, (and re-built upon), when the consulting requirements of 42 U.S.C. § 1437(p)(b) are met. See Note 5, supra.
This is an issue of first impression for federal courts. There has been no challenge to § 1437p(e) since 1994 before the exception was added to the statute.
Plaintiff alleges that CMHA has in effect demolished English Woods without HIUD's approval, in violation of 42 U.S.C. § 1437p(a), § 1437p(b), and 24 C.F.R. § 970.12. However, no demolition has occurred, either de jure or de facto. Instead, CMHA has prudently begun to consolidate occupancy into fewer buildings which can be better maintained.
The law has changed since the development of the line of cases finding public housing agencies liable for de facto demolition. That is, Congress has substantially amended the law regarding demolition, inserting new language into § 1437p that expressly authorizes occupancy consolidation. Subsection (e) of § 1437p now expressly authorizes consolidation without any application for HUD approval and further states that a consolidation does not violate any of the demolition provisions in § 1437p.
In the district court decisions relied upon by Plaintiff, the entire de facto demolition theory rested upon a now absent statutory requirement for approval from HUD before taking "any action" toward demolition. In the pre-1995 cases relied upon by Plaintiff, the basis for liability was that the defendants had allegedly effected demolitions without the required approval. Now, however, under the 1995 and 1998 statutory amendments, a consolidation cannot constitute a violation of the demolition provisions as long as consolidation is for one of the stated purposes, to wit: to improve conditions or efficiency.
The language of § 1437p is plain. When a housing authority implements a consolidation of residents to improve living conditions or efficiency, as here, the consolidation does not violate the demolition provisions, even though a consolidation necessarily includes the closing off of vacant units or areas.
As the evidence at trial reflects, CMHA acted prudently in consolidating occupancy at English Woods. CMHA worked diligently for at least four years to secure grants for extensive revitalization of English Woods. These efforts are memorialized in the 2002 MOU with the Plaintiff. When that funding opportunity evaporated, CMHA did not attempt to effect an unapproved de facto back door demolition — to the contrary, CMHA openly applied, under law, for authority to demolish, and, when permission to demolish was denied, CMHA then pursued a lawful consolidation of occupancy as expressly permitted by statute.
CMHA has not "demolished" English Woods, literally or in effect. Area 4 of English Woods proper remains, as do Marquette Manor (within English Woods proper), and the adjacent Sutter View (formerly the English Woods Addition). The presence of these 400+ units belies the notion that CMHA has unlawfully demolished English Woods.
Accordingly, Plaintiff has failed to prove its claims at trial under counts I and II of the complaint.
D. Plaintiff Has Failed To Prove Its Claim of Racial Discrimination Under the Fair Housing Act, 42 U.S.C. §§ 3601 and 3608(d).
The Fair Housing Act ("FHA") prohibits all practices which make housing unavailable to persons because of, inter alia, race. 42 U.S.C. § 3604. The FHA also requires public housing authorities to affirmatively further fair housing, which duty patently forbids racial discrimination. 42 U.S.C. § 3608(d).
Discrimination under the FHA may take one of two forms: intentional discrimination or discriminatory effect. Arthur v. City of Toledo, 782 F.2d 565 (6th Cir. 1986). Plaintiff does not allege intentional discrimination in its claims under the FHA; instead, Plaintiff's causes of action under the FHA as pled are for discriminatory effect.
See also, Jaimes v. Toledo Metro. Hous. Auth., 715 F. Supp. 835, 839, 841 (N.D. Ohio 1989); United States v. City of Parma, 494 F. Supp. 1049, 1053-55 (N.D. Ohio 1980), aff'd, 661 F.2d 562 (1981), cert. denied, 456 U.S. 926 (1982); Cabrini-Green v. Chicago Hous. Auth., 1997 WL 31002, *12 (N.D. Ill. 1997); Betsey v. Turtle Creek Assocs., 736 F.2d 983, 988 (4th Cir. 1984).
There are two types of discriminatory effects which a facially neutral housing decision can have. "The first occurs when that decision has a greater adverse impact on one racial group than another. The second is the effect which the decision has on the community involved; if it perpetuates segregation and thereby prevents interracial association it will be considered invidious under the Fair Housing Act independently of the extent to which it produces a disparate effect on different racial groups." Arthur, supra, 782 F.2d at 575 (quoting Metropolitan Hous. Dev. Corp. v. Village of Arlington Heights, 558 F.2d 1283, 1295 (7th Cir. 1977), cert. denied, 434 U.S. 1025 (1978) (" Arlington II")).
Under the first prong, proving that the conduct had a greater adverse impact on one racial group than another, it is elemental that: "[p]laintiffs must show that (1) they are within a protected class, and (2) that similarly situated non-members of the class were subject to disparate treatment." Darst-Webbe Tenant Ass'n v. St. Louis Hous. Auth., 299 F. Supp. 2d 952, 958 (E.D. Mo. 2004).
The court cites Oti Kaga, Inc. v. South Dakota Hous. Dev. Auth., 342 F.3d 871, 882-83 (8th Cir. 2003); United States v. Badgett, 976 F.2d 1176, 1179 (8th Cir. 1992); Robinson v. 12 Lofts Realty, Inc., 610 F.2d 1032, 1037 (2d Cir. 1979); United States v. City of Black Jack, 508 F.2d 1179, 1184 (8th Cir. 1974), cert. denied, 422 U.S. 1042 (1975)).
Here, the Plaintiff did not evidence that CMHA's conduct causes non-members of the class (whites) to be treated differently than members of the class (blacks). All English Woods residents, black and white, have been treated equally. The mere fact that CMHA's conduct impacts more blacks than whites (because blacks outnumber whites at English Woods) does not give rise to a showing of disparate impact, unless the whites are treated differently than the blacks. A finding otherwise would result in "the illogical assertion at best" that all actions of CMHA would result in disparate impact liability. See Darst-Webbe, supra, 299 F. Supp. at 962; Tsombanidis v. West Haven Fire Dep't, 352 F.3d 565, 575 (2d Cir. 2003). Here, Plaintiff evidenced no disparate treatment of races.
Accordingly, to prevail at trial, because "the fact that conduct adversely affected nonwhite people does not by itself guarantee relief under the same statute," . . . "plaintiffs [must] argue that . . . the [conduct] perpetuated segregation." Arthur, supra, 782 F.2d at 575.
The burden shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1972), applies in housing discrimination cases under the FHA. See Selden Apartments v. United States Dep't of Housing Urban Dev., 785 F.2d 152, 159 (6th Cir. 1986). That framework requires that a plaintiff first establish a prima facie case of housing discrimination. If the plaintiff establishes a prima facie case, the burden shifts to the defendant to articulate a legitimate, non-discriminatory reason for its actions. At that point, the burden shifts back to the plaintiff to show that the articulated reason is merely pretextual. United States v. Lorantffy Care Center, 999 F. Supp. 1037, 1042 (N.D. Ohio 1998).
Here, the Plaintiff did not evidence at trial that CMHA is attempting to perpetuate segregation in pursuing its occupancy consolidation plan. That is, the choices offered to English Woods residents who must move do not prevent "interracial association." See Arthur, 782 F.2d at 575; Arlington Heights II, 558 F.2d at 1290.
On the contrary, for example, this Court has previously found in a prior case that the use of housing vouchers and scattered sites reduces segregation. See Hutchins v. CMHA, Case No 79-131 (June 14, 1997), slip op. at p. 2. In Hutchins, where a consent decree requires activities toward desegregation in public housing, thereby promoting fair housing, Chief Judge Beckwith found that housing choice vouchers "effectively provide the opportunity for integrative transfers" to other housing. Id. at 7. Further, Chief Judge Beckwith concluded that vouchers serve to achieve desegregation by providing broad choice, in that vouchers provide "unlimited options for housing within CMHA's service area." Id. at 8.
Here, the array of options offered by CMHA included moving within English Woods, moving to a different CMHA-operated development, or, where possible, receiving a housing choice voucher. All of the options presented would likely place English Woods residents in areas that are more racially diverse than English Woods. Given the residents' freedom to choose their own direction pursuant to the broad choices offered by CMHA, the Plaintiff cannot and did not prove that CMHA's conduct was based on segregative intent nor that it will have segregative effect.
Simply put, Plaintiff offered absolutely no evidence of racial discrimination by CMHA. Accordingly, count III of Plaintiff's complaint fails.
D. Plaintiff Has Failed To Prove Its Claim of Intentional Racial Discrimination By CMHA in Violation of Title VI, Civil Rights Act of 1964, 42 U.S.C. § 2000d.
Title VI, of the Civil Rights Act of 1964, provides in pertinent part:
No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. 42 U.S.C. § 2000d.
To state a claim under Title VI, the Supreme Court has made clear that a plaintiff must allege intentional discrimination, not disparate impact. Alexander v. Sandoval, 532 U.S. 275, 280-81 (2001) (citing Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 287 (1978)).
Claims brought under Title VI are analyzed under the same burden shifting framework found in McDonnell Douglas Corp., supra. See Freeman v. Fahey, 374 F.3d 663, 666 (8th Cir. 2004); Paasewe v. Ohio Arts Council, 74 Fed. Appx. 505, 508, 2003 WL 22017539, at *2 (6th Cir. Aug. 25, 2003).
At trial, Plaintiff did not present any evidence, direct or circumstantial, of intentional discrimination by CMHA against English Woods residents based on race. Residents, black and white, may chose the new home that best suits the needs of their families from several options.
Accordingly, Plaintiff's claims under Title VI fail.
E. Plaintiff Did Not Prove At Trial that CMHA Racially Discriminated Against English Woods Residents in Violation of the Constitution.
In order "[t]o establish a violation of substantive due process, a plaintiff must first establish the existence of a constitutionally protected property or liberty interest." Silver v. Franklin Township, Bd. of Zoning Appeals, 966 F.2d 1031, 1036 (6th Cir. 1992).
However, "[t]here is no constitutional right of access to dwellings of a particular quality, nor is the assurance of adequate housing a constitutional mandate." Lindsey v. Normet, 405 U.S. 56, 74 (1972); Jaimes v. Toledo Metro. Hous. Auth., 758 F.2d 1086, 1096 (6th Cir. 1985); Smith v. Town of Clarkton, 682 F.2d 1055 (4th Cir. 1982); Acevedo v. Nassau County, 500 F.2d 1078 (2d Cir. 1974). Accordingly, Plaintiff cannot and did not evidence a violation of the due process clause.
Nonetheless, although there is no constitutionally protected right to specific housing as such, public housing authorities cannot discriminate on the basis of race. Hills v. Gautreaux, 425 U.S. 284 (1976). That is, a plaintiff may establish a violation of the equal protection clause by showing "[p]roof of racially discriminatory intent." City of Cuyahoga Falls v. Buckeye Community Hope Found., 538 U.S. 188, 194-195 (2003) (emphasis supplied) (citing Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252, 265 (1977) (citing, in turn, Washington v. Davis, 426 U.S. 229 (1976)).
"Official action will not be held unconstitutional solely because it results in a racially disproportionate impact. . . . Disproportionate impact is not irrelevant, but it is not the sole touchstone of an invidious racial discrimination.' [Instead], [p]roof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection clause." Buckeye Community Hope Found. v. City of Cuyahoga Falls, 209 F. Supp. 2d 719, 727 (N.D. Ohio 1996) (citing Village of Arlington Heights, 429 U.S. at 264-65) (internal citations omitted).
Here, Plaintiff has no evidence of any intention by CMHA to harm African-Americans. To the contrary, the evidence reveals that CMHA's purpose in consolidating occupancy at English Woods was to create better living environments within the limited funds available, an environment where residents would have improved living conditions and where services would be provided with greater efficiency and effectiveness.
The simple fact that any action at English Woods — whether it be revitalization, demolition or consolidation — will have a impact on a resident population that is 95% African-American is not enough, in and of itself, to give rise to an unlawful constitutional violation. Instead, there must be proof of discriminatory intent.
At trial, Plaintiff failed to prove that CMHA categorized the residents of English Woods by race and then discriminated against the African-American residents. Instead, CMHA's actions were reasonably designed to improve conditions and were a legitimate response to deteriorating conditions and declining occupancy.
The Plaintiff has failed to show that CMHA commenced and is implementing its occupancy consolidation program because of its intent to harm African-Americans.
Accordingly, the Court concludes that Plaintiff has not proven a constitutional violation by CMHA, and count IV of the complaint fails.
CONCLUSION
Upon careful review, the Court finds, under the facts and law as detailed supra, that Plaintiff did not prove at trial that Defendants have acted unlawfully, and, accordingly, judgment shall be entered against the Plaintiff on its complaint.
Wherefore, pursuant to Federal Rule of Civil Procedure 54(b), the Court, by separate entry, shall forthwith enter such judgment.