Legal Opinion: CLR-0002

Index: 2.175 CLR-0002

Subject: Implementation of Sec. 622 of HCDA of 1992

November 30, 1993

MEMORANDUM FOR: Joseph Shuldiner, Assistant Secretary for

Public and Indian Housing, P

FROM: Nelson A. D¡az, General Counsel, G

SUBJECT: Implementation of Section 622 of the Housing and

Community Development Act of 1992

The following responds to your request for advice on the

legal opinion rendered by the law firm of Reno, Cavanaugh &

Hornig concerning implementation of section 622 of the Housing

and Community Development Act of 1992.

ISSUE: The issue is whether HUD\'s failure to issue final

regulations for section 622 of the Housing and Community

Development Act of 1992 (1992 Act)(which establishes the

designated housing process) by the statutory deadline of

April 28, 1993 requires HUD to proceed to review and approve or

disapprove, within the time period set by statute, an allocation

plan submitted by a public housing agency (PHA) that seeks to

designate a public housing project for occupancy by elderly

families.

SHORT ANSWER: No. Case law supports that courts would defer

to HUD\'s decision that regulations are necessary for

implementation of section 622, and allow HUD to promulgate

regulations before implementing any part of section 622.

BACKGROUND: SECTION 622 OF THE 1992 ACT\--NEW SECTION 7 OF

THE 1937 ACT. Section 622 of the 1992 Act amended section 7 of

the U.S. Housing Act of 1937 to provide PHAs with the option,

subject to certain requirements, to designate public housing

projects, or portions of projects, for occupancy by (1) disabled

families, (2) elderly families, or (3) disabled and elderly

families. New section 7 establishes criteria for approval of

designated housing for disabled families and for approval of

designated housing for elderly families. For approval of

designated housing for elderly families, section 7(f) requires

HUD to approve an allocation plan submitted by a PHA. For

approval of designated housing for disabled families, section

7(e) requires HUD to approve an \"application for designated

housing for disabled families\" (which application consists

largely of a supportive services plan), and to meet all other

requirements of section 7. Thus, approval of designated housing

for disabled families requires HUD approval of the PHA\'s

supportive services plan and its allocation plan. (A copy of

section 622 is attached to this memorandum as Appendix A.)

THE CHALLENGE TO HUD\'S AUTHORITY TO ISSUE REGULATIONS FOR

SECTION 622. The issue stated above is before HUD for

consideration because the Washington D.C. law firm of Reno,

Cavanaugh & Hornig (\"the Cavanaugh firm\") advised its client, the

Minneapolis Housing Authority (\"MHA\"), in an August 10, 1993

letter, that the MHA may proceed to develop, and submit to the

Secretary of HUD, an allocation plan in accordance with section

622 of title VI of the 1992 Act, and that \"the Secretary is

obliged to approve or disapprove the plan within the 45 days set

by statute regardless of the nonexistence of regulations.\" (A

copy of the Cavanaugh firm opinion is attached to this memorandum

as Appendix B.)

In the August 10, 1993 letter, the Cavanaugh firm stated its

conclusion as follows:

\[I\]t is our conclusion that HUD\'s position \[that

section 622 is not self-executing\] is contrary to law.

The particulars of the HCDA92 are consonant with

general principles of administrative law, which presume

laws to be immediately effective unless otherwise

specified and which provide no support for the

proposition that a person who is free to do something

under existing law must await the issuance of

regulations to see if they restrict the lawful act. We

believe it was the clear intent of Congress, in this

specific instance, that dilatory behavior by HUD not

obstruct the ability of PHAs to designate elderly

housing. There is no evidence of any specific belief

on Congress\' part that regulations were essential for

the implementation of Title VI-B, and considerable

evidence to the contrary. (Cavanaugh opinion, pg. 1)

The Minneapolis Housing Authority has not yet submitted an

allocation plan to HUD. However, on October 8, 1993, the Housing

Authority for the City of Milwaukee, WI, submitted to HUD an

allocation plan accompanied by its request to designate a project

for occupancy only by elderly families. Other housing

authorities are expected to submit their allocation plans for

elderly-only public housing within the upcoming weeks.

DISCUSSION OF, AND REBUTTAL TO, CAVANAUGH OPINION. The

Cavanaugh firm cites to a number of cases in support of the

advice provided to its client. The facts and holdings of these

cases, and other cases not cited by the Cavanaugh firm, do not

support the conclusion reached by the firm. The following

provides a discussion of, and a rebuttal to, the August 10, 1993

opinion letter of the Cavanaugh firm.

1\. The Statutory Language Provides Evidence that Section

622 Is Not Self-Executing and that Regulations Are Necessary for

its Implementation. Although the Cavanaugh firm refers, at

times, to all of section 622 (or title VI-B) as being self-

executing and not requiring regulations, the Cavanaugh firm

concedes that Congress intended for HUD to issue regulations for

new section 7(e) of the 1992 Act, which pertains to designated

housing for disabled families. The Cavanaugh firm contends,

however, that Congress did not intend for HUD to issue

regulations for section 7(f), which pertains to designated

housing for elderly families.

The Cavanaugh firm states in relevant part as follows:

Where Congress in fact intended that a provision of the

HCDA92 be supplemented by regulation, it said so

specifically. Conveniently, there is no better

illustration of this than what is now section 7(e) of

the HCDA92, relating to designated public housing for

disabled families. Here, the Secretary was explicitly

directed to establish \`forms and procedures for

submission and approval of applications,\' and was

permitted to add to the statutory application factors

\`any other information or certification that the

Secretary considers appropriate.\' \*\*\*

By contrast, subsection (f) dealing with elderly

designation contains no reference whatsoever to

Secretarial contributions. Indeed, the structure of its

language suggests that Congress was limiting

Secretarial discretion to modify or supplement it.

Unlike subsection (e)(2), subsection (f)(2) contains no

invitation for the Secretary to add elements to the

allocation plan as he deems appropriate. \*\*\*

(Cavanaugh opinion, p. 8)

The Cavanaugh firm proceeds to make the argument that since

regulations are not needed for section 7(f), HUD cannot refuse to

review and approve or disapprove an allocation plan submitted by

a PHA for elderly-only housing on the basis of an absence of

regulations. (Cavanaugh opinion, p. 9)

Whether regulations are necessary for implementation of

section 622 (in part or in its entirety) is a decision that

Congress explicitly authorized HUD to make.

Section 684 of the 1992 Act (Applicability) provides as

follows:

Except as otherwise provided in subtitles B through F

of this title and the amendments made by such

subtitles, such subtitles and the amendments made by

such subtitles shall apply upon the expiration of the

6-month period beginning on the date of the enactment

of this Act.

One of the \"except as otherwise provided\" provisions of

subtitles B through F, which may preclude these subtitles from

taking effect six months from the date of enactment of the 1922

Act, is found in section 685 (of subtitle F). Section 685

(Regulations) provides:

The Secretary shall issue regulations necessary to carry out

subtitles B through F of this title and the amendments made

by such subtitles not later than the expiration of the 6-

month period beginning on the date of the enactment of this

Act. The regulations shall be issued after notice and

opportunity for public comment pursuant to the provisions of

section 553 of title 5, United States Code (notwithstanding

subsections (a)(2),(b)(B), and (d)(3) of such section).

Section 685 clearly authorizes HUD to determine whether

regulations are necessary to carry out subtitles B through F.

That is, section 685 recognizes HUD\'s discretion to supplement

section 622 by the establishment, through regulation, of

additional requirements, criteria, or procedures as HUD may

consider necessary to fulfill the statutory objectives of section

622\.

HUD reviewed section 622, and made a decision that

regulations were necessary for implementation of all of

section 622.

Contrary to the position taken by the Cavanaugh firm, the

language of section 7(f) does not suggest that Congress was

limiting the Secretary\'s discretion to modify or supplement the

provisions of section 7(f). Section 7(f)(2) provides as follows:

\(2\) Contents. \-- An allocation plan submitted under

this subsection by a public housing agency shall

include \-- \*\*\*

A reasonable interpretation of the \"shall include\" language

in section 7(f) is that the Secretary has authority to add

requirements which the Secretary considers important to the

approval of an allocation plan. HUD has construed the phrase

\"shall include\" this same way in other HUD statutes.

For example, section 303(e) of the U.S. Housing Act of 1937

(42 U.S.C. 1437aaa-2), which pertains to the selection criteria

for assistance under HUD\'s Hope for Public and Indian Housing

Homeownership Program (HOPE I) provides that \"The Secretary shall

establish selection criteria for a national competition for

assistance under this section, which shall include \*\*\*.\" The

statute then recites mandatory selection criteria, and does not

include a provision that expressly allows the Secretary to add

other criteria as the Secretary considers appropriate. HUD, in

implementing guidelines for the HOPE I Program, construed the

\"shall include\" language of section 303(e) to permit HUD to add

other selection criteria, which HUD did. (See Section 425 of

Appendix A.V to 24 CFR Subtitle A.)

The Supreme Court has held that where an agency provides a

reasonable interpretation of a statutory provision, a court may

not substitute its own construction of the provision. (See

Chevron, U.S.A. v. Natural Resources Defense Council, Inc., 467

U.S. 837, 844 \[104 S.Ct. 2778, 2782\] (1984), Young v. Community

Nutrition Institute, 476 U.S. 972, 981 \[106 S.Ct. 2360, 2365\]

(1986).) The fact that another party may construe the language

of section 7(f) to prohibit the Secretary from imposing

additional criteria, and the fact that this construction may be

equally reasonable, does not permit a court to substitute the

other party\'s statutory construction for that of the agency\'s.

The Supreme Court has held that the view of an agency charged

with administering a statute is entitled to considerable

deference, and to sustain that view, a court need not find that

the agency\'s view is the only permissible construction that the

agency might have adopted, but only that the agency\'s

construction is sufficiently rational. (See Train, Inc. v. NRDC,

421 U.S. 60, 75, 87 \[95 S.Ct. 1470, 1489, 1485\] (1975).)

HUD, exercising its discretion to establish additional

allocation plan requirements as permitted by section 7(f), has

added requirements in the draft regulation that are designed to

ensure that non-elderly disabled families are not underserved by

a PHA as a result of a designation of a public housing project

for elderly families. However, even if HUD were to reverse its

decision to impose by regulation additional allocation plan

requirements, it remains within HUD\'s discretion to refrain from

implementing section 7(f) without regulation if HUD determines

that section 7(f) is significantly linked to the other provisions

of section 622 for which regulations are determined necessary.

The Cavanaugh firm fails to note that an allocation plan is

not submitted only when a PHA seeks to designate a project for

occupancy by elderly families. The allocation plan also must be

submitted by a PHA that seeks to designate a project for

occupancy by disabled families. (See section 7(e)(1).) Thus,

regardless of whether other requirements are added to the

allocation plan, HUD may determine that it is unfair to disabled

persons to only implement the designated housing process for

elderly families while disabled families must await the

completion of proposed and final rulemaking for designated

housing for disabled families. (As discussed earlier, the

Cavanaugh firm concedes that the Congress intended for HUD to

issue regulations for section 7(e), which addresses the approval

process for designated housing for disabled families.)

Despite the protections that the Congress provides in

section 622 to preclude approval of an allocation plan that would

adversely affect persons who are not members of the group for

whom a project is to be designated, the fact remains that the

designation of a public housing project for occupancy by a

particular group can have the effect of reducing the availability

of public housing for persons who are not members of that group.

There may be other available HUD-assisted housing, but the

availability of public housing may be reduced as a result of the

designation process permitted by section 622. Thus, to allow the

designated housing process to proceed for elderly families, and

not for disabled families means that the availability of public

housing may be reduced for non-elderly, disabled persons, and

non-elderly, disabled persons will not have the opportunity to

seek occupancy in designated housing for disabled families until

HUD completes notice and comment rulemaking.

Additionally, there is no indication that the Congress

envisioned or intended designated housing to be made available to

elderly families before it is made available to disabled

families, or vice versa. In establishing the designated housing

process, the Congress, in the 1992 Act, did not take the same

approach that it did in the National Affordable Housing Act

(NAHA) in establishing the Supportive Housing Programs for

elderly persons and disabled persons. In NAHA, section 801

establishes the requirements and procedures for the Supportive

Housing for the Elderly Program (12 U.S.C. 1701q), and section

811 establishes the requirements and procedures for the

Supportive Housing for Persons with Disabilities Program

(42 U.S.C. 8013).

In contrast to this approach, the Congress, in the 1992 Act,

establishes the requirements and procedures for designating

projects for elderly families and for designating projects for

disabled families in a single statutory section \-- section 622.

A decision by HUD to implement, at one time, a single designated

housing process that treats equally elderly families and disabled

families, two groups competing for available public housing, is

consistent with section 622 (which provides for one process), and

should be found to be a reasonable and permissible agency policy

decision.

Consistent with a policy choice to implement all of section

622 at one time (as opposed to piecemeal implementation) is the

fact that HUD\'s regulatory input into the designated housing

process does not necessarily end with approval of an allocation

plan. Section 622 also establishes certain requirements that

will govern a PHA\'s operation of approved designated housing. In

this regard, section 7(a)(3) provides as follows:

If a public housing agency determines (in accordance with

regulations established by the Secretary) that there are

insufficient numbers of elderly families to fill all the

units in a project (or portion of a project) designated

under paragraph (1) for occupancy by only elderly families,

the agency may (pursuant to the approved allocation plan

under subsection (f) for the agency) provide that non-

elderly families who qualify for preferences for occupancy

under section 6(c)(4)(A) may occupy dwelling units in the

project (or portion). (Emphasis added)

Thus, even were HUD to determine that no additional criteria

should be added to the requirements of section 7(f), HUD may

determine that additional requirements are needed to govern the

operation of approved designated housing. Since it is

anticipated that, following approval of allocation plans, PHAs

will commence operation of designated projects as quickly as

possible, regulations applicable to the operation of designated

projects would need to be in place before HUD could approve a

request to designate a project as provided by section 622.

Additionally, if, as the Cavanaugh firm claims, the Congress

thought that regulations were not necessary for implementation of

new section 7(f), or that the Congress did not intend for HUD to

issue regulations for section 7(f), the Congress could have made

section 7(f) effective upon enactment of the 1992 Act or upon a

date certain, or alternatively, limited HUD\'s rulemaking

authority to the remaining subsections of section 7, and excluded

section 7(f) from rulemaking. The Congress took these courses of

action in other sections of the 1992 Act as shown by the

following.

Subsection (e) of section 162 of the 1992 Act (Housing

Counseling) provides:

The Secretary of Housing and Urban Development shall issue

any regulations necessary to carry out the amendments made

by subsection (d), not later than the expiration of the 6-

month period beginning on the date of the enactment of this

Act.

Subsections (a), (b) and (c) were not subject to the rulemaking

provision of section 162.

Subsection (h) of section 509 of the 1992 Act (Mortgage

Limits for Multifamily Projects) (and which consists of

subsections (a) through (i)) provides:

The Secretary of Housing and Urban Development shall issue

regulations necessary to carry out the amendments made by

subsections (a) through (g), which shall take effect not

later than the expiration of the 1-year period beginning on

the date of the enactment of this Act.

Subsection (b)(16) of section 853 of the 1992 Act (Community

Investment Corporation Demonstration provides:

This section shall become effective 6 months from the

date of enactment of this Act.

Subsection (c) of section 932 of the 1992 Act (Disclosures

under the Home Mortgage Disclosure Act of 1975) provides:

The amendments made by subsections (a) and (b) shall

apply with respect to information disclosed under

section 304 of the Home Mortgage Disclosure Act of 1975

for any year which ends after the date of the enactment

of this Act.

HUD\'s decision that regulations are necessary for

implementation of section 622 (in part or in its entirety) is a

decision supported by the language of sections 622 and 685 of the

1992 Act, and is an agency decision that case law supports a

court would uphold.

2\. HUD\'s Failure to Issue Regulations by the Statutory

Deadline Does Not Mean that HUD Has Determined that No

Regulations Are Necessary. In addition to providing evidence

that Congress believed regulations may be necessary for

implementation of title VI, title VI also provides evidence that

Congress wanted the programs, definitions, procedures, and

requirements set out in subtitles B through F of title VI

effective and operational 6 months from the date of enactment of

the 1992 Act.

For those programs, procedures, and requirements provided in

title VI for which no regulations were determined necessary for

implementation, section 684 of the 1992 Act provides that these

programs, procedures, requirements would be effective six months

from the date of enactment. For those programs, services,

procedures, and requirements provided in title VI, for which HUD,

in its discretion, determined that regulations were necessary for

implementation, section 685 requires HUD to issue final

regulations (after providing the public with notice and an

opportunity for public comment) 6 months from the date of

enactment of the 1992 Act.

Given the clear intent of the Congress that the provisions

of subtitles B through F (those that require regulations and

those that do not) would be effective 6 months from the date of

enactment, does HUD\'s failure to issue final regulations for

section 622 make section 622 applicable commencing April 28,

1993 in accordance with section 684?

The response by the Cavanaugh firm to this question is yes.

The Cavanaugh firm states that HUD\'s failure to issue regulations

by the statutory deadline of April 28, 1993 is an admission by

HUD that no regulations are necessary for implementation of

section 622. The Cavanaugh firm states:

In our view, these cases provide support for the

argument that if HUD promulgated no regulations by

April 26 although under statutory obligation to

promulgate by that date \`any regulations necessary,\'

then HUD\'s \`complete response\' should be deemed to be

that no regulations are necessary. (Cavanaugh

opinion, p. 4)

The cases cited by the Cavanaugh firm, however, do not

address a situation comparable to the situation with section 622,

which is that no regulations or any regulatory guidance has yet

been issued by HUD.

In Hazardous Waste Treatment v. EPA, 861 F.2d 277 (D.C. Cir.

1988), cert. denied, 490 U.S. 1106 (1989), petitioners challenged

regulations issued by EPA on the basis of failing to include

\"necessary requirements\" of the statute. The court dismissed the

petition and stated:

\[A\]n agency\'s failure to regulate more comprehensively

is not ordinarily a basis for concluding that the

regulations already promulgated are invalid. \`The

Agency might properly take one step at a time.\' United

States Brewers Ass\'n v. EPA, 600 F.2d 974, 982 (D.C.

Cir. 1979). Unless the agency\'s first step takes it

down a path that forecloses more comprehensive

regulation, the first step is not assailable merely

because the agency failed to take a second. \*\*\*

(861 F.2d at 287)

In Colorado v. Department of Interior (DOI), 880 F.2d 481

(D.C. Cir. 1989), the State of Colorado and three environment

groups requested court review of final regulations issued by DOI.

The petitioners claimed that the final regulations, published

4 years after the statutory deadline, were arbitrary, capricious

and not in compliance with the provisions of the Comprehensive

Environmental Response, Compensation and Liability Act (CERCLA).

In addressing the court\'s jurisdiction over this case, which was

challenged by DOI, the court stated:

We note that the rules at issue in this case are merely

the first in a series of regulations intended to comply

with section 301(c)(2)(A)\'s mandate. \*\*\* In fact, DOI

has already begun the process of promulgating type A

regulations for natural resource damages in other

environments. \*\*\*

In our view, however, DOI\'s jurisdictional argument

misreads section 301(c)\'s statutory mandate and

mischaracterizes petitioner\'s suit. Section 301(c)(1)

expressly requires the President to promulgate natural

resources damages assessment regulations \`not later

than\' a date certain. That statutory deadline has now

passed and the regulations promulgated to date

therefore constitute the President\'s complete response

in compliance with the statutory requirements of that

section. \*\*\* Accordingly, even if DOI promulgates

additional type A rules sometime in the future,

petitioners\' claim that the existing final regulations

are unlawful remains reviewable by this court.

(880 F.2d at 485-486.)

In Hercules Incorporated v. U.S. Environmental Protection

Agency (EPA), 938 F.2d 276 (D.C. Cir. 1991), petitioners alleged

that EPA\'s final regulations implementing certain sections of

CERCLA were not in compliance with the express terms of the

statute. In challenging the court\'s jurisdiction over this case,

the court held, as it did in Colorado v. DOI, supra, that because

the statutory deadline had passed, the promulgated regulations

(notwithstanding that EPA may intend to issue further

regulations) must be deemed the agency\'s complete response in

compliance with the statute, and the regulations are therefore

reviewable by the court. (938 F.2d at 282)

It is not evident how the holdings in the cases cited by the

Cavanaugh firm (cases which involve judicial review of

regulations issued by an agency after a statutory deadline)

support the position that HUD\'s failure to issue its final rule

on the designated housing process 6 months after the statutory

deadline means that HUD\'s complete response is that no

regulations are necessary.

HUD has publicly stated that it intends to issue regulations

for section 622. (See sequence number 1564 in HUD\'s Regulatory

Agenda published in the Federal Register on April 26, 1993

(58 FR 24382, 24434), and sequence number 1635 in HUD\'s

Regulatory Agenda published in the Federal Register on

October 25, 1993 (58 FR 56402, 56448).) HUD also has advised its

Regional offices and Field Offices, housing authorities, and

Senators and members of the House of Representatives who have

inquired about the status of section 622, that HUD has determined

that regulations are necessary for section 622, and are in

development. Thus, HUD\'s failure to issue regulations by the

statutory deadline means only that HUD has missed the deadline.

Once HUD made a decision, in accordance with the authority

provided by section 685, that regulations are necessary for

section 622, the applicability provision of section 684 is moot.

Section 684 only comes into play if HUD determines that no

regulations are necessary. Section 684 does not come into play,

as the Cavanaugh firm suggests, if HUD determines regulations are

necessary, but misses the statutory deadline for issuance of

regulations.

In contrast to the applicability language of section 684,

see section 903(b) of the 1992 Act, which directs HUD to develop

a release form that meets the requirements of section 904 of the

Stewart B. McKinney Homeless Assistance Amendments Act of 1988,

and provides specific instructions on what action is to be taken

(or not taken) until that form is developed. See also section

104(c) of the Energy Policy Act of 1992 (Pub.L. 102-486, approved

October 24, 1992), which clearly specifies the consequences of

HUD\'s failure to issue final regulations by the date established

in this section. Section 104(c) provides as follows:

If the Secretary of Housing and Urban Development has

not issued within 1 year after the date of enactment of

this Act, final regulations pursuant to section 604 of

the National Manufactured Housing Construction and

Safety Standards Act of 1974 (42 U.S.C. 5403) that take

effect before January 1, 1995, then States may

establish thermal insulation and energy efficiency

standards for manufactured housing if such standards

are at least as stringent as thermal performance

standards for manufactured housing contained in the

Second Public Review Draft of BSR/ASHRAE 90.2P entitled

\`Energy Efficient Design of Low-Rise Residential

Buildings\' and all public reviews of Independent

Substantive Changes to such document that have been

approved on or before the date of the enactment of this

Act.

If the Congress intended section 684 to be applicable if HUD

missed the statutory deadline for issuance of regulations set

forth in section 685, the above-described statutory sections

indicate that the Congress would have specifically said so.

Under the \"reasonable statutory interpretation\" principle

enunciated in Chevron, supra, a court should find HUD\'s

construction of section 684 is a reasonable one. That

construction is that section 684 does not nullify HUD\'s authority

to issue regulations under section 685 if HUD misses the

statutory deadline set forth in section 685.

Additionally, case law indicates that courts are adverse to

preclude agency rulemaking where an agency has stated that

rulemaking is necessary.

In Public Citizen Health Research Group (PCHRG) v.

Commissioner, Food & Drug Administration (FDA), 740 F.2d 21

(D.C.Cir. 1984), PCHRG petitioned the court to compel the FDA to

promulgate a rule requiring labels that warned that aspirin given

to a child with influenza or chicken pox may increase the risk of

the child developing Reye\'s Syndrome. On September 20, 1982, the

Secretary of HHS announced that he had signed a proposed rule

that would require the label warnings on aspirin as desired by

the PCHRG. However, before publication of the proposed rule, the

Secretary of HHS withdrew the rule, and on December 28, 1982,

announced that HHS would issue instead an advance notice of

proposed rulemaking on the labeling issue to seek a broad range

of views in advance of the rulemaking process. PCHRG objected to

the issuance of an advance notice of proposed rulemaking and

requested that the court make a judicial decision that aspirin is

misbranded as a matter of law. The court held as follows:

Given the allocation of responsibility in the statutory

scheme, PCHRG\'s request for initial judicial ruling on

the misbranding issue amounts to an attempt to bypass

the administrative process. Principles embodied in the

requirement that a plaintiff exhaust administrative

remedies suggest that such immediate judicial

intervention would be precipitous. When Congress has

allocated to an agency the power to decide certain

questions in the first instance, \`it is normally

desirable to let the agency develop the necessary

factual background upon which decisions should be

based. And since agency decisions are frequently of a

discretionary nature, or frequently require expertise,

the agency should be given the first chance to exercise

that discretion or apply that expertise.\' McKart v.

United States, 395 U.S. 185, 194, 89 S.Ct. 1657, 1662

(1969). (740 F.2d at 29)

Courts recognize that although agencies have a duty to carry

out, as expeditiously as possible, a specific mandate imposed by

a particular statute, agencies must balance implementation of the

specific mandate with the broader mandate that the Congress

imposes on each agency. For HUD, that broader mandate is to

provide the best administration of Federal programs which provide

assistance for housing and for community development.

In Weinberger v. Bentex Pharmaceuticals, Inc., 412 U.S. 645,

(1973), the Supreme Court, citing its holding in an earlier case,

stated as follows:

As we stated in Far Eastern Conference v. United

States, 342 U.S. 570 574-575: \`\[I\]n cases raising

issues of fact not within the conventional experience

of judges or cases requiring the exercise of

administrative discretion, agencies created by Congress

for regulating the subject matter should not be passed

over. This is so even though the facts after they have

been appraised by specialized competence serve as a

premise for legal consequences to be judicially

defined. Uniformity and consistency in the regulation

of business entrusted to a particular agency are

secured, and the limited functions of review by the

judiciary are more rationally exercised, by preliminary

resort for ascertaining and interpreting the

circumstances underlying legal issues to agencies that

are better equipped than courts by specialization, by

insight gained through experience, and by more flexible

procedure.\' (412 U.S. at 654)

HUD has a duty, under the 1992 Act, to PHAs, elderly

families and disabled families to issue regulations for section

622 as quickly as possible so that these groups may take

advantage of the benefits that designated housing is anticipated

to provide. HUD, however, also has a duty to non-elderly

families and non-disabled families, including families with

children, to ensure that implementation of section 622 will not

adversely affect all families served by HUD\'s public housing

program. As stated earlier, designated housing may have the

effect of reducing the availability of public housing for persons

who are not members of the group for whom a project is to be

designated. HUD\'s duty to non-elderly and non-disabled families,

including families with children, may be carried out through the

imposition of additional requirements and procedures that are

designed to minimize any possible adverse impact the designated

housing process may have on these families. Accordingly, a court

should defer to HUD\'s decision that regulations are necessary for

implementation of section 622.

3\. HUD Has Not Unreasonably Delayed Issuance of Regulations

for Section 622. The Cavanaugh firm claims that HUD has violated

its duty of timeliness to issue regulations on the designated

housing process by April 28, 1993. The Cavanaugh firm notes in

its August 10, 1993 letter, that under the Administrative

Procedure Act, an agency owes interested parties a duty not to

\"unreasonably delay\" an agency action. (See 5 U.S.C. 555(b).)

The Cavanaugh firm states that an agency has an obligation to

carry out its activities in a timely manner, and that where the

Congress has imposed statutory deadlines on an agency\'s

activities, the agency is expected to comply with them.

The Cavanaugh firm is correct that agencies owe interested

parties a duty not to unreasonably delay action, and the firm is

also correct that HUD has missed the statutory deadline imposed

for regulations necessary to implement section 622. However,

failure to meet a statutory deadline does not appear to be

sufficient in and of itself for a finding of unreasonable delay

by a court. In fact, the Cavanaugh firm acknowledges in a

footnote that \"courts and commentators have noted the practical

difficulties of enforcing that duty where an agency pleads

incapacity to meet the deadline due to a lack of resources,

conflicting priorities, and/or the time-consuming nature of the

problem.\" (Cavanaugh opinion, fn. 2, p. 3)

The cases cited by the Cavanaugh firm do not provide support

for the firm\'s conclusion that HUD has unreasonably delayed in

the issuance of regulations for section 622.

In Sierra Club v. Thomas, 828 F.2d 783 (D.C. Cir. 1987), the

Sierra Club sought declaratory and injunctive relief to compel

the EPA to conclude rulemaking on whether to add strip mines to

the list of pollutant sources subject to fugitive emissions

regulations issued under the \"prevention of significant

deterioration\" program of the Clean Air Act. The court held that

EPA\'s delay in concluding rulemaking had not been unreasonable.

The court stated:

\[W\]e must remember that Congress has assigned EPA a

very broad mandate, not only under the Clean Air Act

but also under a handful of other equally complex

environmental statutes. Given that Congress provides

EPA with finite resources to satisfy these various

responsibilities, the agency cannot avoid setting

priorities among them. As we have said, we can

perceive no statutory command that EPA assign this

rulemaking a higher priority than any of its other

activities. (828 F.2d at 798)

In Cutler v. Hayes, 818 F.2d 879 (D.C. Cir. 1987), the

court, in considering whether the Food and Drug Administration

unreasonably delayed in implementing its over-the-counter drug

review program, stated as follows:

Any discussion of the standards relevant to the issue

of delay must begin with recognition that an

administrative agency is entitled to considerable

deference in establishing a timetable for completing

its proceedings. An agency has broad discretion to set

its agenda and to first apply its limited resources to

the regulatory tasks it deems most pressing. The

agency\'s discretion is not unbounded, however, since

the consequences of dilatoriness may be great. As we

have had occasion to state, \`\[t\]there must be a rule of

reason\' to govern the time limit to administrative

proceedings. Quite simply, excessive delay saps the

public confidence in an agency\'s ability to discharge

its responsibilities and creates uncertainty for the

parties, who must incorporate the potential effect of

possible agency decisionmaking into future plans.

Moreover unjustifiable delay may undermine the

statutory scheme and could inflict harm on individuals

in need of final agency action. (818 F.2d at 896-897)

The court in Cutler set out the following criteria for

determining where agency delay is unreasonable delay.

Our cases identify a number of factors that aid in

determining whether an agency\'s foot dragging

constitutes unreasonable delay. First, the court

should ascertain the length of time that has elapsed

since the agency came under a duty to act, and should

evaluate any prospect of early completion. Next,

\`\[t\]he reasonableness of the delay must be judged in

the context of the statute\' which authorizes the

agency\'s action.\' This entails an examination of any

legislative mandate in the statute and the degree of

discretion given the agency by Congress. The court

must also estimate the extent to which delay may be

undermining the statutory scheme either by frustrating

the statutory goal or by creating a situation in which

the agency is \`losing its ability to effectively

regulate at all.\'

Third, and perhaps most critically, the court must

examine the consequences of the agency\'s delay. The

deference traditionally accorded an agency to develop

its own schedule is sharply reduced when injury likely

will result from avoidable delay. Economic harm is

clearly an important consideration and will, in some

cases, justify court intervention, and \`\[d\]elays that

might be altogether reasonable in the sphere of

economic regulation are less tolerable when human lives

are at stake.\' Lack of alternative means of

eliminating or reducing the hazard necessarily adds to

unreasonableness of delay.

The agency must justify its delay to the court\'s

satisfaction. If the court determines that the agency

delays in bad faith, it should conclude that the delay

is unreasonable. If the court finds an absence of bad

faith, it should then consider the agency\'s

explanation, such as administrative necessity,

insufficient resources, or the complexity of the task

confronting the agency. Although complexity bears on

avoidance in ascertaining reasonableness, it is not

always sufficient to justify lengthy delays. And if an

agency\'s failure to proceed expeditiously will result

in harm or substantial nullification of a right

conferred by statute, \`the courts must act to make

certain that what can be done is done.\' The court

should weigh any plea of administrative error,

administrative inconvenience, practical difficulty in

carrying out a legislative mandate, or need to

prioritize in the face of limited resources. Of

course, these justifications become less persuasive as

delay progresses, and must always be balanced against

the potential for harm. (818 F.2d at 897-898)

In the matter of delay of issuance of regulations for

section 622, factors that should, and probably would, be

considered by a court are the following: (1) HUD is 6 months past

the statutory deadline, which is not a substantial time period in

comparison to the time lapse in cases in which the issue of

unreasonable delay is addressed; (2) HUD\'s resources are

limited (i.e., since 1980, the number of programs administered by

the Department has increased dramatically, while there has been

an equally dramatic decrease in staff); (3) the passage of the

1992 Act by the Congress imposed a significant regulatory burden

on HUD (the 1992 Act contains 72 statutory sections requiring

regulatory action within 6 months or 180 days of the date of

enactment of the statute); and (4) the change in administration

which occurred in January 1993 as a result of the November 1992

Presidential election.

On the issue of the potential for harm caused by delay in

issuance of regulations for the designated housing process, PHAs

would point to the continued safety problems suffered by elderly

residents in public housing who must reside next to persons whose

disabilities include mental illness, drug or alcohol abuse. On

the issue of whether there are alternative means for eliminating

or reducing this harm, there are, and one alternative is better

and increased security in public housing.

Unless a PHA has a new, unoccupied public housing project

which it seeks to designate for elderly families, the extent to

which designated housing is the solution to security problems for

elderly residents in public housing is questionable. Section 622

does not permit a PHA to evict or require any tenant lawfully

residing in a public housing to vacate the project on the basis

that the project is being converted to a designated housing. The

PHA may offer incentives to induce existing tenants to vacate,

but the choice to leave rests solely with the tenant. Thus, there is

no assurance under the designated housing process that elderly

residents will not continue to occupy public housing projects

with residents who they believe threaten their safety. Even if

there is a new, unoccupied public housing project, the security

of elderly residents may still be threatened, dependent upon the

socio-economic conditions of the neighborhood in which the

project is located.

There is no guarantee that designated housing will result in

safe and secure public housing for elderly residents. An

alternative response to the security problems of elderly

residents in public housing, and also an interim response until

HUD issues regulations, is for PHAs to provide better security in

public housing for all residents.

CONCLUSION. HUD\'s decision that regulations are necessary

for implementation of section 622 is supported by the language of

the 1992 Act, and case law. Existing case law supports that HUD

should be able to successfully withstand a challenge to its

decision to refuse implementation of the designated housing

process until regulations are issued. The possibility of success

of this challenge would be increased if HUD issues its proposed

regulations on section 622 within the very near future.

Attachments