Source: https://law.justia.com/cases/federal/appellate-courts/F2/663/436/146949/
Timestamp: 2020-07-10 07:12:03
Document Index: 598379595

Matched Legal Cases: ['§ 882', '§ 882', '§ 812', '§ 889', '§ 882', '§ 882', '§ 882', '§ 1437', '§ 882', '§ 882', '§ 1437', '§ 882']

Vandermark, Virginia M. and Handy, Barbara, on Behalf Ofthemselves and All Others Similarly Situated, Appellants, v. Housing Authority of the City of York, Miller, Marion L., Inher Capacity Asexecutive Director of the Housing Authorityof the City of York, and Thedepartment of Housing and Urbandevelopment of the United States of America, 663 F.2d 436 (3d Cir. 1981) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Third Circuit › 1981 › Vandermark, Virginia M. and Handy, Barbara, on Behalf Ofthemselves and All Others Similarly Situated...
Vandermark, Virginia M. and Handy, Barbara, on Behalf Ofthemselves and All Others Similarly Situated, Appellants, v. Housing Authority of the City of York, Miller, Marion L., Inher Capacity Asexecutive Director of the Housing Authorityof the City of York, and Thedepartment of Housing and Urbandevelopment of the United States of America, 663 F.2d 436 (3d Cir. 1981)
U.S. Court of Appeals for the Third Circuit - 663 F.2d 436 (3d Cir. 1981) Argued Sept. 15, 1981. Decided Oct. 23, 1981
Pursuant to its authority under the USHA, HUD has promulgated regulations governing the administration and operation of the Section 8 Program at 24 C.F.R. § 882.101 et seq. (1981). Under the program, as it relates to existing housing, HUD enters into "annual contributions contracts" with PHAs, such as defendant Housing Authority of the City of York, which administer and operate the program at the local level. Every application submitted to HUD by a PHA must be accompanied by an administrative plan. Pursuant to 24 C.F.R. § 882.204(b) (3) (i) (1981), the administrative plan shall include:
Sub-section (b) (3) (i) lists the functions that should be addressed in the administrative plan, which include outreach to eligible families, determination of family eligibility, and selection of families.
Under HUD regulations, two criteria, inter alia, must be met for an applicant to be considered eligible for assistance under the program: first, the applicant must qualify as a family, 24 C.F.R. § 812.1, et seq. (1981), and second, the applicant must have an annual income that falls within the designated income limits for the area. 24 C.F.R. § 889.101 et seq. (1981). Under the regulations a PHA may establish additional criteria for determining applicant eligibility for participation in the program subject to the provision that the criteria be reasonably related to program objectives and receive approval of HUD as part of the PHA's administrative plan. 24 C.F.R. § 882.209(a) (3) (1981).
Defendant HUD filed its Motion for Summary Judgment on February 4, 1980. Plaintiffs filed their Cross-Motion for Summary Judgment on February 26, 1980. The district court entered an Order and Memorandum Opinion on June 23, 1980, 492 F. Supp. 359, granting Partial Summary Judgment to defendants and reserving ruling on one remaining issue.1 Upon renewed Motions for Summary Judgment filed by plaintiffs and defendants, the court entered Final Summary Judgment in favor of defendants on the remaining issue on December 8, 1980. 502 F. Supp. 574. Plaintiffs filed their Notice of Appeal on February 4, 1981.
(Emphasis added.) We agree with defendants that this provision clearly indicates that income and family composition are not necessarily the exclusive criteria to be used in determining eligibility for Section 8 housing. This regulation is explicit. Further, 24 C.F.R. § 882.204(b) (1) (i) (c) (1981) provides that an equal opportunity housing plan shall describe the PHA's policies and procedures for: "Selecting among eligible applicants those to receive Certificates of Family Participation including any provisions establishing local requirements for eligibility or preferences for selection in accordance with § 882.209(a) (3)." (Emphasis added.)
42 U.S.C. § 1437d(c) (4) (B) (emphasis added). This policy of sound fiscal management is further enunciated in 24 C.F.R. § 882.209(e) (1) (1981), which provides:
As was noted in the district court opinion (Appendix at 96), there is a superficial appeal to plaintiffs' argument that the fact that HUD has delegated the authority to create certain eligibility and preference requirements to the PHA's, subject to subsequent HUD approval, is in reality nothing more than a ploy to circumvent the APA notice and comment requirements regarding rulemaking.3 However, as was noted earlier, the policy behind low-income housing is to delegate the maximum amount of authority to the local housing authorities. To effectuate that purpose, HUD made provisions for implementation of local requirements in determining eligibility and preferences. See 24 C.F.R. §§ 882.204(b) (1) (i) (C) and 882.209(a) (3) (1981). The court below stated:
Appendix at 97. The district court in Baker, et al v. Cincinnati Metropolitan Housing Authority, 490 F. Supp. 520 (S.D. Ohio 1980)4 rejected the equal protection clause claim on similar grounds.5
It is clear that the policy has nothing to do with the likely performance of the tenant as a rent payer in the private housing market. The prospective tenant can have a history of perpetual delinquency on rent and on every other obligation, and still become eligible by paying off a single creditor, the Authority. A tenant in privately owned substandard housing may owe his landlord thousands of dollars and remain eligible. Indeed Chapter 4 P (3) of the Handbook for the Section 8 Existing Housing Program provides that "PHAs must not establish selection criteria based on the applicant's expected behavior as a tenant." The creditworthiness of the tenant is a matter solely for the judgment of the private sector owner. 42 U.S.C. § 1437f(d) (1) (A). Thus the challenged policy cannot be justified as a predictor of good tenant behavior. It is purely and simply a collection device, favoring a single creditor. There is nothing in Section 8 or its legislative history suggesting that debt collection was one of the purposes Congress had in mind. The authority's policy is no more rationally related to the purposes of Section 8 than would be a policy requiring applicants to pay off delinquent retail installment debts, or to join the YMCA. I agree with Judge Wiseman:
Ferguson v. Metropolitan Development and Housing Agency, 485 F. Supp. 517, 524 (M.D. Tenn. 1980). The appellants make the point that because of the attractive features of the limited Section 8 program the Authority's policy is a potent collection weapon, permitting it to coerce both payments of disputed amounts and payments in preference to other creditors. Congress never intended that the Section 8 program be used for such a purpose. I would reverse.
We agree with defendants that Baker, et al v. Cincinnati Metropolitan Housing Authority, 490 F. Supp. 520 (S.D. Ohio 1980) is on point and is apposite. That case concerned the identical policy, promulgated by the Cincinnati Housing Authority, of accepting Section 8 applications from past residents who had rental arrearages, but not certifying those residents for participation until the balance had been satisfied. The court upheld this policy against similar charges that it was violative of the statute, the regulations, and the Constitution. The decision in Ferguson v. Metro Development and Housing Authority, 485 F. Supp. 517 (M.D. Tenn. 1980), cited by plaintiffs, is not on point. In Ferguson, a similar policy was under review; but the tenant had already been admitted to the Section 8 Program when it was discovered that arrearages were owed. The PHA then immediately evicted the tenant without a hearing. There is no such problem in this case
HUD transmittal No. 7420.7 "Public Housing Administrative Practice Handbook for the Section 8 Existing Housing Program", Chapter 4, Section 4.4, p. 11. Appendix at 74. However, we find HUD's response to the point persuasive (Appellee's Brief at 20-21). First, the Section 8 Handbook was not in existence at the time HUD reviewed and ultimately approved the YHA plan. Second, the Handbook is an operations guide interpreting HUD's regulations. It is not a regulation and does not have the same force as a regulation. Third, the language of the Handbook in any event does not purport to be directive. The use of the word "may" denotes discretion on the part of the local authority. Plaintiffs in oral argument cited Hess v. Ward, 497 F. Supp. 786 (E.D. Pa. 1980) as controlling. Hess does establish the general proposition that "(l)ocal authorities are required to follow the policies set forth in the (HUD) Handbook." 497 F. Supp. at 798. However, this general point does not detract from the persuasiveness of the above analysis.
The bases for excluding past CMHA residents with a rent arrearage from the Section program are at least two fold: (1) to encourage assisted families to meet lawful obligations for rental payments; and (2) thereby maximize effective use of available federal financial assistance to meet national housing goals. This policy is consistent with the underlying objectives of 24 C.F.R. § 882.209(c) (1)
Although the classifications may not admit to "mathematical nicety" (Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S. Ct. 337, 340, 55 L. Ed. 369 (1911)), it cannot be said that the classifications are "clearly wrong, a display of arbitrary power, not an exercise of judgment." Mathews v. de Castro, 429 U.S. 181, 185, 97 S. Ct. 431, 434, 50 L. Ed. 2d 389 (1976). The rational basis requirement therefore has been met and no violation of the Equal Protection Clause is present.
F. Supp. at 529