Opinion ID: 407612
Heading Depth: 2
Heading Rank: 1

Heading: The Broadway-Diversey Building And Neighborhood

Text: 4 The Broadway-Diversey building is a seventeen-story, 249-unit apartment building standing at the corner of Diversey Street and Broadway Street in Chicago. The building was constructed with HUD's promise to subsidize rents and with the developer's guarantee that of the 249 units, 147 would be occupied by low income families with children or by handicapped or elderly residents. Under the agreement, the remaining 102 apartments, forty percent of the building's total, would be rented at prevailing market rates. 5 The Illinois Housing Development Authority filed the initial application requesting HUD to reserve funds for subsidizing rents in the building. Section 201(a) of the Housing and Community Development Act of 1974, 42 U.S.C. § 1437f (Section 8), authorizes HUD to contract with state housing agencies and commit federal funds to subsidize rents in privately owned apartment buildings catering to low income tenants. Holbrook v. Pitt, 643 F.2d 1261, 1266-67 (7th Cir. 1981). Under Section 8, tenants receive federal subsidies so no resident pays more than twenty-five percent of his net income in rent. Those subsidies are paid directly to the building owner. HUD also guaranteed the building's mortgage pursuant to Section 221(d)(4) of the National Housing Act of 1934, 12 U.S.C. § 1715l, and the Government National Mortgage Association eventually purchased it under Title III of the National Housing Act of 1934, 12 U.S.C. §§ 1716 et seq. 6 The building stands on a site which the plaintiffs allege is notorious for its violent crime and sordid atmosphere. They claim male and female prostitution is prevalent, a methadone drug rehabilitation clinic is located within a block of the building, and that the site, the frequent scene of illegal narcotics transactions, commands and receives extraordinary police protection. They also allege that the building stands in an area among the most congested in the country: it holds between 82,000 and 100,000 inhabitants per square mile, and over 40,000 automobiles and 12,000 pedestrians pass through the Broadway-Diversey intersection daily. 7 The plaintiffs first sought to stop federal participation in construction of the apartment building in mid-summer 1980, when they filed their original complaint in this action. They filed the complaint one year after the Illinois Housing Development Authority applied to HUD to reserve Section 8 funds for the project and one month after existing structures were razed. In September, 1980, HUD gave final approval for federal rent assistance and mortgage insurance, and building construction began. At the same time, HUD moved to dismiss this action for the plaintiffs' lack of standing to sue. In response to the motion, the plaintiffs amended their complaint, adding neighbors Evelyn Caldwell and Clara Goldman as plaintiffs.