City of Loveland v. Pierce, C-1-82-972.
| Decision Date | 11 March 1983 |
| Docket Number | No. C-1-82-972.,C-1-82-972. |
| Citation | 564 F. Supp. 76 |
| Parties | The CITY OF LOVELAND, et al., Plaintiffs, v. Samuel R. PIERCE, Jr., et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
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Leonard Slutz, Eric Holzpfel, William B. Singer, Santen, Santen & Hughes, Cincinnati, Ohio, for plaintiff Karl Brown.
Nicholas J. Pantel, Asst. U.S. Atty., Cincinnati, Ohio, Carolyn B. Lieberman, Asst. Gen. Counsel for litigation, Edward G. Weil, Dept. of Housing and Urban Development, Washington, D.C., for Dept. of Housing and Urban Development.
James W. Harper, Asst. Pros. Atty., Cincinnati, Ohio, for Bd. of County Commissioners, Hamilton County.
Mary Asbury, Legal Aid Society, Cincinnati, Ohio, for amicus curiae.
At the outset the Court wishes to thank all counsel for their excellent preparation and presentation of this difficult case. The Court was impressed with and appreciates the quality of the work performed by counsel for both sides.
After this decision was prepared, we were informed by counsel for plaintiff City of Loveland that the City of Loveland had formally withdrawn its opposition to the Loveland Pines Project and intends to dismiss its claims against defendants. However, since the individual plaintiffs have not yet dismissed their claims and it is important to the developer and to HUD that this matter of a preliminary injunction be resolved, we are entering this Opinion and Order already prepared. We have considered the additional information submitted by the parties and find that it does not change the opinion of the Court in any way.
For the reasons set out below, we find that plaintiffs have not shown a likelihood of success on the merits and that for that reason alone, the motion for a preliminary injunction should be denied. We find further, however, that plaintiffs have not shown that they will suffer any irreparable harm from development of the Loveland Pines Project and that those families in need of subsidized housing will suffer great harm if new housing is not made available in Hamilton County. There is an immediate need for additional subsidized housing in this county and the Court believes it is in the public interest that these units be built. Because of the importance to all parties of a final decision on the merits, all additional information must be submitted by April 21, 1983 and the Court will consider the case ripe for final decision at that time.
This matter came before the Court upon motion of the plaintiffs for a preliminary injunction (doc. 4) and federal defendants' memorandum in opposition (doc. 7). A hearing was held on November 15 and 16, 1982 and testimony presented by both plaintiffs and defendants subsequent to the hearing, additional memoranda and evidence were submitted to the Court and considered in the determination made herein (docs. 27-32). It initially was agreed that resolution of plaintiffs' motion would be delayed pending a decision by the Ohio Supreme Court on plaintiffs' appeal from an order of the state court that plaintiff City of Loveland issue a building permit to the developer of the proposed Loveland Pines Project. By letter of February 25, 1983, plaintiffs advised the Court that the Ohio Supreme Court had dismissed plaintiffs' appeal and that a demand for a building permit had been made upon the City of Loveland pursuant to the order of the state court. The matter is, therefore, ripe for decision.
This action was brought by plaintiffs, City of Loveland and residents therein, for judicial review of a decision of the Secretary of the Department of Housing and Urban Development (HUD), a federal agency, approving a site within the City of Loveland for development of additional units of new-constructed assisted housing. Plaintiffs claim that the agency decision was made in bad faith and in violation of its own regulations and of federal law.
The action is one for judicial review of the agency action under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701 et seq. Under the APA our standard of review is extremely narrow; agency action may be set aside by a federal court only if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). As defined by the United States Supreme Court, this means that an agency's decision must stand unless the administrator has failed to consider "relevant factors" or has made a "clear error of judgment." Citizens To Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). In applying this standard, the Court is not "empowered to substitute its judgment for that of the agency." Id.
The following constitutes our findings of fact and conclusions of law.
Title 1 of the Housing and Community Development Act of 1974 (the Act), 42 U.S.C. §§ 5301 et seq., established the Community Development Block Grant Program (CDBG), whereby HUD makes grants to local communities for use in a wide variety of community development activities. CDBG money is not used to subsidize construction of new housing or to subsidize rent for persons needing housing assistance. Hamilton County is considered an "urban county" under the Act and, therefore, is entitled to CDBG funds pursuant to a formula based on population, extent of poverty, and extent of housing overcrowding. 42 U.S.C. § 5306(b).
One of the items that must be submitted to HUD as part of an application for a CDBG fund is a county Housing Assistance Plan (HAP). HUD regulations require that the HAP be developed by the county with full citizen participation in the development process. 24 C.F.R. § 570.303. The HAP contains a survey of the housing stock of the community, an assessment of the community's housing needs, a realistic goal for the provision of assisted housing, and a designation of the general location for proposed low-income housing. See 42 U.S.C. § 5304(c).
Where a HAP identifies a substantial number of low and moderate income persons in need of housing assistance and sets goals for assisting those persons, there are two major HUD programs that can be used; the Section 8 Program and the Low-Rent Public Housing Program. This case concerns the Section 8 New Construction Program. Under this program, a developer of housing that is approved by HUD enters into an agreement with HUD prior to construction in which the developer promises to make a certain number of units available to low-income persons and HUD agrees to subsidize the rent on behalf of those tenants.
Because participation in housing programs generally is necessary to enable a CDBG grantee to achieve its housing assistance goals, the HAP contains a provision in which the grantee sets a goal for providing HUD-assisted housing. The type of assisted housing the community provides depends on its needs.
HUD in turn uses the HAP needs and goals in allocating housing assistance funds among cities and counties. However, the amount of funding available is generally insufficient to permit HUD to allocate enough to each area to satisfy the goals established in the HAP. Therefore, when HUD evaluates whether a grantee has been implementing its HAP, HUD often focuses on the extent to which the grantee has taken advantage of funds made available, rather than the total amount of assistance provided. If the grantee has used all of the funding HUD has made available, but HUD has not made enough funds available to fully meet HAP goals, HUD generally considers that the grantee has performed satisfactorily under its HAP.
Under the Section 8 New Construction Program, HUD makes funds available, usually once a year, by publishing a Notification of Funds Availability (NOFA), an advertisement published in local newspapers and sent to interested developers which informs local developers that funding for a certain number of housing units is available and invites them to submit project proposals for HUD to consider. In response to NOFAs, developers submit proposals which are reviewed by HUD for economic and market feasibility, design standards, environmental problems, and the suitability of the site and surrounding neighborhood. If there is not sufficient response to a published NOFA, HUD often informs the local CDBG recipient that failure to use those funds would make it difficult to meet the recipient's HAP goals and that the locality should take steps to assist developers in preparing satisfactory proposals. There are various ways in which a community can assist developers in selecting and preparing sites for development of HUD-assisted housing.
In March of 1979 the Hamilton County Board of Commissioners formally adopted a Community Development Block Grant Application which included a three year HAP. This application was preceded by citizen participation procedures, including a public hearing. This HAP included the City of Loveland as an acceptable general location for HUD-assisted housing. In July of 1979 while HUD was reviewing the acceptability of the HAP, the county submitted a change to the HAP which removed Loveland from the list of acceptable general locations for HUD-assisted housing. This change was not adopted by the Board of Commissioners, and was made without any citizen participation and without a public hearing. Because this change was not to a "HUD approved" HAP, this change without citizen participation was technically permissible under HUD regulations. See 24 C.F.R. § 570.312(c). In July of 1979 HUD approved the HAP as changed, that is, with the City of Loveland excluded from the list of acceptable general locations for HUD-assisted housing.
In August of 1980 Robert A. Wood, president of the Hamilton County Board of Commissioners, sent a letter to Mr. Bill Riordan,...
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