ALTOONA HOUSING AUTH. v. City of Altoona

• Decision Date: 17 July 2001
• Citation: 785 A.2d 1047
• Parties: ALTOONA HOUSING AUTHORITY, Appellant, v. CITY OF ALTOONA; Thomas C. Martin, Mayor.
• Court: Pennsylvania Commonwealth Court

785 A.2d 1047

ALTOONA HOUSING AUTHORITY, Appellant, v. CITY OF ALTOONA; Thomas C. Martin, Mayor.

Commonwealth Court of Pennsylvania.

Argued May 8, 2001.

Decided July 17, 2001.

Reargument Denied September 25, 2001.

Terressa A. George, Altoona, for appellant.

Roy A. Powell, Pittsburgh, for appellee.

Before SMITH, Judge, LEADBETTER, Judge, and MIRARCHI, Jr., Senior Judge.

Reargument Denied En Banc September 25, 2001.

SMITH, Judge.

The Altoona Housing Authority (Housing Authority) appeals from an order of the Court of Common Pleas of Blair County that sustained the preliminary objections of the City of Altoona (City) to the Housing Authority's complaint for declaratory judgment seeking a determination that the Housing Authority was not required to convey a housing project to the City pursuant to an agreement executed in 1950. The Housing Authority questions whether the trial court erred or abused its discretion in dismissing the complaint or in failing to grant leave to amend where issues of fact remain; whether it erred in failing to consider the authority of the Housing Authority's board of directors in 1950 to bind successor boards; whether it misapplied provisions of three statutes relating to public housing; and whether it erred in determining that the duration of the contract was reasonable.

I

In 1950 the Housing Authority and the City entered into a "Cooperation Agreement" (Agreement) for the stated purpose of developing a public housing project pursuant to the Housing and Redevelopment Assistance Law, Act of May 20, 1949, P.L. 1663, as amended, 35 P.S. §§ 1661-1676. Under the Agreement the City agreed to take steps to annex 17 acres known as "Pleasant Village" (Project), to furnish public services to the Project, to accept dedication of interior streets and alleys and to provide necessary storm and sanitary sewers. The City agreed not to levy or impose real or personal property taxes upon the Project so long as bonds issued in connection with the project remained outstanding. The Housing Authority agreed to make payments in lieu of taxes for that period and to pay for sewer rentals and for the master water meter, meter vault and all water as measured by the master meter and for the installation of fire hydrants. Paragraph 11 stated: "The [Housing] Authority agrees that it will, after the payment of the bonded indebtedness of the Project, convey, upon request, the Project site, together with all improvements thereon, to the City for the sum of One (1) Dollar."

The bonded indebtedness was paid off in April 1999, and in July 1999 the City requested that the Housing Authority convey the Project. The Housing Authority declined, and in January 2000 it filed its complaint for declaratory judgment, contending in Count I that the Project was still "needed" pursuant to Section 10(o) of the Housing Authorities Law, Act of May 28, 1937, P.L. 955, as amended, 35 P.S. § 1550(o), to carry out the purposes of that Act.¹ Count II asserted that the 1950 board of directors of the Housing Authority lacked authority and/or power to bind successor boards of directors in regard to the governmental function of constructing and operating the Project, and Count III contended that the conveyance aspect of the 1950 Agreement was against public policy in that it provided for an unreasonable term of 49 years without consideration of change of circumstances. The City filed preliminary objections in the nature of a demurrer.

The trial court sustained the preliminary objections. As to Count I, the trial court stated that 35 P.S. § 1550(o) gave control of a property to an authority before it chose to bind itself to a contract of conveyance, but it did not create a loophole for the Housing Authority to avoid a legal obligation. The trial court noted that the purpose of the operation of the Housing Authority pursuant to Section 2(d)(2) of the Housing Authorities Law, 35 P.S. § 1542(d)(2), is "the providing of safe and sanitary dwelling accommodations for persons of low income through new construction or the reconstruction, restoration, reconditioning, remodeling or repair of existing structures, so as to prevent recurrence of the economically and socially disastrous conditions hereinbefore described...."

The trial court stated that City Ordinance 3396 and Paragraph 7 of the complaint showed that the Project was designed to provide housing primarily to veterans and their families and then to families of limited income. There was no mention of a "Veterans' Housing Authority" within the City in 1950, but the trial court nonetheless concluded that the agreed intent and actions of the Housing Authority and the City show that the Housing Authority was acting on behalf of veterans, and the court concluded that the Veterans' Housing Authority Act, Act of July 7, 1947, P.L. 1414, 35 P.S. §§ 1590.1-1590.21, applied. Although the trial court acknowledged that the Project met the structural criteria for permanent housing, the court stated that it was constructed as a temporary safety net for veterans and that its purpose should have been served in 49 years. Further, the trial court stated that the Authority had disregarded the requirement that such housing was to be rented only to persons of low income, citing Dornan v. Philadelphia Housing Authority, 331 Pa. 209, 200 A. 834 (1938), and that the Authority's claim that 75 percent of the residents met the statutory criteria for low income was not sufficient under the "exclusive" standard stated in Dornan.

As for Counts II and III, asserting that prior Housing Authority boards could not bind successors and that the 49-year term of the Agreement was unreasonable, the trial court referred to Section 4 of the Housing Cooperation Law, Act of May 26, 1937, P.L. 888, as amended, 35 P.S. § 1584. That section provides that any "State public body,"² for the purpose of aiding and cooperating in the planning, undertaking, construction or operation of housing projects, may, with or without consideration: "(d) Enter into agreements, extending over any period, with a housing authority or the Federal Government respecting action to be taken by such State public body pursuant to any of the powers of this act...." For such cooperation to occur, the trial court stated, successor housing authority boards must be bound by agreements. Also, the authorization for agreements to extend "over any period" indicated the legislature's expectation that contracts or other agreements would outlive the terms of elected officials.³

II

The Housing Authority first argues that the trial court erred or abused its discretion in granting the preliminary objections and dismissing the complaint or alternatively in failing to grant leave to amend where issues of fact remained. It notes that in ruling upon a demurrer the court must regard as true all well-pled, material facts of the complaint and all reasonable inferences therefrom. Baravordeh v. Borough Council of Prospect Park, 706 A.2d 362 (Pa.Cmwlth.1998). The court is to determine whether the facts pled are legally sufficient to permit the action to continue; to sustain such an objection it must appear with certainty that the law will permit no recovery, and any doubt must be resolved in favor of refusing to sustain. Curtis v. Cleland, 122 Pa.Cmwlth. 328, 552 A.2d 316 (1988).

The Housing Authority argues that issues of fact remain. First, it contends that 35 P.S § 1550(o) is nullified by the trial court's conclusion that once the board of directors chooses to bind itself to a contract of conveyance it is deemed to have determined that the property is no longer needed for purposes of the Housing Authorities Law. The Housing Authority's power under that section is expressly limited to selling, exchanging, transferring or assigning real property "when the Authority determines that such property is not needed for the purposes of this act." (Emphasis added.) Based on the pleadings, the Housing Authority did not determine and could not have determined in 1950 that there would not be a need for the property in 1999. Absent any such determination, which the legislature clearly intended to be made, any sale or conveyance of the property was unenforceable. A housing authority may bind itself to make a conveyance so long as it first makes the statutorily required determination of need.

On a related point, the Housing Authority maintains that the trial court improperly took it upon itself to make a determination of whether the property was still needed to carry out the purposes of the Housing Authorities Law, when 35 P.S. § 1550 vests that determination solely with the Housing Authority. In support it cites Blumenschein v. Housing Authority of Pittsburgh, 379 Pa. 566, 573, 109 A.2d 331, 335 (1954), where the Supreme Court upheld a housing authority's choice of a site for a housing project, emphasizing that "judicial discretion may not be substituted for administrative discretion." In addition, Section 6 of the 1949 Housing and Redevelopment Assistance Law, 35 P.S. § 1666, provides in part that preference in occupancy should be given to veterans for five years after the effective date and thereafter, at the discretion of the Department of Commerce, to persons displaced by the necessary operations of public housing and redevelopment projects and other improvement, provided that such persons meet the income qualifications established by the department. The Housing Authority contends that 75 percent occupancy by persons of low income is sufficient to show continued need for the Project, and it asserts that whether the families residing in the Project meet the guidelines is a question of fact that remains to be resolved.

The Housing Authority makes further statutory arguments under its third heading, contending that the trial court erred by misapplying the Veterans' Housing Authority Act and by incorrectly applying other statutes as well. Although the Agreement specifically referenced...