Dayton Veterans Residences Ltd. P'ship v. Dayton Metro. Hous. Auth., 21-3090

• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)
• Parties: DAYTON VETERANS RESIDENCES LIMITED PARTNERSHIP, dba Freedom's Path at Dayton, a Florida limited partnership authorized to do business in the State of Ohio, Plaintiff-Appellant, v. DAYTON METROPOLITAN HOUSING AUTHORITY, an Ohio public housing authority, dba Greater Dayton Premier Management, Defendant-Appellee.
• Docket Number: 21-3090
• Decision Date: 19 November 2021

DAYTON VETERANS RESIDENCES LIMITED PARTNERSHIP, dba Freedom's Path at Dayton, a Florida limited partnership authorized to do business in the State of Ohio, Plaintiff-Appellant,
v.
DAYTON METROPOLITAN HOUSING AUTHORITY, an Ohio public housing authority, dba Greater Dayton Premier Management, Defendant-Appellee.

No. 21-3090

United States Court of Appeals, Sixth Circuit

November 19, 2021

NOT RECOMMENDED FOR PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO

Before: MOORE, KETHLEDGE, and DONALD, Circuit Judges.

OPINION

KAREN NELSON MOORE, CIRCUIT JUDGE.

Seeking to provide housing for disabled homeless veterans in the Dayton, Ohio area, a private developer contacted a local public housing authority for assistance in securing federal subsidies essential to the project's success. The housing authority refused, and the developer sued it for violations of the Americans with Disabilities Act (ADA) and Fair Housing Act (FHA). A district judge initially denied the housing authority summary judgment on the developer's reasonable-accommodation claim, finding that the developer requested an accommodation for disabled persons that a jury could find reasonable. Following the initial district judge's recusal, the successor judge sua sponte reversed on an issue not raised in the initial summary-judgment briefing. Finding there was no causal nexus between

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the proposed tenants' disabilities and the developer's requested accommodation, the successor judge entered judgment in the housing authority's favor. We hold that a reasonable jury could find that the developer's proposed accommodation was necessary to ameliorate the effects of homeless veterans' disabilities. Accordingly, we REVERSE.

I. BACKGROUND

A. Factual Background

Dayton Veterans Residences Limited Partnership, an organization doing business as Freedom's Path, planned to develop approximately sixty units of affordable housing for homeless veterans near the Veterans Affairs Medical Center in Dayton, Ohio. R. 6 (Am. Compl. ¶ 5, 15) (Page ID #48, 50). In late 2011, the U.S. Department of Veterans Affairs awarded Freedom's Path an Enhanced-Use Lease for a tract of land on the campus. R. 43-16 (Enhanced-Use Lease at 1) (Page ID #1743). To build the housing units on that land, Freedom's Path needed to obtain low-income housing tax credits from the Ohio Housing Finance Authority (OHFA) and rental subsidies from the U.S. Department of Housing and Urban Development (HUD). R. 31-1 (Taylor Dep. at 33) (Page ID #520). Defendant Greater Dayton Premier Management (GDPM) serves Dayton as its public housing authority and administers HUD grants. R. 43-12 (Heapy Dep. at 8-9) (Page ID #1516).

Freedom's Path sought rental subsidies called project-based vouchers, which HUD's Veterans Affairs Supportive Housing (VASH) program administered. R. 31-1 (Taylor Dep. at 39) (Page ID #526); R. 43-12 (Heapy Dep. at 12-13) (Page ID #1517). Freedom's Path preferred project-based vouchers to individual tenant-based housing vouchers because the former would help Freedom's Path overcome challenges that might face individual veteran renters. R. 31-1 (Taylor Dep. at 68-69)

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(Page ID #555-56). For example, homeless veterans with criminal records or histories of eviction may not be able to lease housing with individual-based housing vouchers. Id. Freedom's Path also preferred VASH vouchers to similar project-based vouchers available under Section 8 of the Housing Act of 1937 because VASH vouchers subsidized veterans-specific programs in ways that Section 8 vouchers did not. Id. at 24-25; 97-98 (Page ID #511-12, 584- 8).

Freedom's Path also needed project-based vouchers to receive low-income tax credits from the OHFA. Id. at 33 (Page ID #520). Before issuing the tax credits to a developer, the OHFA required a public-housing authority to commit to a number of project-based vouchers equivalent to fifty percent of the proposed units. Id. Freedom's Path was proposing a sixty-six-unit project, so it needed GDPM to commit to thirty-three project-based vouchers to receive the tax credits. Id. at 39-40 (Page ID #526-27); R. 40-2 (Email exchange between Jennifer Heapy and Kim Powell at 1-2) (Page ID #913-14). Because only a public housing authority could, on behalf of itself or another entity, apply to HUD for project-based vouchers, GDPM's assistance was essential for Freedom's Path to pursue the development project. R. 43-14 (Taylor Decl. ¶ 19) (Page ID #1722).

In April 2013, GDPM's Interim Chief Executive Officer, Alphonzio Prude, committed in a letter to granting Freedom's Path thirty-three Section 8 project-based vouchers. R. 43-12 (Heapy Dep. at 87-89) (Page ID #1536); R. 6-1 (Letter from Alphonzio Prude to Don Paxton) (Page ID #62). After receiving this commitment and a $1 million grant from the Department of Veterans Affairs, Freedom's Path applied for low-income housing tax credits with OHFA. R. 31-1 (Taylor Dep. at 44-45, 54) (Page ID #531-32, 541). OHFA rejected Freedom's Path's application but encouraged it to reapply later. Id. at 44-45 (Page ID #531-32).

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In his efforts to reapply to OHFA, Craig Taylor, the head of Freedom's Path, contacted GDPM. Because it would increase the chance that Freedom's Path would be awarded tax credits, Taylor asked GDPM to support his request for a letter of recommendation from the local county Housing Advisory Board. Id. at 99-100 (Page ID #586-87). Taylor also asked for a further commitment of VASH vouchers from GDPM. Id. at 96-97 (Page ID #583-84).

In general, GDPM could obtain VASH vouchers by applying for them when HUD issued a Notice of Funding Availability. R. 43-14 (Taylor Decl. ¶ 21) (Page ID #1723). GDPM could apply for the vouchers on its own behalf or on behalf of another entity. Id. ¶ 22-25 (Page ID #1723). To encourage the development of specific projects, HUD awarded more points to applications in which the public housing authority applies on behalf of an entity. Id. ¶ 24 (Page ID #1723). Taylor hoped that GDPM would apply for sixty VASH vouchers on behalf of Freedom's Path, thus increasing the likelihood that HUD would issue them. R. 31-1 (Taylor Dep. at 59-61) (Page ID #546-48). If GDPM were able to obtain the number of VASH vouchers he needed, Taylor planned to return the thirty-three Section 8 vouchers Prude previously committed to GDPM in exchange. Id.

Taylor initially reached out to GDPM in December 2015. In response to Taylor's inquiries, the new CEO of GDPM, Jennifer Heapy, explained to a colleague communicating with Taylor that GDPM could not honor Prude's previous commitment or apply for VASH vouchers on Freedom's Path's behalf due to a HUD regulation governing a public housing authority's selection of project-based voucher proposals. R. 40-2 (Email exchange between Jennifer Heapy and Kim Powell at 1-2) (Page ID #913-14). That regulation, 24 C.F.R. § 983.51(b), provides that a public housing authority can select project-based voucher proposals only through the procedures in the authority's

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administrative plan. The administrative plan must select such proposals through either (1) its own competitive process or (2) a previous selection based on a program requiring competition, if it took place within the past three years and did not involve any consideration that the project would receive project-based voucher assistance. At the time, GDPM's Administrative Plan provided for project-based assistance via only the first method, i.e., "by a competitive request for proposals initiated by GDPM." R. 42-21 (GDPM Administrative Plan at 1) (Page ID #1081). According to Heapy, Prude's previous commitment did not reflect Freedom's Path's participation in the competitive process, so GDPM could not abide by Prude's commitment while adhering to federal regulations. R. 40-3 (Email from Heapy to Taylor at 2) (Page ID #916).

In response to Heapy's concerns, Taylor proposed working with GDPM and HUD to amend GDPM's Administrative Plan so it could comport with the third-party competition exception that the regulations permitted. R. 40-12 (Email exchange between Jennifer Heapy and Craig Taylor) (Page ID #959). Taylor stated that he had faced similar obstacles in applying for vouchers for different projects in the past and offered to provide examples of language provided to other public housing authorities. Id.

Extensive communications with Freedom's Path, GDPM, and their respective counsel, followed. GDPM continued to assert that it would not honor Prude's April 2013 commitment because it had expired and was impermissible under federal regulations. R. 40-3 (Email from Heapy to Taylor at 2) (Page ID #916); R. 40-4 (Email from Heapy to Taylor et al. at 1) (Page ID #918); R. 40-5 (Email from Heapy to Paxton at 2) (Page ID #921). In response, Freedom's Path insisted that it had expended two years of effort in reliance on Prude's letter in pursuing the project. R. 42-6 (Email Exchange between Freedom's Path and GDPM at 1) (Page ID #1012). Freedom's

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Path continued to ask GDPM to amend its Administrative Plan so that GDPM could comply with regulations and apply for vouchers on Freedom's Path's behalf. Id.

In February 2016, Freedom's Path reapplied for low-income tax credits to OHFA, submitting Prude's letter and a newly obtained letter of recommendation from the Housing Advisory Board in support of its application. See R. 31-1 (Taylor Dep. at 47, 118) (Page ID #534, 605); R. 30-1 (Paxton Dep. at 74-75) (Page ID #426-27). Later that year, OHFA granted Freedom's Path's application. R. 43-7 (Thomas Aff. at 1) (Page ID #1120). Freedom's Path suggested to GDPM that its success in OHFA's competitive process could allow GDPM to submit VASH vouchers on Freedom's Path's behalf under the HUD regulations. R. 42-9 (Email exchange between GDPM and Paxton at 2) (Page ID #1024). Freedom's Path asserted that GDPM needed only to modify its Administrative Plan. In...