Dayton Veterans Residences Ltd. v. Dayton Metro. Hous. Auth.

• Decision Date: 25 March 2019
• Docket Number: Case No. 3:16-cv-466
• Parties: DAYTON VETERANS RESIDENCES LIMITED PARTNERSHIP, d/b/a FREEDOM'S PATH AT DAYTON, Plaintiff, v. DAYTON METROPOLITAN HOUSING AUTHORITY, d/b/a GREATER DAYTON PREMIER MANAGEMENT, Defendant.
• Court: United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio

DAYTON VETERANS RESIDENCES LIMITED PARTNERSHIP, d/b/a FREEDOM'S PATH AT DAYTON, Plaintiff, v. DAYTON METROPOLITAN HOUSING AUTHORITY, d/b/a GREATER DAYTON PREMIER MANAGEMENT, Defendant.

Case No. 3:16-cv-466

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

March 25, 2019

JUDGE WALTER H. RICE

DECISION AND ENTRY OVERRULING IN PART AND SUSTAINING IN PART DAYTON METROPOLITAN HOUSING AUTHORITY'S MOTION FOR SUMMARY JUDGMENT (DOC. #40); OVERRULING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT (DOC. #41); OVERRULING DAYTON METROPOLITAN HOUSING AUTHORITY'S MOTION TO STRIKE (DOC. #48); CONFERENCE CALL SET FOR APRIL 10, 2019, AT 5:00 P.M.

Plaintiff, Dayton Veterans Residences Limited Partnership d/b/a Freedom's Path at Dayton ("Freedom's Path") filed suit against Dayton Metropolitan Housing Authority d/b/a Greater Dayton Premier Management ("Greater Dayton Premier Management" or "GDPM"), alleging violations of Title II of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12132, and the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. § 3604. Freedom's Path maintains that Greater Dayton Premier Management arbitrarily, capriciously and discriminatorily blocked funding for, and financing of, 60 units of project-based affordable housing for homeless veterans, most of whom are disabled.

This matter is currently before the Court on Greater Dayton Premier Management's Motion for Summary Judgment, Doc. #40, Freedom's Path's Motion for Partial Summary Judgment, Doc. #41, and Greater Dayton Premier Management's Motion to Strike Declaration of Craig Taylor, Doc. #48.

I. Background and Procedural History

Plaintiff, Freedom's Path, is a limited partnership formed for the sole purpose of developing and owning 60 units of affordable housing for homeless veterans on the Veteran's Administration's Medical Campus ("VAMC") in Dayton, Ohio. Craig Taylor, a consultant working with Don Paxton of Communities for Veterans ("CFV"), a real estate development company, headed up the Freedom's Path project.

On December 30, 2011, the Veteran's Administration awarded Freedom's Path a 5-year Enhanced Use Lease ("EUL") for 14 acres of land on the VAMC. Doc. #43-16, PageID##1 742-55. At his deposition, Taylor explained that, to complete the housing project, Freedom's Path then needed to obtain: (1) low income housing tax credits ("LIHTCs") from the Ohio Housing Finance Authority ("OHFA"); and (2) project-based rental assistance from the United States Department of Housing and Urban Development ("HUD"). Doc. #31-1, PageID#520.

To accomplish these tasks, Freedom's Path needed the assistance of Defendant Greater Dayton Premier Management, the federal public housing authority ("PHA") serving the Dayton area. Greater Dayton Premier Management administers several HUD programs, including housing assistance through Sections 8 and 9 of the Housing Act of 1937. Greater Dayton Premier Management also administers HUD's Veterans Affairs Supportive Housing ("VASH") program, which provides rental assistance to veterans. Only a public housing authority can apply for VASH vouchers, which are allocated by HUD based on geographic need and the public housing authority's performance data. Doc. #43-14, PageID#1722. VASH vouchers come in two forms—individual tenant-based rental assistance, and project-specific, project-based rental assistance ("PBRA").

As Craig Taylor explained, individual tenant-based housing vouchers are often useless to homeless veterans because, if a veteran has a criminal record or a history of eviction or lacks the financial means to pay the first and last month's rent, a landlord is unlikely to agree to lease to him. Doc. #31-1, PageID#555. Moreover, in order for Freedom's Path to create a veterans-only housing complex, it needed project-based vouchers ("PBVs"). Id. at PageID##584-85.

Although project-based vouchers are also available under Section 8 of the Housing Act of 1937, Freedom's Path preferred VASH project-based vouchers, which combine rental assistance with "wraparound" case management and other clinical services provided by the Veteran's Administration. Id. at PageID##512, 584. For this reason, a commitment for VASH project-based vouchers is "thebrass ring for these projects." Id. at PageID##579-80. After HUD issues a Notice of Funding Availability ("NOFA"), a public housing authority may apply for VASH project-based vouchers on its own behalf, on behalf of other entities, or both. Doc. #43-14, PageID#1723. If a public housing authority applies on behalf of another entity, this increases the chance that HUD will award the VASH project-based vouchers. Id. at PageID#1724. This case stems from Greater Dayton Premier Management's refusal to apply for VASH project-based vouchers on behalf of Freedom's Path.

After obtaining the 5-year lease on the Veteran's Administration's Medical Campus, Freedom's Path applied to the Ohio Housing Finance Authority ("OHFA") for low-income housing tax credits, which are competitively awarded. OHFA requires a commitment from a public housing authority for project-based rental assistance for at least 50% of the proposed units. Because, at that point, Freedom's Path was proposing a 66-unit project, it needed a commitment of 33 project-based vouchers from Greater Dayton Premier Management. Doc. #31-1, PageID#520.

On April 9, 2013, Greater Dayton Premier Management's Interim Chief Executive Officer, Alphonzio Prude, extended support for the Freedom's Path project, committing 33 project-based vouchers "to assist with housing in the newly constructed sixty-six (66) unit building that will provide permanent supportive housing for homeless veterans." Doc. #6-1, PageID#62. These were not VASH vouchers but were to be provided through HUD's Section 8 voucher program.Doc. #33-2, PageID#745. Freedom's Path also received a $1 million promise of a grant from the Veteran's Administration. Doc. #31-1, PageID#541.

Ohio Housing Finance Authority rejected Freedom's Path's application but encouraged it to reapply for low-income housing tax credits at a later date. Id. at PageID##531-32.¹ Before reapplying, Freedom's Path worked to build additional community support for the project through the Housing Advisory Board and local government officials. Id. at PageID#537. Additional letters of support would increase the chance that Freedom's Path would be awarded low-income housing tax credits. Id. at PageID##587, 612-13.

In mid-December of 2015, Kim Powell, Acting Homeless Program Manager of the Dayton Veteran's Administration's Medical Campus, contacted Jennifer Heapy, Greater Dayton Premier Management's new Executive Director,² about setting up a meeting with Craig Taylor to discuss the Freedom's Path project. Doc. #40-2, PageID#914. Taylor sought an immediate letter from Greater Dayton Premier Management in support of his request for a letter of recommendation from the Housing Advisory Board. Doc. #31-1, PageID##586-87. He also sought a commitment of VASH project-based vouchers from Greater Dayton PremierManagement. He hoped that, in the summer of 2016, when HUD issued its next Notice of Funding Availability, Greater Dayton Premier Management would apply for 60 VASH vouchers on behalf of Freedom's Path. Greater Dayton Premier Management could then substitute some of those VASH vouchers for the 33 Section 8 project-based vouchers previously committed by Prude and return those 33 Section 8 vouchers to Greater Dayton Premier Management's pool. Taylor noted that Greater Dayton Premier Management also had unused VASH tenant-based housing vouchers that it could have converted into project-based vouchers. Id. at PageID##546-48, 583-86.

Heapy responded that she was willing to talk to Taylor. With respect to Prude's earlier commitment of 33 project-based vouchers, she cautioned, however, that Prude "appears to have been unaware that HUD regulations do not allow the agency to commit project[-]based vouchers outside of the RFP bidding process and [Prude's actions] could result in HUD recapturing all of the subsidy for the project." Doc. #40-2, PageID#913. She took the position that Prude's earlier commitment of 33 project-based vouchers was inconsistent with 24 C.F.R. § 983.51(b), the HUD regulation governing how a public housing authority ("PHA") must select project-based voucher ("PBV") proposals. That subsection of the regulation provides as follows:

(b) Selection of PBV proposals.The PHA must select PBV proposals in accordance with the selection procedures in the PHA administrative plan. The PHA must select PBV proposals by either of the following two methods.

(1) PHA request for PBV Proposals. The PHA may not limit proposals to a single site or impose restrictions that explicitly or practically preclude owner submission of proposals for PBV housing on different sites.

(2) Selection based on previous competition. The PHA may select, without competition, a proposal for housing assisted under a federal, State, or local government housing assistance, community development, or supportive services program that required competitive selection of proposals (e.g., HOME, and units for which competitively awarded low-income housing tax credits (LIHTCs) have been provided), where the proposal has been selected in accordance with such program's competitive selection requirements within 3 years of the PBV proposal selection date, and the earlier competitively selected housing assistance proposal did not involve any consideration that the project would receive PBV assistance.

24 C.F.R. § 983.51(b) (emphasis added).

During the relevant time period, Greater Dayton Premier Management's Administrative Plan provided for only the first selection method. It stated that "[u]nits selected for project-based assistance will be awarded by a competitive request for proposals ["RFP"] initiated by GDPM." Doc. #42-21, PageID#1081. It is undisputed that, at no time did Freedom's Path submit a proposal in response to an RFP initiated by Greater...