Fletcher v. Housing Authority of Louisville

Decision Date25 January 1974
Docket NumberNo. 73-1466.,73-1466.
PartiesMary FLETCHER et al., Plaintiffs-Appellants, v. HOUSING AUTHORITY OF LOUISVILLE et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

COPYRIGHT MATERIAL OMITTED

David M. Kirstein, Louisville, Ky., for plaintiffs-appellants; Kurt Berggren, Legal Aid Society of Louisville, Louisville, Ky., on brief.

J. D. Raine, Louisville, Ky., Neal Knox, Atty., Dept. of Housing and Urban Development, Atlanta, Ga., for defendants-appellees; George J. Long, U. S. Atty., Louisville, Ky., William E. Grossman, Regional Counsel, Dept. of Housing & Urban Development, Atlanta, Ga., Zirkle, Raine, Francis & Highfield, Louisville, Ky., on briefs.

Before CELEBREZZE, EDWARDS and McCREE, Circuit Judges.

CELEBREZZE, Circuit Judge.

This appeal presents one of an increasing number of challenges to the administration of the federally funded housing program.1 On November 27, 1972, the District Court dismissed Plaintiffs' request for declaratory and injunctive relief against the institution of a "rent range formula" by the Housing Authority of Louisville (HAL).2 In brief, the formula allocates available apartments among eligible applicants so as to ensure accelerated entry of applicants who can pay higher rents than other applicants, thereby generating increased rental income for HAL. The decision below gives this policy legal sanction.

This case arises against the background of a previous District Court case, which invalidated HAL's arbitrary method of admitting people to public housing. Under a June 21, 1972 decision of the District Court for the Western District of Kentucky, HAL was ordered to halt its unconstitutional admission procedures and to agree "to make all decisions regarding the admission of applicants to all Louisville Housing Authority housing projects . . . based upon criteria which is sic consistent with HUD guidelines, and is sic concerned only with the date of application and the family needs of each applicant." Virginia Morris v. Housing Authority of Louisville, Civ. No. 6948 (W.D.Ky., filed June 21, 1972).

Once an applicant was found eligible for public housing, under the June 21, District Court decree, he or she was placed on a chronological waiting list and advanced accordingly, subject to pre-emption by applicants in greater housing need.

On August 22, 1972, the Members of HAL's Board changed these admission procedures. Implementing the provisions of a Circular issued by the U.S. Department of Housing and Urban Development (HUD), HAL's Resolution stated:

"RESOLUTION NO. 51-72

WHEREAS, a review of the Ranges of Rents paid by tenants now occupying apartments operated by this Authority and a comparison with preliminary figures of the 1970 Census reveals the following:

                                     Percent of
                                     Units Now        Distribution of
                  Rents Paid         Rented in       Units Indicated
                  By Tenants         This Range      in 1970 Census
                  From To 
                  $ 0 - $30            51.64%              23%
                  $31 - $45            18.86%              17%
                  $45 - $60             5.35%              19%
                  $61 and over         24.15%              41%  ; and
                

WHEREAS, the Public Housing Program made possible under the Housing Act of 1933 and its amendments, provided housing for the low-income segment of the population within established income limits of admission and continued occupancy determined by the Local Authority and approved by the Department of Housing and Urban Development; and

WHEREAS, the financial solvency of the Louisville Authority, because of housing a majority of its residents in income ranges extremely below the operating costs of the Authority, has reached a point where the solvency of the Authority is in jeopardy; and

WHEREAS, the Louisville Area Office of the Department of HUD has expressed a most urgent need for this Authority to increase its rental income sufficiently to meet its operating expenses in its letter dated July 24, 1972, a copy of which is attached hereto and made a part hereof the same as if copied in full herein; and

WHEREAS, it has been determined by the staff and the Department of HUD that the following Ranges of Rents would produce additional rental income to the Authority:

                                           Percent of
                      Suggested            Units Reccommended
                     Range of Rent
                     From to
                      $ 0 - $30                30%
                      $31 - $45                20%
                      $46 - $60                20%
                      $61 and over             30%
                

NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING AUTHORITY OF LOUISVILLE; That,

The manner of placing eligible applicants in vacant units operated by this Authority be maintained at a level approximating the following Ranges of Rents, in accordance with the existing Statement of Policies and Procedures Governing Admission to and Continued Occupancy of the HUD-Aided Projects:

                                           Percent of
                       Suggested           Units Reccommended
                      Range of Rent
                       From to 
                       $ 0 - $30                 30%
                       $31 - $45                 20%
                       $46 - $60                 20%
                       $61 and over              30%
                

BE IT FURTHER RESOLVED THAT the establishment of Ranges of Rents and the Percentages applying thereto, as provided in this resolution, shall apply to those applicants on the priority list as well as non-priority applicants.

This resolution shall become effective when approved by the Department of Housing and Urban Development."

By instituting this "rent range formula", HAL made prospective tenants' ability to pay rent a key factor in determining which eligible applicants would receive Louisville's federally aided public housing and in what order. The discrimination against applicants in the rent range between $0 and $30 emerges from a review of these figures:

                                                                 No. admitted
                                                                  since rent
                           No. of Eligible                        ranges in
                             Applicants                          effect, for
                               as of           Percentage         Aug. 22 to
                Mo. Rent   Nov. 8, 1972         of Total         Nov. 8, 1972
                $ 0 - 30       1103              68.6%                 54
                $31 - 45        221              13.8%                 47
                $46 - 60        126               7.8%                 35
                $61 - over      157               9.8%                 30
                          (Total - 1607)                         (Total - 166)
                                           No. admitted as percent of
                Mo. Rent                   Total eligible in each range
                $ 0 - $30                             4.9%
                $31 - $45                            21.3%
                $46 - $60                            27.8%
                $61 - over                           19.1%
                

The final column of figures shows that for a period after the rent range formula was in effect, applicants in the $0 to $30 range faced much longer delays in obtaining public housing as compared with more affluent applicants.3

Precisely how long Appellants' wait will be extended because of the institution of the rent range formula is not clear from the proceedings below. Based on evidence in the record, the extra delay occasioned by the August 22d Resolution to an Appellant obtaining public housing could be more than two years.4

Appellees argue that there is no discrimination occasioned by the rent range formula, since it is drawn to ensure that the public housing tenant body eventually reflects the percentages of persons in each rental group eligible to apply for public housing in Louisville.5 We reject Appellees' contention for two basic reasons.

First, Appellees focus on the wrong groups when they look to the groups apparently eligible to apply for public housing. In determining the presence of discrimination, the relevant pools to be compared among the four rent ranges are those who have expressed an interest in public housing — those who have applied for it, not those who might apply. Granting automatic preferences to higher income applicants who might apply in the future over at least equally needy lower income tenants who have been on a waiting list is discriminatory. The rent range formula "vaguely smacks of a quota system," thus casting doubt on its constitutionality. Colon v. Tompkins Square Neighbors, Inc., 294 F.Supp. 134, 139 (S.D.N.Y.1968).

Second, we find that HAL's rent range Resolution imposes a significant penalty on the group of eligible applicants who have been on the waiting list for public housing since August 22, 1972. Cole v. Housing Authority of Newport, 435 F.2d 807, 811 (1st Cir. 1970). Cf. King v. New Rochelle Municipal Housing Authority, 442 F.2d 646, 648 (2d Cir.), cert. denied, 404 U.S. 863, 92 S.Ct. 113, 30 L.Ed.2d 107 (1971); but cf. Lane v. McGarry, 320 F.Supp. 562 (N.D.N.Y.1970). From their positions in line, they have been abruptly moved behind others of no greater housing need with a later application date — simply because these latter applicants can pay more rent. Shifting positions among those waiting in line for a limited supply of housing reinforces the injustice of a change which is itself unauthorized or unreasonable. Cole v. Housing Authority of Newport, 312 F.Supp. 692, 695 (D.R.I.), aff'd., 435 F.2d 807, 811 (1st Cir. 1970). Cf. United States v. Leahey, 434 F.2d 7, 11 (1st Cir. 1970); McGautha v. California, 402 U.S. 183, 273, 274, 91 S.Ct. 1454, 28 L.Ed.2d 711 (1971) (Brennan, J., concurring).

Shuffling the order in which public benefits are to be allocated is not, standing alone, indefensible. Apportioning scarcity requires flexibility for those administrators who perform that unenviable task. Dandridge v. Williams, 397 U.S. 471, 480, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); Lindsey v. Normet, 405 U. S. 56, 74, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972). Given the harsh discrimination against those applicants who could pay only between $0 and $30 rent to HAL, our inquiry...

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