Greer v. Illinois Housing Development Authority

• Decision Date: 18 May 1988
• Docket Number: 64825,Nos. 64811,s. 64811
• Citation: 122 Ill.2d 462,524 N.E.2d 561,120 Ill.Dec. 531
• Parties: , 120 Ill.Dec. 531 Kathleen GREER et al., Appellees, v. The ILLINOIS HOUSING DEVELOPMENT AUTHORITY et al., Appellants.
• Court: Illinois Supreme Court

Page 561

524 N.E.2d 561

122 Ill.2d 462, 120 Ill.Dec. 531

Kathleen GREER et al., Appellees, v. The ILLINOIS HOUSING DEVELOPMENT AUTHORITY et al., Appellants.

Nos. 64811, 64825.

Supreme Court of Illinois May 18, 1988.

Richard T. Franch, Michael Palmer, for appellant, Illinois Housing Development Authority; Jenner & Block, Chicago, of counsel.

James C. Murray, Jr., Francis X. Grossi, Jr., Patrick J. Lamb, Kirk T. Hartley, Rachel F. Best, for appellants Elzie Higginbottom, Alfred Davis, Kenwood Apartments and American Nat. Bank & Trust Co. of Chicago as Trustee U/T/A dated 3/15/83 known as Trust No. 57324; Katten, Muchin & Zavis, Chicago, of counsel.

Michael L. Shakman, Geraldine Soat Brown, Barry A. Miller, Miller, Shakman, Nathan & Hamilton, Mary Pennington Anderson, Chicago, for plaintiffs-appellees.

Justice CLARK delivered the opinion of the court:

This case raises a number of issues stemming from a suit by the appellees, several people who own property near a proposed "rehabilitation development" project in Chicago. Apartments in the project are only made available to "very low-income" tenants. One of the appellants, the Illinois Housing Development Authority (IHDA), approved assisted mortgage financing for the project. The appellees claim that this approval violates an alleged duty on the part of IHDA to avoid undue economic homogeneity in the projects it finances. In a separate action against the other appellants, the owners and developers of the project, the appellees claim that certain structural features of the project violate zoning ordinances, building codes, and rehabilitation codes of the City of Chicago.

The appellees are Kathleen Greer, Petra Harris, Dr. Carol Hurley, George McClelland, Caroline J. Magsaysay, Gonzalo P. Magsaysay, Frank L. Winter, and Aureen L. Winter. The appellants are the Illinois Housing Development Authority, American National Bank & Trust Company of Chicago With respect to the appellees' claim against appellant IHDA, the trial court entered judgment on the pleadings in favor of IHDA. The trial court also entered judgment on the pleadings in favor of the other appellants with respect to the alleged zoning violation. Following an evidentiary hearing, the trial court entered judgment for the other appellants on the building code and rehabilitation code claims as well.

[120 Ill.Dec. 535] as trustee u/t/a dated 3/15/83 known as [122 Ill.2d 471] trust No. 57324, Kenwood Apartments, an unincorporated partnership or association, Elzie Higginbottom, and Alfred Davis.

The appellate court reversed in part, affirmed in part, and remanded for further proceedings. The appellate court found that the appellees' complaint stated a claim against appellant IHDA for failure to refrain from promoting economic homogeneity in the projects it finances. It therefore reversed the judgment on the pleadings in favor of appellant IHDA and remanded for further proceedings on the economic homogeneity claim. It affirmed the judgment on the pleadings in favor of the other appellants on the zoning ordinance claim, but reversed the trial court's judgment in favor of the other appellants on the building code and rehabilitation code claims. (150 Ill.App.3d 357, 103 Ill.Dec. 406, 501 N.E.2d 723.) We granted appellants' petition for leave to appeal. (107 Ill.2d R. 307(a).) The appellees have not cross-appealed to contest the appellate court's finding on the zoning ordinance claim.

Because of the complexity of the facts and issues involved in this case, we have divided this opinion into appropriate headings and discuss the facts pertaining to each issue under each heading.

THE CLAIM AGAINST IHDA

FACTS

Since the claim of the appellees against IHDA depends in great part upon the interpretation of the Illinois Housing Development Act (Ill.Rev.Stat.1985, ch. 67 1/2, par. 301 et seq.) (the Act) and pertinent Federal legislation, we review the history and purpose of both, along with the facts alleged in the pleadings below. Like the appellate court, we also consider various documents--the developers' proposal as well as various letters and memoranda of HUD, other State agencies, and IHDA--which were exhibits incorporated by reference into IHDA's answer to the appellees' complaint. Since neither party disputes their authenticity, we accept them as authentic for the purpose of analysis upon review.

The Illinois Housing Development Act was enacted in 1967. (See Ill.Rev.Stat.1985, ch. 67 1/2, par. 301 (eff. July 24, 1967).) Its legislative history reveals that its passage as enacted was heavily influenced by the legislature's dissatisfaction with existing public efforts to house the poor.

There was a particular source of this dissatisfaction. The source was the perception that then current public housing programs tended to segregate poor people in large, ghetto-like high-rises, which inevitably became focal points for crime, delinquency, illegitimacy, and disease.

This perception is clearly reflected, time and again, in the recommendations of the Legislative Commission on Low Income Housing (the Commission), which was created by Illinois House Bill No. 2035, approved August 17, 1965. In April 1967, the Commission presented its report to the Governor, and it was this report which lead directly to the creation of IHDA. (See Legislative Commission on Low Income Housing, For Better Housing in Illinois (1967) (For Better Housing).) The Commission's report provides helpful background material for the evaluation of the Act.

The Commission noted that "high density, high-rise public housing, which has provided adequate shelter, has also bred increasing social and environmental problems." (For Better Housing at 5.) A particular drawback of such housing was its tendency to "isolate * * * inhabitants from the rest of the community, exacerbate existing social problems through excessive concentration of multi-problem families, and stigmatize those living there in easily identifiable, separate quarters." For Better Housing at 39.

The Commission traced the origins of high-density, high-rise public housing to the 1930s, when public housing was conceived of as "transient accommodation, designed to provide decent housing for families who, for reasons beyond their immediate control, were temporarily unable to afford private housing." (For Better Housing at 37, citing Final Report of the Massachusetts Special Commission of Low-Income Housing (1965) at 15.) The poverty suffered by these families was thought to be related to the ephemeral hardships of depression and war. After a short period in public housing, they were expected to exceed the maximum income limits for continued occupancy. They would then move "up and out" to decent, nonsubsidized housing in the private sector. As they left, the housing they vacated would become available to other low-income families, and the cycle would begin again. For Better Housing at 37, citing Final Report of the Massachusetts Special Commission of Low-Income Housing (1965) at 15.

In fact, however, the rapid movement "up and out" failed to materialize. There was an increasing awareness that the causes of poverty were systematic and endemic; that among the causes, structural unemployment and racial segregation played a strong role; that the turnover of public housing tenants was very low; and that public housing tenants who did move often returned to the very slums they had left behind. For Better Housing at 37-39.

To solve these problems, the Commission recommended, and the Act established, several new kinds of housing programs. The various programs recommended by the Commission were all designed to remove the stigmatizing effects of economically segregated housing projects by replacing them with developments where poor people could live with others in relative anonymity. For example, the Commission recommended the "purchase of all or parts of new, newly rehabilitated or existing privately built developments." (For Better Housing at 39.) Individual low-income units would be purchased "in blocks or scattered throughout the development or structure." The Commission noted that "the effect of this type of housing through acquisition will be housing of improved design, anonymity (i.e., recipients of public assistance will not be instantly identifiable by their housing), the healthy mixture of diverse social and economic groups, and the flexible provision of financial aid. With regard to the last point, if a family is no longer in need of subsidy, it can remain in its home by assuming the full financial obligation." (For Better Housing at 40.) Similarly, the Commission recommended "leasing private apartments in various sections of a community." Under this program, "[n]ot more than 25% of tenants in any one building can be participants in the program. Subsidized tenants pay their rent as other tenants do, only in a lesser amount, and the difference is made up by the housing authority through a direct payment to the landlord." For Better Housing at 40.

The Commission's recommendations with respect to the planning and construction of public housing shared a similar thrust. The Commission noted that the State's role with respect to the planning and construction of public housing was "meager," and that "even in the area in which State funds and State energies have been more directly involved--moderate income housing--the result in terms of units constructed is most disappointing." (For Better Housing at 47.) The Commission proposed that the State program be revamped in two respects: (1) by replacing State grants with direct, low interest, long-term State housing loans to private developers, financed through the sale of tax-exempt State bonds, and (2) by expanding the program to serve low-income families in addition to moderate-income families. (For Better Housing at 47-49.) Therefore the Commission recommended "an expanded State Housing Board be given the power to make federally...