McLaughlin v. Housing Authority of City of Las Vegas

Decision Date31 January 1951
Docket NumberNo. 3642,3642
Citation227 P.2d 206,68 Nev. 84
PartiesMcLAUGHLIN v. HOUSING AUTHORITY OF CITY OF LAS VEGAS et al.
CourtNevada Supreme Court

Bryan & Cory, of Las Vegas, for appellant.

Earl & Earl and Howard W. Cannon, all of Las Vegas, for respondents.

BADT, Chief Justice.

This appeal presents for our determination the constitutionality of the Housing Authorities Law. Nev.Stats. 1947, Chap. 253, p. 782, being §§ 5470.01 to 5470.25, N.C.L.Supp.1943-1949. Plaintiff, as a citizen, resident, taxpayer and owner of real estate in the City of Las Vegas, Clark County, Nevada, brought the action on behalf of himself and all others similarly situated, alleging that the Housing Authority of the City of Las Vegas and the City of Las Vegas were about to proceed with a program for the construction of one hundred dwelling units involving the borrowing of $900,000 to be secured by pledge of the revenues derived from operating the project, etc., and to be repaid with the proceeds of sale of self-liquidating bonds. Plaintiff alleged that in a number of respects the act was in contravention or provisions of the state and federal constitutions. Issues were joined by the answer of the defendants, and the district court thereafter rendered judgment dismissing the proceedings. No matters of fact are in dispute, and the issues of law are clearly drawn. The pleadings of the parties are tantamount to an agreed statement of facts. From them it appears that the Public Housing Administration, a federally owned corporation, is empowered under the United States Housing Act of 1937, as amended, 42 U.S.C.A. §§ 1401-1430, to assist financially local public housing authorities in the development and operation of low rent housing and slum clearance projects. Negotiations were had by the Housing Authority of Las Vegas with the Public Housing Administration under the provisions of the federal and state housing acts, and these negotiations had at the time of the commencement of the action been developed to a point whereunder the local housing authority had entered into what was termed a cooperation agreement with the city, the likewise signed a preliminary loan agreement with and a preliminary note to the Public Housing Administration and had obtained the approval of that administration for the construction of one hundred dwelling units for a low rent and slum clearance project in the city. Plaintiffs do not attack the validity of the creation of the Las Vegas Housing Authority by the state Housing Authorities Law and the resolution of the board of city commissioners. The pleadings contain a detailed description of the project, which we do not find it necessary to follow.

Begun in 1937, activities and operations under the federal act have included the construction of several hundred thousand low rent dwelling units in many communities in the United States. By the amendment of 1949, 81st Congress, Public Law 171, federal financial aid for the construction of an additional 810,000 units was authorized. The Las Vegas program was a part of such authorization. Under the terms of the federal act it was necessary for the several states to enact legislation to set up the proper machinery to enable cities and towns to take advantage of the program.

The provisions of the Nevada Housing Authorities Law are in the main similar to those enacted in between thirty and forty other states in the Union. All have for their general purpose the promotion of low rent housing or slum clearance. The title of the Nevada act contains a general recital of its purposes as being: 'An Act to provide for the creation of housing authorities, providing for the appointment of commissioners of said authority, defining the power of the authority, providing for the removal of commissioners, prescribing regulations with respect to rentals and tenant admissions, authorizing the authority to issue bonds and prescribing the manner of payment therefor, exempting certain property from execution sale, authorizing the authority to borrow money or accept contributions from the federal government, and other matters relating thereto.' The preamble recites the acute shortage of housing for veterans and other persons of low income, the overcrowding in urban and rural areas, the shortage of safe and sanitary dwelling accommodations available at affordable rents, the resulting increase in and spread of diseases and crime, with their menace to health, safety, morals and the public welfare, the necessity for improvement, the inability of obtaining relief without governmental assistance, etc. Sections 1 and 2 of the act are devoted to definitions of the terms used. Section 3 creates in each city 'a public body corporate and politic' to be known as the 'housing authority' thereof. 'Such housing authority is hereby created a public body corporate for municipal purposes and shall be a municipal corporation.' The section provides for the adoption of certain resolutions by the city governing board, reciting certain conditions within the city, etc. Section 7 emphasizes this: 'An authority shall constitute a public body corporate and politic, exercising public and essential governmental functions, and having all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this act * * *.' This is followed by subsections (a) to (f), inclusive, defining in detail the powers deemed to be included in the grant. These include broad powers for the acquisition of property, the construction and renting of dwellings, borrowing of money, etc.

Section 8 declares it to be the policy of the state that the authority operate its projects in an efficient manner so as to fix rentals 'at low rates consistent with its providing decent, safe and sanitary dwelling accommodations for persons of low income,' sufficient only to maintain the project to pay the interest and principal on its bonds, to create a necessary reserve to pay its administrative expenses and 'to make such payments in lieu of taxes as it determines are consistent with the maintenance of the low-rent character of the housing projects.' Section 9 requires the authority to lease the dwelling accommodations only to veterans and other persons of low income, with preference to veterans and servicemen and families of deceased persons who served in the armed forces, at rentals within the financial reach of such persons. Further rules with respect to the intended lessees and the accommodations to be furnished and the rentals to be charged are laid down. Section 11 reads as follows: 'An authority shall agree to make such payments in lieu of taxes to the city, town, county, and the state, or any political subdivision thereof, as it finds consistent with the maintenance of the low-rent character of housing projects or the achievement of the purposes of this act.' Section 12 authorizes the issuance of bonds for any of the corporate purposes of the authority. It then provides: 'Neither the commissioners of an authority nor any person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof. The bonds and other obligations of an authority (and such bonds and obligations shall so state on their face) shall not be a debt of the city, the county, the state, or any political subdivision thereof, and neither the city, the county, the state, nor any political subdivision thereof shall be liable thereon, nor in any event shall such bonds or obligations be payable out of any funds or properties other than those of said authority. The bonds shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.' Sections 13 and 14 are devoted to provisions concerning the nature of the bonds, and the powers, duties and obligations of the sundry parties. The rights of the obligees are further defined in Section 15. Section 19 authorizes any state public body (in this case, the City of Las Vegas) to aid and cooperate in the project by conveying and dedicating property, causing parks, playgrounds, recreational, community, educational, water, sewer and drainage facilities, etc. to be furnished, installing streets, causing services to be furnished 'of the character which such state public body is otherwise empowered to furnish,' enter into agreements relating to the repair, closing or demolition of unsafe, insanitary or unfit buildings, purchase the bonds of the Housing Authority, incur the entire expense of public improvements and enter into broad agreements with the Housing Authority.

Section 20 authorizes the authority to borrow money and to accept grants, contributions and other financial assistance of the federal government. Section 21 confers certain additional powers and provides certain limitations as to rentals. Other sections of the act and other provisions of the sections described do not require further amplification at this time.

The plaintiff contends that the provisions of the state constitution are contravened by the act in numerous particulars. Several of these particulars, and possibly the most important ones, turn upon the question of whether the legislation is for a public use or purpose. Our burden on all points raised is materially lightened by the consideration given by the courts of last resort of over half the states in the Union to attacks upon their statutes almost identical with those here made on the Nevada statute. There exist some differences in the sundry statutes under construction in such courts, and naturally the constitutional provisions of the other states are not in all respects identical with our own. However, both the statutes involved and the constitutional provisions in question in those cases are so closely analogous to the situation here presented and the holdings are so nearly unanimous that we cannot do otherwise than to consider them controlling. Such being the case, no purpose can be served by...

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