Park Vill. Apartment Tenants Ass'n v. Trust

• Decision Date: 25 February 2011
• Docket Number: No. 10–15303.,10–15303.
• Citation: 636 F.3d 1150
• Parties: PARK VILLAGE APARTMENT TENANTS ASSOCIATION; William Foster; Shirley Smith; Cornelius Weekley, Plaintiffs–Appellees,v.MORTIMER HOWARD TRUST; Mortimer R. Howard, Defendants–Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

636 F.3d 1150

11 Cal. Daily Op. Serv. 2524

2011 Daily Journal D.A.R. 3039

PARK VILLAGE APARTMENT TENANTS ASSOCIATION; William Foster; Shirley Smith; Cornelius Weekley, Plaintiffs–Appellees,

v.MORTIMER HOWARD TRUST; Mortimer R. Howard, Defendants–Appellants.

No. 10–15303.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 13, 2010.Filed Feb. 25, 2011.

Thomas Melvin Swihart, Berkeley, CA, for the defendant-appellant.James Russell Grow, Kent Kang Qian, National Housing Law Project, Oakland, CA; Lisa Shouse Greif, Bay Area Legal Aid, Oakland, CA, for the plaintiffs-appellees.Appeal from the United States District Court for the Northern District of California, Saundra B. Armstrong, District Judge, Presiding. D.C. No. 4:09–cv–04780–SBA.Before: WILLIAM A. FLETCHER and MILAN D. SMITH, JR., Circuit Judges, and JAMES D. TODD, Senior District Judge.^*Opinion by Judge MILAN D. SMITH, JR.; Partial Concurrence and Partial Dissent by Judge WILLIAM A. FLETCHER.

OPINION

M. SMITH, Circuit Judge:

The individual Plaintiffs are a group of elderly, low-income tenants of a former project-based, federally subsidized Section 8 housing complex. They argue that federal law gives them a right to remain in the complex and to pay a portion of their rent by using federally funded “enhanced vouchers.” Defendants, who own the housing complex, argue that the tenants have no right to remain in the complex or to use such vouchers to pay their rent. Defendants further contend that even if the tenants have a right to remain in the complex and to pay a portion of their rent relying on such vouchers, a court cannot compel them to enter into a contract with the local housing authority that would require them to provide a certain level of service to tenants of the complex, so long as Defendants are willing to forego payment of that portion of the rent covered by the “enhanced vouchers.”

The district court entered a preliminary injunction in favor of “any tenant at Park Village Apartments.” We affirm in part because the individual Plaintiffs have a statutory right to remain in the complex, and are, accordingly, entitled to an injunction barring Defendants from evicting them solely because they are paying only their statutorily determined portion of each month's rental payment. However, we reverse and remand in part because Plaintiffs have not identified any evidence or statutory authority upon which to base a mandatory injunction compelling Defendants to enter contracts with the local housing authority, so long as Defendants are willing to forego payment of that portion of the rent covered by the “enhanced vouchers.”

FACTUAL AND PROCEDURAL BACKGROUND

A. Statutory Background

For almost four decades, the federal government has provided rental assistance to low-income, elderly, and disabled families through the Section 8 housing program. Congress added the program to the United States Housing Act of 1937 by enacting Title II of the Housing and Community Development Act of 1974, Pub. L. No. 93–383, § 201(a), 88 Stat. 633, 662–66 (1974) (codified as amended at 42 U.S.C. § 1437f). Congress did so “[f]or the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing.” 42 U.S.C. § 1437f(a); see generally Barrientos v. 1801–1825 Morton LLC, 583 F.3d 1197, 1202 (9th Cir.2009).

Section 8 assistance may be either “project-based” or “tenant-based.” 24 C.F.R. § 982.1(b)(1). Project-based assistance is appurtenant to specific housing units, pursuant to which the government provides rental assistance payments to unit owners on behalf of low-income tenants in those units. Id. Tenant-based assistance, on the other hand, is appurtenant to the tenant, pursuant to which the tenant may retain a rental subsidy when he or she moves to another Section 8 housing unit. See 42 U.S.C. § 1437f( o), (r); 24 C.F.R. §§ 982.1(b)(1), 982.314, 982.353, 982.355. Under both forms of assistance, the tenant contributes a prescribed portion of family income toward the rent due, ordinarily the greater of 30 percent of “adjusted income” or 10 percent of gross income. 42 U.S.C. § 1437f( o)(2); see also id. § 1437a(a)(1). The government pays the balance of the rent to the owner, up to a “payment standard” for the dwelling unit, which ordinarily cannot exceed 110% of a local “fair market rental” value established by the Department of Housing and Urban Development (HUD). See id. § 1437f(c), ( o)(1)-(2). The Section 8 program is funded by the federal government and administered by local public housing authorities (PHAs). Barrientos, 583 F.3d at 1202.

Beginning in the late 1980s, an increasing number of subsidized unit owners became eligible to prepay mortgages, or to terminate or not renew their contracts with HUD for project-based and other forms of unit-based federal housing assistance. Id. at 1202–03. Congress enacted new laws to protect tenants in assisted units in the event the owner sought to convert the previously subsidized units to market-rate housing. An early protection was a notice requirement, enacted as part of the Housing and Community Development Act of 1987. See Pub. L. No. 100–242, § 262(a), 101 Stat. 1815, 1890–91 (1988) (codified as amended at 42 U.S.C. § 1437f(c)(8)). In its current form, this protection requires that the owner provide tenants and the Secretary of HUD (Secretary) with an opt-out notice not less than one year before the proposed termination. 42 U.S.C. § 1437f(c)(8)(A). An owner may not evict tenants or increase the rent until one year after providing such notice. Id. § 1437f(c)(8)(B). The notice must also “comply with any additional requirements established by the Secretary.” Id. § 1437f(c)(8)(C).

As more Section 8 project-based assistance contracts began to expire in the late 1990s, Congress created an “enhanced voucher” program, culminating in the enactment of permanent enhanced voucher authority in 1999. See Pub. L. No. 106–74, 113 Stat. 1047, 1109–15, 1121–24 (1999). The 1999 statute had several features. First, it enacted the notice provisions of § 1437f(c)(8) in their current form. Id. § 535, 113 Stat. at 1121. Second, it obligated the Secretary to provide “enhanced vouchers” to tenants residing in project-based subsidized units at the time of termination:

In the case of a contract for project-based assistance under section 8 for a covered project that is not renewed ... upon the date of the expiration of such contract the Secretary shall make enhanced voucher assistance ... available on behalf of each low-income family who, upon the date of such expiration, is residing in an assisted dwelling unit in the covered project.

Id. § 531(a), 113 Stat. at 1113 (codified at 42 U.S.C. § 1437f note, Multifamily Assisted Housing Reform and Affordability Act of 1997, § 524(d)(1) (hereinafter MAHRAA)).

Third, and most importantly for purposes of our opinion, it added a new subsection (t) to Section 8, setting forth various rules governing enhanced vouchers. Id. § 538(a), 113 Stat. at 1122–23. This subsection provided that enhanced vouchers are equivalent to ordinary vouchers as set forth in § 1437f( o), with certain key differences. Most significantly, it provided that

during any period that the assisted family continues residing in the same project in which the family was residing on the date of the eligibility event ¹ for the project, if the rent for the dwelling unit of the family in such project exceeds the applicable payment standard established pursuant to subsection ( o) for the unit, the amount of rental assistance provided on behalf of the family shall be determined using a payment standard that is equal to the rent for the dwelling unit (as such rent may be increased from time-to-time), subject to paragraph (10)(A) of subsection ( o)[.]

Id. (codified at 42 U.S.C. § 1437f(t)(1)(B) (emphasis added)). By making the “payment standard ... equal to the rent for the dwelling unit,” the statute entitles a tenant with an enhanced voucher to have the federal government pay the difference between the designated percentage of the tenant's income payable by the tenant and the market-rate rent for a dwelling unit where he or she resided, even where that amount exceeds the otherwise “applicable payment standard.” Id. § 1437f( o)(1)-(2), (t)(1)(B). The total rent charged by the owner is subject to no specific limit except that it must “be reasonable in comparison with rents charged for comparable dwelling units in the private, unassisted local market.” Id. § 1437f( o)(10)(A).

In a trio of enactments in 2000, Congress amended the enhanced voucher provision to make it even more protective of tenants. It now provides:

[ T ] he assisted family may elect to remain in the same project in which the family was residing on the date of the eligibility event for the project, and if, during any period the family makes such an election and continues to so reside, the rent for the dwelling unit of the family in such project exceeds the applicable payment standard established pursuant to subsection ( o) of this section for the unit, the amount of rental assistance provided on behalf of the family shall be determined using a payment standard that is equal to the rent for the dwelling unit (as such rent may be increased from time-to-time), subject to paragraph (10)(A) of subsection ( o) of this section and any other reasonable limit prescribed by the Secretary, except that a limit shall not be considered reasonable for purposes of this subparagraph if it adversely affects such assisted families[.]

Pub. L. No. 106–246, § 2801, 114 Stat. 511, 569 (July 13, 2000); Pub. L. No. 106–377, § 1(a)(1), 114 Stat. 1441, 1441A–24 (Oct. 27, 2000); Pub. L. No. 106–569, § 903(a), 114 Stat. 2944, 3026 (Dec. 27, 2000) (codified at 42 U.S.C. § 1437f(t)(1)(B) (emphasis added)).

B. Factual and Procedural Background

The Plaintiffs are individual elderly and disabled low-income tenants, and an unincorporated...