Sadler v. 218 Housing Corp.

• Decision Date: 26 July 1976
• Docket Number: Civ. A. No. 75-32A.
• Citation: 417 F. Supp. 348
• Parties: Lorene SADLER, Individually and on behalf of all others similarly situated. Cecilia Hutchings et al., Intervenors, v. The 218 HOUSING CORPORATION et al.
• Court: U.S. District Court — Northern District of Georgia

417 F. Supp. 348

Lorene SADLER, Individually and on behalf of all others similarly situated Cecilia Hutchings et al., Intervenors, v. The 218 HOUSING CORPORATION et al.

Civ. A. No. 75-32A.

United States District Court, N. D. Georgia, Atlanta Division.

July 26, 1976.

Myron N. Kramer, Richard D. Ellenberg, Atlanta, Ga., for plaintiffs.

Lewis Cenker and David K. Whatley, Smith, Cohen, Ringel, Kohler & Martin, John W. Stokes, Jr., U. S. Atty., Richard A. Horder, Asst. U. S. Atty., Dana E. McDonald, U. S. Dept. of Housing and Urban Development, Atlanta, Ga., George M. Fleming, Trial Atty., Dept. of Justice, Washington, D. C., for defendants.

ORDER

RICHARD C. FREEMAN, District Judge.

This is an action brought by low-income residents of a federally-subsidized housing project, known as Rockdale Apartments, seeking to enjoin implementation of a May 6, 1976, decision by the United States Department of Housing and Urban Development hereinafter "HUD" to demolish the 335-unit complex. Plaintiffs are familiar litigants in this court, although their posture has changed somewhat since commencing the instant litigation. When their complaint was originally filed, plaintiffs attacked the deplorable condition of their apartment project on the grounds that the named defendants had collectively failed to provide plaintiffs with decent, safe, and sanitary living conditions in contravention of the due process clauses of the Fifth and Fourteenth Amendments, the National Housing Act, and state and local law. Plaintiffs now contend that they are entitled to an injunction against the proposed destruction of the project on four grounds: (1) that HUD failed to comply with the National Environmental Policy Act of 1969, 42 U.S.C. § 4331, et seq., in reaching its decision to demolish; (2) that HUD failed to afford the resident plaintiffs with notice and an opportunity to be heard in connection with the decision to demolish in contravention of the due process clause of the Fifth Amendment;¹ (3) that HUD violated the provisions of the National Housing Act, 12 U.S.C. § 1701, et seq. by applying a purely economic standard in determining that the project should be demolished; and (4) that HUD violated the fair housing provisions of Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3601, et seq., by failing to make prior studies on the racial effect and impact of its decision. On June 11, 1976, this court held a full evidentiary hearing to consider plaintiffs' motion for a preliminary injunction. The action is presently pending before the court on plaintiffs' request for preliminary injunctive relief, and on plaintiffs' motion to amend the complaint.

PLAINTIFFS' MOTION TO AMEND

On May 18, 1976, plaintiffs moved to amend their complaint to allege claims arising under the National Housing Act, NEPA, and the Fair Housing Act, and to amend their prayers for injunctive relief consistent with these claims. While it is clear that the court never formally granted plaintiffs' motion to amend, the court permitted plaintiffs to present evidence on such claims at the evidentiary hearing held before this Court. Accordingly, plaintiffs' motion to amend their complaint is hereby GRANTED.

THE NATIONAL ENVIRONMENTAL POLICY ACT

Plaintiffs contend that HUD violated the National Environmental Policy Act, 42 U.S.C. § 4331, et seq. hereinafter "NEPA" on the grounds that: (1) HUD made the decision to demolish Rockdale without completing the environmental review procedures contemplated by NEPA, and in particular, plaintiffs attack HUD's failure to file an environmental impact statement, 42 U.S.C. § 4331(b)(1); (2) that HUD concerned itself only with the possible adverse effects of demolition, whereas NEPA requires that all potential economic and social effects be considered; and (3) that HUD failed to consider alternatives to demolition. Plaintiffs appear to have somewhat modified their request for injunctive relief in light of the evidence submitted at the evidentiary hearing. Thus, as originally filed, their motion sought an injunction against demolishing the project, pending the completion of a full environmental impact statement; however, it now appears that plaintiffs seek, at the very least, to enjoin demolition pending the amendment of the Special Environmental Clearance to reflect study into the question of whether demolition of Rockdale will further exacerbate the purported dearth of low and moderate-income housing in the Atlanta metropolitan area. Before turning to the merits of the instant motion, some review of the salient facts appearing of record and adduced at the evidentiary hearing is warranted.

On March 5, 1975, as a result of foreclosure and sale HUD became the owner of Rockdale Apartments. As a result of the action brought by plaintiffs herein attacking the deplorable condition of the property on statutory and constitutional grounds, the parties entered into a consent order requiring HUD to complete its environmental review process to determine whether it would rehabilitate Rockdale. Lorene Sadler, et al. v. The 218 Housing Corporation, et al., Civil Action No. 75-32A (N.D.Ga. Oct. 9, 1975).

Section 102 of NEPA provides that all "major Federal actions significantly affecting the quality of the human environment must be accompanied by a detailed statement assessing the environmental impact of the proposed action," hereinafter "environmental impact statement" or "EIS". 42 U.S.C. § 4332(2)(C). The Council on Environmental Quality (C.E.Q.) created pursuant to the Act, and charged with overseeing implementation of NEPA, promulgated guidelines directing federal agencies to establish their own procedures to identify those actions requiring environmental impact statements. 36 Fed.Reg. 7724. See 40 C.F.R. § 1500.3(a).

In 1971, HUD promulgated such regulations, and in accordance with such regulations and pursuant to previous orders of this court, undertook a "Special Environmental Clearance" of the project.² As a result of an environmental assessment conducted in 1975, the Area Director of HUD, defendant Hartman, made an initial decision on October 11, 1975, that the project should be rehabilitated. Thereafter, while in the process of implementing that decision and setting a timetable for rehabilitation, a study by an independent architectural and engineering firm disclosed that there were significant expenses that had not been considered in connection with the first environmental clearance. This independent study disclosed that the cost to rehabilitate Rockdale would be approximately $1.4 million, or approximately $300,000.00 in excess of the original estimate. As a consequence, a second environmental review was conducted to consider the environmental effect of demolition of the project; defendant Hartman, after receipt of the new cost figures, concurred in the subsequent staff recommendation that the project be demolished, "subject to the completion of the environmental review process which had already begun."³ It is undisputed that defendant Hartman, on April 30, 1976, in recognition of the possible adverse effects of relocation on the current residents of the project directed his staff to prepare a plan to provide moving assistance to existing Rockdale residents to be included as part of the special clearance. Among other things, that study indicated that there were adequate vacant units of comparable size and rent and of superior quality into which the current Rockdale tenants could be relocated. On May 6, 1976, after completion of the Special Environmental Clearance, HUD issued a negative impact statement or "Finding of Inapplicability", stating that destruction of Rockdale would pose no significant environmental impact, reasoning "that demolition of 325 Units is under the 500 unit threshold requiring an environmental impact statement." See Handbook of Departmental Policies, Responsibilities and Procedures for Protection and Enhancement of Environmental Quality, HUD Circular 1390.1 hereinafter "Handbook". See note 2, supra.

At the evidentiary hearing, plaintiffs challenged the sufficiency of HUD's environmental review, primarily upon the grounds that HUD had failed to ask the right questions in conducting its environmental review; that is, plaintiffs contended that HUD failed to consider a purported dearth of low and moderate-income housing when it decided to demolish Rockdale. Moreover, plaintiffs further contend that HUD, while giving lip-service to alternative courses of action, in reality, failed to meaningfully consider viable alternatives to demolition. Finally, plaintiffs challenged the failure of HUD to consider what the Rockdale property might be used for in the event that it was left vacant by demolition. However, the court pretermitted such arguments on the grounds that it was evident that plaintiffs lacked standing to challenge the future uses of the property, in the absence of any concrete plan or proposal. See Jones v. United States Department of Housing and Urban Development, 68 F.R.D. 60, 68 (E.D.La.1975).

Plaintiffs' principal witness was Eugene Harold Bowens, who is president of Interfaith, Inc., a non-profit organization which seeks low-income housing opportunities and participates in the management of such projects. Mr. Bowens stated that in addition to his organization, there were several other organizations of its type in the Atlanta area that might have been willing to assume management of Rockdale, but that neither his organization nor to the best of his knowledge, any other organization had been contacted by HUD to determine whether they would be willing to operate Rockdale. The most significant portion of Mr. Bowens' testimony, however, dealt with the current inadequacy of decent, low and moderate-income housing in the Atlanta metropolitan area as evidenced by a 1974 study conducted by the Atlanta Regional Commission.⁴ In light of his experience in the housing area and experience as a member of that...