West v. Tennessee Housing Development Agency

• Decision Date: 15 July 1974
• Citation: 512 S.W.2d 275
• Parties: Olin WEST, III, a Citizen, Resident and Taxpayer of the State of Tennessee, in his own behalf and on behalf of all othr citizens, residents and taxpayers of the State of Tennessee, v. TENNESSEE HOUSING DEVELOPMENT AGENCY et al.
• Court: Tennessee Supreme Court

Page 275

512 S.W.2d 275

Olin WEST, III, a Citizen, Resident and Taxpayer of the

State of Tennessee, in his own behalf and on behalf of all othr citizens, residents and taxpayers of the State of Tennessee, v. TENNESSEE HOUSING DEVELOPMENT AGENCY et al.

Supreme Court of Tennessee.

July 15, 1974.

Thomas V. White, Nashville, for plaintiff-appellant.

C. Hayes Cooney, Asst. Atty. Gen., Stephen C. Small, Nashville, for defendants-appellees.

OPINION

McCANLESS, Justice.

The plaintiff, describing himself as a citizen, resident, and taxpayer of the State, filed his complaint in his own right and on behalf of all other citizens, residents, and taxpayers of Tennessee who might desire to join him, in accordance with Rule 23 of the Tennessee Rules of Civil Procedure. The defendants are the Tennessee Housing Development Agency, a corporation created by the Tennessee Housing Development Agency Act, Chapter 241 of the Public Acts of 1973, the individual members of the Agency, and its Executive Director.

The plaintiff prayed for a decree adjudging the constitutional rights, duties, and obligations of the defendants and that the defendants be permanently enjoined from selling the obligations of the Agency.

Chancellor Frank F. Drowota delivered his memorandum opinion in accordance with which a decree was entered. The plaintiff has appealed. We have considered the record and because we are satisfied that the Chancellor's opinion is correct in every particular we adopt it as out own. It is, as follows:

'This is an action for a declaratory judgment brought on authority of T.C.A., § 23--1101, et seq. The defendants filed an answer to the complaint on January 8, 1974; the parties also filed certain exhibits. The parties submitted briefs and plaintiff by motion requested that these briefs be made part of the technical record; further, that oral argument be suspended and the Court decide the issues on the pleadings, exhibits, and briefs filed herein. By agreed order entered April 16, 1974, the Court granted plaintiff's motion. In this state of the pleadings, the Court is of the opinion that the case is properly disposed of under Rule 12.03, TRCP.

'By his complaint plaintiff, a citizen, resident and taxpayer of the State of Tennessee, seeks a declaration that Chapter 241, Public Acts of 1973, and known as the 'Tennessee Housing Development Agency Act,' is unconstitutional; further that the defendant agency be permanently enjoined and restrained from selling notes, bonds, or other obligations as authorized by said Act.

'For reasons hereinafter stated this Court is of the opinion that the defendants are entitled to a judgment as a matter of law. A decree will be entered declaring that Chapter 241, Public Acts of 1973, is a constitutional exercise of the police power of the State of Tennessee, and, further, denying the injunctive relief sought by the plaintiff.

'I. THE ACT

'Section 2 of the Act begins with an identification of the problem: '. . . there continues to exist throughout the state a seriously inadequate supply of safe and sanitary dwelling accommodations, primarily accommodations for persons and families of lower and moderate income.'

'The Act proceeds to identify what the General Assembly has determined to be a major cause of this condition, namely, 'recurrent, cyclical shortages of funds in private banking channels available for residential mortgages.'

"Such shortages contribute to drastic reductions in construction starts of new residential units. In addition, these cyclical shortages make the sale and purchase of existing residential units extremely difficult in many parts of the state, especially by those persons of lower and moderate income. The ordinary operations of private enterprise have not in the past corrected these conditions.'

'Having set forth the condition sought to be remedied and a major cause of that condition, the Act then sets forth several specific harmful effects of this condition.

First. This condition is contrary to the public interest and threatens the health, safety, welfare, comfort and security of the people of the state and is inimical to the sound growth and the development of its communities. An adequate supply of housing of a variety of housing types serving persons and families of all income levels and properly planned and related to public transportation, public facilities, public utilities and sources of employment and service is essential to the orderly growth and prosperity of the state and its communities.

Second. It is further found and declared that the drastic reduction in residential construction starts associated with such shortages cause a condition of sustained unemployment and underemployment in the construction industry which results in hardships to many individuals and families, wastes vital human resources, increases the public assistance burdens of the state and municipalities, impairs the security of family life, impedes the economic and physical development of municipalities and adversely affects the welfare and prosperity of all the people of the state. A stable supply of adequate funds for residential mortgages is required to spur new housing starts in an orderly and sustained manner and thereby to reduce the hazards of unemployment and underemployment in the construction industry.

Third. It is further found and declared that these conditions associated with such recurrent shortages of residential mortgage funds contribute to the persistence of slums and blight and to the deterioration of the quality of the environment and living conditions of a large number of persons residing in the state of Tennessee, having adversely affected the economy of the state as a whole, and are contrary to the declared policy of the state to promote a vigorous and growing economy, to prevent economic stagnation, to increase revenues to the state and to its municipalities and to achieve stable local economics.

'With this background, the Act then sets forth the cental purpose of this remedial legislation and outlines the means which the General Assembly has determined will accomplish that purpose, in the following language:

". . . To bring greater stability to the residential construction industry and related industries, and thus to assure a steady flow of production of new housing units, the Tennessee Housing Development Agency shall be given the power to raise funds from private investors through issuance of its bonds and notes to (i) make funds available to sponsors, developers and builders for financing land development and residential housing construction for lower and moderate income persons and families; (ii) to make funds available to sponsors, developers, builders and purchasers for permanent mortgage financing of housing for lower and moderate income persons and families; and (iii) to purchase existing insured mortgages from lenders within the state and direct an amount equal to the proceeds from the liquidated mortgage investments into new mortgages on residential real property; and (iv) to enter into advance commitments with lenders to purchase insured mortgage loans made to persons and families of lower and moderate income; and further, to provide technical, consultative and project assistance services to sponsors of land development or residential housing; and to assist in coordinating federal, state, regional and local public and private efforts and resources to otherwise increase the supply of such residential housing.'

'The Act, then in twenty succeeding sections sets out in detail the particulars by which this legislative design is to be accomplished.

'II. CONSTITUTIONAL CHALLENGES

'Before detailing plaintiff's objections to the Act, it is well to note that every act of the General Assembly comes to the courts with a strong presumption in favor of its constitutionality. Memphis Freight Co. v. City of Memphis, 44 Tenn. 419 (1867); LaFever v. Ware, 211 Tenn. 393, 365 S.W.2d 44 (1963). The determination by the General Assembly, a co-equal branch of government, that the act is constitutional is entitled to great weight. Thus plaintiff must bear a heavy burden in establishing some constitutional infirmity of the Act in question.

'FIRST. Plaintiff argues that the Act serves no public purpose and, therefore, the Act's authorization of the expenditure of public monies is unconstitutional and illegal. By brief plaintiff argues that 'neither the U.S. Constitution nor any other primary source of law in the U.S. gives individuals the right to housing provided by the state in which they live. Although public safety is definitely a concern of each state government, the Plaintiff contends that the State of Tennessee does not have as one of its functions the obligation to provide such housing.'

'This argument misconceives the issue. The issue is not whether an individual has a Right to adequate housing which, upon demand, the state has the Obligation to provide. Rather the issue here is whether the State of Tennessee, acting through its General Assembly, has the Power under our Constitution to use the means set forth in the Act to remedy the problem identified. In the absence of an express or implied prohibition, the General Assembly has all power of legislation. Peay v. Nolan, 157 Tenn. 222, 7 S.W.2d 815 (1928); State v. Graham, 161 Tenn. 557, 30 S.W.2d 274 (1930); Fentress County Beer Board v. Cravens, 209 Tenn. 679, 356 S.W.2d 260 (1961); Perry v. Lawrence County Election Commission, 219 Tenn. 548, 411 S.W.2d 538 (1967), cert. den. 389 U.S. 821, 19 L.Ed.2d 73, 88 S.Ct. 44.

'The gist of plaintiff's argument is that, 'since only a portion of the State's populace--described in the Act as low and moderate income individuals--will personally benefit by being eligible to live in the proposed housing, the 'community as a body' as stated in the (Pack v. South Central Bell Telephone Company, 215 Tenn. 503, 387 S.W.2d 789 (1965)) decision, will not be served. Since...