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WALKER v. NEW YORK CITY HOUS. AUTH.

May 1, 1972

Howard WALKER for himself and other tenants in low cost housing projects in the City of New York who are similarly situated, Plaintiff,
v.
The NEW YORK CITY HOUSING AUTHORITY, Defendant


Mishler, Chief Judge.


The opinion of the court was delivered by: MISHLER

MEMORANDUM OF DECISION AND ORDER (May 1, 1972)

MISHLER, Chief Judge.

 Howard Walker is a tenant of premises 55 Nostrand Avenue, Brooklyn, New York. That building is one of a number of buildings constructed pursuant to the Public Housing Law of the State of New York and known as Marcy Houses. The defendant is an authority organized under the Public Authority Law of the State of New York. The defendant operates 190 low income projects in the City of New York consisting of approximately 157,000 rental units. The projects consist of federal, state and city financed projects. Control of federally financed low income projects is retained in the Department of Housing and Urban Development (HUD). *fn1" City financed low cost projects require the approval of the City Council and the Board of Estimate in planning construction and fixing of rents. *fn2"

 The named plaintiff brought this action on behalf of himself and all the tenants of Marcy Houses. He moves to broaden the class to include all the tenants occupying rental units in apartments owned by defendant. Since the right of the defendant to increase rents in state aided low income houses differs from federal or city aided projects, the court finds the class to consist of tenants in state aided houses owned by defendant. [Rule 23(b)(2)].

 Defendant has increased the rent of tenants since January 1, 1972 upon the annual income review of the tenant. The increase in those instances is based upon the increase in income of the tenant. By letter dated March 17, 1972 all defendant's tenants were advised of a rent increase equal to 7 1/2% of the then current rent effective May 1, 1972. Tenants failing to execute an amendment to the lease were then advised that if they failed to execute the amendment they would be served with a notice terminating their leases and faced eviction. Plaintiff claims that the Economic Stabilization Act of 1970 (P.L. 91-379, 84 Stat. 299) as amended by the Economic Stabilization Amendments of 1971 (P.O. 92-210, 85 Stat. 743) [the Act] froze the rents at the level of December 28, 1971. Plaintiff seeks judgment enjoining defendant from putting the proposed increases into effect and rolling back the rents to the level of December 28, 1971 and further for judgment in the amount of all increases over the rentals of December 28, 1971. Jurisdiction is based on § 210 of the Act.

 Plaintiff moved for a preliminary injunction. The court directed a trial of the action on the merits with a hearing on the motion for a preliminary injunction (Rule 65(a)(2) Rules of Civil Procedure).

 Section 301.501 freezes rents on all apartments except those "in rent controlled units that are subject to the control of a governmental authority under paragraph (b)(1) and (2) of § 301.106."

 Section 301.106(b)(2) in pertinent part provides:

 
"(b) Rent Controlled Housing defined.
 
For the purposes of the section the term 'rent controlled housing' means a residence for which the monthly rent is established or controlled
 
. . . .
 
(2) By (in whole or in part) a state . . . government, or an agency or instrumentality thereof, which has provided financial assistance for the construction . . . of, but which does not own the residence."

 Plaintiff's claim is founded on the power of the authority to fix rents as provided in section 154 of the Public Housing Law of the State of New York. It provides:

 
"Subject to the terms of any loan or subsidy contract with a government, the power to fix rents on a project shall rest ...

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