The opinion of the court was delivered by: LASKER
One out of every 15 or 16 people in the City of New York -- a total of 550,000 persons -- lives in public housing.
In periods of urban decay and housing shortage such as have existed almost continuously since the end of World War II, and particularly in recent years, the allocation of available public accommodations has been of acute concern to low income families looking for a decent place to live. If the supply of public housing was ever sufficient in the post-war era, it certainly has not been adequate to meet the aggravated demand caused by rapid and largely unforeseen migration to the city of poor persons for whom the cost of privately constructed housing is beyond their means.
The decision as to who should be entitled to the benefit of public housing has, therefore, become as important as the location and number of units to be built. The situation has been complicated by radical changes in the racial makeup of the cities. As the percentage of black and Puerto Rican citizens in the urban population has grown and ghettos have unhappily enlarged, local authorities and Congress itself have understandably concluded that for the good of the entire community, racial balance should be one -- though not the sole -- objective of allocation.
In the Fair Housing Act of 1968, Congress declared (42 U.S.C. § 3601):
"It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States."
and directed (42 U.S.C. § 3608(d)(5)) that:
"(d) The Secretary of Housing and Urban Development shall --
(5) administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of this subchapter."
These statutory provisions have been universally construed by court decisions (referred to in detail below) to require housing authorities not merely to follow a policy of "color blindness", but literally to act affirmatively to achieve fair housing, that is, not merely to desegregate, but to integrate housing.
In the case before us, the plaintiff and intervening-defendant classes are cross-claimants for a limited number of apartments in the Seward Park Extension Urban Renewal Area. Defendant New York City Housing Authority is the builder and manager of the project, and George Romney is sued in his then capacity as Secretary of the Department of Housing and Urban Development ("HUD"), which has financially assisted the urban renewal project. They support the claims of the intervening defendants. All parties have moved for summary judgment,
and all factual questions have been resolved either by agreement of the parties, as documented in the papers submitted by them, or by an evidentiary hearing as to certain limited issues.
Before outlining the complex and multi-layered statutory and constitutional arguments made by either side, the history of the battle must be sketched.
The Seward Park Extension Urban Renewal Area is a complex of middle and low income housing constructed with the aid of federal funds on Manhattan's Lower East Side under the supervision of the New York City Housing and Development Administration ("HDA"). Of the low income buildings, two are to be constructed and managed by the New York City Housing Authority. They are the subject of the dispute here.
Title to the urban renewal area vested in the City of New York on November 1, 1967. Gradually over the following years, HDA demolished the existing structures in the area and relocated their inhabitants into various types of accommodations throughout the city. The majority of those relocated were rehoused in public housing in the Lower East Side area. These persons were assured, during the relocation process, that they would have a first priority to return to the buildings completed on the site of their former homes.
Arrangements for the leasing of apartments in the two buildings, one of which is now complete, the other to be completed within a couple of months, began in January, 1972. At that time, HDA sent notices to all former site occupants, without regard to whether they were project or urban renewal site residents
or resided in standard or substandard housing, informing them of their "first priority to return," subject to qualifications as to income, family size and the like. Pursuant to this notice, many former site occupants applied for and were granted leases. At some point in the spring, however, the Housing Authority began informing other former site occupants that all the apartments were filled and commenced leasing apartments to defendant-intervenors.
In April, 1972, plaintiffs moved for preliminary relief. The late Judge McLean granted a temporary restraining order barring the Housing Authority from renting apartments to anyone other than members of the plaintiff class (former site occupants). On May 23, 1972, Judge Frankel, on a motion for a preliminary injunction, filed an extensive opinion, reported at 344 F. Supp. 737, holding (1) that the Housing Authority's actions in renting apartments to persons other than members of the plaintiff class violated the Authority's own regulation,
GM 1810, and thereby deprived plaintiffs of due process; and (2) that, in renting apartments on a priority basis to Jewish tenants, the Authority violated the Establishment Clause of the First Amendment, the Equal Protection Clause, and (because the action disobeyed the antidiscrimination clauses of 42 U.S.C. §§ 2000d and 3604) the Supremacy Clause of the Constitution.
On June 23, 1972, Judge Gurfein filed an order permitting intervention as defendants of Akiva Miller and others similarly situated, persons who are not former site occupants, but who have been given leases or commitments for apartments in the project. These persons had not been originally named as parties and had not appeared or been represented in the litigation as to preliminary relief.
In order to clear the area for urban renewal, 1,852 families were relocated, 802 into public housing. Of the 1,852, fifty-five families resided on the actual site of the Housing Authority buildings. Thirty-two of these were relocated into public housing.
When leasing time for the new buildings came, 161 of the former site occupants were given leases, while 322 applied and were refused. Of the project site residents, 15 have leases and 40 have applied and been turned down. Accordingly, of a total of 360 apartments, 161 went to former site occupants (i.e., families who formerly resided either within the area or the project) and 2 were leased to resident employees. These are not contested. Of the 197 remaining contested apartments, 26 have not been rented and 171 have been leased to defendant-intervenors.
As a result, the plaintiff class numbers 322, of whom 40 are project site residents and 282 are urban renewal site residents. Of the total, 260 reside in public housing (32 project and 228 urban renewal site residents). The intervenor-defendants' class contains 171 members, 97 of whom reside in public housing. Forty-eight of the intervenors are persons transferred from other projects to be close to their place of worship (hereinafter called "house of worship transferees").
Finally, we turn to the racial statistics, which, unfortunately, play a large part in the decision of this case. Sixty percent of the 1,852 urban renewal site residents are non-white
(including 49 of the 55 project site residents). As the leases presently stand, 119 or 36% have gone to non-whites and 215 or 64% to whites. Former site occupants lessees (161 leases) are 60% non-white and 40% white. Defendant-intervenors, with 171 leases, are 12% non-white and 88% white.
The evidence establishes that if plaintiffs prevail the Housing Authority buildings will be 80% non-white by family. If defendants carry the day, the ratio will be 40% non-white to 60% white by family and 50% non-white and white by population. As background to the above, it is noteworthy that the entire urban renewal complex, of which the Housing Authority buildings are only a part, will have the following racial composition by family: If plaintiffs prevail, 27% non-white to 73% white; if defendants win, 18% non-white to 82% white. In sum, the ratios are:
Project Urban Renewal Area
If If If If
plaintiffs defendants plaintiffs defendants
(by family) prevail prevail prevail prevail
white 20% 60% 73% 82%
non-white 80% 40% 27% 18%
Thus, the potential impact of this decision on the racial mix of the urban renewal area as a whole is less drastic than the truly major consequences it will have for the parties and on the population make-up in the two contested buildings.
On the present counter-motions for summary judgment, plaintiffs contend (1) that the Authority's regulation, GM 1810, was in effect at all relevant times and grants plaintiffs a right of first refusal to project apartments, whether they are already housed in public housing or not; (2) that the Authority's action violates due process in not following its own regulations; (3) that the Authority's action (and HUD's inaction) is racially discriminatory as to plaintiffs and thus contravenes the Equal Protection Clause and relevant statutes; and (4) that the Authority's action (and HUD's inaction) violates the Establishment Clause of the First Amendment.
The defendants and intervenor-defendants variously argue that (1) requiring the Authority to give first priority to the plaintiff class of former site occupants would create a racial imbalance in the project contradictory to constitutional, legislative and federal regulatory requirements; (2) that the Authority's regulation, GM 1810, which was promulgated after the Authority took title to the project area, does not apply to the project; that if it does, it does not, construed in the light of its history, require that first priority be given to the plaintiffs; and that if it does, it is unconstitutional as failing to carry out the Congressional mandate of affirmative action to maintain or create balanced communities; (3) that the Authority, as an administrative agency, must be allowed sufficient flexibility to achieve a stable cultural economic, racial and social mix of tenants with which the court should not interfere; (4) that the court should, in accord with accepted principles of administrative law, uphold the Authority's interpretation of its own regulation; (5) that, as to the proposed allotment of apartments to Jewish citizens, the proximity to their place of worship is a legitimate governmental concern which does not infringe on the Establishment Clause; and (6) that, in any event, relevant statutory provisions (42 U.S.C. § 3612(a)) bar the court from interfering with the rights of the intervening defendants who have already been granted leases.
Romney and HUD separately assert, as to themselves, (1) that because they have attempted to ensure that the project would be racially integrated, and have not participated in the Authority's allegedly discriminatory acts, there is no basis for enjoining their future conduct; (2) that HUD's endorsement of the argument that the Authority's regulations should be nullified as violative of the Equal Protection Clause does not constitute discrimination against the plaintiffs and (3) that plaintiffs' failure to utilize HUD's complaint procedure bars their action against the Federal defendants.
In reply to these defenses, plaintiffs take the position that (1) adherence to the Authority's regulation giving first priority to former site occupants is not unconstitutional as an interference with the Congressional mandate to integrate public housing; and (2) that the court has the power, under the Fair Housing Act of 1968, to invalidate the leases of the intervening defendants, and that in any event the leases are contractually insufficient and unenforceable.
Before confronting the crucial issue of the constitutionality of the regulation on which plaintiffs rely, it is necessary to determine what regulation applies and what its meaning is.
Although title to the property involved in this dispute vested in the City of New York on November 1, 1967, plaintiffs rely on a regulation governing former site occupant priority which went into effect on August 14, 1968. Defendants argue that the regulation ...