The opinion of the court was delivered by: LEVAL
PIERRE N. LEVAL, U.S.D.J.
Plaintiffs are elderly tenants at St. Margaret's House, a low income housing project in New York City operated by defendant St. Margaret's House Housing Development Fund Corporation. Plaintiffs challenge the imposition by St. Margaret's of a mandatory meal service charge as a condition of occupancy there. Defendants, St. Margaret's and the U.S. Department of Housing and Urban Development (HUD), (move to dismiss the complaint pursuant to Rule 12(b)(6), F.R.Civ.P., for failure to state a cause of action.)
St. Margaret's is a facility whose construction was financed by a direct loan from HUD, pursuant to § 202 of the Housing Act of 1959, 12 U.S.C. 11701g. As provided under Section 8 of the United States Housing Act of 1937, tenants at St. Margaret's pay a fixed 30% of their income for rent, 42 U.S.C. § 1437a, and HUD pays the remainder of the fair market rent in the form of Housing Assistance Payments (HAP), 42 U.S.C. § 1437f. As a precondition for occupancy, tenants are required by St. Margaret's to sign a lease agreeing to participate in a mandatory meal service charge of $110.00 per month, not scaled to their income, which provides for one meal per day. There are no express exemptions from the plan for health or religious dietary restrictions, and there are no refunds for meals not eaten.
Plaintiffs are tenants who do not want to participate in the meal program. Their first claim for relief is that the imposition of a mandatory meal service charge as a condition of occupancy requires tenants to pay more than 30% of their adjusted income for rent and therefore violates the Brooke Amendment of Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1437a(a)(1), which imposed the percentage limitation on the rent for assisted units. Plaintiffs further claim the mandatory meal charge violates the purpose of Section 202 of the National Housing Act of 1959, 12 U.S.C. § 1701g, to provide low-income elderly or handicapped persons with affordable housing of modest design supportive of independent living.
Plaintiffs' second and third claims allege that the mandatory meal plan violates the Regulatory Agreement and Housing Assistance Payments contract between HUD and St. Margaret's, of which plaintiffs claim to be third-party beneficiaries.
The fourth and fifth claims allege that HUD's approval of the mandatory meal charge violated the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), because it is a substantive rule that was not legally promulgated through notice and comment; it constitutes arbitrary agency action; and it failed to provide procedures to establish reasonable exemptions from the mandatory meal charge.
The sixth claim charges that HUD violated plaintiffs' due process rights under the Fifth Amendment by approving the mandatory meal charge and thereby depriving them of their property without providing minimal procedures for determining whether the meal charge is an essential service, necessary in light of each tenant's needs, or otherwise permissible under the Brooke Amendment.
Plaintiffs seek an order declaring the mandatory meal charge illegal and unconstitutional, and an injunction preventing the defendants from imposing the mandatory meal charge in its current form. Plaintiffs maintain that the meal charge is an essential housing service that should count as part of the total rent that is subsidized by HUD, thereby leaving the tenants' rent at 30% of their income including the meal. charge; alternatively plaintiffs contend the meal charge should be optional for each tenant.
Defendants move to dismiss the complaint. As to the first, second, third and sixth claims, defendants argue that food is not rent so that the mandatory meal charge does not violate the Brooke Amendment. Further, defendants assert that no private right of action exists for plaintiffs to bring suit under the United States Housing Act of 1937 or the Housing Act of 1959. Defendants argue that plaintiffs are not intended third-party beneficiaries of the HAP and Regulatory Agreements between HUD and St. Margaret's and therefore cannot bring suit based on those agreements. Finally, HUD claims the approval of the mandatory meal charge did not violate the Administrative Procedure Act or the due process clause of the Constitution.
Food as an element of Rent
Defendants argue that the mandatory meal charge is not "rent" in the normal meaning of the word. Therefore, they argue the fact that the meal charge increases tenants' payments above 30% of their income does not violate the Brooxe Amendment, which applies only to rent charges.
It is true that, in normal usage, food is not rent. Nonetheless, from the perspective of the tenant, any charge required as a condition of occupancy can be seen as rent, particularly if the charge is attributed to a service the tenant does not desire and does not Ose. In my view ...