United States District Court, S.D. New York
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For Plaintiff: Robert F. Meehan, Westchester County Attorney's Office, White Plains, NY.
For Defendants: Preet Bharara, David J. Kennedy, Lara K. Eshkenazi, Benjamin H. Torrance, United State Attorney's Office, Southern District of New York, New York, NY.
OPINION AND ORDER
DENISE COTE, United States District Judge.
Plaintiff County of Westchester (" County" ) brings these two actions, pursuant to the Administrative Procedure Act, 5 U.S.C. § § 701-706 (" APA" ), 42 U.S.C. § § 12705(c)(1) and 12711, and the Fifth Amendment of the U.S. Constitution, against defendants the United States Department of Housing and Urban Development(" HUD" ) and HUD Secretary Julian Castro (" Secretary" ), seeking review of final administrative determinations by HUD to withhold from the County funds from Community Planning and Development Formula Grant Programs (" CPD Funds" ) for the 2011, 2013, and 2014 fiscal years (" FY2011," " FY2013," and " FY2014" ). For the following reasons, these actions are dismissed and judgment is entered in favor of the defendants.
HUD withheld the CPD Funds at issue here because, in HUD's view, the County failed to provide an accurate certification that the funds would be administered in conformity with the Fair Housing Act and to affirmatively further fair housing (" AFFH" ), as required by federal law (" Certifications" ). To AFFH, the County was required to produce an " AI," which must include an analysis of impediments to fair housing choice in addition to offering appropriate actions to overcome the effects of any identified impediments. HUD determined that the AIs which the County produced to obtain the CPD Funds at issue here were not acceptable under the standards mandated by the federal statutes and regulations that govern the grant programs: despite HUD's assistance, encouragement and guidance, the County refused to provide an adequate assessment of the impediments which local zoning ordinances presented to fair housing choice within the County, and to adequately identify the actions it would take to overcome the effects of any such impediments. The defendants have moved for summary judgment on the ground that their denial of the CPD Funds was not arbitrary and capricious or otherwise in violation of HUD's grant of statutory authority. For the reasons, described below, that motion is granted.
Plaintiff has cross-moved for summary judgment on the ground that HUD may not consider local zoning ordinances when making a decision whether to grant or deny CPD Funds. For this proposition it
relies on two statutory provisions under the HOME Investment Partnerships Program (" HOME" ), which is one of the three CPD grant programs at issue here. 42 U.S.C. § § 12705(c)(1), 12711. These two provisions only apply to the HOME program, and in any event do not relieve the County of its obligation to make accurate Certifications and to produce adequate AIs in order to obtain CPD Funds.
The defendants have an alternative ground for summary judgment premised on the County's breach of its 2009 settlement agreement with HUD, which concluded False Claims Act litigation against the County. In the course of that earlier litigation, this Court determined that the County had filed seven false Certifications between 2000 and 2006 that it would affirmatively further fair housing. Despite the requirements of federal law, the County's AIs, submitted in connection with those Certifications, did not analyze race-based impediments to fair housing. Instead, the Certifications restricted their analysis to impediments to affordable housing in the County. 668 F.Supp.2d at 562. In settling that litigation -- in which the County stood to have damages assessed against it of over $150 million -- the County committed to providing an AI by December 2009 that was acceptable to HUD. It did not do so. It has provided HUD with essentially three AIs since 2009 -- one in 2010, one in 2011 and a third in 2013 -- and HUD has found all three to be inadequate. This Opinion does not reach the question of whether HUD can withhold CPD funds for the County's breach of the settlement agreement.
Before turning to the factual background and then the legal analysis of the issues presented by these motions, it is important to note HUD's contention that there is particular urgency surrounding this litigation. The congressional appropriation reserved for the FY2013 CPD Funds will, by law, revert to the U.S. Treasury on September 30, 2015. Before that time, the funds may be reallocated to other communities. According to HUD, without expeditious resolution of the issues here, over $5 million in FY2013 CPD Funds will not be available for use anywhere as Congress intended.
The facts and procedural history giving rise to this dispute have been described in several previous Opinions issued by this Court and the Second Circuit Court of Appeals.
See, e.g., United States ex rel. Anti--Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 495 F.Supp.2d 375 (S.D.N.Y. 2007) (" 2007 Opinion" ) (denying motion to dismiss False Claims Act lawsuit against the County);
United States ex rel. Anti--Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 668 F.Supp.2d 548 (S.D.N.Y. 2009) (" 2009 Opinion" ) (finding that County's Certifications to obtain CPD Funds were false but reserving on County's scienter); U.S. ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester Cnty., N.Y., No. 06cv2860 (GWG), 2012 WL 917367 (S.D.N.Y.
Mar. 16, 2012) (accepting in part and rejecting in part Monitor's 2011 Report)
(" Magistrate Judge Opinion" );
U.S. ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester Cnty., N.Y., No. 06cv2860 (DLC), 2012 WL 1574819 (S.D.N.Y. May 3, 2012) (" 2012 Opinion" ) (adopting Monitor's conclusions in part and MJ's opinions in part);
United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 712 F.3d 761 (2d Cir. 2013) (" Appeal Opinion" ) (affirming holding that the County had breached promotion requirement); Cnty. of Westchester v. U.S. Dep't of Hous. & Urban Dev., No. 13cv2741 (DLC), 2013 WL 4400843 (S.D.N.Y. Aug. 14, 2013) (" 2013 Opinion" ) (dismissing APA claims for lack of jurisdiction and statutory claim for pleading deficiency);
Westchester v. U.S. Dep't of Hous. & Urban Dev., 778 F.3d 412 (2d Cir. 2015) (" 2015 Opinion" ) (vacating in part 2013 Opinion and remanding on issue of jurisdiction). The Court assumes familiarity with those Opinions. Only those facts necessary to the resolution of the present motion are described below.
I. Statutory & Regulatory Framework
The CPD Funds at issue are allocated pursuant to three different federal programs: the HOME program, the Community Development Block Grant (" CDBG" ) program, and the Emergency Solutions Grant (" ESG" ) program. All three were enacted against the backdrop of the Fair Housing Act (" FHA" ), whose provisions are incorporated by reference into the three grant programs' authorizing statutes.
A. Fair Housing Act
The FHA was passed in 1968 to provide " for fair housing" within the limits imposed by the Constitution. 42 U.S.C. § 3601. The statute bans discrimination on the basis of " race, color, religion, sex, familial status, or national origin" in connection with the sale and rental of housing and other private real estate transactions, subject to limitations imposed by the statute. 42 U.S.C. § § 3604, 3605. " The FHA was enacted to eradicate discriminatory [housing] practices . . . includ[ing] zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification." Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S.Ct. 2507, 192 L.Ed.2d 514, 2015 WL 2473449, at *13 (U.S. June 25, 2015) (citation omitted).
B. Grant Programs
The three grant programs all require that jurisdictions make certain submissions to HUD to determine eligibility. Each program and its application process is described below. Of principal relevance here are the requirement that applicants certify to HUD that they will " affirmatively further fair housing," including an " analysis of impediments" ; for HOME grants, the requirement that jurisdictions submit a " housing strategy" ; and, under the " consolidated plan" process established by regulation, the requirement that jurisdictions submit an " action plan."
1. CDBG Program & the " Affirmatively Further Fair Housing" Requirement
The CDBG program was established under the Housing and Development Act of 1974. 42 U.S.C. § § 5301-5321 (" CDBG statute" ). " The primary objective" of the program is " providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income." Id. § 5301(c). The CDBG program works against the backdrop of the FHA and incorporates by reference standards applicable to fair housing.
Jurisdictions applying for CDBG grants must certify that they have satisfied six criteria in order to be eligible. 42 U.S.C. § 5304(b). Applicants must certify, inter alia, that " the grant will be conducted and administered in conformity with the Civil Rights Act of 1964 [42 U.S.C, § 2000a et seq.] and the Fair Housing Act [42 U.S.C. § 3601 et seq.], and the grantee will affirmatively further fair housing." Id. § 5304(b)(2). By HUD regulation, the duty to affirmatively further fair housing requires the grantee to " conduct an analysis to identify impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard." 24 C.F.R. § 570.601(a)(2) (emphasis added).
2. ESG Program
The ESG program was initially authorized as the " Emergency Shelter Grants" program by the Stewart B. McKinney Homeless Veterans Act of 1987; it was modified to its current form, and name, by the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act of 2009. Administered pursuant to 42 U.S.C. § § 11371-11378, the purpose of the program is, among other things, " to provide funds for programs to assist the homeless, with special emphasis on elderly persons, handicapped persons, families with children, Native Americans, and veterans." Id. § 11301.
The ESG program does not have any independent certification requirements. A grantee may only receive an ESG grant, however, if it also receives a CDBG allocation. Id. § 11373(a). Functionally, therefore, eligibility for ESG hinges on proper AFFH certification pursuant to 42 U.S.C. § 5304(b)(2).
3. HOME Program & the Housing Strategy
The final grant program at issue concerns HOME funds, allocated under the Cranston-Gonzalez National Affordable Housing Act of 1990, codified at 42 U.S.C. § § 12701-12714, 12741-12756. The statute states that its objective is to " improve housing opportunities for all residents of the United States, particularly members of disadvantaged minorities, on a nondiscriminatory basis." Id. § 12702(3). As with the CDBG program, the HOME program is concerned with affordable housing, but operates in conformity with the FHA and incorporates standards relevant to fair housing.
In order to qualify for HOME funds, a jurisdiction must " submit to [HUD] a comprehensive housing affordability strategy in accordance with [42 U.S.C. § 12705]." Id. § 12746(5). Section 12705(b) sets out twenty criteria to be included in the housing affordability strategy (" Housing Strategy" ), two of which are relevant for this Opinion. Section 12705(b)(4) requires grantees to
explain whether the cost of housing or the incentives to develop, maintain, or improve affordable housing in the jurisdiction are affected by public policies, particularly by policies of the jurisdiction, including tax policies affecting land and other property, land use controls, zoning ordinances, building codes, fees and charges, growth limits, and policies that affect the return on residential investment, and describe the jurisdiction's strategy to remove or ameliorate negative effects, if any, of such policies . . . .
Id. Another of the twenty criteria, like the CDBG statute, requires grantees to certify
" that the jurisdiction will affirmatively further fair housing." Id. § 12705(b)(15).
The definition of AFFH under the HOME statute is identical to that under the CDBG statute. 24 C.F.R. § 91.225(a)(1). The AFFH certification is submitted as a component of the Housing Strategy. See id. § § 91.200, 91.225. " Certification," in turn, is defined as a " written assertion, based on supporting evidence," that will be deemed accurate " unless the Secretary determines otherwise after inspecting the evidence and providing due notice and opportunity for comment." 42 U.S.C. § 12704(21). HOME grantees must also submit " annual updates of the housing strategy," and the statutory scheme appears to treat these annual updates as extensions of the initial Housing Strategy, subject to ongoing approval or disapproval by the Secretary of HUD. 42 U.S.C. § 12705(a)(2), (3). Grantees thus must re-certify each year that they are fulfilling the AFFH duty.
Section 12705(c)(1) governs HUD's approval or rejection of Housing Strategies. It provides:
Not later than 60 days after receipt by the Secretary, the housing strategy shall be approved unless the Secretary determines before that date that (A) the housing strategy is inconsistent with the purposes of this Act, or (B) the information described in subsection (b) of this section has not been provided in a substantially complete manner. For the purpose of the preceding sentence, the adoption or continuation of a public policy identified pursuant to subsection (b)(4) of this section shall not be a basis for the Secretary's disapproval of a housing strategy.
Finally, § 12711, which also appears in the same subchapter of the U.S. Code, sets further limitations on HUD's ability to approve or reject a jurisdiction's application for grant funding. It provides:
Notwithstanding any other provision of this subchapter or subchapter II of this chapter, the Secretary shall not establish any criteria for allocating or denying funds made available under programs administered by the Secretary based on the adoption, continuation, or discontinuation by a jurisdiction of any public policy, regulation, or law that is (1) adopted, continued, or discontinued in accordance with the jurisdiction's duly established authority, and (2) not in violation of any Federal law.
Id. § 12711.
4. Action Plans
By federal regulation, jurisdictions may streamline their grant program submissions with a " consolidated plan," by which they may apply simultaneously for CDBG, ESG, and HOME funding, as well as other funding programs (" Consolidated Plan" ). 24 C.F.R. § 91.1. Certain components of the plan -- including a Housing Strategy -- may be submitted on a five-year basis, as may the applicant's AI; other components must be submitted annually. Id. § 91.15(b). Among the required annual submissions are " action plans." Action plans -- like those submitted to HUD by the County -- include a jurisdiction's application for funding, any update to its Housing Strategy, and its annual express certifications that it will AFFH. Id. § § 91.220, .225; see 2009 Opinion, 668 F.Supp.2d at 553. Jurisdictions participating in a consortium that files a consolidated plan must abide by the same requirements. See id. § § 91.420, .425. HUD is permitted to reject any " plan for which a certification is rejected by HUD as inaccurate, after HUD has inspected the evidence and provided due notice and opportunity to the
jurisdiction for comment." 24 C.F.R. § 91.500.
C. The Statutory Lapse Date
The CPD funds are allocated to jurisdictions based on a statutory formula. If not disbursed to the earmarked jurisdiction, these funds may be reallocated to other jurisdictions until the statutory lapse date, i.e. the date on which the federal appropriation for HUD funding expires.
Once the statutory lapse date passes, funds that have not been reallocated remain available to the original jurisdiction in an expired account for five fiscal years to satisfy obligations incurred prior to the lapse date. 31 U.S.C. § 1552(a); see 2015 Opinion, 778 F.3d at 417 n.8. This means that, following the statutory lapse date, funds that were statutorily allocated to the applicant and not reallocated to other jurisdictions can only be distributed to the applicant. 31 U.S.C. § 1553(a); 2015 Opinion, 778 F.3d at 417 n.8. They revert to the Treasury upon the expiration of the five-year deadline. 31 U.S.C. § 1552(b).
II. The 2006 False Claims Act Litigation and 2009 Settlement
This litigation has its genesis in False Claims Act litigation filed against the County in 2006. After this Court determined that the County had falsely certified to HUD that it was affirmatively furthering fair housing, the County entered into a settlement (" Settlement" ) with HUD in 2009. Between that time and today, HUD and the County have sparred over the extent of the County's compliance with federal law and the Settlement, and the County's entitlement to federal housing and community development funds. After the False Claims Act litigation and Settlement are described, the Opinion will describe the principal milestones in the County's interaction with HUD in the years since the County settled the False Claims Act litigation.
A. False Claims Act Lawsuit
In 2006, the Anti-Discrimination Center of Metro New York, Inc., acting as a qui tam relator, sued the County for violation of the False Claims Act, 31 U.S.C. 3729 et seq. (" FCA" ). The lawsuit asserted that the County had received over $52 million from the federal government for housing and community development after falsely certifying, from 2000 through 2006, that it was affirmatively furthering fair housing. The County had submitted those Certifications to HUD on behalf of itself and a consortium of all but five of the municipal entities in Westchester County. The County submitted Consolidated Plans every five years, including a Housing Strategy and an AI. It submitted annual Action Plans in which it annually certified that it would AFFH.
In rejecting the County's motion to dismiss the FCA lawsuit, the Court held that a grantee that certifies to the federal government that it will AFFH as a condition to its receipt of federal funds must analyze the existence and impact of race discrimination on housing opportunities and choice in its jurisdiction. 2007 Opinion, 495 F.Supp.2d at 376. Following the close of discovery, the plaintiff in the FCA lawsuit brought a motion for partial summary judgment, contending that there was no genuine issue that the County knowingly submitted seven false annual Certifications that it would AFFH. According to the qui tam relator, the Certifications were false because the County had failed to analyze
impediments to fair housing choice within the County in terms of race. In opposing the motion, the County continued to dispute that it was required to analyze race when analyzing impediments to fair housing choice, but also took the position that it had determined that racial segregation and discrimination were not significant barriers to fair housing choice within the County. 2009 Opinion, 668 F.Supp.2d at 551. Accordingly, when it disbursed HUD funds, the County had not deemed any municipalities within the Consortium to have failed to AFFH, nor had it deemed any municipalities to be impeding the County's ability to do so. Id. at 559.
In the 2009 Opinion, this Court ruled that the County's certifications to HUD were false as a matter of law. Id. at 562. The Opinion found that the 2000 and 2004 AIs submitted by the County to HUD were devoted entirely to the lack of affordable housing in the County and related obstacles. The record contained " no evidence that either of the County's AIs during the false claims period analyzed race-based impediments to fair housing." Id. The Opinion observed that while federal law does not require the County to find evidence of racial discrimination or segregation where none exists, federal law does require that to obtain the HUD funds at issue . . ., the County had to maintain records of its analysis of whether race created an impediment to fair housing." Id. at 563. Because the County never performed the required analysis of race-based impediments to fair housing, it of course " never created a contemporaneous record of how its management of the HUD-acquired funds or any other 'appropriate' steps it could take would overcome the effect" of any impediments that did exist. Id. at 565. The Opinion observed that the
statutory and regulatory framework . . . impose[d] no duty on the County to undertake any particular course of action to overcome an impediment to fair housing . . ., [but did] require the recipient of the federal funds to certify that it will take " appropriate" actions to overcome the effect of the impediments to fair housing choice that its analysis has identified.
While the 2009 Opinion found that the County's Certifications were false, it denied summary judgment on the issue of the County's " knowing" submission of false claims. Id. at 567. Before the issue of the County's scienter could be tried, the United States filed a notice of intervention in the lawsuit and its own complaint against the County to recover under the FCA the damages it had sustained, as well as associated penalties due to the County knowingly presenting false claims to obtain federal funding for housing and community development. Simultaneously, on August 10, 2009, the United States and the County entered into a thirty-eight page Stipulation and Order of Settlement and Dismissal (" Settlement" ). Because of the treble damages provision of the FCA, had the County not settled the litigation, it was at risk of being found liable for over $150 million in damages.
B. Settlement of FCA Litigation
The Settlement acknowledged that the County receives federal funding from the CDBG, ESG and HOME programs, among others. It required the County to pay $8.4
million to the federal government and $2.5 million to the relator. In addition, the County was required to pay $21.6 million into the County's account with HUD. The Settlement provided that
HUD shall make those funds available to the County for the development of new affordable housing units that will AFFH in the County, provided that the County's use and expenditure of the funds, and any program income earned from the use of the funds, as defined by 24 C.F.R. § 570.500(a), shall be subject to the requirements of the CDBG program and other terms and conditions of the Settlement. Those other terms included the County's duty to ensure the development of at least 750 new affordable housing units within seven years of the Settlement. The Settlement described the criteria, including race-related criteria, for the placement of the new housing units. In addition, the County was required to add $30 million in County funds to this development effort. It also agreed that " [i]n the event that a municipality does not take actions needed to promote" or " undertakes actions that hinder" development of the 750 housing units, it would " use all available means as appropriate to address such action or inaction, including, but not limited to, taking legal action."
Another significant component of the Settlement was the appointment of a Monitor " for so long as the County's obligations" under the Settlement " remain unsatisfied." James E. Johnson of Debevoise & Plimpton LLP has been serving as the Monitor since August 2009. The Settlement provided that the Monitor would conduct compliance assessments every two years " to determine whether the County has taken all possible actions under" the Settlement, " including, but not limited to . . ., if necessary, taking legal action."
The Settlement included several other important components. Of particular interest to the current litigation are the following. The County explicitly acknowledged the importance of the obligation to AFFH, and committed to adopting a policy statement to that effect. It also promised to complete within 120 days an " AI within its jurisdiction that complies with the guidance in HUD's Fair Housing Planning Guide . . . . The AI must be deemed acceptable by HUD." (Emphasis added.) Besides identifying and analyzing the " impediments to fair housing within its jurisdiction, including impediments based on race or municipal resistance to the development of affordable housing," the County agreed that its AI would identify and analyze " the appropriate actions the County will take to address and overcome the effects of those impediments." In this respect, the Settlement closely tracks the language of HUD's regulations defining the AFFH duty. See, e.g., 24 C.F.R. § 91.225(a)(1).
The County made several other critical commitments in the Settlement, one of which became the subject of litigation in the ensuing years. The County agreed that it would " promote, through the County Executive, legislation currently before the Board of Legislators to ban 'source-of-income' discrimination in housing."
III. The County's AIs and HUD's Rejections: 2009 to 2013
The County has never provided an AI to HUD that HUD deemed acceptable, despite its explicit commitment in the Settlement to do so. Since the Settlement, HUD has withheld funds from the County and in some instances reallocated funds initially earmarked for the County to other jurisdictions. The description of the ensuing
years of application and rejection is organized around the AIs the County has submitted to HUD. The final AI and its two supplements, submitted to HUD in 2013, preceded the two HUD letters that are the principal focus of the County's summary judgment motion: the letters of August 9, 2013 and July 18, 2014.
In 2010, the County submitted a late and incomplete AI. Pursuant to the schedule set forth in the Settlement, the County's Settlement-compliant AI was due December 8, 2009. The County requested an extension to January 20, 2010, which HUD granted, and then another extension to September 30, 2010. HUD granted an extension to June 30, 2010. Five days before that deadline, the County asked for an extension to July 31, 2010. HUD consented to an extension to July 23, 2010.
The County submitted a revised AI to HUD on July 23, 2010. HUD rejected the County's AFFH certification on December 21, 2010. HUD observed that the AI " provides data and identifies many issues central to furthering fair housing choice," but failed " to make any material link between those impediments and the actions the County will take to overcome them." In its detailed six-page letter, HUD described five actions the County could take to make its AI acceptable, including identifying the steps it would take to overcome exclusionary zoning practices. HUD notified the County that it would take formal action on the CPD Funds if the County did not submit an acceptable AI by April 1, 2011. Following its December 21 rejection of the AI, HUD contacted the County on several occasions to offer technical assistance with the required analysis.
In 2011, after the United States Attorney's Office notified the County that it would bring an enforcement action, the County submitted another AI. In response to the AI, HUD listed six restrictive zoning practices that the County's future submissions should address. When the County submitted another AI, HUD deemed that submission inadequate as well. The parties then took their disputes to the Monitor. A more detailed description of these events follows.
1. April 13, 2011 AI
On March 24, 2011, one week before its AI was due, the County asked for an extension to May 1, 2011 to submit a revised AI. HUD denied the request, noting the County's delays in responding to HUD's offers of assistance and its delays more generally. HUD warned that it would request that the United States Attorney seek enforcement of the Settlement or pursue administrative remedies if an acceptable AI were not received. The County did not submit an AI on April 1, and on April 6, the United States Attorney advised the County it would act to enforce the Settlement by April 14.
The County submitted an AI on April 13, 2011. On April 28, HUD refused to approve the new AI, referring once again to the County's commitment in the Settlement to complete an AI acceptable to HUD. HUD advised the County that its rejection applied to CPD programs covered by the County's FY2011 Action Plan.
On May 13, 2011, HUD explained the reasons for the April 28 rejection of the AI, which it characterized as " substantially incomplete and unacceptable to HUD." In the nine-page letter, HUD identified seven major deficiencies. Among other things, HUD explained, the County had not adequately examined the availability of family rental housing, barriers related to patterns of racial and ethnic segregation, exclusionary zoning, and the location of affordable
housing. In connection with exclusionary zoning analyses, the letter identified six zoning practices the County needed to address: (1) restrictions that limit or prohibit multifamily housing; (2) restrictions on the size of a development; (3) restrictions directed at Section 8 or other affordable housing;  (4) restrictions that directly or indirectly limit the number of bedrooms in a unit; (5) restrictions on lot size or other density requirements that encourage single family housing or restrict multifamily housing; and (6) restrictions on townhouse development (collectively, " Restrictive Practices" ). The letter noted the connection between the location of affordable housing and patterns of racial segregation, explaining that the County's discussion of affordable housing " [did] not adequately address how it will reduce segregation." Over three days in June, HUD provided the County with technical assistance for a further revision of its AI.
2. July 11, 2011 AI
On July 11, 2011, the County submitted another revised AI. HUD rejected that AI on July 13, 2011. HUD found that the revision did not meet the Settlement's requirements and did not incorporate the corrective actions identified in HUD's May 2011 letter. In particular, HUD pointed to the AI's failure to address deficiencies in the " promotion of source-of-income legislation [and its] plans to overcome exclusionary zoning practices." Both parties subsequently sought review before the Monitor. In its submission to the Monitor, the County committed to identifying specific zoning practices that may have " exclusionary impacts," and, as a last resort, to bringing legal action against a municipality when a particular project is blocked or hindered by its exclusionary zoning ordinance. U.S. ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester Cnty., N.Y., No. 06cv2860 (DLC), 2011 WL 7563042, at *6, *8 (S.D.N.Y. Nov. 14, 2011) (" Monitor's 2011 Report" ).
On November 17, 2011, the Monitor issued a report concluding that the County was " in breach of its obligation [under the Settlement] to promote certain 'Source of Income' legislation." It also concluded that, " under the terms of the Settlement, the County should analyze zoning ordinances in connection with the AI," and found that completion of such analysis would be " appropriate" by February 29, 2012. Id. at *1. The Monitor explicitly endorsed the six Restrictive Practices HUD listed in the May 2011 letter, whose impact on racial disparities the County should, " at a minimum," assess.
Id. at *7. The Monitor also concluded that the County had to identify the types of zoning practices that would lead the County to pursue legal action, if not remedied by the municipality, and the circumstances that would warrant its use of litigation. Id. at *9. The Monitor did not, however, address the propriety of HUD's rejection of the AI or the adequacy of the County's AFFH certification because such issues were not " properly joined."
Id. at *1.
In 2012, the parties litigated the findings in the Monitor's report. Ultimately, the Monitor's findings were adopted by the Court. In addition, the County submitted a document in response to HUD's demand that it address the Restrictive Practices. HUD rejected that document, explaining its reasons for doing so in detail. HUD reminded the County again that it was in jeopardy of losing its FY2011 CPD Funds.
Following litigation, the County was required to provide the Monitor with data that was relevant to an analysis of the zoning ordinances in the municipalities within the ...