Alschuler v. Department of Housing & Urban Development

686 F.2d 472
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 4, 1982
DocketNo. 81-1904
StatusPublished
Cited by16 cases

This text of 686 F.2d 472 (Alschuler v. Department of Housing & Urban Development) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alschuler v. Department of Housing & Urban Development, 686 F.2d 472 (7th Cir. 1982).

Opinion

HARLINGTON WOOD, Jr., Circuit Judge.

Plaintiffs, a local neighborhood association and three of its members, filed suit to enjoin HUD from disbursing housing assistance funds and providing mortgage insurance for a HUD-approved low-income housing project in the Uptown area of Chicago’s North Side, and to enjoin occupancy and further construction of the project. The complaints also named the project developers as defendants. After eleven days of hearings, the district court denied plaintiffs’ motion for a preliminary injunction and dismissed their pendent state claim. See Alschuler v. HUD, 515 F.Supp. 1212 (N.D.Ill. 1981). This appeal followed.

I. Background

This action arises under various federal statutes and regulations controlling HUD’s authority to implement the objectives of the national housing policy. Section 8 of the United States Housing Act of 1937 authorizes HUD to enter into contracts to provide housing assistance payments on behalf of eligible low-income tenants. 42 U.S.C. § 1437f (1976 & Supp. IV 1980) (as amended). Pursuant thereto HUD promulgated a set of comprehensive regulations governing the approval of section 8 funding for substantially rehabilitated housing such as the project at issue here. 24 C.F.R. Pt. 881 (1981). Those regulations establish specific standards for site and neighborhood selection and project eligibility. In pertinent part, 24 C.F.R. §§ 881.206(b) and (c) require that the proposed site further full compliance with Title VIII of the Civil Rights Act of 1968 (“Fair Housing Act”), 42 [475]*475U.S.C. §§ 3601 et seq.,1 and avoid undue concentration of assisted persons in areas containing a high proportion of low-income persons, respectively. The regulations also provide that high-rise elevator projects for families with children are prohibited unless there is no practical alternative, 24 C.F.R. § 881.202(d); see 42 U.S.C. § 1437f(c)(l), and that all projects must comply with applicable local ordinances, 24 C.F.R. § 881.-207(f). To further encourage private investment and participation in furnishing decent housing for low-income people, the National Housing Act of 1954 authorizes HUD to insure mortgages secured by property on which is located a dwelling conforming to the standards for section 8 assistance and “meeting the requirements of all ... local ordinances or regulations, relating to the public health or safety, zoning or otherwise, which may be applicable thereto.” 12 U.S.C. § 17157(d)(2) (1976 & Supp. IV 1980) (as amended).

The factual background of this matter is set forth in detail in the district court’s opinion. 515 F.Supp. 1212. The basic facts are not disputed; rather, the controversy centers on the legal significance to be attached thereto. We therefore recount only so much as is essential to an understanding of our decision.

In June 1979, HUD received from private defendants a preliminary proposal for 82 units of family section 8 housing to be located in the Uptown Community Area. The proposal called for substantial rehabilitation of two adjacent apartment buildings, one a nine-story elevator building and the other a three-story building containing three apartments (collectively, the “Monterey project”). After a one-year period of processing the application, HUD gave final approval for mortgage insurance and rental assistance. Before doing so, HUD determined, inter alia, that the buildings were not located in an area of low-income or minority concentration and would not create an undue concentration of assisted or minority persons in the vicinity, and that there was no practical alternative to approval of the nine-story elevator building. HUD based its determination primarily on 1970 census data on the racial and economic make-up of census tract 321 (in which the project was located),2 census tracts contiguous with tract 321, and the Uptown Community as a whole, but considered other indicators as well. HUD had ranked the Monterey project seventh out of 28 proposed projects on the basis of several criteria pertaining to project desirability. In particular, Monterey was found to be located in a relatively attractive area with several parks and playgrounds, good public transportation, and above average commercial and community services. The quality of the Monterey apartments and the extensive private investments in restoring the neighborhood also impressed HUD officials.

HUD further determined that the buildings conformed to all applicable local ordinances. That conclusion was based on a building permit issued by the Chicago Building Department and a legal opinion letter supplied by the developer at the time of closing.

Plaintiffs alleged as a federal claim that HUD’s action in approving Monterey was arbitrary and capricious for the following reasons. First, HUD in effect ignored the statutory prohibition against high-rise elevator projects for families with children. Second, the proposed rehabilitation violates the Lake Michigan and Chicago Lakefront Protection Ordinance, Chicago, 111., Municipal Code, ch. 194B (1973) (“Lakefront Protection Ordinance”), because it was not sub[476]*476mitted to the Chicago Plan Commission for approval. Third, HUD relied on outdated data to determine the concentration of low-income and minority people in the area and failed to define the relevant area for the purpose of making those determinations. Plaintiffs further asserted the violation of the Lakefront Protection Ordinance as a pendent state claim against the private defendants.

The district court, denying preliminary injunctive relief, ruled that plaintiffs had failed to show a reasonable likelihood of success on the merits of their federal claim. The court also dismissed the state claim, finding that plaintiffs had no private right of action under Illinois law.

II. Federal Claim

Standing

The district court ruled that plaintiffs, as neighborhood residents, have standing to challenge HUD’s decision approving the Monterey project. 515 F.Supp. at 1227-28. In response to plaintiffs’ appeal on the federal claims, defendants reassert their position in the proceedings below that plaintiffs lack standing. Because standing affects jurisdiction, and all parties have had an opportunity to brief the issue on appeal, we review the district court’s conclusion on that threshold inquiry.

The concept of standing “involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975).

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Bluebook (online)
686 F.2d 472, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alschuler-v-department-of-housing-urban-development-ca7-1982.