Blue Earth County Welfare Department v. Cabellero

225 N.W.2d 373, 302 Minn. 329, 1974 Minn. LEXIS 1193
CourtSupreme Court of Minnesota
DecidedDecember 20, 1974
Docket44743
StatusPublished
Cited by20 cases

This text of 225 N.W.2d 373 (Blue Earth County Welfare Department v. Cabellero) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blue Earth County Welfare Department v. Cabellero, 225 N.W.2d 373, 302 Minn. 329, 1974 Minn. LEXIS 1193 (Mich. 1974).

Opinion

Knutson, Justice. *

This is an appeal from a judgment of the district court reversing a decision of the Minnesota commissioner of public welfare on the grounds that the commissioner’s order was arbitrary and unreasonable within the meaning of Minn. St. 1971, § 256.77, subd. 3, in that it was based upon 42 USCA, § 1402 (1), as amended by P. L. 92-213, § 9, 85 Stat. 776, which the trial court held violated the equal protection clause of the Fourteenth Amendment of the United States Constitution.

While the facts as related in the briefs seem extremely complicated, we think the case can be simplified by stating what the statutory provisions involved really accomplish.

In 1970, the Mankato Authority of the United States Department of Housing and Urban Development (hereinafter Mankato Authority) began construction of 141 units of public housing in Mankato. At that time the Blue Earth County Welfare Department (hereinafter county agency) paid shelter assistance based upon the actual cost of such shelter to a recipient up to a maximum of $162 for a family of four, consisting of $130 for rent and $32 for utilities. On November 20, 1970, the Blue Earth County Welfare Board agreed to pay rent to the Mankato Authority for the units under construction at its maximum rate. The Mankato housing opened for occupancy in May 1971. The county agency originally paid rent at the maximum rate agreed upon.

*332 The Housing Act of 1937 1 (the act was codified as 42 U. S. C. §§ 1401 to 1436) provided for Federal financial assistance in the form of loans, annual contributions, and capital grants to public housing agencies for low-rent housing programs. Federal subsidies were available only with respect to housing projects falling within the Federal definition prior to December 24, 1969. 42 USCA, § 1402(1), established four criteria for low-rent housing: (1) That it be decent, safe, and sanitary; (2) that rentals be within the reach of low-income families; (3) that dwellings in the project be available only to low-income families; and (4) that rents be fixed by the public housing agency and approved by the United States Housing Authority after taking into account the rent-paying ability of the family and financial stability and solvency of the housing project.

On December 24, 1969, Congress enacted what has been referred to throughout this case as the First Brooke Amendment, P. L. 91-152, § 213, 83 Stat. 389, which in effect excluded from the definition of low-rent housing those units the rents of which exceeded one-fourth of the tenant-family’s income as determined by the Secretary of Housing and Urban Development. The effect of this act was to limit the amount of rent in a public housing unit to 25 percent of the tenant’s income.

Application of that rent limitation to a tenant whose income consisted of public assistance benefits based in part on actual housing costs rather than upon a flat grant schedule would result in a reduction in his benefits. Consequently, he would accrue no economic advantage from the reduction of his rent. As a matter of fact, his public assistance benefits might be reduced to the point where even his lowered rent would exceed one-fourth of his income, calling for a further reduction in his rent and a corresponding readjustment of his public assistance benefits. In an attempt to avoid these side effects, 2 the First Brooke Amend *333 ment exempted from the rent limitation the units of tenants who would suffer a reduction of public assistance benefits if their rent were reduced. 3

In an apparent attempt to correct some of the difficulties created by the so-called First Brooke Amendment, Congress adopted P. L. 92-213, § 9, 85 Stat. 776, the so-called Second Brooke Amendment, which took effect on December 22, 1971, and was also directed toward coordinating the rent limitation of the First Brooke Amendment with the public assistance schemes of those states basing shelter grants upon actual housing costs. It repealed the exemption provision of the First Brooke Amendment and in its stead amended the definition of low-cost housing to prohibit public welfare agencies from reducing benefits to any tenant as a result of a rent reduction mandated by the First Brooke Amendment. 4

While these statutes read in the abstract are somewhat difficult to comprehend, the legal effect of the First and Second Brooke Amendments may be simplified if we abandon the legal terminology used and view them from the standpoint of what they sought to accomplish. Putting the statutes in simple terms, under the First Brooke Amendment, those receiving shelter as *334 sistance would receive comparable benefits whether they resided in private dwellings or in public housing. Under the Second Brooke Amendment, those residing in public housing, due to the limitation of the rent that could be charged, would receive an advantage from public welfare assistance in that the public agency could not reduce the assistance for rent even though the rent charged was less than the assistance granted. The result was that those living in public housing would in some cases receive more by way of assistance than they actually paid for rent, thus leaving an amount in excess of the rent payment which could be used for other purposes, while those living in private quarters would receive the amount actually paid for rent.

In February 1972, the Mankato Authority received HUD circular HM 7465.13, dated January 18, 1972, which set forth the provisions of the Second Brooke Amendment. The Mankato Authority consequently recomputed, effective December 22, 1971, the welfare assistance for rents for tenants in the Mankato project. The reduction was made retroactive to December 22, 1971, generally by means of credit against future rent. The county agency refused to abide by the so-called Second Brooke Amendment but instead reduced, effective May 1972, shelter grants to tenants of the Mankato Authority by an amount to correspond with the 25-percent rent limitation.

The Minnesota commissioner of public welfare issued a policy bulletin dated May 15, 1972, requiring the county welfare boards to comply with the Second Brooke Amendment. The county agency did not do so. An appeal was taken to the commissioner of public welfare by seven of the recipients affected, acting on behalf of approximately 20 in all. In October 1972, the Minnesota commissioner of public welfare entered an order requiring compliance with the policy bulletin. On appeal to the district court, the Minnesota commissioner of public welfare was reversed, the court holding that the so-called Second Brooke Amendment was arbitrary and unreasonable and violated the equal protection clause of the Fourteenth Amendment of the United States Con *335 stitution.

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Bluebook (online)
225 N.W.2d 373, 302 Minn. 329, 1974 Minn. LEXIS 1193, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blue-earth-county-welfare-department-v-cabellero-minn-1974.