Citizens Committee for Faraday Wood v. John v. Lindsay, Mayor of the City of New York

507 F.2d 1065

• Court: Court of Appeals for the Second Circuit
• Decided: April 28, 1975
• Docket: 17, Docket 73-2590
• Status: Published

Opinions

LUMBARD, Circuit Judge:

Plaintiffs appeal from a judgment dated September 10, 1973, of the Southern District, Robert J. Ward, J., dismissing their complaint after a trial without a jury.¹ D.C., 362 F.Supp. 651. The plaintiffs brought a class action on behalf of all New York City residents who reside in inadequate and deteriorating housing and who would qualify for residence within low-income public housing units. They sought declaratory and injunctive relief against New York City, its mayor, the city’s Housing and Development Administration (HDA) and HDA’s administrator on the grounds that the city’s decision not to proceed with a publicly financed housing project for middle- and low-income families on an eight-acre plot known as Faraday Wood in the North Riverdale section of the Bronx violated the equal protection clause of the Fourteenth Amendment in that it was motivated by racial considerations and had a racially discriminatory effect. In addition, one of the named plaintiffs, the Association for Middle Income Housing, Inc. (AMIH), the sponsor of the project, asserted that the city’s decision to terminate the project breached the city’s contractual relationship with AMIH. The district court found that the plaintiffs failed to show that the defendants had purposefully engaged in racial discrimination in violation of the fourteenth amendment and that the city’s action did not have an unconstitutionally discriminatory effect. It also dismissed the contract claim. We affirm.

New York City’s scatter-site program for selecting public housing sites, first announced in 1966, was designed to promote the building of public housing in the less densely populated areas of the city. Faraday Wood was one of the sites selected under this program. The initial site plans for Faraday Wood included 150 housing units for low-income families and 150 housing units for moderate-income families. However, after public hearings² in the fall of 1967 Faraday Wood was designated for development under the Mitchell-Lama Act³ as a housing development for middle-income families with 20% of the units reserved for low-income families. At the city’s behest AMIH became the sponsor of the project and developed a preliminary plan for the Faraday Wood site, which envisioned one high-rise (twenty-story) building and several low-rise (six-story) buildings. On May 14, 1968, the City Planning Commission indicated that it would consider a formal application for a Mitchell-Lama project on the Faraday Wood site. On May 27th, the HDA advised AMIH that it had given the project preliminary approval subject to submission of acceptable building plans and availability of city funds. Final approval of the project was contingent upon approval of the building plans by the City Planning Commission and the Board of Estimate.

Although there was considerable community opposition to the project, the application was processed in the normal manner until August 1969. On August 8, 1969, however, in the midst of a mayoral primary election, the City Hall Press Office issued a press release that stated that John V. Lindsay, then seeking reelection as mayor of New York City, was opposed to the project because the site was allegedly unsuitable for high-rise construction and because the community was concerned about overcrowding in its schools.⁴ Soon after the press release was issued the HDA stopped processing plans for the Faraday Wood site. An attempt was made to resurrect the project in a modified form in February 1970. AMIH proceeded to adapt its plans to this new proposal, but ultimately differences between the HDA and AMIH led to the termination of the Faraday Wood project in December 1970.

Judge Ward found that the technical problems advanced by the city as justifications for the project’s termination were not substantial and that the termination actually occurred as a political response to community opposition. He concluded, however, that there was no purposeful discrimination on the part of the city because the community opposition was not, in the main, racially motivated. He also found that the termination did not have an unconstitutional racially discriminatory effect because 80% of the units in the project were reserved for middle-income families and thus the brunt of the project’s termination was borne by those families. Unlike the case where low-income families are involved, there is no reason to assume that a disproportionate number of the middle-income families affected would be nonwhite. After making these findings, Judge Ward applied the rational basis standard of equal protection review and found that the city’s action did not violate that standard.

I.

Traditionally courts have used two standards of review when faced with claims that a certain state action violates the equal protection clause.⁵ Usually the state action is upheld if it has a rational basis. See, e. g., Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 31 S.Ct. 337, 55 L.Ed. 369 (1911). However, if the state action infringes upon a fundamental right (voting, travel) or is directed at a suspect class (race), the state is required to justify its action by showing a compelling state interest. See, e. g., Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). Since there is clearly no constitutional right of access to a certain quality of housing, Lindsey v. Normet, 405 U.S. 56, 74, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972), cf. Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970), plaintiffs must establish that the city’s action impinges on a suspect class in order to qualify for the stricter compelling state interest standard.

While race has long been recognized as a suspect classification, low-income status has not been so recognized. San Antonio School District v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973). Thus, plaintiffs must show that there was an impingement or a disproportionate effect on nonwhites when the city cancelled the Faraday Wood project. The district court concluded that no such effect was shown and we agree. Eighty per cent of the project was reserved for middle-income persons.⁶ Since the apartments at Faraday Wood would have rented for at least $80 per room per month, the annual family income limitation for a four-room apartment would have been over $23,000. See N.Y. Private Housing Finance Law § 31 (McKinney Supp.1974). The existence of such a high income limitation for the majority of the project’s occupants precludes a finding that the project’s cancellation had a disproportionate effect on nonwhites. Indeed, the whole rationale for carefully scrutinizing governmental actions that adversely affect traditional public housing projects is that these projects are designed for low-income persons and courts are not blind to the fact that racial minorities are disproportionately represented in the lower-income levels of our society. There is no disproportionate overrepresentation of minorities in middle-income levels.⁷ Hence the assumption used in the typical public housing case is not valid here.

Plaintiffs’ reliance on our decision in Kennedy Park Homes Assn., Inc. v. City of Lackawanna, 318 F.Supp. 669 (W.D.N. Y.), aff’d, 436 F.2d 108 (2d Cir. 1970), cert. denied. 401 U.S. 1010, 91 S.Ct. 1256, 28 L.Ed.2d 546 (1971) is misplaced. In that case we found that the city of Lackawanna was clearly segregated— 98.9% of its nonwhite citizens lived in one of its three wards. The populations of the other two wards were only .2% and .01% nonwhite. The nonwhite ward was the least desirable residential area of the city because it contained a large steel plant. Moreover, it was a ghetto in the traditional physical sense — only one bridge connected it to the rest of the city and the city’s nonwhites were largely contained in that one limited area of the city. Against this background we held that the city could not, absent a compelling interest, thwart the efforts of a private organization to build housing for low-income families in the white area of the city by, among other things, refusing to accede to a reasonable rezoning request. Other courts have reached similar results. See, e. g., Crow v. Brown, 332 F.Supp. 382 (N.D.Ga.1971), aff’d, 457 F.2d 788 (5th Cir. 1972); Dailey v. City of Lawton, 425 F.2d 1037 (10th Cir. 1970); SASSO v. Union City, 424 F.2d 291 (9th Cir. 1970); Joseph Skillken & Co. v. Toledo, 380 F.Supp. 228 (N.D.Ohio, 1974). See also United Farmworkers of Fla. Housing Project, Inc. v. City of Delray Beach, 493 F.2d 799 (5th Cir. 1974).⁸

This case is clearly distinguishable from Lackawanna. First, in Lackawan-na, and the other cases cited above, the housing projects were designed only for low-income persons. In such cases it was possible to say that nonwhites were disproportionately affected since only low-income persons were involved and since a disproportionate number of nonwhites are low-income persons. That is not true in this case. Second, in the cited eases a city acted to thwart a private developer’s attempt to construct housing for low-income persons. The cities involved had no financial or other connection with the project. However, in this case, the governmental body that decided not to proceed with the project was the same one that initiated it and that was going to finance it. Instead of merely asking us to order the city to remove barriers to a private development, plaintiffs are asking us to enter a judgment “[ojrdering the defendants to secure for the plaintiffs an alternative site⁹ in Riverdale upon which the defendants will make possible construction of a housing project for low-income and minority citizens of New York of substantially the same number of dwelling units as .have 'been lost as a result of the illegal blockage of AMIH’s Faraday Wood project.” Such relief would clearly be inappropriate.

Also, in Lackawanna the record clearly established that the city’s actions had been motivated by improper racial considerations. Kennedy Park Homes Assn. v. City of Lackawanna, supra, 436 F.2d at 109, 113-114. Here, however, our reading of the record convinces us that the district court was correct in concluding that the project was terminated because of community opposition and that such opposition was not for the most part racially motivated. There was, for example, evidence in the record that demonstrated considerable community opposition to high-rise structures in general.¹⁰ Plaintiffs’ attempts to prove the existence of racial motives were largely based on descriptions of public meetings where some members of the audience spoke in opposition to the project. However, there were also those who spoke in favor of the project and many of the reasons advanced in opposition — opposition to high-rise construction, fear of overtaxing community facilities — could not be characterized as .racist. Plaintiffs, and our dissenting brother, conclusively perceive racism where we and the district court do not. We think that such perception in this case confuses an area’s desire to protect comparatively uncrowded living conditions with a desire to keep minorities out. It is simply not true that community opposition to the housing proposal here had to be based upon racism. Just because plaintiffs “know” that the opposition was racist is not proof enough. In any event, the decision to terminate the project was made by city officials and plaintiffs did not establish that they were motivated by racial considerations, and, in fact, there was evidence that those officials were not motivated by such considerations and did not believe that the community opposition to the project was primarily racial in character.¹¹

In Lackawanna we also stressed the historical background of the city’s policy of discrimination and noted how it affected the city’s nonwhites. Here, as noted above, there is no showing that the city’s action had disproportionate effect on non whites since the project was designed mainly for middle-income persons.¹² Moreover, this project was only one of many city housing projects. The money tentatively allocated to the Faraday Wood project would be available for another housing project. In contrast, when a private developer is prevented from building public housing in a city, no such housing whatever is provided to the city’s residents.

On the basis of Lindsey v. Normet, supra, and Palmer v. Thompson, 403 U.S. 217, 91 S.Ct. 1940, 29 L.Ed.2d 438 (1971), which held that a municipality could choose not to operate any swimming pools rather than operate them on a desegregated basis, we recently rejected a claim similar to one that plaintiffs make here. In Acevedo v. Nassau County, 500 F.2d 1078 (1974), we examined Acevedo’s claim in light of the cases cited by plaintiffs in that case and we said:

Appellants argue, however, that once appellees began to plan low income housing for Mitchell Field they could not, consistent with the Fourteenth Amendment, abandon the plan if to do so would have a disproportionate impact on minority groups, unless appellees could show a “compelling state interest” for that abandonment.

All of the eases on which appellants rely involve either the refusal of a governmental body to grant benefits equally to all or the governmental obstruction of private projects beneficial to minority groups or integration. Here appellants seek not to remove governmental obstacles to proposed housing but rather to impose on appel-lees an affirmative duty to construct housing. This is clearly not required by any provision of the Constitution.

Acevedo v. Nassau County, supra, at 1081.

Plaintiffs seek to distinguish Acevedo by noting that there was no private builder or sponsor involved in that case.¹³ This seems irrelevant, especially since it probably only indicates that the Nassau County plans were more tentative than the plans here. In any event, the involvement of AMIH in the Faraday Wood project does not change the fact that the project was primarily a city project. The city initiated it, was intimately involved in its planning, and was going to finance it.

We conclude that there is no fundamental right to a certain quality of housing and that a project concerned primarily with middle-income persons does not deal with a suspect class. Hence the city’s actions need not be justified by a compelling governmental interest. Those actions, in view of community opposition not shown to be racially motivated, more than satisfy the requirement of rationality, even if that be viewed with more than minimal vigor. Cf. note 5 supra. Thus here, as in Acevedo, there is no constitutional violation.

Our decision today does not represent a retreat from Lackawanna. In that case we held that a city cannot take discriminatory action which impedes a private organizations’ efforts to build housing for low-income families. Nor can a city build such housing itself and then operate it in a discriminatory manner. See Otero v. New York City Housing Authority, 484 F.2d 1122 (2d Cir. 1973). We hold today only that a city cannot be compelled to build and finance a specific housing project designated, in part, to aid low-income families or any specified group of its citizens simply because it started to plan such a project. As Justice Douglas said in Berman v. Parker, 348 U.S. 26, 33, 75 S.Ct. 98, 102, 99 L.Ed. 27 (1954): “We do not sit to determine whether a particular housing project is or is not desirable.” ¹⁴

II.

Plaintiff AMIH also asserts a contract claim against the city. In AMIH’s words, “This claim is based on the existence of an implied agreement that [the city] would process AMIH’s application for Mitehell-Lama funding in good faith.” Although plaintiff concedes that New York law governs this claim, it relies principally on federal cases that hold that the federal government has a duty to consider honestly bids that it has solicited. See, e. g., Keco Industries, Inc. v. United States, 428 F.2d 1233, 192 Ct.Cl. 773 (1970); Heyer Products Co. v. United States, 140 F.Supp. 409, 135 Ct.Cl. 63 (1956).

However, even if we adopted the standards of these cases the plaintiffs have failed to show that the city acted in bad faith. AMIH knew that this proposal had to be approved by the New York City Board of Estimate before the parties could enter into a binding contract. The Board of Estimate is a political body so AMIH knew that it would consider expressions of opinion by members of the public. It seems to us that it is a proper exercise of discretion for HDA to terminate a project when it feels that the Board of Estimate is unlikely to approve it because of public protest and political considerations.

AMIH also claims that since the city invited it to sponsor the project and caused it to expend money to develop acceptable plans for the project, the city is estopped from denying AMIH’s claim for sums expended in reliance on the city’s actions. As far as municipalities are concerned, the New York courts have clearly rejected such a doctrine. Emerman v. City of New York, 34 A.D.2d 901, 312 N.Y.S.2d 288 (1970).¹⁵

Affirmed.

1 . The case was tried before the late Judge Edward C. McLean. After Judge McLean’s death in October 1972 the case was assigned to Judge Ward. The parties stipulated that Judge Ward could decide the case on the record made before Judge McLean. While in such a case we have the power to set aside the findings of the district judge even if they are not clearly erroneous since we can evaluate the written record as well as he can, see Orvis v. Higgins, 180 F.2d 537 (2d Cir. 1950), cert. denied, 340 U.S. 810, 71 S.Ct. 37, 95 L.Ed. 595 (1950), we find ourselves in basic agreement with Judge Ward’s findings.

2 . The Faraday Wood project was only one of several projects that were discussed. At this point the city had made no firm decisions on what, if anything, to do with the Faraday Wood site.

3 . The Mitchell-Lama Act is the popular name for the New York Limited-Profit Housing Companies Law, N.Y. Priv. Housing Law art. 2 (McKinney’s Consol.Laws, c. 44B, 1962), as amended, (McKinney Supp. 1974).

4 . At trial Mayor Lindsay denied that he had authorized the press release.

5 . In the alternative plaintiffs urge us to adopt an intermediate equal protection test — somewhere between the compelling interest standard and the traditional rational basis standard. The Supreme Court has seemed to apply such a test on several occasions. See, e. g., Reed v. Reed, 404 U.S. 71, 92 S.Ct. 251, 30 L.Ed.2d 225 (1971); Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972). See generally Gunther, The Supreme Court, 1971 Term — Foreword: In Search of Evolving Doctrine on a Changing Court: A Model for a Newer Equal Protection, 86 Harv. L.Rev. 1 (1972). This circuit also espoused such a test. E. g., Boraas v. Village of Belle Terre, 476 F.2d 806 (2d Cir. 1973); Green v. Waterford Bd. of Educ., 473 F.2d 629 (2d Cir. 1973). However, the Supreme Court reversed Boraas and analyzed the case under the rational basis standard of equal protection review. Village of Belle Terre v. Boraas, 416 U.S. 1, 94 S.Ct. 1536, 39 L.Ed.2d 797 (1974). In light of that reversal and the Supreme Court’s refusal to adopt an intermediate standard of review in San Antonio School Dist. v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973) (decided subsequent to the Second Circuit decision in Boraas), it is unclear whether the Court now accepts an intermediate form of equal protection analysis. Cf. Cleveland Bd. of Educ. v. LaFleur, 414 U.S. 632, 94 S.Ct. 791, 39 L.Ed.2d 52 (1974) (citing Green, supra, with approval). In any event, even if we applied the “slightly, but perceptibly, more rigorous” test of rationality of Green, supra, 473 F.2d at 633, the result in this case would be the same, as we point out below.

Plaintiffs also have advanced a statutory claim based on the Fair Housing Act, 42 U.S.C. §§ 3601-3631 (1970). They do not specify how the Act is involved here, except to say that if they establish their constitutional claim, they will have established their statutory claim. Since they view whatever statutory claim they have as dependent on their constitutional claim, we need not discuss it. See Acevedo v. Nassau County, 500 F.2d 1078, at 1082 (1974).

6 . Since plaintiffs had no complaint with the city’s actions until August 1969, the project under consideration then — the 80%-20% project — is the proper measure against which the effect of the termination should be measured. The 50%-50% plan was never more than a tentative suggestion of how the site might be used. See note 2 supra.

7 . It is true, of course, that some nonwhites qualify for middle-income status, but the number is small. According to the 1970 census (based on 1969 figures) blacks and Puerto Ricans comprised only 6.1% of persons with incomes between $10,000 and $25,000 in the New York City SMSA. 1970 Census of Population, Characteristics of the Population, New York, Table 192.

8 . Plaintiffs also cite several cases where courts have ordered cities to adopt nondiscriminatory site-selection policies for the placement of public housing projects. See, e. g., Gautreaux v. Chicago Housing Authority, 503 F.2d 930 (7th Cir., 1974); Banks v. Perks, 341 F.Supp. 1175 (N.D. Ohio 1972). These cases are inapposite here because the plaintiffs never established that New York City followed a practice of discrimination in its general site-selection policies. On the contrary there was evidence that the city adopted a scatter-site program in 1966.

9 . The original site has since been sold by its owner to the government of the Union of Soviet Socialist Republics.

10 . The existence of high-rise structures in North Riverdale does not indicate a lack of bona fide opposition to such structures on the part of many of the community’s citizens. In fact, a February 1968 report by a consulting firm employed by the New York City Planning Commission indicated that “[c]onstruction of high-rise units during the past decade is pinpointed by [Riverdale] community leaders as their major objection to recent developments.” Such opposition, of course, can only be expressed when the public is allowed to participate in the planning process. Thus it is only when a public agency, which is required to hold hearings on its projects, proposes a high-rise building that a community has an opportunity to express its opposition to such buildings.

11 . We realize that Palmer v. Thompson, supra, suggests that courts generally should not inquire into motives in order to establish racial discrimination. However, we conclude from a reading of all the opinions in that case that it is doubtful that the Court intended to exclude from all consideration clear evidence of purposeful racial discrimination.

12 . Contrary to the assertion of the dissent that the Faraday Wood project was designed to aid low-income persons, and as clearly evidenced by the high-income limit for project renters, the Mitchell-Lama Act was designed to correct “[t]he greatest single deficiency in the States urban centers [which is] the shortage of moderate income housing for families whose earnings exceed the traditional public housing level.” Foreword to McKinney’s Consolidated Laws of New York, Private Housing Finance Law, vii (1962) (statement of MacNeil Mitchell, Chairman, Joint Legislative Committee on Housing and Multiple Dwellings).

13 . Our opinion in Acevedo made no mention of Acevedo’s failure to show that Nassau County was segregated. The dissent’s attempt to distinguish Acevedo on this ground seems strained.

14 . The soundness of Justice Douglas’s statement is seen in the dissent’s uncertainty over what remedy would be appropriate in this case if its views were followed. Courts are not equipped to choose housing sites, approve plans, sell bonds and oversee construction projects. Moreover, if we required the city to build this housing project, the city might be deterred from considering future projects for fear that if it indicated even a tentative interest in a project, the federal courts might later force it to build it, despite the city’s financial condition or its other housing programs.

15 . Plaintiffs’ reliance on Planet Construction Corp. v. Board of Educ., 7 N.Y.2d 381, 198 N.Y.S.2d 68, 165 N.E.2d 758 (1970), is misplaced. In that case the New York Court of Appeals merely held (4-3) that a board of education could itself take action with regard to a contract that it had entered into that might estop it from asserting a particular provision of that contract. That is a far cry from holding that a governmental body can be held to a contract because of certain actions taken by its officials, when all parties involved knew that the officials had no power to enter into a binding contract.