Richland Park Homeowners Ass'n v. Pierce

671 F.2d 935, 17 ERC 1649
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 2, 1982
DocketNo. 81-1282
StatusPublished
Cited by16 cases

This text of 671 F.2d 935 (Richland Park Homeowners Ass'n v. Pierce) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richland Park Homeowners Ass'n v. Pierce, 671 F.2d 935, 17 ERC 1649 (5th Cir. 1982).

Opinion

TATE, Circuit Judge:

The plaintiffs brought this suit to obtain declaratory and injunctive relief to prevent the United States Department of Housing and Urban Development (“HUD”) from providing federal financial assistance for the construction and operation of a certain low-income apartment project in Dallas, Texas. The plaintiffs alleged that, in approving federal financing for the apartment project, HUD violated procedures mandated by the National Environmental Policy Act (“NEPA”), 42 U.S.C. §§ 4321 et seq., and by administrative law. The plaintiffs are associations of residential property owners in the neighborhood of the apartment project.

After extensive discovery, the district court granted a summary judgment in fa[938]*938vor of HUD.1 The plaintiffs appeal. We affirm. In view of the completion and occupancy of the subsidized apartment project, and noting that there is no showing that HUD acted in bad faith, we find that the plaintiffs are not entitled to the post-completion equitable relief sought, even though HUD may in two minor respects have failed to comply with certain NEPArelated procedures.

I. The Factual Background

The essential facts are undisputed. The plaintiffs are incorporated homeowners’ associations whose shareholders own residential real estate in the immediate vicinity of the project. This area is in what is described as a rather “posh” residential suburb, and the factual showing is open to the interpretation that the homeowners represented by the plaintiffs mostly oppose the project because they fear that the low-income residents of the project will cause a material degradation of their neighborhood “environment.”

HUD agreed to finance the project in question pursuant to section 8 of the National Housing Act of 1934, as amended by the Housing and Community Development Act of 1974, 42 U.S.C. § 1437f (the “Act”). The purpose of the Act is “to remedy thé unsafe and unsanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income . . . . ” 42 U.S.C. § 1437. In accordance with the Act and relevant regulations, in December, 1980, the HUD Dallas area office issued a Notice of Funds Available (“NOFA”) for federally subsidized multifamily housing under the Section 8 Lower Income Housing Assistance Program. See 42 U.S.C. § 1437f. The NOFA, which is analogous to a request for bids, solicits applications for project proposals.

Under the section 8 program, HUD provides developers with certain permanent financing consideration and mortgage insurance. The developers, in turn, reserve 20% of the apartment units in the subsidized project for qualified lessees with low or very low incomes. These low income tenants pay no more than 25% of their monthly income for rent, and HUD pays the developer-owner the remainder of the fair market value rent.

Pursuant to HUD regulations adopted in response to NEPA, HUD must assess the environmental effects of a proposed project before the project is accepted for section 8 subsidization. See 24 C.F.R. §§ 50.20 et seq. The regulations establish a two-level environmental clearance procedure. First, an environmental assessment is prepared. Depending on the magnitude of the proposal, the assessment will be either a normal environmental clearance (“NEC”) or, for larger proposals, a more-detailed special environmental clearance (“SEC”). Second, based on the facts gathered and analyzed in the NEC or SEC, HUD decides whether an environmental impact statement (“EIS”) must be prepared prior to the decision to approve or reject the proposed project. An EIS is a much more detailed public statement regarding the proposed action. NEPA mandates the preparation of an EIS if the proposal is determined to be a “major Federal action significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(c).

In response to the December 1980 NOFA, Landmark Properties, Inc. (the “developer”),2 submitted a proposal for a 280 unit multi-family apartment complex on the subject site. Under this first proposal, 56 units were to be reserved for low income tenants under the section 8 program.

In February 1980, HUD appraiser Gene Hollinsworth conducted a preliminary environmental analysis of the developer’s proposal. Hollinsworth studied the proposal, [939]*939and he conducted a field investigation. Hollinsworth recommended that the proposal be rejected, because: 1) the site sided a railroad track and exceeded acceptable noise level, 2) the site had two open ditches across it for storm drainage, and 3) the proposed density (approximately twenty apartment units per acre) exceeded the density of “typical insured projects.”

After its initial proposal was rejected, the developer commissioned a noise consulting firm to do a noise study on the subject site. Taking HUD’s comments and the noise consultant’s recommendations into account, the developer submitted a revised proposal on April 7, 1980.

HUD assigned Carol Wakeman, another appraiser, to evaluate the revised proposal. Wakeman reviewed the revised plans, the noise study, a flood hazard boundary map, and city engineering maps for water and sanitary sewer service. She also made a field inspection of the site and the surrounding neighborhood, and she discussed with a city engineer the question whether the project might cause any problem with respect to the storm drainage easements. Based on these inquiries, Wakeman concluded that the revised proposal was “acceptable subject to [completion of required environmental analysis], soils and engineering studies, and noise attenuation for office building [which was to be located much closer to the railroad tracks than the apartment units].”

In May 1980, after HUD had received a recommendation for favorable consideration of the project from the North Texas Council of Governments (which had invited comment from the city of Dallas, the Dallas independent school district, and the Richardson school district), HUD gave the proposal preliminary approval. In August 1980, Wakeman was instructed to complete her environmental clearance. Unaware that an SEC was required due to the magnitude of the proposal, Wakeman completed an NEC. After consulting with a number of city officials and reviewing the accumulated material, Wakeman recommended “Acceptance subject to soils test and engineer’s study.” She concluded that no EIS would be required because the project was “not a major Federal action significantly affecting the quality of the human environment.”

On September 29, 1980, HUD and the developer entered into contracts whereby the developer agreed to construct a 220 unit apartment complex. The agreements required HUD to 1) provide subsidy payments for 44 units for twenty years; 2) provide mortgage insurance; and 3) enable the developer to obtain a permanent financing commitment from the Government National Mortgage Association (“GNMA”).

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Bluebook (online)
671 F.2d 935, 17 ERC 1649, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richland-park-homeowners-assn-v-pierce-ca5-1982.