Waleska Velez v. Cuyahoga Metro. Housing Authority

795 F.3d 578, 2015 FED App. 0173P, 2015 U.S. App. LEXIS 13265, 2015 WL 4569450
Court of Appeals for the Sixth Circuit·Decided July 30, 2015·No. 14-3978·Published·Cited by 2 cases

Opinion

OPINION

LUDINGTON, District Judge.

The question raised on appeal in this case is whether fees charged by lessors for lease terms shorter than one year are “rent” under Section 8 of the Housing Act of 1937 (“Act”). 1 Appellants Waleska Velez and Kimberly Hatcher, Plaintiffs below, appeal the district court’s order denying their motion for summary judgment and granting Appellee Cuyahoga Metropolitan Housing Authority’s (“CMHA”) motion for summary judgment. Appellants argue that the district court incorrectly determined that the term “rent,” as used in the Act and its accompanying regulations, does not encompass the fees charged by lessors on short-term leases.

Because the subject fees are an expense payable by the lessees for the occupancy of the rental unit, we conclude that the expenses are part of the lessees’ rent under the Act. We reverse. Further, we remand to the district court for proceedings consistent with that conclusion.

I.

The underlying facts that are germane to the legal issues on appeal are few. Appellants are two individuals who qualify for the Section 8 low-income housing assistance voucher program, known as the Housing Choice Voucher Program. 42 U.S.C. § 1437f(o).

A.

Title 42 U.S.C. § 1437f codifies Section 8 of the Housing Act of 1937. Pub.L. No. *580 75-412, 50 Stat. 888, 891. Under this provision the relevant housing authority (at the time, the U.S. Housing Authority— now, the U.S. Department of Housing and Urban Development (HUD)) was authorized to make loans and contributions to local public housing authorities to assist in the construction and administration of “low-rent housing” (i.e., public housing projects) for “families of low income.” 50 Stat. at 888, 891. In its original form, the Act did not provide for a tenant-based housing subsidy program. Section 8 read: “The Authority may from time to time make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of this Act.” Id. at 891.

In 1974, Congress amended the Housing Act to “significantly enlarge! ] HUD’s role in the creation of housing opportunities.” Hills v. Gautreaux, 425 U.S. 284, 303, 96 S.Ct. 1538, 47 L.Ed.2d 792 (1976) (citing Housing and Community Development Act of 1974, Pub.L. No. 93-383, sec. 201, § 8, 88 Stat. 633, 662-66). In the 1974 amen-datory act, Congress authorized the first permanent tenant-based rental housing assistance program — the Section 8 Rental Certificate Program — which allowed the use of federal funds to subsidize a tenant’s monthly rental housing costs. 2 “Building on the success of the Certificate Program,” 80 Fed.Reg. 8243, 8244 (Feb. 17, 2015), Congress created the Housing Choice Voucher Program in 1983. 3 See Housing and Urban-Rural Recovery Act of 1983, Pub.L. No. 98-181, sec. 207, 97 Stat. 1155, 1181-82 (codified as amended at 42 U.S.C. § 1437f(o)). 4 The provisions governing the voucher program are at issue here.

Under the Section 8 Housing Choice Voucher Program, 42 U.S.C. § 1437f(o), and its accompanying regulatory framework, see 24 C.F.R. § 982, certain low-income individuals qualify to receive housing assistance vouchers that subsidize the cost of renting privately-owned housing units. Under the program, HUD “pays rental subsidies so eligible families can afford decent, safe and sanitary housing.” 24 C.F.R. § 982.1(a). The voucher program is administered “by State or local governmental entities called public housing agencies (PHAs),” such as CMHA. Id.

The Act and regulations contain various provisions that govern the amount of the rental subsidy paid by a public housing agency on behalf of a low-income tenant. The regulations refer to subsidy payments by the public housing agency on behalf of a low-income renter as “housing assistance payments.” These payments are defined as “[t]he monthly assistance payment by a PHA, which includes: (1) A payment to the owner for rent to the owner [sic] 5 under the family’s lease; and (2) An additional payment to the family if the total assistance payment exceeds the rent to owner.” 24 C.F.R. § 982.4(b). In turn, *581 the regulations define “rent to [the] owner” as “[t]he total monthly rent payable to the owner under the lease for the unit. Rent to owner covers payment for any housing services, maintenance and utilities that the owner is required to provide and pay for.” Id.

B.

Appellants are tenants receiving subsidy payments under the voucher program. Appellant Velez has participated in the program since February 4, 2012. Am. Proposed Stipulations, ECF No. 26, Page ID 279. Appellant Hatcher has participated in the program since July 1, 1999. Id. at 281. Both Appellants initially entered into one-year leases with third-party defendant The K & D Group, Inc. (“K & D”). At the end of the one-year lease terms they renewed their leases for terms less than one year. The standard lease designates “RENT” as a specified amount to be paid per month. Id. at 293. The lease further provides: “If Resident(s) shall holdover after the end of the term of this Rental Agreement, said holdover shall be deemed a tenancy of month to month and applicable month to month fees shall apply.” Id. The lease does not prescribe the amount of the month-to-month fee. K & D maintains a separate policy establishing the month-to-month fee, id. at 280, and lessees are notified of the fee when K & D issues lessees a “Lease Renewal Notice,” id. at 308.

Velez entered into a month-to-month tenancy after her initial one-year term expired in 2013 without executing a new agreement, id., and Hatcher entered into two separate month-to-month tenancies, in 2007 and 2012, and, in 2011, a nine-month lease agreement, id. at 283-86. Under each of these short-term agreements, K & D charged Appellants Velez and Hatcher monthly month-to-month and short-term lease fees. 6 These fees varied in amount based upon the length of the short-term lease but ranged between $35.00 per month for the nine-month lease term and $100.00 per month for the month-to-month lease.

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Waleska Velez v. Cuyahoga Metro. Housing Authority, 795 F.3d 578, 2015 FED App. 0173P, 2015 U.S. App. LEXIS 13265, 2015 WL 4569450 (6th Cir. 2015).

795 F.3d 578 (Waleska Velez v. Cuyahoga Metro. Housing Authority) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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