7th DraftNovember 16, 20183:17 PM1:43 PM
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTHERN TEXAS
Civil Action No.
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MEMORANDUM IN SUPPORT OF APPLICATION FOR
TEMPORARY RESTRAINING ORDER/PRELIMINARY INJUNCTION
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- INTRODUCTION AND SUMMARY OF CLAIMS
Since approximately October 2003, up to 75 low income tenants of Prince Hall Chambre Apartments (“Prince Hall”) have been forced to pay unaffordable rents because the defendant owner Giddens has deprived them of federal rent subsidies to which they were entitled. Not only have these tenants and their families endured the financial and other hardships caused by paying more than they could afford for rent, some have already suffered and others are threatened with termination of utilities and ultimately the loss of their homes. Not only have these families been deprived of the section 8 subsidies to which they’ve been entitled, but the actions of both the owner and the United States Department of Housing and Urban Development (“HUD”) threaten to prematurely and illegally terminate their right to “enhanced “ vouchers, which would ensure their right to remain living at Prince Hall.
In their complaint, the plaintiffs raise a number of claims against both the owner and HUD. This motion, however, is focused on just a part of the case that needs the Court’s immediate attention. Plaintiffs seek a temporary restraining order and/ preliminary injunction to achieve two objectives : 1. preserving the right of all sSection 8 eligible residents to receive enhanced vouchers, including, if necessary preserving the existing Section 8 contract at Prince Hall until the Court can determine plaintiffs’ claims to sSection 8 assistance; 2. provide short term protection to plaintiff tenants from the risk of eviction or displacement by preventing eviction or lockouts or termination of utilities based on a tenant’s inability to pay market rate rents.
The first objective is necessary because if the Section 8 contract expires on June 30, HUD may take the position that they no longer have legal authority to provide the sSection 8 subsidies which plaintiffs seek. The second objective is necessary because a number of Prince Hall residents have been threatened with or experienced eviction, utility termination and lockout solely because they could not afford to pay an illegally excessive rent.
As a result Pplaintiffs move pursuant to Rules 65 (a) of the Federal Rules of Civil Procedure for a temporary restraining order and preliminary injunction to enjoin the defendants from taking actions that will threaten the permanent loss of housing subsidies to which plaintiffs would be entitled but for the illegal actions of defendants and that will lead to the displacement of the low income plaintiff tenants from their homes at Prince Hall Chambre Apartments. Without preliminary injunction relief, plaintiffs are faced with these irreparable injuries before their underlying claims against the defendants for their unlawful actions can be fully adjudicated
Defendant Owner’s unlawful actions which threaten plaintiffs with irreparable injury include (a) failure to fully utilize rent subsidies for the benefit of plaintiffs as required by 24 C.R.F. §§ 245.205 and 886.129, and the terms of a section 8 Housing Assistance Payments (HAP) contract, and (b) failure to comply with the terms of a Use Agreement and the HAP contract which require ongoing maintenance of the property in good, decent and sanitary condition, thereby threatening the residents who are participating in the sSection 8 program with loss of their homes.
Defendant HUD’s unlawful actions which threaten plaintiffs with irreparable injury include (a) failing to assure that the oOwner not interfere with tenants’ obtaining rent subsidies as required by 12 U.S.C. § 1715z-1b, which would prevent their displacement and (b) violating the enhanced voucher statute, 42 U.S.C. §1437f(t); and (c) violating itsHUD’s duty to administer its programs so as to affirmatively further fair housing, 42 U.S.C. § 3608.
Moreover, the defendants’ actions have had and will continue to have a disparate adverse impact upon minority residents and minorities in need of subsidized housing, in violation of the Fair Housing Act.
II.FACTUAL AND LEGAL BACKGROUND
A. Prince Hall Chambre Apartments – Affordable Housing for Low Income Tenants
Prince Hall Chambre Apartments (Prince Hall) is a 192 -unit apartment complex located at 3650 Dixon Avenue, Dallas, Texas. The complex contains a mix of 1, 2, 3 and 4 bedroom units. Affordable rental units, particularly larger units available for families, are a scarce housing resource in the Dallas area.
Almost all[MSOffice1] of the tenants at Prince Hall are racial minorities. Most residents are African American and almost all the rest are Hispanic. In contrast, according to the latest data available, from the 2000 Census, 13.6 % of the Dallas metropolitan area population is African-American, and African Americans disproportionately need subsidized housing. Approximately 87% of the Dallas Housing Authority’s Ssection 8 recipients and those on its waiting list are African American[JDC2].
The complex was previously owned by[MSOffice3]the Prince Hall Chambre Charitable Trust (the “Trust”) which conveyed the property to the current owner, defendant, Harvey Giddens (“Owner”) sometime in October 2003. Mr. Giddens’ involvement with the property began much earlier when he was retained to manage in the property in approximately March 2002.
Prior to October 2003, the property was subject to a mortgage made and subsidized under the federal section 221(d)(3) mortgage program under which rents were restricted to ensure the project remained affordable to its lower income residents.[MSOffice4]. As is the case with many developments under federal multifamily programs, HUD determined that further subsidies were necessary to make these buildings affordable to very low income households beyond subsidizing the owner’s mortgage payments. As a result, the property is further subsidized with a project-based sSection 8 contract or Housing Assistance Payments contract (HAP) originally covering all 192 units and now covering 168 of the 192 units. Under this contract, the residents of the units covered pay rent equal to thirty percent of their adjusted incomes and the oOwner receives a subsidy from HUD to cover the difference between the rent paid by the tenants and the Contract Rents approved by HUD. The HAP contract obligates the Owner to ensure that the maximum number of units covered by the contract be rented to eligible tenants who will benefit from the subsidy provided. [tlt5] This is also required by applicable HUD regulations. 24 C.F.R. §§ 245.205; 886.129. The HAP contract also requires maintenanceainance of the property in good and habitable condition[JDC6].
Severely substandard conditions at Prince Hall led to a lawsuit by the City of Dallas in 2002 to compel the then owner, the Trust, to address the problems. Following a judgment and injunction in favor of the City in March 2002, the ownerTrust took two other actions. First, iIt decided not to renew the Section 8 HAP contract, issuing a one year notice of the intention to “opt out” of the program. Second, the owner and it hired defendant Harvey Giddens to manage the property.
At some point in time the owner Trust also agreed to transfer ownership of the property to the ddefendant, Harvey Giddens. Prior to the decline in conditions leading to the City’s lawsuit, the tenants of Prince Hall generally were the recipients of the full authorization of 168 units of sSection 8 subsidies. However, because of deteriorating conditions and the beginning of the rehabilitation process, about half the units becamewere vacant during this period of time.
As defendant Giddens completed his rehabilitation of the vacant units, he re-rented them to new tenants. Many, if not all of these tenants, are likely to be eligible for Section 8. [tlt7]Despite that fact,Nonetheless, defendant Giddens refused to process and certify these tenants for Section 8 subsidies, even wheren these tenants inquired about rent subsidies. HUD officials were aware Giddens was failing to certify new tenants for Section 8, but apparently took no action to assure that heGiddens began compliedying with his Section 8 duties.
As a result, up to 75 households now reside at Prince Hall without the benefit of subsidized rent.
On or about August 7, 2002, defendant Giddens executed a Use Agreement with HUD. Both the HAP contract and Use Agreement prohibit the Owner from discrimination based on race and require compliance with the Fair Housing Act.
- The Plaintiff Tenants Association and Individual Plaintiffs.
Prince Hall Chambre Tenants’ Association (the “Association”) is an unincorporatedion association of tenants living at Prince Hall. Although the Association has been in existence for a number of years, it resumed regular meetings in November 2002 when a steering committee was formed. Membership in the Association is open to all residents of Prince Hall. The Association’s mission [JDC8]includes representing residents in issues affecting their homes and influencing management decisions about the property for the best interests of the residents. The Association complies with the HUD definition of tenant organization and has met at least monthly and sometimes much more often since November 2002. The Owner’s violations of the HAP contract and Use Agreement and HUD’s violations of law have significantly harmed Tthe ability of the Association to carry out its mission mission.has been significantly harmed bythe Owner’s violations of the HAP contract and Use Agreement and by HUD’s violations of law.
As a result, some of the Association’s members have been denied the benefit of sSection 8 assistance under the HAP contract and are paying rent well in excess of that which they can afford. These members will continue to struggle with unaffordable rent burdens and may have to move from Prince Hall either voluntarily or in response to the oOwner’s eviction for nonpayment of rent. [tlt9]
In addition to depriving many tenants being deprived of Section 8 assistance, all tenants have been deprived of the right to remain in their homes with their Section 8 benefits. This right exists because Federal law requires that when owners such as defendant Giddens choose to “opt out” (not renew the contract) of the Section 8 program , tenants who had been receiving a project based Section 8 subsidy attached to their unit will instead receive an “enhanced voucher.” 42 U.S.C. § 1437f (t). These enhanced vouchers permit tenants to take their rent subsidies and move elsewhere, or if the tenant stays, the vouchers providevouchers provide rent protections to the tenants should the owner increase the rents after the contract expiration. Further, the statute protects tenants with enhanced vouchers from displacement by mandating that they be allowed to remain living at the property after the contract expiration subject to lease termination only for cause.
HUD has taken no steps to provide enhanced vouchers to Section 8 eligible tenants who are not currently receiving Section 8 assistance, despite HUD policies which make such vouchers available to all low income tenants whose units are covered by the Section 8 project-based contract, which require HUD to begin processing the vouchers at least 120 days prior to contract expiration, and which requireprovide that residents should receive these vouchers 60 days prior to contract expiration. HUD Notice PIH 2001-41, ps. 14-16, 19; HUD Section 8 Renewal Policy, § 11-3.B.2[JDC10]. The low income tenants who reside in the 75 units which the Owner refused to make part of the HAP contract could be denied the benefit of the enhanced vouchers upon expiration of the contract on June 30, 2004. Even if they subsequently receive the Section 8 assistance of which they have been deprived of, unless the assistance comes in the form of enhanced vouchers, there will be no assurance they can remain at Prince Hall.
These affected tenants include disabled individuals, single working mothers with minor children, and other very low income working families who are already struggling to provide a stable home environment. If they have to move from their current homes they it will suffercause significant disruption and harm to these low income plaintiff families. [MSOffice11]These tenants chose Prince Hill Chambre as their homes in part because of its location that is close to their jobs (Jones Declaration,), their children’s’ schools (Jones Declaration), friends, family and accessible public transportation (Declaration[MSOffice12]). Some of these tenants have already endured harm related to their having to suffer tThis burden of unaffordable rent has already caused harm to some tenants who have been charged huge late fees for nonpayment, had electricity to their unit shut off and been denied access to their unit by the owner’s changing of the locks. (Durham Declaration[MSOffice13])
C. HUD’s Actions
HUD approved the transfer to Giddens, knowing of his intention to prepay the mortgage and opt out of Section 8. HUD knew that this path would necessitate the issuance of enhanced vouchers to tenants to give them the protections of federal law. However, HUD has taken no steps to make enhanced vouchers available. Thus the 75 households who have been illegally denied project subsidies also face the threat of permanent loss of the ability to receive enhanced vouchers once the project-based contract expires at the end of June.[JDC14]
HUD consented both to Mr. Giddens’ purchase of the property and his desire to pay off the HUD mortgage early. Defendant Giddens’ response has been to flout his legal obligations to provide tenants with Section 8 and to maintain the property. At a tenants’ meeting on April 22, 2004, Giddens told tenants, “ I“I danced to HUD’s tune for two or three years. Now they are dancing to mine.” Rollins Declaration.
III. ARGUMENT
Plaintiffs’ Complaint seeks the following relief:
- A permanent injunction directing the Owner and HUD to immediately take all steps necessary to provide all eligible tenants with the benefits of the project’s sSection 8 contract and an order that the Owner reimburse all eligible tenants for the Owner’s previous failure to provide such tenants with the benefits of the project’s sSection 8 contract.
- A permanent injunction prohibiting the Owner from taking any action to terminate the occupancy of any tenant eligible to receive assistance under the HAP contract but for whom assistance was not sought by the Owner.
- A permanent injunction directing the Owner to take all steps necessary to bring the condition of Prince Hall in compliance with the HAP contract and the Use Agreement and an award of damages for the Owner’s failure to provide decent safe and sanitary housing to Section 8 recipients.
- A permanent injunction requiring HUD to issue vouchers to all low income tenants receiving, or eligible to receive, assistance under the HAP contract, so as to allow them to remain living at Prince Hall.
- A permanent injunction requiring HUD and the Owner to permit any persons displaced by the Owner’s failure to adequately maintain the property to return to the property after repairs are made and to continue their residence there with ana voucher.
In order to maintain the status quo, and prevent irreparable injury to the plaintiffs pending resolution of the case on the merits, plaintiffs are entitled to a temporary restraining order and preliminary injunction:
- Ordering that Ddefendant Giddens immediatelyGiddens immediately notify all current residents not receiving Section 8 that they will be required to pay rent equal to no more than thirty per cent of their adjusted gross income and that as long as tenants pay rent equal to that standard they shall not be evicted or subjected to lock-outs or utility terminations for non-payment of rent even if they owe arrears from prior to the date of this order. Any tenants who have had their electricity terminated for non-payment of rent shall immediately have their service restored by defendant Giddens. As long as a tenant pays future rent based upon this standard, they shall not be locked out or have their utilities terminated during the pendency of this action.
- Ordering that Plaintiff Valenshay Durham immediately be offered the next vacant apartmentvacant apartment in Prince Hall and shall subsequently be charged rent based upon the standard set out above.
- Ordering that during the pendency of this action, any new tenants moving in shall have their rent determined by the same standard set out above, providing they are eligible for the section 8 program and that the total number of tenants on Section 8 has not exceeded 168.
- Ordering that the oOwner and HUD immediately take all necessary actions to ensure that eligible tenants do not lose the opportunity to secure enhanced vouchers pending a determination on the merits, including, if necessary, extending the existing Ssection 8 contract.
- Ordering that HUD set aside legal and budget authority for 168 enhanced vouchers, to be provided both to Prince Hall tenants previously receiving Section 8 as well as those tenants who have been deprived of Section 8 assistance, and shall be prohibited from taking any action which would deny enhanced voucher eligibility for these households pending a final determination on the merits.
A. Plaintiffs satisfy the requirements for Issuance of a Temporary Restraining Order and Preliminary Injunction