Newark Coalition for Low Income Housing v. Newark Redevelopment Housing Authority Memorandum of Law

    IN THE UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY

NEWARK COALITION FOR LOW INCOME )
HOUSING, et al, )

)Plaintiffs, )
)- v - ) CIVIL ACTION
) No.

NEWARK REDEVELOPMENT AND HOUSING )
AUTHORITY, and JACK F. KEMP, ) '
Secretary of the United States )
Department of Hous ing and .Urban )
Development, )

)Defendants. )

MEMORANDUM 0. LAW IN SUPPORT OF PLAINTIFF'S MOTION FOR 
TEMPORARY RESTRAINING ORDER *LND PRELIMINARY INJUNCTION

MELVILLE D. MILLER, JR. ESQ. 
JOSEPH HARRIS DAVID, ESQ.

Legal Services cf New Jersey 
78 New Street 
New Brunswick, N.J. 08901 
(201) 246-0770

MICHAELINE LOUGHLIN, ESQ.
Seton Hall Clinical 

Program
1095 Raymond Boulevard 
Newark, N.J. 07102 
(201) 642-8848

HUGH HEISLER, ESQ.
PAUL GIORDANO, ESQ. 

Essex-Newark Legal 
Services

1095 Raymond Boulevard 
Newark, N.J. 07102 
(201) 642-8707

JULIUS L. CHAMBERS, ESQ. 
JOHN CHARLES BOGER, ESQ. 
JON C. DUBIN, ESQ.

NAACP Legal Defense & 
Educational Fund, Inc. 
99 Hudson Street 
16th Floor
New York, N.Y. 10013 
(212) 219-1900

RUBEN FRANCO, ESQ.
RICHARD RIVERA, ESQ. 
ARTHUR A. BAER, ESQ. 

Puerto Rican Legal 
Defense & Education 

Fund, Inc.
99 Hudson Street 
14th Floor
New York, N.Y. 10013 
(212) 2* ■*- 3 J 6 0

SISTER MAUCARET WELCH,ESQ 
7 Soutn Street 
Newark, N.J; 07107 
(201) 292-6542

ATTORNEYS FOR PLAINTIFFS



TABLE OF CONTENTS
PAGE

PRELIMINARY STATEMENT .....................................  1
STATEMENT OF THE FACTS ............................. .....  2
ARGUMENT .............................'.....................  3.1

s

I. THIS COURT SHOULD ENTER A PRELIMINARY INJUNCTION 
PROHIBITING : (i) THE DEMOLITIONS OF COLUMBUS
HOMES AND KRETCHMER; (ii) ALL DEMOLITION-RELATED 
ACTIVITY; AND (iii) THE FAILURE TO RENT VACANT 
HABITABLE NHA APARTMENT UNITS, DURING THE PENDENCY 
OF TFT? ACTION .......................................  11

II. THE NHA HAS NOT DEMONSTRATED, NOR COULD HUD PROPERLY 
FIND, THAT THE COLUMBUS AND KRETCHMER BUILDINGS 
SLATED FOR DEMOLITION ARE OBSOLETE, INFEASIBLE OF
MODIFICATION TO RETURN THEM TO USEFUL LIFE OR IN
THE CASE OF KRETCHMER, NECESSARY TO DEMOLISH TO
ASSURE THE USEFUL LIFE OF THE REMAINDER OF THE
PROJECT IN VIOLATION OF 42 U.S.C. § 1437p(a).........  21
1. COLUMBUS HOMES ..................................  23
2. KRETCHMER HOMES'.................................  31

III. THE NHA HAS FAILED TO MEET THE REQUIREMENT OF A 
ONE-FOR-ONE REPLACEMENT PLAN FOR THE PROPOSED 
DEMOLITIONS, IN VIOLATION OF 42 U.S.C.§ 1437 p(b)
AND HUD REGULATIONS...................................  39
A. THE COLUMBUS HOMES REPLACEMENT PLAN VIOLATES

THE 1987 ACT AND REGULATIONS THEREUNDER.........  39
1. The Plan Fails To Identify Or 

Assess The Suitability Of The 
Proposed Sites For Replacement 
Housing In Violation Of HUD
Regulations ................................  4 0

2. The Plan Does Not Include A 
Credible Or Meaningful Schedule For 
Its Completion Within Six Years In 
Violation Of 42 U.f C.§ 1437
P(b) (3) (D)............................... . . • 42

i



PAGE
3. The Secretary's Commitment of Funds for

The Plan "Subject To Appropriations",
While At The Same Time Recommending To 
Congress No Appropriations To Cover His 
Commitment, Combined With The Commitment's
Lack Of Detail, Renders It Legally *
Inadequate Under 42 U.S.C. § 1437p(b)..... . 48

4. The Plan Fails To Provide Access For 
Handicapped Tenants In The Replacement 
Units In Violation of
HUD Regulations. ..................   51

5. The NHA Did Not Properly Consult With 
Tenants In Preparation Of The Plan In 
Violation Of 42 U.S.C.§
1437 p(b) (1)      51

6. The Plan Fails To Provide For 
Appropriate Relocation of Tenants 
In Violation of 42 U.S.C.§ 1437
p(b) (3)[F]&[G] And HUD Regulations ____ .... 53

7. The Plan Fails To Ensure That The 
Same Number Of Individuals and 
Families Will Be Provided Housing 
In Violation of 42 U.S.C.§ 1437'
P(b) (3) [E]   54

8. The Plan Fails To Provide 
Assurances That The Replacement 
Housing Will Be Affordable In 
Violation of 42 U.S.C.§ 1437p
(b)(3) ............................ ......... 55

9. The Plan Is So Lacking In Detail That
It Is Neither Credible Nor Realistic ....... 56

B. THE ABSENCE OF A REPLACEMENT PLAN FOR UNITS
TO BE DEMOLISHED AT KRETCHMER HOMES VIOLATES %

42 U.S.C. 5 1437p fb̂  ■ fd) ... ....... ........... 57
4
*1. The 1987 HCDA's Plain Language

Requires Its Application To All 
Demo'itxon Activity After February 
5, 1988 And It Bars the NHA's
Demolition of Kretchmer Without A
Replacement Plan ............................  57

l i



PAGE

#

f

2. The 1987 HCDA's Plain Language
Requires Its Application To All 
Demolition Activity After February 
5, 1988 And' It Prohibits The
S e c r e t a r y  From F u r n i s h i n g  
Assistance For The Demolition Of 
Kretchmer Without A Replacement
Plan .......................................  61

3. Even Under HUD Regulations In
Effect In 1985, HUD's Approval 
Of The N H A 's Application To 
Demolish Kretchmer Without Pre­
paration Of A Replacement Plan Was
Unlawful ...................................  63

IV. ALL NHA DEMOLITION-RELATED ACTIVITY,
VIOLATES THE HOUSING COMMUNITY DEVELOPMENT 
ACT OF 1987 AND MUST 3E ENJOINED, AS MUST ITS 
CONTINUING REFUSAL TO RENT VACANT UNITS . . , ,.....  65

V. THE PROPOSED DEMOLITIONS ARE BARRED BY THE 
SECRETARY'S FAILURES TO COMPLY WITH THE 
NATIONAL ENVIRONMENTAL POLICY ACT, 42 U.S.C.
§ 4231 et seq...... ......................... . 67

VI. THE NHA'S PROPOSED DEMOLITIONS AND REFUSAL 
TO RENT VACANT UNITS HAVE HAD AND WILL HAVE 
DISPARATE RACIAL EFFECTS IN VIOLATION OF 
TITLE VIII OF THE FAIR HOUSING ACT OF 1968,
42 U.S.C.§ 3601 et sea. AND THE CIVIL RIGHTS
ACT OF 1964, 42 U.S.C.§ 2000d ................... 71

VII. THE SECRETARY'S FAILURE TO PROPERLY CONSIDER 
OR AVERT THE RACIAL IMPACT OF THE PROPOSED 
DEMOLITIONS IS VIOLATIVE OF HIS AFFIRMATIVE 
DUTY TO FURTHER THE PURPOSES OF TITLE VIII OF
THE FAIR HOUSING ACT, 42 U.S.C. §3608 (e)(5).....  82

VIII. THE NHA'S PROPOSED DEMOLITION OF KRETCHMER 
AND COLUMBUS HOMES AND BLANKET REFUSAL TO 
RENT VACANT UNITS VIOLATE THE NEW JERSEY
CONSTITUTION .....................................  84
A. Article I, Paragraphs 1 and 2, of 

the New Jersey Constitution 
Embodies a Fundamental Right To 
Housing That Precludes NHA's Course 
Course Of Conduct .......................... 84

in



PAGE
B. Article I, Paragraphs 1 and 2,

Requires That NHA Utilize Scarce 
Housing Resources in a Manner 
Consistent with The General
Welfare ....................................  87

CONCLUSION ........ .......... .......... .............. . . • • • 92 *

*

IV



PRELIMINARY STATEMENT

This is a class action brought pursuant to the United States Housing Act, 

42 U.S.C. 1437 et sea.; the Administrative Procedure Act, 5 U.S.C. 702 et sea.; 

Title VIII of the Fair Housing Act of 1968, 42 U.S.C. 3601 et sea^; Title VI of 

the Civil Rights Act of 1964, 42 U.S.C. 2000d; the National Environmental Policy 

Act, 42 U.S.C. 4321 et sea.; and the Fifth and Fourteenth Amendments to the 

United States Constitution, as well as state constitutional and statutory 

provisions under this Court's prerogative to exercise pendent jurisdiction. 

Plaintiffs seek injunctive and declaratory relief against the Newark Housing 

Authority (NHA), the United States Department of Housing and Urban Development 

(HUD), and the Secretary of HUD, halting the destruction, demolition, 

disposition and mismanagement of public housing in derogation of law.

This brief is in support of plaintiffs' motion for a temporary restraining 

order and preliminary injunction, pursuant to Rule 65 of the Federal Rules of 

Civil Procedure.1 Plaintiffs seek to enjoin defendants from demolishing any of 

the nearly 2000 public housing apartment units slated for imminent destruction 

at the Columbus Homes and Kretchmer Homes projects; taking any action in 

preparation or in anticipation of such demolition or disposition activities at 

Columbus and Kretchmer, and failing to rent vacant habitable units. The 

preliminary relief plaintiffs seek would prevent the irretrievable loss of 

scarce low income housing and ongoing and future irreparable hardships, while 

simply requiring defendants to comply with their ctatutorily imposed duties.

1 Since plaintiffs are indigents, this Court should waive any requirement 
of a bond on this motion. See Bass v. Richardson. 338 F Supp. 478, 490 
(S.D.N.Y. 1971); See also Powelton Civic Home Ass'n v . HUD. 284 F. Supp. 809, 
840 (E.D. Pa. 1968)

1



In July of 1988 many of plaintiffs, together with a number of 

organizations, filed a complaint in the Superior Court of New Jersey, Essex 

County, against the NHA. This state court action sought relief barring the NHA 

from taking further steps toward demolition at any of its projects, compelling 

the NHA to rent vacant habitable units, and ordering the NHA to properly manage 

its projects. The action was based on both state and federal law claims.

Subsequent to the filing of the state complaint, the NHA submitted and HUD 

approved an application for the demolition of Columbus Homes, consisting of 

1,506 housing units. This development, together with demolition preparations 

and activities at Kretchmer Homes and other NHA projects, violated, inter al ia. 

recent amendments to the United States Housing Act. Because of HUD's approval 

of and acquiescence in these activities, and because the actions involve very 

substantial violations of federal law, plaintiffs are filing this United States 

District Court action against HUD and its Secretary, in addition to the NHA. 

The prior state court action is being vo1untarily dismissed without prejudice 

on plaintiffs' motion, with the consent of defendant NHA.

STATEMENT OF FACTS

Desperate Affordable Housing and Homelessness Crises in Newark

Since 1985, the NHA, with HUD's approval and acquiescence, has embarked 

on the most massive demolition program in the history of public housing, 

involving the attempted destruction of over 5000 apartment units. Considered in 

isolation, the elimination of so many units without adequate replacement is 

profoundly disturbing; considered against the backdrop of the Newark area's 

deepening housing and homelessness crisis, the magnitude of this loss is 

staggei ing.

The numbers alone are shocking. Newark, a city of 316,240 (United States

2



department of Commerce, Bureau of the Census, County and City Data Book 1988. 

582 (1988)), is estimated to have a homeless population of over 16,000, a 

-lomolessness rate among the highest of any major city in the nation. The NHA's 

public housing waiting list is currently estimated at over 7,000 families, and 

was as high as 13,000 in 1986. See Affidavit of Victor DeLuca, dated March 10, 

1989 at par. 9, Exh.2.2

The plaintiffs have few, if any, alternatives to public housing, given 

Newark's critical shortage of affordable housing of even poor quality. Nearly 

19,000 low and very low-income tenants are paying unaffordable rents. Newark 

lousing Assistance Plan (HAP) at 7-11, Exh. 12. The city possesses 14,055 

substandard occupied units, Id. at 7. These conditions qualify Newark's 

housing stock as or.e of the worst in the nation. See Burchell, Housing and 

Economic Change in Newark. Report Prepared for the New Jersey Department of the 

Public Advocate, at 6 (1986), Exh. 16.

In addition to these grim economic realities the plaintiffs' 

opportunities to f-nd adequate housing in the county and city are further 

restricted by continuing racial discrimination and residential segregation. See 

general 1y National Urban League, State of Black America 1989. (January 1989), 

at 77-106 (citing studies of continuing residential segregation in several 

cities including Newark). The city's HAP specifically found "a critical 

shortage of housing for low/moderate income and minority groups11 and 

"discrimination in ownership, rental, and financing of housing." HAP at 3, Exh. 

12. (emphasis added).

Background of NHA's Demolition Program

2. 1986 HUD Audit of NHA, at Overview P. 2, Exh. 14.

3



The grave implications of NHA's current demolition activity should be 

assessed by placing it within its proper context: a massive demolition program, 

embarked up on by the NHA in 1985, the largest in the history of the nation's 

public housing program. Notwithstanding that nearly half of its 13,000 public 

housing units were in mid-rise and high-rise buildings, during the early 1980's 

the NHA decided to abandon the use of its high-rises as family dwellings. This 

theoretical position was as breathtaking in its sweep as it was unsupported by 

the experiences of a number of ether public housing authorities, which had made 

high-rises work for families.

In 1985 the NHA adopted as its guide the Public Housing Master Plan. 

Newark. New Jersey (December 1984) (hereinafter Master Plan), Exh. 9. The 1984 

Master Plan acknowledged that the city's public housing vacancy rate was the 

highest of any major housing authority in the country and that its level of 

deterioration was among the most serious in the nation. Id. at 12.

In the Master Plan, the NHA acted on its conclusion that high-rise 

buildings were inappropriate, by announcing a five year effort to demolish the 

city's family high-rise projects. Id. at 1-2. In fact, the NHA had begun to 

abandon the high-rises well before the formal announcement in the Master Plan, 

allowing large numbers of units to remain vacant and deteriorate. The NHA's 

desire to assist the gentrification of Newark, an upgrading of property values 

which forces poor residents to move from the city, appears a prominent motive 

behind the Master Plan and the overall demolition program. The NHA observed that 

the city could not be expected to devote "a major share of its meager resources" 

to a public housing system (and its low-income population) already overburdening 

city services. Master Plan at 32.

The NHA has continued to adhere to this philosophy of demolition. In June

4



1987 the NHA filed a "Comprehensive Modernization Plan," announcing that "five 

family high-rise projects comprised of thirty-nine buildings should be 

demolished and replaced by townhouses or sold to developers." 1987 Comprehensive 

Modernization Plan at 1, Exh. 7. In March 1988 a seco-id Comprehensive 

Modernization Plan proposed an even more sweeping course: the elimination of 

over 5,000 units out of-an original 13,133 units, with only minimal replacement.

1988 Comprehensive Modernization Plan at 2-6, Exh. 18. To date, the NHA has 

actually demolished 816 units at the Scudder Homes site, without creating a 

single new unit (ground has recently been broken in June 1988 for a mere 101 

units at the Scudder Homes site).

Current Demo!ition. Activity

The planned demolitions of Kretchmer and Columbus Homes would withdraw 

nearly 2,000 low-incume units from a city already facing this deepening housing 

and homelessness crisis. The Kretchmer projects, where 372 units are slated for 

imminent destruction, are conveniently located in a quiet tree-lined residential 

area, bordering the City of Elizabeth, within easy walking distance of grocery 

and drug stores, a community health center, churches, and a park. Affidavit of 

Vic DeLuca, par. 15 ,Exh. 2. Columbus Homes, where over 1500 units are to be 

destroyed, has ready access to public transportation, including bus and railroad 

lines an important feature for low-income families unable to purchase or 

maintain automobiles. A major city park, shopping center, clinic, and 

neighborhood schools are all located within walking distance. IcL at par. 17.

The area adjacent to the Columbus site is experiencing gentrification, 

and substantial private developer activity and interest. See 0KM Columbus Homes 

Rep't at 45, Exh. 1. Both Columbus and Kretchmer provide a more socially and 

economically integrated environment than the majority of Newark's public

5



housing, situated in the city's economically and racially impacted Central Ward. 

The area east and west of the Columbus project, for example, abuts the 

Colonnade, a private high-rise apartment complex. See NHA Columbus Demolition 

Application, at 6, Exh. 3. The elevated Interstate Route 280 and Lackawanna 

railroad tracks pass by the project on its southerly side, creating natural 

barriers between the city's gentrifying North Ward and its racially impacted 

Central Ward. IcL

Despite the city's critical shortage of safe, sanitary, and affordable 

housing and the highly desirable location of both Kretchmer and Columbus Homes, 

the NHA has slated both projects for demolition. In September 1985 the NHA 

obtained HUD approval for the demolition of three Kretchmer buildings. Exh. 6. 

The NHA has stated that it will not replace them.

In October 1988 HUD approved the demolition oi? over 1500 Columbus Homes 

units. HUD approval decision, Exh. 4. The required replacement plan for these 

targeted units is woefully inadequate. Moreover, the NHA intends to sell the 

Calumbus site to a private developer for market-rate housing, rather than retain 

tiiis increasingly valuable land for use in housing the poor, as the NHA's 

mssion would appear to require.

Racial Impact of Planned Demolitions

The demolitions will have a devastating impact on racial minorities0 in 

a variety of ways. The supply of scarce low-income housing resources will be 

reduced sharply for thousands of desperately needy overwhelmingly minority

3
The term "racial minorities" 

Hispanic individuals.
as used herein, shall refer to Black or

6



homeless and inadequately housed people.** The planned demolitions of Columbus 

and Kretchmer a^ne would remove nearly 2000 units from housing sites located 

in places .advantageous to low-income minority households. Finally, these plans 

will' increase segregation in the city by relocating displaced tenants and 

placing new replacement public housing in the racially and economically impacted 

Central Ward, and by removing 2000 units from more integrated areas of the 

city.^ Nonetheless, neither HUD's demolition approval determinations, nor any * 5

 ̂ Members of racial minority groups comprise a disproportionate share of 
the homeless and inadequately housed persons in Essex County. Those eligible 
to apply for NHA-operated housing include not only residents of Newark but also 
residents from other towns in Essex County, including Belleville, Bloomfield, 
Irvington, and Nutley. In 1980, Blacks comprised 44.36% of this group of cities 
and towns, and Latinos comprised 13.74%. Bureau of the Census, U.S. Dept, of 
the Census, Countv and City Data Book 1983. 740-50 (1983). In comparison, the 
homeless population of Essex County is overwhelmingly Black. Estimates place 
the percentage of county Black homeless at 95%. Affidavit of Eileen Finan,
4, Exh. 8. Hispanics also are dramatically overrepresented among the county's 
poor. In 1980, 18.4% of the population of Essex County living below the poverty 
line was Hispanic even though Hispanics represented only 9.08% of the county 
population. Bureau of the Census, U.S. Dept, of Commerce, General Social and 
Economic Characteristics: 1980 Census of the Population. Chap. C, pt. 32 (July 
1982). In view of the economic realities indicated by these bleak statistics, 
the withdrawal of low-income housing units in a scarce nrarket has had and will 
continue to have an adverse impact on both Blacks and Hispanics.

5
Unlike the majority of the city's public housing located in the racially 

and economically impacted traditional Central Ward, both Kretchmer and Columbus 
are located in areas with more integrated residential patterns. Kretchmer is 
located in the East Ward, which borders Elizabeth, a city over 75% white. County 
and City Data Book 1983 at 740. Although public housing tenants in the East Ward 
are predominantly minorities, several hundred tenants, amounting to nearly one 
third of the area's public housing tenants, are white. See Exh. 13, map and NHA 
demographics. Although as a result of redistricting, Columbus is technically 
now part of the new Central Ward, the area where Columbus is located is more 
racially and economically diverse than the traditional Central Ward. Although 
the immediate area is predominately minority, it does not contain much public 
housing other than Columbus. Moreover, it borders on areas that are not 
predominantly minority.

Over 70% of the units provided for the relocation of plaintiffs whose units 
are to be demolished are in the Central Ward. HAP at Exh. B, Exh. 12. A similar 
percentage of the acreage listed as available as sites for new replacement 
housing units are also there. Id at A, Exh. 12. The comparative numbers of

7



of the documents presented in the NHA's demolition applications, as much as 

mention, much less thoughtfully weigh, these impacts, nor do they contain 

analysis of alternative courses of action which would have less detrimental 

impact on housing opportunities for racial minorities.

Warehousing of Vacant Units

The NHA's 1984 Master Plan acknowledged that the city's public housing vacancy

rate was the highest of any major housing authority in the country. Master Plan

at 32, Exh 9. By September, 1987, the NHA's vacancy rate had increased by 945

percent over the past decade. Complaint, at par. 62 (e). Currently, nearly 40

percent of the NHA's entire housing stock lies vacant.®

HUD is well aware of the NHA's acute vacancy problem, but has failed to

take effective corrective measures. In a 1986 audit of the NHA, HUD found there

Wpro 5285 vacahcies in NHA housing, and noted that 1200 of the vacancies were

at family low-rises or elderly high-rises. The HUD officer stated:

Judging- from the volume of inquiries this office receives from 
applicants, it would appear that all habitable units could be 
filled.

Black and Whites in these census tracts comprising the Central Ward, in which 
the majority of the city's low-income housing projects are already clustered, 
follow:

Census tract 31 
39 
63
65
66

5421 Blacks 12 Whites 
2595 B1acks 5 Whites 
4499 Blacks 14 Whites 
1972 Blacks 115 Whites 
3748 Blacks 85 Whites

Bureau of the Census, U.S. Dept, of Commerce, 1980 Census of Population and 
Housing. Census Tracts Newark. N.J, Standard Metropolitan Statistical Area No. 
PHC*)-2-261 (July 1983) at 96-98, Exh. 49.

® Under HUD regulations, a vacancy rate in excess of 3% (occupancy rate 
below 97%) is considered abnormal and requires the housing authority to prepare 
a five-year comprehensive occupancy plan demonstrating how it will return to full 
occupancy. 24 C.F.R. 990.118.

8



HUD 1986 audit at Finding #3, Exh. 14. Eleven months later, NHA director Milton 

Buck responded that 2600 units were deliberately held vacant due to plans for 

their demolition, 1100 units are in projects undergoing modernization, and thus 

less than 1400 units were vacant without justification. Letter from Milton hiick 

to Walter J. Johnson, August 4, 1987, Exh. 15. (Emphasis added). HUD, to date, 

has not taken significant corrective measures in response to the NHA's startling 

revelation.

Mismanagement of Newark's Public Housing

Newark's public housing system has been beset by a long and unbroken 

history of inept management and maintenance. Vacancies have soared; essential 

repairs and security have been neglected; construction and modernization has 

lagged or gone uncompleted; and modernization funds have been lost for timely 

failure to commit.

The NHA's construction record has been nothing short of abysmal. In 1974 

and 1978 the NHA received funding for the construction of approximately 516 

units of new housing; 372 units eventually became available for occupancy in 

1987 and 1988, ten years after HUD first approved and reserved funding for them. 

Some of these units still remain unoccupied. During this time HUD recaptured 

80 units due to delay, and the NHA had to abandon completely 47 units due to 

inappropriate site selection. The NHA's record of modernization is equally 

bleak. In 1983, for example, after warnings from HUD, $5,000,000 were 

recaptured "due to the NHA's failure to make more than minimal use of available 

modernization funds." HUD 1984 Audit, o. 32, Exh. 21.

Despite HUD's ongoing awareness- of the NHA's history of management and 

maintenance problems, HUD has failed to take appropriate corrective measures.

9



In 1979 HUD designated the NHA as an operationally troubled authority. In the 

1980's HUD conducted three audits of the NHA, all sharply critical of the 

authority on a number of. grounds, ranging from its soaring vacancy rate to its 

failure to timely complete modernization projects. This history demonstrates 

that HUD was acutely aware of the NHA's woeful construction, modernization, 

management and maintenance track records; nevertheless, it approved the Columbus 

replacement plan, an endeavor of unprecedented scope, without the slightest 

analysis or discussion of the NHA's ability to perform any aspect of this 

proposal.

Renovation Alternatives to Demolition 

Plaintiffs' nationally recognized experts on public housing management and 

rehabilitation, OKM Associates, Inc. (hereinafter OKM) and On-Site Insight, Inc. 

(hereinafter 0511), have conducted on-site inspections of Kretchmer and Columbus 

Homes., and have determined that the rehabilitation of both Columbus and *

The 1982 HUD audit criticized the NHA for its failure to comply with 
prescribed time frames for the completion of modernization projects. The 1984 
HUD audit again underscored the authority's troubling "[l]ack of urgency in 
developing an overall planning strategy and timetable for expending available 
modernization funds totaling $68,641,239.11 1984 Audit, at 32, Exh. 21. The 1986 
HUD audit found that the NHA still had $55 million in unobligated modernization 
funds and noted that the NHA's failure to submit implementation plans "again 
calls into question the NHA's modernization capability." HUD 1986 Audit, finding 
#5, Exh. 14. This same audit also found the NHA to have the highest vacancy rate 
of any major public housing authority in the country, despite a more than ample 
number of applicants to fill all habitable units. See HUD 1986 audit, finding 
#3, Exh. 14. In February 1988, HUD yet again noted the NHA's poor planning, 
implementation, and progress, despite frequent HUD warnings regarding impending 
deadlines. Letter from Johnson to Clark dated February 17, 1988. Exh. 34. 
HUD's only response in the face of such consistent ineptitude has been to 
require the NHA to enter a "Memorandum of Understanding." The NHA's failure to 
fulfill its legal obligations, and HUD's acquiescence in that failure, have taken 
a heavy toll upon thousands of inadequately housed and homeless individuals in 
the city of Newark, who must continue to live without safe, sanitary, and 
affordable housing, and without the benefits of residence in a socially 
integrated environment.

10



Kretchmer is feasible from a structural and design perspective. Exh 1, Aff. of 

Dr. Thomas Nutt-Powell at pa^. 13. They also identified several renovation 

alternatives to the proposed demolitions at both Columbus and Kretchmer. Id. 

at OKM and OSI Kretchmer and Columbus Homes Reports. Plaintiffs' experts have 

provided substantial documentation in support of these alternatives to 

demolition; their extensive analyses are enclosed herein. Id. In addition, 

plaintiffs' experts have reviewed the NHA's meager submissions to HUD .and have 

found no competent documentation supporting the defendants' conclusion that 

renovation cannot be feasibly pursued. Id.

ARGUMENT 

POINT I

THIS COURT SHOULD ENTER A PRELIMINARY INJUNCTION 
PROHIBITING: p) THE DEMOLITION OF COLUMBUS HOMES AND 
KRETCHMER; (ii) ALL DEMOLITION-RELATED ACTIVITY AND 
(iii) THE FAILURE TO RENT VACANT HABITABLE NHA APARTMENT 
UNITS, DURING THE PENDENCY OF THIS ACTION

The plaintiffs are entitled to a preliminary injunction pursuant to Fed. 

R. Civ. 65. A grant of such injunctive rel ef is required where the moving 

party demonstrates that "irreparable injury will occur if relief is not granted 

to maintain the status quo until a final adjudication on the merits can be made 

and that there is a reasonable probability of eventual success on the merits." 

Continental Group. Inc, v. Amoco Chem. Corp.. 614 F.2d 351, 356 (3rd Cir. 1980). 

In addition, the court must weigh the possibility of harm to other interested 

persons from the grant or denial of injunctive relief, as well as considerations 

of public interest. Id. at 356. These four factors structure the court's 

inquiry; however, no single aspect is dispositive. A proper judgmp..t entails 

a "delicate balancing of all the elements." See Constructors Asr.'n of Western 

Pennsylvania v. Kreps. 573 F.2d 811, 815 (3rd Cir. 1978).

11



As demonstrated below, an injunction is plainly appropriate, based on each 

of the four factors to be considered. Regarding the first factor, plaintiff and 

their classes are suffering continuing irreparable harm caused by homelessness 

or inadequate housing, for which a monetary award at some future date cannot 

afford adequate relief. Moreover, they are irreparably harmed if the threatened 

units are in fact demolished, because an already scarce housing supply will be 

drastically reduced. These units would then no longer be available for 

renovation, as plaintiffs contend is required by law, nor i.> there a likelihood, 

let alone a certainty, that they can be replaced.

Second, the plaintiffs have a strong probability of eventual success on 

their numerous claims, as set forth in detail in the following points of this 

brief.®

Third, defendants constitute the public authorities charged by law wit.n 

the responsibility of preserving, maintaining, developing and expanding the 

supply of decent and affordable low-income housing in Newark, and with 

furthering housing opportunities for racial minorities. They cannot be viewed 

as harmed by virtue of an order requiring them to fulfill these legally required 

duties.

Finally, the public interest will be far better served by the maintenance 

and expansion of scarce affordable housing, rather than by its demolition, 

misuse, reduction, and increased segregation in a city and county with critical

o
Plaintiffs' legal claims are extremely compel 1ing, as will be demonstrated. 

But even if this were not the case, where as here the remaining three factors 
decidedly favor the moving party, that party need not demonstrate as strong a 
likelihood of success on the merits as would otherwise be required. The public 
interest and balance of hardship tips decidedly in plaintiffs' favor and mandates 
the issuance of a preliminary injunction. Constructors Association, Supra, at 
815. See also Jackson Dairy. Inc, v. H.P. Hood & Sons. Inc.. 596 F.2d 70, 72 
(2d Cir. 1979).

12



low-income housing needs.

For plaintiffs and their classes--the present and prospective applicants 

and the current tenants alike--the low-income public housing projects operated 

by the NHA constitute the major source of affordable units in the City of 

Newark. The lives of Ernestine Betts, Aida Guzman, Nereida Varela and Elaine 

Williams graphically depict the irreparable harm suffered by these named 

plaintiffs, and by the classes of present and -prospective applicants they 

represent.

Plaintiff Ernestine Betts has been unable to find a decent affordable 

apartment, although she has been seeking suitable housing for years. Betts and 

her two daughters have been forced to leave at least eight different apartments 

due to unsafe and unsanitary conditions. At one dilapidated apartment, the 

family was without electricity and water; in another, the kitchen floor 

collapsed; others were infested with rodents.

Betts and her family currenfy live in a small overcrowded basement 

apartment which has an unbearable noxious odor due to a sewage backup in the 

nearby cellar. Betts Aff. dated March 22, 1989, par. 6-10, Exh. 50. Because 

of this she has given her landlady notice, and her landlady told her she must 

leave in April. Id. at par. 10. Her seventeen-year-old daughter, while 

attending remedial high school classes, has become discouraged, no longer 

wishing to continue her education. Id. at par. 14, 15.

Plaintiff Aida Guzman has been on the waiting list for public housing 

since 1979. Guzman Aff. at par. 9, Exh. 7. She presently resides in an severely 

overcrowded one-^oom apartment with her three children. Id at par. 6. Because 

she and her J.ildren suffer from severe bronchial asthma, her doctor has 

certified that the family is in need of a larger apartment with greater air

13



circulation for medical reasons. Id. at par. 6 and Attachment A.

Plaintiff Varela lives in substandard private housing. There is 

frequently no heat in her apartment, and she and her children often get sick 

from the cold. Varela affidavit at par. 13, Exh. 7. There are also leaks in 

the living room when it rains; the lock to one of the doors downstairs is 

broken; there are large cracks in the ceiling and wall of the children's bedroom 

soaking the bedroom with rain; the radiator in the kitchen leaks, spilling water 

over the floor when it is turned on; the winter wind blows through the bathroom 

ceiling window; the faucet in the bathtub is defective so that children may get 

burned if they turn it on; and there has been a broken window since the summer. 

Id. at par. 9. For approximately three to four months there were big rats in 

her apartment, but since she got a cat the problem has ended. IcL Because of 

the stress of her living conditions and poverty, Varela's health is suffering. 

Exh. id. at par. 12.

Plaintiff Elaine Williams has resided in the Lincoln Motel in East Orange, 

New Jersey, since June, 1987. Affidavit of E. Williams at par. 1, Exh. 7. She 

would like to leave the motel, which has roaches and mice, and which is without 

cooking facilities. Id. at par. 14. Williams receives food vouchers that are 

supposed to last two weeks, but they only buy five or six days worth of food for 

her family of three. IdL at par. 10.

Approximately 450 to 500 families live in welfare motels in Essex County. 

DeLuca Affidavit at par. 9, Exh. 2. Families living in welfare motels are 

incapable of providing nutritious meals for their children due to the fact that 

they have no refrigeration or cooking facilities IcL at par. 11. These same 

families spend an inordinate amount of thei. welfare payments and rood stamp 

allocations to buy smaller quantities of food from motel restaurants or

14



convenience shops, deceasing even further the small amount they have to spend

on other necessary items, such as clothing and transportation. kL Without

cooking facilities, the type of food consumed is limited, and nutrition suffers,

since almost all those living in welfare motels are families with children. IcL

Inadequate nutrition can have long-term health consequences. Id.

Persons who have no shelter often are depressed and anxious about their

future. Id. at par. 12. They typically feel a sense of hopelessness,

disorientation and humiliation at their situation. Id. Frequently homeless

parents suffer intense stress from uncertainty about meeting the daily needs of

their children. Id. If 2,000 units of NHA public housing are destroyed without

realistic replacement housing and if 400 of NHA housing units are permitted to

continue to stand vacant without justification, these homeless and inadequately

housed plaintiffs will suffer irreparable injury for wf.ch future monetary

damages will not afford sufficient relief. Even a few details from the

plaintiffs' daily round of hardships dramatize the extent to which homelessness

and inadequate housing jeopardize and impair the mental health and physical

well-being of adults and children, the integrity of the family, and the

education and future opportunities of children. See general 1y Newark Pre-School

Council Association for Children of New Jersey, Not Enough jo. Live On, in Report

of the Governor's Task Force on the Home!ess 33-39 (1985); National Social

Science and Law Project, Jhe Cost of an Adequate Living Standard j_n N.J.: An

Update, in Report of tjie Governor's Task Force on the Homeless 40-43 (1985).

As the New Jersey Appellate Division aptly stated in commenting on Essex

County's and Newark's homelessness crisis:

There appears to be no governmentaliy provided emergency group shelters 
in Newark or elsewhere in Essex County, and t^e few privately maintained 
ones are seriously over-crowded, overstressed, and unable to respond to 
the overwhelming need. In short, the record in this case describes a

15



catalog of human suffering, illness, disease, degradation, humiliation, 
and despair which shakes the foundations of a common belief in a 
compassionate, moral, just, and decent society.

Rodgers v. Gibson. 218 N.J. Super 452, 457 (App. Div. 1987).

When the hazards of the plaintiffs' daily living conditions are considered

in conjunction with their physical and psychological toll, it is small wonder

that other courts have found that critical shortage of housing impose

irreparable injury on low-income families. See Sworob v, Harris. 451 F. Supp.

96 (E.D. Pa. 1978), aff'd mem., 578 F.2d 1376 (3rd Cir.), cert, denied. 439 li.S.

1089 (1979); Resident Advisory Bd.v.Rizzo. 429 F. Supp. 222, "226 (E.D. Pa.

1977; (in light of the urgent need for decent low-income housing, "[fjurther

delay in the construction of these 120 townhouses will undoubtedly injure the

plaintiffs, even though everyone recognizes that the construction of 120 houses

does not come close to satisfying the needs of approximately 14,000 families on

the waiting list for housing."), modified. 564 F.2d 126 (3rd Cir.), cert, denied

sub nom. Whitman Area Improvement Council v. Resident Advisory Bd.. 435 U.S.

908 (1978). Accord North Avondale Neighborhood Ass'n v. Cincinnati Metro.

Housing Authority, 464 F.2d 486, 488 (6th Cir. 1972) (per curiam) (city's

serious housing shortage imposes substantial harm).

Courts have found plaintiffs suffered irreparable harm in several cases

which are factually similar to the present case. In Tenants for Justice v.

Hills, 413 F. Supp. 389 (E.D. Penn. 1975), the court issued a preliminary

injunction enjoining evictions of tenants after HUD's sale of low-income housing

property. HUD sold the property to a private developer without imposing any

condition on the rent charged the low-and moderate-income tenants who lived at

the project. After repeated increases in rent, the tenants staged a rent

strike, and the new owner subsequently threatened to evict striking tenants who

16



did not pay the new rent in full.

The court found, inter alia. that tenants were deprived of due process 

rights when HUD disposed of the property without notice or hearing; that HUD 

violated its own regulations by failing to consider alternative methods of 

disposition which would have preserved the property as low-income housing; and 

that HUD violated its own regulations and the Environmental Protection Act by 

failing to prepare and process an environmental impact statement. The court 

found that unless the evictions were stayed, "plaintiffs will clearly suffer 

great and irreparable harm. While this would probably be true with respect to 

ariv public housing pro.iect. it is particularly clear in the present case, in 

view of the demonstrated absence of available housing for low and moderate 

income families in the ... area." Id. at 393 (emphasis added).

In Cole v. Lvnn. 389 F. Supp. 99 (D.D.C. 1975), feints of a housing 

project sued HUD when it decided to demolish the project without holding a 

hearing for tenants and without articulating rational reasons for its decision 

to demolish. The court ordered a halt to all demolition, as well as required 

HUD to take affirmative steps to restore tenants to their prior status before 

demolition was begun, by directing HUD to begin restoration work, replace 

appliances, and provide security, among other things. Id. at 105-106.

In Kent Farm Co. v. Hills, 417 F. Supp. 297 (D.D.C. 1976;, the court 

granted a preliminary injunction to the owner of a low- and moderate-income 

housing project to enjoin foreclosure proceedings. The court required HUD to 

articulate rational factors motivating its decision to foreclose, and to 

consider national housing policy in determining whether foreclosure was 

appropri ate.

In TOOR v. U.S. Dept, of HUD. 406 F. Supp. 1024 (N.D.Cal. 1973), plaintiff

17



residents of a redevelopment area and an organization sought an injunction 

prohibiting a redevelopment agency from relocating them out of the redevelopment 

area and prohibiting HUD from further funding redevelopment of the area until 

the agency had observed plaintiffs' rights. The court granted a preliminary 

injunction prohibiting relocation of plaintiffs and demolition until the 

defendant redevelopment agency submitted a relocation plan that was in 

accordance with law. Id. at 1041-42. The injunction subsequently was dissolved 

by consent, id. at 1045, and a similar order reissued, jji at 1051. Plaintiffs' 

subsequent motion for a preliminary injunction was deemed unnecessary due to a 

similar injunction in place at the time in another case. TcL at 1053-55.

Moreover, even in the absence of this concrete factual showing of 

irreparable harm, defendants' violations of federal anti-discrimination laws, 

presumptively constitute such injury. See Gresham v. Windrush Partners. 730 

F.2d 1417, 1423 (11th Cir.) (Title VUI), cert, denied sub nom. Windrush 

Partners. Ltd, v. Metro Fair Housing Servs.. 469 U.S. 882 (1984); Bolthouse v. 

Continental Wingate Co.. Inc.. 656 F Supp. 620, 628 (W.D. Mich. 1987) 

(Rehabilitation Act).

The current tenants of the NHA-operated projects are likewise suffering 

and will suffer further injury. Defendants' refusal to fill vacant apartments, 

and failure to maintain and rehabilitate other units, have led to a decline in 

the overall physical environment. It is well-known that under-occupied, poorly 

maintained projects present an open invitation to crime. Courts have considered 

such conditions to constitute irreparable injury requiring injunctive relief.

See Cole v. Lvnn. 389 F. Supp. 99, 105 (D.D.C. 1975). See Cole v. Hills. 

396 F; Supp. 1235, 1238 (D.D.C. 1975). Plaintiffs likewise suffer irreparably 

"if they must live in inadequate, often health endangering housing for any

18



period of time." Johnson v. United States Dep't oi Aqric., 734 F.2d 774, 789 

(11th Cir. 1984).

Moreover, the relocation tenants face as a consequence of defendants' 

policies of vacating and demolishing buildings has also been deemed to 

constitute irreparable harm. See Johnson v. United States Dep't of Aqric.. 

supra 734 F. 2d at 788 (noting the "intangible value" of a person's home and 

the uprooting caused by relocation). As one court has noted, "It is axiomatic 

that wrongful eviction constitutes irreparable injury." Brown v. Artery Pro.. 

Inc., 654 F. Supp. 1,106, 1,118 (D.D.C. 1987) (granting preliminary injunction 

in Title VIII action by tenants in low-rent apartment complex seeking to avoid 

ouster during conversion to high-rent units); modified. f>91 F. Supp. 1459 

(D.D.C. 1987) (upholding grant of preliminary injunction). Finally, the 

discriminatory impact of defendants' policies upon the tenant class, forcing 

relocation of many tenants into more segregated housing and neighborhoods, also
Q

''iolates Title VIII, invoking the Gresham presumption. See Trafficante v. 

Metropolitan Life Ins.. Co.. 409 U.S. 205, 209-210 (1972) (recognizing harm from 

the loss of the "important benefits of interracial associations").

Regina Latimore, a tenant in Kretchmer Homes, likes living in an 

integrated area because it gives her access to different ideas and people. 

Latimore Aff. at par. 9, Exh. 7. Kretchmer is located on the border of

Elizabeth, which is over 75% white. The area is also racially and ethnically 

diverse.

Plaintiff Theresa Williams of Kretchmer Homes has recently had her 

apartment fully renovated by the NHA, yet the NHA now is asking her to leave as

9See page 18, supra.

19



it intends to demolish the building. T. Williams Aff. at 3, 5, Exh. 7. She 

likes her apartment and does not want to move. She has lived in Kretchmer Homes 

for 23 years, likes living in an integrated area, has many friends in the area, 

and does not want to start all over again. Ld^ at par. 2, 10, 14. Indeed, 

Kretchmer tenants unanimously opposed demolition and relocation. Aff. of 

Estrella Johnson and attached petition of Kretchmer tenants, Exh. 7.

The other factors of the Rule 65 balancing test, harm to others and the 

public interest, unquestionably favor the grant of a preliminary injunction. 

Defendants cannot complain of harm from an order requiring them to carry out 

their functions to provide affordable, snfe, and sanitary housing in a city with 

desperate housing needs. See Resident Advisory Bd. v. Rizzo. 429 F. Supp. at 

226. It is indisputably in the public interest for social welfare laws to be 

implemented (see Johnson v. United States Dep't of Aqric.. supra 734 F.2d at 

788), for the city's acute, shortage of decent, sanitary, low-income housing to 

be remedied (see Cole v. Lvnn. supra 389 F. Supp. at 102, 105) and for low- 

income tenants not to be needlessly displaced (see Richland Park Homeowners 

Ass'n., Inc, v. Pierce. 671 F.2d 935, 943 (5th Cir. 1985)).

Plaintiffs' Likelihood of Success on the Merits

The remaining points of this brief address each of plaintiffs' legal 

claims supporting this request for a temporary restraining order and preliminary 

injunction.

Under the Administrative Procedure Act, 5. U.S.C. 701 et sefl. an agency's 

"decision must be overturned if it was arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with law', or if the decision failed 

to meet '.tatutory, procedural or constitutional requirements." Business 

Association of University City v. Landrieu, 660 F.2d 867, 873 (3d Cir. 1981).

20



Tht district court must make a "searching and careful" inquiry into the facts 

umerTying the agency's decision. See Citizens to Preserve Overton Park v. 

Vope, 401 U.S. 402, 416 (1971). Moreover, "[w]hen an administrative decision 

is made without consideration of all relevant factors it must be set aside." 

Shannon v. U.S. Dept, of Housing and Urban Dev., 436 F.2d 809 at 819 (3d Cir. 

1970). As discussed below, the Secretary's actions and decisions at issue on 

this application must be immediately suspended because they are not in 

accordance with the National Housing Act, as amended by the Housing and 

Conmunity Development Act of 1987, because they fail to take into account 

numerous relevant factors, and because they are contrary to the facts *nd the 

evidence. Similarly, the challenged NHA actions violate numerous provisions of 

applicable law, and must be enjoined.

POINT II

THE NHA HAS NOT DEMONSTRATED, NOR COULD HUD PROPERLY 
FIND, THAT THE COLUMBUS AND KRETCHMER BUILDINGS SLATED 
FOR DEMOLITION ARE OBSOLETE, INFEASIBLE OF MODIFICATION 
TO RETURN THEM TO USEFUL LIFE, OR, IN THE CASE OF 
KRETCHMER, NECESSARY TO DEMOLISH TO HELP ASSURE THE 
USEFUL LIFE OF THE REMAINDER OF THE PROJECT.

42 U.S.C. § 1437o(a), as amended by the Housing and Community Development 

Act of 1987, provides that the Secretary may not approve an application for 

demolition of a project or a portion thereof unless a determination has been 

made that:

. . . the project or a portion of the project is 
obsolete as to physical condition, location or other 
factors making it unusable for housing purposes, and no 
reasonable program of modification is feasible to return 
the project or a portion of the project to useful life; 
or in the case of an an-l-.Cation proposing the 
demolition of only a portior of the project, the 
demolition will help to assu^ the useful life of the 
remaining portion of the .project. (Emphasis supplied.)

21



The 1987 Act thus requires, as a precondition to demolition, a finding 

that a project be obsolete, and that there are no reasonable programs of 

modification. The conjunction "and" was added by the 1987 Act, replacing the 

earlier disjunctive "or." This change makes demolition much more difficult to 

sustain; under the previous version of this section a housing authority seeking 

demolition had to satisfy only one of these tests (obsolescence, infeasibility 

of modification, or necessity to assure the useful life of the remainder of the 

project).

The relevant legislative history of the successive versions of the 

National Housing Act demonstrates that Congress intended demolition or 

disposition only as an absolute last resort.^ "Given the desperate need for

^  The National Housing Act has long emphasized the need to preserve and 
expand the supply of low income housing. In the United States Housing Act of 
1949, Congress set a national goal of "a decent home and suitable living 
environment for every American family." 42 U.S.C. Section 1441. Frustrated with 
the slow national progress toward this goal, Congress in 1968 reaffirmed it 
explicitly. 42 U.S.C. Section 1441(a). In 1974, Congress found the nation 
still lagging in its pursuit of the goal of increasing the quality and quantity 
of low income housing, and was particularly concened about the increasing 
abandonment and neglect of such housing. 42 U.S.C. Section 1441a(b). Congress, 
therefore amended the Act in 1974 to require "a greater effort . . .  to encourage 
the preservation of existing housing . . . . "  42 U.S.C. 1441a(c).

The Housing and Community Development Act (HCDA) of 1987; strengthened the 
express federal commitment to preservation, as well as recognizing even greater 
needs for increasing the supply of public and subsidized housing. Congress 0 
specifically found that recent reductions in federal assistance have contributed 
to a "deepening housing crisis for low and moderate income families," 42 U.S.C. 
Section 5301 (note), Pub. L. No. 100-242, Section 2(a)(1), 101 Stat. 1819 (1987), 
and that "the national tragedy of homelessness" dramatically demonstrates the 
few available alternatives for shelter for "people living on the economic margins 
of society." Section 2 (a)(3). Congress therefore declared the purposes of the 
Act: (1) "to reaffirm the principle that decent affordable shelter is a basic 
necessity" and to remedy a "serious" housing shortage; (2) to make federal 
housing assistance more equitable by providing for "the less affluent people of 
the nation," (3) "to provide needed housing assistance for homeless people'1, and 
others "who lack affordable decent, safe and sanitary housing;" and (4) to reform 
existing programs to ensure the most effici''o+ delivery of federal assistance. 
Section 2(b).

22



affordable housing for lower-income families, care must be taken not to sell or 

demolish these units unless no way can be devised to make the units livable. " 

(Emphasis added.) H.R. REP. NO. 122, 100th Cong., 1st Sess. 25 (1987), and H.R. 

REP. NO. 230, 99th Cong., 1st Sess. 28 (1985). The legislative history of an 

earlier version of this section sounds this same theme: "(I)t must be 

emphasized that the demolition or sale of any public housing project in this 

country should only be permitted as last resort.” (Emphasis added.)^

Columbus Homes

In approving the Columbus Homes demolition application, HUD found that the 

project was "obsolete as to physical condition making it unusable for housing 

and that no reasonable program of modifications is feasible to return the 

project to useful life." Exh. 4. Although the statute requires a demonstration 

of both obsolescence and infeasiblity, there is simply no competent evidence 

before HUD to support either of these determinations. The NHA presented .no 

professional detailed analysis of feasible renovation alternatives for Columbus 

Homes.

It axiomatic that HUD's discretion "must be exercised in a manner 
consistent with the national housing objectives set forth in the several 
applicable statutes." Kirby v. U.S. Dept, of HUD. 675 F. 2nd 60, 68 (3rd Cir. 
1982); Commonwealth of Pennsylvania v. Lynn. 501 F. 2nd 848,855 (D.C. Cir. 1975); 
Cole v. Lynn, 389 F. Supp. at 102.

^  Staff of the House Subcommittee on Housing and Community Development 
of the Committee on Banking, Finance and Urban Affairs, 98th Corg., 1st Sess. 
Compilation of the Domestic Housing and International Recovery and Financial 
Stability Act of 1983 at 319 (Comm, print 1984). "(T)he Committee believes that 
every effort should be made to retain the present stock of public housing." S. 
REP. No. 142 98th Cong., 1st Sess. 26 (1982) reprinted in 1983 U.S. Code Cong, 
and Admin. News 1768, 1809. "The purpose of this provision is to ensure th't 
the public housing stock remains available for housing for low-income families." 
H. R. REP No. 123, 98th Cong., 1st Sess. 3C (1983).

23



In contrast, plaintiffs' nationally recognized public housing experts (see 

jjrfra). headed by Jeffrey Lines of OKM Associates and Dr. Thomas Nutt-Powell of 

On-Site Insight, conducted an extensive inspection and analysis, and concluded 

that the rehabilitation of Columbus Homes is feasible from a structural and 

design perspective. Exh. 1, Nutt-Powell Aff. at par. 13. They have also 

identified specific renovation alternatives.

Mr. Lines has extensive experience in the management and rehabilitation 

of distressed public housing developments. Lines Aff. at par. 7, Exh. 1. Dr. 

Nutt-Powell has extensive experience in assessing the rehabilitation and 

physical needs of distressed public housing developments. Nutt-Powell Aff. at 

par. 5, Exh. 1. His firm, OST, has served as the lead infection team for a HUD 

survey of the nation's public housing stock, id. at par. 4. The affidavits and 

resumes of Mr. Lines and Dr. Nutt-Powell, and the incorporated reports of OKM 

and OSI on Columbus Homes, are contained in Exh. 1. OKM's and OSI's reports 

contain substantial detailed analysis, and include site, unit, and building 

renovation and reconfiguration diagrams, detailed cost estimates of renovation 

alternatives, and numerous attachments and supporting documentation.

The OKM/OSI reports are based on a physical inspection of Columbus Homes, 

and on a review of the architectural diagrams. The reports demonstrate that 

there are feasible renovation alternatives for the rehabilitation of Columbus 

Homes to provide decent housing for the poor. OKM founc that "there are a 

number of design and modernization options which could be pursued that may offer 

significant opportunities for preserving the Columbus Homes housing development 

as a viable housing resource." Exh. 1, OKM Columbus Homes Report at 1. OSI

24



presented a detailed analysis of four* 1 such 

Lines noted that "(e)ach of the options 

cases substantially below, the estimated 

guidelines which would apply to the NHA's 

at 4.

Significantly, the NHA did not 

analysis,and presented no expert studies

1 ?options. As to renovation costs, 

(except one) are below, and in some 

new public housing development cost 

replacement application. . . ." Id.

conduct a similar inspection and 

to HUD justifying the demolition or

12 These options are:

1. Rehabilitate Columbus Homes "as is" without 
substantial redesign of the site or 
structures and no reduction in total number 
of units at the development.

2. Major rehabilitation with modest redesign 
of buildings and site with a reduction of 
approximately 17 percent of the total number 
of units and a net loss of two buildings on 
site.

3. Major rehabilitation with major redesign of 
buildings and site with a reduction of 
approximately 34 percent of the total number 
of units including demolition of selected 
existing structures and construction of new 
buildings.

4. Major rehabilitation with major redesigning
of each and every component of the property 
including major demolition of buildings 
(approximately one-half) leaving a total of 
864 units consisting of one and two bedroom 
apartments the development which can if 
desired, be renamed and managed separately. 
Further site design has been given oome 
substantial attention in order to iua\e the 
site more useful and beneri. .a 1 to
residents.

25



1 o
ruling out renovation alternatives for Columbus Homes. Such study must occur 

before such a massive elimination of housing stock is proposed or approved. As 

stated by Mr. Lines, the OSI options for rehabilitation and constriction "are 

presented as examples of items which the NHA could recommend and should have 

analyzed thoroughly before proceeding with plans for demolition." Id at 4. 

Indeed the NHA's Master Plan stated that a study would be undertaken on 

Columbus; it never occurred. Exh. 9, at 26.

The explicit consideration of alternatives and explanation as to why a 

specific alternative is rejected is particularly warranted here, since past NHA 

documents state that all or part of Columbus is viable. The 1984 Master Plan 

stated:

Reconfiguration of family high-rises to 
house families with children in walk-up and 
duplex units on the lower floors and 
childless households in elevator-accessed 
units on the upper floors is a viable option 
at all six family high-rise projects.

Exh. 9, at 20.

The NHA Master plan also mentioned as a "high priority" the "completion 

of the redesign of Columbus Homes . . . which (is) scheduled to enter the 

construction phase within one year, but (has not) been funded " (Emphasis 13

13 The only arguably relevant document in the application is a two-page 
letter from Mr. Alvin Zach, (City of Newark's Director of Engineering) suggesting 
in a clau<;e that the buildings are "unsafe as to structural aspects." Exh. 3 
at Enclosure #4. Commenting on this letter, Mr. Lines stated: "There is no 
analysis that we could find in the application that supports this statement. 
The needed background to support such a determination or implication is not 
documented in the statement, and we have not reviewed any outside professional 
study which supports this statement." Exh. 1, OKM Columbus Rep't at 8.

In addition-, HUD was aware of the NHA's extremely poor management record. 
See Exhs. 14, 20, and 21. This poor record increased HUD's responsibility to 
require preparation of a detailed professional study examining all alternatives, 
before approving demolition. HUD's failure to do so was arbitrary ancf 
capricious.

26



added.) ■ Id. at 38. Indeed, as late as July, 1987, the NHA's Comprehensive 

Occupancy Plan stated that the NHA intended to retain 582 units at the Columbus 

site. Exh. 1, OKM Columbus Homes Rep't at 3. Moreover, when the NHA solicited 

proposals for the development of Columbus Homes, two development teams proposed 

retaining major, portions of the existing site and structures. Id. at 8-9."

In view of the strong evidence that Columbus Homes can be rehabilitated, 

the absence of any detailed professional study before HUD to the contrary, and 

the NHA's own documents suggesting the viability and desirability of renovating 

all or part of Columbus Homes, there was no evidentiary basis supporting HUU's 

determination that "no reasonable program of modification is feasible to return 

the project or a portion of the project to useful life."

In addition, HUD's failure to consider relevant factors provides an 

alternative basis for suspending it* demolition approval under Section 1437p(a). 

In Citizens to Preserve Overton Park v. Volpe. 401 U.S. 402, 416 (1971), the 

Supreme Court held that a district court reviewing an agency decision must 

determine "whether the decision was based on a consideration of the relevant 

factors. . . . "  Accord. Shannon v. U.S. Dept, of HUD, 436 F. 2d 809, 819 (3d 

Cir. 1970). The NHA's application to HUD to demolish Columbus Homes contained 

no discussion of alternatives to demolition. In approving the NHA's demolition 

request, HUD made no reference to any alternatives to demolition. It must be 

concluded that HUD did not consider alternatives to demolition, and that there 

is a strong likelihood that HUD's decision will be set aside on the merits. See, 

e.q.. Silva v. East Providence Housing Authority. 565 F. 2d 1217, 1223-25 (1st 

Cir. 1977) (where record of HUD's decision-making prior to termination of low- 

income housing project was defective for failure of HUD to consider unexplored 

alternatives, prospective tenants of project were entitled to remand to HUD.

27



In addition to actually considering alternatives to demolition, HUD is 

also required to provide reasoning for rejecting those alternatives. In Price 

v. Pierce. 615 F. Supp. 173, 184-85 (M.D. 111. 1985), HUD's decision to 

eliminate ninety units from an assisted housing project was found not properly 

based on consideration of all relevant factors where HUD failed to explain fully 

its reasons for approval of reductions, and thus plaintiffs, and applicants for 

assisted housing were entitled to have the decision vacated and remanded. In 

Cole v. Lvnn. 389 F. Supp. 99, 102 (D.D.C. 1975), a court held tenants entitled 

to a preliminary injunction to prevent further demolition of a low-income 

housing project, and to restore the project to pro-demolition condition, where, 

inter alia. HUD failed to explain whv alternatives to demolition were 

disregarded or deemed impractical "A rational statement of the ultimate 

decision and the reasons for it must be provided, which will then be reviewable 

by the courts for abuses of discretion." Id. at 104 (citation omitted). See 

also Kent Farm Co. v. Hills. 417 F. Supp. 297, 302 (D.n ,C. 1976) (significant 

final agency decision should be documented by a record of factors rationally 

considered by agency; "'Courts should require administrative officers to 

articulate the standards and principles that govern their discretionary 

decisions in as much detail as possible.'")

HUD clearly failed to articulate the reason for rejecting alternatives to 

demolition. Where, as plaintiffs have demonstrated, clear alternatives to 

demolition exist, and where indeed the NHA was aware of alternatives to 

demolition, HUD's failure to explain in detail the basis for its decision and 

the reasons for rejecting alternative'' and demolition is a substantial and 

reversible error.

In addition to failing to demonstrate infeasibility of renovation,



defendants also lack competent documentation that the buildings are obsolete as 

required by 42 U.S.C. 1437p(a). The statute requires a determination that the 

project is obsolete as to "physical condition, location, or other factors." In 

approving the Columbus demolition, the Secretary found that the project is 

obsolete as to "physical condition."*4

Such structural deficiency has not been demonstrated at Columbus Homes. 

Nor is Columbus obsolete as to its physical design. The Stella Wright Housing 

Project, a project similar in design and size to Columbus, is currently 

providing housing to 800 tenants. There are 401 vacant units in Stella Wright, 

which the NHA is planning to rehabilitate and use for relocating Columbus Homes 

displaces. See HAP at Exh. A, Exh. 12. To address problems of crime and 

security, the city located a Newark police station in Stella Wright to address 

those concerns. The NHA has offered no rationale why an increased police 

presence cannot also be implemented and effective at Columbus. See Exh. 18, 

Comp. Mod. Plan at 87 ("Furthermore, a new poli:e substation with a complement 

of over 50 officers and Soul-0-House, a full service outpatient, drug 

rehabilitation center, have recently been relocated to Stella Wright Homes.") 

(Emphasis in original).

After a review, of the evidence before HUD. this Court must conclude that 

the agency decision approving demolition was arbitrary and capricious, and an 

abuse of discretion. Mr. Lines, after reviewing many relevant documents and the 

NHA application to demolish Columbus Homes, stated that:

. . . we have reviewed the complete NHA demolition

*4 There was no finding of obsolescence as to 'location" or "othe- factors. 
The location of Columbus Homes is a choice one, located near the train station, 
and near public transportation for down^wn. It is ideally located for low- 
income people who frequently cannot afford automobiles. See DeLuca Affidavit 
at 17, Exh. 2, see also OKM Columbus report at 4-5, Exh. 1.

29



application submitted to and approved by HUD, and no 
study is contained in this application. However, there 
is a two-page letter from Mr. Alvin Zach (City of 
Newark's Director of Engineering) which has merely a 
conclusory statement that the buildings are unsafe as 
to structural aspects. There is no analysis that we 
could find in the application which supports this 
statement. Further . . . the needed background to 
support such a determination or implication is not 
documented in the statement and we have not reviewed any 
outside professional study which supports this 
statement.

Exh. 1, OKM Columbus Homes Rep't at 3,8.

Mr. Lines also debunks the NHA's sweeping dismissal of high rises as

suitable housing for families:

NHA has not presented any persuasive evidence that the 
renovation of highrise units in the City of Newark is 
not feasible. In fact, in the case of the Stella Wright 
housing development it appears that the NHA is 
requesting that the highrise units be preserved. Tn the 
Comprehensive Plan for Modernization (CPM) and the 
Comprehensive Occupancy Plan (COP) the NHA does not 
appear to provide any strong evidence that the high rise 
developments should be destroyed. The process of 
addressing management and physical deficiencies through 
the wholesale demolition of substantial numbers of 
housing units is extreme and does not appear to be fully 
supported in either the CPM or COP.

Id. at 8.

Finally, the destruction of the buildings is just the first step in a 

planned disposition of the property. The demolition is simply designed to clear 

the land so that it is more attractive for private developers. Indeed, before 

NHA had even filed its demolition application for Columbus, it had already 

entered into a contract with a private party (a firm led by Kenneth A. Gibson 

and Peter Macco) to sell the cleared site. (Exhs. 61, 62) Nonetheless, the 

planned disposition was not part of the demolition application, oven though both 

the statute and HUD regulations have distinct criteria guiding the Secretary's

30



consideration of whether to approve the proposed disposition of a public housing 

site.

There is no indication that the planned disposition would meet the 

requirements of 42 U.S.C. 1437p(a)(2), nor did the Secretary of HUD so find. 

For defendant HUD to have approved a demolition of a project when it was 

expressly part and parcel of a planned disposition of that project, without any 

consideration or decision whether the integrally-related disposition itself 

satisfied the statute and regulations thereunder, was a serious abuse of 

discretion and violation of applicable law. Without evaluating the demolition 

and disposition an integrated scheme, there is no basis to judge, inter al_ia, 

the effect on overall availability of public housing land and units in Newark, 

just one part of the evaluation required by law.

KRETCHMER HOMES

The Kretchmer Homes housing project consists of five eight-story and the 

two low-rise buildings, located near the Elizabeth bcrder, containing 730 units. 

In September, 1985, HUD approved the demolition of three eight-story buildings, 

with 372 units. With reference to the three statutory tests, the Secretary made 

no finding as to obsolescence. He did determine "that the demolition of a 

portion of these projects will help to assure the useful life of the remain 

portions." Exh. 5. In addition, he determined "that it is not economically or 

socially feasible to rehabilitate these projects to their original condition." 

Id. In approximately April, 1988, two and one-half years after this approval, 

the NHA solicited bids from demolition companies. On March 16, 1989 the NHA 

ratified demolition contracts for the three buildings.

Notwithstanding the Secretary's determination that partial demolition of 

Kretchmer would help assure the useful life of the remainder, in July, 1988 the

31



NHA announced plans to sell or demolish the remaininq five buildings of 

Kretchmer Homos (358 units). Exh. 3 at Ends. 5 and 5. It has been relocating 

tenants from one of those these buildings as a prelude to demolition. See Exh. 

7. Affidavit of Regina Latimore. The NHA has yet to submit an application for 

this total demolition or disposition, and HUD has not approved it.

OKM arid OSI also conducted a detailed inspection of Kretchmer Homes. They

concluded that "(r)ehabilitation of Kretchmer (Homes) is feasible from a

structural and design perspective." Exh. 1, OSI Kretchmer Rep't at 1; See OKM

Kretcnmer Rep't. at 8. OSI further stated:

(T)here are many feasible options for 
modernization and/or redevelopment of 
Kretchmer Homes using the existing 
structures. There appears to be no reason 
from a structural or design option 
perspective to abandon and/or demolish all 
or part of the development. This 
observation does not rule out some or even 
substantial reconfiguration to some or all 
of the buildings.

Ibid. OSI kretchmer Rep't. at 1. (Emphasis added.) Similarly OKM concluded:

TWle strongly believe that the renovation 
of all buildings at Kretchmer Homes can be 
accomplished in such a manner as to enhance 
the overall development. As indicated in 
the attached report from OSI there are a 
number of design, renovation and occupancy 
options1which if pursued could address any 
problem with respect to density of 
buildings, units or households at Kretchmer 
Homes.

Ibid. OKM Kretchmer Rept at 8. (Emphasis added.) Moreover, in the opinion of 

OKM, Kretchmer Homes is a strong candidate for receiving substantial

32



modernization money.^

Similarly, the NHA's own documents and studies support the contention that 

Kretchmer Homes is a viable project. First, the NHA's original 1984 Master Plan 

called for the rehabilitation and reconfiguration of Kretchmer; it did not 

envisage demolition. See Exh. 9 at 19. ("The reconfiguration of Kretchmer 

Homes (NJ2-10) is to begin in mid-1987 and completed by early 1989.") Exh. 9, 

at p. 38, See also id. at 20. Second, the NHA's own consultants studied 

Kretchmer Homes and set forth at least one feasible alternative for 

rehabilitation that did not involve widespread demolition. See discussion at pp. 

36-37 infra. (See Exh. 48 at 9).

Subsequent to HUD's approval of the partial demolition of Kretchmer, The 

HCDA of 1987 became effective on February 5, 1988. Defendants take the position 

that the 1987 Act does not apply to the Kretchmer approval, since it occurred 

before the effective date of the Act.

Plaintiffs disagree, and contend in any event that the Secretary's 

decision violates both the HCDA of 1987, and the pre-1987 version of 42 U.S.C. 15

15. OKM stated:

It should be noted, in a recent Congressional hearing 
the Deputy Assistant Secretary for Public Housing stated 
that the per unit rehabilitation cost for public housing 
under the HUD Major Rehabilitation of Obsolete 
Properties (MROP) is about the same as that estimated 
for renovating Kretchmer Homes. MROP (which uses 
housing development funds) and the Comprehensive 
Improvement Assistance Program (CIAP) are two important 
sources of funds which could be used to renovate this 
property. Since there are strong redesign and 
modernization alternatives (see attachment) and the 
neighborhood area where Kretchmer Homes is located seems 
stable, this property would likely be considered a 
strong candidate for receiving CIAP or' MROP funding. 
Id. at 6-7, Exh. 1.

33



143 7p.

The 1987 Act applies to Kretchmer Homes, notwithstanding the prior

approval, because subsequent to the effective date of the 1987 Act, the NHA is

taking - and HUD is approving - steps to demolish the buildings, thus invoking

the plain language of subsection (d) of the 1987 Act:

A public housing agency shal1 not take action to 
demolish or dispose of a public housing project or a 
portion of a public housing project without obtaining 
the approval of the Secretary and satisfying the 
conditions specified in subsections (a) and (bl of this 
section.

See the discussion of the applicability of the 1987 Act to Kretchmer at 

56-60, infra. Therefore, unless the NHA can show that it has met the 

requirements of subsections (a) and (b), it cannot proceed with demolition. As 

discussed at the beginning of this Point, the 1987 amendments changed the 

disjunctive linking the requirements in subsection (a), meaning that all the 

tests in the subsection must be satisfied.

With regard to the subsection (a) requirements, as noted plaintiffs' 

experts establish that the buildings can be rehabilitated, and are not obsolete. 

Indeed, even HUD did not find that the buildings were obsolete. In its 1985 

approval, HUD relied upon an infeasibility finding rather than obsolescence, 

stating "that it is not economically or socially feasible to rehabilitate these 

projects to their original condition."

Since the NHA cannot show either that the buildings are obsolete, or that 

they cannot be reasonably rehabilitated, it cannot satisfy subsection (a) of the 

1987 Act, which requires that both tests be met, and it is therefore barred from 

Demolishing Kretchmer by 42 U.S.C. Section 1437 p(d).

34



Moreover, the NHA and HUD can no longer contend that demolition of a 

portion of a project would help to assure the useful life of the remaining 

portion of the project, a ground relied upon by the Secretary in the 1985 

approval.

When the NHA, however, in June, 1988, announced that it intended to sell 

or demolish all of Kretchmer Homes, it completely undermined the validity of the 

Secretary's 1985 determination. (It bears noting that the NHA did not even urge 

this portion of the project/preserving the useful life of the remainder theory 

when it originally submitted the demolition application for Kretchmer in 1985. 

txh. 5, at 2.*6) Since the NHA is no longer seeking to demolish only a 

"portion" of the project, and there will be no "remaining" portion of the 

project, the "useful life" ground does not apply. Since none of the tests apply 

under the new Act, the demolition must be enjoined. The terms of subsection (a) 

cannot be satisfied.

Moreover, the proposed demolition of Kretchmer also violates the 

requirements of subsection (a) of the pre-1987 Act. It should be initially 

noted that HUD applied the wrong test in approving demolition at Kretchmer 

Homes. It found that it was not feasible to "rehabilitate these projects to 

their original condition." (Emphasis added.) Exh. 5. The test, however, is 

whether "it is feasible to return the project or a portion of the project to 

useful life." 42 U.S.C. 1437p(a). The difference is significant, since the 

former may not be feasible, while the latter may well be. For example, a 

project requiring substantial redesign and reconfiguration can feasibly be

The NHA application calls for the sale or demolition of 358 units. When 
added to the 372 units, which have already been approved for demolition, it 
equals 730 units, which the total for Kretchmer.

35



returned to a useful life, even though it will not be returned to its original 

condition. This misreading and misapplication of the law invalidates the 1985 

demolition approval to the extent that it was based on the ground that there are 

no feasible programs of modification.

In addition to misreading and misapplying the law, HUD otherwise abused 

it discretion, and acted in an arbitrary and capricious manner in approving the 

demolition. First, the NHA presented no professional studies to HUD justifying 

the demolition. The NHA application to destroy 372 units of housing was a two- 

page letter. Exh. 5. No studies or documents accompanied it.

The letter referred to the 1984 Master Plan. As noted, that document 

originally specifically called for the reconfiguration and preservation of 

Kretchmer Homes. Approximately five months after the publication of the Master 

Plan, the NHA Board of Commissioners amended the Master Plan by resolution to 

call for the demolition of all mid-rise bu'ldings at Kretchmer. Exh. 46. The 

Board resolution.cited no studies justifying the demolition. In view of the 

contradiction between the original Master Plan and the amendment, HUD should 

have insisted on professional studies explaining the change, and justifying the 

demolition.

The two-page letter application also referred to the Todd study, a 

document which was not presented to HUD. The NHA stated that Todd "agrees that 

no reasonable improvement of the family high-rise buildings will return this 

project to a useful life." HUD should have insisted on seeing this document in 

order to evaluate it.

Had it done so, it would have seen that the NHA actually misl-J HUD in its 

reference to the Todd study. That study contains no statement suggesting 

reasonable modifications are infeasible to return the project to useful life.

36



In actuality, one alternative proposed by Todd was to demolish only one mid-rise 

and one low-rise, and to keep the remaining buildings. Exh. 48 at 9. Had HUD 

seen this study, and not been misled, it might have reached a different result, 

and not authorized a demolition of such magnitude.

In addition, at the time HUD approved the demolition, HUD had prepared a 

project viability review of Kretchmer which found that there were no "serious 

locational or structural conditions which indicate that the long term viability 

of the project is questionable." Exh. 28 at 1. Sinct HUD was aware that the 

buildings were structurally sound, it was an added abuse of discretion not to 

have insisted on professional studies justifying demolition. This is especially 

so in view of the conflict with the original Master Plan which called for the 

preservation of Kretchmer Homes.

OKM evaluated the 1984 Master Plan, the Todd study,and other relevant

reports and information mentioned in the supporting affidavit. It concluded:

There was nothing in any of these reports which rules 
out the availability of feasible alternatives for 
renovation of the buildings as opposed to demolition.
In fact, the Todd study presents a range of alternatives 
which includes potentially viable renovation 
alternatives. Further, the NHA's own 1984 Master Plan 
appears to envision the preservation of the buildings 
at Kretchmer Homes."

Exh 1, OKM Kretchmer Report at 5-6.

For all of the above reasons, HUD abused its discretion, and was misled 

in approving the demolition. There was not sufficient support before it to 

justify a determination that there were no feasible programs of modification.

The only ground that could conceivably justify the decision is the "useful 

life" test. As noted, however, the NHA now intends to dispose of the entire 

project, so that the useful life theory has no validity now. Moreover, even in

37



1985, this ground was not a valid basis for approving demolition.

First, as noted the NHA's application did not seek to justify demolition 

on the ground that it would help to assure the useful life of the rest of the 

project. In addition, the local office did not base its decision on this 

ground. The decision on this ground appears to have come solely from the

distant HUD national office, and out of thin air.

As noted, HUD's 1985 approval stated that "the demolition of a portion of

these projects will help to assure the useful life of the remaining portions."

Exh. 6. It continued: "(t)he demolition will remove vacant, uninhabitable units

from the public housing inventory and significantly enhance the long-term

viability of the remaindsr of the projects." Id. These are numerous problems

with this conclusion. First, as stated by OKM:

There is also nothing in these reports which asserts or 
demonstrates that it is necessary to demolish the three 
buildings containing 372 units at Kretchmer Homes to 
assure the useful life of the remaining buildings there.
It is our opinion that if the +hree buildings were 
properly renovated, useful life of the remaining 
buildings could be both assured and enhanced. The one 
report by Thomas A. Todd in particular, sets forth a 
range of alternatives for redesigning the Kretchmer 
Homes housing development. OSI (see appendix) also 
recommends that redesign be undertaken with respect to 
this housing development.

Exh. 1, OKM Kretchmer Report at 6.

The 1985 NHA application sought permission to demolish three mid-rise 

buildings at the site (372 units), and to replace some of the lost units with 

townhouses. Exh. 5 at 1. The NHA further advised HUD that it intended 

eventually to demolish the remaining two mid-rises, totalling an additional 256 

units. Id. at 2. Thus the HUD statement that "the demolition would enhance the 

long term viability of the remainder of the project(s)" is incorrect based on

38



the very application that HUD had before it. The demolition of the 372 units 

would not help to assure the useful life of the "remainder of the project." 

HUD's confusion and inaccuracy, even if inadvertent, evidences an abuse of 

discretion, and arbitrary and capricious action.^

Moreover, when HUD approved the demolition of 372 units, it also iri effect 

acknowledged NHA's plan to eliminate the additional 256 units. It thus approved 

in principle the elimination of 628 units (86% of the project) to preserve the 

useful li^e of 102 units, a gross misapplication and distortion of the useful 

life standard. Here HUD approved or acknowledged the virtual elimination of the 

entire project.

In sum, on no ground does the 1985 HUD approval withstand scrutiny, even 

under the pre-1987 version of the statute. The approval is invalid and must be 

set aside.

POINT III

THE NHA HAS FAILED TO MEET THE REQUIREMENT OF A ONE-FOP- 
ONE HOUSING REPLACEMENT PLAN FOR THE PROPOSED 
DEMOLITIONS, IN V.IOLATION OF 42 U.S.C. 1437p(b) AND HUD 
REGULATIONS.

The 1987 Act, 42 U.S.C. 1437p(b)(3), provides that:

The Secretary may not approve an application [for demolition] 
or furnish assistance... unless ...the public housing agency 
has developed a plan for the provision of an additional 
decent, safe, sanitary, and affordable dwelling unit for each 
public housing dwelling unit to be demolished...

A. The Columbus Homes Replacement Plan Violates the 1987 Act and 
Regulations Thereunder.

HUD's confusion may result from the fact that its approval dealt at once 
with the demolition of three projects: Kretchmer, Scudder, and Hayes. HUD 
treated all projects identically, and did not differentiate between the three.

39



The Columbus demolition application contained a three-page "replacement

housing plan," covering three housing projects, Columbus, Kretchmer and Walsh

Homes. Exh. 3 at Enel. #6. The actual information about replacement housing

covers only one page. Moreover, the only information specific to Columbus Homes

is that contained in the following table:

Six-Year Replacement Housing Plan

NEW UNITS 
COLUMBUS HOMES

Year 1 194
Year 2 194
Year 3 390
Year 4 372
Year 5 356
Year 6 —

TOTAL 1,506

Exh. 3 at Enel. #6, p.3. This skeletal plan violates a long list of federal 
requirements.

1• The Plan Fails to Identify or Assess the Suitability of the 
Proposed Sites for Replacement Housing In Violation of HUD 
Requlations

1 O
The HUD interim regulationJO requires the NHA to specify where replacement

housing will be located and to evaluate the proposed .site:

The plan must include an assessment of the suitability of the 
location of proposed replacement housing based upon 
application of the Site and Neighborhood standards established 
at 24 C.F.R. 941.202 (b), (c), and (d).

53 Fed. Reg. 30,989 (to be codified at 24 C.F.R. 970.11(h)). 18

18
. An interim regulation was published August 17, 1988 (53 Fed. Reg. 

30984). A modified interim regulation was published on October 14, 1988 (53 Fed. 
Reg 40,221).

40



The NHA replacement plan violates this portion of the interim regulations

in two respects. First, the plan itself does not identify the location of the

proposed 1,506 replacement units. This omission is particularly critical since
19the NHA has indicated that it is running out of land.

Second, since the plan does not identify the location of replacement housing, 

HUD could not have confirmed that the NHA assessed the suitability of the sites, 

as required by HUD's Site and Neighborhood standards. The plan itself does not 

contain any such assessment. According to the pertinent Site and Neighborhood 

standards, the sites must further full compliance with nondiscrimination laws, 

may not be in areas of minority concentration unless certain conditions apply, 

and must promote greater choice of housing opportunities and avoid concentration 

of assisted persons in areas containing a high proportion of low-income persons.

Indeed the City's 1988-91 HAP (note 49 infraV Exh. 12 at Exh. A, indicates 

that the NHA intends to put most of the replacement housing in the most racially 

segregated and economically impacted area in the city. Thus, the failure to 

identify appropriate locations for replacement housing and assess their impact 19

19 .See Exh. 9 at 32. Although the NHA did not identify the location of the 
units in its plan, it did identify approximately 44 acres for the 1,506 units 
in an attachment to the City of Newark's 1988-91 Housing Assistance Plan (HAP) 
filed after the Columbus approval. Exh. 12 at 13 and Exh. A thereto. This HAP 
is not part of the replacement plan, and does not in any way satisfy the 
statutory and regulatory requirements. It is noteworthy that the sufficiency 
of the acreage mentioned in the HAP itself is highly suspect since: (a) it
includes nine acres at Scudder Homes where, upon information and belief, 
construction of Scudder replacement units is currently occurring; (b) it includes 
a five acre parcel which is the site of the three Kretchmer buildings, the 
demolition of which is the subject of this litigation; (c) it includes two acres 
which are the site of a building at Hayes. There is no designation in the HAP 
as to how many housing units each of the parcels identified in the HAP can 
accommodate. Forty-four acres is an extremely small area for l,5Uo townhouse 
units, averaging approximately thirty un^ts per acre.

41



is critical.

2. The NHAs Columbus Homes Housing Replacement Plan Does Not 
Include a Credible or Meaningful Schedule for Its Completion 
Within Six Years, in Violation of 42 U.S.C. 1437p(b) (3HD)

The 1987 Act provides that the replacement housing plan must "include() 

a schedule for completing the plan . . . except that the schedule shall in no 

event exceed 6 years." 42 U.S.C. I437p(b)(3)(D) (Emphasis added.

The plan violates the six-year requirement in several respects. First, 

there is no statement or assurance that the construction of the units will be 

completed within six years, nor indeed any mention of when any of the units 

listed in the "schedule" will in fact be started or completed.

Second, it is improbable in the extreme that the plan can be completed 

within six years. This is demonstrated by the NHA's track record in 

constructing new units, by the NHA's own estimates of construction time 

required, and by reference to Congressional and HUD parameters for construction 

of new units, as outlined below.

In 1977 and 1978 the NHA received funding for the construction of 

approximately 517 units of new housing. The first of these units became 

available for occupancy in 1987 and 1988, an incredible ten years after HUD 

reserved funding. See table on the following page. Indeed, some of the units 

are still not occupied. Since it took the NHA ten years to construct 390 units, 

it is exceedingly doubtful that the NHA can construct 1,506 units within six 20

20 . The applicable regulation tracks this language, and st’ iu!ai;es that the 
schedule must not exceed six years "from the date specified to begin plan 
implementation." 53 Fed. Reg. 30,989, to be codified at f F.R. 970.11(d). 
Since in September 1988 HUD approved and funded the initial ij4 units identified 
in Year 1 of the plan, and since HUD approved the demolition in November, 1988, 
the plan plainly has commenced.

42



years. 21

?1 . Based on this track record, it would take the NHA over 38 years to 
complete construction of the .,506 units in the replacement plan.

43



SUMMARY OF NHA CONSTRUCTION PROJECTS FOR PAS': 12 YEARS

Date Date Start Da'.e of Time from
HUD of Site of Con- Comp 1et- date of

Project
Number

No. of Committed 
Units Funding

Approval 
by HUD+

struction++ ion# commit­
ment of 
funds to 
completion

NJ-2 47 9/30/77 2/6/84 8/30/85 9/30/87 10 yrs.

NJ2-30 50 9/30/77 2/6/84 8/30/85 9/30/87 10 yrs.

NJ-2-31 61 7/14/78 5/83 5/3/84 6/30/87 9 1/2 yrs

NJ2-35 95 9/19/78 2/6/84 8/30/85 9/30/88 10 yrs.

(48 units only)

NJ2-36 89 9/19/78 2/6/84 9/3/85 9/30/88 10 yrs.

NJ2-37 95 9/19/78 2/6/84 9/3/85 9/30/88 10 yrs.

NJ2-38 lulx* 9/24/85 6/4/87 6/3/88

(NJ39- P002-038) _

NJ2-39 124 9/23/86

NJ2-40 100 9/14/87

NJ2-41 194 9/22/88*

This table is derived from a handwritten chart, given counsel by Stuart 
Mindes, a HUD official. Exh 45.

** Denotes 200 units originally approved for funding. 99 of these (those 
slated for the Hayes site) have been transferred to 2-39, and joined with 
25 other units.

+ The average time from commitment of funding to site approval is slightly 
over five years. •

++ The average time from site approval to start of construction is 
approximately 1.25 years.

# The average time from start of construction to completion of construction 
is approximately 2.56 years.

44



The chart reveals that the NHA did not obtain site approval for projects

funded in 1977 until February, 1984. Thereafter it did not start construction
22until 1985. The actual construction took two years on some projects, three.

years on others. Work on part of one project of 95 units had to be abandoned
23after eight years, and the NHA had to start the process anew.

The NHA's construction record continues to be dismal. In September, 1985 

the NHA received funding to construct units on the site of Scudder Homes. In 

1987, four buildings at Scudder Homes were demolished. To date, only 

foundations have been laid for the new buildings. In 1989, HUD notified the NHA 

that the project was "substantially behind schedule." Exh. 33. Although the 

NHA's contract required construction to be forty percent complete, it was 

estimated to be only nine percent complete. HUD found this "a serious situation 

warranting your immediate attention." Ld.

As demonstrated above, the NHA's record on time required for construction 

of new housing is wrenchingly slow. The NHA's history of modernization projects 

is also telling as to the likelihood of its completion of 1,506 new units in the 

statutory six years. The HUD modernization program is the vehicle by which HUD 

awards money to rehabilitate and upgrade existing projects. HUD has sharply 

criticized the NHA's inability to complete modernization program? in timely 22 23

22 . Along the way the NHA obtained extensions of deadlines, and at one point 
HUD actually canceled projects because of the NHA delays. See letter from Thomas 
Verdon to Milton Buck dated June 16, 1982, Exh. 29.

23. In addition, apparently due to delays over the years, HUD reduced NHA 
funding, and took 80 units away. Exhs. 30 and 31.

NJ 2-3b was funded for 100 units in 1978. In 1985 the funding was 
reduced 5 units to allow for construction of only 95 units. This was split into 
two sites, one of 48 units, the other site of 47 units. In 1986 the construction 
on the 47-unit site had to be abandoned due to difficulties with the site. Exh. 
32.

45



fashion over the past ten years. In 1982, HUD conducted the first of three 

audits of the NHA in the 1980's. The 1982 Audit criticized the NHA for a lack 

of goals concerning deadlines for completion, and for its failure to complete 

the aporoved modernization projects within the prescribed time frames. See HUD 

1984 Audit at 32, Exh. 21. After the NHA failed to heed the warnings of the 

1982 Audit, HUD required the NHA to return $5,000,000 in 1983 "due to the NHA's 

failure to make more than minimal use of available modernization funds." Id.

In 1984 HUD again audited the NHA, and was harshly critical of the NHA's 

"(I)ack of urgency in developing an overall planning strategy and timetable for 

expending available modernization funds totaling $68,641,239.1,24 In response 

to this Audit, the NHA stated in part that it would expend three-fourths of the 

$68,000,000 in the next two years.2^

Nevertheless, according to the 1986 HUD Audit the situation had not 24 25

24 HUD found: "Approximately 2-3 years after approval by HUD, the NRHA was
still engaged in planning for expenditure•of these funds and only minimal use 
of these funds has been made in actually implementing the programs objectives." 
HUD continued:

(W)e believe that the primary reason for the failure of the NRHA to 
maximize use of available funds was a lack of a fully developed 
modernization strategy, with a definitive timetable for implementing the 
strategy.

1984 Audit, Exh. 21 at 33. At another point HUD stated:

(W)e believe that approximately one-half of the available modernization 
funds i.e., those authorized in FY's 1981 and 1982, will exceed the 
recommended 3 year guideline for completion of comprehensive modernization 
projects and those authorized in 1980 have already exceeded the mandated 
completion date.

Id.

25Id. at 75.

46



changed. HUD found that the NHA "had $55 milli.0n in unobligated modernization 

funds." HUD 1986 Audit at Finding No. 5.-, Exh. 14. HUD stated that it had 

repeatedly requested the submission of implementation plans that established key 

dates for obligating and expending funds." Id. It stated that the failure to 

submit implementation plans "again brings into question the NHA's modernization 

capability." id.

In February, 1988, HUD found little changed:

The predicament in which the NHA found itself regarding 
impending deadlines for obligating modernization funds 
. . . resulted from inadequate planning and failure to 
heed the many written and verbal warnings of HUD 
concerning the approaching deadlines.

. . .  We have not seen much progress by the NHA in 
developing detailed implementation schedules that permit 
the securing of bid and contract approvals from HUD 
prior to the NHA taking aciion, or that permit the 
timely obligation of funds. b

In short, from 1982 to 1988, HUD has sharply criticized the NHA for its 

failure to timely implement the modernization program.

Turning to the replacement "plan" itself, which is in fact just one page 

of information about units to be constructed, it states that it is based on 

prior applications for new units, dated April 9, 1987, ami June 30, 1988. See 

Redacement Housing Plan, Exh. 3, Enclosure 6, p. 3. In these prior applications 

the NHA estimates completion of those projects in 845 days (2 1/4 years). Exhs. 

35 and 36. The implausibility of the NHA's estimate is apparent when compared 

with the NHA's record of approximately ten years for construction, as outlined 

above. However, even accepting this unrealistic 845-day timetable, the NHA

. Letter from Walter Johnson, HUD Newark 'r^o office to Ida Clark dated 
February 17, 1988. Exh. 34, at Finding No 1 and Finding No. 5.

<7



cannot complete construction of the 1,506 units according to its plan within six 

years.

In Year 5, for example, the NHA proposes building 376 units. Applying the 

NHA's own timetable of 845 days, construction of these 376 apartments would not 

be completed until Year 8. Similarly, the 352 units listed for Year 4 would not 

be completed until Year 7. Thus, even according to the NHA timetable, 728 units 

(Years 4 and 5; 48 percent of the entire project) would not be completed until 

well beyond the statutory six years. Where it is clear that even according to 

the NHA's own timetables, almost one-half of the units will not be completed 

within the time required by statute, approval of such an application is contrary 

to law and must be set aside.

In addition, prior to the 1987 Act HUD had a policy of recapturing 

development funds if a public housing authority did not start construction 

within 30 months. Congress has also provided that HUD may not recapture funds 

from a housing au+hority during the first 30 months of a project. 42 U.S.C. 

1437c(k).

HUD views this 30-month period as a "construction start deadline," and 

requires assurances from a housing authority that construction merely will be 

begun within two and one-half years. See Letter to Mr. Buck of the NHA from A. 

Wietecki of HUD, dated (1988) Exh. 37. Applying to construct and constructing 

new units is a complicated, lengthy procedure under HUD rules. The HUD 

construction handbook outlines the steps a public housing agency must follow in 

constructing new public housing units, including reviews by the processing 

'•ontrol and reports unit, multifamily housing programs branch, legal division, 

economic market analysis branch, fair housing and equal opportunity division, 

assisted housing management branch, architectural and engineering branch, and

48



cost branch, all before an application can be approved. See HUD Handbook 7416.1 

REV-1, Chapter 7. HUD approval is also required before a site may be utilized 

or before bids may be issued or secured. The construction process itself is a 

complicated and lengthy one. In any event, under this 30-month yardstick, 

construction of the 390 units mentioned for Year 3 would not begin with Year 6, 

and a total of 1,118 units (74 percent of the entire replacement housing 

project) would not be completed until after the six years had run-.

Thus NHA now proposes to embark on a massive project of 1,506 units, 

almost four times as large as the total construction approved in the last 

decade, and to do it all within six years. Given the NHA's appalling 

construction track record, its marked inability to rehabilitate its units (not 

considering building new ones) in a reasonable time, its own prior estimates of 

substantial time required for construction, and Congressional estimates of time 

required, the NHA may well lack the capacity to construct a sing!e new unit 

within six years, let alone all 1,506.

As the many HUD audits and warning letters indicate, HUD is well aware of 

the NHA's inadequate construction and modernization track records.

Nevertheless, it approved the NHA's insubstantial and unsupported replacement 

housing plan without mentioning any concern regarding the NHA's ability to carry 

it out. HUD's inexcusable failure to explicitly consider an unquestionably 

"relevant factor," mandates that this Court set HUD's approval aside. See 

Shannon v. U.S. Dept, of HUD. 436 F.2d 809, 819 (3d Cir. 1970).

3. The Secretary's Commitment of Funds for the Plan "Subject to 
Appropriations." While at The Same. Time Recommending To 
Congress No Aporopriations to Cover That Commitment Combined 
with the Commitment's Lack of Detail. Renders it Legally 
Inadequate Under 42 U.S.C. 1437p(b).

In HUD's approval of the Columbus demolition, it committed funding for

49



replacement units in a number equal to those being torn down, "subject to 

appropriations". See Exh. 4. In form this qualification is consistent with the 

Act. However the commitment must be considered inadequate as a matter of law 

unless several stipulations are added. First, HUD and the new Administration

must at least propose appropriations sufficient to cover the commitment, or HUD

cannot possibly be deemed to have acted in good faith. To date the 

Administration's budget has proposed no new specific public housing funding for 

demolition replacement. The budget deficit makes it highly unlikely that there 

will be sufficient new construction money.27 28 Implied in HUD's approval of new 

units "subject to appropriations" is an understanding that HUD will in good 

faith seek such appropriations. To permit destruction of public housing where 

HUD does not seek such funding is to subvert the intention of Congress, as

expressed in the HCDA of 1987. In order for there to be a valid plan, the

Administration's commitment of new funds must be clarified, and there must be 

a funding request to support it. An absence of good faith violates basic 

principles of fundamental fairness.2®

Further, HUD's commitment is fatally vague. It does not indicate what 

specific dollar amount is actually committed, what HUD would spend for ’the

27HUD has estimated that over the next six years 19,000 new units will be 
needed for nationwide demolition and disposition replacement housing. See NAHRO 
Monitor, Volume 10, No. 23 (December 15, 1988) at p. 4, Exh. 22. Yet at the same 
time HUD proposed funding for only 2,500 new housing units in its 1990 budget. 
Id. at 2. Moreover, the Office of Management and Budget advised HUD that there 
would be no new units of replacement housing fiscal year 1990, and directed HUD 
to seek a repeal of the one-for-one replacement requirement, Id. at 3, an action 
which even the former HUD Secretary Pierce candidly lab°Ii>d as a "frontal 
assault" on the Congressional intent expressed in the 1987 Hoiking and Community 
Development Act. Id.

28
• White v. Rouqhton, 530 F.2d' 750, 754 (7th Cir. 1976) (due process 

requires fair and consistent conduct by administrative agencies).

50



project at various appropriation levels, what priority HUD would assign the 

Newark project as compared with other replacement housing proposals around the 

country, should appropriations be limited, or even when the funds would become 

available. Before demolition is allowed, the NHA snould have a sufficient 

specific commitment so that it can be honored and enforced, if necessary. See. 

e.q.. Dotson v. U. S. Dept, of HUD. 731 F.2d 313 (6th Cir. 1984) (affirming 

order that HUD reserve funds for particular housing project in order to avoid 

recapture). This specificity is of critical importance. If it is not required, 

HUD can issue a trail of paper "commitments" in approving demolitions that have 

no reasonable prospect of being fulfilled; the buildings would then fall, and 

the letter and spirit of the law would be subverted.

4. The Plan Fails to Provide Access for Handi­
capped Tenants in the Replacement Units, in 
Violation of HUD Regulations

53 Fed. Reg. 30,989 (to be codified as 24 C.F.R. 970.11(i)) provides that 

the replacement housing plan "must contain assurances that any replacement 

units...newly constructed... will meet the applicable accessibility requirements 

set forth in 24 C.F.R. 8.25." This section requires that there be a certain 

percentage of units accessible to disabled tenants. Since the plan .does not 

contain any assurances whatsoever, it violates Section 970.11(i).

5. The NHA Did Not Properly Consult With 
Tenants in Preparation of the Plan, in 
Violation of 42 U.S.C. 1437p(bHl)

The HCDA of 1987 requires that tenants be consulted prior to approval of 29

29Under the 1988 Fair Housing Amendments Act, Section 6, Pub. L. 100-430, 
102 Stat. 1619-1620, all HUD units constructed after 1991 musJ- be accessible to 
handicapped persons. This requirement directly bears on the replacement plan 
since many of'the proposed replacement units will be u ilt after 1991.

51



a demolition request.

The Secretary may not approve an application or furnish assistance 
... unless (1) the application from the public housing agency has 
been developed in consultation with tenants and tenant councils, if 
any, who will be affected by the demolition . . .

42 U.S.C. 1437p(b). This requirement is made applicable to public housing

authorities by subsection (d).

HUD Demolition Handbook 7486.1 specifies that "at least 45 days before the 

PHA submits its request for demolition" it "shall notify" tenants and tenant 

organizations. HUD Handbook 7486.1 2-la. Moreover, tenants "shall be afforded 

a reasonable opportunity to present their views on the proposal and alternatives 

to it." Id. The HUD Field Office must certify that "tenants were given adequate

opportunity to review and comment" on the demolition. HUD Handbook 7486.1 2-

lc.

The NHA did not properly consult with tenants and tenant organizations. 

On July 25, 1988, the same day that the NHA submitted its demolition application

to HUD, the NHA mailed a notice to tenants informing them that the NHA intended

to demolish Columbus Homes. See Tenant Notification Letter in Columbus 

Application, Exh. 3 at Exhs. 8, 9 and 10. Clearly this was not the 45-day 

notice the Handbook requires. Indeed, when tenants subsequently met with the 

NHA, they presented a petition dated July 29, 1988 signed by 89 tenants in which 

they expressed their "overwhelmingO" opposition to the demolition and objected 

to the NHA's failure to notify them earlier. See Tenants' Petition, Exh. 56. 

When the NHA presented its own petition supporting the demolition, only 46 of 

118 households present at the October 12, 1988 meeting signed the NHA petition. 

See NHA Petition, Exh. 57.

Tenant organizations also must be notified similarly to affected tenants.

52'



HUD Handbook 7486.1-21. The Newark Tenants' Council, Inc. received the same 

letter mailed on the same date as did the tenants. Tenant Notification Letter 

ir Columbus Application, Exh. 3 at Exhs. 8, 9 and 10. Because the NHA failed to 

notify tenants and tenant councils at least 45 days before submitting its 

demolition application to HUD, HUD's approval of the application was contrary 

to law since the Secretary "may not approve" such an application. 42 U.S.C. 

1437p(b)(1) (emphasis added).

The obvious reason for requiring that tenant notification come prior to 

submission of the application for demolition is so that tenant comments may be 

considered and incorporated into the application. Presumably, if sufficient 

objection is raised, the plans to demolish would not be pursued at all. Where 

tenant comments are solicited only after the application's drawn and submitted, 

an invitation for input is an empty gesture; the demolition request is a fait 

accompli. Hence subsequent attempts to "cure" inadequate notice fail unless a 

new application reflecting tenant and tenant council comments is drafted and 

submitted.

6. The Plan Fails to Provide for Appropriate Relocation of 
Tenants in Violation of 42 U.S.C. 1437p(b)(31fFl&fGI and HUD 
Reoulations

The HCDA of 1987 requires that a housing replacement plan contain a tenant
o

relocation component. Before taking any action to demolish or dispose of a 

unit, the NHA must assist in relocating the tenants to other low-income housing 

"to the extent practicable, of the tenant's choice." 42 U.S.C 1437p(3)(F) & 

(G). The relocation plan must be approved by HUD. HUD Handbook 7486.1 para. 

2-4 b. A copy of the relocation plan submil.rcd by NHA with its application for 

demolition on July 25, 1988 is attached Exh. 3, Enel. 3, Exh. .7. The NHA's 

relocation plan is another summary three-page document, and it fails to comply

53



with the HCDA of 1987 in several respects.

Relocation cannot proceed "until the tenant of the unit is relocated to 

decent, safe, sanitary, and affordable housing ..."42 U.S.C 1437p(b)(3)(G).3® 

In its relocation plan, the NHA identified units to be "refurbished." It does 

not indicate when this will be done, or with what funds. The relocation plan 

also identifies units to be built two years from now as "available" for 

relocation.

Courts have reviewed the requirement that tenants be relocated to "decent,

safe, and sanitary" housing carefully. In TOOR v. HUD. 406 F. Supp. 1024, 1037

(N.D. Cal. 1973), the court disallowed a relocation plan which provided that

each rental unit "will be inspected." IcL (Emphasis in original.)

Since the agency itself had no idea when it submitted the relocation Plan 
whether or not the vacancies which it projected were "decent, safe and 
sanitary", the Secretary of HUD did not have before him information on 
which to make a determination that the statutory requirements were being 
met. Therefore, there was no way for the Secretary to give an approval 
which would not be arbitrary and without basis in fact.

TOOR v. HUD. 406 F. Supp. at 1037. Similarly, the inclusion of units not yet

refurbished and not yet built cannot meet the requirement that units be decent,

safe, and sanitary. HUD's approval of the NHA's plan is invalid and should be

set aside.

7. The Plan Fails to Ensure That the Same Number 
of Individuals and Families Will Be Provided 
Housing. In Violation of 42 U.S.C. 1437ofbW3UEl

The HCDA of 1987 requires that the same number of individuals and families

will be housed after demolition as were housed before. 42 U.S.C. 30

30The relocation plan must include "a certification that the relocation 
resources are decent, safe, sanitary and acf:rdable;..." HUD Handbook 7486.1 
para. 4-1 d. Accord 24 C.F.R. 970.8(d).

54



1437p(b)(3)(E) . There is no assurance or guarantee in the replacement housing

plan that the NHA can comply with such requirements, since it apparently is

unaware of how many persons are housed in the various different size 
32apartments.

Such inconsistency and apparent lack of awareness of the needs of families

is further evidence that the NHA's replacement housing plan is flawed, and that

destruction of housing based upon it is contrary to law.

8. The Plan Fails to Provide Assurances That the Replacement 
Housing Will Be Affordable, in Violation of 42 U.S.C. 
1437p(bim

The HCDA of 1987 requires replacement units be "affordable," and lists 

several forms of federally assisted housing which satisfy statutory 

requirements. See 42 U.S.C. 1437p(b)( 3 ) The NHA plan does not identify the

31The pertinent regulation is similar. See 24 C.F.R. 970.11(e).

32 . The figures in column A below, taken from page 3 of the NHA's 
Application, list apartment sizes and numbers of families in each apartment in 
Columbus Homes. The figures column B, also ostensibly describing the composition 
of Columbus Homes, are taken from the NHA's Relocation Plan Exhibit I subtitled 
Relocation Units needed by bedroom size.

1 - bedroom units
A B

36
2 - bedroom units 232 137
3 - bedroom units 115 137
4 - bedroom units - 59
5 - bedroom units 36 14

383 383

Exh. 3 at 3.

33 .The interim regulation similarly requires that a plan include "the 
provision of an additional . . . affordable dwelling unit (at rents no higher 
than permitted under the Act)..." to replace all units demolished.

55



nature of the replacement units to be funded. Hence there is no guarantee that 

the replacement units will comport with the affordability requirement of section 

1437n(b).

9. The Plan is so Lacking in Detail That it is Neither Credible 
nor RealiStic.

The document that the NHA deems its replacement housing plan is so lacking 

in detail as to fail to be credible or realistic, and cannot constitute the plan 

that Congress intended as a prerequisite to demolition of housing for needy 

persons under the 1987 Act. Among the additional omissions not addressed above 

are (A) any mention of the number, source and amount of any rent supplements to 

be applied to the new units; (B) any indication of the s*’te of working drawings 

or other palpable plans for the new construction; (C) any indication as to what 

approvals and permits are required, whether any haveoeen obtained, and when the 

remainder may be expected; (D) what specific contingency plans for alternative 

funding exist if HUD is unable to meet it? commitment in any year; and (E) 

specifically how the NHA plans to overcome past difficulties, whether caused by 

management problems or other factors, which have prevented it from constructing 

or rehabilitating units in a timely fashion in the past. The listed issues 

concern specific, concrete matters that must be handled in the orderly 

development of new units. Most of the above details are outlined by the court 

in TOOR v. HUD. 406 F. Supp. 1024, 1055 (N.D.Cal. 1973), as necessary 

information to be submitted in quarterly statements of the defendant 

redevelopment authority's progress in building between 1500 and 1800 new 

apartments. As is clear from the above list, many critical questions remain 

unanswered by the NHA's replacement housing plan.

Plaintiffs have reason to require specificity regarding the NHA's plan,

56



given the NHA's tardiness in building and failure in renovating the units it 

planned to build and renovate in the past; Further specificity in the plan will 

highlight potential problems before they occur, and provide assurance and

guidance to the NHA, HUD, and all affected parties.

B. The Absence of a Replacement Housing Plan for Units
to be Demolished at Kretchmer Homes Violates 42 U.S.C.
1437d (b(d)

The NHA has no plan to replace the units to be destroyed at Kretchmer

Homes. Defendants take the position that no plan is needed because the

demolition approval occurred before the effective date of the 1987 Act.

However, the plain language of the 1987 Act applies to the present situation.

Consequently, the demolition of Kretchmer Homes must be enjoined, since the one-

for-one replacement requirement of the Act has not been met. Even if the 1987

Act does not apply, HUD nevertheless violated its own regulation requiring

replacement housing when it impermissibly "waived" this regulation in its 1985

approval of the Kretchmer demolition.

1. The 1987 HCDA Act Applies to All Demolition Activity After 
February 5. 1988. and it Bars the NHA's Demolition of
Kretchmer Without a Replacement Plan

No plan for one-for-one replacement of units at Kretchmer Homes has been 

submitted by the NHA or approved by HUD. Although HUD approved an application 

for demolition of part of Kretchmer Homes in September, 1985, the 1987 Act 

directly applies to the impending demolition. The express language of the 1987 

statute states that a public housing authority "shall not take any action to 

demolish. . . without. . . satisfying the conditions specified in subsections 

(a) and (b) of this section." 42 U.S.C. 1437p(d). Subsection (b) requires a 

one-for-one replacement housing plan. The legislative: ‘listory of this provision 

emphasizes that the amendment is intended to clarify the existing intent "that

57



no PHA shall take any. steps toward demolition and disposition without having

satisfied the statutory criteria." H. CONF. REP. No. 426, 100th Cong., 1st 

Sess. 172 (1987) (emphasis added).

The intent of Congress is wholly consistent with the clear language of the 

statute above. Congress sought to bar demolition even where the approval 

occurred before the act became law. This was set forth in a letter from

Congressman Henry Gonzalez, Chairman of the House Subcommittee on Housing and

Community Development, and primary sponsor of the 1987 Act, to HUD's former 

Secretary Pierce:

It has come to my attention that the Department has not 
yet decided whether and how the statutory amendments 
should apply to situations in which a pubMc housing 
authority has previously secured HUD approval for 
demolition or disposition. It was our intent that the
new ouatutc iiiuuiu ai
PHA's and HUD must

i y uu uiujc
comolv with

 ̂. LU
the

a u lull
new

emu u11 d i.
statutory

reauirements before proceeding wi£Ji anv previous!v

The ultimate act of demolition clearly falls within the proscription on 

"any action." Similarly the other actions toward demolition which the NHA has 

taken in 1988, and must take in 1989,^ fall within the proscription against 34 35

34 Letter from Henry Gonzalez to Samuel Pierce, May 4, 1988 Exh. 23. Given 
the recent passage of the Act, the statement of the Chairman of the Committee 
which was responsible for the emergence of the bill is instructive. Cf. Orego 
v. United States Dept, of Housing & Urban Development. 701 F.Supp. 1384, 1398, 
n.14 (N.D.I11. 1988) (Congressman Gonzalez, Senator Cranston, and Congressman 
St. Germain's letter regarding intent of a different provision of the 1987 
housing legislation is "wholly consistent with the intent indicated by the plain 
wording of the statute, unlike the Secretary's implausible 'mistake' scenario.").

35 . In addition, as discussed in Point IV of this brief, this provision bars 
NHA actions such as relocating tenants to empty buildings to prepare them for 
demolition, not rerenting those units, and awarding biHs for the demolition 
contracts. Throughout 1988 and 1989 the NHA has engaged in these activities
towards the demolition of Kretchmer Homes.

58



"any action." To effectuate its position that the statute does prevent

demolition where the approval occurred before the effective date of the 1987

Act, HUD adopted an interim regulation stating that the Act did not apply to

"(g) units approved for deprogramming before February 5, 1988." 53 Fed. Reg.

30,987, to be codified at 24 C.F R. 970.2(g). The statute does not mention the

terms "deprogramming," or "approved for deprogramming." The regulation carves

out an exception to the Act which is unauthorized; it is inconsistent with the

Act, and therefore invalid. This is supported by post-enactment history that
37the deprogramming regulation is "not justified by the statute." 36 37

36 . The unpublished 2 and 1/2 page opinion of the District Court in th«i 
Western District of Pennsylvania, denying a stay pending appeal from an order 
upholding an earlier demolition approval of 102 units of the Pittsburgh Housing 
Authority, is distinguishable from the instant case. See Tillman v. Housing 
Authority of Pittsburgh. No. 88-311, unpub., injunction pending appeal denieci 
mem, order (W.D.Pa., March 10, 1988), injunction pending appeal denied without 
opinion (3d Cir. March 15, 1988). Exh. 47. Among many other distinguishing 
factors, is the fact that in this case plaintiffs have presented a strong case 
that there are feasible options for the rehabilitation of Kretchmer Homes. The 
Tillman court did not mention similar evidence in its opinion. Second Congress 
has required an one-for-one replacement of all units to be demolished; this is 
obviously a condition precedent to the irreversible act of demolition. On this 
point the Tillman court is simply wrong.

37 . On December 6, 1988 Congressman Gonzalez wrote:

The interim rule specifies that units approved for deprogramming 
before February 5, 1988, are not covered by the one-for-one 
replacement requirement. That provision is not justified by the 
statute. The goal of the legislation is to severely limit the 
conditions under which public housing may be sold or demolished in 
order to preserve as much badly needed housing as possible. The 
legislation is intended to assure that any public housing building 
that at one time served as a housing unit, whether vacant, 
uninhabitable, converted to a new use or "deprogramed" at the time 
of application for disposition or demolition is made should be 
replaced unless there is no need for low income housing in the 
community. There is no logical or statutory reason for applying the 
Act to units approved for deprogramming after February 5, 1988, but 
not to those units approved for deprogramming prior to February 5, 
1988.

59



. Finally, assuming arguendo that the interim regulation's deprogramming 

exception is val;d, the new Act's protections apply to two buildings at 

Kretchmer which had not been approved for deprogramming by February 5, 1988. 

The applicable regulation, 24 C.F.R. 990.102, defines "Unit Approved for 

Deprogramming" as one "for which HUD has approved the PHA's formal request to 

remove the unit from the PHA's inventory and the annual contributions 

contract..." In addition, that section defines "Unit Months Available" for use 

in computing the operating subsidy under the ACC between HUD and a PHA.

Applying these regulations, two of the buildings sought to be demolished 

have not been approved for deprogramming. The I1HA has not formally requested 

that the units be removed from its inventory Ci from the ACC. Indeed, it has 

continued to count them in its inventory, and to receive operating subsidies 

from HUD for those units. (See Exhs. 53, 55) Thus, under the regulations the

Exh. 29 at p. 10. Former Secretary Pierce agreed with Ccr.yressman Gonzalez that 
HUD was currently barred from furnishing assistance for current demolition, and 
that this restriction on HUD would apply in cases where there was a prior 
approval of demolition. See letter from Secretary Pierce to Congressman Gonzalez 
dated July 1, 1938, Exh. 25.

[W]e recog lize that section 18(b), while it preserves actions open to PHAs 
whenever IUD has "approve(d) an application," also subjects to the 
requirements of paragraphs (1), (2), and (3) any Secretarial action to 
"furnish assistance under this section under this Act." Exh. 25.

See also similar letter of Michael Dorsey, Acting HUD General Counsel to 
Gonzalez, August 18, 1988, Exh. 26.

Former Secretary Pierce disagreed, however, with Congressman Gonzalez' 
statement that demolition was barred where approval preceded the effective date 
of the 1987 Act. Exh. 25.

There is no rational justified /„ for the Secretary's position that one 
section of the Act (the restrictions ',n HUD from assisting demolitions) applies 
even where there has been a prior approval, but that another section of the Act, 
(the restrictions on demolitions jy PHA's) does not apply where there has been 
an approval prior to the effective date of the Act.

bu



units must still be considered as unit months available for purposes of 

computing the operating subsidy of the Authority. Since they are still 

considered "unit months available," they are by definition not "approved for 

deprogramming." See 24 C.F.R. 990.102."^

2. The 1987 HCDA's Plain Language Requires Its Application to
All Demolition Activity After February 5. 1988 and It
Prohibits the Secretary From Furnishing Assistance for the
Demolition of Kretchmer Without a Replacement PI an

42 U.S.C. 1437(b) prohibits the Secretary from approving an application 

to demolish or from furnishing assistance for demolitions unless the 

requirements of the Act are met. Since there is no plan for one-for-one 

replacement HUD cannot furnish assistance for demolitions.

The demolition has not occurred. If it does, HUD will be furnishing 

assistance in that it will have to transfer funds to the NHA to pay for the 

demolition costs. 38

38The regulation also provides that:

On or after July 1, 1991, a unit is not considered 
available for occupancy in any PHA Requested Budget Year 
if the unit is located in a vacant building in a project 
that HUD has determined is nonviable.

Hence even if HUD considers the buildings non-viable, the units are still 
considered available for occupancy, (and hence not approved for deprogramming) 
until after 1991.

The HUD Handbook provides that when a building is approved for demolition, 
it should be deprogramed within two months. However, deprogramming is not 
automatic; it must under the regulations be requested by the PHA and approved 
by HUD. Not only were these units not deprogramed within two months, but they 
are still to plaintiffs' knowledge used in computing the operating subsidy 3 1/2 
years later. Finally, even assuming arguendo that HUD had approve*! the units 
for deprogramming, that approval was waived or rescinded by HUD when it 
continued to treat the buildings as unit months available within the meaning of 
24 C.F.R. § 990.102.

61



In addition in July, 1988, after the effective date oi the 1987 Act, the 

NHA requested HUD approve a reprogramming of its modernization grant so that it 

could spend additional funds on demolition over and above what had been approved 

in 1985. Exh. 42. HUD approved this additional expenditure of funds, plainly 

both an "approval" and "furnishing assistance," in violation of the 1987 Act. 

Exh. 41. The NHA has just entered contracts for demolition and asbestos 

removal. Plaintiff does not know if they exceed the 1985 grant for demolition. 

If they do, the Secretary will be violating the Act in this respect as well.

Additionally, HUD has engaged in a continuous series of actions and 

approvals of NHA actions in implementing the demolition plans, which must be 

deemed "furnishing assistance" as well as approving demolition.

a. On August 1, 1988 the NHA requested approval from HUD for the award 

of a contract for professional services to execute and supervise the demolition. 

See Exh. 38. On August 5, 1988 HUD approved this request. See Exh. 29. By 

regulat^n HUD must approve such contract awards. See 24 C.F.R. 968.12(f) 

entitled "Contract Award."

b. On August 9, 1988 the NHA requested approval of the demolition 

specifications. See Exh. 40. On August 16, 1988 HUD approved the NHA's 

proceeding with bids. See Exh. 41.
o

c. On August 1, 1988 the NHA requested approval for the award of a 

contract to build a day care center in a Kretchmer mid-rise building. See Exh. 

51. This was necessary because the current day care center is located in a 

building scheduled for demolition. On August 5, 1988 HUD approved the execution 

of the contract. See Exh. 52.

d. On September 20, 1988 HUD advised the NHA that its prospective 

demolition contractor had been disqualified. On September 22, 1988.the NHA

62



requested a 90 day extension in which to readvertise. On December 22, 1988 HUD 

extended the time in which the NHA could obligate the funds for demolition until 

March 8, 1989. Exh. 44.

e. Upon information and belief HUD has approved the new demolition 

contracts.

Thus HUD has furnished assistance for demolition, and given a series' of

approvals for the implementation of the demolition (which is in effect an

approval of demolition) after the effective date of the Act. In addition HUD's

allowing the demolition to go forward in the face of the new Act is tantamount

to an approval of demolition. This course of action, constitutes a violation

of the Act since there has been no approved plan for one-for-one replacement,

and the current requirements of subsection (a) of the Act are not met.

3. Even Under HUD Regulations in effect in 1985. HUD's Approval 
of the NHA's Application to Demolish Kretchmer Without a One- 
for-One Replacement Plan was Unlawful.

At the time of the NHA's submission of its Kretchmer demolition

application (May 24, 1985), and of HUD's approval (September 9, 1985), HUD

regulations required preparation of a one-for-one replacement plan where there

was a local need for such housing. The regulation provided:

If there is a local need for low-income housing the 
PHA's request for demolition or disposition shall 
include a plan for replacement housing on a one-to-one 
basis or as approved by HUD to be warranted by current 
and projected needs, subject to HUD's finding as to the 
availability of funds.

44 Fed. Reg. 55,368-69 (November 9, 1979) (formerly promulgated at 24 C.F.R. 

§870.6).39

This regulation became effective December 10, 1979. Id. A revised 
rule was proposed in 49 Fed. Reg. 28,414 (July 12, 1984), which did not require 
replacement plans to accompany requests for demolition approval. However, the 
final rule, published in 50 Fed. Reg. 50,891 (December 13, 1985), did not become

63



The NHA's application does not include such a plan, or even a suggestion 

of the plan's necessity. Although HUD waived the one-to-one plan requirement 

in its demolition approval, such a waiver had not even been requested by the 

NHA, and neither HUD nor the NHA made a finding that the local housing market 

contained sufficient low-income housing to warrant such a unilateral 

"waiver".* 40 Nor is there a finding by HUD that there was insufficient funding 

to provide replacement for any of the units to be demolished.

"[Government agencies must follow their own published regulations." 

Griffin v. Harris, 671 F.2d 767, 772 (3d Cir. 1978). Nothing in the demolition 

regulations in effect in 1985 permitted the Secretary to waive the one-to-one 

replacement plan requirement..It follows a fortiori that the Secretary's waiver 

as to Kretchmer, without explicit "consideration of relevant factors," see 

Citizens to Preserve Overton Park v. Volpe. 401 U.S. 402, 416 (1971), or at 

least findings, explanations, evidence or documentation supporting such an 

extraordinary act, is contrary to law.

Although there are no reported decisions interpreting this regulation, the 

commentary accompanying the publication of the final rule establishing the one- 

to-one plan requirement indicated only that waiver of certain agency procedures 

might be warranted where "[a] situation imposing an immediate threat to life, 

health or safety might warrant expeditious action." 44 Fed. Reg. 65,369 

(November 9, 1979). Again, there is no finding or documentation of such a life

effective until March 1, 1986, s£e 51 Fed. Reg. 7*33 (March 4, 1986), well after 
the Kretchmer demolition approval.

40
The NHA's 1985 Housing Assistance Plan (HAP), approved by HUD pursuant 

to 42 U.S.C. 5304(c), demonstrated just the contrary. See Exh. 19.

64



To .the contrary, as plaintiffs havethreatening situation at Kretchmer.^ 

demonstrated, the removal of nearly 400 scare0 low-income housing units, without 

replacement of one single unit, in the midst of desperate national, regional and 

local low-income housing crises, will create and extend hardships and threats 

to plaintiffs' and their class members' health and safety.

POINT IV

ALL NHA DEMOLITION - RELATED ACTIVITY VIOLATES THE 
HOUSING & COMMUNITY DEVELOPMENT ACT OF 1987 AND MUST BE 
ENJOINED, AS MUST ITS CONTINUING REFUSAL TO RENT VACANT 
UNITS

The NHA is also engaged in substantial activities in furtherance of 

demolition at other Newark high-rises not the subject of demolition approvals. 

These activities include deliberate refusal to rent available vacant units, 

forced relocation of tenants from targeted units, failing to properly maintain 

family high-rise buildings, and other actions set forth in plaintiffs; 

complaint.

The Housing and Community Development Act of 1987 makes plain that the 

public housing authority (herein "PHA") cannot take any action to demolish or 

dispose of public housing units without such approvals. 42 U.S.C. 1437p(d). 

The legislative history of this provision emphasizes that the amendment is 

intended to clarify the existing intent "that no PHA shall take any steps toward 

demolition and disposition without having satisfied the statutory criteria," H. 

CONF. REP. NO. 100th Cong., 1st Sess. 172 (1987) (emphasis added). This 

includes demolition preparation and planning activity, asbestos removal and

^  Presumably, if such life-threatening circumstances had existed at 
Kretchmer, the NHA would have completed the relocation :f tenants and demolition 
preparatory activities in less than the 3 and one half years it has taken to 
date.

65



implosion activity, securing of related contracts and bonds, solicitation of 

bids, refusal to fill vacant units, failing to maintain and repair units, and 

involuntarily relocating tenants.

Congress imposed this obligation upon PHAs in the 1987 Act;: after 

concluding that the D.C. Circuit's interpretation of the then-existing 

requirements was "erroneous." See H. CONF. REP. NO. 426, 100th Cong., 1st 

Sess. 172 citing Edwards v. District of Columbia. 821 F.2d 658 (D.C. Cir. 1987). 

In Edwards, the D.C. Circuit had held that a PHA's refusal to fill vacant units 

or to provide adequate maintenance to projects it intended to demolish, was not 

actionable by applicants for or tenants of the project. 821 F.2d at 662 n. 16.

After the enactment of the 1987 Act, there can simply be no question that 

such de facto demolitions are illegal, and that tenants and applicants, such as 

plaintiffs, have enforceable rights against such conduct. As explained in a 

recent district court decision:

. . Congress intended to prohibit the destruction of 
public housing projects without [PHAs first satisfying 
the statutory criteria]. Because the result -- the 
[unlawful] destruction of a housing project--is the same 
whether done by a wrecking ball and bulldozers or by 
neglect that renders the units uninhabitable, the 
requirements of § 1437p should apply to both actual 
and de facto demolitions. To conclude otherwise would 
allow public housing agencies to evade the law by simply 
allowing housing projects to fall into decay and 
disrepair.

Concerned Tenants of Father Panik Village v. Pierce. 685 F. Supp. 316, 321 (D. 

Conn. 1988) (citations omitted).

This conclusion is also supported by HUD's interim regulations under the 

1*87 Act. Those regulations reiterate the NHA's duty to "continue to meet its 

ACC [annual contribution contract] obligations to maintain and operate the 

property as housing for low-income families" 24 C.F.R. 970.12, 53 Fed. Reg.

66



30984, 30936-89 (August 17, 1988). This regulation, like all federal

regulations, is binding on the NHA. See Thorpe v. Housing Authority of Durham. 

393 U.S. 268 (1969).

There can be no doubt that the deliberate refusal and failure to fill

massive vacancies--such as the NHA's conduct here--is a de facto demolition.

It has maintained these vacancies, in large part, due to a policy of

seeking the eventual demolition of over 5,000 units out of an original 13,000

plus units. The refusal to fill those units greatly enhances the incidence and

risk of their destruction through vandalism, arson and neglect. This practice

renders units unavailable to desperately needy homeless families and others as

well as endangering the health and safety of current tenants and area residents.

As courts have long recognized:

Experience has confirmed the court's view that the 
ultimate destruction of the project through vandalism 
is certain, in spite of guards, unless the project is 
inhabited.

Cole v. Hills. 396 F. Supp. 1235, 1238 (D.D.C. 1975)(emphasis added). Thus, as 

explained by one court:

[A preliminary injunction is required] in that 
vandalism, empty apartments and continuing unsafe 
conditions would as a practical matter, effectively 
accomplish demolition bv a process of erosion. Only bv 
filling the building with qualified needy tenants can 
the project remain viable pending final determination.

Cole v. Lvnn. 389 F. Supp. 99, 105 (D.D.C. 1975)(emphasis added).

POINT V

THE DEMOLITIONS OF COLUMBUS HOMES AND KRETCHMER ARE 
BARRED BY THE SECRETARY'S FAILURE TO COMPLY WITH THE 
NATIONAL ENVIRONMENTAL POLICY ACT 42 U.S.C. 4231 et sea.

The National Environmental Policy Act of 1969 ("NEPA"), 42 U.S.C. 4231 et

67



sea.. mandates that agencies of the federal government include in every 

recommendation, report or proposal for major federal actions significantly 

affecting the quality of the human environment, a detailed statement by the 

responsible official on (a) the environmental impact of the proposed action,

(b) any adverse environmental effects which cannot be avoided should the 

proposal be implemented, (c) alternatives to the proposed action, and (d) any 

irreversible and irretrievable commitments of resources which would be involved 

in the proposed action should it be implemented. 42 U.S.C. 4332(2) (c) (1), 

(ii), (iii), (v).

NEPA is implemented, in part, by Council on Environmental Quality 

Regulations ("CEQ"), 40 C.F.R. 1500-1508, which establish the basic procedural 

requirements for compliance with NEPA. These procedures are to be followed by 

all federal agencies and are incorporated in HUD regulations promulgated to 

establish procedures for compliance by HUD programs with NEPA. 24 C.F.R. 50.1.42 43

An environmental assessment is required for all requests for demolition 

or disposition involving over five units of public housing. HUD Handbook
A *3

7486.1, 2-5 2(1). The environmental assessment will result in either a

finding of no significant impact (F0NSI) or an Environmental Impact Statement 

(EIS). 24 C.F.R. § 50.33; HUD Demolition Handbook 7486.1, 2.50.

A. HUD Violated NEPA bv Failing to Prepare an EIS.

According to federal regulations, HUD must prepare an EIS if a demolition

42 Under CEQ regulations a proposal exists "at that stage in the development 
of an action when an agency subject to the Act has a goal and is actively 
preparing to make a decision on one or more alternative means of accomplishing 
that goal and the effects can be meaningfully evaluated." 40 C F.R. § 1508.23 
The NHA's proposed demolition of Columbus and Kretchmer Homes require HUD 
approval and thus are proposals of.federal action.

43 The sole exception is unapplicable here.

68



proposal will be a major action with significant effect on the human 

environment. The demolition of 2,500 or more existing housing units is presumed 

to have a significant effect. 24 C.F.R. 50.42(b) (3), HUD Handbook 7485.1 par. 

2-5a(2)(4). An action which is related to other actions is significant "if it 

is reasonable to anticipate a cumulatively significant impact on the 

environment. Significance [of environmental impact] cannot be avoided by 

breaking [an action] down into component parts." 40 C.F.R. 1508.27 (b) (7). 

Proposed demolition of Columbus and Kretchmer Homes must be evaluated with other 

"actions which are geographically related and are logical parts of a composite 

of contemplated actions." 24 C.F.R. 50.21 (a).

In its July, 1988 demolition application to HUD, the NHA indicated that 

it intended to demolish and seek replacement for 4,564 units at Columbus, Walsh, 

Hayes and Scudder Homes. Exh. 3, Enel. #5.^ Since the NHA's total demolition 

plans must be considered jointly, and since the demolition is of more than 2,500 

units, an EIS should have been prepared. * 1

44 The NHA has taken the following concrete steps pursuant to its overall 
plan to demolish mid and high-rise public housing in Newark:

1. Actual demolition of 816 units at Scudder Homes;* . Complaint. 45
(a).

2. Obtained HUD approval for the demolition of 1,506 units at Columbus
Homes; (Exh. 4).

3. Obtained HUD approval for demolition of 372 units at Kretchmer Homes*. 
Exh. 6.

4. Obtained pre-act approval for the demolition of 328 units at Hayes 
Homes; Exh. 6.

5. Shut down four buildings at Walsh Homes; - 252 units; Exh. 17 at 2.
(announced deprogramming of those units for 1992. Exh 18 at 3)

6. Maintained 847 vacancies at Hayes Homes as of 12/1/87; Exh. 18 at 7.
7. Started emptying another building at Kretchmer Homes (which contains

128 units); (Exh. 7, Aff. at Regina Latimore,at 3).

Numbers 1 and 3 above refer to actual or planned demolition's of u.;its in 
addition to the 4,564 units. Hence the total planned functionally related 
demolitions amounts to at least 5, 7-52 units.

69



Additionally, HUD is aware that an EIS should have been prepared. In a

memorandum from HUD Acting Regional Administrator Geraldine McGann to HUD Newark

Area Office Manager Walter Johnson, dated November 30, 1988, McGann wrote:

It is anticipated that the Newark Housing Authority (NHA) will be 
submitting new applications for demolition in accordance with the 
implementing regulations to the Housing and Community Development 
.Act of 1987. Environmental regulations dictate (24 C.F.R. Part 
50.42) that an Environmental Impact statement (EIS) is required if 
a proposed action involves the demolition of 2500 or more existing 
housing units. (It is important to note that there is nothing 
magical with the number 2500 other than being a guidepost for 
determining "significance"-the basic rule governing when an EIS is 
required). Procedures further require that we aggregate individual 
actions when they are "geographically related and are logical parts 
of a composite of contemplated actions" - see 24 C.F.R. Part 50.21

Based on the premise that the NHA will be submitting new 
applications for demolition, and given the current state of local 
awareness and opposition to such actions, we recommend that an 
E.I.S. be prepared covering the Authority's Total plans for 
demolition in the City of Newark. _

Exh. 10. (emphasis added)^

Since an EIS was required and none was prepared, the demolitions of Columbus and 

Kretchmer violate NEPA and must be enjoined.

B. HUD Has Violated NEPA bv Failing to Properly Provide for Public 
Participation

"When the proposed action is, or is closely similar to, one which requires 

the preparation of an EIS pursuant to 50.42(b), but it is determined . . . that 

the proposed action will not have a significant impact on the human environment" 

24 C.F.R. 50.34(a), then "[njotice of availability of the F0NSI shall be given 

to the public in accordance with subsections (a)-(d) of 50.25." 24 C.F.R. 50.34.

45 McGann concluded: The planned demolition of a large number of units,
whether stated or implied, in a heavily concentrated built-up urban setting 
cannot be realistically argued as routine action(s). Id. See Hanley v. Mitchell. 
460 F. 2d 640, 647 (2d Cir. 1974) (discussing likely environmental impacts in 
concentrated urban settings).

70



HUD regulation 24 C.F.R. 50.25, subsections (a)-(d), requires that such 

notice: (1) be published in the Federal Register; (2) identify a date when the

official public involvement element of the proposed actions is completed and HUD 

internal processing will continue; (3) be published in an appropriate local 

printed news medium and sent to individuals and groups known to be interested 

in the proposed action, and (4) inform the public where additional information 

may be obtained. See also 40 C.F.R. 1505.6. Because the NHA has failed to 

comply with any of these requirements despite several requests of the NHA by 

HUD, HUD's approval of the NHA's application was erroneous and the proposed 

demolitions must be enjoined under NEPA.

C. HUD has Violated NEPA bv Failing to Prepare a FONSI on the Columbus 
Homes Demolition

Finally, as mentioned previously, all demolitions involving over five 

units require either a FONSI or EIS. Because HUD has not published a FONSI on 

the proposed Columbus demolition, and consequently the public has nnt had the 

opportunity to comment, this action must be enjoined under NEPA.^®

POINT VI

THE NHA'S PROPOSED DEMOLITIONS OF KRETCHMER AND COLUMBUS 
HOMES AND BLANKET REFUSAL TO FILL VACANT APARTMENT UNITS 
HAVE HAD AND WILL HAVE DISPARATE RACIAL EFFECTS IN 
VIOLATION OF THE FAIR HOUSING ACT OF 1968, 42 U.S.C.
3601 et. seo. AND THE CIVIL RIGHTS ACT OF 1964, 42 
U.S.C. 2000d

Members of racial minority groups comprise a disproportionate share of the 

homeless and inadequately housed persons in Essex County. This includes 

families, children and individuals such as plaintiffs who are currently on the

^  Plaintiffs' Freedom of Information Act request dated December 21, 1988 
for all environmental documents pertaining to Columbus did not yield a FONSI or 
an EIS. See Fxh. 27.

71



NHA waiting and pre-waiting lists; who were denied a place cn the waiting list

or were dissuaded from even applying for public housing; or who would accept

public housing from defendant NHA if provided the opportunity. NHA tenants who

will be displaced and relocated when their units are demolished are also

predominantly Black and Hispanic. See Exh. 13, Map of Newark Housing Authority

Public Housing Projects with Racial Demographics and Census Tracts. Indeed, all

of the individual named plaintiffs and their families are racial minorities.

Given the disproportionate dependence of racial minorities on low income

housing resources, defendant's actions and plans to reduce the available supply

of low-income public housing -- by demolishing Kretchmer without any replacement

housing, demolishing all of Columbus Homes without guaranteed replacement

housing, failing to fill vacant units throughout the housing authority, and

other conduct -- have had and will have discriminatory effects in violation of

Title VIII of the Fair Housing Act of 1968, 42 U.S.C. 3601 et sefl. and Title VI

of the Civil Rights Act of 1964, 42 U.S.C. 2000d. Additionally, by proposing

the relocation of the vast majority of displaced tenants to the more racially

and economically impacted Central Ward, proposing the construction of the vast

majority of replacement housing in the Central Ward, and \y demolishing and

removing nearly 2,000 units from more integrated location; at Columbus and

Kretchmer, the NHA's conduct will have segregative consequences to plaintiffs

and to the community at large in violation of the above protections.

A. The AddIicable Law

1. Title VIII. 42 U.S.C. 3604

Title VIII of the Fair Housing Act of 1968 provides that:

it shall be unlawful . . . [t]o make unavailable, [or 
t]o discriminate against any person i~ the terms, 
conditions, or privileges of sale or rental of a 
dwelling, or in the provision of services in connection

72



therewith, because of race, color, religion, sex or 
national origin.

42 U.S.C. 3604(a) and (b). Virtually every circuit that has examined Title 

VIII, including the Third Circuit, has accepted the conclusion -- drawing on 

Title VII precedents and analogies, see Griggs v. Duke Power Co.. 401 U.S. 424 

(1971) -- that a Fair Housing Act violation can be proven by evidence of 

discriminatory effect, without any showing of discriminatory intent. See, e.g.. 

Resident Advisory Board v. Rizzo. 564 F.2d 126, 146 (3d Cir. 1977), cert, denied 

sub nom., Whitman Area Improvement Council v. Resident Advisory Board. 435 U.S. 

908 (1978); Huntington Branch NAACP v. Town of Huntington. 844 F.2d 926 (2d 

Cir.), aff'd. on other grounds. 109 S. Ct. 276 (1988).

Thus, even if a defendant's course of conduct were devoid of the slightest 

scintilla of racial animus, it nevertheless violates Title VIII if its actions 

produce a racially discriminatory effect. See Smith v. Anchor Bldg. Corp., 536 

F.2d 233 (8th Cir. 1976) ("Effect, not motivation, is the touchstone because a 

thoughtless housing practice can be as unfair to minority rights as a willful 

scheme."); accord Resident Advisory Board v. Rizzo. 564 F.2d at 148, n.31.

In determining whether a challenged action has a discriminatory effect, 

federal courts consider: (1) "ultimate effect discrimination" - the effect on 

the community involved and also (2) "adverse impact discrimination" - whether 

the action has a greater adverse impact on one racial group than another. See 

Huntington Branch NAACP v. Town of Huntington. 844 F.2d at 937; Brown v. Artery 

Organ.. Inc.. 654 F. Supp. 1106, 1115 (D.D.C. 1987); Keith v. Volpe. 618 F. 

Supp. 1132, 1150-51 (C.D.Cal. 1985). These two theories are separate and 

independent grounds for establishing discriminatory effects, either one of which 

is sufficient to establish a Title VIII violation. See Keith v. Volpe. 618 F. 

Supp. at 1150-51. In assessing adverse impact, statistical evidence of racially.

73



disparate impact against a minority group can be:

"highly probative of a § 3604(a) violation. Statistics, 
although not dispositive, 'have critical, if not 
decisive significance,' U.S. Northside Realty 
Associated. Inc., 518 F.2d 884 (CA 5, 1975 . . . ."

United States v. Mitchell. 580 F 2d at 791.

Once a plaintiff has shown a discriminatory effect, the burden shifts to

the defendant to establish:

A justification [that] must serve, in theory and 
practice, a legitimate, bona fide interest of the Title 
VIII defendant, and ... [that] no alternative course of 
action could be adopted that would enable that interest 
to be served with less discriminatory impact.

Resident Advisory Board v. Rizzo, 564 F.2d at 149.

2. Title VI. 42 U.S.C. 2000d

Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, together with 

its implementing regulation, 24 C.F.R. 1.4(b)(2)(i) likewise reaches

discriminatory effects, without requiring proof of discriminatory intent. Title 

VI prohibits discrimination in federally assisted programs and activities, such 

as the federal housing programs.

Where, as in this motion, plaintiffs only seek declaratory and injunctive 

relief, a violation of Title VI and its implementing regulations may be 

established without proof of discriminatory intent. Guardians Ass'n v. Civil 

Service Comm'n, 463 U.S. 582 (1983); see also NAACP v. Medical Center. Inc.. 

657 F.2d 1322, 1328 (3d Cir. 1981). To establish a firinia facie case under Title 

VI, the plaintiff must demonstrate "some definite, measurable disparate impact." 

NAACP v. Medical Center. Inc.. 657 F.2d at 1332. Once the plaintiff has met 

this initial burden, the defendant must go forward with evidence to "'rebut 

[_1hat] prima facie case.'" Id. at 1333 (citation omitted). Evidence that the

74



defendant has chosen the least discriminatory alternative satisfies this 

standard. Id.

B. The Relevant Facts

1. Discriminatory Effects

By any measure, the Housing Authority's proposed demolition of Columbus 

Homes, Kretchmer and other projects, without a guaranty of one-to-one 

replacement,.and failure to fill vacant, units have-had and will continue to have 

racially discriminatory effects on the plaintiffs in a variety of ways.

a. Adverse Impact - Loss of Scarce Low Income Housing 
Units

First, the defendant's conduct has reduced and will continue to reduce the 

supply of scarce low income housing units to desperately needy, overwhelming 

minority homeless, inadequately housed and low-income populations. Those 

eligible to apply for NHA operated housing include not only residents of Newark 

but also residents from other towns in Lssex County, including Belleville, 

Bloomfield, Irvington and Nutley. Affidavit of Eileen Finan, Exh. 8 at 50. 

In 1980, Blacks comprised 44.36 percent of this group of cities and towns and 

Hispanics comprised 13.74 percent. Bureau of the Census, U.S. Dept, of 

Commerce, County and City Data Book 1983, 740-50 (1983). For Essex County 

overall the comparable figures for 1980 were 37.2 percent Black and 9.08 percent 

Hispanic. Id. at 368.

In comparison to the above-mentioned statistics, the homeless population 

of Essex County is overwhelmingly Black. Estimates supplied by the Homeless 

Unit within the Division of Welfare, Essex County Department of Citizen 

Services, place the percertage of county Black homeless at o’er 90 percent. 

Eileen Finan Affidavit, Exh. 8 at 4.

75



Hi span i cs are dramatically overrepresented among the county's poor. In 

1980, 18.4 percent of the population of Essex County living below the poverty 

line were Hispanic even though only 9.08 percent of the county population was 

Hispanic. Bureau of the Census, U.S. Department of Commerce, General Social and 

Economic Characteristics: 1980 Census of the Population. Chap. C, pt. 32 (July 

1983). In view of their disproportionate representation among the poor, the 

removal of affordable public housing will have an obviojs disparate impact upon 

the Hispanic population. Thus the withdrawal of low- income housing units in 

a scarce market has had and will continue to have an adverse impact on both 

Blacks and Hispanics.

The homeless and inadequately housed Blacks and Hispanics who seek access 

to low-income public housing units are least able to bear the burdens imposed 

by the NHA s actions. For this population, there are few if any affordable 

alternatives to public housing, especially in light of the steady decline in 

Newark's housing stock over the years. The city's 1989-1991 Housing Assistance 

Plan (HAP) indicates that nearly 29,000 low and very low income housenolds 

paying unaffordable rents, are in need of rental subsidies. HAP at 7-11, Exh. 

12. In addition to the scarcity of affordable housing, plaintiffs also face a 

housing stock that qualifies as one of the worst in the nation in terms of 

quality. See Burchell, Housing and Economic Change in Newark, New Jersey, 

Report Prepared for the Department of the Public Advocate at 6 (1986), Exh. 16. 

Similarly, the City's 1989 HAP also states that Newark possesses 14,055 

substandard occupied units. HAP at 7, Exh. 12.

In addition to these grim economic realities, the plaintiffs' 

opportunities to find adequate housing in the County and City is further 

restricted by continuing racial discrimination and residential segregation. See

76



Generally. National Urban League State of Black America 1989. (January, 1989), 

at 77-106 (citing studies of continuing residential segregation in several 

cities including Newark). The city's 1989-1991 HAP specifically found "a 

critical shortage of housing for low/moderate income and "minority groups" and v  

"discrimination of ownership, rental and financing of housing." HAP at 3, Exh.

1 2 .

b. Adverse Imoact- - Loss of Convenient Location

Second, the loss of convenient and desirable housing locations also has 

adverse effects on plaintiffs. Cf. Brown v. Artery. 654 F. Supp. at 1119.

Columbus Homes, slated for imminent demolition, is in a location with ready 

access to public transportation, including bus and railroad lines. DeLuca 

Affidavit at par. 17, Exh. 2. This feature is all the more important for low 

income families and individuals who often cannot afford to purchase or maintain 

automobiles... The nearby railroad station operates lines through small suburban 

towns where the low and semi-skilled may find work, while the interstate affords 

tenants with automobiles mobility to higher paying jobs for the technologically 

skilled. A small shopping center, a clinic, and neighborhood elementary and 

neighborhood schools are located within walking distance of Columbus Homes.

Branch Brook Park, a major city park designed by Frederick Olmsted, creator of 

Central Park, lies within six blocks. Id.

The Kretchmer projects are conveniently located in a quiet tree-lawn 

residential area, directly on the City of Elizabeth border. Although located 

away from the center of the city, Kretchmer is also within easy walking distance 

of grocery and drug stores, a community health center, churches, and a park. Id. 

at 15.

c. Ultimate Effects on the Community

77



Much of the City's public housing is concentrated in the virtually all 

Black traditional Central Ward of the City.^ This is the least economically 

developed area of the city. In the projects in this area, recent estimates show 

that there is no more than a handful of white residents. See Exh. 13, [Map of 

Public Housing In The City of Newark & Racial Demographics]. In the East Ward, 

where Kretchmer is located, residential patterns are more integrated, as the 

ward and projects border on the City of Elizabeth, which is over 75 percent 

white. County and City Data Book 1983 at 740. Although, public housing tenants 

in this portion of the East Ward are primarily minorities, several hundred 

tenants, amounting to nearly one third of the area's public housing tenants are 

white. See Exh. 13.

When Columbus was built it was located in the north ward which describes 

the area of town north O’-' the railroad tracks. See DeLnca Affidavit at par 16, 

Exh. 2. Although, the wards were redistricted in 1980 and Columbus became part 

of the new Central Ward, it is still on the other side of the railroad tracks 

and Interstate Route 28C from the traditional Central Ward, and is identified 

as a North Ward project. Id. Columbus still uses the North Ward zip code, 

north district post office and police station. Id. The area where Columbus is 

located is also more racially and economically diverse than the traditional 

Central Ward on the other side of the tracks. Although the immediate area is 

predominantly minority it does not contain much public or assisted housing other 

than Columbus. See Exh. 13. The public housing projects in the area are 

predominantly minority but there are a few hundred white tenants, id. Thus, as 

HUD recognized on a fair housing review i* authorizing the placement of 100

47 . See Supra at n.5 (displaying 1980 census tract data for traditional 
Central ‘ard).

78



units of family public housing in another area within the North Ward on a fair 

housing review:

This proposal for 100 units of family public housing is 
slated for census tract 0092. This tract, along with 
the surrounding areas, is predominately minority, 
specifically Hispanic. The area however has no assisted 
housing and as such offers opportunities for minorities 
to reside in an area not reviewed as a low income public 
housing impacted area. This proposal is in keeping with 
FH/EO's recommendation that assisted housing be 
dispersed throughout the community. Though the area is 
predominately minority, it does border’ areas having 
substantial non minority populations. As such we can 
recommend approval of this proposal and hope that this 
is the start of a movement to place housing in areas 
other than the traditional. Central Ward Zones.

(Emphasis added.) Memorandum from James R. Moore, Director, Fair Housing &

Equal Opportunity, HUD Newark Office to James J. Lo-Ptus, Housing Director 

October 4, 1983. Exh. 11. Moreover, the Columbus site is adjacent to large 

market rate high rise developments and there is private developer interest in 

additional market housing in the area. See OKM Columous Homes Rep't at 1, 

Exh. 1. However, because, the NHA proposes to sell the Columbus site to private 

developers, the plaintiffs will not have an opportunity to live in this more 

socially and economically integrated environment.

The removal of nearly 2,000 units from these a^eas at Kretchmer and 

Columbus will have a segregative effect. In addition, over 70 percent of the 

units provided for the relocation of plaintiffs whose units are to be 

demolished, are in the racially segregated and economically impacted traditional 

Central Ward. See HAP at Exh. B, Exh. 12. This includes 401-high rise family
A O

units at the Stella Wright projects, and 306 town house units slated for

Although, the NHA claims that ail high-rise public housing is 
unsuitable for families, it has not proposed the demolition of the Stella Wright 
projects. Although, some low-and mid-rise housing, including all buildings at

79



completion by the end of the year (NJ-2-38, 2-39, 2-40). This, too, will have 

a segregative effect.

Finally, although the NHA has not proposed any replacement units for

Kretchmer and only speculative replacement beyond the first 194 units for

Columbus, the vast majority of the NHA's proposed sites for replacement units

are in the Central Ward. See HAP at Exh. A, Exh. 12. At least 32 of the 44

acres identified by the NHA as available for replacement housing are in the
49Central Ward. See Id. . Thus, notwithstanding HUD's earlier instructions to 

the NHA to place public housing outside of "the traditional Central Ward Zones," 

tne NHA's proposed placement of replacement housing there will clearly have a 

segregative effect. This proposed conduct also expressly contravenes both HUD's 

fair housing site selection regulations, see 24 C.F.R. 941.202(c)(1), and HUD's 

new demolition replacement plan fair housing notice, see HUD Notice PIH 88-56(5) 

(May 20, 1988).

Thus, the racially discriminatory effects of the NHA's proposed actions 

would not be limited to the devastating consequences on the predominantly 

minority homeless and inadequately housed plaintiffs denied housing due to the 

reduction of scarce public housing units; it would also have racially

segregative effects injuring plaintiffs and the community at large Cf. 

Huntington Branch NAACP, 844 F.2d at 938 ("In sum, we find that the

Kretchmer, are proposed for demolition, none of the disproportionately white 
occupied projects are proposed for demolition, which would cause the relocation 
of significant numbers of white tenants to the traditional Central Ward. See 
Exh. 13 (revealing several predominantly white projects in white neighborhoods).

49This includes the 15.239 acres listed in the Old Third Ward Urban Renewal 
Project Area, the 5.690 acres in the Central Ward Urban Renewal Project Area, 
9.0 acres at the Scudder homes site and 3.730 acres at the Hayes Homes site. 
Id.

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disproportionate harm to blacks and the segregative impact on the entire 

community resulting from the refusal to rezone create a strong prima facie 

showing of discriminatory effect - far more than the Rizzo test would 

require.11). (Emphasis added.)

2. The Governmental Interest

The defendant can neither assert a "legitimate, bona fide interest," 

Resident Advisory Board v. Rizzo. 564 F.2d at 149, nor claim the "least 

discriminatory alternative" has been followed, id; NAACP v. Medical Center. 

Inc. 657 F.2d at 1333. There are presently estimates of 16,000 homeless persons 

in Newark alone and 7,000 families on the waiting list, OeLuca Affidavit at par. 

9, Exh. 2, yet defendant NHA, rather than seeking to expand the number of units 

availaole in the face of this critical shortage, has instead taken steps to 

reduce the public housing supply. The NHA has demolisned 816 units, and has 

proposed the elimination of over 5,000 units (out of an original 13,133 units), 

with only minimal replacement planned, or guaranteed. This unprecedented course 

of conduct cannot be said to advance a legitimate interest much less to 

constitute the least discriminatory alternative.

Indeed, although not part of plaintiffs' evidentiary burden, as discussed 

supra at Point II, plaintiffs' nationally recognized public housing experts have 

prepared less discriminatory alternatives to the proposed demolitions of nearly 

2000 units at Columbus Homes and Kretchmer. These alternatives demonstrate that 

a variety of options exist for the renovation and reconfiguration of Columbus 

Homes and Kretchmer to make those apartments more suitable to plaintiffs. As 

also discussed supra at Point III, the replacement plan for Columbus is 

inadequate and speculative and there is no proposed replacement for Kretchmer. 

The proposed renovation alternatives will both ensure the retention of more

81



housing units suitable and available to the desperately needy plaintiff classes, 

as well as the retention of substantial low income housing at two sites with 

particular social and functional value to low-income minority households. These 

options will also avert the adverse and highly segregative relocation and new 

site placement consequences to plaintiffs.

Thus, even if these demolitions were deemed permissible under the Housing 

and Community Development Act of 1987, they must be enjoined as violative of the 

Fair Housing Act and related civil rights protections, because this conduct has 

devastating discriminatory effects on plaintiffs, and the defendants have not 

and could not demonstrate the absence of less discriminatory alternatives to 

further legitimate governmental interests.

POINT VII

THE SECRETARY'S FAILURE TO PROPERLY CONSIDER OR AVERT 
THE RACIAL IMPACT OF DEMOLISHING NEARLY 2,000 UNITS AT 
COLUMBUS AND KRETCHMER HOMES IS VIOLATIVE OF HUD'S 
AFFIRMATIVE DUTY TO FURTHER THE PURPOSES OF TITLE VIII 
OF THE FAIR HOUSING ACT PURSUANT TO 42 U.S.C. 3608(e)(5)

42 U.S.C. 3608(e)(5)^ provides:

(e) The Secretary of Housing and Urban Development shall...

(5) administer the programs and activities 
relating to housing and urban development 
in a manner affirmatively to further the 
policies of [Title VIII of the Fair Housing Act].

"This statute is not precatory; HUD is obliged to follow these policies.

Action taken without consideration of them, or in conflict with them, will not

stand." Commonwealth of Pennsylvania v. Lvnn. 501 F.2d 848, 855 and n.23 (D.C.

Cir. 1974). Section 3608(e)(5) imposes a mandatory obligation on HUD "to do

50Plaintiffs may enforce this provision against .he Secretary in federal 
court under the Administrative Procedure Act. See NAACP v. Secretary of HUD. 
817 F.2d 149, 157-161 (1st Cir. 1987).

82



more than simply not discriminate itself; it reflects the desire that HUD use 

its grant programs to assist in ending discrimination and segregation to the 

point where the supply of genuinely open housing increases." NAACP v . Sec, of 

HUD. 817 F.2d 149, 155 (1st Cir. 1987).

The Third Circuit has recognized that this affirmative duty requires HUD 

to "thoughtfully weigh the question of racial impact," Business Association of 

University City v. Landrieu. 660 F.2d 867, 874 (3d Cir. 1981), investigate and 

determine the social factors involved in the approved housing choice, Shannon 

v. HUD. 436 F.2d 809, 819 (3d Cir. 1970); Young v. Pierce. 628 F. Supp. 1037, 

1055 (E.D. Tex. 1985), and weigh appropriate alternatives, Shannon. 436 F.2d at 

822; accord NAACP v. Sec. HUD. 817 F.2d at 157 ("HUD's pattern of grant 

activity in Boston reflects a failure over time, to take seriously its minimal 

Title VIII obligation to evaluate alternative courses of action in light of 

their effect upon open housing."). These obligations apply with equal force to 

public housing demolitions. See Jones v. HUD. 390 F. Supp. 579, 590 (E.D. La. 

1974).

As just demonstrated, the demolition of nearly 2,000 units at Columbus and 

Kretchmer will have a devastating impact on racial minorities in a variety of 

ways. This conduct will reduce the supply of scarce low income housing 

resources to thousands of desperately needy disproportionately minority homeless 

and inadequately housed persons. It will remove nearly 2,000 units from housing 

sites with particular social and functional value to low income minority 

households. Finally, these plans will increase segregation in the City by 

relocating displaced tenants and placing new replacement public housing in the 

racially and economically impacted traditional Central Ward, and by removing 

2000 units from more integrated areas of the City.

83



Nonetheless, neither HUD's demolition approval determinations nor any of 

the documents presented in the NHA's demolition applications as much as mention, 

much less thoughtfully weigh, these impacts or analyze alternative courses of 

action with less impact on housing opportunities for racial minorities. 

Moreover, to the extent the Secretary analyzed, investigated and weighed 

alternatives to the Columbus and Kretchmer demolitions, his failure to take 

affirmative actions to avert the unacceptaole racially adverse consequences of 

these demolitions, is a violation of his affirmative duty under 3608 (e)(5). 

Cf. Young v. Pierce. 628 F. Supp. at 1055. Accordingly, the Secretary's 

determination must be set aside.

POINT VIII

THE NHA'S PROPOSED DEMOLITION OF KRETCHMER AND COLUMBUS 
HOMES AND BLANKET REFUSAL TO FILL VACANT UNITS VIOLATE 
THE NEW JERSEY CONSTITUTION

In addition to plaintiffs' federal law claims, there are very substantial 

state law grounds on which they have a likelihood of success, and over which 

this Court can and should exercise pendent jurisdiction, since they arise from 

a common nucleus of operative fact.

These state law claims are based squarely on the rapidly developing New 

Jersey doctrine concerning affirmative housing obligations of governmental 

entities. While no New Jersey case directly addresses demolition of public 

housing, the clear import of this developing doctrine is that municipalities and 

their instrumentalities, in this case the NHA. have a constitutional obligation 

to do everything in their power to avoid the destruction of affordable low- 

income housing which they own and control, as well as a duty to take all 

reasonable steps within their power to expand such housing.

A. Article I. Paragraphs 1 and 2. of the New Jersey Constitution 
Embodies a Fundamental Right to Housing That Precludes

84



Defendant NHA's Course of Conduct.

The inadequately housed and homeless individuals who comprise the plaintiff 

class have a fundamental right to adequate, safe, and affordable housing that 

is guaranteed by Article I, paragraphs 1 and 2, of the New Jersey Constitution. 

The broad and expansive language of these sections impose on local governments 

a constitutional responsibility to exercise delegated powers in accordance with 

the general welfare, thus‘prohibiting a course of conduct in derogation of this 

fundamental right to housing. The NHA, as an instrumentality of the municipal 

government, must also exercise its delegated powers consistently with the 

general welfare. Defendant NHA's failure to take reasonable steps to increase 

the supply of public housing in a market of scarcity, accompanied by its ongoing 

commitment to reducing the number of available units through demolitions, 

warehousing of vacant units, and sales of scarce public housing land to private 

developers,, clearly constitutes such a forbidden course of conduct. This 

cdnduct is typified by the NHA's proposed demolition of 372 units at Krotchmer 

without the suggestion of replacing even one single unit.

Although the text of the New Jersey Constitution does not guarantee a

fundamental right to housing in express terms, the language of both paragraphs

1 and 2 of Article I is extremely broad and expansive. Paragraph 1 states that:

All persons are by nature free and independent, and have certain 
natural and independent rights, among which are those of enjoying 
and defending life and liberty, acquiring, possessing, and 
protecting property, and of pursuing and obtaining safety and 
happiness.

Paragraph 2 provides that "[government is instituted for the protection, 

security, and benefit of the people . ." The language of these sections have

been found to provide far-reaching protection for a variety of rights not 

specified in the text. See e^jg., Right to Choose v. Byrne, 91 N.J. 287 (1982)

85



(right to medicaid funding for medically necessary abortion); Southern 

Burlington County NAACP v. Township of Mt. Laurel, 67 N.J. 151, 174-75 (1975) 

(Mt. Laurel I) (prohibition on exclusionary zoning); see also State v. Schmid, 

84 N.J. 535, 555 (1980) ("The guarantee of our State Constitution have been 

found to extend to a panoply of rights deemed to be most essential to both the 

quality of individual life and the preservation of personal liberty.") These 

constitutional provisions provide a source of affirmative responsibilities for 

municipal and municipal instrumentalities alike.^

New Jersey decisions construing Article I have gone far toward recognizing 

a fundamental right to housing. Although the United States Supreme Court has 

concluded that there is no fundamenta1 right to adequate housing under the 

Fourteenth Amendment to the United States Constitution, see Lindsey v. Normet. 

405 U.S. 56, 74 (1972), it is well-settled that the New Jersey Constitution 

provides an independent source of rights and protections for the state's 

citizenry. See, e.g., Schmid. 84 N.J. at 553 ("The view that state 

constitutions exist as a cognate source of individual freedoms and that state 

constitutional guarantees of these rights may indeed surpass the guarantees of 

the federal Constitution has received frequent judicial expression"); Right to 

Choose. 91 N.J. at 303 (Article I, paragraph 1, expresses the "social,

A municipal instrumentality may not exercise its municipal functions 
in a manner that contravenes the constitutional obligations of its creating 
municipality. N.J.S.A. 55-14A-4 clearly states that a housing authority 
"constitutes an agency and instrumentality of the municipality or county creating 
it." See Housing Authority of the City of Newark v. Sanger. 142 N.J. Super. 332, 
340-41 (App. Oiv. 1976). While the housing authority is endowed with statutory 
powers independent of the municipality, "it nonetheless engage[s] in a municipal 
function.'" De Vita v. Housing Authority of City of Paterson. 17 N.J. 350, 360 
(1955). It is thus, wel1-settled that a municipal housing authority may not 
exercise its "public and essential goverrmertal functions," N.J.S.A, 55:14A-7, 
in contravention of constitutional 1 imitations. See, e_jg., Kutcher v. Housing 
Authority of the City of Newark. 2J N.J. 181, 188 (1955).

86



political, and economic ideals of the present day in a broader way than ever 

before in American constitutional history.") (quoting Milmed "The New Jersey 

Constitution of 1947, " in N.J.S.A. Const., Art. I -111 91 at 110 (1971)). See 

also Pollock, State Constitutions as Separate Sources of Fundamental Rights. 35 

Rutgers L. Rev. 707, 707 (state constitutions have become increasingly important 

as guarantors of fundamental rights);' Brennan, State Constitutions and the 

Protection of Individual Rights. 90 Harv. L. Rev. 489, 491 (1977) ("State 

constitutions, too, are a font of individual liberties, their jrotections often 

extending beyond the Supreme Court's interpretation of federal law.").

In determining whether an asserted right qualifies as a fundamental right, 

the New Jersey state courts will consider "the traditions and [collective] 

conscience of our people' to determine whether a principle is so rooted [there]

. . . as to be ranked as fundamental'" (citations omitted). King v. South 

Jersey National Bank. 66 N.J. 161, 178 (1974). There is a readily discernible 

"collective conscience" within the state regarding the right to housing. All 

three branches of the state government have concurred in the principle that the 

prevention of homelessness is a necessary governmental function, at least, as 

here, where private resources have proved unavailing. See Maticka v. City of 

Atlantic Citv. 216 N.J. Super. 434, 447-50 (App. Div. 1987). Judicial decisions 

have consistently accorded "the right to decent housing a preferred status under 

our State Constitution." Taxpayers Ass'n of Weymouth Township, Inc, v. Weymouth 

Townsnio. 80 N.J. 6, 44 (1976), appeal dismissed. 430 U.S. 977 (1977).

The provision of decent, safe, and sanitary shelter for the needy has long 

been recognized as an indispensable component of the promotion of the general 

welfare under Article I. It is not only "elementary that the very purpose of 

government is to provide for the health, safety and general welfare of the

87



people," but also that "the question of whether a citizenry has adequate and 

sufficient housing is certainly one of the prime considerations in assessing the 

general health and welfare of that body." New Jersey Mortgage Finance Agency 

v. McCrane, 56 N.J. 414, 420 (1970). This belief in the fundamental right to 

housing was expressed with particular poignancy in Apartment Housing Council v. 

Mayor & Council of the Borough of Ridgefield. 123 N. J. Super. 87, 95 (Law Div. 

1973), aff'd per curiam. 128 N.J. Super 192 (1974), where the court stated, "The 

dignity of every human being demands a right to be housed." The New Jersey 

Supreme Court has stated in a similarly uncompromising fashion that, "[T]here 

cannot be the slightest doubt, that shelter, along with food, are the most basic 

human needs." Mt. Laurel I. 67 N.J. at 178; see also Robinson v. Cahill. 62 

N.J. 473, 495 (1973) ("surely no need is more basic than food and lodging.").5  ̂

Where such an important personal right is affected by governmental action, 

the New Jersey Constitution demands a compelling demonstration of public need 

to justify the challenged action^ No 'uch public need can be shown on these 

iafcts, where the NHA's actions in reducing the available supply of affordable

52The high priority accorded by the judiciary to the preservation of health 
provides a separate basis for recognizing the fundamental right to housing. 
Nearly eighty years ago, New Jersey courts recognized that:

o

[a]mong the most [important] of personal rights, without which man could 
not live in a state of society, is the right of personal security, 
including the preservation of a man's health from such practices as may 
prejudice or annoy it,' a right recognized, needless to say, in almost the 
first words of our written Constitution.

Right to Choose, 91 N.J. at 304 (quoting Tomlinson v. Armour & Co., 75 N.J.L. 
748, 757 (E. & A. 1908). The lack of affordable, safe, and sanitary housing 
inevitably subjects the homeless and inadequately housed to serious physical and 
psychological harm. See, e.g.. Report of the Governor's Task Force on the
Homeless (October 1985) at 33-34 (quoting Newark Pre-School Council Ass'n for 
Children of New Jersey, Not Enough to Live On) and at 40-43 quoting National 
Social Science and Law Project, The Cost of an Adequate Living Standard in N.J. 
(Sept. 1983)).

88



housing in a scarce market run counter to the state's strong legislative and 

judicial declarations on the fundamental importance of the availability of 

affordable housing and on the critical shortage of such safe, sanitary 

dwellings. See, e.g.. the Local Housing Authorities Law, N.J.S.A. 55:14A-2.

B. Article I. Paragraphs I and 2, Requires That Defendant 
NHA Utilize Scarce Housing Resources in a Manner 
Consistent with the General Welfare.

Even assuming arguendo that the New Jersey Constitution does not recognize 

a fundamental right to housing, the Court may yec grant relief on a narrower 

basis. At a constitutional minimum, Article I, paragraphs 1 and 2, must

prohibit a municipal housing authority from squandering scarce resources in 

contravention of the general welfare. Defendant NHA's a.tions in preferring 

demolition, warehousing and neglect over preservation and renovation, violate 

these constitutional provisions.

A municipal housing authority may not constitutionally adopt policies that 

foreclose it,from providing a readable opportunity for low-and moderate-income 

housing. The New Jersey Supreme Court has unmistakably imposed on

municipalities a broad constitutional obligation to meet the housing needs of 

their indigenous poor and their regional fair share of the population. In Mount 

Laurel I. the New Jersey Supreme Court found that a developing municipality, in 

excluding housing for lower-income people, had violated its constitutional 

responsibility to affirmatively afford a reasonable opportunity for the 

construction of its fair share of the present and prospective regional need for 

low-and moderate-income housing. 67 N.J. at 179-30. The proper provision of 

adequate housing of all types for all categories of people was deemed an 

"absolute essential in promotion of the general welfare." 67 N.J. at 179.

Accordingly, a developing municipality must affiHi.atively plan and provide

89



a "reasonable opportunity for an appropriate variety and choice of housing, 

including, of course, low and moderate cost housing, to meet the needs, desires, 

and resources of all categories of. people who may desire to live within its 

boundaries;" or put negatively, such a municipality "may not adopt regulations 

or policies which thwart or preclude that opportunity." 67 N.J. at 179. Art. 

I, par. 1 requires that a municipality exercise its authority in accordance with 

the general welfare and with the state constitutional requirements of 

substantive due process and equal protection of the laws, "the requirements of 

which may be more demanding than those of the federal constitution." 67 N.J. 

at 174-75, 180-81, and presumably more demanding than those of federal statutory 

law as well.

The scope of this constitutional obligation was subsequently expanded. 

Southern Burlington Countv NAACP v. Township of Mt. Laurel. 92 N.J. 158 (1983) 

(Mt. Laurel III.. The Supreme Court here extended the original Mt. Laurel 

obligation to encompass every municipality which has been designated by the 

state as a growth area, Id. at 226-27, 238-39. Developed municipalities, 

including the central cities and built-up suburbs, were likewise deemed subject 

to the Mt. Laurel obligation. Id. at 248, n. 21.

The NHA's policy of demolition and disposition clearly threaten the 

general welfare by further reducing the stock of affordable housing in a 

continually diminishing and deteriorating market. See HAP at 7-11, Exh. 12. 

Uncontroverted evidence demonstrates that a disproportionate large part of 

Newark's housing stock is in severe disrepair, and that an even larger part of 

Newark's lower-income population is spending a disproportionate amount for 

shelter. Id. An already critical housing shortage is rendered all the more 

desperate by the continuing erosion in the. number of available units. Id. The

90



present situation confirms all too well the words of the New Jersey Supreme

Court in Mt. Laurel II: "Upper and middle income groups may search with

increasing difficulty for housing within their means; for low and moderate 

income people, there is nothing to search for." 92 N.J. at 212.

The city's acute shortage of decent and affordable housing is causally 

connected to the city's level of homelessness. There are an estimated 16,000 

homeless in Newark. DeLuca Affidavit at par. 9, Exh. 2.

Given this market of scarcity, at a minimum the constitutional requirement

that municipalities afford a "reasonable opportunity" for low-and moderate-

income housing prohibits such squandering of limited housing resources. Rather

than preserving scarce resources through a plan of reasonable renovation,

defendant NHA has preferred a policy of demolition, warehousing, and private

sales. For example, the anticipated cost of demolishing 372 units at Kretchmer-

-units which the NHA vows not to replace--amounts to at least $1.7 million

(estimated costs1 for demolition and related activities have ranged as high as

at least $3.4 million). See Exhs. 41, 42. This sum could alternatively be
4

used to rehabilitate existing units for the homeless and inadequately housed 

plaintiff class. Thus, defendant NHA's course of conduct runs counter to the 

general welfare by dissipating the very resources that could otherwise afford 

to the poor and homeless a realistic opportunity of accommodating their housing 

needs.

This court is empowered to require the NHA to refrain from needlessly 

restricting access to affordable housing--including its disposition and 

demolition of projects--as well as to order the authority to undertake 

affirmative measures--such as the renovation and renting of existing units. 

Cf. Mt. Laurel II, 92 N.J. at 261-62, 270-71. Requiring such affirmative

91



measures is not beyond the scope of this court's authority, for unless such 

affirmative acts are required, constitutional guarantees will "embody rights in 

a vacuum, existing only on paper." (citation omitted), Robinson v, Cahill, 69 

N.J. 133, 147, cert, denied sub., nom Klein v. Robinson. 423 U.S. 913 (1985); 

accord Mt. Laurel II. 94 N.J. at 270-71.

CONCLUSION

For the reasons stated herein, the plaintiffs' Motion for a Temporary 

Restraining Order and Preliminary Injunction halting the imminent demolition of 

Columbus Homes and Kretchmer all demolition related activity, and the failure 

to rent vacant habitable units, should be granted.

Respectfully Submitted,

Legal Services of New Jersey
78 New Street
New Brunswick, New Jersev 08901

By:_________________________________
Melville 0. Miller, Jr.

Joseph Harris David

NAACP Legal Defense and Educational 
Fund, Inc.

i By: Julius L. Chambers,
John Charles Boger, and 
Jon C. Dubin

99 Hudson Street, 16th Floor 
New York, New York 10013

Essex-Newark Legal Services
By: Hugh Heisler and Paul Giordano
1095 Raymond Blvd.
Newark, New Jersey 07102 
(201) 624-4500

Puerto Rican Legal Defense and 
Education Fund
By: Ruben Franco, Richard Rivera 
and Arthur Baer

92



99 Hudson Street
New York, New York 10013

Margaret Welch 
7 South Street 
Newark, New Jersey 07102 
(201) 292-6542

Michaelene Lough!in
Seton Hall Law School Clinic
1095 Raymond Blvd
Newark, NJ 07102
(201) 642-8848

Attorneys for Plaintirfs

* Plaintiffs gratefully acknowledge the assistance of Margaret Stevenson, 
Esq. and Eileen Tinan, a third-year student at Columbia University School of 
Law, in the writing and preparation of this brief.

*

93