Newark Coalition for Low Income Housing v. Newark Redevelopment Housing Authority Memorandum of Law
Public Court Documents
January 1, 1989

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Brief Collection, LDF Court Filings. Newark Coalition for Low Income Housing v. Newark Redevelopment Housing Authority Memorandum of Law, 1989. 7cc0658f-bf9a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/680487ab-f33e-4e56-9fd3-f779992922c0/newark-coalition-for-low-income-housing-v-newark-redevelopment-housing-authority-memorandum-of-law. Accessed April 19, 2025.
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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. 80 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