National Housing Law Project Housing Law Bulletin

Court Upholds Tenants' Challenge to CHA's Demolition Plan

At the end of January, the United States District Court in Chicago denied a motion of the Chicago Housing Authority (CHA) to dismiss a suit brought by the tenants' organization in Cabrini-Green, challenging the CHA's plan to demolish eight buildings in their project. Cabrini-Green Local Advisory Council v. Chicago Housing Authority, No. 96 C 6949 (N.D. Ill. Jan. 21, 1997).¹ The case is the first brought challenging plans for demolition of public housing since the one-for-one replacement requirement was suspended by Congress. It is also the first case brought by tenants calling into question HUD's plan to have 100,000 units of public housing demolished by the year 2000.

The Facts

The case involves Cabrini-Green, a very large public housing development of approximately 3,600 units housing 6,000 residents. It is located on Chicago's north side, adjacent to the Gold Coast, an affluent Chicago neighborhood. Ninety-four percent of the families at Cabrini are headed by African Americans. It is a prime target in HUD's efforts to transform public housing, through demolition, displacement of the current tenants and development of many fewer replacement units that will be occupied by tenants with significantly higher incomes.

When the HOPE VI program was created by the FY 1993 Appropriations Act and the 1992 Housing and Community Development Act, CHA applied for $50 million to revitalize part of Cabrini. At that time the plan was to demolish three buildings with 660 units, replace them on a one-for-one basis with some new public housing and some certificates, and to rehabilitate another building that had 60 units.

HUD approved the HOPE VI application and subsequently approved the applications to demolish the three buildings, based upon one-for-one replacement plans for each building. HUD did not approve or disapprove the overall replacement housing plan for Cabrini. Having gotten approval for demolition, CHA razed two of the three buildings. Then, after the one-for-one replacement requirement was suspended and HUD began pushing private/public partnerships for the transformation of public housing, CHA developed a new plan for Cabrini. That plan called for the demolition of eight buildings, not three, with 1,324 units. Instead of one-for-one replacement, only 300 to 325 new units for very low-income tenants would be built. The building previously slated for rehabilitation would be demolished under the new plan.

When CHA began its HOPE VI plan, it had promised the tenants' organization, the Local Advisory Council (LAC), that the tenants displaced by the demolitions and rehabilitation would be offered relocation in the area of Cabrini-Green and that CHA would meet with LAC to develop a master plan for Cabrini. Subsequently, CHA agreed that tenants in one of the buildings slated for demolition would not be relocated until replacement housing had been built. In addition, CHA promised that tenants in the building to be rehabilitated would be guaranteed a right to move back in if they agreed to move out, which they did.

In the development of the final plan, CHA violated all of its promises to the LAC and the Cabrini tenants. It developed the new plan behind closed doors, excluding LAC from the meetings where all the decisions were made. It decided to demolish without replacement housing the building it had promised to keep until replacement housing was completed. It decided to demolish the building that other tenants had moved out of when they had been promised the right to return after its rehabilitation.

The Claims for Relief

The suit brought by LAC against CHA included 22 claims for relief. The first four were based on the Fair Housing Act and the fifth was based on the Title VI of the 1964 Civil Rights Act.² The Fair Housing Act claims were that the plan for Cabrini-Green would require demolition of 1,300 units, displacement of 675 families, mostly African American people, and the provision of only 300 to 325 replacement units for people in the income range of the displaced tenants. The allegation was that implementation of that plan would make housing unavailable to at least 300 African American families on the basis of their race and that those families were not being offered opportunities for relocation housing outside areas of racial concentration. In addition, there were allegations that those actions would have a discriminatory impact on women and families with children.

The next five claims were based upon the HOPE VI legislation. 42 U.S.C. § 1437l note (1994). They were, first, that CHA's plan for Cabrini would not revitalize it, as required by the HOPE VI statute. Instead, it would result in a net loss of 1,000 units of housing for very low-income people. Next, the plaintiff claimed that the CHA plan did not conform to the City of Chicago's Consolidated Plan, as required by HOPE VI, because the Consolidated Plan called primarily for preservation of existing housing, measures to increase the supply and availability of resources for homeless people, and improvement of the housing and quality of life for low-income public housing residents. Finally, the HOPE VI claims alleged that CHA was obliged to make tenants displaced from Cabrini eligible for the replacement housing funded by HOPE VI and to provide them relocation housing of their choice.

The next two claims, 11 and 12, were based upon the public housing demolition statute.³ They were that CHA had failed to consult with LAC regarding the demolition plans, as required by that statute, and that one of the buildings slated for demolition was not obsolete and could be returned to a useful life.

Claim 13 asserts that CHA's plan violated the statute on distressed public housing,⁴ because it had created a preference for admission to the units to be built before holding a public hearing to secure the views of the tenants.

The fourteenth claim was that CHA had violated the Uniform Relocation Act.⁵ The allegations were that CHA had failed to assess the relocation needs of the families, to ensure the displaced tenants that they would get comparable replacement housing and to make sure that there were relocation opportunities outside areas of African American concentration.

Beyond these 14 federal claims, the complaint also states eight claims under state law. The first, claim 15, was that CHA had exceeded its authority under the state law creating the housing authority. The claim, in essence, was that CHA had a responsibility to relieve the shortage of decent housing. Taking 1,000 units of public housing off the market was not consistent with that responsibility.

The next five claims covered contractual agreements that CHA had reached with LAC and then breached. The breaches were (1) developing the plan without negotiating with LAC, (2) failing to provide enough replacement housing to meet the needs of all displaced tenants, (3) forcing the tenants to leave one of the buildings before replacement housing had been developed, (4) failing to provide displaced tenants relocation opportunities in the Cabrini neighborhood, and (5) demolishing the one building it had promised to rehabilitate.

The final claim was that CHA was estopped from demolishing the one building that had been slated for rehabilitation, because the tenants in it had moved out of their homes in reliance upon CHA's promise that it would be rehabilitated and they would be able to return after the rehabilitation.

Grounds for the Motion to Dismiss

Ripeness

As is usual in major housing litigation, the defendants attempted to have the suit dismissed on grounds unrelated to the merits of the claims. The first ground was that the case was not ripe for adjudication because CHA's plan had not been finalized and no one had yet suffered any injury from the tentative plan, nor was any injury imminent.

The court rejected CHA's ripeness claim. In its view, regardless whether the plan was final, some injury had already been caused by CHA's actions and more injury was imminent. Because CHA had promised LAC that it could participate in the formulation of the plan and because the demolition statute required CHA to consult with tenant organizations when preparing demolition plans, CHA's exclusion of LAC from the plans' development had already injured LAC. In addition, CHA had begun taking concrete steps to implement the plan, including vacating buildings and not maintaining and securing them, including the one previously slated for rehabilitation. Those steps made it clear that the potential for injury from the final plan was sufficiently imminent to make the dispute ripe for adjudication. The court concluded that a claim may be ripe even before HUD approves a final plan where the injury occurs during the process of applying for HUD's approval and is being made imminent by steps taken during that process.

Standing

CHA's next argument before going to the merits of the dispute was that LAC did not have standing to bring nine of the claims set out in the complaint. Those nine claims were the Fair Housing Act claims, the Title VI claim, the claims that the tenants would be denied eligibility for the replacement housing and relocation housing of their choice, outside areas of minority concentration, as required by the HOPE VI Statute and the Uniform Relocation Act, and, finally, the promissory estoppel claim.

CHA's position on standing was that these claims would require factual inquiries about individual tenant's injuries and could not be brought by the tenants' organization for itself or on behalf of the members. The court rejected these standing arguments as well. It held that the organization could sue on its own behalf, as long as it alleged, and eventually proved injury to itself, without having to allege and prove that identified individual members were being injured. The allegations that LAC had been excluded from the planning process and had had to devote institutional resources to finding out what the plan was and to keep it from injuring the tenants was sufficient injury in fact. The court rejected CHA's argument that even if LAC was suing on its own behalf, it would have to identify particular tenants who would be injured by CHA's violations of the laws alleged in the complaint.

The court also addressed the question whether LAC had standing to bring this suit on behalf of its members and concluded that it did. As an organizational plaintiff, it had to allege facts showing (1) that the members would have standing to sue in their own right, (2) that the members' interests are germane to the organization's interests, and (3) that it would not be necessary for individual members to participate in the lawsuit.⁶

Because the third element of the standing test is merely a prudential consideration established by the courts, it was irrelevant to the Fair Housing Act claims, since that Act has already been interpreted as overriding judicially created prudential limitations on standing.⁷ Thus the plaintiff would not have to show that participation of individual members was unnecessary for resolution of the Fair Housing Act claims. In addition, the complaint showed that CHA's actions would injure both the interests of the members in being members of LAC and their individual rights under the Fair Housing Act and the laws relating to relocation.

Private right of action under Section 1983

After claiming that LAC had no standing to bring certain claims, CHA then asserted that there was no private right of action to bring eight of the claims in the complaint. Seven of those eight claims were based on federal statutory law, and CHA claimed that the statutes in question were too vague to create rights that could be enforced under Section 1983.⁸

The court rejected CHA's position with regard to four of the private right of action claims. The first claim was that CHA's plan would not "revitalize" Cabrini-Green as required by the Hope VI statute. The court acknowledged that "revitalize" was not very specific, but concluded that some activities at the extremes, such as spending all the HOPE VI funds on demolition without rebuilding anything or CHA's turning its back on the project, would violate CHA's HOPE VI duties and LAC's rights. The second and third claims were that CHA's plan was not consistent with Chicago's Consolidated Plan. Here, the court found that the greater specificity in the Chicago's Consolidated Plan made it even easier to find an enforceable right to have the Cabrini plan conform to the city's plan. The fourth claim involved CHA's duty to consult with LAC in formulating the demolition plan, imposed by the public housing demolition statute. The court found that duty also to be enforceable by LAC.

The court discussed two counts that were based upon two statutory requirements on replacement housing. One was the HOPE VI statute, which provides that people displaced by HOPE VI-funded activities are eligible for any replacement housing built with HOPE VI funds. The second statute was the provision in the demolition statute providing that displaced tenants are entitled to be relocated to decent housing which is "to the maximum extent practicable," housing of their choice. The court concluded that the "maximum extent practicable" language in the demolition statute made that duty too ambiguous to be enforced.

That conclusion is probably a mistake. The separate duty to provide relocation housing of the displaced persons' choice, which is qualified by the "to the maximum extent practicable" language, is not too ambiguous for enforcement. A very similar issue was encountered in litigation to enforce HUD's duty to eliminate the hazards of lead-based paint "as far as practicable." The court held that that duty was specific enough to be enforced, because "practicable" means anything that is possible, not merely a balancing of conveniences.⁹ "To the maximum extent practicable" seems to be an even more stringent standard and thus a more enforceable one.

The statute making HOPE VI displacees eligible for HOPE VI replacement housing does not itself have the "to the maximum extent practicable" qualifier. Thus there is no ambiguity about that duty. The plaintiff should be allowed to amend the complaint to seek enforcement of that statute alone.

The other federal statutory claim that the court dismissed was that one of the buildings slated for demolition did not fit into the statutory categories for buildings that may be demolished. The statute authorizes demolition only of buildings that are obsolete and for which there is no reasonable program of modifications that would return the project to a useful life.¹⁰ The court concluded that the term "useful life" was too vague to be judicially enforceable, and that the statute itself merely stated Congress' desires but did not impose any requirements. That latter position, however, is without any support in the statutory language.

CHA also claimed that the plaintiff had no implied private right of action to enforce the Illinois statute that sets out a PHA's responsibilities and duties. After analyzing Illinois cases, the court agreed with the defendants and dismissed that claim.

Jurisdiction over state law claims

CHA's fourth diversionary assertion was that the court did not have jurisdiction over the state law claims. That position was based upon a misapplication of a Seventh Circuit case on enforcement of consent decrees to the facts of this case.¹¹ The court quickly distinguished Evans and dismissed CHA's position on jurisdiction out of hand, finding that the supplemental jurisdiction statute provided jurisdiction over the state law claims.

The Merits

When it came to the merits, the court refused to dismiss on the grounds that the plaintiff had failed to state a claim. CHA had asserted that the Fair Housing Act claims would fail for three reasons, but the court rejected all three. The first was that the plaintiff had not alleged any discriminatory actions, but the court held that the exclusion of over 300, mostly African American, tenants from the newly revitalized Cabrini-Green and their displacement into racially segregated neighborhoods adequately alleged a violation of the Fair Housing Act. The second was that the plaintiff had to allege that CHA was acting intentionally to discriminate against the African American tenants, but the court correctly pointed to the well established law that discriminatory effect establishes Fair Housing Act and Title VI regulatory violations.¹² Finally, the court rejected CHA's claim that if the plaintiff's allegations stated a claim under the Fair Housing Act, CHA would never be able to open up Cabrini-Green to a wider range of tenants. In the court's view, that argument was appropriate at the trial or summary judgment stage when all the facts were settled.

The court also rejected CHA's claims that the plaintiff was in effect collaterally attacking the judgment in Gautreaux v. Chicago Housing Authority¹³ by asserting that displacement of LAC's members from Cabrini and their exclusion from the revitalized neighborhood violated Title VI. At the motion to dismiss stage, it was not clear to the court that there was an inherent conflict between what the plaintiff sought in this case and what the plaintiffs in Gautreaux had secured.

CHA also attacked the merits of the plaintiff's contract claim, asserting that LAC was not a party to some of the alleged contracts, that CHA was not bound by agreements made by its own executive director, and that the terms of some of the contracts were unascertainable. A similar assertion was made that the promissory estoppel claim must fail because CHA's promise that the tenants could return after rehabilitation was ambiguous. The court quickly rejected all of these arguments.

This decision is of great significance. At its core is the principle that housing authorities and HUD cannot run roughshod over the interests of public housing tenants who will be adversely affected by the campaign to demolish all the deteriorated public housing in the country. PHAs may not loosely make promises to the tenants that they will not be hurt and then proceed to ignore those promises as if they had never been made. They cannot ignore the fact that the vast majority of the tenants in these buildings are people of color and that they will suffer because of these demolitions. The fact that the end result may be better housing for other people, some of whom may be people of color, does not lessen the injury suffered by these particular people. Fortunately, the courts are sensitive to these issues. One would hope that HUD and the PHAs would be the same.

¹Plaintiff was represented by Richard Wheelock, John Witcomb, Brenda Graver and Ira Rheingold of the Legal Assistance Foundation of Chicago.

²42 U.S.C.A. § 3600 (West 1994) and 42 U.S.C.A. § 2000d (West 1994).

³42 U.S.C.A. § 1437p (West 1994).

⁴42 U.S.C.A. § 1437v (West 1994).

⁵42 U.S.C.A. §§ 4601 et seq. (West 1994).

⁶Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333 (1977).

⁷Havens Realty Corp. v. Coleman, 455 U.S. 363, 372-74 (1982).

⁸42 U.S.C.A. § 1437p (West 1994).

⁹Ashton v. Pierce, 541 F. Supp. 635, 641 (D.D.C. 1982), aff'd, 716 F.2d 56 (D.C. Cir. 1983).

¹⁰42 U.S.C.A. § 1437p(a)(1) (West 1994).

¹¹Evans v. City of Chicago, 10 F.3d 474 (7th Cir. 1993), cert. denied, 114 S.Ct. 1831 (1994).

¹²Metropolitan Hous. Dev. Corp. v. Village of Arlington Heights, 558 F.2d 1283 (7th Cir. 1977) (Fair Housing Act); Guardians Ass'n v. Civil Service Comm'n, 463 U.S. 582, 584 n.2 (1983) (Title VI regulations).

¹³304 F. Supp. 736 (N.D. Ill. 1969).