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JOHNSON v. PENNSYLVANIA HOUSING FINANCE AGENCY ET AL. (09/19/73)

decided: September 19, 1973.

JOHNSON
v.
PENNSYLVANIA HOUSING FINANCE AGENCY ET AL., APPELLANTS



Appeal from Commonwealth Court of Pennsylvania, No. 139, C.D. 1973, in re Joyce Johnson v. Pennsylvania Housing Finance Agency, John Chately, Jr., William H. Wilcox, Robert R. LaVelle, Leon E. Hickman, James A. Lineberger, Richard J. Fox, John M. O'Brien, and John McCoy.

COUNSEL

Jerome J. Shestack, with him Thomas R. Schmuhl, and Schnader, Harrison, Segal & Lewis, for appellants.

Mitchell S. Lipschutz, for appellee.

Justin J. Blewitt, Jr., Deputy Attorney General, Peter W. Brown, First Deputy Attorney General, and Israel Packel, Attorney General, for amicus curiae, Commonwealth of Pennsylvania.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy and Manderino, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Nix took no part in the consideration or decision of this case.

Author: Roberts

[ 453 Pa. Page 331]

This is a taxpayer's suit in equity, challenging the constitutionality of the recently enacted Housing Finance Agency Law, Act of December 5, 1972, P. L. 1259, §§ 1 et seq., 35 P.S. §§ 1680.101 et seq. (Supp. 1973). This Court has assumed plenary jurisdiction.*fn1 Given the innovativeness of the undertaking authorized by the

[ 453 Pa. Page 332]

Housing Finance Agency Law, "[i]t [has] naturally invite[d] . . . the attack of those who are inclined to regard all experiments in our social and economic life as presumptively unconstitutional." Dornan v. Philadelphia Housing Authority, 331 Pa. 209, 213, 200 Atl. 834, 836 (1938).

Appellee, plaintiff below, has presented to this Court a veritable barrage of constitutional arguments apparently "in the hope that a stray shot may find its way to some vital target." Belovsky v. Redevelopment Authority, 357 Pa. 329, 341, 54 A.2d 277, 283 (1947). However, our determination of the merits of appellee's contentions leaves the Housing Finance Agency Law unscathed; it is undoubtedly constitutional in all respects.

Specifically, appellee argues that the Housing Finance Agency Law (hereinafter "H.F.A.L.") is unconstitutional in that it (1) does not serve a public purpose; (2) contravenes the constitutional prohibition against delegation of legislative power; (3) authorizes a debt or pledge of credit by the Commonwealth; (4) constitutes an irrevocable grant of special privileges and immunities; (5) provides for a prohibited exemption from taxation; (6) creates a special or local law; and (7) fails, in its title, to state the full subject of the Law. As noted above, all of these contentions are without legal substance.

The legislative findings*fn2 make clear that the H.F.A.L. stems from and is mandated by the critical

[ 453 Pa. Page 333]

    housing shortage presently existing throughout the Commonwealth with respect to low income, moderate

[ 453 Pa. Page 334]

    income, and elderly persons and familiies.*fn3 H.F.A.L., 35 P.S. § 1680.102 (Supp. 1973). See also Reitmeyer v. Sprecher, 431 Pa. 284, 290, 243 A.2d 395, 398 (1968). In response to this problem of critical state concern, and in the hope of alleviating it, the Legislature has established the Pennsylvania Housing Finance Agency (H.F.A.L., 35 P.S. § 1680.201 (Supp. 1973)) as a "public corporation and government instrumentality," with express powers to administer two basic programs involving

[ 453 Pa. Page 335]

    housing purchases (H.F.A.L., 35 P.S. § 1680.301a (Supp. 1973)) and housing rentals (H.F.A.L., 35 P.S. § 1680.401a-404a (Supp. 1973)).

Under the housing purchase program, the Housing Finance Agency is authorized to lend funds to any mortgagor for the "construction, reconstruction or rehabilitation of housing units for sale to individual purchasers of low or moderate income . . . ." H.F.A.L., 35 P.S. § 1680.301a(a) (Supp. 1973). All sales are to be supervised by the Agency. Once a unit is sold to a purchaser of low or moderate income, the original mortgagor's obligation to the Agency is released, and the new purchaser assumes his own mortgage obligation to the Agency. Under this phase of the program, the Agency is additionally empowered to issue loans directly to individuals of low or moderate income for the purchase of housing units. H.F.A.L., 35 P.S. § 1680.301a(e) (Supp. 1973).

The rental program (H.F.A.L., 35 P.S. § 1680.401a-404a (Supp. 1973)) authorizes the Agency to ". . . make mortgage loans to mortgagors for such projects as in the judgment of the Agency have promise of supplying well-planned, well designed apartment units which will provide housing for low and moderate income persons . . . ." H.F.A.L., 35 P.S. § 1680.402a (Supp. 1973). All loans granted by the Agency subject the mortgagor to regulation and limitation of rents charged, and permissible profits earned.

In order to finance the above programs, the General Assembly has empowered the Agency to issue bonds and notes, which are to be payable out of the Agency's revenue, including the proceeds of its mortgage loans. H.F.A.L., 35 P.S. § 1680.501a (Supp. 1973). As the H.F.A.L. declares, the notes and bonds issued by the Agency do not constitute "a debt of the Commonwealth or of ...


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