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FOX v. UNITED STATES HUD

January 10, 1979

Barbara FOX et al.
v.
The UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT et al.



The opinion of the court was delivered by: NEWCOMER

MEMORANDUM AND ORDER

The parties are presently before the Court requesting its approval of a settlement reached in this class action lawsuit. The lawsuit concerns urban renewal activities in the Washington Square West Area (Area) of the City of Philadelphia (City). After reviewing the terms of the settlement as set forth in the stipulation for Consent Decree and considering the arguments of the parties and the objectors, the Court has decided under Rule 23(e) of the Federal Rules of Civil Procedure to approve the settlement.

 BACKGROUND

 This case has a long, but fascinating, pretrial history set in a bed of tensions generated by the nature of the parties and disputes involved. In December 1969, the original Washington Square West Project Area Committee filed an action (Civil Action No. 69-2972) against the United States Department of Housing and Urban Development (HUD) and the Redevelopment Authority of the City of Philadelphia (RDA) seeking to enjoin urban renewal activities in the Area due to an alleged lack of adequate citizen participation. HUD was charged with unlawfully refusing recognition of the plaintiff as the representative of the residents in the Area. A petition to intervene in the action was filed in January, 1970, by another group of Area residents, including the named plaintiffs in this action, who claimed that the original plaintiff was not an adequate representative; in addition the intervenors sought construction of housing for low and moderate income persons. The representation dispute was finally resolved by HUD recognition of a democratically chosen Washington Square West Project Area Committee (PAC).

 The newly filed class action was brought on behalf of present and former residents of the Area who alleged that defendants' urban renewal activities drove low and moderate income persons, predominantly nonwhites, out of the Area and transformed a formerly racially and economically integrated community into a predominantly white, affluent one. They sought relief under the Housing Act of 1949, 42 U.S.C. § 1455(c); the Uniform Relocation Act of 1970, 42 U.S.C. § 4601 et seq.; the Housing and Community Development Act of 1974, 42 U.S.C. § 5301 et seq.; the Fair Housing Act, 42 U.S.C. § 3601 et seq.; the Fifth and Fourteenth Amendments, and the Philadelphia Ordinance of September 25, 1967.

 Plaintiffs moved for certification of a class composed of four distinct subclasses:

 
I. PRESENT RESIDENTS (OWNERS AND RENTERS) OF THE WASHINGTON SQUARE WEST, UNIT 2, URBAN RENEWAL AREA WHO ARE NOT NOW SCHEDULED TO BE DISPLACED THROUGH URBAN RENEWAL ACTIVITIES, WHO DO NOT QUALIFY FOR FEDERALLY ASSISTED LOW OR LOW-MODERATE INCOME HOUSING, BUT WHO HAVE MOVED INTO THE PROJECT AREA OR REMAINED IN THE PROJECT AREA UNDERSTANDING AND RELYING ON THE FACT THAT THE PROJECT AREA WAS COMPRISED OF A DIVERSE AND INTEGRATED RACIAL AND ETHNIC MIX OF PEOPLE AND DESIRE AND INTEND TO LIVE IN SUCH AN AREA.
 
II. ALL BLACK PERSONS WHO HAVE BEEN FORCED TO MOVE FROM THEIR FORMER RESIDENCES IN THE PROJECT AREA AS A RESULT OF URBAN RENEWAL ACTIVITIES AND WHO HAVE HAD TO RELOCATE OUTSIDE OF THE PROJECT AREA INTO AREAS OF MINORITY RACIAL CONCENTRATION AND WHO QUALIFY FOR FEDERALLY ASSISTED LOW OR LOW-MODERATE INCOME HOUSING.
 
III. ALL PRESENT AND FORMER TENANT RESIDENTS OF THE PROJECT AREA WHO HAVE BEEN TEMPORARILY OR PERMANENTLY RELOCATED INTO INADEQUATE OR SUBSTANDARD HOUSING AND/OR WITHOUT ADEQUATE RELOCATION ASSISTANCE.
 
IV. ALL LOW-INCOME TENANT RESIDENTS OF THE PROJECT AREA WHO ARE FACED WITH IMMINENT OR EVENTUAL DISPLACEMENT FROM THEIR RESIDENCES WITHOUT ADEQUATE RELOCATION ASSISTANCE OR REPLACEMENT HOUSING BEING MADE AVAILABLE TO THEM.

 The motion was granted on June 24, 1976. See Barbara Fox v. United States Housing and Urban Development, 416 F. Supp. 954 (E.D.Pa.1976).

 On January 25, 1978, a Motion to Intervene as Defendants was filed on behalf of the Washington Square West Civic Association, Rosanne Forcina, Lee Lippman, Arlene Love, Florence McMenamin, Donna Maguire, Joseph A. Talvacchio and Theresa Talvacchio. The Motion was denied on April 25, 1978, upon finding that the intervenors' interests were adequately represented by defendants in this action, and that the motion was untimely.

 The only objectors to the settlement were members of Subclass I. At the August 11, 1978 hearing, some of them moved for a continuance, claiming that they had inadequate time to prepare for the hearing. A continuance until September 18, 1978 was granted and plaintiffs' attorneys were directed to make available to objectors' counsel prior discovery obtained in this case. When the hearing resumed on September 18, 1978, objectors again moved for an extension. Although the Court recognized that delaying the hearing burdened those persons who sought early implementation of the Consent Decree, it again continued the hearing until October 10, 1978, to permit objectors further discovery. Evidence on the settlement was taken on October 10, 1978, and again on October 30, 1978, when the hearing was concluded.

 The Terms of the Settlement

 The settlement provides for the construction or rehabilitation of 131 units of subsidized housing on certain properties within the Area that RDA presently owns; 111 units will be substantially rehabilitated and 20 units will be new construction. HUD will seek private developers of the units, and prepare a Developer's Packet consistent with the terms of the settlement which provides that consideration will be given to a developer's proposal if it suggests scattering the subsidized housing on various preapproved sites throughout the Area instead of concentrating the subsidized units in one or two locations. Prior to selection of a developer or developers, HUD will make available to plaintiffs, the PAC, RDA, and the City's Technical Evaluation Committee copies of all preliminary developers' proposals; these groups' comments on the proposals will be considered by HUD in designating developers, if they are submitted to HUD within 30 days from the date that the proposals are made available to the parties and the PAC.

 The settlement is funded under what is commonly known as the Section 8 program, 42 U.S.C. § 1437f, which is designed to allow low and low-moderate income persons to live in privately owned housing. Under the program, tenants pay no more than 25% Of their income for rent, and HUD pays the private owner of the housing the remainder of the rent up to fair market value. In this case, present tenants of RDA who are eligible for subsidized housing under Section 8 will be given first priority to the 131 units; persons who have been identified as being relocated and desiring to return to the Area then will be given preference. The names of the persons who are to be given priority are listed in exhibits to the Consent Decree. If these lists are exhausted, then the private owners may lease the units to other persons who meet Section 8 eligibility criteria.

 The agreement also requires HUD to review the City of Philadelphia's Innovative Grant Proposal and determine whether it will fund a community based nonprofit corporation in the Area. If HUD decides not to, the City, if requested by the PAC, will provide up to two-thirds of the amount requested from HUD to fund this corporation.

 Although not mandated by this settlement agreement 300 units of additional Section 8 housing are soon to be constructed by the Postal Workers Union for the elderly and handicapped. This settlement agreement requires RDA to assist members of Subclasses II, III and IV who are eligible for and desire to live in the Postal Workers' project in completing applications and obtaining necessary papers to accompany the application. In addition, RDA must notify subclass members who are eligible to live in that development of the availability of that housing and the terms of rental subsidies.

 The subclass members' claims for relocation payments are preserved under the settlement agreement. Each party is to bear its own costs including but not limited to attorney fees. Upon approval of the Consent ...


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