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June 12, 1979


The opinion of the court was delivered by: DITTER

This is an action brought by the plaintiff homeowner's association to prevent the Department of Housing and Urban Development (HUD) from financing a proposed senior citizen's housing project in Lower Moreland Township, Montgomery County, Pennsylvania. Jurisdiction is vested in this court by 28 U.S.C. §§ 1331 and 2201, as well as by the Administrative Procedure Act, 5 U.S.C. § 551 et seq.

Presently before me is the plaintiff's motion for a preliminary injunction restraining HUD from disbursing any funds for the use of the housing project at issue pending a final determination of this suit on its merits. After considering the evidence presented at the preliminary injunction hearing, together with the extensive briefs of counsel, I have concluded that the plaintiff's motion must be granted.


 Ordinarily, it would be appropriate to begin an opinion of this nature with a statement of the relevant facts. To understand the facts of the present case fully, however, it will be useful to review the applicable statutes and regulations first.

 Section 202 of the National Housing Act authorizes loans by the Secretary of HUD to private and public nonprofit organizations, known as sponsors, in order to assist them in constructing housing facilities for low-income elderly and handicapped families. 12 U.S.C. § 1701q(a)(1). *fn1"

 By the Housing and Community Development Act of 1974, 42 U.S.C. § 5301 et seq., Congress created the Community Development Program, the purpose of which was to improve housing and related facilities for low-income residents of the nation's urban communities. Under this program, a "unit of general local government," as defined in 42 U.S.C. § 5302(a)(1), may apply for funding in the form of a Community Development Block Grant (CDBG). Such applications must be renewed on an annual basis as long as the local government unit wishes to continue its participation in the Community Development Program. An important component of the application is the Housing Assistance Plan (HAP). The purpose of the HAP is to assess housing assistance needs in the local government's area, specify an annual goal for the number of persons or dwelling units to be assisted, and indicate the general locations of proposed low-income housing facilities. 42 U.S.C. § 5304(a)(4).

 In order for a HAP to be approved, it must satisfy a "proportionality requirement." HUD has divided low-income persons needing housing assistance into three "household types": (1) elderly and handicapped; (2) families and non-elderly individuals; (3) large families. The HAP must set goals for assisting the three household types in the same proportion as it identifies their respective needs. 24 C.F.R. § 570.306(c).

 Congress recognized the necessity of coordinating applications by non-profit sponsors under section 202 with the housing needs and goals identified by the relevant local government unit in its HAP. This coordination is provided by section 213 of the Housing and Community Development Act of 1974, 42 U.S.C. § 1439. Under the terms of section 213, whenever a section 202 application proposes the construction of assisted housing within an area covered by an approved HAP, the application must be submitted by HUD to the local government unit. This procedure gives the local government an opportunity to object if the housing project proposed by the section 202 sponsor is inconsistent with the current HAP. 42 U.S.C. § 1439(a)(1). Section 213 also provides that if the local government does so object, HUD may not approve the 202 application unless it determines that the proposed project Is consistent with the HAP. 42 U.S.C. § 1439(a)(2).

 The HUD regulations promulgated under section 213 delineate the review and objection procedure in greater detail. These regulations provide that the local government's objection on the ground of inconsistency may be based on any of six criteria including the objection that the proposed location of the project is not within an area where assisted housing is needed as identified by the HAP. Specifically, 24 C.F.R. § 891.204(b)(4) says:

The proposed location of newly constructed or substantially rehabilitated units is inconsistent with the general locations specified in the applicable HAP, and is objectionable to the local government for reasons which are specified.

 The regulations further provide that if the local government unit does not object, the HUD field office director may approve the application unless he makes an independent determination that it is inconsistent with the HAP. 24 C.F.R. § 891.205(b)(1). Conversely, if the local government Does object, the field office director must concur in the objection and disapprove the application "unless he makes an independent determination of consistency, based on substantial evidence, that the application is consistent with the applicable HAP (sic)." 24 C.F.R. § 891.205(b)(2).

 Finally, regulations of the federal Office of Management and Budget (OMB) establish an additional review procedure. Under the provisions of an OMB document known as Circular A-95, HUD is required to submit all section 202 applications to both the state government and the appropriate regional planning agency within whose jurisdiction the proposed project will be built. This process is generally referred to as the "A-95 review." Unlike the section 213 procedure, the A-95 review is strictly advisory in nature.


 The following narrative will constitute my findings of fact. On September 23, 1977, defendant GDL Manor Corporation (GDL) was notified that it had been conditionally selected by HUD as an approved sponsor under section 202. In response to this notice, GDL submitted an application for approval of its plan to build a section 202 elderly housing project in Southampton Township, Bucks County, Pennsylvania. On January 11, 1978, however, the Southampton Township Board of Supervisors notified HUD that it had declined to approve a necessary zoning change. In search of another location, therefore, a representative of GDL met with the Commissioners of Lower Moreland Township and proposed the construction of the section 202 project on a site in Lower Moreland at the corner of Huntingdon Pike and County Line Road. The project would consist of 111 apartment units in a four story building.

 The Commissioners held two public hearings to consider a change of zoning that the project would require. A number of witnesses testified at these hearings concerning the potential effect of GDL's proposal. *fn2" Their testimony established that if constructed, the project could seriously and adversely alter the character of the surrounding community.

 The proposed site is a 5.3 acre parcel. It is surrounded by a residential subdivision known as Justa Farm, which consists of large single-family houses situated on lots averaging one acre in size. The houses tend to have a high market value. The members of the plaintiff association are residents of Lower Moreland Township, all of whom own homes near or adjacent to the proposed site of the GDL project.

 A traffic study of the Huntingdon Pike County Line Road intersection was conducted by John Comiskey, a registered traffic engineer and a qualified expert, who testified at the hearings. As the following table indicates, the study concluded that Present traffic at peak hours exceeds the design capacity of the intersection in all directions:

 The proposed GDL project would add an estimated 280 vehicle trips through the intersection per day, approximately ten percent of which would occur at peak hours. Moreover, the elderly residents of the 111 apartments could be expected to increase pedestrian volume substantially, particularly since a shopping center is located diagonally across the intersection. It is likely that a pedestrian cycle would have to be added to the traffic signal, increasing the present 58 second total cycle to 77 seconds. The result of this change would be to reduce the green light time for each direction, increase the waiting time, and conceivably double the actual traffic congestion at certain points. Residents have observed that some drivers seek to avoid the intersection, with its present volume of traffic, by detouring through adjacent residential streets. This phenomenon will be compounded by construction of the GDL project.

 In addition to causing traffic problems, the proposed project will adversely affect the community in other ways. GDL plans to pay Lower Moreland Township $ 20,000. per year in lieu of annual property taxes. This equals approximately $ 180. per unit. Uncontradicted testimony established, however, that each unit would require municipal services costing an average of $ 306. per year. The presence of the senior citizen facility will also place increased burdens on the Township's police and fire departments.

 Aesthetically, the project will be significantly out of character with the surrounding neighborhood. The proposal calls for a four story, multi-unit apartment building in an area presently dominated by single-family homes. Moreover, the project will place an added strain on the Township's already inadequate sewer system.

 Finally, GDL has offered no plans for feasible, alternative uses of the building in the event the project should fail economically. Thus, while it is only speculation, the Township residents face the potential of being left with a vacant and untended apartment building in the midst of their community. *fn3"

 Even before receiving formal notification from HUD, however, the County learned of the GDL proposal from Lower Moreland officials. Through its planning commission (MCPC), the County determined that the project was objectionable because its proposed location was inconsistent with the County's HAP. Lower Moreland Township was not within an area identified by the HAP as needing new elderly housing facilities. Two senior citizen housing projects were already operating within the Township, and the surrounding area had a below average ...

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