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VANDERMARK v. HOUSING AUTHORITY CITY YORK (10/23/81)

decided: October 23, 1981.

VANDERMARK, VIRGINIA M. AND HANDY, BARBARA, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, APPELLANTS
v.
HOUSING AUTHORITY OF THE CITY OF YORK, MILLER, MARION L., IN HER CAPACITY AS EXECUTIVE DIRECTOR OF THE HOUSING AUTHORITY OF THE CITY OF YORK, AND THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT OF THE UNITED STATES OF AMERICA



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA (D.C. Civil No. 79-1064)

Before: Gibbons, Hunter, Circuit Judges and Gerry,*fn* District Judge.

Author: Hunter

Opinion OF THE COURT

This appeal raises a question under the United States Housing Act ("USHA") of 1937, as amended by the Housing and Community Development Act of 1974, 42 U.S.C. § 1437f. The USHA provides for financial assistance from the federal government to state and local governments to remedy unsafe and unsanitary housing conditions, as well as housing shortages, of low income families. Specifically, Section 8 of the USHA, as amended, 42 U.S.C. § 1437f, authorizes the Secretary of Housing and Urban Development ("HUD") to enter into annual contribution contracts with Public Housing Agencies ("PHA") who in turn may enter into contracts to make assistance payments to owners of existing housing projects on behalf of low income tenants. The PHA issues a "Certificate of Family Participation" to eligible participants. The Certificate indicates that its holder is authorized to participate in the Section 8 Existing Housing Program ("Section 8 Program") and that the housing authority will make assistance payments to a landlord, chosen by the tenant, who agrees to participate in the Section 8 Program.

Defendant York Housing Authority ("YHA"), as one of its criteria for determining eligibility to its Section 8 Program, adopted a policy of denying participation in the program to individuals who owe debts to the YHA arising out of their prior occupancy in YHA projects (the "indebtedness policy"). Plaintiffs Virginia M. Vandermark and Barbara Handy challenge YHA's indebtedness policy as inconsistent with the USHA and federal regulations, as not in compliance with the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 551 et seq. (1976), and as violative of their constitutional rights under the equal protection and due process clauses of the fourteenth amendment. The district court rejected all of plaintiffs' challenges to YHA's policy. We affirm.

FACTS

Pursuant to its authority under the USHA, HUD has promulgated regulations governing the administration and operation of the Section 8 Program at 24 C.F.R. § 882.101 et seq. (1981). Under the program, as it relates to existing housing, HUD enters into "annual contributions contracts" with PHAs, such as defendant Housing Authority of the City of York, which administer and operate the program at the local level. Every application submitted to HUD by a PHA must be accompanied by an administrative plan. Pursuant to 24 C.F.R. § 882.204(b)(3)(i) (1981), the administrative plan shall include:

a statement of the PHA's overall approach and objectives in administering the Existing Housing program; a description of the procedures to be used in carrying out each function; and a statement of the number of employees proposed for the program, by position and function to be performed.

Sub-section (b)(3)(i) lists the functions that should be addressed in the administrative plan, which include outreach to eligible families, determination of family eligibility, and selection of families.

Under HUD regulations, two criteria, inter alia, must be met for an applicant to be considered eligible for assistance under the program: first, the applicant must qualify as a family, 24 C.F.R. § 812.1, et seq. (1981), and second, the applicant must have an annual income that falls within the designated income limits for the area. 24 C.F.R. § 889.101 et seq. (1981). Under the regulations a PHA may establish additional criteria for determining applicant eligibility for participation in the program subject to the provision that the criteria be reasonably related to program objectives and receive approval of HUD as part of the PHA's administrative plan. 24 C.F.R. § 882.209(a)(3) (1981).

Defendant YHA, as one of its criteria for determining eligibility for Section 8 housing, adopted a policy of denying participation in the Section 8 Program to individuals who owe debts to the YHA arising out of their prior occupancy in YHA projects. The relevant portion of this policy statement, which is embodied in section II, Paragraph A-4 of the statement, states: "Applicants who are former tenants of the Housing Authority and have vacated owing the Authority monies will not be considered eligible for participation until such monies are paid in full." Appendix at 67. This statement of policy was part of the YHA's administrative plan submitted to and approved by HUD and was in effect at the times in question.

When the PHA determines that an applicant is eligible to participate in the Section 8 Program, it issues a Certificate of Family Participation. In this case, plaintiff Vandermark applied for a certificate of family participation in the Section 8 Program administered locally by defendant YHA in September, 1977. Her application was reviewed by the YHA and her name was placed on the waiting list in December, 1977. On January 3, 1978 Vandermark's application for a certificate of family participation was approved. She was notified to appear on January 12, 1979 for an enrollment interview. On January 5, 1979, she was advised that her application was being withdrawn because of an alleged debt of $194.30 owed to the YHA arising out of the occupancy of a YHA owned public housing unit in 1975. Appendix at 6, 32.

Plaintiff Handy applied to the Section 8 Program on December 22, 1978. Her name was placed on the waiting list at that time, but was withdrawn 14 days later when she was notified by letter that a debt she owed to the YHA prevented her application from being processed. Appendix at 7, 33. Handy was later informed that her application would remain on pending status until the alleged debt to the YHA was paid. Appendix at 33.

PROCEDURAL HISTORY

Plaintiffs filed their complaint on August 21, 1979 in the United States District Court for the Middle District of Pennsylvania seeking declaratory and injunctive relief against defendants. The complaint alleged that the defendants acted ...


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