On May 29, 2007, a fair housing focused nonprofit organization filed a lawsuit against the United States Department of Housing and Urban Development ("HUD") under 42 U.S.C. §§ 1437(f) and 3608(e)(5) in the U.S. District Court for the Northern District of Texas. Plaintiff, represented by private counsel, asked the court for injunctive relief, claiming that HUD should use smaller rental housing market areas, instead of large multi-county regions, as a basis for determining Fair Market Rents ("FMRs"). Specifically, plaintiff alleged that HUD's practice of using a large multi-county region as the starting point for determining FMR violated both 42 U.S.C. § 1437(f), which requires HUD to base FMRs on "market area," and the Fair Housing Act of 1968, 42 U.S.C. § 3601, et seq., which imposes an affirmative duty on HUD to promote fair housing policies.
Under its housing subsidy programs, HUD contracted with local public housing agencies and private landlords to pay the difference between the FMR and the amount paid by the tenant (roughly 30% of the tenant's income.) The lower the FMR, the less likely it was for a low-income tenant to be able to find an affordable unit.
The "market area" used by HUD to determine FMRs in the Dallas rental housing market was comprised of eight counties. HUD, however, applied rent levels calculated using a twelve-county region. Plaintiff alleged that this practice resulted in lower FMRs for the Dallas rental housing market area, thereby precluding the Housing Choice Voucher Program participants from obtaining rental housing in more affluent, Caucasian areas.
On October 2, 2007, defendant filed a motion to dismiss, arguing that plaintiff lacked standing and that plaintiff's claims were barred by the doctrine of sovereign immunity.
On September 29, 2009, the Court (Judge Reed O'Connor) granted defendant's motion on the ground of sovereign immunity with respect to plaintiff's claims under 42 U.S.C. § 1437(f), but denied the motion in all other respects.
On October 26, 2009, plaintiff amended its complaint and sought relief under 42 U.S.C. § 3604(a) and 42 U.S.C. § 3608(e)(5), arguing that the state's practice violated equal protection incorporated in the Fifth Amendment. HUD filed their answer to the amended complaint a month later.
The parties then appeared to enter into settlement negotiations. On May 4, 2010, the Court ordered the parties to submit a settlement by June 4th. When this deadline passed without a settlement agreement, the Court temporarily closed the case. It reopened the case in 2012 to officially dismiss the case after the parties apparently filed a settlement agreement. The agreement is not publicly available, and the case is now closed.
Elizabeth Daligga - 07/18/2012
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