Sеction 8 of the Fair Housing Act of 1968 serves two statutory purposes: (1) "aiding low-income families in obtaining a decent place to live" and (2) "promoting economically mixed housing." 42 U.S.C. § 1437f(a). This case is not about what is good housing policy, however. This case is about the rule of law-whether an agency effectively may suspend a duly promulgated regulation without observing the procedures or identifying relevant factual criteria that the law requires to effect such a change. The U.S. Department of Housing and Urban Development ("HUD"), without notice and comment or particularized evidentiary findings, has delayed almost entirely by two years implementation of a rule requiring over 200 local Public Housing Authorities ("PHAs") in 24 metropolitan areas, which HUD selected based on fixed, objective criteria, to calculate housing vouchers' values based on local, rather than metropolitan-wide, prevailing market rents. The plaintiffs, two voucher holders and a nonprofit organization devoted to providing housing opportunities for low-income people in Connecticut, move to preliminarily enjoin HUD to implement the rule on January 1, 2018, the rule's effective date. Pls.' Mot. Preliminary Injunction, ECF No. 15 ("Pls.' Mot."). For reasons this Memorandum Opinion explains in detail, the plaintiffs' motion for a preliminary injunction is granted.
I. FACTS
A. Overview of the Housing Choice Voucher Program and Fair Market Rents
Congress enacted the Housing Act of 1937 to assist state and local governments "to remedy unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income." Pub. L. No. 75-412, § 1,
A voucher's value is calculated largely on the basis of HUD's determination of the "fair-market rent" ("FMR") for a dwelling of a particular size and type (e.g ., a two-bedroom home).
A PHA generally sets a payment standard "between 90 percent and 110 percent of the published FMR for that unit size."
B. Problems with FMR Calculations in Metropolitan Areas
FMRs often do not, in practice, accurately reflect rents actually charged in neighborhoods within a broad metropolitan area, as "rents can vary widely within a metropolitan area depending upon the size of the metropolitan area and the neighborhood
Prior to 2000, HUD generally calculated FMRs to reflect the 40th percentile rent in a given metropolitan area. See
HUD has concluded, based on recent research, that the 50th Percentile Rule is "not an effective tool" for "increasing HCV tenant moves from areas of low opportunity to higher opportunity areas." Final Rule ,
C. The Small Area FMR Demonstration Project
In the wake of the 50th Percentile Rule's apparent fаilure, HUD considered alternative ways to expand housing opportunities for voucher holders. See
HUD undertook a demonstration project to test SAFMRs' effectiveness. Section 8 Housing Choice Voucher Program Demonstration Project of Small Area Fair Market Rents in Certain Metropolitan Areas for Fiscal Year 2011 ,
D. The SAFMR Rule
Before the demonstration project's completion, HUD published advance notice of
One year later, on June 16, 2016, HUD published a notice of the proposed new rule. See Establishing a More Effective Fair Market Rent System; Using Small Area Fair Market Rents in Housing Choice Voucher Program Instead of the Current 50th Percentile FMRs ,
HUD published a final rule on November 16, 2016. Final Rule ,
E. The Interim Report's Preliminary Findings
After HUD announced the Rule's promulgation, but before the Rule was set to go into effect, HUD received preliminary findings from the demonstration project in the form of an Interim Report titled Small Area Fair Market Rent Demonstration Evaluation . Defs.' Opp'n, Ex. 1 ("Interim Report"), ECF No. 24-4. This report contained good news on SAFMRs efficacy to achieve Section 8's statutory goals, with mixed results for some demonstratiоn project PHAs.
Specifically, the Interim Report found that SAFMRs in the pilot PHAs make "the availability of units [ ] much more evenly distributed across different types of neighborhoods, leading to increased availability in high-rent ZIP Codes and reduced availability in low-rent ZIP Codes." Interim Report at vii; see also id . at viii ("Because SAFMRs increase access to high-rent ZIP Codes and reduce access to low-rent ZIP Codes, we found not unexpectedly that the transition to SAFMRs led to an increase in units potentially available to HCV holders in higher-opportunity areas under SAFMRs compared with FMRs and fewer units in lower opportunity areas."). As a result, "[f]ollowing the implementation of SAFMRs, HCV holders in the demonstration sites are slightly more likely to live in high-rent ZIP Codes than they were prior to the demonstration," while no such change was observed in "comparison PHAs." id. at viii. Further, "[t]he slight changes in rents among the SAFMR PHAs also translate into slight changes in opportunity." id. ; see also id. at ix (finding that "[a]cross all evaluation PHAs ... changes in rents are also reflected in changes in access to opportunity."). Moreover, Housing Assistance Payment ("HAP") costs, which "are the subsidy costs that PHAs incur on behalf of HCV holders for rent and utilities," "declined in real terms per unit between 2010 and 2015 in SAFMR PHAs," while "[r]ents paid to landlords remained nearly flat in real terms between 2010 and 2015 but varied by rent category." id. at x. The report states, "[i]n summary, it appears that Small Area Fair Market Rents are working as intended-increasing access to units in higher-opportunity areas and decreasing access in lower-opportunity areas." id. at 61.
At the same time, the Interim Report troublingly found that "the gain in units with rents below the applicable FMR in high-rent ZIP Codes does not offset the decrease in the number of units in the low-rent and moderate-rent ZIP Codes, resulting in a net loss of units potentially available to HCV holders ovеrall." Id. at vii. The net effect of SAFMR implementation across the pilot PHAs, the Interim Report found, was "a loss of over 22,000 units (3.4 percent) that might otherwise be affordable to HCV holders." Id. In addition, the Interim Report noted that average payment standard amounts declined by about 11 percent in inflation-adjusted terms in pilot PHAs, resulting in average rent burden increases for HCV voucher holders of about 16 percent overall and 22 percent in low-income ZIP codes. Id. at ix-x. In contrast, payment standard amounts relying
The Interim Report's findings related only to Phase 1 of the demonstration project. Id. at xi. In 2018, HUD will receive a Final Report combining and synthesizing data collected in Phases 1 and 2, the latter of which will (1) update the Interim Report's empirical analyses with new housing data, and (2) use qualitative interviews of tenants and landlords to determine how SAFMRs have affected or could affect housing decisions. Id. at xi, 98.
F. HUD's Two-Year Delay of the SAFMR Rule
On August 10, 2017, HUD issued a memorandum delaying SAFMR designations for 23 of the 24 metropolitan areas subject to the Rule (excluding Dallas), requiring PHAs in affected areas to implement the Rule in 2020 rather than in 2018. Defs.' Opp'n, Ex. 2, Suspension of Small Area Fair Market Rent (FMR) Designations ("Suspension Mem.") at 2, ECF No. 24-5. The Suspension Memo expressly noted, however, that "any PHA operating in the covered metropolitan areas" could still "voluntarily implement[ ] the use of Small Area FMRs prior to ... 2019," and that PHAs in the Dallas metropolitan area would continue to implement SAFMRs pursuant to the settlement agreement. Id. at 1, 3. On August 11, 2017, HUD sent over 200 affected PHAs a letter informing those PHAs that their metropolitan areas' mandatory SAFMR designations were suspended until 2020. Defs.' Opp'n, Ex. 3, Letter from Dominique Blom, Gen. Deputy Assistant Sec'y for Public & Indian Housing, HUD, to PHA Exec. Dirs. ("Letter to PHAs") (Aug. 11, 2017), ECF No. 24-6; HUD Decl. ¶ 12.
The Suspension Memo identified "several findings" in the Interim Report "that are worrisome and where further research is needed to address a number of critical questions with respect to the potential harm to HCV families (both participants and applicants) in areas transitioning to Small Area FMRs." Id. at 5. "[F]indings of the interim report that are of most concern to HUD," the Suspension Memo stated, "relate to the availability of units and the impact of Small Area FMRs on voucher success rates and utilization, and to rent burdens among assisted households." Id. Specifically, the Suspension Memo stated that "[o]ne of the findings of concern from the interim report is that the gain in units with rents below the applicable FMR in high-rent ZIP codes did not offset the decrease in the number of units in the low-rent and moderate-rent ZIP codes." Id. The Suspension Memo acknowledged that, by contrast to the operation of SAFMRs in the pilot PHAs, the Rule capped any SAFMR decrease to 10 percent per year, but concluded that this provision "may only slow the pace of the loss of units, as opposed to preventing the overall decline in the number of units available to HCV families in the metropolitan area." Id. at 5-6. The Suspension Memo also recounted the Interim Report's findings that SAFMRs have potential to increase voucher holders' rent burdens. Id. at 6. The Suspension Memo again acknowledged that, by contrast to the operation of SAFMRs in the pilot PHAs, the Rule allows PHAs to hold nonmoving families harmless from payment standard amount decreases, but noted that "there is no protection for families that must move to a new unit or for applicant families off the waiting list who are trying to lease a unit on the program for the first time." Id. at 7.
The Suspension Memo identified two other concerns with respect to implementing the Rule. The first concern was
G. The Plaintiffs
The plaintiffs are two African-American women living in metropolitan areas the Rule would affect, as well as Open Communities Alliance ("OCA"), a nonprofit organization devoted to providing social and economic opportunities for low-income people. Compl. ¶¶ 18-20, ECF No. 1. Plaintiff Crystal Carter is a voucher holder who would like to move from Hartford, Connecticut, to nearby Simsbury, Connecticut, to be near her children's schools and to provide her family a safer home and better opportunities. Carter Decl. ¶¶ 6-7. Hartford's voucher holders, who are disproportionately nonwhite, are concentrated in poor, racially segregated neighborhoods. Pls.' Mot., Attach. 6, Decl. of Will Fischer, Sr. Pol'y Analyst, Ctr. on Budget & Pol'y Priorities ("CBPP Decl.") ¶ 11, ECF No. 15-6. As of 2016, 41 percent of voucher holders in the greater Hartford metropolitan area lived in high-poverty neighborhoods, while only 18 percent of voucher holders in the area lived in low-poverty neighborhoods.
Plaintiff Tiara Moore, much like Ms. Carter, would like to move from Chicago, Illinois to the high-opportunity area of DuPage County, Illinois, to provide a safer neighborhood and better opportunities for her daughter. Moore Decl. ¶¶ 5-6. Not only does DuPage County have better schools than Chicago, Ms. Moore's mother lives in DuPage County and could provide childcare while Ms. Moore works.
H. The Instant Litigation
On October 23, 2017, the plaintiffs filed a complaint challenging the Rule's delay, see Compl., and, on November 8, 2017, moved for a preliminary injunction that would require HUD to implement the Rule without
II. LEGAL STANDARD
The Administrative Procedure Act ("APA") authorizes any "person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action" to seek "judicial review thereof."
"Agency action is arbitrary and capricious 'if the agency has relied on factors which [law] has not intended it to consider, entirely failed to consider an important aspect of the problem, or offered an explanation for its decision that runs counter to the evidence before the agency.' " Mayo v. Reynolds ,
"A party seeking a preliminary injunction must make a 'clear showing that four factors, taken together, warrant relief:
III. DISCUSSION
The plaintiffs seek a preliminary injunction requiring HUD to implement the Rule on its effective date of January 1, 2018. Pls.' Mot. Their motion challenges the lawfulness of HUD's two-year delay of the Rule's implementation in ways relating to claims in the complaint.
A. Likelihood of Success on the Merits
The plaintiffs' (1) notice and comment and (2) arbitrary and capricious claims boil down to a common issue-whether HUD identified adverse rental housing market conditions local to the particular PHAs as to which HUD delayed the Rule's implementation. For reasons explained below, HUD did not. HUD's failure to connect the Rule's delayed implementation in specific PHAs by reference to local conditions means
1. HUD Lacked Authority to Delay the Rule's Implementation.
The plaintiffs argue that they likely will succeed on the merits of their claim that HUD's delay of the Rule is procedurally defective because HUD did not observe the requirements of notice and comment. Pls.' Mem. at 22-27. HUD, invoking a provision of the Rule, argues unsuccessfully that the Secretary has broad authority to delay the Rule's implementation wholesale whenever the Secretary determines he has reason to do so. Defs.' Opp'n at 21-27; Hr'g Tr. (Dec. 19, 2017) at 30.
The APA generally requires a federal agency engaged in informal rulemaking to engage in notice and comment procedures. See
The Rule, which requires PHAs administering the HCV program in select metropolitan areas to use, as of January 1, 2018, SAFMRs, unquestionably is a substantive regulation delay of which ordinarily would require notice and comment. HUD, however, did not delay the Rule's implementation through notice and comment. Thus, HUD's action wаs lawful only if another source of authority empowered HUD to delay the Rule's implementation without notice or comment. HUD asserts that
a) Section 888.113(c)(4)'s Meaning
HUD's failure to use notice and comment means that the agency's authority to delay the Rule's implementation must flow, if at all, from § 888.113(c)(4). Section 888.113(c)(4) allows HUD to temporarily suspend a region's SAFMR designation or exempt a PHA from use of SAFMRs under specified circumstances. The regulation provides, in relevant part:
HUD may suspend a Small Area FMR designation from a metropolitan area, or may temporarily exempt a PHA in a Small Area FMR metropolitan area from use of the Small Area FMRs, when HUD by notice makes a documented determination that such action is warranted. Actions that may serve as the basis of a suspension of Small Area FMRs are:
(i) A Presidentially declared disaster area that results in the loss of a substantial number of housing units;
(ii) A sudden influx of displaced households needing permanent housing; or
(iii) Other events as determined by the Secretary.
Section 888.133(c)(4)'s plain language makes clear that HUD may suspend an SAFMR designation or exempt a PHA only upon one of three enumerated actions' occurrence. Further, under the canon of ejusdem generis , which "limits general terms which follow specific ones to matters similar to those specified," Wallaesa v. FAA ,
Section 888.113(c)(4)'s first two enumerated actions each involve changes to local rental housing market conditions that drive rents up, to voucher holders' detriment. The over-arching rationale for HUD's suspension authority that the Rule's preamble sets out confirms the enumerated examples' focus on local rental housing conditions. There, the Rule states that an SAFMR designation's suspension requires "a documented finding of adverse rental housing market conditions." Final Rule ,
The Supreme Court's reasoning in Kucana v. Holder ,
Begay likewise is clarifying. The Armed Career Criminal Act imposes a sentencing enhancement on a defendant who violates
Finally, the Rule's localist phrasing and the interrelation of the Rule's provisions, viewed holistically, show that HUD may justify a particular SAFMR designation's suspension or PHA's exemption only through a localized determination that conditions in a particular affected area or PHA warrant such action. Section 888.113(c)(4)'s first sentence requires HUD to designate SAFMR areas each year, which "designations will be permanent."
The third sentence cabins HUD's discretion to suspend an SAFMR designation or exempt a PHA, enumerating three "[a]ctions" that "may serve as the basis of a suspension of Small Area FMRs." Id.
The plaintiffs and defendants read § 888.113(c)(4) differently. The plaintiffs understand HUD's authority to suspend an SAFMR designation or exempt a PHA more narrowly, arguing that the term "events" reaches only "unexpected events resulting in a sudden change in localized rental market conditions." Pls.' Mem. at 26. "Whether market conditions have 'negative impacts on voucher families,' " the plaintiffs argue, "has nothing to do with whether any area meets regulatory criteria for small area designation or whether its FMRs remain reliable." Pls.' Reply Mem. Supp. Mot. ("Pls.' Reply") at 9, ECF No. 25. Section 888.113(c)(4), however, by its plain terms authorizes HUD to suspend an SAFMR designation or exempt a PHA even when the conditions that triggered the SAFMR's application to that metropolitan area or PHA still apply, so long as a qualifying event occurs. HUD could have written § 888.113(c)(4) in terms that would allow SAFMR suspensions or PHA exemptions only when a particular metropolitan area or PHA no longer satisfied the criteria for SAFMR designation in the first place, but HUD did not so limit the suspension/exemption authority that the regulation conferred. Cf. Wallaesa ,
The defendants, in turn, contend that § 888.113(c)(4) vests HUD with virtually boundless authority to suspend SAFMR designations or exempt PHAs. The defendants specifically argue that (1) the three enumerated actions merely illustrate, rather than exhaust, the sort of actions that trigger HUD's authority to suspend an SAFMR designation or exempt a PHA, and (2) the third action gives HUD unreviewable discretion to suspend an SAFMR designation or exempt a PHA for essentially any reason. Defs.' Opp'n at 21-27. These arguments do not pass muster.
First, the defendants argue that § 888.113(c)(4) does not provide an exclusive list of actions that may justify suspending an SAFMR designation or exempting a PHA, but merely nonexclusive examples of such actions. Defs.' Opp'n at 23-24. This construction is inconsistent with § 888.113(c)(4)'s phrasing, which provides, "Actions that may serve as the basis of a suspension of Small Area FMRs are ," then lists three specific actions.
Second, the defendants argue that even if HUD may suspend an SAFMR designation or exempt a PHA only upon an enumerated action's occurrence, the third action is phrased so broadly as to give HUD essentially unreviewable discretion to suspend an SAFMR designation or exempt a PHA for any reason. Defs.' Opp'n at 22-26. The ejusdem generis canon, the defendants say, is inapplicable because § 888.113(c)(4) contains no "general term which follows specific ones." Defs.' Opp'n at 24 (alterations and internal quotation marks omitted). This is incorrect. Section 888.113(c)(4) enumerates two specific actions-"A Presidentially declared disaster area that results in the loss of a substantial number of housing units" and "A sudden influx of displaced needing permanent housing"-followed by a third, more general action-"Other events as determined by the Secretary."
The defendants contend that the Rule's overall context shows that ejusdem generis does not apply, identifying three aspects of the Rule that the defendants characterize indicating "an intent to be expansive." Defs.' Opp'n at 24-25. Although "the ejusdem generis canon does not control when the whole context dictates a different conclusion," Wallaesa ,
Nor would applying the ejusdem generis canon render the phrase "as determined by the Secretary" superfluous. This language, read in context, can be read to vest HUD with discretion to determine whether a qualifying event warrants an SAFMR designation's suspension or a PHA's exemption, such that HUD need not suspend a designation or exempt a PHA each time a designated area or PHA experiences a disaster. This language does not allow HUD to determine whether something qualifies as an "event" in the first place. In other words, § 888.113(c)(4)(iii) gives HUD discretion, but cabins that discretion by allowing its exercise only upon a qualifying "event['s]" occurrence. The defendants compare the phrase "other events as determined by the Secretary" to the language of
Finally, the defendants invoke the Auer doctrine to argue that their construction of the regulation is due deference even if the regulation's meaning is not clear. Defs.' Opp'n at 25-26. As exрlained in detail above, however, the defendants' construction is "inconsistent with the regulation," Press Commc'ns LLC ,
Whether HUD invoked a proper triggering "event" to justify delaying by two years the Rule's implementation thus turns on whether HUD based the Rule's delay on an event involving local "adverse rental housing market conditions." The Suspension Memorandum presents three rationales for delaying the Rule's implementation: (1) the Interim Report's findings showing the Rule's potentially negative impact on voucher holders; (2) comments received in response to the Reducing Regulatory Burden notice; and (3) HUD's failure timely to create SAFMR guidance and technical assistance for affected PHAs. Suspension Mem. at 5-8. The latter two rationales have nothing to do with local rental housing market conditions in the 23 affected PHAs, and so cannot independently sustain HUD's invocation of § 888.113(c)(4)'s third action. As to the Rule's potential adverse impact on voucher holders, the Suspension Memorandum identified evidence from the Interim Report, which evaluated the demonstration project's preliminary findings, that SAFMRs may decrease rental housing unit stock. Id. at 5-6. The demonstration project's 7 pilot PHAs and the 200+ Rule-affected PHAs essentially do not overlap, however, and HUD has identified no basis to conclude that any lessons on SAFMRs' efficacy that can be extrapolated from the demonstration project findings apply to the Rule-affected PHAs, as material differences in the pilot and Rule-affected PHAs' relevant characteristics exist.
The Suspension Memorandum primarily relied on the Interim Report's findings that SAFMR use caused a net loss of units available to voucher holders in the pilot PHAs. The Interim Report stated that although the pilot PHAs' use of SAFMRs
should increase the pool of units potentially available ... in high-rent FMRs, while reducing the pool of units that are located in lower-rent ZIP codes .... the gain in units with rents below the applicable FMR in high-rent ZIP codes did not offset the decrease in the number of units in the low-rent and moderate-rentZIP codes, resulting in a net loss of units that are potentially available to voucher families.
Suspension Mem. at 5; see Interim Report at vii. The Suspension Memorandum concluded that "[t]he net effect across the 7 study PHAs is a loss of over 22,000 units (3.4 percent) that might otherwise have been affordable to voucher families." Suspension Mem. at 5.
The problem with HUD's reliance on demonstration project data to justify the Rule's delay is that HUD has failed to show that the pilot and Rule-affected PHAs share similar characteristics, such that any conclusions as to SAFMRs' efficacy that can be extrapolated from the demonstration project's findings apply to the Rule-affected PHAs. For example, in at least one significant way, the Long Beach pilot PHA did not demographically represent the Rule-affected PHAs. Long Beach's high-rent ZIP codes contained only 11 percent of the PHA's rental housing units, a lower figure than for any other pilot PHA. Interim Report аt 28 & tbl. 4-1. By contrast, high-rent ZIP codes in each Rule-affected area must, according to the selection criteria, contain at least 20 percent of the area's total rental housing unit supply. See SAFMR Area Designations ,
Long Beach, though only one of the seven pilot PHAs, distorted the demonstration project's findings because much of the net decrease in rental housing unit supply that the project attributed to SAFMRs occurred in Long Beach. The Interim Report found that decreases in rental housing unit supply largely were concentrated in Long Beach, which saw a greater than 10 percent net loss of rental housing unit supply.
The pilot PHAs also did not represent Rule-affected areas with respect to the SAFMR mandate's geographic scope within a metropolitan area. Only two of the seven pilot PHAs-Laredo and Mamaroneck-mandated SAFMR use throughout the entire metropolitan area.
That the pilot PHAs were not representative of Rule-affected PHAs is unsurprising, as HUD used entirely different criteria to select these two groups. HUD used five fixed, objective "selection criteria" to determine which PHAs the Rule would cover: the (1) "number of vouchers under lease in the metropolitan FMR area;" (2) "percentage of the standard quality rental stock, within the metropolitan FMR area is in small areas (ZIP codes) where the Small Area FMR is more than 110 percent of the metropolitan FMR area;" (3) "percentage of voucher families living in concentrated low income areas;" (4) "percentage of voucher families living in concentrated low income areas relative to the percentage of all renters within these areas over the entire metropolitan area;" and (5) "vacancy rate for the metropolitan area."
Entirely different criteria guided the pilot PHAs' selection. HUD first constructed a pool of PHAs that met seven initial criteria, which were entirely different than the criteria HUD used to determine the Rule's coverage. HUD included in the initial pool each PHA that: (1) "[h]ad at least 500 vouchers in use as of September 30, 2011;" (2) "[h]ad at least 10 housing choice voucher (HCV) tenants living in ZIP Codes where the SAFMR exceeded the metropolitan area Fair Market Rent (FMR) by more than 10 percent in fiscal year 2012;" (3) "[h]ad at least 10 HCV tenants living in ZIP Codes where the SAFMR was more than 10 percent less than the metropolitan area FMR;" (4) "[h]ad attained at least 95 percent HCV family reporting in Public and Indian Housing Information Center;" (5) "[w]as not troubled, as determined by the Section 8 Management Assessment Program;" (6) "[h]ad the administrative capacity to carry out the SAFMR program;" and (7) "[h]ad not been involved in litigation that would seriously impede its ability to administer the HCV program." Demonstration Project ,
HUD's decision to use different selection criteria for the pilot PHAs and Rule-affected areas reflects the different purposes HUD intended the demonstration project and Rule to serve. HUD "randomly selected five PHAs for the demonstration that differed across various characteristics" because HUD sought "[t]o test how SAFMRs may potentially affect a range of PHA types." Interim Report at 2. In promulgating the Rule, however, HUD specifically targeted "those metropolitan areas ... where establishing FMRs by ZIP code areas has the potential to significantly increase opportunities for voucher families."Final Rule ,
Finally, HUD's incorporation into the Rule of various provisions designed to protect against the very concerns that the demonstration project identified further undermines HUD's reliance on demonstration project data to delay the Rule. Most significantly, as discussed above, the Rule requires all PHAs within an affected metropolitan area to use SAFMRs, addressing
In sum, the significant differences between the (1) pilot and Rule-affected PHAs, (2) selection criteria HUD used to identify each group, and (3) purposes HUD sought the demonstration project and Rule to achieve impose on HUD a burden to show that any conclusions the Interim Report extrapolated from the demonstration project's findings apply to the specific Rule-affected areas. Neither the Suspension Memo nor Letter to PHAs, however, even attempt to make such a showing. Nor, for that matter, does the defendants' briefing. The plaintiffs thus have established likely success on the merits of their notice and comment claim.
2. HUD's Delay of the Rule's Implementation Was Arbitrary and Capricious
The plaintiffs also argue that HUD's delay of the Rule's implementation was arbitrary and capricious. Pls.' Mem at 28-34. According to the plaintiffs, HUD failed adequately to explain its reasons for delaying the Rule's implementation. Id. at 28. As explained above, § 888.113(c)(4) required HUD to identify adverse rental housing market conditions local to a particular area or PHA to justify suspending an SAFMR designation or exempting a PHA in that area. HUD, as explained, did no such thing. Instead, HUD attempted to justify delaying the Rule's implementation by two years by citing data based on a small number of pilot PHAs, which did not represent the Rule-affected areas in terms
B. Risk of Irreparable Harm
The plaintiffs argue that they will suffer irreparable harm if HUD does not implement the Rule by January 1, 2018. "The party seeking a preliminary injunction must make two showings to demonstrate irreparable harm." League of Women Voters ,
1. Crystal Carter
Plaintiff Crystal Carter has demonstrated a risk of irreparable injury sufficient to warrant a preliminary injunction. Ms. Carter and her five minor children currently use a Housing Choice Voucher to rent a four-bedroom house in the City of Hartford, Connecticut. Carter Decl. ¶ 1. Three of Ms. Carter's children attend high-performing schools in the Simsbury School District through Hartford's Open Choice school integration program. Id. ¶ 4. Ms. Carter wishes to use her voucher to move to the town of Simsbury in Hartford County, Connecticut, to be closer to those schools. Id. ¶ 6. Simsbury's poverty rate of 3.4 percent, Decl. of Sasha Samberg-Champion ("Pls.' Decl."), Ex. I, Poverty Data for Simsbury Town, CT, ECF No. 16-9, is much lower than the poverty rate in Ms. Carter's ZIP code, which is 32.2 percent, Pls.' Decl., Ex. G, Poverty Data for 06114 ZIP Code, ECF No 16-7. Simsbury offers higher quality education and a safer living environment for Ms. Carter's entire family than does Hartford. Carter Decl. ¶ 6. As the plaintiffs observe, "[l]iving close to her children's schools has obvious benefits for any parent, including reducing the children's commute times, giving them more opportunity to engage with their classmates out of school, and allowing the parent to be more involved with her children's schools." Pls.' Mem. at 39.
The Rule's implementation would enable Ms. Carter to move her family from Hartford to Simsbury; the Rule's suspension deprives her of the Rule's benefits. If the Rule goes into effect, the FMR for a four-bedrоom unit in much of Simsbury will be $1,940 per month for Fiscal Year 2018. See Pls.' Decl., Ex. F, 2018 Hartford SAFMRs
The defendants correctly observe that Ms. Carter's children already attend school in Simsbury, Defs.' Opp'n at 34, but do not dispute that Ms. Carter would enjoy the obvious benefits of "be[ing] closer to [her] children's schools" and "liv[ing] in a safer and healthier neighborhood environment for [her] children" if she lived in Simsbury. Carter Decl. ¶ 6. The defendants argue that "the mere possibility ... that [Ms. Carter's] school-age children may potentially earn a higher income in their mid-twenties if they move at some point to a lower-poverty area is entirely speculative and in no way imminent." Defs.' Opp'n at 34. The plaintiffs, however, identify "robust evidence that children who moved to lower-poverty areas when they were young (below age 13) are more likely to attend college," to "have substantially higher incomes as adults," and to "live in better neighborhoods themselves as adults," and are "less likely to become single pаrents." Raj Chetty et al., The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment , 106 AM. ECON. REV. 855, 899 (2016); see also LORA ENGDAHL, POVERTY & RACE RES. ACTION COUNCIL, NEW NEIGHBORHOODS, NEW SCHOOLS: A PROGRESS REPORT ON THE BALTIMORE HOUSING MOBILITY PROGRAM 27-28 (2009) (finding that relocation to low-poverty areas produces significant mental health benefits to Housing Choice Voucher holders); MARGERY AUSTIN TURNER & LYNETTE RAWLINGS, URBAN INST., PROMOTING NEIGHBORHOOD DIVERSITY: BENEFITS, BARRIERS, AND STRATEGIES 2 (2009) (describing the myriad ways "[n]eighborhoods matter to the well-being of children and families."). The weight of this research certainly indicates that Ms. Carter's family may enjoy some additional benefits from living in Simsbury.
The defendants also argue that Ms. Carter has not "identified any imminent risk that she or her family will actually be subject to criminal activity in Hartford." Defs.' Opp'n at 34. This arguments set the bar too high. "[A]s a preliminary injunction requires only a likelihood of irreparable injury, ... Damocles's sword does not have to actually fall ... before the court will issue an injunction." League of Women Voters ,
The defendants observe that Ms. Carter has not "alleged that she has applied for housing in Simsbury, that if she did apply she would be likely to be selected despite competition from other applicants, or that there are sufficient landlords in Simsbury participating in the HCV program and accepting voucher-holding tenants including, in particular, her." Defs.' Opp'n at 34. To apply for housing in Simsbury prior to the Rule's implementation, however, would be futile-the Rule's premise is that voucher holders such as Ms. Carter cannot obtain housing in high-income areas like Simsbury because current payment standards do not suffice to make such housing affordable. Ms. Carter has established that she intends to apply for and obtain such housing as soon as she possibly can. Carter Decl. ¶¶ 6-7. A landlord's discrimination against voucher holders, moreover, would violate Connecticut law. See Con. Gen. Stat. § 46a-64c; Comm'n on Human Rights & Opportunities v. Sullivan Assocs. ,
Finally, the defendants dispute that any expenses associated with Ms. Carter's longer commute would be sufficiently burdensome to warrant injunctive relief.
2. Tiara Moore
Plaintiff Tiara Moore likewise has demonstrated a risk of irreparable injury sufficient to warrant a preliminary injunction. Ms. Moore and her minor child live in an apartment in the City of Chicago, Illinois. Moore Decl. ¶ 1. The Chicago Housing Authority has issued Ms. Moore a Housing Choice Voucher for $1,207 per month for a two-bedroom unit. Id. ¶¶ 4, 7. Ms. Moore wishes to move to DuPage County, Illinois, to live in a neighborhood that will afford her family greater employment opportunities, higher quality education, and a safer living environment, as well as to be nearer to Ms. Moore's mother, who provides child care so that Ms. Moore can work. Id. ¶¶ 5-6. DuPage County's poverty rate of 7.4 percent, Pls.' Decl., Ex. J, Poverty Data for DuPage County, Ill., ECF No. 16-10, is also much lоwer than the poverty rate in Ms. Moore's ZIP code, which is 33.8 percent, Pls.' Decl., Ex. H, Poverty Data for 60644 ZIP Code, ECF No 16-8. Ms. Moore has not, however, been able to locate any two-bedroom rental units in DuPage County for $1,207 per month. Id. ¶ 7. The Rule would enable Ms. Moore to move her family from the City of Chicago to DuPage County. For fiscal year 2018, the FMR for a two-bedroom unit in the broad Chicago metropolitan area, which includes DuPage County, would be
The defendants argue that Ms. Moore will suffer no injury from the Rule's delay, as the Rule would not benefit her in the first place. Defs.' Opp'n at 35. The defendants observe that the Chicago Housing Authority is a Moving to Work PHA and so would be exempt from use of SAFMRs even if the Rule were implemented. See id. , Attach. 3, Decl. of Marianne Nazzaro ¶¶ 2-3, ECF No. 24-3; Final Rule ,
3. OCA
Finally, Plaintiff OCA has demonstrated a risk of irrepаrable injury sufficient to warrant a preliminary injunction. An organization, to show irreparable harm, must show first that "the 'actions taken by the defendant have perceptibly impaired the organization's programs." League of Women Voters ,
OCA has shown that the Rule's delay will "perceptibly impair[ ]" OCA's programs and "directly conflict with the organization's mission." League of Women Voters ,
The defendants assert that plaintiffs must show that OCA's claimed monetary loss "threatens the very existence of the movant's business" to support OCA's claims of irreparable economic injury. Defs.' Opp'n at 36 (quoting Wisc. Gas Co. v. FERC ,
C. Balance of Equities and Public Interest
The third and fourth factors that courts consider in determining whether a
IV. CONCLUSION
For the foregoing reasons, the plaintiffs' motion for preliminary injunction is granted. An appropriate Order accompanies this Memorandum Opinion.
Notes
Federal Rule of Evidence 201 allows a court to take judicial notice of "a fact that is not subject to reasonable dispute because it ... is generally known within the trial court's territorial jurisdiction; or ... can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Both of these conditions apply to a description of the HCV programfound on HUD's public website.
Although SAFMRs are a recent innovation, HUD recognized the shortcomings of FMR schedules based on metropolitan area-wide, rather than more localized, rent levels as early as 1977. See Comptroller Gen. of the U.S., CED-77-19, Major Changes Are Needed In The New Leased-housing Program 21 (1977) ("HUD's decision to prepare single FMR schedules for entire SMSAs [Standard Metropolitan Stаtistical Areas] or for counties grouped into areas totaling 250,000 population is questionable. This approach ignores important distinctions between metropolitan central cities and suburban areas as well as among suburban areas within SMSAs, and it does not adequately consider the economic and demographic differences among non-SMSA counties. For example, the San Francis co-Oakland, California, SMSA had identical FMRs for the counties of Alameda, Contra Costa, Marin, San Francisco, and San Mateo. HUD field office officials said that each of these counties' actual market rents could vary by 30 to 40 percent.").
Under Local Rule of Civil Procedure 65.1(d), "[o]n request of the moving party together with a statement of the facts which make expedition essential, a hearing on an application for preliminary injunction shall be set by the Court no later than 21 days after its filing, unless the Court earlier decides the motion on the papers or makes a finding that a later hearing date will not prejudice the parties." LCvR 65.1(d). The plaintiffs did not request an expedited hearing, and in any event, the Court finds that the parties' consent to modification of the original scheduling order, see Minute Order, dated Nov. 8, 2017, which moved briefing's conclusion back to December 11, 2017, obviates any concern regarding prejudice to the parties occasioned by the hearing date.
The Supreme Court, in Winter v. Natural Resources Defense Council, Inc. ,
The complaint also raises a third claim, asserting that HUD acted contrary to statute in delaying the Rule's implementation by distributing housing funds in a manner that perpetuates racial segregation and does not provide opportunity to rent quality housing throughout a metropolitan area. Compl. ¶¶ 158-163. The plaintiffs' motion does not address this argument, and the defendants do not res pond to it. See generally Pls.' Mot.; Defs.' Opp'n.
All citations to the December 19, 2017 hearing transcript cite to a rough draft of the transcript. A final draft of the transcript is forthcoming and will be made available on this case's docket. Discrepancies between the rough and final transcript drafts regarding page numbers may exist.
The defendants' argument that HUD soon will rescind the Rule through notice and comment and thus moot the plaintiffs' notice and comment claim, see Defs.' Opp'n at 31, only underscores that HUD has not yet invoked notice and comment, and thus, that the plaintiffs' claim is not moot. The issue of whether HUD's planned action would moot the plaintiffs' claim is not yet ripe for review.
Johnson v. United States abrogated Begay by voiding the phrase "otherwise involves conduct that presents a serious potential risk of physical injury to another," known as § 922(e)(2)(B)(ii)'s "residual clause," for vagueness. --- U.S. ----,
Notably, again, this sentence references "a suspension of[SA]FMRs."
A conclusion that
The one PHA that the demonstration project and Rule both affected is the Housing Authority of Cook County, Illinois. Compare Demonstration Project ,
The Interim Report defined a high-rent ZIP code as a zip code with a "rent ratio"-the ratio of a two-bedroom SAFMR over a two-bedroom metropolitan area FMR-of greater than 1.1, and a low-rent ZIP code as a zip code with a rent ratio of below 0.9. Interim Report at 27.
The Dallas pilot PHA also saw a large decrease in number of rental housing units lost, but this loss amounted to only 4% of the Dallas pilot PHA's total rental housing unit supply. Interim Report at vii.
With respect to the fifth criterion, HUD defined a metropolitan area's vacancy rate as "the number of Vacant For Rent Units divided by the sum of the number of Vacant For Rent Units, the number of Renter Occupied Units, and the number of Rented, not occupied units." SAFMR Area Designations ,
As the Institute for Policy Integrity at New York University School of Law, which filed a brief as amicus curiae in support of plaintiffs' motion for a preliminary injunction, observe, various provisions of the Rule are "expressly designed to limit Rule-related increases in tenants' rent burdens .... [b]ut HUD makes no mention of these differences between the demonstration project and the Small Area Rule, even as it relies on the Interim Evaluation of the demonstration projects as a justification for suspending implementation of the Rule." Amicus Br. at 8, ECF No. 21.
The Court, relying on the United States Postal Service's "Look Up A ZIP Code" tool, see Look Up A Zip Code™ , U.S. Postal Serv. , https://tools.usps.com/go/ZipLookupAction!input.action?mode=2&refresh=true (last visited Dec. 23, 2017), takes judicial notice that the ZIP Code for much of Sims bury is 06070. Fed. R. Evid. 201.
The defendants also assert that their arguments as to why Ms. Carter has not shown irreparable harm apply equally to Ms. Moore. Defs.' Opp'n at 34-35. The defendants' arguments fail as to Ms. Moore for the same reason they fail as to Ms. Carter.