United States v. Starrett City Associates, Starrett City, Inc., Delmar Management Company

respect any undertaken with officers or Conclusion employees Brigham Young University, The order of district court is af- investigation of Ischie which the IRS firmed. concededly conducting discriminatory. case, however, Brigham Young fur- concluding nishes us with no basis for University petitioners

Brigham Young showing similarly There is no situated. Young University actively Brigham depressed realty,

solicited the donation of offered to structure donations meet America, UNITED STATES of contributors, ap- needs of the or selected Plaintiff-Appellee, any event, praisers for its donors. In we v. court, agree with the district see 653 1348-49, ASSOCIATES, single that a instance STARRETT CITY Star Inc., Management Delmar investigate provide of failure to does not Company, Defendants-Appellants. adequate evidentiary basis for a conclusion investigation. of selective Docket 87-6132. No. 1483. Hazel, Similarly, United States (6th Cir.1983), help F.2d 473 is of no Appeals, United States Court of There, petitioners. defendants were con- Second Circuit. offenses, victed of income tax-related Argued July raised a “colorable” claim that had singled similarly Decided March out from others situ- thirty-four ated where other members of group

defendants’ tax revolt committed tax prosecution.

violations but did not face No

remotely present similar facts are here. event, any petitioners have failed to

carry showing their burden of investigation

IRS’s of Ischie is motivated “the desire to exercise of [their] rights.” United States v.

Moon, only 718 F.2d at 1229. There is showing, entirely upon

most tenuous based interpretation

petitioners’ of certain com during by Kees his

ments interviews of Kaldor, that Kees had

Ischie moti improperly upon petition

vation to intrude rights,

ers’ first amendment and no show

ing any alleged whatever that bias on part

Kees’ has become the IRS’s institu posture.

tional See United States v. Mill

man, (2d Cir.1987). again, therefore, Judge

Once Weinfeld cor

rectly concluded that the quash motion to

should be denied and evidentiary that no

hearing required. donors,

is "correct investigation to the extent that it refers to an tional and not to the extent that it refers investigation to determine the names of addi- to a civil of BYU.” Asst. Reynolds, U.S. Bradford William (David K. Gen., Washington, D.C. Atty. Yeomans, Dept, of R. Flynn, William D.C., J. Malo- Justice, Washington, Andrew Eastern District Atty. for the ney, U.S. counsel), plain- N.Y., N.Y., Brooklyn, tiff-appellee. (Col- Abram, New York B.

Morris Carey, Daniel L. McMahon, G. Michael leen Rifkind, Weiss, & Paul, Wharton Sosland, counsel), for Garrison, New York defendants-appellants. NEWMAN, and MINER

Before ALTIMARI, Judges. Circuit Judge: MINER, Circuit General, on Attorney States The United (“the govern- States of the United behalf under Title action ment”), this commenced (“Fair Rights Act of Civil VIII Act”) defend- “the or Act” Associates, ants-appellants Manage- Delmar and City, Inc. “Starrett”) (collectively, Company District Court States the United J.). (Neaher, York of New District Eastern Starrett’s maintained government The in its renting solely on complex Brooklyn origin, national race applicants’ basis unavailable making apartments and are then hispanic and black violate applicants, to white available made Act, 42 (d) (b), (c) 804(a), section (1982). (d) 3604(a) U.S.C. § for sum- cross-motions made parties docu- on extensive based judgment mary court The district mentary submissions. favor of judgment summary granted ap- enjoined permanently government the basis discriminating on from pellants apartments. rental of in the race judgment. appeals BACKGROUND present. between 1975 and the See id. constructed, Appellants operate own City,” largest housing “Starrett devel tenanting procedure requires com- opment nation, consisting high of 46 pletion of preliminary information card 5,881 buildings containing rise stating, alia, applicant’s inter race or in Brooklyn, complex’s York. The New origin, family composition, national income opened rental office in December 1973. employment. and The rental office at Star- capital Starrett has made contributions of City appli- rett receives and reviews these $19,091,000 project, to the the New York preliminarily cations. Those that are found Housing Agency State Finance has made eligible, family composition, based on in- $362,720,000 loans, mortgage in and the come, employment apartment and size of Housing Department and Urban file,” sought, placed are in “the active Development monthly subsidizes Starrett’s separate by which records race are main- mortgage payments. interest The United apartment tained for sizes and income lev- Housing project a Foundation abandoned Applicants acknowledge- els. are told in an development cooperative apart a build apartments present- letter that no are City ments at the Starrett site available, ly applications but proposed Starrett to construct rental units placed have been file active and that on the on the site condition that the New they will be notified when a unit becomes City approve York Board of Estimate a apartment available for them. When an city transfer to Starrett of the real estate available, applicants becomes are selected granted original tax abatement to the from the processing, active file for final project. The transfer created “substantial creating processed applicant pool. a As community opposition” neigh because “the arise, applicants vacancies race a or na- surrounding project past

borhood and origin tional depart- similar to that of the experience housing” with subsidized cre ing ated pool fear that “the conversion to rental tenants are selected from the and apartments would result in Starrett apartments. offered becoming overwhelmingly minority an de 1979, group ap- December of black velopment.” v. United States Starrett plicants brought against an action Starrett Assocs., (E.D.N. City F.Supp. 668, in the United States District Court for the Y.1987). approved, The transfer was how Eastern District of New York. The district ever, “upon the assurance of Starrett plaintiff court certified the class in June City’s developer that it was intended to City Assocs., 1983. Arthur v. Starrett racially integrated create a community.” (E.D.N.Y.1983). F.R.D. 500 Plaintiffs al- Id. leged tenanting procedures that Starrett’s sought Starrett has to maintain a racial by violated federal and state law discrimi- white, by apartment distribution of 64% nating against them on the basis of race. hispanic City. and black at Starrett 22% 8% parties stipulated The to a settlement in Id. at 671. Starrett claims that these racial May and a consent decree was en- quotas necessary the loss of subsequently, tered see Arthur v. Starrett tenants, white which would transform Star- Assocs., City 79-CV-3096, slip op. No. 1at predominantly into a (E.D.N.Y. 2, 1985). April pro- The decree complex. points Starrett difficulty to the would, vided that depending Starrett attracting has had in integrated appli- apartment availability, make an additional pool cant from the time Starrett year 35 units each five-year available for a opened, despite advertising extensive and period minority applicants. to black and promotional pur- efforts. Because of these Id. at 10. ported difficulties, adopted Starrett a ten- anting procedure government promote present commenced the and maintain the desired procedure action balance. This June “to in relatively percent- place [cjourt resulted joined stable before the the issue but ages of whites and living minorities expressly at Star- left unresolved” in the Arthur behavior, human defend- “legality decree: consent ” expert stated one precision,’ limiting the with practice ants’ been esti- occurs has tipping point minori- at available number popula- de- 60% from 1% prescribed mated in order ties ranged be- consensus tion, States but United racial balance.” gree expert, 262, 263 Another Assocs., 20%. tween 10% alleged on inte- in 1980 report complaint prepared had (E.D.N.Y.1985). tenanting York poli- New City for Starrett, through gration Community Housing violation Division cies, discriminated State government tipping complex’s Specifically, Renewal, Act. estimated violated a pop- black 40% approximately point at maintained unavailable ex- A making third 674-75. by Id. at basis. ulation race, 42 U.S.C. solely because involved blacks who had pert, forcing black 1950’s, found 3604(a); since § ventures apartments longer for significantly produced white-minorFy wait ratio a 2:1 that race, id. solely because whites than 676. id. at integration. See successful pre- that enforcing by 3604(b); § govern- however, accepted the court, The limiting the while applicants white fers Starrett’s that contention ment’s accepted, applicants numbers for unavailable apartments making an in representing by 3604(c); and id. § whites, for reserving them blacks, while apart- no that letter acknowledgement based minorities conditioning rental and in fact when rental for available are ments only from derived “tipping formula” aon 3604(d). Because available, id. § units violations origin are clear national or race intervene had refused government the court The district Housing Act. Fair dis- moved suit, defendants Arthur the for opportunities apartment that found judicial the under as barred this suit miss “than fewer far were hispanics and 1985, blacks 2, that April On estoppel doctrine. ori- national and if race expected 265. at F.Supp. denied. was motion account,” while into taken not were gin discovery, taking for period Following a substantially were for whites opportunities summary judg- moved government the rates application their what than greater Defendants 30, 1986. January on ment Minority 672. Id. at projected. summary judg- a cross-motion made the than longer times ten up to waited documen- 5, Extensive 1986. May on they were before applicant average white argu- made, and were tary submissions at 676. Id. apartment. offered August on heard were the motion ments in Octo- white 21.9% was file active 26, 1986. the occupied 64.7% whites but ber tenanting the that maintained Although the January 1984. the behest adopted at “were procedures hispanic 18% and black was 53.7% file and achieve solely [sjtate respec- hispanics, and blacks October ra- by motivated not and were and 7.9% only 20.8% occupied tively, sup- To 673. at animus.” cial Id. at January 1984. as of submitted appellants position, port their Further, dispute this. did Appellants ex- housing testimony of three written ar- tipping appellants’ found court flight” “white They described perts. elastici- “wide by the undercut was gument white in which phenomena, “tipping” and diffi- lack and standard” ty of that community as aof out migrate residents black increasing their they had culty mi- poor and community becomes became “when to 35% from 21% quota resulting increases, nority population private litigating necessary to avoid minority com- predominantly to a transition un- threatened lawsuit Arthur Acknowledging at munity. See id. “ at 678. practices.” lawful particular point tipping ‘the violated found also court does itas depending development, housing representations making untrue byAct uncertainties factors on numerous apartment unavailability qualified race, minor- cause color or origin national ity applicants in order reserve units for sale housing by, or inter alia: (1) Id. at 676. Finally, whites. refusing court re- to rent or make any available jected claim that duty Starrett’s im- dwelling, id. 3604(a); (2) offering. § dis- posed upon government criminatory “terms, achieve privi- conditions or integration justified actions, stating leges” rental, id. 3604(b); (3) making, § arrogate cannot printing them- publishing notice, “[defendants “any state- powers” public selves the of a housing ment, or advertisement ... indicates Id. authority. any preference, limitation, or discrimination race, based color ... or origin,” national The court concluded Starrett’s obli- id. 3604(c); (4) representing any § gation “simply solely to comply person any “that dwelling is not available with the Fair Housing Act” treating for ... rental when dwelling such is in fact “black and other applicants ... on available,” id. § so 3604(d). the same basis as seeking whites in avail- able Id. City.” Housing practices unlawful under court noted dispute that Starrett did not Title VIII include those motivated operative alleged facts to show by racially discriminatory purpose, but violations Id. Act. also those that disproportionately affect 672, 678-79. Accordingly, Judge Neaher See, e.g., Robinson v. 12 Lofts minorities. granted summary judgment govern- for the Inc., Realty, (2d ment, enjoining Starrett from discrimina- Cir.1979). Section designed 3604 “is to en ting against applicants on the basis of race sure that no one right is denied the to live adopt written, “[requiring [them] they where choose for discriminatory rea objective, uniform, nondiscriminatory ten- sons.” See Neighborhood Southend Im ant selection procedures” standards and prov. Clair, Ass’n v. County St. 743 subject to approval. the court’s Id. at 1207, (7th F.2d Cir.1984). 1210 Although jurisdiction court retained par- over the denial, every “not especially temporary ties years. for three denial, of public low-income housing has a appeal, discriminatory impact On presses on racial arguments minorities” VIII, see similar to violation of Title Arthur v. those it made before the district Toledo, 565, (6th court. We 782 affirm the district F.2d 577 judg- court’s Cir. 1986), leading ment. an action to discriminatory availability effects housing vio DISCUSSION Act, Neighborhood see Southend lates the Ass’n, Improv. 743 F.2d at 1209-10. Rights VIII of the Civil ofAct 1968 (“Fair Housing Act”), Act” “the 42 U.S. public Starrett’s allocation fa (1982), C. 3601-3631 pursu was enacted §§ cilities on the basis quotas, by of racial Congress’ ant thirteenth denying amendment applicant access to a unit other Co., see powers, v. Williams Matthews 499 solely race, wise available pro 819, (8th Cir.), denied, F.2d cert. 825 419 duces a “discriminatory effect ... [that] 1027, U.S. 1021 507, & 95 S.Ct. 495 42 hardly & could Burney v. Hous clearer,” (1974); L.Ed.2d 294 & Auth., ing United States v. 302 746, F.Supp. (W.D.Pa. 551 770 Inc., Bob Realty, Lawrence 115, 1982). 474 F.2d Appellants do not contend that the (5th Cir.), denied, cert. 414 plain U.S. language of section 3604 does not 826, 131, 94 S.Ct. (1973); 38 L.Ed.2d proscribe 59 practices. Rather, Hunter, United States v. 205, 459 F.2d 214 claim to be governmental “clothed with au (4th Cir.), denied, cert. 934, 409 U.S. 93 thority” obligated, and thus under Otero v. 235, S.Ct. 34 (1972), L.Ed.2d 189 Auth., New pro “to York Housing 484 F.2d vide, within limitations, (2d Cir.1973), 1122 pur effectuate the fair throughout pose United Housing the Fair affirma States.” 42 U.S.C. tively Section 3604 promoting integration § prevent of the statute prohibits ing reghettoization discrimination be- “the of a model inte-

HOI denied, 1010, cert. 1256, 401 U.S. need not decide 91 community.” We S.Ct. grated (1971) actor, (stating 28 L.Ed.2d 546 however. that each of is a state whether provisions “proscribes discriminatory these with were a state actor if Starrett Even color”). conduct because of race or Fur quotas the racial and related duty, such a ther, parallel between the antidiscrim- employed at objectives ination of Title VIII and Title the antidis- violate Rights VII Civil Act of 42 Act. provisions of the crimination (1982), U.S.C. 2000e-2000e-17 has been §§ government cite to and the Both Starrett See, e.g., v. Town recognized. Smith history Housing of the Fair legislative Clarkton, (4th 682 F.2d 1065 Cir. support positions. of their This his- Act in 1982). Thus, Supreme analysis Court’s from the tory solely of statements consists permissible of what constitutes race-con Hunter, Congress. See floor of provisions scious affirmative action under reveal “that n. 4. These statements 210 at goals of federal with law similar to those enacted, Title VIII was the time that at provides of Title VIII a framework for Congress that strict adherence believed examining the affirmative use of racial provisions of the the anti-discrimination quotas Housing under the Fair Act. “racially eliminate discrimina- would [A]ct” Although any pre classification ultimately housing practices tory [and] sumptively discriminatory, see Personnel integration.” result residential 256, 272, Feeney, Admin. v. 442 U.S. 99 769; see Rubinow- Burney, F.Supp. 551 2282, 2292, (1979), 60 L.Ed.2d 870 S.Ct. Trosman, Action and itz & Affirmative plan race-conscious affirmative action does Implementing Dream: the American necessarily violate federal constitution Home- Policies Federal statutory provisions, see, e.g., United al or ownership Programs, 74 Nw.U.L.Rev. — Paradise, U.S. -, v. States 107 S.Ct. Thus, (1979). saw the 538 n. 1053, 1064, (1987) (plurality L.Ed.2d policy as the means to antidiscrimination amendment); (fourteenth United opinion) poli- antisegregation-integration effect the Weber, 193, 208, Steelworkers quotas cy. at 769. While See 2721, 2729, (1979) 61 480 99 S.Ct. L.Ed.2d integration policy, promote Title VIII's However, VII). plan (Title a race-conscious poli- they its contravene antidiscrimination “ageless in reach into the cannot be [its] cy, bringing goals the dual into ability in affect past, and timeless to [its] history legislative provides conflict. v. Bd. Wygant Jackson the future.” of resolving guidance for this con- no further Educ., 476 U.S. 267, 1842, 1848, 106 S.Ct. flict. (1986) (plurality opinion). A L.Ed.2d 260 90 pro analogous We therefore look must employing racial distinctions plan prohibit of law enacted to visions federal goal as temporary nature with a defined in guides in segregation and discrimination as See, v. e.g., Johnson point. termination its — criteria determining to what extent racial U.S. -, Agency, 107 Transportation may integration. Both be used to maintain (1987); 1442, 1456, 94 L.Ed.2d 615 S.Ct. amendment, pursuant the thirteenth Paradise, 1070; Metal Sheet at 107 S.Ct. enacted, Title and the four EEOC, 478 421, VIII was v. 106 S.Ct. Workers empower (fifth 3019, (1986) teenth amendment 3053, 92 L.Ed.2d 344 discrimination, eradicating in v. act racial Fullilove equal protection); amendment Kreps, Klutznick, Pa. v. 489, Constructors Ass’n W. 448, 448 U.S. 100 S.Ct. of Weber, 811, (3d Cir.1978), 2780, 2758, (1980); 573 816 n. 12 F.2d 902 65 L.Ed.2d 2729-30; 208-09, see both the fourteenth amendment and Title at 99 S.Ct. at 443 U.S. congressional Metropolitan v. Hous by the Lucas VIII are informed also Jaimes Auth., 1203, (6th eradicating ing goal racial discrimination F.2d 1208 Cir. 833 antidiscrimination, 1987) integration (stating through principle that affirmative City authority public housing “should Kennedy see Park Homes Ass’n v. plan for Lackawanna, (W.D.N.Y.), finding 669, court’s F.Supp. upon 694 end 318 [district] accomplished”). More- (2d Cir.1970), goal 'd, its been 436 108 F.2d aff 1102

over, discriminatory adversely we observe that societal discrimina- imbalance affect- ing tion alone seems “insufficient and over ex- whites within Starrett or City appel- pansive” adopting as the basis so-called complexes. other lants’ On contrary, “benign” practices discriminatory with ef- was initiated as an people,” fects “that work innocent complex, and Starrett’s purpose avowed 1848, in Wygant, 106 S.Ct. at the drastic employing race-based tenanting practices is way rigid quo- and burdensome racial to maintain that initial Final- Furthermore, quotas the use tas do. ly, quotas do provide Starrett’s minori- history generally should be based some ties with access to Starrett but rather discrimination, 1847, of racial see id. at or ceiling Thus, act as a access. imbalance, Johnson, see 107 S.Ct. at 1452- impact appellants’ practices square- falls 53, seeking entity employ within ly minorities, for whom VIII was Finally, designed to in- them. measures up to open housing opportunities. intended minority participation, crease ensure quotas Starrett claims that use quotas, Burney, “access” see such as keep serves the numbers of minorities 763, generally upheld, F.Supp. at entering enough low to avoid Johnson, 1456-57; see, 107 S.Ct. at e.g., setting flight.” off a wave “white Al- Paradise, 1070-71; Weber,443 107 S.Ct. at though flight” phenomenon may the “white 208, However, at U.S. at 99 S.Ct. be a factor into account “take[n] programs designed integration maintain integration equation,” Parent Ass’n An- limiting minority participation, such as Ambach, High drew Jackson School quotas, Burney, ceiling see 705, (2d Cir.1979), F.2d it cannot serve Jaimes, 763, validity, are doubtful see justify attempts to maintain (invalidating public at 1207 hous- 833 F.2d City through at Starrett inflexible racial authority integration plan ing to the extent quotas temporary neither na- quota), as strict racial acts remedy past ture nor used to discrim- “ represented out least ‘single[ those well ] complex. ination or imbalance within the political process to bear the brunt ” Appellants’ reliance on is mis- Otero program,’ Fullilove, benign 448 U.S. at placed. In Otero the New York Hous- 519, (Marshall, J., concur- 100 S.Ct. at 2796 (“NYCHA”) ing Authority relocated over ring) (quoting Bakke, Regents v. 438 U.S. 1800 families in Lower Side East 2733, 98 S.Ct. 57 L.Ed.2d way Manhattan to make the construc- J., (1978)(Brennan, part concurring apartment buildings. tion new dissenting part)). regulations, to its Pursuant NY- ceiling quotas Starrett’s use occupants former CHA offered the site City lacks priority returning first of to First, each these Star- of characteristics. within the built urban renewal area. Id. at City’s goal practices only of the However, response 1125-26. because the al integration quotas maintenance. The by largely the former site resi- years. ready in effect for ten have been seeking nearly dents to return was seven predict Appellants that their race-conscious greater expected, times than de- NYCHA tenanting practices for at must continue regulation to order clined follow its in to years, explain least fifteen more but fail to creating “pocket ghetto” avoid a that adequately approximation how that “tip” integrated community an to- event, In any reached. these predominantly minority a wards communi- far temporary. goal from Since the of ty. Id. at 1126. It up instead rented integration purportedly maintenance is of half these to site non-former by threatened potential the for “white occupants, whom were white. Id. 88% of flight” basis, continuing a no definite termination date quotas for Starrett’s perceivable. Second, appellants by brought not as In suit former site occu- do sert, show, pants promised priori- and there is ho evidence the the to were denied prior of existence ty, racial discrimination or court held matter of the district as a

H03 quota, because racial a strict operate as ra- achieve to action “affirmative law a rental entitled to residents site per- former was not communities cially balanced white, id. approximately 40% were depriving priority in result it would where mitted in re- measure As a one-time housing, and at 1128. public minority groups” of circumstances special favor in sponse summary judgment granted thus 1970’s, early re- in the court Side This Lower East 1130. Id. at plaintiffs. impact had an in summary judgment, challenged Otero grant action versed had less burden- group far housing authorities aas public on non-whites stating that duty statutory discriminatory than Starrett and constitutional some federal goal of possible, as fulfill, practices. continuing much as “to pat- residential open, segre- increase prevent terns CONCLUSION recognized we but ghettos,” in gation, race is imply that intend to doWe might tobe instances some in effect “the un- consideration always inappropriate racial aof members some inte- promote efforts in Title VIII der assisted publicly in residing only that Title hold housing. We grated at 1133-34. Id. location.” particular ain rigid use appellants not allow does VIII however, control not, does Otero to main- indefinite duration quotas racial in- did in Otero challenge case. integration level a fixed tain mainte- long-term procedures volve minority access restricting but integration, levels of specified nance accommoda- and desirable scarce apart- new 171 of rather, to them. We available otherwise tions pre- occupants, site to non-former ments the dis- judgment affirm therefore res- site former white, although dominantly court. trict sought those minority, idents, largely priority entitled were Judge, NEWMAN, Circuit JON Ote- regulation. own NYCHA’s under dissenting: statutory or not delineate did court ro Housing Act Fair means enacted permissible limits housing. segregation only NYCHA’s racial prohibit held but integration, successful inval- the most is one of declared could not practice rent-up limits. of racial nation those examples law under as matter id respectfully observed dissent I in Otero fact, housing. court tenanting practic- Congress intended of race-conscious not believe use I do engage mainte- “to prohibit landlords allow might es general hous- private subject engineering, racial to. nance social supervi- through judicial control ing. undefined un- forma “constitute could sion” discrimination.” lawful I. note important particularly It is apart- owned privately is a in Otero challenged action NYCHA It Brooklyn. consists complex in initial single event—the ato only applied 5,881 containing rent- buildings high-rise deter- complexes of the new up rent —and there. live 17,000 people Nearly al units. alone. instance first tenancy in the mined has been City inception Starrett From imme- the sought only to NYCHA main- achieve and operated planned and ghetto” “pocket of a creation diate racial tain experienced a Side, had East Lower been to have originally was complex would population, white steady loss of housing de- owned cooperatively as a built there, re- racial balance tip precarious the Co-Op City sponsor by the velopment inev- flight and white in increased sulting ob- financing was When Bronx. the com- of the ghettoization “non-white itable by the over taken was tained, project Further, sus- munity.” Id. rental business owner, whose current regulation did of NYCHA’s pension housing. Because City giv- New York had Hispanic, Oriental, and 4.5% other 2% en previous developer substantial tax mixed. figures These fairly con- abatements, City’s approval was neces- stant since During period sary if City Starrett was to have the bene- minority percentage of the City Starrett fit of these tax The prospect abatements. population has been approximately 45%. large, of a low-income rental com- In City agreed, Starrett part as of a plex generated political oppo- considerable settlement brought by lawsuit a class sition City within the those applicants, of Black to raise minority project feared that the would attract rental percentage unit over 38% five minority tenants. The new owner and the years. New York State Division of Housing and The consequence of policy Starrett’s Community (DHCR) gave Renewal assur- maintaining racial balance has been that steps ances that affirmative would be tak- Black disproportion constitute a en to maintain City integrat- Starrett as an ately larger waiting share of the list for community. ed assurances, On these apartments Whites, than do and remain on City York New Board of ap- Estimate the list for considerably longer periods of proved the City construction of Starrett as time than do Whites. ofAs November development. a rental up Blacks made approximately 54% time, At policy DHCR called for an waiting list while ap Whites filled integration goal majority 70% 30% proximately places of the on 22% the list. minority state-sponsored tenants For a apartment, two-bedroom average projects. adopted The defendants goal waiting qualified time the list appli City. for Starrett Since the size tenants’ cants was twenty months for Blacks and varied, target families percentages re- Whites; two months for for a one-bedroom flected the anticipated racial distribution of apartment, the comparable figures were units, rather persons than of living eleven months and four months.1 complex. To target reach its balance, racial explicitly Starrett City de- development City Starrett as an first-come, clined to rent apartment first-served complex committed to a deliber- Instead, basis. reacting to the fact that ate of maintained Blacks and other applied minorities has at all times occurred with knowl- greater in far edge, encouragement, and support financial Whites, numbers than management im- agency of the United States directly posed ceilings on the of apart- number housing, concerned with Department ments of various sizes that be rented would Housing Development (HUD). and Urban to Blacks and other minorities. As the Under a contract between HUD and Star- number of tenants of minority each rett government federal pays all ceiling reached the particular for a size of percent but one of the debt service of the apartment, subsequent applicants from mortgage loan extended to Starrett placed waiting were on a list the New York State Finance until per- sufficient vacancies occurred to Agency (HFA). By March 1986 HUD had mit a rental to member paid HFA more than million $211 on Star- without exceeding the ceiling. established City’s In exchange behalf. for this experience As subsidy, with this interest policy de- City agreed veloped, decided that it limit the eligible rent tenants to a permit percentage monthly figure specified rent- by HUD or to a ed to minorities to move percentage above 30% and to stated of the tenant’s monthly reach approximately components 25%, 35%. The (initially 30%), income now whichever of this aggregate figure Black, greater. addition, 21% 8% provided HUD has 1. Occasionally, the burden greater for these units numbers than Black policy rental ignates complex falls on seniors, Whites. The des- apart- White seniors have waited for and, buildings certain for citizens senior longer ments than Black seniors. during periods applied when White seniors have

H05 minority applicants for same rights of the in- low tenants with for rental subsidies dispute just settled their housing who had subsidies rental these 1981 Since comes. terms. year. favorable million nearly $22 have been the devel cooperation close Despite its as an City II. of Starrett opment States now United complex, the housing is whether in this case The issue it to abandon City force to Starrett sues Title policies violate City’s rental Starrett it to enabled policies rental 1968, 42 Rights ofAct the Civil VIII bringing (1982 Ill Supp. & U.S.C. §§ as question raises substantial suit of the as the “Fair Hous- 1985), known generally to inte commitment the Government’s to explicitly has The United States ing Act.” timing the suit housing. The grated a constitu- any claim of assert to declined In in doubt. further commitment puts that Appellee at for Brief See tional violation. for hous applicants Black a class 1979 n. 9. to brought chal suit City ing at Starrett their dispute that do not defendants statutory and constitution lenge on federal literal lan policies fall within poli rental tenant selection the same grounds al dis prohibition on guage v. Star VIII’s case. Arthur in this at issue cies (ERN) housing practices.2 See Associates, criminatory 79 Civ. City they govern contend federal 3604. Instead (E.D.N.Y.1979). With U.S.C. § sidelines, par of the purposes observing they are state actors engaged Amendment, policies their litigation Arthur to the Fourteenth ties More negotiations. the Fourteenth under both settlement to be tested protracted are later, mutually by advanta Housing Act years four than Amendment Regents reached. scrutiny was standard geous settlement strict policy of Bakke, its continue to City permitted University was California tenant its through maintaining 57 L.Ed.2d 265, 98 S.Ct. City return, In policies. selection test because they meet this (1978),and that over by percent three increase agreed to further policies race-conscious their units proportion of years five inte promoting interest of state compelling same At the minority tenants. by occupied narrowly tailored housing and are grated agency, DHCR, housing time, the state minimum, At a interest. achieve to Arthur a defendant was also which a trial on to contend, they entitled steps agreed to take affirmative litigation, claim. their prove the merits for mi opportunities housing promote are entitled view, the defendants my housing DHCR-supervised norities statutory issue simply on prevail City. Specifically, New York projects in law- limited the Government priority give a agency agreed the State liter- statute of the Though terms suit. minority applicants on projects in other actions, the defendants’ encompass the ally waiting No member list. City such apply to intended was never statute applicants hous minority the class bar intended to was This statute actions. the settle objected ing at Starrett it to apply To segregation. perpetuation Thus, the needs ment. precisely bar maintenance had been the suit for whose benefit class “to congressional contrary to the by met their satisfaction brought were limitations, within provide, opportunities for more providing throughout United fair Just and elsewhere. both 42 U.S.C. § States.” after settlement month one cautioned wisely suit, have been We reached, filed States United way surer is no Hand that Learned “[t]here vindication with ostensibly concerned longer waiting list the Starrett main barred from Though have been no race, applicants. White admitted than because race, re- applicants, of their a document misread than to read it liter experience lack of living actually Guiseppi ally.” Walling, Negroes.” next to Id. at 2275. Starrett (2d Cir.1944)(concurring opinion), City is proposition committed aff'd Gemsco, sub nom. Inc. v. Walling, 324 Blacks and Whites shall live next to each (1945). 65 S.Ct. 89 L.Ed. 921 other. A law enacted op- to enhance the aphorism always is That not true with re portunity people for of all races to live next spect statutes, always text whose is to each other should not interpreted starting point analysis and sometimes prevent a landlord from maintaining one of ending point. But literalism is not al the most integrated housing successful ways appropriate approach even with projects in America. statutes, Supreme as the long ago Court None legislators who enacted Title recognized: rule, “It is a familiar that a view, expressed VIII ever on whether thing may be within the letter the stat they wished to the maintenance of yet statute, ute not within the racially housing. balanced Most of those spirit, not within its nor within the intent of passed who this statute in probably Holy makers.” Church Trinity could not even contemplate private real States, 457, 459, v. United 143 U.S. estate deliberately owner set 511, 512, (1892). S.Ct. 36 L.Ed. 226 out to racially achieve a balanced tenant Title discriminatory VIII b.^rs housing population. they thought Had of such an practices in order segregated to end hous eventuality, slightest there is not the rea- ing. promoting segre son to believe that would have raised gated housing. contrary, On the it is main legislative hands it. taining integrated housing. surely It is This Circuit previously ruled spirit within the of the Fair Act to Title apply VIII does not literally prohib- enlist Act to bar housing. racially policies based rental adopted to isNor there indication application promote integration. Otero v. New York perverse the statute toward such a end City Housing Authority, (2d 484 F.2d 1122 was within the intent of those who enacted Cir.1973). In public that case housing the statute. It is true that there are some authority had by regula- committed itself legislative statements history that give tion to priority first broadly condemn “any” discrimination for displaced who had Mondale, reason. Senator principal project. construction of the sponsor VIII, of Title said “we do not authority disregarded then regula- its own any good see justification, reason or tion, apprehension on its giving based place, permitting first discrimination in priority first to the class of those displaced the sale housing.” or rental of Cong. site, from the most of whom were non- (1968). context, Rec. 5642 But his like that White, project would cause the pass occurred,3 the entire debate con “tipping point” so-called pre- and become cerned maintenance of segregation, not in dominantly question non-White. The first tegration. point His was that there nowas in Otero whether authority’s delib- for discriminating against reason a Black erate not to priority poli- decision honor its who wished to live in a previously all-White cy because the pre- benefitted class was housing project. He decried the explicitly dominantly non-White violated prospect Title VIII. going sepa “we are to live The Court held that the Act was not rately in violat- ghettos white Negro ghet ed simply tos.” because a Id. at race-conscious 2276. The decision purpose VIII, had been said, made he connection with rental replace was to ghettos “by policy: truly integrated and living balanced patterns.” out, Id. at pointed 3422. As Congress’ he providing desire in fair hous- biggest problems we face ing throughout “[0]ne the United States was to 3. Because Title VIII reports. was offered as a floor tee Senate, amendment in the there no commit-

H07 applying the site were from placed to ghettos of urban spread the stem Star- project, whereas the new housing in even housing, open, promote n long-term policy a pursue to City seeks instances rett in some effect the though nothing I see integration. maintaining of a members of some prevent to might be history Title of legislative residing publicly in text the minority from If, a distinction. such supports location. that particular VIII housing in a assisted holds, bars Starrett Title VIII Court as the even policy, rental race-conscious a race-con- that decided Court the Once and maintain promote adopted to though necessarily vio- not did policy rental scious policies bar such it would then integration, issue difficult the Act, faced it then the late long- aor on a short-term adopted whether imposed an the Act case—whether the dis no makes Since term basis. promote to duty affirmative poli rental durations among the tinction authority to permit to force sufficient terms, Otero’s its to alleged violate cies issue, that On regulation. own its violate policy rental of a race-conscious upholding authori- favor ruled also Court be cannot promote adopted to de- which a trial remanding for ty, was policy simply because ignored apprehen- its that establish could fendant duration.4 limited well point” was “tipping concerning a sion priori- of its be abandonment can somehow Title VIII if founded even But inte- promote necessary to of a race- was policy ty make lawfulness to construed inte- promotes gration. policy rental conscious policy, of the duration turn gration Otero. than easier much case Our it so that a trial to City is entitled released seeking Starrett to be City is policy its its contention prove made can previously it has a commitment from In the integration. housing. To needed still any of though Government, some Title VIII Court District not find need prevail it contested pro- summary judgment, it to compelling seeking obligation affirmative a contention freely chosen City’s factual has It integration. mote currently pre- was policy is entitled rental integration and race-conscious promote pass- complex forbids VIII something in Title needed unless vail seg- becoming in Title anything point” If voluntary policy. “tipping ing the its poli- on a brief relied race-conscious The Government prohibited regated. VIII made integration, Otero employee, promote HUD adopted aof cies affidavit decided summarily observation the unremarkable primarily would any cer- predict with defendant. is difficult it par- in a point” “tipping precise tainty the significance Acknowledging the summa- opposing neighborhood. ticular distinguishes Otero, the Court ruling in de- presented judgment, ry in- Otero ground that on the essentially evi- abundant providing affidavits tailed duration, applica- limited policy volved that abandonment show dence those dis- in which period only to the ble housing. in the context life Cf. fact strafed Title Court, parallel between drawing a High School Jackson Andrew Ass’n Parent VII, bars discrimination Title VIII and Cir.1979) (2d Ambach, F.2d (1982), supports 2000e § U.S.C. employment, 42 point” con- "tipping validity aof (recognizing deci- Supreme Court VIII with of Title its view course in the context public school in the cern race-con- use of limited approving sions decree). desegregation framing a remedial statutory and constitu- under remedies scious VIII arising under statutory issue employment context. standards tional what basis of on the decided be should Congress a common VII share Though VIII and Titles it enacted proscribing when discrimination, was combatting objective of stan- Whether provision. assumption that preclude the differing contexts between differ action affirmative developed dards for em- action of affirmative the law need housing contexts employment and housing. The readily applicable ployment is explicitly Government since considered with a been concerned have not cases Title VII any claim litigation to advance in this declined force beyond which work point" "tipping action. unconstitutional demon- is a segregated. Yet might become policies complex cause the prefers to York that it to outlaw maintenance pass “tipping point” and soon become a I do Congress not believe segregated development. This evidence made that decision in and it is a solidly experience. relevant question based on substantial whether it would make housing developments near Several Star- today. such a decision Until operating acts, without authority we should not lend our maintenance, integration have become ra- surely bring result this lawsuit will cially segregated, including one across the about. In the words of Dr. Clark: City. street from Starrett tragedy highest would be a [I]t magnitude litigation if this were to lead Otero established for this Circuit that a to the destruction of one of the model policy adopted pro race-conscious rental integrated communities in the United integration mote does not violate Title VIII States. and that a defendant must be afforded an opportunity to demonstrate at a trial that Because the Fair Act does not policy needed to its rental is require tragedy occur, respectfully this I housing complex becoming segregat dissent. may ed. Starrett affidavit evidence summary sufficient to entitle it to well be

judgment on issue of continued need race-conscious rental to main integration.

tain At a minimum it is enti present

tled to a trial to its evidence to a

trier of fact.5 private housing Whether GUNBY, Jr., Appellant Charles complexes through should be maintained 86-3707, policies the use of race-conscious rental deny equal opportunity minorities an highly to rent is a controversial issue of PENNSYLVANIA ELECTRIC COMPA- policy. social argu- There is a substantial NY, Appellant in 86-3723. imposing any artificial bur- 86-3707, Nos. 86-3723. quest dens on minorities for hous- ing. hand, On the other there is a substan- Appeals, United States Court of argument against forcing tial Third Circuit. housing complex segregated, to become Argued July if even current conditions make only by imposing feasible means of some Decided Feb. delay extra minority applicants for hous- Rehearing Rehearing In Banc

ing. Department Officials of the of Justice 4,1988. Denied March urge policy. are entitled to the former Re- spected rights civil advocates like the noted

psychologist, Clark, Dr. Kenneth are enti- urge

tled policy, the latter as he has

done in an affidavit filed in this suit. That

policy choice should be left to the individual private property

decisions of owners unless

and until legis- or the New York

lature decides for the Nation or for New adequate-

5. The Court provide faults Starrett for not witnesses can be called to it. ly event, explaining prohibits the basis for its estimate of the is the issue whether Title VIII during policies doing today, time which its rental would have what Starrett whether to be retained in the future in order to avoid has made an incorrect estimate of needed, segregation. explanation If such an what it will have to do sometime in the future to the Court should remand trial so that

Case Details

Case Name: United States v. Starrett City Associates, Starrett City, Inc., Delmar Management Company

Court Name: Court of Appeals for the Second Circuit

Date Published: Mar 1, 1988

Citation: 840 F.2d 1096

Docket Number: Docket 87-6132; 1483

Court Abbreviation: 2d Cir.