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 violates 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 contracts 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 is 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 is 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 lacks standing and that plaintiff's claims are 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 the equal protection principle incorporated in the Fifth Amendment to the U.S. Constitution; 42 U.S.C. § 3604(a); and 42 U.S.C. § 3608(e)(5). HUD filed their answer to the amended complaint a month later.
Following several months of negotiations, the plaintiffs submitted a stipulation of dismissal and the case was closed. The settlement agreement was not entered with the court, and we have no further information on the case at this time.
As of the time this writing, the case is pending, the court having extended a deadline to submit settlement documents until June 4, 2010.Elizabeth Daligga - 07/18/2012