of $ 38,000. HUD defines "low income" families as those whose annual income is $ 25,600 or less.
HUD estimates that 50% of the single-family houses are sold to investors who rent the properties or resell them for profit. Supplemental Declaration of Stephen A. Martin. Affidavits from leaders of various non-profit organizations ("housing providers") that have attempted to acquire these single-family houses estimate the figure to be much higher, especially in urban areas such as the District of Columbia where affordable housing is scarce. See Declaration of Rev. Thomas Knoll, Executive Director of Community Family Services. HUD cannot estimate what percent of the houses are sold to homeless or low income persons.
The sale proceeds are deposited into the four funds that make up the Federal Housing Administration (FHA) Insurance Fund. The FHA Insurance Fund uses these monies to pay insurance claims, maintenance and sales costs, salaries, and to fund future mortgage insurance transactions. There is a rapid turnover of the single-family homes acquired by HUD. In the first ten months of fiscal year 1988, HUD acquired approximately 7,128 properties per month and sold approximately 6,212 per month. HUD acquired 64,880 properties in fiscal year 1987 and sold 52,694 of them, resulting in a net intake of 2.2 billion dollars. HUD has three programs intended to assist the homeless. In its Reduced Sales Program, HUD offers a 10% discount to qualified homeless organizations. HUD has sold 164 single-family properties to homeless providers since 1985. Its Lease Program leases houses to homeless organizations at a cost of one dollar per year on a case-by-case basis. This program was recently changed to include the single-family inventory. Currently, 185 houses are leased under this program. HUD also has a Lease Option Program that permits homeless providers to lease houses for six months while applying for grants to purchase them. Plaintiffs allege that they have been "frustrated and rebuffed" when seeking to obtain housing under these programs, and that the HUD local field offices are either not aware of or not supporting the programs. See Declaration of Rodman McCoy, Director of Program Services of Neighborhood Housing Services; Declaration of Rev. Thomas Knoll. A phone survey conducted by plaintiffs of housing providers in 32 cities revealed that none were aware of these HUD programs. Declaration of Mary Ellen Hombs, Analyst for National Coalition for the Homeless. In their declarations in this case, several organizations specifically averred that when they sought to purchase single-family houses at some type of discount, HUD field offices told them HUD was forbidden from selling the houses under any circumstances other than sale to the highest bidder. See Declaration of Rev. Jim Dickerson, Director of MANNA; Declaration of Rodman McCoy. In one instance the Washington field office allegedly told area housing providers that it would accept bids for a block of properties on a preferential basis, the organizations submitted bids, and the field office rescinded the sale on orders from the national office. Declaration of Rev. Jim Dickerson.
Defendant Pierce contends that the plaintiffs lack standing because their injuries are speculative, not fairly traceable to HUD's conduct, and not likely to be redressed by the relief they seek. The injury cited by the individual plaintiffs is being homeless. The organizational plaintiffs face a severe shortage of houses that they can make available for homeless and low-income families, and their members are homeless as a consequence. These claims of injury are sufficiently concrete. Havens Realty Corp. v. Coleman, 455 U.S. 363, 379, 71 L. Ed. 2d 214, 102 S. Ct. 1114 (1982); Action Alliance of Senior Citizens v. Heckler, 252 U.S. App. D.C. 249, 789 F.2d 931, 937-38 (1986).
Plaintiffs have also satisfied the causation and redressability requirements for standing. They have convincingly demonstrated that their inability to find sufficient housing is caused, at least in part, by HUD's refusal to make houses available from its single-family inventory. Some of the organizations have bid for HUD properties against other purchasers with little or no success. See Declaration of Rodman McCoy. Plaintiffs cite specific examples where houses purchased by investors at HUD auctions remained vacant after their sale and subsequently deteriorated. See id. In other cases, homes purchased by investors deteriorated beyond repair even when occupied. Declaration of Martha Scott, Mayor of Highland Park, Michigan. Plaintiffs also cite instances in which HUD refused to sell houses because its minimum price was not met, and the vacant houses subsequently fell into a state of disrepair. Declaration of Rodman McCoy; Declaration of Rev. Jim Dickerson. In short, plaintiffs' injuries are caused by HUD's refusal to make single-family properties available to assist the homeless. See Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252, 261, 50 L. Ed. 2d 450, 97 S. Ct. 555 (1977).
Most of the organizational plaintiffs, and similar organizations they claim to represent, currently have programs in which they acquire single-family houses and make them available at little or no cost to homeless families or individuals. Declaration of LaVelle Williams, Chair of the Michigan Avenue Community Organization; Declaration of Edward Schwartz, Director of the Office of Housing and Community Development for Philadelphia; Declaration of Brian Carome, Executive Director of Housing Opportunities for Women; Declaration of Rosa Sims, Executive Director of United Street Networking and Planning; Declaration of Martha Scott. The plaintiffs are ready and able to use HUD's single-family homes to alleviate the homelessness of their members.
The defendant asserts that plaintiffs' prospects for redress are too attenuated because the relief requested will not compel HUD to provide any of its inventory to the plaintiffs. But the relief requested, HUD's compliance with the statutes, is the "necessary first step" for the plaintiffs to reap any benefit from the statutes. Bruce v. Department of Defense, 1987 U.S. Dist. LEXIS 14944, No. 87-0425, mem. op. at 6 (D.D.C. June 17, 1987) (individual and organizational homeless plaintiffs had standing to challenge DOD's failure to promulgate regulations under statute designed to assist the homeless); see also Arlington Heights, 429 U.S. at 261; Samaritan Health Center v. Heckler, 636 F. Supp. 503, 512 (D.D.C. 1985); National Ass'n. of Rehabilitation Facilities v. Schweiker, 550 F. Supp. 357, 364 (D.D.C. 1982). The defendant's standing argument must be rejected.
The criteria to be applied when considering a motion for preliminary injunction are:
1) plaintiffs' likelihood of success on the merits;
2) irreparable injury to the plaintiffs in the absence of injunctive relief;
3) possibility of harm to other interested parties from the injunctive relief and
4) the interests of the public.
WMATC v. Holiday Tours, 182 U.S. App. D.C. 220, 559 F.2d 841, 842-43 (1977); Virginia Petroleum Jobbers Ass'n v. FPC, 104 U.S. App. D.C. 106, 259 F.2d 921, 925 (1958). The Court will evaluate each of these factors in turn.
A. Likelihood of Success on the Merits
1. The McKinney Act claim
The Stewart B. McKinney Homeless Assistance Act, 42 U.S.C. § 11301 et seq., enacted in 1987, was intended "to use public resources and programs in a more coordinated manner to meet the critically urgent needs of the homeless." Id. § 11301(b)(2). The Act consists of nine titles providing food, shelter, education, training, health services, and housing assistance to the homeless. Section 501 of the Act, codified at 42 U.S.C. §§ 11411-12, sets out a process by which underutilized federal property is to be made available to assist the homeless. First, the statute requires HUD to collect information about federal buildings and real properties "that are described in surveys by the heads of controlling agencies as underutilized." Id. § 11411(a). HUD is to identify which of these underutilized properties "are suitable for use for facilities to assist the homeless." Id. HUD is instructed to consult with the Department of Health and Human Services (HHS) and the Administrator of General Services (GSA) when developing the criteria for the suitability determination. Id. HUD must then notify the respective agency heads as to which of their properties have been identified as suitable. Id. § 11411(b). Then, within thirty days, the agency heads must either declare the identified property as "excess" to their needs or explain why it is not excess. Finally, HHS and GSA are to make the properties identified by HUD available to the homeless by the use of leases at least one year in duration. Id. § 11411(c).
Section 501 also requires the GSA to make quarterly reports, beginning 90 days after enactment of the statute, on the implementation of the statute. The report is to include a list of the properties identified by HUD as suitable, a statement of the agency heads' responses, and a description of the actions taken by HHS and GSA to make the suitable properties available to the homeless. Id. § 11411(e).
HUD argues that its single-family inventory is not subject to the Act's procedure for making underutilized federal properties available to the homeless. HUD offers three reasons why it, unlike other federal agencies, is not required to survey its single-family inventory and describe its underutilized properties. First, it says that the discretion granted HUD by the National Housing Act, 12 U.S.C. § 1701 et seq., trumps the requirements of the McKinney Act. The relevant section of the National Housing Act reads:
Notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, the Secretary [of HUD] shall have power to deal with, complete, rent, renovate, modernize, insure, or sell for cash or credit, in his discretion, any properties conveyed to him in exchange for [mortgage insurance claims] . . . .
12 U.S.C. § 1710(g). The National Housing Act predates the McKinney Act, but there is nothing in the McKinney Act to suggest that Congress intended to amend the National Housing Act.
Plaintiffs have two responses to this analysis. First, they to point a statement in two House committee reports on the 1988 reauthorization of the McKinney Act that makes clear that the House committees intend for the McKinney Act to apply to HUD's inventory:
The Committee is also concerned that the Department make available foreclosed single-family properties in the HUD inventory for use under one year leases by homeless families.