## Facts

- Tenants of public housing operated by the Chester Housing Authority (CHA) sued HUD and CHA officials on behalf of a putative class, seeking declaratory and injunctive relief regarding widespread vacancies and substandard conditions.
- Plaintiffs alleged CHA’s long-term neglect and mismanagement produced deteriorated, uninhabitable vacant units and effectively removed units from use, preventing applicants and overcrowded families from obtaining appropriate housing.
- While the case was pending, HUD designated CHA a “troubled housing authority” and assumed control of CHA’s assets and management after finding substantial breach of CHA’s obligations under HUD’s Annual Contributions Contract (ACC).
- HUD pursued a multi-year, phased modernization and reconstruction plan funded through modernization grants, including temporarily keeping units offline during comprehensive rehabilitation and relocating residents within developments during construction.
- Plaintiffs sought a preliminary injunction requiring defendants to repair and re-occupy vacant units promptly and to change management practices, arguing that leaving units vacant amounted to unlawful “de facto demolition,” violated federal housing law and regulations, breached ACC obligations, and was arbitrary or unlawful under the Administrative Procedure Act (APA).

## Issues

1. Whether leaving units vacant pending comprehensive rehabilitation can constitute unlawful “de facto demolition” in violation of federal public housing statutes and regulations governing demolition and disposition.
2. Whether the public housing statutes, implementing regulations, and/or the ACC create privately enforceable tenant rights supporting injunctive relief compelling specific rehabilitation and occupancy measures.
3. Whether HUD’s modernization and management choices for a troubled housing authority are reviewable under the APA or are largely committed to agency discretion.
4. Whether plaintiffs satisfied the requirements for a preliminary injunction, including likelihood of success on the merits and irreparable harm.

## Decision

- The court denied plaintiffs’ motion for a preliminary injunction.
- The court concluded plaintiffs did not show a sufficient likelihood of success on claims that HUD’s and CHA’s actions constituted unlawful demolition or violated federal housing law, the ACC, or the APA.
- The court accepted HUD’s rationale that phased, large-scale rehabilitation could be more fiscally efficient and effective than interim, unit-by-unit repairs that might be undone by later reconstruction.
- The court determined that the short-term increase in vacancies associated with a modernization strategy did not equate to permanent removal of units from inventory requiring demolition/disposition procedures.
- Balancing harms and the public interest, the court declined to order changes that could disrupt or jeopardize a comprehensive, multi-year rehabilitation plan.

## Legal Principles

- Preliminary injunctive relief requires a showing of, at minimum, a substantial likelihood of success on the merits and equitable factors supporting immediate court intervention.
- High vacancy rates and deteriorated conditions do not, by themselves, establish unlawful “de facto demolition” where the responsible agency is pursuing a plan to preserve and rehabilitate the housing stock rather than permanently eliminate units.
- Courts are reluctant to substitute judicial judgments for HUD’s policy and funding decisions concerning rehabilitation phasing and allocation of modernization resources absent a clear statutory or regulatory violation.
- Under APA review, agency action is not set aside unless shown to be arbitrary, capricious, an abuse of discretion, or otherwise contrary to law; broad statutory discretion weighs against ordering a specific remedial strategy.

## Conclusion

The court refused to compel immediate, unit-by-unit repairs and re-occupancy through a preliminary injunction, holding that HUD’s phased modernization approach for a troubled housing authority was not shown to be unlawful demolition or arbitrary agency action and that equitable considerations favored allowing the comprehensive rehabilitation plan to proceed.


Velez v. Cisneros, 850 F. Supp. 1257 (E.D. Pa. 1994)