Legal Debate Over Fair Housing Settlement in Westchester County Continues

As a previous blog post has discussed, Westchester County settled a lawsuit brought in 2009 which alleged that the county falsely certified that it had complied with federal fair housing requirements when it accepted community development funds. This lawsuit was settled under a consent order under which Westchester County agreed to use $51.6 million to build 750 units of “affordable” housing over seven years in 31 communities throughout the county.

Any settlement of a complex litigation matter involves necessary compromises for all parties involved. Complicating the situation is the fact that the settlement was negotiated and executed by County Executive Andrew Spano, who is no longer in office. The current county executive is Rob Astorino, who had no role in the original settlement. A recent editorial by Mr. Astorino in the Journal News states his position on the matter. He believes that the county is complying with its obligations under the settlement agreement, but believes that the U.S. Department of Housing and Urban Development (HUD) is overreaching and has misinterpreted the intent of the agreement.

At the core of the dispute is the question of the required goals of the settlement. Mr. Astorino believes that the settlement is meant to promote affordable housing throughout the county, and is committed to building the 750 units as mandated by the agreement. HUD’s interpretation is that the overall goal is to integrate the county’s housing patterns, and that such integration should be the primary purpose of the settlement.

The current dispute relates to issues caused by the differing interpretations of the settlement. Mr. Astorino believes that he is complying with the specific terms of the settlement by building the affordable housing units, as required. HUD has stated that the units should “affirmatively further fair housing.” What this means is anyone’s guess. Fairness is obviously in the eye of the beholder, and could be the subject of endless court disputes, in which the litigation never ends. One specific issue is whether landlords of the new, affordable housing should be required to accept Section 8 vouchers as rent. Section 8 vouchers are government subsidies that allow the recipient to pay their rent through vouchers provided by the federal government. The funds are given directly the landlord after the tenant applies and is approved for same.

The settlement agreement requires that the government promote litigation to require such vouchers be accepted. Mr. Astorino has stated that he may veto such legislation, and, in any case, would not be legally required to sign such a bill. It is left for the reader to decide whether the language “promote” requires the County Executive to approve such litigation or any similar bills which he may feel are not in the county’s best interests.

As stated in our prior post on this issue, the bigger problem is that where there is an attempt to manipulate the housing market (or any other market) through government intervention, there will be continual disputes over whether the government is complying with an obligation to affirmatively further fair housing. In any legal settlement, the devil is in the details. If imprecise language is used, then both sides can and do argue over proper compliance, as is happening in this case. In addition, if the parties cannot agree on the overall goal of the settlement, only the language in the actual written agreement can be binding. Our firm has settled many complex real estate cases. We are extremely careful in ensuring that the intent of all parties is reflected in such agreements, and that each party’s obligations under such agreements are clear and unambiguous.