Johnson v. United States Department of Housing and Urban Development (Hud), 911 F.2d 1302 (1990)

Citation: Johnson v. United States Department of Housing and Urban Development (Hud), 911 F.2d 1302 (1990)
Parent Document: Johnson v. United States Department of Housing and Urban Development (Hud), 911 F.2d 1302 (1990)
Jurisdiction: United States (federal)
Effective Date: 1990-10-29
Original Source: https://www.courtlistener.com/opinion/546951/johnson-v-united-states-departme... ↗

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On December 21, 1987, Congress passed the Preservation Act of 1987, Pub.L. No. 100-242, 101 Stat. 1877 (1988) (codified at 12 U.S.C. Sec. 1715l note) ("the Preservation Act"), the subject of dispute in this lawsuit. The Preservation Act was prompted by the prospect that nearly one million units of low income housing built in the 1960s would soon be eligible to be released from rent restrictions because of the expiration of the twenty-year moratorium on unilateral mortgage prepayment and the expiration of Section 8 rental assistance contracts. H.R.Conf.Rep. No. 426, 100th Cong., 1st Sess. 192, reprinted in 1987 U.S.Code Cong. & Admin.News 3317, 3458, 3489 (hereinafter cited as "Conference Report, ---- USCCAN ----"). To prevent a national crisis in the availability of low income housing, Congress passed a temporary measure making it more difficult for owners of Sec. 221(d)(3) housing to release themselves from the terms of the regulatory agreement. Conference Report, 1987 USCCAN 3490. In section 222 of the Preservation Act, Congress provided: "An owner of eligible low income housing seeking to initiate prepayment or other changes in the status or terms of the mortgage or regulatory agreement shall file with the Secretary a notice of the intent of the owner in such form and manner as the Secretary may prescribe." Preservation Act, Sec. 222, 101 Stat. 1879. The Preservation Act requires such owners to submit to HUD a "plan of action" detailing, among other things, the impact of such termination on the current tenants and the local supply of affordable housing. Id. Sec. 223(b), 101 Stat. 1879.1 In lieu of approving the owner's request to terminate, HUD is authorized to offer the owner additional financial incentives to encourage the owner to remain in the program. Id. Sec. 224, 101 Stat. 1880.2 A plan of action that requests termination of low income affordability restrictions may only be approved if HUD determines in writing, after considering the views of appropriate State and local agencies and the affected tenants, that implementation of the plan will not materially harm existing tenants and that sufficient housing exists in the community. Id. Sec. 225(a), 101 Stat. 1880.3 Different approval criteria apply to a plan of action that includes additional financial incentives in lieu of termination. See id. Sec. 225(b), 101 Stat. 1881.

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