COUNTY PRESS RELEASE: 2nd CIRCUIT COURT GIVES WESTCHESTER MAJOR VICTORY IN HOUSING SETTLEMENT 2/18/15

2/18/15 - In a major victory for Westchester County with respect to the 2009 affordable housing settlement with the federal government, the U.S. Court of Appeals for the Second Circuit has rejected claims by the Department of Housing and Urban Development that HUD's actions are not reviewable by the courts.

Westchester County Executive Robert P. Astorino had argued that "HUD acted in an arbitrary and capricious manner" when it began withholding federal funds from the county in 2011. The appeals court vacated a lower court ruling and held that HUD's actions are "subject to judicial review."

"The Second Circuit's ruling is a major victory for due process against an aggressively overreaching federal bureaucracy," Astorino said. "Just like everyone else, HUD has to follow the law. In this case, HUD was making up its own rules. That's not right and the court has now made it very clear that actions by HUD are subject to judicial review." 

The case stems from HUD's decision to start withholding Community Development Block Grants (CDBG) and other federal funds based on what the agency claimed was its "discretionary" power. But the appeals court rejected HUD's arguments, pointing to a number of statutes limiting the agency's authority.

"We conclude that the statutes governing HUD's administration of the relevant grants provide meaningful standards constraining HUD's exercise of discretion and that HUD's actions are thus subject to judicial review," the decision states, adding, "The agency's adoption of regulations that might appear to give the agency unfettered discretion does not act to nullify the meaningful standards which exist in the statute."

Central to the county's case was overreach by HUD. HUD had hoped to pressure the county to dismantle local zoning by withholding the federal grants. Astorino resisted, saying such actions went beyond not only the terms of the settlement but also violated the home rule provisions of the New York State Constitution.

In a critical part of the decision, the appeals court noted that HUD did not have the right to reject the county's housing strategy or withhold funding on the basis of "land use controls [and] zoning ordinances ... that may affect the development of affordable housing in the jurisdiction."

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