Westchester’s Housing-Money Protest Sputters

(CN) - The Second Circuit chucked claims over millions of community-planning dollars that the federal government revoked from wealthy Westchester County, N.Y.

A lawsuit that the Anti-Discrimination Center of Metro New York brought in 2006 put the case in motion.

With the nonprofit accusing Westchester of having filed false certifications to receive grant money, the federal government ultimately intervened and reached a $30 million settlement that required Westchester to increase fair-housing opportunities.

The deal tasked Westchester with developing and marketing 750 affordable rental and owner-occupied units in 31 mostly white communities, and Westchester agreed to study fair-housing impediments, including discriminatory zoning and resistance by landlords to tenants supported by the government's Section 8 program.

Both of these issues had been part of the annual certifications that the Anti-Discrimination Center accused Westchester of having falsified.

Westchester brought its own lawsuit in 2013, saying the government had improperly reallocated $7.4 million in grant funds that had been meant for it in fiscal year 2011.

Though U.S. District Judge Denise Cote in Manhattan dismissed the lawsuit, the 2nd Circuit reversed earlier this year after the U.S. Department of Housing and Urban Development notified Westchester that it was ineligible to receive $10 million for community planning for 2013 and 2014.

Cote ruled for the government again this past July, however, and a three-judge panel with the Second Circuit affirmed that decision Friday.

"Because exclusionary zoning can violate the [Fair Housing Act] FHA, and because HUD is required to further the policies of that statute, it was reasonable for HUD to require the county to include in its ["analyses of impediments"] AI an analysis of its municipalities' zoning laws," the unsigned opinion states. "Moreover, in concluding that the county's zoning analysis was flawed and incomplete, HUD reasonably relied on detailed reports from the monitor."

For the appeals court, those reports "refuted the county's conclusion that no municipality had ordinances that were exclusionary under state or federal law."

Plus, the agency "provided a written explanation" for each rejection, and gave Westchester "multiple opportunities to make changes and to resubmit a revised AI," the panel ruled.

As such the decision to withhold and reallocate the county's community planning funds was neither arbitrary nor capricious under the Administrative Procedure Act.

The agency did not violate other provisions of federal law either, the ruling states.

"As a condition for the distribution of millions of dollars in CPD funds, HUD required the county to analyze whether the zoning laws in some of its municipalities were exclusionary and, if so, to develop a plan to encourage these municipalities to change their laws," the panel ruled. "When the county did not comply to HUD's satisfaction, HUD withheld the county's funding. We agree with the district court that this decision did not violate either U.S. Code Sec. 12705 or Sec. 12711."

The court emphasized that "this decision does not mean that any of Westchester County's municipalities violated the Fair Housing Act or engaged in discrimination on the basis of race." (Emphasis in original).

Westchester County Executive Rob Astorino called the ruling "a big victory."

The ruling "vindicates our fight to protect home rule and local zoning," Astorino said. "The issue with HUD and the monitor has never been about race or access to housing," Astorino said in a statement. "There is no place for discrimination in Westchester or any place else. But by the same token, there needs to be checks on the federal government's ability to use its power and money to reshape our communities."

Dawn Dearden, a spokeswoman for the U.S. Attorney's Office, declined to comment on the ruling.

Westchester is home to just over 972,000 residents, with a median owner-occupied housing unit value of $518,400 between 2009 and 2013, census records show.

The population is 55 percent non-Hispanic white, 23.7 percent Hispanic and 16.1 percent black.

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