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Mother Zion Tenant Association v. Donovan

No. 402239 (N.Y. Supreme Court decided Apr. 11, 2007)

Current residents of New York City project-based Section 8 property seek to prevent owner from opting out of the program by exercising their rights under Local Law 79.

Memorandum and Order (PDF)

Dismisses the complaint, finding NYC’s Local Law 79, Admin. Code of the City of NY §§26-801, is in direct conflict with the Section 8 program because it burdens the owners’ ability to withdraw when Section 8 allows for withdrawal by owners. The court states that this burden “directly interferes with the methods by which the federal statute was designed to reach its goals” and is, therefore, impliedly preempted by federal law. The court also noted that the express preemption provision of the Low Income Housing Preservation and Resident Homeownership Act (LIHPRHA), 12 USC §§ 4101, did not directly apply in this case because federal programs relating to mortgage loans were not involved. Having found that Local Law 79 was preempted by federal law, the court did not consider arguments based on state law. The decision will be appealed to the Appellate Division.

HPD's Notice of Motion to Dismiss (PDF)

Owner's Notice of Motion to Dismiss (DOC)

HPD's Memorandum in support of motion to dismiss (PDF)

* Local law preempted by state law: Local Law 79 conflicts with the state’s Mitchell-Lama Law, Eminent Domain Procedure Law (EDPL) and Urstadt Law
* Local law is expressly and impliedly preempted by federal law
o Local Law 79 restricts the prepayment of mortgages, which is expressly preempted by 12 U.S.C. §4122(a)
o Local Law 79 interferes with federal law by overriding the exit provisions of federal housing programs and is impliedly preempted

* Local law directly interferes with the functionality of federal housing programs: citing Forest Park II, local laws that merely delayed an owner’s withdrawal from federal housing programs directly interfered with the federal prepayment schemes under LIHPRHA and were invalid

Owner's Affirmation in support of motion to dismiss (DOC)

* Affordable housing is adequately preserved without Local Law 79
* Local Law 79 constitutes an unlawful deprivation of property without due process because its terms are too vague
* Local Law 79 is an unlawful denial of equal protection because it discriminates between private developers who own “assisted rental housing” and those who do not

Corporation Counsel of the City of New York's Reply Memorandum in support of motion to dismiss (PDF)

* Local Law 79 effects a taking of property and is preempted by New York EDPL

Petitioner-tenant's Memorandum in opposition to motion to dismiss (WPD)

* Local Law 79 is not preempted by federal law:

o LIHPRHA does not expressly preempt Local Law 79 because the Mother Zion apartments are not covered by LIHPRHA
o Federal law does not impliedly preempt Local Law 79 because several state Supreme Courts have ruled that state laws mandating landlords’ continued participation in tenant-based Section 8 programs were not preempted

* Local Law 79 is not preempted by state law:

o Local Law 79 does not constitute an unlawful taking because it provides market value compensation to owners and does not force owners to sell and is, therefore, not in conflict with the EDPL
o If the EDPL applied, Local Law 79 would not be in conflict with it because the EDPL refers to alternative procedures a condemnor may use
o Local Law 79 does not violate the Urstadt Law because rents would continue to be established by federal law and imposes no restrictions greater than what is already authorized under State law

* Local Law 79 does not violate the Equal Protections Clause because it is an economic regulation subject to rational basis review and the classification is rationally related to the goal of Local Law 79
* Local Law 79 does not violate the Due Process Clause because it has a core meaning that can be reasonably understood

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