Court Gives Westchester Victory In Housing Fight With HUD

It was a large victory for the county on Wednesday, when the 2nd Circuit US Court of Appeals handed Westchester a victory in the ongoing housing conflict between the county and the US Department of Housing and Urban Development (HUD).

The court rejected federal claims that HUD could withhold funding without being subject to judicial review, which means Westchester can now challenge HUD’s decision to withhold federal funds from the county.

The county and HUD have been arguing over the allocation of federal money since 2009, when the two parties reached an agreement regarding the development of Westchester-based affordable housing units. But, in 2011, HUD began withholding Community Development Block Grants (CDBG) and other federal funds from Westchester over disagreements on what the 2009 deal actually entailed—this would then force the county to pay a larger portion of the agreed $51.6 million expenditure, some of which HUD was supposed to cover.

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In Wednesday’s ruling, the federal appeals court rejected the HUD’s claim that they had “discretionary power” to withhold funds based on the disagreements.

“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 court said in its ruling. “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.”

Westchester County Executive Rob Astorino, unsurprisingly, was quick to praise the court’s ruling.

“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.”

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Though this is a victory for Westchester, the county is limited in recovering money: of the more than $7 million withheld in 2011, all but $750,000 has been reallocated by HUD, which means the county can no longer claim it. Still, Astorino pointed out “HUD is still withholding 2013 and 2014 grants of more than $10 million, which the county will pursue.”

The case now goes back to US District Court Judge Denise Cote for further review.

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