9th Circuit says L.A. broke the law when it cut housing subsidies for the poor

Los Angeles’ Housing Authority reduced rent subsidies for about 20,000 poor people in 2004 in violation of the law, a federal appeals court ruled unanimously Monday.

A three-judge panel of the U.S. 9th Circuit Court of Appeals said the Housing Authority, which administers Section 8 funds, sent recipients a notice so “incomprehensible” that some may have thought they were getting a higher subsidy instead of a cut. The fliers also had no contact information to help residents with questions, the court said.

The notice “in no way explained the potential effect of the change: that it could potentially increase the tenant’s expected rent contribution and decrease his subsidy,” Judge Stephen R. Reinhardt, a Carter appointee, wrote for the court.

The cuts affected many elderly and disabled recipients and families with young children, requiring them to pay an average of $104 more a month for their rent, the court said.

“For many Section 8 beneficiaries, subsidies from the Voucher Program for a stable and renewable one-year term are the difference between safe, decent housing and being homeless,” Reinhardt wrote.

The court ruled in a class action brought by the Los Angeles Coalition to End Hunger and Homelessness. The court said the law requires the Housing Authority to give recipients a year’s notice of possible cuts, and the fliers were so confusing and inadequate that the authority violated the recipients’ rights to due process.

The flier “uses the term ‘payment standards’ six times without ever defining or explaining the term’s meaning,” Reinhardt said. “A short and simple explanation, such as ‘this means that the Housing Authority has reduced the maximum amount it will contribute towards recipients’ rent,’ would have provided at least a small measure of clarity.”

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Barrett Litt, an attorney for the recipients, said damages would run in the millions of dollars.

“This decision should not only lead to compensation for the tens of thousands of Los Angeles Section 8 recipients that were hurt by the illegal reduction in benefits back in 2004-2006, but also protects all Section 8 recipients going forward, wherever they may be,” Litt said.

As a result of the lawsuit, the Housing Authority has since revised its notices, Litt said.

Stephanie Carroll, senior staff attorney at Public Counsel, praised the decision.

“After eight years of litigation, this is a fabulous result for low-income tenants,” Carroll said.

Roy G. Weatherup, who represents the Housing Authority in the case, said he would recommend appealing the decision to a larger panel of the 9th Circuit and then to the U.S. Supreme Court if necessary.

Weatherup refused to speculate on potential monetary damages and emphasized that the court had not decided whether the city would have to compensate the beneficiaries. That matter would be left to a lower court.

“I believe the decision is erroneous in a number of ways,” Weatherup said. “In our view, there are genuine issues of material disputed facts that the court just glossed over.”

Twitter: @mauradolan

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