Noel v. City of New York

1

SHAUNA NOEL and EMMANUELLA SENAT, Plaintiffs, v. CITY OF NEW YORK, Defendant.

No. 15-CV-5236-LTS

United States District Court, S.D. New York

April 28, 2023

MEMORANDUM OPINION AND ORDER

LAURA TAYLOR SWAIN, CHIEF UNITED STATES DISTRICT JUDGE

Plaintiffs Shauna Noel and Emmanuella Senat (“Plaintiffs”) who are African-American, bring this action against the City of New York, seeking monetary, declaratory and injunctive relief under the Fair Housing Act (“FHA”), 42 U.S.C. § 3604 et seq., and the New York City Human Rights Law (“NYCHRL”), NYC Admin Code § 8-107, et seq. Plaintiffs allege that the City of New York's community preference policy for affordable housing distribution has a discriminatory effect, causing a disparate impact on the basis of race and perpetuates segregation. Plaintiffs also assert a disparate treatment claim, alleging that the City of New York (“Defendant” or the “City”) engaged in intentional discrimination on the basis of race in enacting, expanding, and maintaining the policy. Plaintiffs have moved for partial summary judgment on their discriminatory effect claims. Defendant has cross-moved for summary judgment dismissing all of Plaintiffs' claims.^[1] The Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. section 1331 and 1367.

The Court has considered the submissions of both parties carefully^[2] and, for the following reasons, denies Plaintiffs' motion for summary judgment in its entirety grants Defendant's motion for summary judgment to the extent it is directed to Plaintiffs' disparate impact claim, and denies Defendant's motion in all other respects.

Background

The factual background of this longstanding dispute has been discussed in the Court's prior decisions. (See e.g., docket entry nos. 42, 148, 217.) The following summary is focused on the material facts pertinent to the instant motion practice.^[3]

Plaintiffs challenge the community preference policy (“CP Policy” or the “Policy”) that the City utilizes in allocating housing made available through its affordable housing lottery program (the “Lottery”). (Pl. 56.1 St. ¶ 14; Def. 56.1 St. ¶¶ 1-2.) New York City is currently facing a “housing crisis” whereby there is “an overall shortage of units, especially units renting at the lower end of the market, an increasing lack of affordability as rents rise faster than incomes, a decline in apartment rentals that have rent restrictions or regulations, and a high rate of displacement among residents.” (Docket entry no. 898 (“Goetz Decl.”) ¶ 8.) The City, through the provision of tax incentives, loans, and zoning density bonuses, subsidizes housing projects including units committed to be provided on an affordable basis in accordance with certain criteria, which are constructed by private developers. (Docket entry no. 900 (“Brown Decl.”) ¶ 3.) Many housing projects that are granted these benefits are required to allocate the affordable housing units located within these projects through the Lottery. (Def. 56.1 St. ¶ 24.) When a person wants to apply for an affordable housing unit within a development project, the individual can submit either an electronic application through the City's centralized, online database, called Housing Connect, which contains information regarding all newly-constructed housing projects offering affordable housing units and accepting applications, or submit a paper application. (Id. ¶¶ 26-27.)

Once the application process has closed for affordable housing units within a particular housing project, each application is assigned a random number, which becomes the application's “log number,” by Housing Connect. (Def. 56.1 St. ¶¶ 29-30.) The log numbers are listed in sequential order on a document called the log,^[4] which is used by developers to track and process the applications for the affordable housing units in the project. (Id. ¶¶ 31-32.) The applications are reviewed in sequential order, subject to certain set-asides and preferences. (Id. ¶¶ 31-33.) A “preference means that applicants with specific qualifications are prioritized for a certain number of units.” (Id. ¶ 35.) Through the CP Policy, a percentage of the affordable housing units are set aside for applicants with a community preference (generally, applicants living in the Community District (“CD”)^[5] in which the housing project is located). (Id. ¶¶ 2, 36 37.)

The CP Policy, as originally implemented in or about 1988, set aside 30 percent of units for applicants with a community preference, but in 2002, HPD increased to 50% the proportion of units set aside for applicants with the preference. (Id. ¶¶ 6, 8.) The Policy applies to affordable housing projects throughout the City during the initial lease-up of available housing units available within a project. (Id. ¶¶4, 18.) Neither the length of time an applicant has resided within a CD, nor the applicant's housing conditions at the time of the application, affects the applicant's eligibility for the community preference under the Policy.

Developers allocate the affordable housing units in log number order through each of the preference categories until the number of set-aside units is exhausted for a particular preference category. (Def. 56.1 St. ¶ 46; see also Pl. 56.1 St. ¶ 23 (explaining how log-number order “becomes subordinate” to preference order).) Affordable housing units not allocated through preference categories are available to any eligible applicant, subject to a general priority for New York City residents relative to non-residents.^[6] (Def. 56.1 St. ¶ 52.) In addition, once the 50 percent block of units set aside for community preference applicants has been exhausted, community preference applicants may continue to compete for housing units, subject to the remaining preferences and log-number order. (Pl. 56.1 St. ¶ 31.)

Preference-order and log-number order aside, applicants will not be awarded affordable housing units unless they meet certain eligibility requirements and a unit type for which they are eligible remains to be filled at the time their log number is reached. (Def. 56.1 St. ¶¶ 33, 48, 54, 57.) An applicant is “apparently eligible” if their household size and income level, as reported in their application, meet the requirements for at least one type of unit within the project. (Id. ¶ 39.) If, at the time an apparently eligible applicant's log number is reached, there is at least one unit type available for which that applicant is eligible, the applicant must appear for a meeting with the developer and provide further documentation in order to confirm their eligibility before being awarded the unit. (Id. ¶ 51.) An applicant who does not attend the interview with the property developer, or who does not meet eligibility requirements, will not be awarded a unit, unless the applicant succeeds in appealing an unfavorable eligibility determination. (Id. ¶¶ 159-162.)

Plaintiffs filed the Second Amended Complaint in this action on June 22, 2018. (Docket entry no. 469 (“SAC”).) Plaintiff Noel is an African-American New Yorker, who at the time the SAC was filed was a resident of Queens. (SAC ¶ 14.) She applied to several affordable housing Lotteries between 2015 and 2018 (Def. 56.1 St. ¶¶ 264-65), including Lotteries for housing projects in Manhattan CDs. (SAC ¶ 14.) Ms. Noel alleges that she was not selected to be interviewed for units in the developments to which she applied. (Id.) Plaintiff Senat is an African-American New Yorker who, at the time the SAC was filed, resided in Manhattan. (Id. ¶ 15.) She applied for several affordable housing Lotteries between 2014 and 2018, both within and outside the CD in which she resided, and was ultimately awarded a housing unit through a Lottery in 2018. (Def. 56.1 St. ¶¶ 268-271.) Both Plaintiffs have alleged that they intend to continue to apply to the City's affordable housing unit developments in the future. (SAC ¶¶ 1415.)

Plaintiffs assert that the CP Policy is unlawful under the FHA and the NYCHRL because the Policy operates to perpetuate residential segregation in the City and causes Plaintiffs to suffer a race-based disparate impact on their opportunity to compete for affordable housing units. (SAC ¶¶ 183-86.) Plaintiffs also claim that the CP Policy is unlawful because it is the product of intentional racial discrimination and thus violates the FHA and the NYCHRL. (Id. ¶¶ 187-190.)

Discussion

Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment is to be granted in favor of a moving party where that party can demonstrate “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed R. Civ. P. 56(a). Material facts are those that “might affect the outcome of the suit under the governing law,” and there is a genuine dispute where “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Rojas v. Roman Catholic Diocese of Rochester, 660 F.3d 98, 104 (2d Cir. 2011) (citation omitted). In evaluating a motion for summary judgment, the Court must “construe all evidence in the light most favorable to the nonmoving party, drawing all inferences and resolving all ambiguities in its favor.” Dickerson v. Napolitano, 604 F.3d 732, 740 (2d Cir. 2010).

The FHA prohibits racial discrimination in the provision of housing, making it unlawful “to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” 42 U.s.C. §3604(a).

Discriminatory Effect Claims

In order to prove the discriminatory effect of a housing policy plaintiffs may advance one or both of two methods: “(1) ‘adverse impact on a particular minority...