Westchester's failure to justify exclusionary zoning supports HUD's withholding of funds, the Second Circuit rules

County of Westchester v. U.S. Dep’t of Housing & Urban Dev., No. 15-2294-cv (2d Cir. Sept. 25, 2015).

Here’s one for the fans of Show Me a Hero, which chronicles the resistance to housing desegregation in Yonkers. Yonkers, of course, is located in Westchester County, which is the subject of this decision.

Almost a decade ago, an anti-discrimination group filed a False Claims Act case against Westchester, charging Westchester with having falsely certified to HUD that it was complying with HUD’s fair-housing regulations. 

The federal government intervened in that case and settled it in 2009. Under that settlement, the court entered a consent decree requiring Westchester to take specific steps to provide affordable housing. This included pledges to ban discrimination against tenants who receive public assistance, to submit acceptable periodic progress reports to the HUD, and, most significantly, to use county funds to build 750 units of affordable housing over the next seven years. 

In the years since that consent decree, Westchester has applied for HUD funding, which HUD withheld for fiscal years 2011, 2013, and 2014. Those decisions to withhold funding are what Westchester challenges in this appeal.

To get funding, Westchester needed to explain how it was fulfilling its obligation to “affirmatively further fair housing.” Yet the court-appointed monitor of the consent decree concluded that several Westchester cities’ zoning laws seem to have exclusionary limits on development. And Westchester never properly explained why the monitor’s conclusion was wrong. HUD relied on the monitor’s detailed analysis to withhold funding. This reliance was reasonable, so HUD was within its authority to withhold funding. 

One hopes that this decision will encourage other local governments to examine their zoning laws. These laws’ limits on multifamily development restrict new units and drive up the price of housing—and lack of affordable housing falls more heavily on blacks and Latinos than on whites. Seattle is currently in the midst of a debate on upzoning single-family zoning areas to allow somewhat denser development. Perhaps this decision will influence that debate. Perhaps cities need to be more afraid of HUD than of upper-middle-class NIMBYs.