HUD Suffers Setback in Plan To Sell N.Y. Properties


By JOSEPH GOLDSTEINStaff Reporter of the Sun
January 4, 2008 updated 1/6/08 12:08 pm

A plan by the federal government to sell thousands of subsidized housing units in New York to private developers has suffered a setback, after a federal judge ruled Thursday that tenants facing eviction had been denied any explanation or opportunity to challenge their removal.
At issue are eviction notices from the Department of Housing and Urban Development to residents living in low-incoming housing, mostly in Harlem and the Bedford-Stuyvesant section of Brooklyn. A judge in Brooklyn, Frederic Block of U.S. District Court, said the notices violate the Constitution's guarantee of due process by failing to explain the reason for the evictions. Additionally HUD the agency must provide tenants with an avenue to contest them, Judge Block found.
It was not immediately clear how many tenants had received the eviction notices. But the ruling sets ground rules for how HUD must proceed as it goes about transferring 514 properties to private developers here. The federal government took possession of the properties following large-scale fraud by real estate investors who took advantage of HUD-insured mortgages and then abandoned buildings to foreclosure.
In 2002, HUD entered into a plan with the city's Department of Housing Preservation & Development to turn the properties over to the private developers. Most of the properties have already been sold. Judge Block's decision will likely put on hold further property sales that require the tenants to vacate the properties during subsequent renovations, which are being funded in part by HUD.
Judge Block's ruling hinges on a specific HUD regulation that denies tenants the usual amount of notice and due process when the evictions are for the purposes of selling or renovating the building. In other instances, such as when HUD evicts tenants because the housing stock is unsafe, the agency's policy is to provide free temporary housing.
"It is difficult to fathom why," Judge Block wrote, HUD's position is that "it can take poor peoples' homes without telling them why and without affording them a meaningful opportunity to be heard."
Judge Block, who was nominated to the bench by President Clinton, called for a court hearing to determine what courtesies HUD is required to extend to the tenants.
A spokesman for the U.S. attorney's office in Brooklyn, which handled the case for the government, declined to comment on the ruling. Lawyers for the plaintiffs could not be reached.
Four tenants from three buildings filed the suit. One of them, Elias Linares of Brooklyn, had said that if evicted he, his wife, and three children would be homeless, according to court documents.