Park Village Apartment Tenants Association v. Mortimer Howard Trust

The Section 8 program involved recipients contributing a portion of their income towards rent while the government paid the remaining balance up to a predetermined payment standard. When some subsidized-unit owners became eligible to terminate their contracts with the US Department of Housing and Urban Development (HUD) to provide project-based assistance, Congress introduced a program to provide enhanced vouchers to tenants in those units. If an owner increased the rent after termination of the HUD contract, tenants were entitled to an increased subsidy to cover the difference, even if the remaining balance exceeded the set payment standard. Park Village Apartments, a former project-based subsidized-housing development, was owned by the Mortimer Howard Trust (the trust) (defendant). After the trust’s contract with HUD expired, the trust provided notice of its intent to opt out of Section 8 and raise rents. The notice contained a HUD-required certification that federal law allowed the tenants to choose to continue living at the property provided that the unit, rent, and owner met the requirements of the tenant-based program. After raising the rent, the trust refused to accept the tenants’ enhanced Section 8 vouchers and threatened eviction for nonpayment. The trust also refused to enter into Housing Assistance Payment (HAP) contracts with the Oakland Housing Authority (OHA), a condition precedent to the trust receiving enhanced voucher payments. The tenants (plaintiffs) filed suit. The district court enjoined the trust from collecting increased rent unless the trust did so through enhanced vouchers and from evicting tenants for nonpayment of rent covered by the vouchers. The court further required the trust to establish HAP contracts with OHA. The trust appealed, arguing that the statute did not mandate owners to allow tenants to stay or accept enhanced vouchers as rent payment.