Monitor: County Could Face Hefty Fines For Federal Fair Housing Case Violations

John Jordan | May 2015

Wooden gavel and American dollars

Wooden gavel and American dollars

 

WHITE PLAINS—In what appears to be an escalating battle between the court appointed Housing Monitor James Johnson and the Astorino administration, Johnson has charged that the county is in violation and in possible contempt of the terms of the 2009 federal fair housing case settlement.

If found in contempt, the county could be subject to daily fines and be ordered to build additional affordable housing units above and beyond the court-ordered 750 units agreed upon in the $51.6-milllon fair housing case settlement reached during the administration of former County Executive Andrew Spano. While the monitor, the U.S. Department of Housing and Urban Development and Westchester County have waged court battles over terms of the settlement, this marks the first time that the Housing Monitor has cited the county for possible contempt in connection with the settlement terms.

“In addition to monetary penalties, the County’s failure to comply with the financing-in-place benchmark requires it to ensure the development of affordable housing in addition to the 750 units required by the Settlement.” —James Johnson, Housing Monitor

In his “Supplemental Report Regarding Implementation of the Stipulation and Order of Settlement and Dismissal for the 2014 Calendar Year” filed with the U.S. District Court for the Southern District of New York on May 8, Johnson charged that the county is in violation of two provisions of the 2009 settlement—not complying with the benchmark for financing in place by the end of 2014 and its duty to “use all available means” to address municipal impediments to fair housing.

The center of the latest dispute is the county’s inclusion of 28 affordable units, which are to be part of the proposed and controversial Chappaqua Station housing development, in the court’s mandate to have financing in place for 450 units of affordable housing by the end of 2014. The Chappaqua Station project has not secured all its municipal approvals, but obtained $2.925 million in conditional bond financing from Westchester County in November 2014.

The project is awaiting final approval of building and fire code variances from the New York State Hudson Valley Regional Board of Review. In addition, developer Conifer Realty, LLC and The Town of New Castle are in litigation over the terms of a special use permit. The developer of the project has also not secured a building permit in connection with the project, which has sparked some local opposition, Johnson stated in his report. He subsequently charged that the 28 affordable units at Chappaqua station should not be counted as part of the 450-unit mandate by the end of 2014 and therefore places the county in non-compliance with the terms of the settlement. Specifically, Johnson asserts that with the exclusion of the Chappaqua Station units, the county had 426 units with financing in place by year’s-end 2014, 24 units short of the court-mandated benchmark of 450.

In addition, Johnson stated that the county has not “used all available means to address New Castle’s opposition to the proposed Chappaqua Station development” that is to be built adjacent to the Chappaqua Metro North station in the Town of New Castle.

“For the federal monitor to suggest we have not met our obligations is incorrect. The county attorney is strongly objecting to the monitor’s findings and is requesting a review of the issue.” — Phil Oliva, spokesman for Westchester County Executive Robert Astorino

Phil Oliva, spokesman for Westchester County Executive Robert Astorino, said in a prepared statement: “Five years into the federal housing settlement, Westchester remains ahead of schedule on meeting key benchmarks. There are 469 affordable housing units that have financing in place and 424 units that have building permits.  Both numbers exceed the December 31, 2014 benchmarks. For the federal monitor to suggest we have not met our obligations is incorrect. The county attorney is strongly objecting to the monitor’s findings and is requesting a review of the issue.”

He continued, “Any determination on the county’s compliance needs to be resolved through the dispute resolution process and the courts, not the monitor. In the meantime, the county will continue to work cooperatively and successfully with the 31 municipalities that are part of the settlement and will also continue to support the Conifer project located in Chappaqua. As County Executive Astorino has said, ‘diplomacy, not depositions or litigation, will help accomplish the goals of the settlement agreement and we continue to pursue that path undeterred.’”

Johnson stated in his report that he is referring his findings of the county’s alleged breach of the settlement to the Department of Justice “for appropriate action, which may include an action for contempt.” The housing monitor stated that the county could face penalties of “$30,000 from the first day of non-compliance (first month) and $60,000 for each month of continued non-compliance.”

The number of mandated units could also increase due to the latest dispute between the county and the monitor. In his report, Johnson stated, “In addition to monetary penalties, the County’s failure to comply with the financing-in-place benchmark requires it to ensure the development of affordable housing in addition to the 750 units required by the Settlement…The Settlement authorized the Monitor to determine the formula for calculating the number of additional units.”

He stated that his determination on the scope of the county’s monetary penalties and the number of additional affordable housing units to be developed would be calculated in a future report.

The $51.6-milllion settlement stemmed from a housing desegregation lawsuit brought by the Anti-Discrimination Center of Metro New York filed against Westchester County in 2006. In its lawsuit filed in 2006, the Anti-Discrimination Center charged that Westchester had received $50 million in federal housing and community development funding by “falsely certifying that the county had affirmatively furthered fair housing.” The suit alleged that Westchester “chose not to analyze impediments to fair housing choice based on race or municipal resistance, and chose not to take appropriate steps to overcome such impediments.”

John Jordan
Editor, Real Estate In-Depth