ROSARIO v. DIAGONAL REALTY LLC LLC LLC 6555 LCC 509 LLC (2005)

In these three consolidated actions for declaratory and injunctive relief, seven rent stabilized tenants are seeking to resolve the identical issue as to whether their landlords are authorized to decline continued participation in the Federal Section 8 rent subsidy program.¹  Plaintiffs move for summary judgment seeking a declaration that the defendant landlords are obligated to continue accepting their Section 8 rent subsidies.   Plaintiffs contend that under New York State's Rent Stabilization laws they are entitled to renewal leases with Section 8 subsidies, as the Section 8 rent subsidy constitutes a material term and condition of their expired rent stabilized leases.   Plaintiffs further argue that under New York City's J-51 tax law, the defendants landlords who are receiving J-51 tax benefits are prohibiting from discriminating against Section 8 recipients, and are, therefore, required to accept plaintiffs' Section 8 rent subsidies.   In opposition, the defendant landlords argue that the amendment to the Federal Section 8 statute which eliminated the so-called “endless lease” requirement, permits them to “opt-out” of the Section 8 program, and any provisions to the contrary in New York State's Rent Stabilization law and New York City's J-51 law, are preempted by the Federal Section 8 statute.   As discussed below, these issues have been resolved by a number of trial level courts in New York City and Westchester County, with a split in the opinions as to whether a landlord has the right to opt-out of the Section 8 program.   To date, no appellate court has yet to address and reconcile the conflict.²

I. Factual Background

The facts essential to the determination of this issue are undisputed.   Plaintiffs are seven individual tenants who all reside in rent stabilized apartments and all receive Section 8 rent subsidies.   Some have had Section 8 subsidies since the inception of their tenancies, while others became eligible for the subsidies sometime thereafter.   The five defendants are the plaintiffs' landlords, and four of the five landlords are receiving tax abatements under New York City's J-51 tax abatement program.³  The defendant landlords have all notified the plaintiff tenants and the New York City Housing Authority (NYCHA) that they no longer wish to participate in the Section 8 program, and will not be accepting the rent subsidy payments administered by the NYCHA.   In notifying the tenants, the landlords gave them an opportunity to remain in their apartments and offered them rent stabilized leases, however, the tenants would be responsible for paying the full stabilized rent amount without the Section 8 subsidy.   It is not disputed that none of the plaintiff tenants can afford their apartments without the Section 8 subsidy.

In each instance, the NYCHA sent the landlord a letter stating its “legal position” that under New York State law, landlords are not entitled “to opt out of the Section 8 program.”   The NYCHA also sent a letter to the tenants explaining that “[w]e understand that your landlord has recently informed you that he or she has decided not to renew the Section 8 contract with the NYCHA for your apartment․It is the position of the NYCHA that your landlord is not legally entitled to do that.”

On July 22, 2003, the NYCHA's Director of Leased Housing Department, Gregory A. Kern, issued a Memorandum (LHD No. 03-26), addressing the legal issues arising from the attempts by landlords to opt-out of Section 8 for rent stabilized tenants.   Expressing the NYCHA's disagreement with certain recent decisions from Courts in Westchester County and from DHCR which found that a landlord is entitled to opt-out of Section 8, the Memorandum explains that the NYCHA has “always taken the position that Section 8 subsidy constitutes an essential condition” of a rent stabilized lease, and, therefore, the landlord cannot offer the tenant a renewal term without also renewing the Section 8 subsidy.   The Memorandum states that the NYCHA “discovered that several of our Section 8 landlords are attempting to implement those court and DHCR opinions ․ [and] are offering some Section 8 tenants renewal terms without Section 8 subsidy and declining to renew the corresponding HAP [Housing Assistance Payment] Contracts with NYCHA.   Some landlord organizations are also promoting the view among our landlords that they can do this if they wish.”   The Memorandum continues:  “Upon advise from the NYCHA Law Department, I am announcing here NYCHA's position that Section 8 landlords in New York City are not entitled to follow the DHCR and Westchester court opinion.   We believe those opinions were wrongly decided, whereas the earlier opinions by State courts in New York City were correct․ [S]taff shall continue to enforce our standing policy, and all inquiring landlords shall be advised, that our landlords of occupied rent stabilized apartments must offer a continuation of Section 8 subsidy as a condition of renewals with their tenants.   We shall abide by this policy unless and until ordered to do otherwise by a State court with jurisdiction in New York City.”

II. Section 8 Federal Rent Subsidy Program

Before examining the issues presented for determination, some background as to purpose and procedures of the Section 8 program, is instructive.   In 1974, Congress amended federal housing law to create what is commonly known as the Section 8 housing assistance program, with the intention of aiding “low income families in obtaining a decent place to live, by subsidizing private landlords who would rent to low income tenants.”  Cisneros v. Alpine Ridge Group, 508 U.S. 10, 12, 113 S.Ct. 1898, 123 L.Ed.2d 572 (1993)[quoting 42 USC § 1437f(a) ].  “Under the program, tenants make rental payments based on their income and ability to pay;  the Department of Housing and Urban Development (HUD) then makes ‘assistance payments' to the private landlords in an amount calculated to make up the difference between the tenant's contribution and a ‘contract rent’ agreed upon by the landlord and HUD.” Id. Section 8 authorizes the Secretary of HUD to enter into annual contribution contracts with local public housing authorities, which in this instance is the NYCHA, so that they may make assistance payments to owners of existing buildings.

When the NYCHA deems a tenant eligible for Section 8 assistance, the NYCHA issues a voucher, and the tenant must then locate an apartment and a landlord “willing to lease the unit under the [Section 8] program.”  24 CFR § 982.302(a), (b).  Upon locating an apartment, the tenant executes a lease with the landlord, which includes “the HUD-prescribed tenancy addendum.”  24 CFR § 982.305. Generally, the tenant is responsible for paying no more than 30% of his or her household income toward the monthly rent.  42 USC § 1437f(o ) (2)(A).   At the same time, the landlord enters into a separate Housing Assistance Payment (HAP) contract with the NYCHA, by which the NYCHA agrees to pay the landlord a subsidy equal to the balance of the fair market rent.  24 CFR §§ 982.1, 982.451.

In 1996, Congress enacted a temporary amendment to the Section 8 law, which inserted an introductory clause to 42 USC § 1437f(d)(1)(B)(ii), providing that “during the term of the lease, the owner shall not terminate the tenancy except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause” (emphasis added).  Pub.L. No. 104-134, § 203(c)(2), 110 Stat. 1321, 1321-281 (1996).   In 1998, Congress made this statutory amendment permanent.  Pub.L. No. 105-276, § 549(a)(2)(A), 112 Stat. 2461, 2607 (1998).⁴

As evident from the legislative history of these amendments, the change in language adding the phrase, “during the term of the lease,” was intended to eliminate the so-called “endless lease rule,” which required landlords to renew leases for Section 8 tenants, and prevented them from terminating a Section 8 tenancy unless they instituted court proceedings and established “good cause” within the meaning of 42 U.S.C. § 1437f(d)(1)(B)(ii).   See S. Rep. 105-2, 1997 WL 282462 (Leg.Hist.);  H.R. Rep. 105-76, 1997 WL 205589 (Legis.Hist.);  S. Rep. 104-195, 1995 WL 768616 (Legis.Hist.);  H.R. Conf. Rep. 104-353, 1995 WL 689613 (Legis.Hist.);   see also Carol Rickert & Assocs. v. Law, 132 N.M. 687, 691, 54 P.3d 91 (Court of Appeals, New Mexico 2002);  Franklin Tower One, LLC v. N.M., 157 N.J. 602, 725 A.2d 1104 (Supreme Court, New Jersey 1999).   Congress also repealed the rule commonly referred to as “take-one, take-all,” which had required a landlord who accepted one Section 8 tenant to accept all Section 8 tenants.   Congress believed that these and other statutory requirements,⁵ were “administratively burdensome to landlords” and that the “reforms will make participation in the section 8 tenant-based program more attractive to private landlords and increase housing choices for lower income families.”  144 Cong. Rec. S11833-02 at S11844, 1998 WL 698664 (Cong.Rec.).   While recognizing that the endless lease and take-one, take-all rules “were created to protect assisted households from owner discrimination,” Congress specifically stated that it did “not anticipate that the repeal of these rules will adversely affect assisted households because protections will be continued under State and local tenant laws.”  S. Rep. 105-21 at 36, 1997 WL 282462 (Legis.Hist.);   accord S. Rep. 104-195 at 32, 1995 WL 768616 (Legis.Hist.);  Franklin Tower One, LLC v. N.M., supra at 612, 725 A.2d 1104.

III. Procedural Background

As a result of the amendments to the Section 8 law, the Federal statutory restrictions on an owner's right to terminate a Section 8 tenancy are now limited to the extent of prohibiting only a termination “during the term of the lease.”  42 USC § 1437f(d)(1)(B)(ii).   Relying on this language in the Federal statute, defendant landlords assert that they are entitled “opt-out” of the Section 8 program, and will no longer accept Section 8 benefits on behalf of the plaintiff tenants once the term of each tenant's last rent stabilized renewal lease has expired.

Plaintiffs commenced the instant actions seeking injunctive and declaratory relief, regarding their landlords' refusal to continue accepting their Section 8 subsidies.   Plaintiffs' consolidated motions seek summary judgment on their claims for a declaration that defendant landlords are not permitted to terminate their participation in the section 8 program, where as here, the tenants are protected by the renewal requirements of the Rent Stabilization law, and most of the landlords are receiving J-51 tax benefits.   As noted above, plaintiffs assert that under New York's Rent Stabilization Code, the landlord of a rent stabilized apartment must provide the tenant with a renewal lease “on the same terms and conditions as the expired lease,” and the receipt of a Section 8 subsidy is a material term and condition of a rent stabilized lease.   Plaintiffs further assert that under New York City's J-51 tax abatement law, landlords benefitting from J-51 tax abatements are prohibited from discriminating against Section 8 recipients, and as result, any defendant landlord receiving a J-51 tax abatement is required to accept the tenant's Section 8 rent subsidy.

In opposing the motions, defendant landlords contend that the amendments to the Section 8 law eliminating the endless lease requirement, give them the absolute right to opt-out of participating in the Section 8 program, and, as a result, they are now permitted to refuse to accept the plaintiff tenants' Section 8 rent subsidies.   Specifically, defendants argue that the provisions of the New York's Rent Stabilization law requiring automatic lease renewals, conflict with and therefore, are preempted by the Federal Section 8 statute, which no longer mandates a “endless lease.”   As to New York City's J-51 tax abatement law, defendants argue that this local law simply prohibits a landlord from discriminating against Section 8 tenants by initially refusing to rent to them, and does not prevent a landlord from ceasing to participate in the Federal Section 8 program.   Defendants also argue that plaintiffs' interpretation of the J-51 law would essentially “nullify” and “frustrate Congressional mandates” that landlords are free to discontinue Section 8 participation.

Based upon a review of the relevant statutes, regulations, case law and legislative history, this Court concludes that defendant landlords are required to offer plaintiff tenants renewal leases with Section 8 rent subsidies, as defendants' refusal to continue accepting plaintiff's Section 8 subsidies violates both the letter and spirit of the provisions of New York City's J-51 tax abatement law which protect tenants from discrimination based on Section 8 status, Administrative Code § 11-243, and the provisions of New York State's rent stabilization laws which protect a rent stabilized tenant's right to a renewal lease on the same terms and conditions as the expired lease, RSC § 2522.5(g)(1).

IV. Preemption Generally

 At the outset, the Court must resolve the threshold question of Federal preemption.  “[P]reemption is not to be lightly presumed,” California Federal Savings & Loan Ass'n v. Guerra, 479 U.S. 272, 281, 107 S.Ct. 683, 93 L.Ed.2d 613 (1987), and “the presumption is that Congress did not intend to preempt the States' power to regulate matters of local concern.”  Matter of Holtzman v. Oliensis, 91 N.Y.2d 488, 494, 673 N.Y.S.2d 23, 695 N.E.2d 1104 (1998).   Moreover, Federal courts have permitted States to impose greater restrictions than those imposed by Federal law, see e.g. California Federal Savings & Loan Ass'n v. Guerra, supra, and New York courts have found that State laws imposing stricter requirements than Federal law are not necessarily preempted, see e.g. City of New York v. Job-Lot Pushcart, 88 N.Y.2d 163, 643 N.Y.S.2d 944, 666 N.E.2d 537, cert. den. 519 U.S. 871, 117 S.Ct. 186, 136 L.Ed.2d 124 (1996).

As a general proposition, courts in New York and other jurisdictions, including the highest courts in Connecticut, New Jersey and Massachusetts, have held that the Federal Section 8 legislative scheme does not preempt State tenant protection laws.   See e.g. Mott v. New York State Division of Housing & Community Renewal, 211 A.D.2d 147, 628 N.Y.S.2d 712 (2nd Dept.), app. dism. 86 N.Y.2d 836, 634 N.Y.S.2d 444, 658 N.E.2d 222 (1995);  Kouznetski v. Verga Assocs., N.Y.L.J., July 10, 2002, p. 29, col. 2 (Sup.Ct., Kings Co.);   Commission on Human Rights & Opportunities v. Sullivan Assocs., 250 Conn. 763, 772-774, 739 A.2d 238 (1999);  Franklin Tower One, LLC v. N.M., 157 N.J. 602, 615-619, 725 A.2d 1104 (Supreme Court, New Jersey 1999);  Attorney General v. Brown, 400 Mass. 826, 511 N.E.2d 1103 (1987);  Stevenson v. San Francisco Housing Authority, 24 Cal.App.4th 269, 29 Cal.Rptr.2d 398 (1994);  but see Seminara Pelham, LLC v. Formisano, 5 Misc.3d 695, 782 N.Y.S.2d 898 (City Ct., New Rochelle 2004);  Knapp v. Eagle Property Management Corp., 54 F.3d 1272 (7th Cir.1995).

V. New York City's J-51 Law

Turning first to New York City's J-51 tax abatement law, any question of Federal preemption has been eliminated by the Federal Section 8 regulation which explicitly states that nothing in the Section 8 scheme is intended to preempt State and local laws prohibiting discrimination against Section 8 tenants.  24 CFR § 982.53(d).

 In an effort to provide landlords with an incentive to improve and rehabilitate their buildings, and maintain and increase the supply of urban housing stock, New York City enacted the so-called “J-51” law, Administrative Code § J51-2.5 (now § 11-243), which gives multiple dwelling owners tax abatements and exemptions for certain enumerated projects, to offset any increase in real property taxes that would otherwise result from the improvements.   See In the Matter of 31171 Owners Corp. v. New York City Department of Housing Preservation & Development, 190 A.D.2d 441, 442-443, 599 N.Y.S.2d 19 (1st Dept.1993);  Matter of Acropolis Gardens Realty Corp. v. Department of Housing Preservation & Development, 175 A.D.2d 242, 243, 572 N.Y.S.2d 708 (2nd Dept.1991);  Kraebel v. New York City Department of Housing Preservation & Development, 959 F.2d 395, 398 (2nd Cir.), cert. den. 506 U.S. 917, 113 S.Ct. 326, 121 L.Ed.2d 245 (1992).   As one court explains, “the City of New York has determined that certain improvements to residential apartment buildings are worth encouraging, and to do so, it has provided significant public subsidies for private undertakings.”  Id.

Since its enactment, the J-51 law has included a nondiscrimination clause binding property owners participating in the J-51 program.   Over time, the law has been amended to expand the classes of protected individuals, and the current law, as amended in 1993, provides in pertinent part as follows:

No owner of a dwelling to which the benefits of this section shall be applied, nor any agent, employee, manager or officer of such owner shall directly or indirectly deny to any person because of race, color, creed, national origin, gender, sexual orientation, disability, marital status, age, religion, alienage or citizenship status, or the use of, participation in, or being eligible for a governmentally funded housing assistance program, including, but not limited to, the section 8 housing voucher program and the section 8 housing certificate program, 42 U.S.C. 1437 et. seq. ․ any of the dwelling accommodations in such property or any of the privileges or services incident to occupancy therein.

[emphasis added] Admin. Code § 11-243(k);  4301 Realty LLC v. Yurovskaya, Civil Court, Kings Co., Index No. L & T 106482/02 (February 4, 2005).

The legislative history confirms that the proposed law was intended to “make clear that when an owner receives tax benefits under the J-51 program, that owner may not discriminate against potential tenants on the basis of gender, sexual orientation, citizenship status, disability, or a tenant being the recipient of Section 8 vouchers or other federal housing aid․ I applaud ․ the bill's primary sponsors ․ for their efforts to ensure that all housing, including private housing receiving public subsides or tax benefits, is available to all New Yorkers, especially to those who are most in need.”   Statement of Mayor David Dinkins, June 1, 1993, Intro. No. 393-A.

In October 1999, final regulations implementing the 1998 amendments to the Section 8 statute, were promulgated by HUD, the federal agency responsible for administering the Section 8 program.   64 FR 56894-01, 1999 WL 957493 (F.R.).   As of 2000, the regulations have included a provision stating that Section 8 is intended to have absolutely no effect on State and local laws prohibiting discrimination based on Section 8 status.  Id. Specifically, the following language was added to 24 CFR § 982.53, which is entitled “Equal opportunity requirements”:  “Nothing in part 982 [governing the Section 8 voucher program] is intended to pre-empt operation of State and local laws that prohibit discrimination against a Section 8 voucher-housing because of status as a Section 8 voucher-holder.” ⁶  24 CFR § 982.53(d).

In accord with the express terms of 24 CFR § 982.53(d), this Court is bound to determine that the anti-discrimination provisions of the City's J-51 law are not preempted by the Federal Section 8 statutory scheme.   The plain language of the J-51 law and its legislative history, unequivocally demonstrates that J-51 was intended to prohibit owners receiving the benefits of a J-51 tax abatement, from discriminating against tenants who, inter alia, qualify for Section 8 rent subsidies.   As such, J-51 falls squarely within the Section 8 regulation stating that nothing in the Section 8 scheme is intended to preempt “operation of State and local laws that prohibit discrimination against a Section 8 voucher-holder because of status as a Section 8 voucher-holder.”  24 CFR § 982.53(d).  Thus, pursuant to the express terms of 24 CFR § 982.53(d), it is unquestionable that the anti-discrimination provisions of the J-51 law are not preempted by any provision of the Section 8 law, including 42 USC § 1437f(d)(1)(B)(ii), which eliminated the endless lease requirement.

Based upon the foregoing, any landlord in New York City receiving a J-51 tax abatement is legally mandated under the anti-discrimination protections of the J-51 law, to accept and continue accepting a tenant's Section 8 rent subsidy.   This holding is consistent with the holding in 4301 Realty LLC v. Yurovskaya, Civil Court, Kings Co., Index No. L & T 106482/02 (February 4, 2005), which is the only opinion to date to reach this issue.

In the instant actions, four of the five named defendant landlords concede that they are currently receiving significant benefits pursuant to New York City's J-51 tax abatement program.   As determined above, the J-51 law prohibits these defendants from discriminating against any tenant based upon the tenant's participation in the Section 8 program.   Thus, such defendants are obligated to continue accepting their tenants' section 8 rent subsidies, and are not permitted to opt-out of Section 8, as long as they are receiving the benefits of a J-51 tax abatement.   See 4301 Realty LLC v. Yurovskaya, supra.

VI. New York's Rent Stabilization Code

 Next, the Court will consider whether the Federal Section 8 statute preempts the provisions of New York State's Rent Stabilization laws which protect a rent stabilized tenant's right to a renewal lease on the same terms and conditions as his or her expired lease.   The determination of this issue requires an analysis of the “three ways in which a Federal law can preempt a State or local law:  one, by express provision in the Federal statute;  two, by inference, where the Federal legislative scheme is so pervasive and the character of the obligations imposed leaves no room for the State or local government to legislate;  and three, to the extent that the State or local law actually conflicts with the Federal law, for example where compliance with both is impossible or adherence to the State or local law would thwart the objectives of its Federal counterpart.”  City of New York v. Job-Lot Pushcart, 88 N.Y.2d 163, 167, 643 N.Y.S.2d 944, 666 N.E.2d 537, cert. den. 519 U.S. 871, 117 S.Ct. 186, 136 L.Ed.2d 124 (1996).

A reading of the Section 8 statute and regulations reveals no explicit language providing for the preemption of such laws.   As previously discussed, the only explicit preemption language in the Section 8 statute and regulations, merely states that Section 8 is not intended to preempt State and local laws prohibiting discrimination against Section 8 recipients.  24 CFR § 982.53(d).  Thus, the Court must consider whether the Section 8 amendment eliminating the endless lease requirement, preempts by inference, or conflicts with the lease renewal protections afforded to rent stabilized tenants under the New York State's Rent Stabilization laws.

In seeking to opt-out of participating in the Section 8 program, the defendant landlords are relying on the amendment to the Section 8 statute which repealed the endless lease requirement.   That amendment added language to the statute which refers to termination “during the term of the lease,” by an “owner” in the most general sense.  42 U.S.C. § 1437f(d)(1)(B)(ii).   It cannot be said that the Section 8 statute is so comprehensive as to create an inference that Congress intended to leave no room for State or local regulation in the area, and this Court is not persuaded that the provisions of Section 8 cannot be harmonized with those of the Rent Stabilization law.   See Mott v. New York State Division of Housing & Community Renewal, 211 A.D.2d 147, 152, 628 N.Y.S.2d 712 (2nd Dept.), app. dism. 86 N.Y.2d 836, 634 N.Y.S.2d 444, 658 N.E.2d 222 (1995);  Franklin Tower One, LLC v. N.M., 157 N.J. 602, 619, 725 A.2d 1104 (Supreme Court, New Jersey 1999).   To the contrary, the Section 8 program has always called for substantial State and local participation.   See id. at 609-619, 725 A.2d 1104;  Attorney General v. Brown, 400 Mass. 826, 828, 511 N.E.2d 1103 (1987).   This conclusion is firmly supported by the legislative history of the Section 8 amendments eliminating the endless lease and “take-one take-all” provisions, as Congress explicitly noted that “protections will be continued under State and local tenant laws.”   S. Rep. 105-21 at 36, 1997 WL 282462 (Legis.Hist.);  S. Rep. 104-195 at 32, 1995 WL 768616 (Legis.Hist.);  Franklin Tower One, LLC v. N.M., supra at 612, 725 A.2d 1104.   The Massachusetts Supreme Court has recognized that “federal housing legislation creates the network of subsidized housing law superimposed upon and consciously interdependent with the substructure of local law relating to housing.”  Attorney General v. Brown, 400 Mass. 826, 831, 511 N.E.2d 1103 (1987);  supra (quoting Kargman v. Sullivan, 552 F.2d 2, 11 [1st Cir.1977] ).

 This Court further finds that New York State laws providing rent stabilized tenants with statutory lease renewal protections, do not conflict with the intent of the Section 8 amendment eliminating the endless lease requirement.   For preemption purposes, a conflict arises when compliance with both the State and Federal statutes is physically impossible.   See City of New York v. Job-Lot Pushcart, supra at 170, 643 N.Y.S.2d 944, 666 N.E.2d 537.   Here, compliance with the Federal Section 8 statute and the State Rent Stabilization laws is not impossible, as, for the reasons discussed below, the text of 42 U.S.C. § 1437f is devoid of any requirement that participation in the Section 8 program be voluntary.   See Commission on Human Rights & Opportunities v. Sullivan Assocs., 250 Conn. 763, 773, 739 A.2d 238 (1999);  Attorney General v. Brown, supra at 829, 511 N.E.2d 1103.

 A conflict resulting in preemption also arises when “the State or local law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.”  City of New York v. Job-Lot Pushcart, supra at 170, 643 N.Y.S.2d 944, 666 N.E.2d 537.   New York has both a strong and long-standing public policy of protecting residential tenants as reflected by the provisions of the Rent Stabilization Code which substantially restrict a landlord's ability to terminate a rent stabilized tenancy, and require the landlord to offer renewal leases to rent stabilized tenants.   See Rent Stabilization Association of New York City, Inc. v. Higgins, 83 N.Y.2d 156, 164-166, 608 N.Y.S.2d 930, 630 N.E.2d 626 (1993);  390 West End Assocs. v. Harel, 298 A.D.2d 11, 15, 744 N.Y.S.2d 412 (1st Dept.2002).   Unless a landlord is able to satisfy specific statutory criteria permitting non-renewal or termination, a rent stabilized tenant is automatically entitled to a renewal lease “on the same terms and conditions as the expired lease.”   RSC § 2522.5(g)(1);  Roxborough Apartments Corp. v. Becker, 296 A.D.2d 358, 745 N.Y.S.2d 173 (1st Dept.2002);  17th Holding LLC v. Rivera, 195 Misc.2d 531, 758 N.Y.S.2d 758 (App. Term, 2nd Dept.2002);  Fishel v. New York City Conciliation & Appeals Board, 123 Misc.2d 841, 474 N.Y.S.2d 908 (Sup.Ct., Kings Co.1984);  Tann Realty Co. v. Thompson, 112 Misc.2d 392, 446 N.Y.S.2d 959 (Civ.Ct., Kings Co.1981).

From a historical standpoint, rent regulations were first enacted in New York State in response to what was found to be a severe housing shortage following World War II, caused in large part by the return of war veterans.   Rent Stabilization Ass'n of New York City, Inc. v. Higgins, 83 N.Y.2d 156, 164-165, 608 N.Y.S.2d 930, 630 N.E.2d 626 (1993), cert. den. 512 U.S. 1213, 114 S.Ct. 2693, 129 L.Ed.2d 823 (1994);  Devlin v. New York State Division of Housing & Community Renewal, 309 A.D.2d 191, 194-195, 764 N.Y.S.2d 100 (1st Dept.2003), lv. app. den. 2 N.Y.3d 705, 780 N.Y.S.2d 311, 812 N.E.2d 1261 (2004).  “The emergency housing Rent Control Law (L. 1946, ch. 274) was passed into law in 1946 to provide property owners with a fair return for their investment and at the same time to provide affordable housing accommodations for the general population.”  Id. Any housing unit completed prior to February 1, 1947, was subject to the Rent Control Law. Id.

In response to the continuing housing emergency and the need to regulate dwelling units constructed after 1947, the Rent Stabilization Law was enacted in 1969, “to ameliorate, over time, the intractable housing emergency in the City of New York․ By regulating rents and providing occupants with statutory rights to tenancy renewals under rent stabilization a ‘less onerous form of [rent] regulation’ the State intended to protect dwellers who could not compete in an overheated rental market, through no fault of their own.”  Manocherian v. Lenox Hill Hospital, 84 N.Y.2d 385, 389, 618 N.Y.S.2d 857, 643 N.E.2d 479 (1994), cert. den. 514 U.S. 1109, 115 S.Ct. 1961, 131 L.Ed.2d 853 (1995)(quoting Sullivan v. Brevard Assocs., 66 N.Y.2d 489, 494, 498 N.Y.S.2d 96, 488 N.E.2d 1208 [1985] ) “The regulation of this field has been maintained ‘to prevent uncertainty, hardship and dislocation,’ and to ‘forestall profiteering, speculation and other disruptive practices.’ ”  Id. (quoting NYC Admin. Code § 26-501).

In light of the foregoing, the lease renewal requirements of the Rent Stabilization law are not an obstacle to the accomplishments of the objectives of the Section 8 rent subsidy program;  rather, the Federal and State laws advance a common goal, i.e. affordable, decent housing for lower income families.   The essence of the Federal Section 8 law is aiding low income residents in obtaining affordable housing, and it was with that precise goal in mind that Congress repealed both the endless lease and “take-one take-all” requirements, as they were having the unintended effect of discouraging landlords from participating in the Section 8 program.   See Franklin Tower One, LLC v. N.M., supra.   New York shares that goal, as the lease renewal rights of rent stabilized tenants are an integral part of the tenant protection laws enacted to protect residential tenants from the effects of what the legislature has deemed to be a severe shortage of affordable rental housing in New York City.

This determination is consistent with nearly identical issues of preemption addressed by the highest courts in New Jersey, Franklin Tower One, LLC v. N.M., supra, Connecticut, Commission on Human Rights & Opportunities v. Sullivan Assocs., supra and Massachusetts, Attorney General v. Brown, supra.   Each case holds that a State statute prohibiting landlords from discriminating against tenants receiving Section 8 subsidies, is not preempted by the Federal Section 8 law.   Significantly, after the last of these cases was decided in 1999, a new Section 8 regulation was promulgated at 24 CFR § 982.53(d), which expressly provides that Section 8 is not intended to preempt State and local laws prohibiting discrimination against Section 8 tenants.   The addition of this provision reflecting the explicit intent that Section 8 does not preempt State and local laws, evidences that the holdings in Franklin Tower One, LLC v. N.M., supra, Commission on Human Rights & Opportunities v. Sullivan Assocs., supra and Attorney General v. Brown, supra are in harmony with the intent of the Section 8 statutory scheme.

Moreover, the analysis of the preemption issue in those decisions, albeit not binding on this Court, is both instructive and persuasive, particularly as to those Courts' uniform rejection of the landlords' arguments regarding the voluntary nature of the Section 8 program.   For example in Franklin Tower One, LLC v. N.M., the issue was whether Congress' repeal of the “take-one, take all” requirement of the Section 8 statute, which required landlords renting to one Section 8 recipient to rent to all otherwise qualified Section 8 recipients, preempted a New Jersey law prohibiting discrimination against Section 8 recipients.   The landlords argued that Congress intended Section 8 to be a voluntary program involving voluntary participation by landlords, which would conflict with the New Jersey's anti-discrimination law, since that law necessarily result in mandating Section 8 participation.   Rejecting this argument, the New Jersey Supreme Court succinctly states as follows:

That 42 U.S.C.A. § 1437f does not mandate landlord participation in the Section 8 program is undisputed.   However, the voluntary nature of the Section 8 program is not at the heart of the federal scheme.   The inference that the program is voluntary derives only from one section of the statute that permits landlords to screen potential tenants, and no language in that provision implies that a landlord's right to screen tenants includes the right to reject tenants solely on the basis that they are qualified for governmental rental assistance.   See 42 U.S.C.A. § 1437f(d)(1)(A).   Nothing in the statute, however, mandates that landlord participation in the Section 8 program be voluntary, nor is there any provision that prohibits states from mandating participation.   That conclusion is supported by the history of 42 U.S.C.A. § 1437f(t), the “take-one, take-all” provision.   That provision was enacted to increase the availability of low-income housing.   It was repealed only because it was having the unintended effect of discouraging landlords from joining the Section 8 program.   The goal of Congress, however, has always been to assist in providing housing to low-income tenants.

Franklin Tower One, LLC v. N.M., supra at 619-620, 725 A.2d 1104;  accord Commission on Human Rights & Opportunities v. Sullivan Assocs., supra at 772, 739 A.2d 238;  Attorney General v. Brown, supra at 830, 511 N.E.2d 1103;  but see Seminara Pelham, LLC v. Formisano, supra.

In the instant actions, defendant landlords argue that any provision of the rent stabilization law requiring them to renew the lease with the Section 8 subsidy, is preempted by the Section 8 statute, which provides for voluntary participation and no longer mandates an endless lease.   Although the holding in Franklin Tower One, LLC v. N.M., supra, is specifically addressed to the elimination of the “take-one, take-all” requirement in the Section 8 statute, the legal analysis of the preemption issue is equally applicable to the endless lease requirement at issue here, as both provisions were repealed at the same time and for the same reasons.   The legislative history shows the endless lease and “take-one, take all” requirements were characterized as the “ two key disincentives in current law to owner participation,” 1995 WL 602577 (F.D.C.H.), testimony of Christina L. Garcia, on behalf of the National Apartment Association, H.R. Subcommittee on Housing & Community Opportunity (October 13, 1995), and that the elimination of these provisions was part of the “key reforms” designed to “encourage greater owner participation.”  S. Rep. 105-21 at 36, 1997 WL 282462 (Leg.Hist.).

Thus, with respect to the instant actions, the analysis in Franklin Tower One, LLC v. N.M., supra, as well as Commission on Human Rights & Opportunities v. Sullivan Assocs., supra, and Attorney General v. Brown, supra, supports the conclusion that as nothing in the Section 8 statutory scheme requires that landlord participation be voluntary, Section 8 does not conflict with New York State laws requiring landlords to offer rent stabilized tenants renewal leases on the same terms and conditions as the expired leases, and, thus, continue accepting tenants' Section 8 rent subsidies.   This is not to say that landlords are mandated to participate in Section 8, but rather for rent stabilized tenants, once the landlord accepts Section 8 subsidies on their behalf, the lease must be renewed on the same terms and conditions as the expired lease which included the tenants' Section 8 subsidy payments. See RSC § 2522.5(g)(1);  Roxborough Apartments Corp. v. Becker, supra;  17th Holding LLC v. Rivera, supra;  Fishel v. New York City Conciliation & Appeals Board, supra;  Tann Realty Co. v. Thompson, supra

Defendant landlords additionally argue that preemption is warranted to preserve the goal of the amendment to the Section 8 statute which repealed the endless lease requirement.   This argument is misplaced.   The legislative history reveals that Congress amended 42 USC § 1437f(d)(1)(B)(ii) to add “during the term of the lease” in response to complaints from the private apartment industry that the endless lease provision was one of the key disincentives to owner participation in the Section 8 program.   See 1995 WL 602577 (F.D.C.H.), testimony of Christina L. Garcia, on behalf of the National Apartment Association, H.R. Subcommittee on Housing & Community Opportunity (October 13, 1995);  1997 WL 165570 (F.D.C.H.), testimony of Thomas R. Shuler, on behalf National Multi-Housing Council, S. Subcommittee on Housing Opportunity & Community Development (April 9, 1997).   A reading of the legislative history shows that Congress' consideration of this issue was limited to the context of a general category of landlord tenant relationship that is not subject to State or local regulation of a landlord's right to terminate or renew the tenancy, where a landlord can freely choose, without cause, not to renew a tenant's lease once it expires.   That type of landlord tenant relationship is vastly different from the relationship a landlord in New York City has with a tenant residing in an apartment subject to regulation under rent stabilization, as absent a showing as to specific statutory criteria permitting non-renewal or termination, the landlord is mandated by law to renew a rent stabilized tenant's lease.   See Rent Stabilization Association of New York City, Inc. v. Higgins, supra;  390 West End Assocs. v. Harel, supra.

As indicated in the legislative history of the Section 8 amendments, the private apartment industry asserted that the endless lease provision, “denies owners their usual option to opt-out of a rent relationship with a tenant when the lease expires.   Outside of Section 8, it is a well established provision of landlord-tenant law that when a lease expires, both owner and tenant have the option of ending the rental relationship.   Owners need this option to protect the value of their investment from tenants who cause loses.   Likewise, tenants need the option to opt-out if the owner is providing an inferior product.”   1995 WL 602577 (F.D.C.H.), testimony of Christina L. Garcia, on behalf of the National Apartment Association, H.R. Subcommittee on Housing & Community Opportunity (October 13, 1995);  accord 1997 WL 165570 (F.D.C.H.), testimony of Thomas R. Shuler, on behalf National Multi-Housing Council, S. Subcommittee on Housing Opportunity & Community Development (April 9, 1997) (emphasis added).

Thus, the elimination of the endless lease provision, was simply intended to assist landlords who would otherwise have the right to terminate their relationship with a tenant, but for the Section 8 rule requiring them to renew the lease.   Here, in New York City, notwithstanding Section 8, landlords who own rent stabilized apartments are obligated to offer renewal leases to their tenants, and can only terminate or refuse to renew a rent stabilized tenancy on specific statutory grounds.   See Rent Stabilization Association of New York City, Inc. v. Higgins, supra;  390 West End Assocs. v. Harel, supra.   In other words, New York City's rent stabilized tenants are provided with statutory protections to ensure renewal and protect against termination.   As determined herein, Congress explicitly intended that such State and local laws protecting tenants would continue to do so, even after the endless lease and “take-one take-all” provisions were repealed.   See S. Rep. 105-21 (1997);  S. Rep. 104-195 (1995);  Franklin Tower One, LLC v. N.M., supra at 612, 725 A.2d 1104.⁷

Thus, for the reasons cited above, this Court finds that the elimination of the Section 8 endless lease requirement, does not preempt the statutory lease renewal protections of New York's rent stabilization laws.

 Finally, the Court turns to consideration of plaintiff's rights under rent stabilization, and the question whether they are entitled to rent stabilized renewal leases with Section 8 subsidies.

Plaintiffs are all rent stabilized tenants entitled to the full range of benefits and protections conferred by the State's rent stabilization laws, including the automatic right to a renewal lease “on the same terms and conditions as the expired lease.”   RSC § 2522.5(g)(1);  Roxborough Apartments Corp. v. Becker, supra;  17th Holding LLC v. Rivera, supra;  Fishel v. New York City Conciliation & Appeals Board, supra;  Tann Realty Co. v. Thompson, supra.   This Court finds that the defendant landlords' participation in the Section 8 program and acceptance of Section 8 rent subsidies on behalf of the plaintiff rent stabilized tenants, constitutes a material term and condition of the tenants' expired rent stabilized leases, within the meaning of RSC § 2522.5(g)(1), and as such, defendants are obligated to offer plaintiffs renewal leases on those same terms and conditions, which must include the tenants' Section 8 rent subsidies and the landlords' continued acceptance of the those subsidy payments.   See Fishel v. New York City Conciliation & Appeals Board, supra;  Tann Realty Co. v. Thompson, supra.

This conclusion is supported by the Section 8 regulations and the language contained in the “HUD-prescribed tenancy addendum,” which all Section 8 tenants receive along with a standard form lease.  24 CFR § 982.308(b)(2).⁸  HUD describes a Section 8 tenant's lease as “composed of two parts:  the owner's standard form lease, plus the federal tenancy addendum.”  64 FR 56894-01 at 56903, 1999 WL 957493 (F.R.).   Basically, the HUD tenancy addendum serves to explain the specific terms and conditions of the Section 8 voucher program, and states that “[t]he owner is leasing the contract unit to the tenant for occupancy by the tenant's family with assistance for a tenancy under the Section 8 housing choice voucher program” (emphasis added).   Referring directly to the landlord's Housing Assistance Payments (HAP) contract with the public housing authority (PHA), the tenancy addendum states that “[u]nder the HAP contract, the PHA will make housing assistance payments to the owner to assist the tenant in leasing the unit from the owner.”   The addendum explains that “[e]ach month, the PHA will make a housing assistance payment to the owner on behalf of the family ․ [and] the amount of the monthly housing assistance payment will be determined by the PHA.” As to the tenant, the tenancy addendum explains that “[t]he family is responsible for paying the owner any portion of the rent to owner that is not covered by the PHA housing assistance payment” and that “[t]he tenant is not responsible for paying the portion of rent to the owner covered by the PHA housing assistance payment under the HAP contract between the owner and the PHA.” Also, the Section 8 regulations explicitly provide that Section 8 tenants “shall have the right to enforce the tenancy addendum against the owner.”  24 CFR § 982.308(f)(2).

Applying the Section 8 regulations to the instant actions, each plaintiff's lease consists of a standard rent stabilized lease or lease renewal, plus the HUD tenancy addendum, which is defined as an actual part of the lease.⁹  Given the explicit references in the tenancy addendum to the Section 8 rent subsidy payments to the landlord, as well as the tenant's obligation to pay only that portion of the rent not covered by the subsidy, and the tenant's rights under the regulations to enforce the tenancy addendum against the landlord, this Court concludes that terms of the tenancy addendum and the rent stabilized lease are so interrelated, that the Section 8 rent subsidy referenced in the tenancy addendum constitutes a material term and condition of the rent stabilized lease within the meaning of RSC § 2522.5(g)(1).

This conclusion is further supported by the unquestionable fact that the prior rent stabilized leases or lease renewals were executed with Section 8 subsidies, and as indicated from the Section 8 statute, plaintiffs, who have all qualified for Section 8 assistance, could not afford to pay the full amount of the stabilized rent as listed on the leases, without the substantial financial assistance of the subsidies provided by the Section 8 program.   Given the significance of the Section 8 subsidies, this Court finds that the Section 8 subsidy is a material term and condition of the lease.   To hold otherwise, would render meaningless and vitiate the statutory right of these rent stabilized tenants to automatic and continuous renewals of their leases on the same terms as the expired lease, as they still qualify and, therefore, are dependent upon the Section 8 subsidy payments to assist them in leasing their rent stabilized apartments.

 Significantly, as explained above, the NYCHA, the local public housing authority charged with administering the Section 8 program in New York City and implementing the Federal statute and regulations, has issued a formal statement of its legal position and standing policy that “our landlords of occupied rent stabilized apartments must offer a continuation of Section 8 subsidy as a condition of renewal with their tenants,” and that the “Section 8 subsidy constitutes a essential condition for such leases.”   NYCHA Leased Housing Department Memorandum, July 22, 2003 (LHD # 03-26).   When a case involves an administrative policy implemented by the governmental agency charged with administering the statute, courts will defer to the agency's interpretation of a statute, as long as it is not irrational or unreasonable.  Matter of Salvati v. Eimicke, 72 N.Y.2d 784, 791, 537 N.Y.S.2d 16, 533 N.E.2d 1045 (1988), rearg. den. 73 N.Y.2d 995, 540 N.Y.S.2d 1006, 538 N.E.2d 358 (1989);  Matter of 300 West 49th Street Assocs. v. New York State Division of Housing & Community Renewal, 212 A.D.2d 250, 255, 629 N.Y.S.2d 194 (1st Dept.1995).   Here, the NYCHA's interpretation is entitled to deference, as it is not unreasonable nor irrational.

As noted at the beginning of this opinion, there is a split in the courts that have previously resolved the legal questions presented in the instant actions.   This Court's determination is consistent with the majority of the opinions from trial level courts in New York City, holding that a landlord is not entitled to opt-out of Section 8 for rent stabilized tenants receiving Section 8 subsidies.   Ellwood Realty LLC v. Polanco, Civ.Ct., N.Y. Co., Index No. 69979/04, December 13, 2004;  Tibout Estates, LLC v. Coleman, N.Y.L.J., October 19, 2004, p. 20, col. 1 (Civ.Ct., Bronx Co.);   M 1849 LLC v. Inniss, Civ.Ct., Bronx Co., L & T Index No. 13927/04, August 23, 2004;  Bran-Trav Development LLC v. Matus, Civ.Ct., Kings Co., L & T Index No. 55013/04, July 27, 2004;  Kouznetski v. Verga Assocs., supra;  see also Cosmopolitan Assocs. v. New York City Department of Housing Preservation & Development, Sup.Ct., Queens Co. Index No. 4816/05, May 31, 2005.   These decisions also hold that the amendment to Section 8 eliminating the endless lease provision, 42 USC § 1437f(d)(1)(B), is not preempted by New York's rent stabilization laws.¹⁰

Opinions reaching the opposite determination, i.e. the landlord is entitled to opt-out of Section 8 upon expiration of the term of a rent stabilized lease, are from the City Court of New Rochelle in Westchester County.  Seminara Pelham, LLC v. Formisano, supra;  Mayco, LLC v. Boreland, N.Y.L.J., January 28, 2004, p. 20, col. 3;  185 Union Avenue Realty Corp. v. Harris, N.Y.L.J., July 9, 2003, p. 28, col. 1;  30 Eastchester LLC v. Healy, 2002 WL 553709 (March 28, 2002)(n.o.r.).¹¹  Several opinions from courts in New York City rely on and follow 30 Eastchester LLC v. Healy.   Cosmopolitan Assocs., LLC v. Ortiz, N.Y.L.J., November 12, 2004, p. 20, col. 1 (Civ.Ct., Queens Co.);  Licht v. Moses, 5 Misc.3d 1023(A), 799 N.Y.S.2d 161, 2004 WL 2812911 (December 7, 2004, Civ.Ct., Kings Co.).¹²  For the reasons indicated above, this Court respectfully disagrees with these decisions.

This Court, however, does not agree with one distinction that appears to have been created in some of the prior decisions.   Notwithstanding the absence of supporting documentation, it is not disputed that all of the tenant plaintiffs have been receiving Section 8 benefits from either the outset of their tenancies, or some time thereafter.   A number of prior decisions emphasize the fact that the rent stabilized tenant was a Section 8 recipient since the inception of his or her tenancy.   See e.g. Ellwood Realty LLC v. Polanco, supra;  Tibout Estates, LLC v. Coleman, supra;  M 1849 LLC v. Inniss;   Bran-Trav Development LLC v. Matus, supra.   By inference, these cases suggest that the result might differ, had the rent stabilized tenant become eligible for Section 8 benefits only after the commencement of the tenancy.   This Court, however, is not persuaded that this is a distinction that should make a difference in the ultimate determination, as it would create an inequitable result, by which some Section 8 recipients residing in rent stabilized apartments would have greater protections than others.

VII. Conclusion

In conclusion, this Court determines that Federal Section 8 law eliminating the endless lease requirement does not preempt the provisions of New York City's J-5 law prohibiting landlords from discriminating against Section 8 recipients, nor the provisions of New York's Rent Stabilization Code giving rent stabilized tenants the right to a renewal lease on the same terms and conditions as the expired lease, i.e. with the Section 8 rent subsidies.   Furthermore, this Court determines as a matter of law that those defendants receiving J-51 tax benefits are obligated to continue accepting their tenants' Section 8 rent subsidies, and that plaintiffs, as rent stabilized tenants, are entitled to renewal leases with Section 8 rent subsidies, as their Section 8 subsidies constitute a material term and condition of their expired leases.

Accordingly, it is hereby

ORDERED that plaintiffs' consolidated motions for summary judgment are granted;  and it is further

ORDERED, ADJUDGED AND DECLARED that with respect to plaintiffs, who are rent-stabilized tenants, defendants are obligated to continue accepting Section 8 rent subsidies and are not permitted to opt-out of the Federal Section 8 rent subsidy program; and it is further ordered, adjudged and declared that with respect to those defendants who are receiving tax benefits under New York City's J-51 law, they are obligated to continue accepting Section 8 rent subsidies and are not permitted to opt-out of the Federal Section 8 rent subsidy program.

This constitutes the decision, order and judgment of this Court.

FOOTNOTES

1.   By a so-ordered stipulation dated November 18, 2004, the parties consented to the consolidation of Lasandra Washington v. 509 Realty Co., LLC, Index No. 403005/04 with Sonia Rosario v. Diagonal Realty, LLC, Index No. 402448/04.   The motion to consolidate Igor Gumanovsky, Candida Cartagena and Sylvia German v. Bennet Realty, LCC and Diplomacy Realty, LLC, Index No. 402748/04 with the Rosario action, is hereby granted in the absence of opposition.   Thus, both the Washington and Gumanovsky actions are consolidated with the Rosario action under the Rosario index number, 402448/04.   The Court issued two interim orders dated February 17, 2005 and March 17, 2005, granting the motions of Celeste Vergez and Mariete Rosenfeld, respectively, to intervene in the Gumanovsky action and to add Rosenfeld's landlord as a defendant (6555 Realty, LLC).  The caption of the consolidated actions is the caption listed above, which also includes the names of the intervening parties.   The parties have stipulated that plaintiffs' original motions for preliminary injunctions are converted to motions for summary judgment, as the underlying issue is purely a legal question.   To the extent the relief sought in the outstanding motions, has not already been resolved by the Court or the parties, the motions are consolidated for disposition herein (motion sequence no. 001 in Sonia Rosario v. Diagonal Realty, LLC, Index No. 402448/04;  motion sequence nos. 001, 002, 003 and 004 in Gumanovsky, Candida Cartagena and Sylvia German v. Bennet Realty, LCC and Diplomacy Realty, LLC, Index No. 402748/04;  and motion sequence nos. 001 & 002 in Lasandra Washington v. 509 Realty Co., LLC, Index No. 403005/04).

2.   One decision from the First Department Appellate Division holds that the landlord can regain possession of the tenant's Section 8 apartment, after the Section 8 lease expired and the landlord no longer desired to participate in the Section 8 program, but in that case the apartment was neither rent stabilized nor rent controlled, and the decision is devoid of an reference to the City's J-51 tax abatement law.  Simms v. Popolizio, 175 A.D.2d 62, 572 N.Y.S.2d 319 (1st Dept.1991);  see also Matter of Gwynn v. Mulligan, 2003 WL 22134901 (Sup.Ct., West.Co.2003)(n.o.r.).

3.   Although the actions involve seven separate plaintiffs, only five defendant landlords are named in the caption, since plaintiffs Cartagena, German and Vergez reside in the same building and have the same landlord, Diplomacy Realty, LLC. Plaintiff Washington does not allege that her landlord, defendant 509 Realty Co., LLC, is receiving a J-51 tax abatement.   The four other defendant landlords admit that they are receiving J-51 tax abatements.

4.   The Section 8 amendment at issue herein, was part of a legislative package of amendments to the Section 8 statute, enacted as the Quality Housing and Work Responsibility Act of 1998, which provided for the complete merger of the Section 8 tenant-based Certificate and Voucher programs, into a new Housing Choice Voucher Program.  Pub.L. 105-276.

5.   Congress also eliminated the requirement that landlords use a form of lease approved by HUD, and added a provision permitting landlords to use the standard lease form that is used in the locality for non-Section 8 tenants, “plus the HUD-prescribed tenancy addendum.”  42 U.S.C. §§ 1437f(d)(1)(B)(I), 1437f(7);  24 CFR § 982.308(b)(2).

6.   24 CFR § 982.53(d) continues:  “However, such State and local laws shall not change or affect any requirement of this part, or any other HUD requirements for administration or operation of the program.”

7.   The apartment industry testimony is consistent with this conclusion:  “Eliminating these provisions [endless lease and “take one, take all”] will in no way deny Section 8 recipients the rights and protections provided to non-subsidized residents.   All residents are protected under the Fair Housing Act, the Americans with Disabilities Act, and state and local resident protections laws.   These laws provide a comprehensive set of protections for all residents, both subsidized and non-subsidized.”  1997 WL 165570 (F.D.C.H.), testimony of Thomas R. Shuler, on behalf National Multi-Housing Council, S. Subcommittee on Housing Opportunity & Community Development (April 9, 1997).

8.   Although plaintiffs have not submitted copies of all lease and lease renewal documents, the current version of the HUD-prescribed tenancy addendum can be found on HUD's website, and is identified as “form HUD-52641-A (3/2000), ref Handbook 7420.8.”   The form states that “previous editions are obsolete.”

9.   Although the record does not include copies of the actual and current lease documents for all seven plaintiffs, the Section 8 regulations define a Section 8 tenant's lease as a standard form lease plus the HUD-prescribed tenancy addendum.  24 CFR § 982.308(b)(2).   The lease documents submitted vary as to the individual plaintiffs and do not include in each instance a rent stabilized lease or lease renewal, or the tenancy addendum.   However, since it is undisputed that the plaintiff tenants all receive Section 8 subsidies, and that their apartments all subject to rent stabilization, under New York law they are entitled to a rent stabilized lease or lease renewal.   Thus, under the Section 8 regulations, plaintiffs' leases must consist of a standard form rent stabilized lease or lease renewal, plus the HUD tenancy addendum.

10.   Some of these decisions also rely on the terms of the HAP contract between the landlords and the NYCHA.   See e.g. M 1849 LLC v. Inniss, supra (HAP contract a material term and condition of rent stabilized lease, and must be renewed with lease);  Bran-Trav Development LLC v. Matus, supra (HAP contract commencing at inception of tenancy remains in effect until tenancy terminated under Rent Stabilization Code);  Ellwood Realty LLC v. Polanco, supra (tenant argued terms of HAP contract extends landlord's participation in Section 8 into any extension of lease term);  but see Cosmopolitan Assocs., LLC v. Ortiz, (HAP contract independent and landlord not obligated to renew HAP contract simply because rent stabilized lease had to be renewed);  Licht v. Moses, supra (landlord obligation to offer tenant rent stabilized lease on same terms and conditions as expiring lease, but no concomitant obligation for public housing authority to enter into HAP contract, or for tenant to renew lease;  HAP contract cannot stand on its own).   As indicated, however, there is a difference of opinion as to the effect and significance of the HAP contract in relation to a rent stabilized lease.   The parties' arguments relating to the HAP contract will not be addressed in view of this Court's resolution of the issues on the grounds indicated above.

11.   These four decisions were rendered by the same judge.

12.   Defendants also cite to an administrative decision of the New York State Division of Housing and Community Renewal (DHCR), In the Matter of the Administrative Appeal of Highland Management Corp. (Tenant-Precious Byrd), DHCR, Docket # QB910041RO, DRO Docket No. PK910001RV.   The Court is unable to comment on DHCR's decision, as it unpublished and no copy is annexed to any of the motion papers.   However, based upon a discussion of that decision in Cosmopolitan Assocs. v. Ortiz, supra, it appears that DHCR relied on 30 Eastchester LLC v. Healy, supra, in finding that the owner was not obligated to offer the tenant a Section 8 renewal lease.   It is unclear whether an Article 78 proceeding was commenced to challenge DHCR's determination.   In any event, in New York City, the NYCHA, and not DHCR, is the local housing authority charged with administering Section 8.

JOAN A. MADDEN, J.