Housing Development Corporation Is Government-Assisted Housing Entity

Facts: A site owner evicted a resident without giving a reason for the termination, arguing that it did not have to do so because it did not take over the site occupied by the resident until more than a decade after it was converted to a housing development fund cooperative corporation. The owner claimed that the corporation did not have to operate under the same requirements and restrictions as a government-assisted housing entity.

The resident challenged the eviction in court, arguing that the housing corporation did, in fact, operate like a government-assisted housing site, and therefore, the owner needed a legitimate reason to evict him. The court ruled in favor of the resident, and the owner appealed.

Ruling: The appeals court upheld the lower court's decision.

Reasoning: The appeals court noted that the owner's site was organized exclusively for the purpose of developing a housing project for persons of low income. Specifically, when the owner took over the building, the certificate of transfer included a 25-year restriction on the sale or transfer of the deed without the written approval of the New York City Department of Housing Preservation and Development as well as a covenant requiring that the premises be used solely as a housing project for persons or families of low income.

Subsequently, New York City and the owner executed a regulatory agreement in which the city suspended the owner's obligation to pay certain real estate taxes and provided for forgiveness of those arrears upon compliance with the regulatory agreement. That agreement, the court ruled, specifically entwined the corporation with the New York City Housing Authority by placing restrictions on the rentals and sales of units in the building, including a restriction on sales, rentals, and subleases to households whose annual income exceeds 120 percent of the median income and by specifically restricting occupancy to low-income residents.

The court, therefore, ruled that the eviction of the resident for no legitimate reason was illegal and ordered the resident to be reinstated.

• 330 South Third Street HDFC v. Blair, July 2010