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Westchester County Leaders Mostly Happy About HUD Case Court Decision

Westchester County Legisalture Chairman Michael Kaplowitz said there is still work to be done to please HUD despite the favorable court ruling. Photo Credit: File photo
Westchester County Executive Rob Astorino saw the win in federal appeals court as mostly positive. Photo Credit: File photo

WHITE PLAINS, N.Y. -- In what Weschester County officials called a victory in their ongoing court battle against the U.S. Department of Housing and Urban Development, a federal appeals court ruled on Wednesday that HUD funding decisions are reviewable by courts.

County Executive Rob Astorino, who was criticized for his hardline stanch by Gov. Andrew Cuomo in last year's gubernatorial race, said the Second Circuit decision "upholds the county's right to due process against federal overreach."

Astorino had argued that “HUD acted in an arbitrary and capricious manner” when it began withholding federal funds from the county in 2011. The U.S. Court of Appeals on Wednesday vacated a lower court ruling and held that HUD’s actions are “subject to judicial review.”

“The Second Circuit’s ruling is a major victory for due process against an aggressively overreaching federal bureaucracy,” Astorino said. “Just like everyone else, HUD has to follow the law. In this case, HUD was making up its own rules."

The case stems from HUD’s decision to start withholding Community Development Block Grants and other federal funds based on what the agency claimed was its “discretionary” power.

Westchester County Legislature Chairman Michael Kaplowitz, D-Somers, tempered Wednesday's celebration by saying the court battle is not over and federal funds have already been lost.

"The judicial review as ordered does not guarantee County victory, it only guarantees our day in court and before the same judge who has ruled against the County numerous times in the past,'' Kaplowitz said. "In fact, all these issues remain to be litigated with uncertain outcome. Such endless litigation will take years with significant direct and indirect costs to be borne by Westchester taxpayers."

Nevertheless, Astorino called it a "vindication for the county. A lot of people asked, 'Why are we fighting HUD?' Today’s decision is a clear statement that the county was right to defend local zoning.”

In terms of recovering the money, the county’s options are limited. Of the more than $7 million withheld by HUD in 2011, all but about $750,000 have been reallocated by the agency to other jurisdictions. The court ruled that once HUD reallocated the funds, the county’s claim to them became moot. HUD is still withholding 2013 and 2014 grants of more than $10 million, which the county will pursue.

Under the terms of the 2009 affordable housing settlement, Westchester County agreed to spend “at least” $51.6 million to ensure the development of 750 fair and affordable housing units (rental and home ownership) and to market the units not just to Westchester residents, but to minority households in surrounding counties, including New York City, as well.

Five years into the settlement, the county is in full compliance by meeting HUD benchmarks, Astorino said. The county finished 2014 with 454 units with financing and 406 units with building permits. All 31 communities have identified potential sites and 223 units are occupied.

Chairman Kaplowitz said Wednesday's court decision does not bring back the lost $6.7 million from 2011 and the $15.6 million of taxpayer’s money for 2012-2014 which he said is still imperiled.

"While we have achieved a notable victory, now is the time to negotiate from strength,'' Kaplowitz said. "Public policy can best be served here by all parties negotiating rather than litigating their differences."

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