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July 30, 1980


The opinion of the court was delivered by: Crowley, District Judge.


These consolidated cases are now before the Court on plaintiffs' motion for further relief against the Chicago Housing Authority (CHA) through appointment of a receiver.

The lawsuits, initiated in 1966, have had an extensive and complex history. Plaintiffs, black tenants in and applicants for public housing, brought these actions alleging violations of their rights under the Equal Protection Clause of the Fourteenth Amendment. They charged the CHA and its executive director with intentionally violating 42 U.S.C. § 1981 and 1983 by maintaining existing patterns of residential separation of the races through tenant-assignment and site-selection procedures.

  In 1969, after examination of thousands of pages of
depositions, affidavits and exhibits, plaintiffs' motion for
summary judgment was granted and defendants were permanently
enjoined from continuing racially

discriminatory practices.*fn1 Gautreaux v. Chicago Housing
Authority, 296 F. Supp. 907 (N.D.Ill. 1969). The parties were
ordered to submit a plan for selection of future sites on a
nondiscriminatory basis. On July 1, 1969, the court entered a
supplemental judgment order containing a comprehensive plan to
remedy the effects of and prevent the continuation of CHA's
unconstitutional site-selection and tenant-assignment
procedures. Gautreaux v. Chicago Housing Authority, 304 F. Supp. 736
 (N.D.Ill. 1969). The CHA was directed to "use its best
efforts" to increase the supply of Dwelling Units as rapidly as
possible. Id. at 741. The supplemental order enjoined further
construction of public housing in "non-white" areas of Chicago
unless there was simultaneous construction of at least 75
percent of all proposed units in Chicago's white areas; ordered
the CHA not to concentrate large numbers of Dwelling Units in
or near a single location; and provided that no public housing
project should contain Dwelling Units designed for occupancy of
more than 120 people.*fn2

For the past eleven years plaintiffs have been attempting to reap the benefits of the 1969 judgment order. Despite continuous litigation*fn3, numerous hearings and remedial court orders and referral to a Special Master*fn4, the purposes of this judgment order have not yet been achieved. In fact, because of its negligible progress in providing remedial housing to members of the plaintiff class, CHA has been charged with a callous disregard for the rights of the black, underprivileged citizens of Chicago. See Gautreaux v. Chicago Housing Authority, 503 F.2d 930, 932 (7th Cir. 1974).

On May 18, 1979, on joint motion of the parties, this Court entered an order modifying previous judgment orders to remove previous restrictions on CHA development plans. The order also prohibited CHA from developing public housing in the Limited Public Housing Area without simultaneous development in the General Public Housing Area.*fn5 The order contained three significant provisions: 1) it removed CHA's obligation to put its first 700 units in white or general public housing neighborhoods; 2) it changed the ratio of new construction and rehabilitation with respect to white versus black neighborhoods; and 3) it explicitly included elderly housing. Finally, the order required CHA to concentrate on the rehabilitation method of developing public housing by providing that 300 units be rehabilitated and 100 units be newly constructed.

On August 31, 1979, the Special Master, Magistrate Olga Jurco, rendered her final report and recommendations.*fn6 After conducting 68 hearings, beginning in March, 1975, and reviewing an extensive report of an urban consultant employed to assist her in evaluating the precise causes for the delay in implementing the judgment order, the Master stated that the CHA had failed to aggressively take all practicable steps to comply with the 1969 judgment order. However, the Master noted that delay was also attributable to factors not completely within the control of the CHA or HUD and concluded that the CHA had finally accepted the course of conduct it must follow. Although noting the CHA's inefficient bureaucratic operation and inability to reevaluate its criteria for suitable remedial housing was responsible, in large part, for the long delay, the Master did not recommend appointment of a receiver.

The Master made several recommendations. She suggested that CHA's site search be concentrated in the General Public Housing Area as well as the Limited Public Housing Area, and that HUD repossessed properties be used in the rehabilitation program. Additionally, she recommended that CHA take advantage of Article X of the 1969 judgment order*fn7 to permit modification of that order to allow proposed developments designed by CHA alone or in combination with other private or public agencies. In addition, she recommended that the CHA hire additional personnel to work solely on land site and building availability.

In support of the motion to appoint a receiver, plaintiffs assert that, as of December 18, 1979, CHA has neither authorized the acquisition of any land or buildings for the General Public Housing Area nor submitted any requests for HUD approval of proposed housing to be developed on land or buildings acquired by CHA prior to the May, 1979 order. They claim that CHA has shown no progress in implementing the May, 1979 order and maintain that, as a result of CHA's failure to show reasonable progress in complying with the May, 1979 order, HUD intends to withhold public housing funds for the fiscal year of 1980.

CHA responds that past delays have been caused by normal bureaucratic procedures and that since the removal of procedural obstacles, CHA has increased its efforts to comply with both the original July, 1969 order and the May, 1979 order. CHA claims that in the past HUD prototype cost limits, the dollar amount CHA may spend in building new apartments, prevented it from building more than 114-117 units by the new construction method. It claims that changes in HUD prototype construction cost limits, which were raised 50% in June, 1979, will enable housing development plans to proceed more rapidly in the future. It also states that since the May, 1979 order, CHA has hired new people, set up a new functional office within the office of the CHA and plans to hire additional staff in the near future.

An evidentiary hearing was held at plaintiffs' request for the purpose of deciding if the extraordinary remedy of appointing a receiver was either necessary or appropriate to achieve compliance with the May, 1979 order. The Court has reviewed the testimony and arguments presented at the hearing and carefully examined the exhibits proffered by the parties. It makes the following findings of fact and conclusions of law.

Without recounting the minute detail and numerous statistics presented at the hearing, it is clear that CHA's record for the past eleven years is far from impressive. CHA utilizes two methods of developing public housing: 1) acquiring vacant land and building on the land (the new construction method) and 2) acquiring existing buildings and rehabilitating them (the rehabilitation method). From 1969, only 114-117 apartments were developed by the new construction method. Since 1977, when the rehabilitation method became available, CHA has not acquired and rehabilitated a single building.

While pre-1979 prototype costs created some obstacle to building new apartments, the evidence indicates that CHA could have ameliorated this obstacle and reduced the per-unit costs by creative planning. Per-unit costs could have been substantially reduced by acquisition of sites which would accommodate larger buildings and by combining family housing with elderly housing, which is cheaper to build.

Since the May, 1979 order, CHA's statistical record has improved only slightly. No building has yet been rehabilitated and turned into public housing in the General Public Housing Area. Nor has any building been placed under rehabilitation physical reconstruction work. On January 8, 1980, five buildings previously ordered to be acquired for the General Public Housing Area were sent to HUD as part of a development program, and 21 buildings were authorized by CHA commissioners for acquisition in the General Public Housing Area. Of the 21 buildings authorized, 18 of them were buildings identified by two community organizations, the Organization of Palmer ...

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