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Illinois Housing Dev. Auth. v. Van Meter

OPINION FILED OCTOBER 10, 1980.

ILLINOIS HOUSING DEVELOPMENT AUTHORITY, APPELLEE,

v.

A.D. VAN METER, JR., CHAIRMAN OF THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY, APPELLANT.



Appeal from the Circuit Court of Sangamon County, the Hon. Simon L. Friedman, Judge, presiding.

MR. JUSTICE MORAN DELIVERED THE OPINION OF THE COURT:

The circuit court of Sangamon County declared valid an amendment to the Illinois Housing Development Act (amendment) which authorized the issuance of municipal bonds by plaintiff, the Illinois Housing Development Authority (Authority), to raise low-interest mortgage money. The court issued a writ of mandamus ordering defendant, A.D. Van Meter, Jr., as chairman of the Authority, to execute a notice of sale of bonds and to take all action necessary to issue the bonds.

The Authority was created in 1967 (Ill. Rev. Stat. 1967, ch. 67 1/2, par. 301 et seq.) to remedy what the legislature found to be a serious shortage of decent, safe and sanitary housing available to persons and families of low and moderate income (Ill. Rev. Stat. 1967, ch. 67 1/2, par. 303). In furtherance of this purpose, the legislature, in 1979, passed the amendment at issue, which provides in part:

"(b) The Authority may have outstanding at any one time bonds and notes in an aggregate principal amount not exceeding $50,000,000, in addition to the amount authorized in subsection (a), which additional amount shall be used solely for the purposes of making loans to lending institutions, as provided for in Section 7.24 of this Act, for use by such institutions in making residential mortgage loans where the proposed owner-occupant, who shall be an Illinois resident, has never previously owned a single-family home or condominium and where each of such loans made by the participating lending institutions is for an amount which does not exceed 95% of the value of the property which is to be purchased with the proceeds of the loan. Of the proceeds of bonds issued under authority of this subsection (b), one-half shall be allocated for use in counties with a population of over 3,000,000 and one-half for use in the remainder of the State. The interest charged by the lending institutions on such residential mortgage loans shall not be less than .5% nor more than 1% above the interest rate on the bonds authorized by this subsection." Ill. Rev. Stat., 1979 Supp., ch. 67 1/2, par. 322(b).

To implement the amendment, the Authority adopted a resolution that authorized the issuance of $50 million in bonds to fund the above-quoted subsection and directed the defendant to execute said bonds. By separate resolution, the Authority directed the defendant to publish a notice of sale inviting bids for the purchase of the bonds. However, the defendant refused either to execute the bonds or publish the notice as directed by the resolution and plaintiff instituted this action. This court allowed direct appeal under Rule 302(b). 73 Ill.2d R. 302(b).

Defendant contends that the amendment, by restricting recipients of mortgage loans to persons in families who have never owned a single-family home or condominium, (1) violates the equal protection clauses of both the United States and Illinois constitutions, and (2) constitutes special legislation in violation of article IV, section 13, of the Illinois Constitution.

The first test in assessing an equal protection claim is to determine if the amendment herein at issue operates to the disadvantage of a suspect class or infringes upon a fundamental right. (San Antonio Independent School District v. Rodriguez (1973), 411 U.S. 1, 17, 36 L.Ed.2d 16, 33, 93 S.Ct. 1278, 1288.) If the legislation in question creates a "suspect classification," such as race (Loving v. Virginia (1967), 388 U.S. 1, 11, 18 L.Ed.2d 1010, 1017, 87 S.Ct. 1817, 1823), alienage (Graham v. Richardson (1971), 403 U.S. 365, 371-72, 29 L.Ed.2d 534, 541-42, 91 S.Ct. 1848, 1851-52), national origin (Oyama v. California (1948), 332 U.S. 633, 646, 92 L.Ed. 249, 259, 68 S.Ct. 269, 275), or infringes upon a fundamental right, such as the right to travel (Shapiro v. Thompson (1964), 394 U.S. 618, 634-35, 22 L.Ed.2d 600, 615, 89 S.Ct. 1322, 1331-32), the right to vote (Harper v. Virginia State Board of Elections (1966), 383 U.S. 663, 670, 16 L.Ed.2d 169, 174, 86 S.Ct. 1079, 1083), or the right to fair treatment in the criminal process (Douglas v. California (1963), 372 U.S. 353, 355-56, 9 L.Ed.2d 811, 813-14, 83 S.Ct. 814, 815-16), then the statute must promote a compelling or overriding State interest. If a suspect classification or fundamental right is not found, the legislation simply must bear a rational relationship to a legitimate governmental interest. Dandridge v. Williams (1970), 397 U.S. 471, 485-87, 25 L.Ed.2d 491, 501-03, 90 S.Ct. 1153, 1161-62.

The defendant argues that the amendment creates a suspect classification based upon wealth, which, in itself, should trigger a review under a strict-scrutiny standard. However, where no fundamental right is involved, the United States Supreme Court repeatedly has applied the rational-relationship test to legislative classifications based upon wealth. In San Antonio Independent School District v. Rodriguez (1973), 411 U.S. 1, 36 L.Ed.2d 16, 93 S.Ct. 1278, legislation was enacted invoking a property tax system which financed school districts in a manner that created subsidiary districts with educational opportunities based on the wealth of the district in which the child resided. There, the court applied the rational-relationship test:

"[T]his Court has never heretofore held that wealth discrimination alone provides an adequate basis for invoking strict scrutiny * * *." 411 U.S. 1, 29, 36 L.Ed.2d 16, 40, 93 S.Ct. 1278, 1294.

Based upon this test the court found no violation of the equal protection clause. The court considers such wealth classifications to be regulations concerning economic and social welfare policy that do not merit active judicial review under the strict-scrutiny or compelling-interest standards. See Dandridge v. Williams (1970), 397 U.S. 471, 485-87, 25 L.Ed.2d 491, 501-03, 90 S.Ct. 1153, 1161-62; Jefferson v. Hackney (1972), 406 U.S. 535, 546-49, 32 L.Ed.2d 285, 295-98, 92 S.Ct. 1724, 1731-32 (upholding a legislative classification that limited the receipt of welfare benefits); James v. Valtierra (1971), 402 U.S. 137, 141-43, 28 L.Ed.2d 678, 682-83, 91 S.Ct. 1331, 1333-34 (upholding a constitutional classification limiting low-income public housing).

We conclude, under the above authority, that legislation based on wealth does not constitute, per se, a suspect classification under the equal protection clauses of either the United States or Illinois constitutions.

Although defendant concedes there are "no cases squarely holding that housing is a fundamental right," he asks this court to treat the right to housing as such a right, "due to the seriousness of the problem," and apply the "suspect" test in this instance. The United States Supreme Court has clearly ruled that a right to private housing is not a fundamental right. (Village of Belle Terre v. Boraas (1974), 416 U.S. 1, 7, 39 L.Ed.2d 797, 803, 94 S.Ct. 1536, 1540; Lindsey v. Normet (1972), 405 U.S. 56, 74, 31 L.Ed.2d 36, 50-51, 92 S.Ct. 862, 874.) Consequently, the court has always applied the rational-relationship test to government actions that might burden a person's ability to find adequate housing. We hold in the instant case that a wealth classification infringing on a person's right to housing, a nonfundamental right, should be examined under a rational-relationship standard of review.

Under the traditional equal protection standards utilized by both the Federal and State courts>, a legislative classification will be upheld if it bears a rational relationship to a legitimate legislative purpose. (McGowen v. Maryland (1961), 366 U.S. 420, 425-26, 6 L.Ed.2d 393, 398-99, 81 S.Ct. 1101, 1104-05; S. Bloom, Inc. v. Mahin (1975), 61 Ill.2d 70, 76.) Thus, the inquiry shifts to an analysis of the legislative purpose and a subsequent determination whether the legislative classification is rationally related to that purpose. In re Estate of Karas (1975), 61 Ill.2d 40, 47-48.

As earlier noted, the Authority was established to remedy a serious shortage of decent, safe and sanitary housing available to persons and families of low and moderate income. The defendant concedes that issuance of bonds for the purchase of houses and condominiums is a proper public purpose within the scope of the Illinois Housing Development Act. The question has thus become whether the legislative ...


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