substantial private investment in new construction and
rehabilitation of residential rental property, as well as the
rehabilitation and condominium conversion of many older
In determining whether completion of the Monterey
rehabilitation project will result in an undue concentration
of minority residents or lead to a racially segregated housing
area, the evidence adduced at the hearing supports a number of
ways of defining the relevant area. The deposition testimony
of Martin Hauselman, for example, indicates that the
Association members themselves have been concerned in the past
primarily with an area within two blocks of their Association
boundaries. Other plaintiffs feel that their neighborhood is
all of Uptown. The conflicting definitions of the "relevant
neighborhood" offered by the individual plaintiffs and the
plaintiffs' expert, Dr. Elizabeth Warren, for purposes of
determining whether an "undue concentration" of assisted
persons or minorities exists in the "area" surrounding the
Monterey, were based on highly subjective judgments. In many
instances the court was left with the firm conviction that
boundaries of the relevant area were directly correlated to
the witnesses' interest in having this court decide that
relevant statistics would show a greater or lesser
concentration of poor or minority residents. The point is that
the determination of what a neighborhood is, for purposes of
determining "undue concentration" of minority residents or
assisted persons, is, itself, a highly subjective judgment.
That fact necessarily affects this court's determination of
whether or not HUD officials abused their discretion in
determining that approval of the Monterey project would not
result in an undue concentration of assisted persons or
minority residents in the area surrounding the project.
This court is reluctant to substitute its judgment for the
judgment of HUD officials in determining the "relevant area"
that HUD must take into account when it makes a determination
that a proposed section 8 housing site is located in an "area"
that will avoid undue concentration of minorities or assisted
persons. The court is aware of the fact that the district
court in King v. Harris, 464 F. Supp. 827 (E.D.N.Y. 1979) did
just that, in determining that HUD action similar to the action
in this case was arbitrary and capricious. This court does not
feel that it is bound to do so on the record made in this case.
This court does not know what the record established in King
but it is clear that the Second Circuit's decision of September
5, 1980, affirming the district court, relied on the fact that
the evidence in that case justified the conclusion of the
district court. The district court's opinion in King, strictly
read, establishes only that it was arbitrary for HUD officials
to consider only the racial and economic mix of the particular
census tract in which the project was located. In this case,
HUD officials did much more than that. HUD officials considered
current available data on the amount of assisted housing
available in census tract 321, census tracts contiguous with
tract 321, and the Uptown Community Area as a whole. These
officials also took into account that the site was located in
the "General Public Housing Area" (GPHA) as defined by the
injunction in Gautreaux v. CHA, 304 F. Supp. 736, 742 (N.D.Ill.
1969). The GPHA is composed of all census tracts which are not
located within one mile of a census tract with a non-white
population greater than 30%. In addition, HUD's Area Office
officials determined, on the basis of an analysis of market
rental prices in the neighborhood, and on the basis of a
favorable finding of a loan management specialist, that the
area surrounding the Monterey Apartments was not an area
containing a high proportion of low-income persons.
4. Concentration of Poor and Minority Residents in the Area.
In July of 1979 when HUD's preliminary processing of the
Monterey proposal was taking place, the 1970 census figures
were the most reliable available source for determining the
ethnic, racial, and economic composition of the immediate
neighborhood surrounding the Monterey.
Data relied upon by Dr. Warren during her testimony included
1978 estimates of
population and income level for the City of Chicago issued by
the National Planning Data Corporation. There is no evidence
as to how this data was compiled or of the reliability of the
The plaintiffs also introduced evidence of the racial
composition of the Chicago Public Schools. There is no
evidence that public school racial composition reflects the
racial composition of the surrounding community. The
plaintiffs also introduced HUD subsidized housing occupancy
reports to show that some subsidized housing in the area
surrounding the Monterey reflects an increasing percentage of
minority occupancy. There is no evidence that HUD occupancy
reports accurately reflect the racial composition of the
Uptown community or of the neighborhood immediately
surrounding the Monterey. Cf. King v. Harris, supra at 835; Lee
v. Nyquist, 318 F. Supp. 710, 717 (W.D.N.Y. 1970) (finding
correlation between school and residential segregation).
According to 1970 census figures, census tract 314 had a
median family income of $14,926 and a mean family income of
$18,279. In 1970 in the City of Chicago the median family
income was $10,242 and the mean family income was $11,418.
Census tract 314 is not a low-income area.
According to 1970 census figures, census tract 321 had a
median family income of $7,268 and a mean family income of
$8,276. Census tract 321 east of Broadway is far more affluent
than the western half, and its residents are economically and
socially similar to residents of census tract 314. Census
tract 321 east of Broadway is not a low-income area.
According to 1970 census figures, census tract 315 had a
median family income of $6,985 and a mean family income of
Table I sets out the percentages of total housing units
which receive federal subsidies for the census tracts
immediately surrounding the Monterey project.
Uptown 321 314 315 316 320 606 607 608
Units as of
Census) 67,353 5,223 2,831 5,780 2,127 716 609 1,521 2,771
units as of
July 1, 1979*fn* 6,287 849 18 1,734 321 1 11 285 12
% of Subsidized
units as % of
Housing Units 9.3 16.2 .6 30 15.1 .1 2 17.9 4