Legal Aid Files Class Action Against Public Housing Provider
Housing Law Unit
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Earlier this month, Legal Aid filed a class action complaint in federal district court against the manager and owners of Capitol Gateway Family Rental, a DC public housing development, alleging that they have systematically failed to follow federal law in providing utility allowances to public housing tenants. The lawsuit seeks restoration of a prior, authorized utility allowance amount and a refund to tenants of rent they overpaid – or utility assistance they did not receive – since the changes the defendants imposed took effect in 2014.

Capitol Gateway, which was developed as part of the federal HOPE VI program to revitalize public housing, is a mixed-income property that includes 61 units of public housing. The D.C. Housing Authority gives the owner federal funds to operate these units, and in return, the landlord must comply with public housing laws. Those laws include rules about how much tenants can be charged for rent and utility costs.

Under federal law, tenants in subsidized housing are supposed to pay no more than 30 percent of their income – the level generally considered affordable – in rent and utility costs. To put this into practice, landlords establish a “utility allowance” that estimates how much the average tenant, living in a home of similar size and design, should pay for utilities. That dollar figure is calculated into the tenant’s rent obligation, and if the family’s income is low enough, it will receive a check each month to help cover utility bills.

Federal law established detailed rules about how the utility allowance is established and how it may be changed. But beginning in 2014, Capitol Gateway tenants began seeing large decreases in their utility allowances – meaning that they experienced rent increases of more than $100, or reductions of more than $100 in their assistance payments. For tenants living on very low and often fixed incomes, this change posed and continues to pose a significant hardship.

Legal Aid’s complaint alleges that the defendants failed to follow the law in changing the utility allowance. Among other things, we allege that they did not give tenants an explanation of the change, an opportunity to comment on and oppose the change, or an explanation of how to request an exemption for disability-related or other special circumstances. Finally, we allege that the new numbers are simply too low to account for the average Capitol Gateway tenant’s utility costs.

The complaint is filed on behalf of four individual plaintiffs and requests certification of a class representing all the public housing tenants at Capitol Gateway. The named defendants are A&R Management, Kettler Management, and East Capitol Family Rental LP.

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