Full opinion text
FINDINGS AND CONCLUSIONS ON MOTION FOR PRELIMINARY INJUNCTION; ORDERS ON MOTIONS FOR DISMISSAL AND PARTIAL SUMMARY JUDGMENT WEIGEL, District Judge. Plaintiffs are individuals who reside within the Yerba Buena Center Redevelopment Project Area D-l in San Francisco and an unincorporated association (Tenants and Owners in Opposition to Redevelopment — “TOOR”). On their own behalf and on behalf of all others similarly situated, they charge that their statutory and constitutional rights are being violated in connection with that Project.- Plaintiffs ask for declaratory relief and for an injunction prohibiting' the defendant San Francisco Redevelopment Agency from dislocating residents of the Yerba Buena Project Area and prohibiting the Department of Housing and Urban Development (hereinafter “HUD”) from further funding of the Yerba Buena Project until defendants have complied with their statutory and constitutional obligations to plaintiffs. The Court undertook to assist the parties in reaching a settlement of the complicated practical problems which must ultimately be solved in the interest of fair and effective resolution of their controversies. Since it has become clear that the parties are unable to reconcile their differences, the Court must now pass upon plaintiffs’ motion for a preliminary injunction and defendants’ motions to dismiss as well as counter motions for partial summary judgment. THE PROJECT AND THE STATUTES The Yerva Buena Project Area is a low income residential and commercial district which, because of its proximity to the downtown business section of San Francisco, offers exceptional opportunities for commercial and financial development. (See generally plaintiffs’ Exhibit 74, “A Major Opportunity to Invest in Downtown San Francisco”.) The project was begun in the early 1960’s with the execution of a Survey and Planning Contract between the Redevelopment Agency of the City and County of San Francisco and the federal Housing and Home Finance Agency. (Exhibit 1 of the Administrative Record —hereinafter “Ad.Rec.”.) After initial approval in July, 1965 (Ex. 4, Ad.Rec.), the Redevelopment Agency was advised, on November 10, 1966, by letter from the Federal Regional Director of Urban Renewal, that the application for a loan and grant contract had been approved (Ex. 8, Ad.Rec.). The contract was closed on December 2, 1966, providing for a capital grant in the amount of $31,155,279 and the establishment of a temporary loan fund of $49,754,729. (Ex. 10, Ad.Rec.) While the Plan itself does not specify the precise figures, none of the parties before the Court has challenged the fact that the Project, unless modified, will destroy low rent housing for over 3,000 persons and provide less than 300 new low rent units. (Defendants’ admissions 30 & 31.) The Housing Act of 1949, as amended, 42 U.S.C. § 1441, et seq., lays down statutory requirements which govern urban renewal contracts between the federal government and local renewal agencies. 42 U.S.C. § 1455 provides that “Contracts for loans or capital grants shall require that (c)(1) There shall be a feasible method for the temporary relocation of individuals and families displaced from the urban renewal area, and there are or are being provided, in the urban renewal area or in other areas not generally less desirable in regard to public utilities and public and commercial facilities and at rents or prices within the financial means of the individuals and families displaced from the urban renewal area, decent, safe, and sanitary dwellings equal in number to the number of and available to such displaced individuals and families and reasonably accessible to their places of employment. (c) (2) As a condition to further assistance after August 10, 1965 with respect to each urban renewal project involving the displacement of individuals and families, the Secretary shall require, within a reasonable time prior to actual displacement, satisfactory assurance by the local public agency that decent, safe, and sanitary dwellings as required by the first sentence of this subsection are available for the relocation of each such individual or family. Basically, these sections require the local redevelopment agency to provide a plan for relocating persons out of urban renewal areas which plan must be approved by HUD as part of the initial program approval and again just prior to actual relocation. In attempting to meet the requirements of § 1455(c)(1), the Redevelopment Agency of San Francisco submitted (with the Yerba-Buena Project Plan —Ex. 16, Ad.Rec.) a Relocation Plan in early 1966 (Ex. 6, Ad.Rec.). It purported to show to HUD how residents dislocated from the Yerba Buena area would be rehoused. This Plan was approved by the Regional Administrator, by the Acting Deputy Assistant Secretary for Renewal, and finally, on October 18, 1966, by the Assistant Secretary for Renewal and Housing Assistance, Department of Housing and Urban Development. (Ex. 7, Ad.Rec.) Although § 1455(c)(2) may not otherwise have applied to the Yerba Buena Project, since Yerba Buena was officially approved prior to August 10, 1965, the operative date of that section, HUD informed the Redevelopment Agency in the approval letter of November-10, 1966 (Ex. 8, Ad.Rec.), that the Agency should comply with the Local Public Agency Letter No. 346 (Ex. 9, Ad.Rec.) which implements § 1455(c)(2). See Western Addition Community Organization v. Weaver, 294 F.Supp. 433, 436 (N.D.Cal. 1968) (hereinafter “WACO”). Letters concerning approval under § 1455(c)(2) were exchanged beginning in May, 1967 and on May 29, 1969, the Agency received final federal approval as required by (c)(2). Plaintiffs allege five basic causes of action. They contend, first, that the Relocation Plan does not meet the requirements of § 1455(c) and the regulations promulgated thereunder in that approval of the Plan by HUD was arbitrary and without substantial basis in fact. In this connection, plaintiffs contend further that, irrespective of whether or not the Plan was valid in November, 1966 or May, 1969, residents of the Project area are in fact being relocated into housing which does not meet the required standards. Second, plaintiffs claim that they have been denied due process of law because they were not accorded adequate hearings prior to the approval of the Redevelopment and Relocation Plans. Third, plaintiffs urge that the Project denies them equal protection of the laws. Fourth, they assert that defendants violated the HUD regulation requiring consultation with minority groups. Finally, plaintiffs contend that the Redevelopment Plan includes a luxury hotel in violation of 42 U.S.C. § 1456(g). MOTIONS TO DISMISS The federal defendants maintain that plaintiffs do not have standing to sue under the Federal Housing Act, 42 U.S.C. § 1441 et seq. While this was once the law in this Circuit (see Johnson v. Redevelopment Agency of City of Oakland, 317 F.2d 872 (9th Cir. 1963), cert. denied, 375 U.S. 915, 84 S.Ct. 216, 11 L.Ed.2d 154 (1963)), the Supreme Court has recently redefined standing requirements. Under this most recent formulation, plaintiffs clearly have standing to maintain this action. See Association of Data Processing Service Organizations, Inc. v. Camp, Controller of the Currency, 397 U.S. 167, 90 S.Ct. 838, 25 L.Ed.2d 200 (1970); see also Barlow v. Collins, 397 U.S. 167, 90 S.Ct. 830, 25 L.Ed.2d 200 (1970); Norwalk CORE v. Norwalk Redevelopment Agency et al., 395 F.2d 920 (2d Cir. 1968); Western Addition Community Organization v. Weaver, 294 F.Supp. 433 (N.D.Cal.1968); Powelton Civic Home Owners Ass’n v. Department of Housing and Urban Development, 284 F.Supp. 809 (E.D.Pa.1968); Note, Judicial Review of Displacee Relocation in Urban Renewal, 77 Yale L.J. 966 (1968). The federal defendants further argue that venue as to them does not lie in this Court under 28 U.S.C. § 1391(e) because not all defendants are officers or employees of the United States. This claim must fall under the decisions in Macias v. Finch, 324 F.Supp. 1252 (N.D.Cal.1970) and in Powelton Civic Home Owners Ass’n v. Department of Housing and Urban Development, 284 F.Supp. 809 (E.D.Pa.1968). The reasoning in those cases makes it clear that this Court has personal jurisdiction over the defendant Romney and that venue here is proper. The defendants also move to dismiss on grounds of collateral estoppel. They argue that the Relocation Plan was found valid in Silver v. San Francisco Redevelopment Agency, unreported decision, California Court of Appeal, 1st App.Dist., Div. 1, No. 1 (Civ. No. 25233 May 13, 1969), and that the Silver decision is binding on this Court as determinative of the issues here presented. The rule of collateral estoppel is that where an issue of fact or law “essential to the judgment is actually litigated and determined by a valid and final judgment, the determination is conclusive between the parties.” Restatement, Judgments 68(1)(2). Neither the parties in Silver nor the issues there presented are before this Court. The plaintiffs in Silver were Yerba Buena property owners, not residents. The defendants in Silver included none of the federal defendants before the Court here. The statutory issues discussed in Silver involved state law, not the federal Housing Act of 1949, the crucial statute in this case. In fact, Silver was decided prior to the § 1455(c)(2) approval which is under attack here. None of the constitutional arguments presented in this case were determined in Silver, and the court there expressly reserved to plaintiffs and their class the right to raise the constitutional arguments at a later date. Id. at 23. The argument that collateral estoppel bars this Court from consideration of the issues here presented is wholly without merit. Finally, the federal defendants argue that this Court does not have subject matter jurisdiction over the issues here raised. They argue: That plaintiffs have not met the $10,000 jurisdictional amount requirement of 28 U.S.C. § 1331(a), (see Rosado v. Wyman, 414 F.2d 170 (2d Cir. 1969); that jurisdiction will not lie under the mandamus statute, 28 U.S.C. § 1361, because the actions by the federal defendants involved in this case are discretionary (see Seebach v. Cullen, 224 F.Supp. 15 (N.D.Cal.1963), aff’d 338 F.2d 663 (9th Cir. 1964), cert. denied, 380 U.S. 972, 85 S.Ct. 1331, 14 L.Ed.2d 268 (1965)); and that the Administrative Procedure Act, 5 U.S.C. § 701 et seq., does not give this Court jurisdiction. Contrary to defendants’ contentions, jurisdiction is plainly and fully provided for by the Administrative Procedure Act. Section 702 (5 U.S.C. § 702) states that “a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” Such judicial review is precisely what plaintiffs seek. Since they have standing, the only remaining question is whether the Administrative Procedure Act specifically excludes the kind of review they seek. Section 701 states that judicial review is not available if it is precluded by statute or committed exclusively to agency discretion. There is no provision in the Housing Act of 1949, as amended, precluding judicial review of the agency decisions under attack here. Nor can immunity against such review be inferred. “[P] reclusion of judicial review of administrative action adjudicating private rights is not lightly to be inferred . Indeed, judicial review of such administrative action is the rule, and nonreviewability an exception which must be demonstrated.” Barlow v. Collins, 397 U.S. 159, 166, 90 S.Ct. 832, 837 25 L.Ed.2d 192 (1970). See also Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 631 (1967). Nowhere in the Housing Act is there the slightest indication that Congress intended to preclude judicial review of the Secretary’s approval of relocation plans. The agency decision at issue in this case is not one committed to agency discretion. 42 U.S.C. § 1455 states that “[cjontracts . . . shall require that . . . there shall be a feasible method for the temporary relocation of individuals and families . . . The Secretary shall issue rules and regulations to aid in. implementing the requirements of this subsection . . . Such rules and regulations shall require that there be established ... [a] relocation assistance program . . .” § 1455 states further that the “Secretary shall require . . . satisfactory assurance . . .” (emphasis added). The statute speaks in mandatory terms. The specific requirements of § 1455(c)(1) and (c)(2) with respect to rents, distances from places of work, nature of the dwellings and “satisfactory assurance” bespeak statutory limitation upon the discretion of the Secretary. The Secretary’s power and duty to approve a valid Relocation Plan, far from being a decision which is “committed to agency discretion by law,” is carefully limited by the language Congress employed in the statute. Whether or not ■ the Secretary has met the statutory requirements is a question reviewable by the courts. Plaintiffs, as has been noted, have undertaken to state five causes of action which are now considered, seriatim. PLAINTIFFS’ CLAIMS RE RELOCATION Plaintiffs’ first and principal charge •is that the federal defendants have approved a Relocation Plan and are currently providing funds for the Project in violation of 42 U.S.C. § 1455(c)(1) & (2) and that the local defendants are unlawfully forcing relocation of residents for whom adequate relocation housing is not available. The rights claimed by plaintiffs in this connection stem from three provisions of the Housing Act. Defendants are proceeding under a loan and grant contract. Section 1455(c)(1) declares that such contracts must require “a feasible method for the temporary relocation of individuals and families displaced from the urban renewal area . . .” Section 1455(c)(2) provides that as a condition to further federal assistance after August 10, 1965, the “Secretary shall require, within a reasonable time prior to actual displacement, satisfactory assurance” that adequate relocation housing is available. The section is intended to insure that' a Relocation Plan approved pursuant to subsection (c)(1) is still satisfactory just prior to actual displacement. In that interest, (c) (2) requires submission of a new Relocation Plan or, at the very least, submssion of evidence indicating that the (c)(1) Plan is still valid. The third statutory obligation goes back to § 1455(c)'(l) which provides not only that there shall be a feasible method (i. e., plan) for relocation at the outset, but also that the loan and grant contract shall require that “there are or are being provided” dwellings which meet the substantive requirements of (c)(1). Both parties to the contract, the Department of Housing and Urban Development and the local public agency, are thus under a continuing obligation to insure the availability of relocation-housing which meets the standards of the statute. In other words, even if a plan is properly approved at the time the contract is made, and even if supplementary information properly gives the Secretary satisfactory assurance just prior to actual displacement, both the federal and the local defendants remain under a continuing obligation to provide adequate housing at all times during the relocation process. Determination of the standard of judicial review is the threshold question in considering plaintiffs’ claims that these statutory obligations were violated. Plaintiffs ask the Court to “reverse” the Secretary’s decisions if they were not supported by “substantial basis in fact”. The local defendants argue that this Court’s inquiry is limited to a determination of whether or not the Secretary’s approvals were arbitrary, capricious or discriminatory, and that, accordingly, the approvals should stand even if supported only by slight evidence. The federal defendants argue that the Secretary’s decisions are totally discretionary and that review is limited to determining if approval was given. Previous decisions on the question of scope or standard of judicial review have been few and confusing. In Garrett v. City of Hamtramck, Civ. No. 32004 (E.D.Mich. March 7, 1969), the Court enjoined an urban renewal project because “defendants have failed to convince the Court that this housing now in existence will provide adequate low-cost rental units to meet the needs of those individuals who face displacement as shown in the comprehensive renewal program.” Id. at 7. Hamtramck placed the burden on the defendants to prove to the Court that the relocation was adequate. In WACO, the Court stated that the Secretary’s action was reviewable “to the extent of determining whether the Secretary’s discretion . . . has been exercised not arbitrarily but reasonably upon some substantial and supporting factual basis.” 294 F.Supp. at 443. In a subsequent decision, dissolving the preliminary injunction in WACO, the Court made clear that its scope of review was limited simply to determining whether the Secretary’s decision was arbitrary and without basis in fact. See unreported decision, Civ. No. 49053, March 5, 1969. Although the Court in WACO may have changed its standard of review between the first and second opinions (see Note, Enjoining Urban Renewal—Inadequate Relocation Facilities: Western Addition Community Organization v. Weaver, 21 Hastings Law Journal 433, 445 (1970)), this Court concludes that the Court in WACO consistently limited review to a determination of “arbitrariness.” The phrase “substantial basis in fact” in the first WACO opinion means only that a court should fully explore the record on the question of arbitrariness. It does not mean that a court should overturn a non-arbitrary decision by the Secretary because, in the court’s view, the decision was not supported by substantial evidence. The statute commits substantial powers of complex decision making to an executive department which is or should be staffed by highly trained personnel. Because of this and based on the reasoning in WACO, the Court concludes that judicial review is limited to the legal question of whether or not there was any basis in fact for the Secretary’s decisions. However, the fact that judicial review is limited cannot absolve this Court from the duty of thorough examination of the record. In undertaking such an examination, the Court’s focus has been on the record underlying the (e)(2) approval. Even if the (c)(1) approval in 1966 was erroneously given, it has been superseded by the May, 1969, (c)(2) approval. (Of course, the earlier Plan is still relevant insofar as it was the basis of the 1969 approval. But it is the 1969 approval which is at issue here.) In reviewing the (c) (2) approval of the. Yerba Buena Project, it is necessary (for reasons which will become clear in a moment) to examine the (c)(2) approval of the closely related Western Addition Redevelopment Project. In a letter dated August 15, 1967, the Agency transmitted to HUD a document entitled “Status of the Program of the San Francisco Redevelopment Agency for Rehousing Residents of the Western Addition Area A-2”. (Ex. 11, Ad.Rec.) That letter and the accompanying report constituted the Agency’s attempts to fulfill the requirements under (c) (2) as to the Western Addition Redevelopment Project. The letter stated that the Program submitted was “at a minimum a statement of assurance from the Members of the San Francisco Redevelopment Agency on the adequacy of relocation resources for the renewal program of that project.” On July 29, 1968, HUD accepted this Program as satisfactory assurance subject to four conditions, two of which will be later considered at some length. (The conditions are set out in a letter of July 29, 1968, from Regional Administrator to Redevelopment Agency, (Ex. 11, Ad.Rec.)). On January 24, 1969, the Agency gave its response to the four conditions and they were approved on January 29, 1969. {See unreported decision in WACO, Civ. No. 49053, March 5, 1969). The Yerba Buena (c)(2) approval followed a similar pattern. (See Ex. 11, Ad.Rec.) On August 13, 1968, the Assistant Regional Administrator wrote to the Redevelopment Agency requesting a statement of assurance on the adequacy of the housing resources for the Yerba Buena Project. On August 20, 1968, the Agency replied that the transmittal of August 15, 1967, was intended to be the Agency’s assurance for Yerba Buena as well as for the Western Addition. On September 13, 1968, the Regional Administrator replied that “we are accepting your statement that the Agency Members did take into consideration the adequacy of resources for Yerba Buena Center along with Western Addition A-2 even though no specific mention is made of this.” The HUD letter went on to say that the July 29, 1968 letter concerning Western Addition was equally applicable to Yerba Buena — in other words, that the four conditions in that letter had to be satisfied before (c) (2) could be satisfied. On March 17, 1969, the Regional Administrator again wrote the Agency stating, in effect, that the four conditions in the July 29, 1968 letter had not yet been officially satisfied for Yerba Buena. On May 9, 1969, the Agency presented its responses to the four conditions and on May 29, 1969, HUD gave its final approval to the Relocation Plan with a finding that the assurances of August, 1967 and May 9, 1969, taken together, were satisfactory. The starting point in analyzing the record before the Secretary is, then, the August 15, 1967 report. Although the major portion of this document deals with Western Addition, section 9 includes a HUD form 6122 (Estimated Housing Requirements and Resources for Displaced Families) covering the redevelopment projects in Western Addition, Yerba Buena, and Hunters Point. This form contains the Agency’s statistical conclusions as to the availability of housing for displaced persons. In reaching these conclusions, the Agency relied on the Relocation Plans submitted at earlier stages of the Western Addition and Yerba Buena Redevelopment Projects, as well as on a Housing Report which had been done for the Agency in 1967 by one E. M. Schaffran and Company. In reviewing the Agency’s assurances, HUD was required to examine both the housing reports and the statistical conclusions contained in form 6122 in order to make a determination that the substantive requirements of § 1455(c) (1) had been met.. The substantive requirements of § 1455(c)(1) can be divided into two parts. First, the statute requires that there be relocation dwellings “equal in number to the number of and available to such displaced individuals and families . . .” In other words, there have to be at least as many available vacant dwellings as the number of dwellings to be destroyed by the' redevelopment. Second, these dwellings have to meet certain standards: (a) they must be “not generally less desirable in regard to public utilities and public and commercial facilities . . . and reasonably accessible to their [the displaced residents’] places of employment”; (b) they have to be “at rents or prices within the financial means of the individuals and families displaced”; and (c) they have to be “decent, safe, and sanitary”. Plaintiffs argue that the Relocation Plan did not in May, 1969 properly establish that there would be sufficient vacancies, the first requirement of the statute and that, furthermore, the vacancies which were established did not meet the substantive standards of the statute. The plaintiffs’ argument that the Plan did not properly indicate the number of vacant dwellings which could be expected in San Francisco during the period of relocation is based on four separate claims. The plaintiffs argue, first, that the housing reports relied on by the Redevelopment Agency use the concept of “turnover” to reach estimates of the number of vacancies and that the turnover concept is invalid and misleading. (The concept of turnover in calculating housing vacancies is to make the bald assumption that the total number of vacancies which will be available over a certain future period of time is some multiple of the vacancies which came open during a prior and lesser period of time.) Defendants do not refute the charge that turnover is an invalid and misleading technique for estimating vacancies. Indeed, they would stand on weak ground if they did so since HUD now prohibits the use of turnover in assessing relocation resources. HUD Regional Circular 907 states at page 10: “Some LPA’s have utilized the turnover concept in formulating their relocation plans, i. e., a number of units is expected to become available, as a result of turnover, for rehousing displaced households. This approach has very limited applicability, if any, in ascertaining available relocation housing resources. Turnover, in essence, represents the process by which one occupied unit becomes vacant and reoccupied. It is a ‘neutral’ process with respect to altering the supply of excess housing, i. e., the number of units which are in excess of the combined amount required to accommodate locality households and provide for mobility. It is only the excess units — or vacancies — which can be considered as supplying relocation housing resources for displaced families. The limited applicability, if any, that the turnover concept possessed would be only within the absolute numerical limits of vacant housing units. That is, to say, for planning purposes, turnover units that can be used for relocation cannot exceed in amount the number of vacant standard housing units that are in excess of the minimum amount required for mobility. Turnover units and vacant units are not additive.” This Court does not have to reach an independent conclusion on the degree to which turnover is used in the Relocation Plan, since HUD officials already have made such a determination. In a HUD memorandum dated August 21, 1967, the Director of HUD’s relocation branch stated that “it should be noted that the entire relocation plan is based on turnover with the exception of 200 units of new public housing which will not be available.” See WACO, 294 F.Supp. at 439. Thus, on the basis of its own regulations, HUD admits that the Plan does not accurately reflect the number of vacancies in San Francisco. (See also plaintiffs’ Ex. 68, p. 16, lines 10-18). Plaintiffs’ second claim is that the determination of the number of vacancies was erroneous because it relied on public housing as a source of vacancies. In support, plaintiffs point out that there is now and was at the time of the (c) (2) approval a waiting list for public housing of some five or six thousand eligible persons. (Plaintiffs’ Memorandum in Support of Preliminary Injunction, at 23; see also plaintiffs’ Ex. 84.) The plaintiffs’ third argument in support of their claim that the Plan overestimated the housing vacancies for relocated families and individuals is that the Plan relied on the existing housing supply in violation of HUD Regional Circular 907. That circular, promulgated in February, 1968, states that communities which have a vacancy rate of less than 3% may not rely on existing vacancies in the community for the purposes of relocation. A Relocation Plan in such a community may be approved by HUD if “housing of appropriate size and price levels will be added to the inventory in sufficient amount, on a one-to-one basis, to meet the needs of all categories of families and persons to be displaced by such HUD programs.” Plaintiffs state that the vacancy rate in San Francisco is considerably less than 3%, and there is no question but that housing demolished in Yerba Buena is not going to be replaced on a one-to-one basis. (Local defendants’ responses to plaintiffs’ request for admissions number 30 and 31.) Neither party has pointed to a specific study which was before the Secretary indicating what the exact vacancy rate was in May, 1969. Plaintiffs have introduced evidence (attachment to affidavit of Richard Thomson Le Gates dated November 3, 1969) which indicates that, at some unspecified time in 1969, the vacancy rate in San Francisco for dwellings renting for less than $100 a month was virtually 0.00. (Plaintiffs’ Ex. C; see also plaintiffs’ Ex. 79.) Defendants deny this and have submitted their own study to show that the vacancy rate is adequate. (Defendants’ Ex. 10a.) Although the evidence tends to support plaintiffs’ claim, the Court' makes no specific finding on this issue at this time. Plaintiffs’ fourth and final attack on the Plan’s conclusion that there are sufficient vacancies is that the Plan relies on the same sources as those relied on for the Western Addition Project. The August, 1967 submission, which contains the 6122 forms for both Yerba Buena and Western Addition, specifically states that the two projects, as well as the Hunters Point Project, are considered together. (Ex. 11, Ad.Rec.) However, it was proper for the defendants to consider the relocation problems of the two projects together, and it may have been legally required. If the defendants had stated that there were sufficient vacancies for the residents displaced from one project, without considering the demand for new housing caused by persons displaced from the other, the Plan might well be invalid. If the Plan shows, in a non-arbitrary fashion, that there are enough vacancies to meet the demands of all the projects, then approval of the Plan was valid. In the light of plaintiffs’ four relevant charges, there are serious questions concerning the validity of the Agency’s calculations of existing vacancies available for Yerba Buena residents. Without indicating whether these problems alone would justify a preliminary injunction, the Court now proceeds to consider the claims that the vacancies which do exist fail to meet the substantive requirements of § 1455(c) (1) and (c) (2). Plaintiffs claim that the Plan and the Secretary’s approval of it violate the statute’s requirement that the dwellings used for relocation be “not- generally less desirable [than their old residences] in regard to public utilities and public and commercial facilities” and “reasonably accessible to their places of employment.” This argument is based on the Plan’s statement that “in view of the relatively small area which San Francisco covers and the excellent public and commercial transportation systems in the City of San Francisco, the Agency has designated any area in the City as acceptable for relocation housing.” (Ex. 6, Ad.Rec., at 7.) The initial legal question here is whether the statute permits the defendants to consider a whole city as a permissible area for relocation. The Court finds no prohibition in the statute against so doing and, having examined the record in regard to so treating San Francisco, concludes it was not arbitrary to provide that the whole city be used for relocation purposes. .The second substantive requirement of the statute is that the displaced residents shall be provided housing “at rents or prices within [their] financial means.” The August, 1967 Plan, covering Western Addition, Hunters Point and Yerba Buena, contains a clear admission by the Agency that this statutory requirement regarding rents cannot be met. That Plan states that the vacancies which exist are at rents which are too high for many of the displaced residents with the lowest incomes. Specifically, the Plan acknowledges that there were “a total of 1087 singles with incomes under $100 per month who would require additional federal or local aids.” (Ex. 11, Ad.Rec., at p. 51); and a “total of 508 singles with incomes of $100 or $200 requiring additional Federal or local aids.” (id. at 52); and “252 families [who] require additional Federal or local aids . . .” (id. at 50). Consequently, two of the four conditions which the Secretary required the Agency to fulfill prior to giving final approval dealt with supplemental rent and relocation assistance. The first condition called for the “availability and utilization of relocation aids under the pending Housing and Urban Development Act of 1968 and related appropriation bills”. The second called for “adoption by the Board of Supervisors of a resolution or resolutions, satisfactory to the Regional Administrator, specifying the purposes for which money previously appropriated ($300,000) shall be expended, including amounts for rent supplements, and the organizational unit or units having control of such appropriations and expenditures.” (Letter of July 29, 1968, from Regional Administrator to Redevelopment Agency, Ex. 11, Ad.Rec.) Clearly, then, from the Agency’s own figures, there were 1,595 single residents in August, 1967, and 252 families for whom the City did not have relocation housing at proper rents. It is also clear that the City intended to supply this housing by rent supplements, not by new housing. (Letter dated August 15, 1967 from Redevelopment Agency to HUD, item 3, Ex. 11, Ad.Ree.) Therefore, for the Secretary’s May, 1969 approval to have been non-arbitrary, there should have been information before him indicating that the rent supplement programs were adequate to meet the needs. This Court has searched the record for any such information. It has searched in vain. Moreover, the rent and relocation supplements are limited by their own terms to a maximum of two years. (See letter from Redevelopment Agency to HUD, May 9, 1969, Ex. 11, Ad.Ree., with respect to the time limitation on the federal grants; see copy of resolution of San Francisco Board of Supervisors attached to letter of April 24, 1970 from the Redevelopment Agency to this Court with respect to the limitation on the local grants.) Therefore, the rent supplements can only be used to make up the deficiency in low-rent vacancies during the first two years after a resident’s relocation. After that time, the rent supplements disappear and the displaced resident is left with a rent which he cannot afford. The use of the supplements to make up for a lack of vacancies could only be justified, therefore, if at the end of the two years, the City shall have built new housing to provide for low-rent residents. However, nothing before the Secretary indicated that this would be done in sufficient quantity and time to house the 1,595 individuals and 252 families or any substantial numbers of either. The limited rent supplements in existence simply do not make up adequately for the lack of low-rent vacancies. This Court concludes that it was arbitrary for the Secretary to approve a Relocation Plan which failed to show the sufficiency of rent supplements and which, by its own uncontroverted figures, made it clear that displaced residents would be left without housing within their financial means two years after their displacement. The third substantive requirement contained in § 1455(c)(1) is that the relocation housing be “decent, safe and sanitary”. The Plan itself shows that, at the time of its submission, the Agency had made no careful cheek to determine if the projected vacancies were “decent, safe and sanitary”. At page 11 of the original Plan approved in 1966, the Agency stated that each rental unit “will be inspected” prior to actual relocation. (Ex. 6, Ad.Ree., emphasis added.) The lack of information as to the character of the projected vacancies was not cured by the 1967 Schaffran Report. It stated only that buildings with certificates of occupancy were used in the study. (Ex. 11, Ad.Ree., at 1.) Paper approval does not indicate that a dwelling is “decent, safe and sanitary” within the meaning of the statute. Such a pro forma approval provided no real protection of the legitimate needs of displaced persons. Indeed, the defendants themselves admit that a certificate of occupancy does not establish that a dwelling is “decent, safe and sanitary”. (Defendants’ memo in opposition to a preliminary injunction, Ex. 3; defendants’ answers to plaintiffs’ interrogatories 7, 13, 14(1) and 15.) Since the Agency itself had no idea when it submitted the Relocation Plan whether or not the vacancies which it projected were “decent, safe and sanitary”, the Secretary of HUD did not have' before him information on which to make a determination that the statutory requirements were being met. Therefore, there was no way for the Secretary to give an approval which would not be arbitrary and without basis in fact. Plaintiffs’ final claim is that they are threatened with irreparable damage because defendants cannot provide the adequate relocation housing required under the continuing duty imposed under 42 U.S.C. § 1455(c)(1). While there is some conflict, the weight of the evidence sustaining this claim is overwhelming. (See, e.g., letter from Samuel Jackson, Ass’t Secretary for Metropolitan Planning and Development, HUD, to Mayor Alioto, dated March 24, 1970, in regard to the San Francisco Workable Program, attached to brief of April 1, 1970, submitted as amicus curiae by the Citizens Task Force for a Workable Housing Policy; study by David Bradwell and Associates for San Francisco Department of City Planning, plaintiffs’ Ex. C; “A Summary Report on a Survey of Residential Hotels in San Francisco” by Leonard Goodman, February 1, 1970, plaintiffs’ Ex. AA; affidavit of Wallace Smith, plaintiffs’ Ex. 1; excerpts of statements of John Tolan, Deputy for Development, Office of the Mayor, San Francisco, before House Subcommittee on housing, plaintiffs’ Ex. PP; newspaper reports, plaintiffs’ Ex. 60; affidavit of Mitchell Forster, plaintiffs’ Ex. EE; “Analysis of 20 Hotels,” Human Rights Commission of San Francisco, 10/29/69, plaintiffs’ Ex. 2; affidavit of Fred Threefoot, Manager of Rentals, San Francisco Housing Authority, plaintiffs’ Ex. 84.) PLAINTIFFS’ CLAIMS RE INADEQUACY OF HEARINGS Plaintiffs argue in their second cause of action that they have been denied due process of law in that the hearings which were held during the planning of the redevelopment project were constitutionally inadequate. While plaintiffs’ claims in this regard tend further to support the granting of preliminary injunctive relief, they need not now be discussed nor disposed of since the Court has found other grounds requiring such relief. The cross motions for partial summary judgment regarding this cause of action are denied without prejudice. PLAINTIFFS’ CLAIMS RE DENIAL OF EQUAL PROTECTION Plaintiffs argue in their third cause of action that they are being denied equal protection of the laws by the local defendants in the implementation of the Redevelopment and Relocation Plans. First, plaintiffs state that the defendants are discriminating against minority groups since members of such groups will have a more difficult time finding adequate relocation housing due to private discrimination in the housing market. Second, plaintiffs make the much broader claim that the Yerba Buena project discriminates against all the residents of the area because it takes away their housing without a sufficiently compelling governmental interest. Since neither the plaintiffs nor the defendants have moved for partial summary judgment on this issue, the Court is faced only with the question of whether or not this cause of action, as amplified by affidavits and documents, supports the issuance of a preliminary injunction. The Court has concluded that the motion for a preliminary injunction is sufficiently supported by other considerations. Therefore, the complex questions here involved need not now be considered except to observe that evidence adduced in support of plaintiffs’ contentions suggests — when measured against defendants’ counter-availing material — the propriety of preliminary injunctive relief. (See generally affidavit of Associate Director, Council for Civic Unity, plaintiffs’ Ex. 65; plaintiffs’ Ex. 66; plaintiffs’ Ex. AA, at 10-11. Compare defendants’ Ex. 8.) PLAINTIFFS’ CLAIMS RE HOTEL CONSTRUCTION Plaintiffs maintain in their fourth cause of action that defendants have violated 42 TJ.S.C. § 1456(g) which declares: . “(g) No provision permitting the new construction of hotels or other housing for transient use in the redevelopment of any urban renewal area under this subchapter shall be included in the urban renewal plan unless the community in which the project is located, under regulations prescribed by the Secretary, has caused to be made a competent independent analysis of the local supply of transient housing and as a result thereof has determined that there exists in the area a need for additional units of such housing.” The facts relevant to this claim are not in dispute. The San Francisco Board of Supervisors has not made the determination referred to in the statute. The official Plan does not include provision for a hotel (Ex. 16, Ad.Rec.). The Redevelopment Agency has referred in a prospectus for developers and in all similar statements to a modern convention hotel to be built in the project area. (Defendants’ response to plaintiffs’ request for admission number 59; see also plaintiffs’ Ex. 74.) The situation, then, is that the Redevelopment Agency has proceeded and is proceeding to purchase and clear land for a hotel which is not in the Plan and which could not now be constructed. Plaintiffs argue that this violates their rights since they will be moved from their dwellings for an illegal purpose. Defendants’ response is that the prospectus- is used simply as a method of soliciting alternative proposals and that this Court should not presume that they will act contrary to law. See generally Old Town Development Corp. v. The Urban Renewal Agency of the City of Monterey, 249 Cal.App.2d 313, 57 Cal.Rptr. 426 (1967). Since both parties agree that the hotel is not presently in the Plan and could not be constructed without compliance with § 1456(g), there is no present controversy before this Court for decision. Plaintiffs’ motion for partial summary judgment on this cause of action is denied and defendants’ motion for partial summary judgment thereon is granted. MINORITY CONSULTATION Plaintiffs contend in their fifth cause of action that the local defendants have violated the applicable HUD regulations with respect to minority group consultation during the planning of the Yerba Buena Project. Plaintiffs have accordingly moved for partial summary judgment as well as for a preliminary injunction; defendants have opposed these motions and have made separate motions to dismiss for failure to state a cause of action. The parties disagree at the outset as to exactly which regulation was applicable at the time minority groups were supposed to be consulted. The regulation relied upon by defendants will be deemed controlling for present purposes. That regulation states, in pertinent part: “When a project will result in a substantial net reduction in the supply of housing in the project area available to minority group families, a Report on Minority Group Considerations (Checklist Code No. R 215), describing: * * * * * * (3) Steps taken, and the results achieved, in consulting with representative leadership of the minority group; and the representative character of the leadership consulted.” (Urban Renewal Manual 10-4-2, November 20, 1963, quoted in local defendants’ first memorandum in opposition to plaintiffs’ motion for preliminary injunction, at 4.) Since Yerba Buena works substantially to reduce housing for all residents of the area, including minority persons, there is no dispute that the regulation applies. The local defendants submitted two reports in attempting to comply with the regulation. Plaintiffs rely primarily on the first report for their argument that the regulation was violated by defendants. (Ex. 14, Ad.Rec.) In relevant part, that report reads as follows: “Representative leadership of the minority community has not been consulted on this project because of the events which have taken place in relation to the Western Addition Area 2 Project. . . . [I]n the sweep of national concern for the improvement of rights and opportunities of minority group citizens, the leadership of local civil rights groups has been alerted to take a strong position in opposition to urban renewal. Consequently, civil rights leaders in San Francisco have subsequently taken a militant stand in opposition to the redevelopment of Western Addition Area 2, particularly with reference to the Relocation Program. . [D]ue in part to the unanimous approval given the Area 2 Plan by the Board of Supervisors, there has been a division in the leadership of the NAACP and the United Freedom Movement that makes it difficult to approach minority leaders at this time. For this reason the Redevelopment Agency believes that it is inappropriate to submit the Relocation Program for Yerba Buena Center for consideration by these groups presently. Between submission of Part I and Part II of the Loan and Grant Application will be a more appropriate time.” The report indicates plainly and unequivocally that the defendants disregarded the requirements of consultation with representative leadership of minority gi’oups. The defendants point to a later report which lists several minority group organizations and representatives with whom the Agency had consulted about the Yerba Buena Plan. (Ex. 15, Ad.Ree.) Included in this group were representatives of the NAACP, the Bay Area Urban League, the Community Services Organization (a Spanish-American organization), and the San Francisco Filipino Community, Inc. Defendants contend that this report cured any error in their initial submission. The plaintiffs maintain that as a matter of law the regulation required the local defendants to report to HUD on the “results achieved” in the minority group consultation. The report actually submitted in this case merely lists the organizations which were contacted. There is no federal interest in requiring consultation without at least some bare description of the nature of the meetings and the “results achieved”. Beyond that, the interests of minority groups in having their views before the Secretary are substantial. See generally Powelton Civic Home Owners Ass’n v. Department of Housing and Urban Development, 284 F.Supp. 809 (E.D.Pa.1968). In the course of approving local redevelopment plans, the federal defendants make decisions which have a substantial impact on the lives of residents of the area. Because of housing discrimination, this impact often falls most harshly on members of minority groups. HUD recognized this interest by promulgating the regulation in question. Therefore, in light of the explicit language of the regulation, it is clear that the Redevelopment Agency was required to report to HUD on the views of the minority groups consulted. That was not done in this case and the evidence is therefore without conflict in showing that the defendants have failed to comply with regulation 10-4-2 of the Urban Renewal Manual (Nov. 20, 1963). Plaintiffs’ motion for partial summary judgment on this issue is therefore granted. SUMMARY 1. For present purposes, the Court has not found it necessary to make a final determination on the issues inherent in plaintiffs’ claims that they were denied constitutionally adequate hearings prior to final approval of the Plan for the Project. Accordingly, all pending motions to dismiss this cause of action are hereby denied and the cross motions for partial summary judgment are denied without prejudice. 2. Plaintiffs’ cause of action grounded in claims that they were denied equal protection of the laws in connection with the Redevelopment and Relocation Plans is not ripe for decision at this stage of the proceedings. Since neither plaintiffs nor defendants have moved for partial summary judgment as to this cause of action, the only matter standing submitted for the Court’s decision is the defendants’ motion to dismiss. That motion is denied. 3. As to plaintiffs’ cause of action claiming unlawful inclusion of a luxury hotel in the Plan, the evidence before the Court makes it clear that there is no present basis for support of this claim. Accordingly, defendants’ motion for partial summary judgment in this connection is granted. 4. The evidence adduced in support of plaintiffs’ motion for a preliminary injunction is overwhelming in establishing that the defendants have not met the mandate of Congress laid down in 42 U. S.C. § 1455(e)(1) and 42 U.S.C. § 1455(c)(2). Those provisions of the Housing Act of 1949, as amended, require that the Secretary of HUD be. presented with evidence that relocation housing will be “decent, safe and sanitary” and “within the financial means” of the persons displaced. That requisite evidence was not so provided. Therefore, there was no basis in fact for the contrary determination made by the Secretary in May, 1969. The record further establishes that there is not now adequate relocation housing in San Francisco which meets the requirements of the Act and is available for persons yet to be displaced from the Project area. The salutary purposes of the Housing Act of 1949, as amended, are to eliminate blight and provide a “decent home and a suitable living environment for every American family”. 42 U.S.C. § 1441. These purposes are not furthered by efforts to relocate persons out of one substandard area into another. The statute makes it abundantly clear that 'Congress intended residents of blighted areas to be beneficiaries, not victims, of urban renewal. 5. The evidence is overwhelming, too, in showing that defendants wholly failed to comply with the HUD regulation requiring consultation with minority group leaders and requiring report of the results of such consultation. The regulation is particularly important in slum clearance projects because these areas usually, as in the case of Yerba Buena, house significant numbers of minority groups. It is not enough for the local agency to consult the leaders of minority groups. The regulation expressly requires, in addition,.that the local agency report to HUD on the results achieved. While there may have been some such consultation by the local defendants, no report of results was made to HUD. . CONCLUSIONS OF LAW 1. A preliminary injunction should issue as per Exhibit A attached. 2. No security should be required in connection with the issuance thereof. See Urbain v. Knapp Bros. Mfg. Co., 217 F.2d 810, 815 (6th Cir. 1954); United States v. Onan, 190 F.2d 1, 7 (8th Cir. 1951); Western Addition Community Organization v. Weaver, 294 F.Supp. 433, 446 (N.D.Cal.1968); Hurwitt v. City of Oakland, 247 F.Supp. 995 (N.D.Cal.1965). PRELIMINARY INJUNCTION The Court has today filed its Findings of Fact and Conclusions of Law setting forth the reasons for the issuance of this Preliminary Injunction. Accordingly: 1. It is hereby ordered, adjudged and decreed, pending the further order of this Court, that the defendant San Francisco Redevelopment Agency, its officers, agents, servants, employees, attorneys, and all persons in active concert or participation with them or any of them are, each and all, hereby restrained and enjoined from: (a) Attempting to remove, threatening to remove, or acting to remove (by initiating contacts or making unsolicited offers or otherwise) any resident in the Yerba Buena Center Redevelopment Project Area D-l from any premises therein used by such person for residential purposes; and , (b) Breaching, terminating, interfering with or attempting to breach, terminate or otherwise interfere with, any relationship of landlord and tenant pertaining to any premises in said area used by the tenant for residential purposes; and (c) Raising or attempting to raise the rent of any resident of said area as to premises used as a residence in said area by such person; and (d) Reducing or curtailing or attempting to reduce or curtail or to cause the reduction or curtailment of any services or facilities furnished with the residential tenancy in said area of any resident therein; and (e) Demolishing or attempting to demolish or undertaking to condemn any structure within said area heretofore used in whole or in part for residential purposes or any structure now containing the place of residence of any resident of said area. 2. It is further hereby ordered, adjudged and decreed, that commencing on July 1, 1970, and thereafter until the further order of this Court, the Secretary of the United States Department of Housing and Urban Development, his officers, agents, servants, employees, attorneys, and all persons in active concert or participation with them or any of them are, each and all, hereby restrained and enjoined from honoring requisitions from the defendant, San Francisco Redevelopment Agency, for Yerba Buena Center Redevelopment Project Area D-l financing. 3. It is further hereby ordered, adjudged and decreed, that no person restrained and enjoined by this Preliminary Injunction shall undertake to avoid compliance by any indirection. 4. Nothing in this Preliminary Injunction is intended to nor shall permit nor excuse any violation of law by any party. 5. Any person enjoined by this Preliminary Injunction may move for termination upon showing that San Francisco Redevelopment Agency has hereafter submitted evidence (to the Secretary 'of the United States Department of Housing and Urban Development in an amended or supplemental Relocation Plan) of compliance with all pertinent requirements of 42 U.S.C. § 1455(c)(1) and 42 U.S.C. § 1455(c)(2) of the Housing Act of 1949, as amended, as well as evidence of compliance with all pertinent regulations (including requirements relating to consultation with minority groups) and upon showing, in addition, that said Secretary, having considered such evidence, has thereafter approved said amended or supplemental plan by an approval in writing. Notice of any such motion shall be given to all parties to this proceeding. 6. Any party may, upon notice to all other parties, move for a modificiation of this injunction upon showing that modification is necessary to avoid danger to the safety of any person in said project area or to avoid substantial monetary loss or waste which can be avoided without detriment to any resident of said area or upon any other showing of good cause for modification. MEMORANDUM CONCERNING THE COURT’S ORDER OF NOVEMBER 9, 1970 The attorneys for the plaintiffs and the attorneys for the defendants San Francisco Redevelopment Agency and M. Justin Herman reached an agreement, on October 20, 1970, for settlement of this complex and long-standing litigation. The agreement was promptly ratified by those defendants, but it now appears that plaintiffs have not done so and that further efforts by the parties themselves to reach a settlement are not likely to be availing. .Under these circumstances, the Court itself has sought means for bringing a just end to the litigation. The order signed today has been worked out in that interest. It guarantees full protection to the rights of the residents of the Yerba Buena Center and, at the same time, permits redevelopment to go forward. The order also serves the interests of the community at large, as contemplated by the relevant federal statutes, in providing for construction of a large number of new housing units. The salient provisions of the order are these: 1. The order insures that no resident of Yerba Buena who is dissatisfied with relocation housing need ever leave residence in the Yerba Buena Center unless a board of arbitrators, to be established by the parties themselves to insure fairness and impartiality, finds that the relocation housing offered to the resident fully meets the requirements of the Act of Congress. 2. It orders San Francisco Redevelopment Agency to do everything it offered to do under the agreement of October 20, 1970, which counsel for plaintiffs as well as for the Agency had approved. 3. In addition, it requires the completion, within three years, of a minimum of 1500 units of new or rehabilitated low cost housing. Unless that minimum is exceeded by providing at least 1800 such units, eligible residents of Yerba Buena will have first priority as to 300 units of the new housing. (This provision was ordered to encourage construction of the larger number of units of new housing which, in the Court’s view, will result in greater benefit to the remaining residents of Yerba Buena than the provision of priorities on the basis of the lower number of units of new housing.) 4. On August 28, 1970 HUD re-certified the supplemental relocation plan for the Yerba Buena Center. To obtain that recertification, the San Francisco Redevelopment Agency made commitments and representations in addition to those which this Court found insufficient last April. Today’s order requires the San Francisco Redevelopment Agency to carry out those additional commitments and make good on those new representations. It is not to be anticipated that today’s order will end all problems nor resolve all disagreements which gave rise to this litigation. It is difficult, if not impossible, to satisfy the wishes, on the one hand, of the hundreds of residents in the Center with respect to relocation (some want to stay where they are regardless) and, on the other hand, the demands of the Redevelopment Agency to be permitted to proceed with an urban renewal plan approved by all the duly constituted local and federal authorities. The order, therefore, is no panacea. The Court intends it to provide a feasible means for reconciling conflicting interests of the parties, so far as possible, without denying the full legal rights of any party. It is not to be expected that all the parties will agree with this assessment of the order and its effect. That is, usually, and in this case, an inevitable consequence, of the decisional process. The order eliminates any necessity for the Court to make a finding as to whether or not a majority of the plaintiffs have disapproved the agreement reached by counsel on October 20, 1970. It also eliminates the need for the Court now to decide whether or not the recertification by HUD is supported by sufficient evidence. HUD was not a party to that agreement of October 20, 1970 nor, although invited, did it take any meaningful part in subsequent settlement efforts nor in working out today’s order. It may not be amiss to conclude by noting that where this has been characteristic of HUD’s participation throughout the course of this litigation. ORDER The Court has fully considered the stipulation of the parties made on October 20, 1970, proceedings subsequently had under the provisions thereof, evidence theretofore and since presented, arguments and memoranda of counsel. The Court has also reviewed its FINDINGS AND CONCLUSIONS dated April 29, 1970 as well as the FINDINGS, RECOMMENDATIONS AND ORDER OF SPECIAL MASTER dated June 18, 1970. This order is based upon all of the foregoing and upon the authority and jurisdiction, in law and equity, vested in this court. It is also based upon the consent of defendants San Francisco Redevelopment Agency and M. Justin Herman (hereinafter referred to jointly and severally as said defendants). It is hereby ordered that: 1. Said defendants shall perform diligently and in good faith all of the obligations set forth for performance by them in that certain written agreement dated the 20th day of October 1970. A copy thereof is attached hereto as Exhibit A. Said agreement shall also be deemed to provide that the Fifteen Hundred (1500) units of new or rehabilitated housing referred to in Paragraph SECOND thereof shall be completed within Three (3) years of the date of said agreement and if that residents of Yerba Buena Center eligible for relocation benefits shall have first priority as to at least Three Hundred (300) units thereof unless a