Matthaei v. Housing Authority

Bond, C. J., delivered the opinion of the Court. A resident and taxpayer of Baltimore City, an intervening party in a suit in equity in virtual representation of all such taxpayers, contends that a particular project of the Housing Authority of Baltimore, for erection of houses on vacant land in the outskirts of the city, transgresses statutory limits of the authority, or, if it does not, statutes and an ordinance of the city sanctioning it are unconstitutional; and an injunction against it has been sought. A demurrer by the respondent authority and the city to an amended bill of complaint has been sustained, and the appeal is from that action. The statutes of the state are chapters 517 and 518 of the Acts of 1937, and the ordinance was approved June 27th, 1938.

All appear to have been enacted in pursuance of the housing program of the federal government (See Act of Sept. 1st, 1937, ch. 896, 50 Stat. 888 , 42 U. S. Code Ann. sec. 1401 et seq.), notwithstanding the fact that the state statutes were passed more than three months earlier. See studies 23 Minnesota Law Rev. 879, 7 George Washington Law Rev. 520. The program is one for slum clearance and provision for persons whose incomes are too low to enable them to live in other than insanitary or unsafe conditions. The federal government is to participate by donating the larger part of the money required through a United States Housing Authority to local authorities or agencies, in loans up to ninety per cent of the cost of development or acquisition of a project, in annual contributions over a period of years, or in a grant of capital for the purpose.

The state statute, in a form adopted in many states, with variations not now important, adheres closely to the terms of the federal ⁵¹⁰ enactment. And in Baltimore City the authority has been been duly formed according to the program. It has made a contract for loans from the United States authority to be applied to the cost of acquisition, and annual contributions of three and one-half per cent of the cost of development up to a limited sum total. Under the state statute, Acts 1937, ch. 517, sec. 21, properties of the authority are to be exempt from all taxes or assessments, state or city, and, in lieu of those taxes and assessments it has been agreed between the city and its authority that 3.9 per cent of what are called shelter rents, to be received from a development of houses, shall be paid to the city.

Bonds are to be issued to be payable out of the revenues of the authority, to provide funds to be contributed locally. No question is raised of the right of the appellant to maintain the suit to contest a departure of the authority from the limits placed upon it. The proceeding is one on behalf of taxpayers who would be affected by diversion of state or city tax funds to wrong uses, or by exemption of properties from paying taxes like their own; and in this state the taxpayers may sue for an injunction. Schley v. Lee, 106 Md. 390, 403 , 67 A. 252 ; Sun Cab Co. v. Cloud, 162 Md. 419, 427 , 159 A. 922 .

The questions which the appellant does raise are few. He does not dispute the validity of any part of the Act of Congress, and agrees that under the police power of the State, delegated to the. city, slums may be cleared and slum dwellers newly housed in order to remove dangers threatened to the rest of the population, as well as to themselves, by slum conditions. And the court is not asked to consider any possibility, if there is any, of conflict of the legislative enactments with the Home Rule Amendment of the State Constitution, article XIA, and the City Charter adopted in accordance with it. Compare Adler v. Deegan, 251 N. Y. 467 , 167 N. E. 705 .

The decision is confined to questions argued. It is urged, generally, that there are limits on the powers of the governmental agencies considered, and that ⁵¹¹ a question of transgression of the limits must be one for judicial determination. And given the existence of the limits this is unquestionably true. Not only the construction of the law but the existence of facts declared by the Legislature may be contested.

New Central Coal Co. v. George’s Creek Coal & Iron Co., 37 Md. 537, 560 ; State v. Mott, 61 Md. 297, 306 , 48 Am. Rep. 105 ; Arnsperger v. Crawford, 101 Md. 247, 252 , 61 A. 413 ; Cox v. Revelle, 125 Md. 579, 588 , 94 A. 203 . Attacks on housing statutes in other states appear to have been mostly on questions of validity of the enactments on their faces. In this instance some of the basic facts are put in question.

And the court agrees that a demurrer to such an attack must be considered cautiously, and judicial notice should be relied on less readily than is urged in argument, as a ground for denying a hearing to offered proof. Underlying the contentions in the case is a belief of the appellant that this project in the outskirts is not one for rehousing slum dwellers, but on the contrary one for housing persons or families in better condition. From this it follows, in the argument, that the development is unauthorized by the statutes, or, if not, is not within the police power, and not a proper subject for tax exemption or other special treatment. It is true that the program is one for slum clearance and the housing of persons or families whose incomes are so low that they must live in the proscribed conditions.

This is made clear in the laws. Section 10 (a) of the federal act, 42 U. S. Code Ann. sec. 1410 (a), goes so far as to provide that no annual contributions shall be made by the United States authority in connection with the development of any project involving the construction of new dwellings, unless the project includes elimination by demolition, condemnation, and effective closing, or compulsory repair, of unsafe or insanitary dwellings situated in the locality or metropolitan area, substantially equal in number to the number of newly constructed dwellings provided by the project, except that the elimination may be deferred where conditions produce danger of overcrowd ⁵¹² ing. The requirement is found in section 11, 42 U. S. Code Ann., sec. 1411, also. Other sections throughout the Act of Congress declare the object to be to relieve slum dwelling.

The state enactment, chapter 517, does not contain the provision for equal elimination of unsafe or insanitary dwellings along with any new construction. Counsel for the appellants state that it was deliberately omitted by the Legislature. In several sections, for instance, section 3 (i) and (j), the act extends the functions of the local authorities to the provision of decent, safe and sanitary apartments or other living accommodations to persons or families who lack the necessary income, as determined by the authority, to enable them to live in decent, safe, and sanitary dwellings without overcrowding. And a later section, 10 (d), apparently copied from the federal act, provides that new dwelling accommodations shall not be rented to persons who have an annual income in excess of five times the rental, including the cost, as determined by the Authority, of ordinary acessory living services or facilities.

Evidently the design is to include among the objects of the law those who would be compelled to live in the conditions considered threatening, if not given better. The provision for those who would otherwise be dwellers in similarly dangerous conditions is within the same police power that justifies removal of the slums. It is, in substance, the power to remove nuisances. Owners’ Realty Co. v. Baltimore, 112 Md. 477, 484 , 76 A. 575 .

But does the restriction in the federal act, sections 10 (a) and 11, compel the city authority to accompany that provision with elimination of dwellings? The appellant contends that it does, and that in this project the restriction is disregarded. It is averred in the bill that in the whole metropolitan district of Baltimore 3079 new dwellings are planned, but only about 2000 houses are to be acquired and torn down, that on the vacant area now considered 700 new houses are to be built,