[PROPOSED] ORDER ON PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION
Plaintiffs' Motion for Preliminary Injunction came on for hearing before this Court on December 15, 2009, Lisa S. Greif, Bay Area Legal Aid, and James R. Grow, National Housing Law Project, appearing for Plaintiffs, and Edward M. Higginbotham appearing for Defendants.
Plaintiffs are elderly low-income tenants of Park Village Apartments, a former federally subsidized housing development in Oakland, and an unincorporated association of Park Village Apartments tenants. In response to Defendant Howard's and Defendant Trust's (hereafter, both referred to as "Defendant") recent actions to increase their rent portions to $1,192 monthly while refusing the federal enhanced voucher assistance offered on their behalf, Plaintiffs seek relief to prevent Defendant from increasing their rents, from evicting them for nonpayment of this rent increase or from refusing to accept their voucher assistance, until Defendant takes the steps necessary to accept the voucher assistance payments provided to effectuate their Congressionally-legislated right to remain in their homes. After consideration of the briefs and arguments of counsel, the Court hereby GRANTS Plaintiffs' Motion for Preliminary Injunction.
Park Village Apartments was developed in 1978 with federal project-based rental subsidies pursuant to a housing assistance payments ("HAP") contract with the United States Department of Housing and Urban Development ("HUD") under Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1437f. After renting the apartments with the assistance of project-based subsidies for over two decades, Defendant's final project-based contract with HUD expired in 2005. Following the expiration of the contract, Defendant attempted to increase the Plaintiffs' rent portions to $1,192, but this Court enjoined the rent increase because Defendant failed to comply with federal notice requirements, 42 U.S.C. §1437f(c)(8). Park Village Apts. Tenants Ass'n v. Mortimer Howard Trust, No. C 06-7389 SBA, 2007 WL 519038 (N.D. Cal. Feb. 14, 2007); No. C 06-7389 SBA, 2008 U.S. Dist. LEXIS 54246 (N.D. Cal. July 16, 2008).
Consequently, the Defendant served another federal opt-out notice on July 25, 2008, to be effective July 25, 2009. In the opt-out notice, Defendant certified, as required by federal law, that he would honor the Plaintiffs' right to remain in their units with voucher assistance. As a result of the termination of the project-based Section 8 contract, Plaintiffs are eligible for and have received special enhanced rental assistance vouchers under federal law. 42 U.S.C. §1437f(t). On August 31, 2009, Defendant notified the Plaintiffs that he intended to increase Plaintiffs' rent portions to $1,192, effective October 1, 2009.
Defendant refused to accept Plaintiffs' vouchers, contending that he is not obligated to do so. Plaintiffs have commenced this action to enforce their right to remain under federal law with their enhanced vouchers, while also asserting other claims to require the acceptance of their vouchers and block the purported rent increases under federal and state laws.
The decision to grant or deny a motion for preliminary injunction is a matter within the district court's discretion. Am. Trucking Ass'ns, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009). The standard for assessing a motion for preliminary injunction is set forth in Winter v. Natural Res. Def. Council, Inc., ___ U.S. ___, 129 S.Ct. 365, 376 (2008).
"Under Winter, plaintiffs seeking a preliminary injunction must establish that (1) they are likely to succeed on the merits; (2) they are likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in their favor; and (4) a preliminary injunction is in the public interest." Sierra Forest Legacy v. Rey, 577 F.3d 1015, 1021 (9th Cir. 2009).
A. LIKELIHOOD OF SUCCESS ON THE MERITS
1. Federal Enhanced Voucher Provisions
Federal law mandates Defendant to accept enhanced vouchers. In 1999, Congress enacted the Enhanced Voucher statute to ensure continued rental assistance when tenants face an opt-out situation. Pub. L. No. 106-74, § 531, 113 Stat. 1047, 1113 (1999). The vouchers are called "enhanced vouchers" because they are designed to cover any market-reasonable rents that exceed the ordinary subsidy limit set by the local public housing authority for its regular Housing Choice Voucher program, and because they provide tenants with an "election to remain." See 42 U.S.C. § 1437f(t), as amended by Pub. L. No. 106-246, § 2801, 114 Stat. 511, 569 (July 13, 2000). HUD's Section 8 Renewal Policy Guide further clarifies that this statute establishes a "right to remain." HUD, SECTION 8 RENEWAL POLICY, Sec. 11-3(B) (as revised Jan. 15, 2008) ("tenants who receive an enhanced voucher have the right to remain in their units as long as the units are offered for rental housing ...