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Jersey City Housing Authority v. Gadsen

A-6769-02T3 (N.J. Super. App. Div. 2004) (Unpublished)

LANDLORD-TENANT; PUBLIC HOUSING—When calculating a public housing tenant’s income to determine the tenant’s maximum rent payable, it is necessary to include funds “anticipated to be received,” but this only includes what a tenant actually receives in child support payments, not the full amount in the child support order.

A public housing authority brought a dispossess action against one of its tenants. The dispute was over the required amount of rent. The Brooke Amendment to the United States Housing Act of 1937 sets forth that rent should not exceed thirty percent of a public housing tenant’s income. The authority argued that the amount of child support “ordered to be paid” to the tenant should be used when determining the monthly rent. In opposition, its tenant argued that rent should be calculated based on child support payments “actually received.”

The lower court agreed with the authority. Regulations under the Brooke Amendment promulgated by the Department of Housing and Urban Development (HUD) define"Annual Income” to include funds “anticipated to be received.” Thus, the lower court reasoned that by using those words instead of “actually received,” the intent was to include income the tenant was supposed to receive, even if she did not actually receive it.

The Appellate Division disagreed, ruling that focusing on that single phrase contravened the overriding objective of a regulatory scheme designed to provide affordable rent to low-income families. The Court defined “anticipate,” using the Oxford English Dictionary, which defines it as: “look[ing] forward to, look[ing] for (an uncertain event) as certain.” Given the father’s poor payment history, the Appellate Division felt that the tenant could not “anticipate” to receive all of the support ordered. In addition, Congress had specifically excluded sums “not actually received” in the definition of income thus depriving HUD of the authority to expand the definition by regulation.

The Court held that the phrase “anticipated to be received” was employed to allow housing authorities to annualize income. A tenant with irregular income might have its rent set either too high or too low if the rent was based on income received at the moment of recertification.

Whereas, the lower court felt that including only child support received would cause a disincentive to enforce child support orders, the Appellate Division pointed out that such orders were enforced by the probation department, and not by the tenant. In addition, this particular tenant only received a subsidy, not the whole rent. Thus, the Court opined that the tenant would not forego the enforcement of child support when such an order would put considerably more money in her pocket than in the landlord’s. For those reasons, the Appellate Division reversed the lower court’s decision and held that in determining a public housing tenant’s income for the purpose of calculating monthly rent, a housing authority should take into consideration the amount of child support actually received, and not the amount of support ordered.

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