HOUSING AUTHORITIES ‑- POWERS ‑- ACQUISITION, OPERATION AND DISPOSITION OF PROJECTS OWNED BY FEDERAL ADMINISTRATION

HOUSING AUTHORITIES ‑- POWERS ‑- ACQUISITION, OPERATION AND DISPOSITION OF PROJECTS OWNED BY FEDERAL ADMINISTRATION

State Housing Authorities have power to acquire the properties of Federal projects, but may operate them only for nonprofit low rental purposes.

Disposition of such property, once acquired by housing authorities, is controlled by Federal statute.  (Section 1586, Title 42, U.S.C.A.)

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                                                                 January 31, 1951

Honorable Ole H. Olson
Member, House of Representatives
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 440

Dear Sir:

            We have your letter of January 25, 1951, regarding the proposal by various city housing authorities within the state to take over housing projects built and owned by the Federal Housing Administration.  You request our opinion on the following questions:

            1.         Are existing or present statutes of the state of Washington adequate to permit housing authorities to take over such federal owned property, operate the same and return the profits, if any, to the city treasury?

            2.         Is there any restriction as to what use the city can make of such projects?

            3.         What are the restrictions as to the city disposal of such property once acquired?

            It is our understanding that your inquiry relates generally to city housing authorities, and that the term "city" as used in questions 2 and 3 refers to city housing authorities.

            Our conclusions may be summarized as follows:

             [[Orig. Op. Page 2]]

            1. City housing authorities have the power to acquire and take over housing projects owned by the Federal Housing Administration, but may not operate the same for profit.

            2. Such projects may be used by city housing authorities for low rent housing purposes only.

            3. Such property once acquired by city housing authorities may only be disposed of subject to the terms and conditions of the agreement with the Federal Housing Administration under which it was acquired and to the provisions of section 1586, Title 42, U. S. Code Annotated [[U.S.C.A.)]].

                                                                     ANALYSIS

            Section 8 of the Housing Authorities Law, chapter 23, Laws of 1939 (Rem. Rev. Stat. 6889-8) as amended by section 1, chapter 43, Laws of 1945 (6889-8, Rem. Supp. 1945), under sub‑paragraph (d) provides in part that the housing authorities shall have the power

            "* * * to purchase, lease, obtain options upon, acquire by gift, grant, bequest, devise, or otherwise including financial assistance and other aid from the state or any public body, person or corporation, any real or personal property, or any interest therein; * * *"

            Under Section 21 of the Washington Housing Authorities Law, section 1, chapter 23, Laws of 1939 (Rem. Rev. Stat. Supp. 6889-21) provides in part that local housing authorities shall be empowered

            "* * *to take over * * * any housing project or undertaking constructed or owned by the Federal Government, and to these ends, to comply with such conditions and to enter into such * * * agreements as may be necessary, convenient or desirable.  It is the purpose and intent of this act to authorize every authority to do any and all things necessary or desirable to secure the financial aid or cooperation of the Federal Government in the undertaking, construction, maintenance or operation of any housing project by such authority."

            These provisions of our State Housing Authorities law would appear to give local housing authorities ample power and authority to take over the projects now owned by the Federal Housing Administration.

             [[Orig. Op. Page 3]]

            The first part of section 9 of the act (Rem. Rev. Stat. Supp. 6889-9) specifically provides that:

            "It is hereby declared to be the policy of this state that each housing authority shall manage and operate its housing projects in an efficient manner so as to enable it to fix the rentals for dwelling accommodations at the lowest possible rates consistent with its providing decent, safe and sanitary dwelling accommodations, and that no housing authority shall construct or operate any such project for profit, or as a source of revenue to the city or the county.  * * *"

            Under these provisions, it is clear that the Act does not contemplate or authorize the operation of projects by local housing authorities for profit, but on the contrary, contemplates the charging of the lowest possible rentals consistent with a "break even" basis of operation.

            Under the Washington Act, housing authorities are empowered to operate their projects as low rent projects only.

            Under section 1586, Title 42, U. S. Code Annotated [[U.S.C.A.]]giving the Federal Housing Administration power to convey Federal projects to local housing authorities upon the execution of an agreement containing such terms and conditions as the Federal Administration may require, it is expressly provided that the use of such property shall be confined to low rent housing for a period of 40 years.  It is also therein provided that in the event that such property or any part thereof shall at any time during such period become unsuitable for use as low rent housing, the project or any part thereof shall, with the approval of the Federal Administration, be sold by the local authority and the net proceeds paid over to the Federal Administration.  As to any Federal project taken over by a local housing authority, the provisions of the Federal Act specifically control the disposition of any such property.

Very truly yours,

SMITH TROY
Attorney General

FRED L. HARLOCKER
Assistant Attorney General