Resident Didn't Disclose All Income

Facts: A resident sued the local housing authority for terminating her Section 8 rent assistance. At the time she first applied for assistance, she had been receiving Minnesota Supplemental Assistance (MSA) payments. The resident didn't disclose her MSA income where required on her initial Section 8 assistance application. She also failed to disclose her MSA income on her annual Section 8 assistance recertification applications for the following 11 years.

Each Section 8 assistance recertification application included the resident's signature and a printed warning stating: “I understand that providing false information will result in the termination of my Section 8 rent assistance.” On her recertification application in August 2010, the resident indicated that she was unsure whether she received MSA. The PHA investigated, and discovered that she had continuously received MSA payments since February 1997. The authority then informed her that her Section 8 rent assistance would be terminated for failure to disclose income, and she owed the agency $1,176 as reimbursement for excess benefits paid during the period of December 2006 to November 2010.

An informal hearing was held, which the resident attended with her adult son, who served as her translator and holds the power of attorney for her. The son explained that the failure to disclose the MSA income wasn't intentional, and he offered to repay the benefits. The son, who's also her landlord, explained that his mother enjoys her unit and its location.

The PHA also reviewed letters from the resident's doctors explaining that she suffers from various ailments, including chronic major depressive disorder, insomnia, pain disorder, depression, chronic headache, dizziness, vertigo, loss of balance and poor orientation, fatigue, poor memory, and several other mental illnesses.

The PHA upheld the termination of her Section 8 rent assistance. The resident challenged the termination, arguing that the PHA didn't consider relevant evidence and mitigating factors, and therefore, its decision was arbitrary and capricious.

Ruling: A Minnesota appeals court upheld the PHA's decision.

Reasoning: The court found there was substantial evidence in the record supporting the finding that the resident failed to disclose income as required by HUD regulations. HUD regulations permit the PHA to consider “all relevant circumstances” of the case in determining whether to deny or terminate Section 8 housing assistance due to the action or failure to act by a participant, including “the seriousness of the case, the extent of participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial or termination of assistance on other family members who were not involved in the action or failure.”

The PHA considered all evidence of mitigating circumstances provided by the resident in its decision to uphold the termination of her Section 8 rent assistance. In particular, the PHA considered her health, her lack of English skills, the relatively small dollar amount of Section 8 rent assistance paid, the importance of the assistance to the resident, and the impact on her household budget of the termination of the assistance. The PHA analyzed all evidence of mitigating circumstances, but it also reviewed the uncontroverted evidence that she violated her obligation to provide complete and true information. The PHA articulated “a rational connection between the facts found and the choice made,” and therefore, didn't act in a way that was arbitrary or capricious.

• Kouznetsov v. Carver County Housing and Redevelopment Authority, December 2011