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Federal Court Consent Decree Clears Way for Delaware Affordable Housing Project

Relman, Dane & Colfax is pleased to announce the successful resolution, on November 28, 2012, of claims it brought on behalf of Diamond State Community Land Trust. The complaint alleged that Sussex County (Delaware) violated the Fair Housing Act, Title VI of the Civil Rights Act and the obligation to affirmatively further fair housing (AFFH) when it denied preliminary site plan review to a homeownership development designed for low- and moderate-income people employed in agricultural, retail and service industries.

The Firm initially brought the claims through an administrative complaint with the U.S. Department of Housing and Urban Development (HUD), alleging discrimination on the basis of race, color and national origin. After an extensive investigation, HUD referred the FHA matter to the U.S. Department of Justice (DOJ), which convened pre-suit negotiations involving Diamond State and Sussex County. These resulted in the simultaneous filing of a complaint and consent decree with the U.S. District Court for the District of Delaware, which is expected to approve the settlement.

Under the terms of the consent decree, Sussex County is required to reconsider the land use denial and pay Diamond State $750,000 in damages and attorney's fees. Beyond that, the County is required to appoint a fair housing compliance officer, take affirmative steps with respect to promotion of future affordable housing development and provide periodic reports to the public and the Department of Justice. HUD retained jurisdiction over Diamond State's remaining claims (which were based on the County's receipt of federal funds) and on August 23, 2012, found that the County was in noncompliance with its Title VI and "AFFH" obligations. HUD notified the County that its failure to come into immediate compliance would lead to "further action to suspend or terminate, or refuse to grant or to continue further Federal financial assistance" or to an additional referral to DOJ. The County has agreed to enter into a Voluntary Compliance Agreement, under which it must develop a new plan to address impediments to fair housing choice and adopt strategies to integrate affordable housing into all communities in the county.