July 12, 2023 -- On Tuesday, July 11, a federal court for the Southern District of Texas entered a take nothing judgment dismissing claims brought by the owners of Arbor Court Apartments, an apartment complex located on Greens Bayou, against the City of Houston.
After an exhaustive review of the evidence, the court determined that there was no constitutional taking of the property arising from the City’s denial of permits to repair the property following Hurricane Harvey. The first-floor units became uninhabitable when the hurricane flooded these units with three to four feet of water. Media reports showed evacuating residents wading through water as high as chest deep. This property is in a flood plain, largely in a floodway, and has repeatedly flooded.
A court is required to consider and weigh several factors in such circumstances to determine whether a government entity’s regulatory action illegally deprives an owner of the use of the property. The factor that weighed most heavily in the court’s determination was health and safety in the context of flood control management. The City, in its permit application determinations, correctly factored in the severity of Hurricane Harvey on the heels of the Tax Day Flood.
The court decision also recognized that the public expects its government to take steps quickly and comprehensively to address major natural disasters. The residents of this complex rely on federal government assistance for rent and are at greater risk in disasters because they are economically limited in their housing choices. As the court stated, “… the residents who live in this type of housing cannot simply pick up and move in the same way that residents of other buildings may. Thus, these residents are uniquely vulnerable.”
The court further found that the purpose of the City’s flood ordinance is to reduce the likelihood that development will increase the dangers of flooding. A flood ordinance assists in ensuring that the development in the City complies with FEMA development eligibility standards for property owners to participate in the National Flood Insurance Program.
The owners sought $32.1 million from the City in this lawsuit. Importantly, the owners retained the lucrative, above-market federal housing assistance contract utilized at this property when HUD granted its request to use the contract for another apartment complex.