-2 Section 220 of the National Housing Act was designed .... "to aid in the elimination of slums and blighted conditions and the prevention of the deterioration of residential property The statute seeks to accomplish these goals by attracting private investors through a system of federally guaranteed mortgages. Tenants' Council of Tiber Island - Carrollsburg Square v. Lynn, 162 U.S. App. D.C. 61, 497 F.2d 648, 650 (1973), cert. denied, 419 U.S. 970 (1974). In insuring such mortgages, the Secretary of HUD is empowered to "require such mortgagor to be regulated or restricted as to rents or sales, charges, capital structure, rate of return and methods of operation Pursuant to this authorization, the Secretary has promulgated the following -regulation: 6/ : .... (e) Rents and charges. No charge shall be made by the mortgagor for the accommodations, facilities or services offered by the project in excess of those approved by the Commissioner in writing prior to the opening of the project for rental. approving such charges and in passing upon applications for changes, consideration will be given to the following and similar factors: In Consonant with this regulation, the Secretary entered into an agreement with the plaintiffs that reads in pertinent part: 4(a) Owners shall make dwelling accommodations and services of the project available to occupants at charges not exceeding those established in accordance with a schedule approved in writing by the Commissioner ... .... 4(b) The Owner shall have the right to charge any tenant any amounts as from time to time may be mutually agreed upon between the tenant and the Owner and approved in writing by the Commissioner for any facilities and/or services which may be furnished by the Owner to the tenant upon his request, in addition to the facilities 4/12 U.S.C.$1715k (a) (1970). 1. 5/ 12 U.S.c.§1715k (d) (2) (A) (1970) (emphasis added). 624 C.F.R. $ 207.19(c) (1975) (emphasis added). This provision applies Plaintiffs' Opposition to Defendants' Motion for Summary Julment and · 3 and services included in the approved Rental .... Thus, whatever may be the Secretary's authority, he has undertaken ̧ only to establish maximum rents. Regulation 74-20 was enacted by the District of 8/ Columbia Council pursuant to the District of Columbia Rent Control Act of 1973, and was approved by Mayor Walter E. Washington on August 1, 1974. It sets maximum rents for housing in the District of Columbia, the amount of the maximum for any given unit being equal to 112.32% of the rent charged on February 1, 1973. However, the Regulation recognizes that the landlord is entitled to "a reasonable return from such housing accommodations," and authorizes the District of Columbia Housing Rent Commission to "make such individual adjustments of the maximum rent ceilings as may ... 10/ .... be necessary to correct hardships of [sic] other inequities In pursuing this inquiry, the Court is mindful of the admonition by the Supreme Court: If Congress is authorized to act in a field, it New York Dept. of Social Services v. 8/ 87 Stat. 623, Pub. L. 93-157, 45 D.C. Code §§ 1622, 1623 (Supp. 1975). 9/ Regulation, 74-20 § 5(b). See Apartment and Office Building, Ass'n of Metropolitan Washington v. Washington, No. 8995 (D.C. App, July 16, 1975), slip op. at 5. 1b Regulation 74-20, § 6(n). : It has similarly been stated: -4 So we Congress legislated here in a field which the Burbank v. Lockheed Air Terminal, Inc., --Only when there are "persuasive reasons" and "an unambiguous congressional mandate" should the Court find that the area has been preempted, Florida Lime & Avocado Growers, supra, 373 U.S. at 142, 146-47. These observations are especially apt where, as here, the subject at issue has traditionally been left to state or municipal control and involves a problem that is necessarily amenable only to regulation directed at the particular conditions in each locality or region. 11/ Nor is this an area in which This case does not involve a situation in which Congress has expressly declared that it intends the federal activity to be exclusive. preemption may be inferred from the need for exclusive federal supervision or national uniformity, or from the existence of a comprehensive and detailed federal regulatory scheme. See, eg, Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 633, (1973); Florida Lime & Avocado Growers, supra, 373 U.S. at 141, 143-44, 146-47; Note, Parker v. Brown: A Preemption Analysis, 84 Yale L.J. 1164, 1167-69 (1975), and cases cited therein. National uniformity is not even attempted, since the existing federal program concerns only maximum rents which are set on a project-byproject basis, compare Florida Lime & Avocado Growers, supra, 373 Had 11/ The instant situation varies from that in most preemption cases because the D.C. rent control program was established pursuant to an enabling statute cnacted by the Federal Congress. However, the fact that Congress authorized Tent control in the District of Columbia does not by itself evince a congressional determination that the field was not preampted with regard to $220 projects. By the same token, Congress also did not expressly conclude that $220 occupied the area to the exclusion of all local control. Congress focused on the problem prosented herein, the preemption issue might well be different. However, the parties have not cited any indication that Creas addressed or resolved this question, compare Perez v. Campbell, 402 U.S. 637, 655 (1971). Thus, the fact of congressional authorization is without significance, and the Court must dispose of the matter without the assistance of legislative consideration. -5 U.S. at 147-51. Furthermore, § 220 is not a rent control measure 12/ at all; thus, there is no federal system of rent control in effect. HUD itself recognizes that § 220 projects must comply with, inter alia, "all applicable building and other governmental Section 220 therefore cannot be considered as regulations.' 13/ per se preemptive of local control. __The_preemption issue therefore turns on the question whether there is an actual conflict between the federal and local laws such that the latter "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,' Perez v. Campbell, 402 U.S. 637, 649-50 (1970); : Under the "actual conflict" test, it does not appear that D.C. Regulation 74-20 has been preempted by § 220 of the National Housing Act. The Secretary of HUD by establishing maximum rents protects the Federal Government's "interest as a -mortgagee in the economic soundness of the project," and assures the financial viability and continuity of a project because "'exhorbitant returns" and "runaway revenues,' are prevented, Tiber Island, supra, 497 F.2d at 652-53. However, this interest is not necessarily impaired by a rent control measure that sets a ceiling beneath the maximum fixed by the Secretary. " :. Plaintiffs argue that the Secretary's schedule allows them to charge rents up to the specified maximum and that 12/ See Tiber Island, supra, 497 F.2d at 652, 653. Other sections of the 13/ 24 C.F.R. §§ 220.506(c), 220.594 (1975) (emphasis added). 14/ Both parties have contended that their position is supported by the relationship of the respective purposes underlying, § 220 and D.C. Regulation 74-20. However, the preemption issue does not depend on "whether the purposes of the two laws are parallel or divergent," Florida Lime & Awcado Growers, supra, 373 U.S. at 142, or on whether the local legislature had some purpose în mind other than frustrating the federal policy, Perez v. Campbell, sapra, 402 U.S. at 651-52. Consideration of purposes is relevant only in determining whether there is an actual conflict that hinders the effectuation of the congressional objectives. -6 -D. C. Regulation 74-20 is therefore invalid because it forbids that which is permitted by the National Housing Act. Although The fact their premise is correct, the conclusion is erroneous. that something is permissible under federal law does not necessarily mean that the states may not prohibit it. See Florida Lime & Avocado Crowers, supra, 373 U.S. at 143 ("the District Court indicated that the Florida growers might have avoided such rejections by leaving the fruit on the trees beyond the earliest picking date permitted by the federal regulations"). Here, the federal standard establishes a maximum rent. It prohibits any charge in excess of that amount, but does not conversely create a right or entitlement to exact the specified maximum. Under These circumstances, no conflict with the federal provisions is presented. See Druker v. Sullivan, 322 F. Supp. 1126, 1129-30, subsequent opinion, 334 F. Supp. 861 (D. Mass. 1971), aff'd, 458 F.2d 1272 (1st Cir. 1972), opinion after abstention sub nom. Druker v. Boston, 287 N.E.2d 801 (Mass. Sup. Jud. Ct. 1972); Stoneridge Apts., Co. v. Lindsay, 303 F. Spp. 677, 679 (S.D.N.Y. 15/ Moreover, since the federal standard is permissive rather than mandatory, there is no "impossibility of dual Compliance" with the two statutes, Florida Lime & Avocado Growers, supra, 373 U.S. at 142-43. 1969. The Court's holding that the D.C. rent control law is not preempted by § 220 finds additional support in HUD's general position on the issue. Although preemption is a question of law that is ultimately to be decided by the Court, the view of the agency assigned to administer the congressional program should be considered in determining the federal interests at stake and the degree to which such interests are impaired or frustrated by the local action. As the Supreme Court stated in New York Dept. 15/ The Court recognizes that the recent decision in Sanders v. Federal National Mortgage Ass'n, 393 F. Supp. 739 (E.D. La. 1975), involving federal preemption of state usury laws, proceeded by a different analysis and reached a contrary conclusion. However, it must be noted that Sanders arose in a different context that sufficiently distinguishes it from the present case. Morcower, to the extent that Sanders is contrary to the instant decision, the Court finds it unpersuasive. |