IN THE SUPREME COURT OF NEW JERSEY

FRANKLIN TOWER ONE, L.L.C.,
as successor in interest to
SAVA HOLDING CORPORATION,

Petitioner - Plaintiff,
v.
N.M.,
Respondent-Defendant.
Docket No. 45037

On Writ of Certification From a Final Judgment of the Appellate Division of the Superior Court of New Jersey Before Judges Havey, Newman and Collester

BRIEF OF AMICI CURIAE OF
NATIONAL MULTI HOUSING COUNCIL, NATIONAL APARTMENT ASSOCIATION,
NATIONAL LEASED HOUSING ASSOCIATION, NATIONAL ASSOCIATION
OF HOME BUILDERS, NEW JERSEY APARTMENT ASSOCIATION,
MANUFACTURED HOUSING INSTITUTE
AND INSTITUTE OF REAL ESTATE MANAGEMENT

BRIEF OF AMICI CURIAE OF NATIONAL MULTI HOUSING COUNCIL, NATIONAL APARTMENT ASSOCIATION, NATIONAL LEASED HOUSING ASSOCIATION, NATIONAL ASSOCIATION OF HOME BUILDERS, NEW JERSEY APARTMENT ASSOCIATION, MANUFACTURED HOUSING INSTITUTE AND INSTITUTE OF REAL ESTATE MANAGEMENT

INTRODUCTION

 The National Multi Housing Council, the National Apartment Association, the National Leased Housing Association, the National Association of Home Builders, the New Jersey Apartment Association, the Manufactured Housing Institute and the Institute of Real Estate Management (jointly, the ";Amici";), by and through undersigned counsel, respectfully submit this brief on the merits of the pending matter. The Amici represent thousands of apartment owners throughout the nation that have entered into contracts to receive rental subsidies pursuant to Section 8 of the U.S. Housing Act of 1937, as amended (";Section 8";), or have chosen not to participate in the program.

In a larger sense, however, the Amici also represent the interests of hundreds of thousands of low-income American families who are the beneficiaries of those Section 8 rental subsidies. Those families have gained safe, comfortable and affordable housing in tens of thousands of units across the country through the success of the Section 8 program, which united the financial resources of the Federal government with the entrepreneurial skills of private housing developers.

That success is directly threatened by statutes like N.J.S.A. 2A:42-100, which with the best intentions, threaten to subvert the successful cooperative relationship between the Federal government and private owners that is the essential mechanism of the Section 8 program. By forcing nonparticipating owners to accept Section 8 tenants, the entire structure of the Section 8 program is endangered. In such cases, the Supremacy Clause of the U.S. Constitution dictates that the Federal interest in assuring the continuation of a successful Federal program preempts even well-intentioned state enactments, such as N.J.S.A. 2A:42-100. For these reasons, as explained in the following brief, the Supreme Court of New Jersey should reverse the decision of the Appellate Division and hold that the Section 8 statute, 42 U.S.C. 1437f, preempts N.J.S.A. 2A:42-100.

PROCEDURAL HISTORY

This case arose when the appellee, Nellie Martinez, attempted to pay a portion of the rent for her apartment located in an 18-unit building in West New York, New Jersey, with a rent voucher issued pursuant to the Federal Section 8 rent subsidy program, 42 U.S.C. § 1437f. The owner of that building refused to accept the Section 8 voucher and initiated proceedings claiming non-payment of rent.

Following trial, the court issued a written opinion that concluded the owner had the right to refuse to accept the tenant's rent voucher, on the grounds that the Section 8 program was intended to be voluntary. Sava Holding Corp. v. Martinez, Docket No. LT-010643-96 (Sup. Ct., Special Civil Part)(September 13, 1996).

On appeal, the Appellate Division reversed, concluding that the owner's refusal to accept the Section 8 voucher constituted discrimination against the tenant pursuant to N.J.S.A. 2A:42-100, the so-called ";source of income"; law, which prohibits owners of multiunit buildings from refusing to rent to an individual based on the ";'source of any lawful rent payment.'"; Franklin Tower One, L.L.C. v. N.M., Sup. Ct., Appellate Division, Docket A-001036-96T3 (October 22, 1997) at 2(referred to herein as the ";Appellate Division"), quoting N.J.S.A. 2A:42-100.¹

The Appellate Division concluded that the rent vouchers constituted a source of income for purposes of N.J.S.A. 2A:42-100 and that federal law did not preempt the enforcement of that state law. Essentially, the Appellate Division concluded that providing affordable housing is the purpose of both the Section 8 program and N.J.S.A. 2A:42-100, and that ";'[i]t does not follow that, merely because Congress provided for voluntary participation, the States are precluded from mandating participation. . . .'"Appellate Division at 6, quoting Attorney General v. Brown, 511 N.E.2d 1103, 1106 (Mass. 1987).

On November 18, 1997, the current owner filed its Petition For Certification in this case. On November 20, 1997, the Amici filed their Application For Leave to Appear As Amici. On January 15, 1998, this Court entered an order, granting the Amici leave to appear in this case and to file a brief. On January 22, 1998, this Court granted the Petition for Certification.

STATEMENT OF MATERIAL FACTS

1. CONGRESS INTENDED THAT OWNER
 PARTICIPATION IN THE SECTION 8
 CERTIFICATE PROGRAM BE VOLUNTARY.

 For nearly forty years, Federal housing policy has been premised on the voluntary participation of the private sector. Congressional enactments concerning the Section 8 Certificate program manifest this intent. Congress, well aware of the governmental entanglement that occurs upon an owner's Section 8 participation, underscored the need for voluntary participation.

A. Experience From Previous Federal
 Programs Demonstrated The Urgent
 Need For The Vigorous And Voluntary
 Participation Of The Private Housing Industry
 To Provide Decent And Affordable Housing.

 Congress initiated widespread Federal involvement in providing affordable housing in the United States Housing Act of 1937, 50 Stat. 888. That landmark law created the public housing program, whereby the Federal government made construction funds available to local housing authorities, who, in turn, built, owned and managed public housing. The public housing program was the sole Federal effort until 1961, when Congress enacted the Section 221(d)(3) program of below market interest rate loans to private sector developers who passed this benefit through to lower income project tenants in the form of decreased rents.

 The full articulation and rationalization of the urgent need for private sector involvement is set forth in the 1968 report of the President's Committee on Urban Housing (";The Kaiser Commission";), entitled A Decent Home. The report emphasized throughout the need of greater private sector involvement in providing affordable housing. The Commission noted, ";that this country will not reach the required level of production without the full involvement of American business.";² The Kaiser Commission recommended the creation of a Federally-chartered corporation, the National Corporation for Housing Partnerships (";NCHP";), as a means of attracting private capital into the Section 236 program, created in the Housing and Urban Development Act of 1968 (the ";1968 Act"), as an enhanced successor to the Section 221(d)(3) program. The Kaiser Commission envisioned that NCHP would attract private investment in low income housing, both for the social and financial (mainly tax) benefits. Following through on the Kaiser Commission's recommendation, Congress established the National Corporation for Housing Partnerships in Title IX of the 1968 Act.

 Although not directly related to Section 8, the role played by NCHP is indicative of Congress' view that only a strong, voluntary response from the private sector could address the Nation's housing needs. As the statement of purpose of the 1968 Act emphasizes, Congress ";declares that it is the policy of the United States to encourage the widest possible participation by private enterprise in the provision of housing for low or moderate income families.";³ Significantly, Congress used the word ";encouraged," to suggest the need to partner public and private sector involvement in housing, instead of any indication of mandated private sector participation -- the result of the Appellate Division decision in this case. It was exactly in this spirit of voluntary cooperation that Congress conceived the Section 8 program.

B.  Voluntary And Cooperative Participation By The Private Sector Is
 The Hallmark Of The Section 8 Program.

 The Section 8 Housing Assistance Program traces its origins to Section 23 of the United States Housing Act of 1937, entitled ";Leased Housing in Private Accommodations."; The provision was added to the United States Housing Act of 1965 at the urging of New Jersey Representative William B. Widnall, the Ranking Republican on the House Banking and Currency Committee. Under the program local housing authorities, as an alternative to building new public housing, were encouraged to lease units from private owners of existing projects. The local housing authority would in turn sublease the units to low income tenants. Representative Widnall dubbed his program, ";rent certificates," a term not used at the time, but one that is commonly used under the successor Section 8 program. Again, private sector participation was solely voluntary.

 In 1973, President Nixon declared a moratorium on all housing programs and commissioned a nine-month study to develop a restructured housing effort. On September 19 of that year, the President announced the results of his study, and stated that a revised Section 23 program would become the nations' major housing effort.⁴

 In August of 1974, President Ford, in one of his first official acts, signed into law the Housing and Community Development Act of 1974, P.L. No. 93-383 (1974) (the ";1974 Act";). The 1974 Act included a revamped United States Housing Act, renumbering Section 23 as Section 8 (42 U.S.C. 1437f), with two major elements under the new program. First, owners who constructed new housing or substantially rehabilitated existing projects would receive subsidy directly from HUD through a Housing Assistance Payment Contract (a ";HAP Contract") for all of the units in the project (termed the Section 8 New Construction or Substantial Rehab Program). This program is not at issue here. Second, an owner of an existing project could lease out individual units to low income families who received Section 8 Certificates from the local housing authority, the concept envisioned by Representative Widnall in the Section 23 Program. As before noted, this program became known as the Section 8 Certificate Program and is the focus of the present controversy.⁵

 Like the Federal housing laws that preceded it, the 1974 Act emphasized the private sector's discretionary role in the program. For example, Section 8(d)(1)(A) (42 U.S.C. 1437f(d)(1)(A) provided that ";the selection of tenants for such units shall be the function of the owner. . . ."; The Senate, in its report, emphasizes that ";the Committee has accepted the essence of HUD's recommendation, which is to give private developers the incentive for profit and the risk of loss in the construction and management of housing developed for low income families." S. Rep 93-693 (1974) at 44 (emphases added). Again, mandatory participation flies directly in the face of the voluntary structure which the Congress fashioned.

 Congress emphasized the need for voluntary participation in the program, because it realized that once an owner entered in the program, it would become subject to rigorous HUD regulation. Among the most obvious provisions is that any owner that accepts a Section 8 Certificate must sign a HAP Contract with HUD, which imposes vast Federal control over the owners' day-to-day business operations. For example, every unit in the program is subject to HUD's strict Housing Quality Standards, 24 C.F.R. §§ 882.109 and 982.401 (1997), and the administering local housing authority inspects annually to assure HQS compliance. The regulations also impose strict criteria concerning rents that can be obtained by the owner (24 C.F.R. §§ 882.106 and 982.401 (1997)), adjustment to these rents (24 C.F.R. §§ 882.108 and 982.401 (1997)), and security and utility deposits (24 C.F.R. § 882.112)(1987). It even specifies what lease provisions are mandatory or impermissible. 24 C.F.R. § 982.308(b)(1997). The regulations also impose additional requirement the owner must satisfy when it wishes to terminate a tenancy. 24 C.F.R. §§ 982.309 and .310 (1997). Thus, by taking a single Section 8 tenant, the owner acquires an aggressive, intrusive and far from silent partner -- the Federal government.

C.  Subsequent Modifications To The Section 8 Program Preserved The
 Concept Of Voluntary Participation.

 It is true that in 1987 Congress did wish to make Section 8 Certificates utilizable to a greater extent. For that reason, the Housing and Community Development Act of 1987, P.L. No. 100-242 (the ";1987 Act";), included two provisions that Congress believed would make the certificates more useful. First, it prohibited an owner already participating in federally-assisted housing from refusing to take Certificate holders. The 1987 Act clearly limited the programs to include only those where a subsidy was present, incorporating the definition of subsidized housing contained in Section 203(i) of the Housing and Community Development Amendments of 1978, P.L. 95-557 (1978), codified at 12 U.S.C. 1701z-11. Further, in Section 146 of that Act, Congress added a new Section 8(t)⁷ -- the so-called ";take-one, take-all"; provision -- requiring an owner who has taken one Section 8 certificate tenant to rent to any other tenant with a Section 8 certificate. The Committee Report of the House Banking, Finance and Urban Affairs Committee, where the provision originated, states that ";the Committee is very concerned about the problems experienced by holders of Section 8 certificates and vouchers in securing units in which to use their portable subsidies." H. Report 100-122 (1987) at 32.

 Even here, however, Congress was unwilling to tamper with the bedrock concept of voluntary participation in the Section 8 program. Thus, even though Congress had real concerns about owners refusing to take Section 8 certificate holders, it enacted enforcement provisions only in regard to those owners already voluntarily participating in the Section 8 Program or other Federal housing subsidy programs. It pointedly did not mandate that owners who had no nexus with the Federal programs accept such certificates.

 In other words, what Congress did not do is as significant as what it did do. Congress did say that if an owner voluntarily chooses to enter the Federal programs and become subject to its extensive regulations, then there would be no greater burden in renting to other tenants subject to the same regulatory scheme. There is an equally strong message in what the statute said by implication -- if you have chosen not to subject yourself to the comprehensive scheme of Federal regulation, we will not make you do so. The Appellate Division, in its interpretation of the New Jersey source of income law N.J. S.A. 2A:42-100, stands this congressional intent on its head.

 Indeed, this is the line drawn in M.T. v. Kentwood Const. Co., 278 N.J. Super. 346 (App.Div.1994), where the court properly held that a landlord who accepted Section 8 rental certificates from other tenants could not refuse to enter into a Section 8 contract with a pre-existing tenant under the ";take-one take-all" provision. By the same token, the ruling of the Appellate Division is directly contrary to congressional intent by requiring that New Jersey owners choosing not to participate in the Federal programs must nevertheless enmesh themselves in the all-encompassing Federal regulatory scheme.

 Indeed Congress is even having second thoughts about the wisdom of ";take-one, take-all." Apparently, Congress is aware that this provision, under which owners lose the right to limit Section 8 occupancy, may discourage an owner who might take one or a few Section 8 certificates from entering the program on the fear that its project would then be soon converted to an all-Section 8 project. The provision has been suspended in appropriations acts for the past three fiscal years and the suspension may soon become permanent.⁸

 This historical overview manifests a Congressional intent that Section 8 participation by owners should be voluntary. The New Jersey source of income law, N.J.S.A. 2A: 42-100, as construed by the court below, mandates owner participation, and thus directly contravenes that intent. The following discussion amply demonstrates that in such instances the long standing doctrine of Federal preemption comes into play. Accordingly, this court should either construe the New Jersey law so that Section 8 vouchers are not deemed to be a ";source of income" for purposes of N.J.S.A. 2A:42-100, or declare the statute preempted by the Federal statutory scheme.

ARGUMENT

I. UNDER THE SUPREMACY CLAUSE, PROVISIONS OF STATE LAW MAY
 BE PREEMPTED BY FEDERAL ENACTMENTS.

 One of the principal features of the U.S. Constitution is the Supremacy Clause, which provides that enactments of the national Congress shall constitute the supreme law of our nation:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any thing in the Constitution or Laws of any State to the Contrary notwithstanding.

U.S. Constitution, Article VI, clause 2. As interpreted by succeeding generations, the Supremacy Clause has balanced the purposes and policies of our Federal system on the one hand, and the reserved rights of the individual states on the other. To carry out these principles, the doctrine of preemption has defined those cases in which, expressly or impliedly, Federal law preempts conflicting or overbearing provisions of State law. Louisiana Pub. Serv. Comm'n. v. FCC, 476 U.S. 355, 368 (1986). In this case, those considerations unequivocally weigh in favor of preemption of N.J.S.A. 2A:42-100, the source of income law.

A. Under the Preemption Doctrine, Federal Laws May Expressly
 Or Impliedly Preempt State Laws.

 Federal law may preempt state law expressly or by implication. Preemption is express when Congress has stated its intent to oust state law explicitly in the language of a Federal statute. Gade v. National Solid Wastes Management Assn., 505 U.S. 88, 98 (1992); Wisconsin Public Intervenor v. Mortier, 501 U.S. 597, 604-05 (1991). Even where Congress has not expressly stated its intent to preempt state law, preemption may be implied. Implied preemption comprises two categories: ";field preemption"; and ";conflict preemption."; Field preemption occurs ";where the scheme of federal regulation is 'so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.'"; Fidelity Fed. Sav. & Loan Assn. v. De la Cuesta, 458 U.S. 141, 153 (1982), quoting Rice v Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). Conflict preemption arises where ";compliance with both federal and state regulations is a physical impossibility,"; Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43 (1963), or where state law ";stands as an obstacle to the accomplishment and execution of the full purpose and objectives" of a federal program. Hines v. Davidowitz, 312 U.S. 52, 67 (1941).

 Section 8 does not expressly preempt New Jersey's source of income law nor can it be said that the Federal government has unilaterally pervaded the area of housing to the exclusion of the states. Nevertheless, Section 8 does preempt N.J.S.A. 2A:42-100, because that statute conflicts with the goals and mechanisms adopted by Congress in enacting Section 8, as explained below.

B Because It Conflicts With The Goals And Mechanism Of The Section 8 Program, N.J.S.A. 2A:42-100 Is Impliedly Preempted.

1.  Conflict preemption is intended to assure that State laws do not interfere with the accomplishment of the goals and purpose of Federal law.

 N.J.S.A. 2A:42-100 is preempted here because it ";stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress" in the Section 8 program. Hines, 312 U.S. at 67. Here, a state law, superficially complementary to the Federal program, clearly conflicts with the voluntary participation that is central to the Section 8 program.

 Following these principles, courts repeatedly permit preemption of state laws that conflict with the means adopted by Congress to carry out a Federal program, even where the state and Federal laws have complementary purposes. In Gade, for example, the Supreme Court set aside state occupational and safety regulations that had not received Federal approval, because ";the design of the statute"; persuaded the court that Congress intended that employers and workers would be subject to only one set of such laws. 505 U.S. at 99. In Cienega Gardens v. United States, the U.S. Court of Federal Claims recently ruled that Federal law preempted local rent control ordinances, which effectively precluded apartment owners from prepaying their Federally-insured mortgages, pursuant to the terms of their mortgage insurance. 38 Fed. Cl. 64, 83 (1997), appeal pending, No. 97-5126, 5134 (Fed. Cir. 1997). The court there recognized that the owners' contractual right to prepay was ";a major facet of the federal housing program"; and that ";[a]ny state or municipal ordinance that materially interferes with the owners ability to prepay . . . poses an immediate obstacle to the fulfillment of Congressional objectives embodied in the federal housing programs." Id. at 83 - 84.

 Like the promise of prepayment in Cienega, the voluntary character of the Section 8 program is a major attraction to owners and cannot be stripped from the program without doing major damage to it. ";Owner participation in the section 8 program is voluntary,"; as the Seventh Circuit Court of Appeals explained in Knapp v. Eagle Property Management Corp., and ";[i]t seems questionable . . . to allow a state to make a voluntary program mandatory." 54 F.3d 1272, 1280 and 1282 (7th Cir. 1995)(affirming that Section 8 vouchers do not constitute a source of income under Illinois law). As the following analysis shows, N.J.S.A. 2A:42-100 directly threatens the means adopted by Congress to carry out the goals of the Section 8 program, and therefore must be preempted.

2. N.J.S.A. 2A:42-100 makes participation in the Section 8 program mandatory, against the clear intent of Congress.

 As shown above, Congress intentionally devised the Section 8 program to unleash the enterprise and resources of the private sector towards the creation of decent and affordable housing for low-income American families. From the outset, Congress realized that it could never achieve the degree of private participation and production through compulsion that it could obtain by the owners' willing and voluntary cooperation. See pp. 4ff, above; Knapp, 54 F3d at 1278 (Section 8 was intended to ";increase the availability of low-income housing"; and Congress knew it needed to make the Section 8 program ";attractive to owners"). N.J.S.A. 2A:42-100 reverses that system of voluntary participation, and would substitute the voluntary and cooperative incentives provided to encourage owner participation with hard-edge mandates.

 The conflict here is express and immediate, not the subject of conjecture or exaggeration. For New Jersey owners already participating in Section 8, it amounts to an attempt by the state to impose a ";take one, take all" requirement on them. But this is exactly the imposition that Congress, after including a similar requirement in Section 8 in the 1987 Act, has twice suspended, and may well soon repeal entirely. See pg. 14, fn.8, above. Clearly, N.J.S.A. 2A:42-100 conflicts directly with Congress's most recent position on this matter, because it imposes on New Jersey owners the exact burden that Congress has lifted from owners in the other 49 states. The conflict for these owners could not be more apparent.

 The impact on non-participating Section 8 owners is even more profound than the burden that participating owners would have to bear. If Congress is unwilling to force its current contractors -- who have entered into HAP Contracts and submitted themselves voluntarily to the rigors of HUD regulation -- to accept additional Section 8 certificates against their will, there is even less reason to believe it would condone mandatory participation by non-Section 8 owners. Contrary to the apparent view of the Appellate Division, accepting a Section 8 certificate is not a mere equivalent to accepting cash. As the prior history shows (pp. 10-11, above), by taking a single Section 8 certificate, an owner becomes subject to vast and intrusive Federal regulation of his business:

• Most obviously, the owner must execute a HAP Contract with HUD. In exchange for receiving Section 8 payments, the owner thereby becomes subject to vast, far-reaching Federal controls over the manner in which it operates its business. Indeed, they restrict transfers of general partner interest without government approval, address the amount and manner of rent adjustments, and require complete access to the owner's property, books and records among other provisions. Not surprisingly, many owners make justifiable decisions that the cost of complying with HUD program rules are not worth the payments the HAP Contract provides.⁹
• The owner is subject to HUD's Housing Quality Standards (";HQS";). 24 C.F.R. §§ 882.109 and 982.401 (1997). The HQS rules impose strict additional requirements on owners and carry with them the expectation of inspections and enforcement actions. Thus, the administering housing authority is required to conduct an HQS inspection of each property annually. These standards address matters as diverse as security, lead paint, interior air quality, neighborhood conditions, water supply, and so on. 24 C.F.R. § 982.401 (1997).
• The owner becomes subject to a panoply of other burdensome Section 8 regulations. HUD's Section 8 regulations are broad in scope, specific in application and intrusive. They require certain mandatory lease addendums, which specify mandatory and prohibited lease provisions. 24 C.F.R. § 982.308(c). They also specify permissible rent levels, adjustments to those rents, security and utility deposits, and rent termination, among many other matters. See pp. 10-11, above.

 Clearly, most owners strive to maintain the attractiveness and physical condition of their properties, and to treat their tenants well. One does not need to attribute bad faith to them, however, to recognize that they may have compelling reasons to avoid Section 8's burdensome contractual and regulatory duties. Speaking of such owners, the Knapp court said

We assume that their non-participation constitutes a legitimate reason for their refusal to accept section 8 tenants. . . .

54 F.3d at 1280. If therefore, Congress had good reason to exempt its participating owners from the rigors of the ";take one, take all" provisions, it had even greater justification to exempt non-participating owners from those burdens completely.

 Recently, HUD explained its rationale in favor of eliminating the ";take one, take all" requirements of Section 8, and in doing so, explained the importance of voluntary participation in the Section 8 program:

The old ways of doing business -- ";take one, take all" -- forced landlords to accept all qualified recipients in their rental properties once they accepted one Section 8 tenant. Many landlords were reluctant to join the program because they feared their apartment buildings would lose their mix of renters with varying incomes and would assume the worst characteristics associated with public housing. Under new guidelines, landlords will be able to accept as many or as few certificate holders as they want. The result will be better management of buildings and a greater universe of landlords willing to participate in the [Section 8 ] program.

HUD, 15 Ways the New HUD Helps People, http://www.hud.gov/15ways.html (1/29/98) at 5 (emphasis added). HUD clearly understands the intimate and enduring connection between the success of Section 8 and the voluntary willingness of owners to accept the burdens of participating in that program. These burdens justify both the reluctance of some owners to participate in Section 8 and Congress's respect for that decision.

  3. Notwithstanding their mutual goal of providing decent and affordable housing to low-income families, there is a conflict between N.J.S.A. 2A:42-100 and Section 8.

 The analysis adopted by the Appellate Division ignored the cooperative mechanism that is central to the purpose adopted by Congress, concluding that the ";heart" of the Section 8 program is the welfare of low-income individuals, not the right of owners to join or abstain from the Section 8 program voluntarily. Appellate Division at 6. This approach is both short-sighted and legally incorrect. No one doubts that the purpose of the Section 8 program was to improve living conditions of low income individuals, and that N.J.S.A. 2A:42-100 is motivated by the same worthy goals.

 But the purpose of a social welfare program should not be confused with its mechanism, and it is there that N.J.S.A. 2A:42-100 poses a direct threat to the ways and means adopted by Congress to accomplish that purpose. No matter how commendable its purpose, no state legislature has the power to second-guess Congress's judgment about the best way to carry out a Federal program, nor may the legislature enact laws that jeopardize the accomplishment of those Federal purposes. If a state statute, no matter how well-intentioned, threatens the means adopted by Congress to achieve the purpose of a Federal program, that statute is properly preempted:

Under the Supremacy Clause, state law that in effect substantially impedes or frustrates federal regulation, or trespasses on a field occupied by federal law, must yield, no matter how admirable or unrelated the purpose of that law.

Teper v. Miller, 82 F.3d 989, 995 (11th Cir. 1996)(emphasis added). Where, as here, the state statute has an adverse impact on Congressional goals -- including a decision to make a massive housing program purely voluntary -- it must yield to the goals and mechanisms of Federal law. Thus, even if N.J.S.A. 2A:42-100 and Section 8 are aimed at the same purpose -- ameliorating the condition of low income families -- if the state statute frustrates the goals of the Federal law, it must be preempted.

 By the same token, the Appellate Division's analysis also ignores the impact of N.J.S.A. 2A:42-100 on HUD itself. HUD has issued hundreds of pages of regulations and guidance for the Section 8 program, and imposes, as demonstrated above, substantial burdens on participating owners, counting on those owners to abide by the terms of their contracts and HUD's rules and regulations with a minimum of oversight and enforcement. By adding possibly hundreds of new owners, who for many reasons previously decided not to participate in the Section 8 program, N.J.S.A. 2A:42-100 guarantees that HUD will be required to devote its scarce administrative resources to explaining, instructing and, undoubtedly, enforcing its rules against owners conscripted into the program against their will. Given the voluminous regulations needed to carry out even a purely voluntary program, it is not surprising that Congress has declined to make Section 8 mandatory for all owners, and has even suspended its ";take one, take all" provisions for participating owners. N.J.S.A. 2A:42-100 directly conflicts with the spirit of voluntary cooperation that is critical to HUD's administrative tasks under Section 8 and strongly points towards preemption here.¹⁰

4. Properly construed, Section 8 does not infringe on New Jersey's interest in improving the quality of housing for low-income families.

 As the Appellate Division's opinion points out, New Jersey has an estimable history of state action in providing housing opportunities for its low-income citizens. Appellate Division at 7ff. In many areas, such as in regulating eviction proceedings, the state has made clear its desire to ameliorate these families' housing conditions.

 There is virtually no conflict between these statutes and Section 8, because, as noted above, these laws are all directed to improving the quality of affordable housing. Thus, by concluding that Section 8 preempts N.J.S.A. 2A:42-100, the Court would not materially restrict the state's ability to act to provide better housing. Indeed, if it wished to, New Jersey could initiate its own direct rent subsidy program, and require owners to accept its own state vouchers. At least in theory, a self-contained state program would not interfere with or hinder the purposes of the Federal Section 8 program.

 Rather, the Court's decision here is limited to the narrow question of preemption where the state attempts to piggy-back on an existing Federal program in a way that actually frustrates the accomplishment of the Federal purpose. Faced with the choice of mandatory participation in a heavily-regulated Federal program, or taking their units out of the rental market, many owners may decide to quit the rental market entirely. Ironically, low income families in New Jersey thus could find themselves with fewer housing options, not more. Indeed, the loud protests from owners dragged into the Section 8 program would undoubtedly reverberate outside New Jersey and could loosen Congress' support for the Section 8 program entirely. It is far from speculative that the end result of enforcing the source of income law here would reduce the rental housing stock, increase the cost of available units, and drastically decrease enthusiasm for the Section 8 program among all owners -- clearly impermissible ";obstacle[s] to the accomplishment and execution of the full purposes and objectives" of the Section 8 program. Hines, 312 U.S. at 67.

CONCLUSION

 The Appellate Division apparently viewed this as a case in which an owner, in violation of N.J.S.A. 2A:42-100, merely refused to accept in payment of rent a cash equivalent in the form of a Section 8 certificate. As this analysis shows, from the point of view of the owner, the decision to accept a Section 8 certificate is a much more complicated matter, potentially requiring a complete change in the way in which the owner does business. By ignoring the actual impact of the acceptance of a Section 8 voucher on the owner, the Appellate Division failed to understand why Congress chose to make the Section 8 program voluntary, and for that reason, failed to comprehend the unavoidable conflict between N.J.S.A. 2A:42-100 and the Section 8 program. The impact of this error could adversely affect the interests of owners and low-income rentals alike. This Court, respecting the considerations that led Congress to make Section 8 a purely voluntary program, should determine that N.J.S.A. 2A:42-100 is preempted by Section 8.

Dated: February 1998 Respectfully submitted,

CERTIFICATE OF SERVICE

 I HEREBY CERTIFY THIS ___ day of February, 1998, that a copy of the foregoing was served by U.S. Postal Service, first class mail, postage prepaid, upon the undersigned:

Tara P. D'Amato, Esq.
638 Newark Avenue
Jersey City, New Jersey 07306

 

John Ukegbu
c/o Hudson County Legal Services
574 Newark Avenue
Jersey City, New Jersey 07306

 _______________________________
Harry J. Kelly