Kemp

An Oregon owner of low-income housing brought a declaratory judgment action against the United States Department of Housing & Urban Development [HUD] challenging HUD’s determination that the expiration of a ten-year real property tax abatement on a “Section 8” housing project was not a basis for a special rent adjustment under 42 U.S.C. § 1437f(c)(2)(B) (1988). The partnership appeals the district court’s grant of summary judgment in HUD’s favor. We reverse and remand.

I

In 1980, Clay Tower Apartments, an Oregon general partnership, finished construction on a housing project for low-income elderly people. Clay Tower Apartments v. Kemp, 757 F.Supp. 1145, 1146 (D.Or.1991). The partnership financed the construction *479 through what is now known as the Oregon Housing Agency [OHA], The financing proceeded under Section 8 of the United States Housing Act of 1937, as amended by § 201(a) of the Housing and Community Development Act of 1974, Pub.L. No. 93-383, 88 Stat. 653 (codified at 42 U.S.C. §§ 1437 to 1440).

Pursuant to the Section 8 Program, OHA and the partnership entered into a Section 8 Housing Assistance Payments [HAP] contract. 1 Under a HAP contract, the owner collects a…