(dissenting).
I dissent from the decision to remand this case to Chief Judge Battisti for his ruling as a single judge on the claim of racial discrimination and from the decision that the Local Cooperation Agreement requirement in 42 U.S.C. § 1415(7) (b) (i) is constitutional.
The dissolution of the three-judge court is not justifiable either from the point of view of judicial economy or the orderly disposition of this case. The three-judge court has already heard the evidence relating both to the claim that the statute is unconstitutional and the claim that defendants discriminated. Therefore, the dissolution of the three-judge court after the ruling on the constitutionality of the statute and prior to ruling on the claim of racial discrimination does not result in a timesavings. See Perez v. Ledesma, 401 U.S. 82, 90, 91 S.Ct. 674, 27 L.Ed.2d 701 (Stewart concurring); Florida Lime and Avocado Growers, Inc. v. Jacobsen, 362 U.S. 73, 84, 85, 80 S.Ct. 568, 4 L.Ed.2d 568 (1960). Moreover, this case could have been decided in a more orderly fashion without dissolution. The practice of avoiding rulings on the constitutionality of a federal statute where relief can reasonably be granted without reaching that question is one consistently sanctioned by the Supreme Court. United States v. Thirty-Seven Photographs, 402 U.S. 363, 369, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971); Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285, 76 L.Ed. 598 (1932). In this case, it is possible that the relief requested could be granted upon a finding of discrimination without reaching the question of the constitutionality of the statute. However, this orderly disposition was precluded by the decision to rule on the constitutionality of the statute first and then remand the remainder.
In dissenting from the dissolution of the three-judge court, I will present my findings concerning the claim of discrimination because I think this may be the only question which the three-judge court should have reached. However, since the Court has ruled that the Local Cooperation Agreement requirement is constitutional, I will also comment on the inadvisibility of broadening the doctrine of James v. Valtierra, 402 U.S. 137, 91 S.Ct. 1331, 28 L.Ed.2d 678 (1971), to uphold that statute.
I. INVIDIOUS DISCRIMINATION BY SUBURBS *
A. THE TEST
Under the equal protection clause of the Fourteenth Amendment to the Constitution and the Civil Rights Acts, state and municipal officials are prohibited from acting with the intent of perpetuating patterns of racial discrimination in housing. Reitman v. Mulkey, 387 U.S. 369, 380, 381, 87 S.Ct. 1627, 18 L.Ed.2d 830 (1967); 42 U.S.C. § 1983. Since the officials seldom admit publicly that their acts are racially motivated, the courts have developed methods to test certain acts or refusals to act in order to determine whether discriminatory intent exists.
In particular the courts have examined, first, whether the act has a racially discriminatory effect and, second, whether there is legitimate nonracial explanation for the act. In Hunter v. Erickson, 393 U.S. 385, 89 S.Ct. 557, 21 L. Ed.2d 616 (1969), for example, the Court emphasized the need to examine the potential impact of an ordinance which mentioned race but appeared to be neutral rather than discriminatory on its face and for which there was no general legislative purpose. At least five circuits have adopted the principle that, even though an act is seemingly neutral on its face and does not mention race, if *1252it results in housing discrimination and if the officials fail to give a reasonable nonracial reason for it, the act constitutes invidious discrimination in violation of the Fourteenth Amendment. Dailey v. City of Lawton, 296 F.Supp. 266 (W.D.Okl.1969), aff’d 425 F.2d 1037, 1039, 1049 (10th Cir. 1970); Crow v. Brown, 332 F.Supp. 382 (N.D.Ga.1971), aff’d 457 F.2d 788 (5th Cir. 1972); Kennedy Park Homes Association v. City of Lackawanna, 318 F.Supp. 669 (W.D.N.Y.), aff’d 436 F.2d 108 (2d Cir. 1970), cert. denied, 401 U.S. 1010, 91 S.Ct. 1256, 28 L.Ed.2d 546 (1971); Hawkins v. Town of Shaw, Mississippi, 437 F.2d 1286 (5th Cir. 1971); Banks v. Perk, 341 F.Supp. 1175 (N.D.Ohio 1972) , aff’d 473 F.2d 910 (6th Cir. 1973) ; Southern Alameda Spanish Speaking Organization v. City of Union City, California, 424 F.2d 291, 295-296 (9th Cir. 1970); Gautreaux v. Chicago Housing Authority, 342 F.Supp. 827, 829 (N.D.Ill.1972). The importance of this doctrine is aptly demonstrated by the situation here presented.
B. ACTION OR INACTION
The defendant suburbs urge the Court to characterize their refusal to negotiate the Local Cooperation Agreement, which is a prerequisite to federal funding for low income housing under 42 U.S.C. § 1415(7) (b) (i), as mere inaction which it claims could not be discriminatory. However, it is unnecessary to rule on the question of whether municipal inaction can be reached under the Fourteenth Amendment because the refusal in this case clearly constitutes affirmative action. See Hawkins v. Town of Shaw, Mississippi, 461 F.2d 1171, 1173 (5th Cir. 1972).
The action required of the defendant suburbs was not actual spending and construction, as would be the case, for example, in the failure to build a school. All that was needed was the approval for the plans made by defendant CMHA and financed by the federal government. Furthermore, the defendant suburbs were pressed on numerous occasions for their decision in this regard. That they viewed their withholding of the Local Cooperation Agreement and negotiations related thereto as affirmative action is evident by_remarks by officials in defendant (Parma) There, both the Mayor and President of Council spoke of the need to exclude public housing and, in the case of the President of City Council, to keep blacks from moving into the suburb by way of public housing.
In other words, the refusals of defendant suburbs to negotiate a Local Cooperation Agreement were not within the analogy of one who walks past a drowning person but were more akin to the analogy of one who holds a life preserver over a drowning person and, upon consideration, decides not to drop it. See C. Black, State Action, Equal Protection and California’s Proposition 14, 81 Harv.L.Rev. 69, 73 (1967). The defendant suburbs who could have effortlessly permitted the development of low income public housing but preferred to prevent it must be said to have acted affirmatively. See Loving v. Virginia, 388 U.S. 1, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967).
C. RACIAL DISCRIMINATION
A brief examination of existing housing patterns and the racial characteristics of plaintiffs and defendant suburbs demonstrates the discriminatory effect of the defendant suburbs’ refusals to negotiate. Cuyahoga County is segregated racially, with ninety-seven per cent of its black population residing in four municipalities. The defendant suburbs are examples of the more than fifty municipalities predominately populated by whites which surround the black population. Four of the defendant suburbs are 99.1 to 99.8 per cent white, with the fifth suburb being 95.5 per cent white.1
*1253Plaintiffs, who are seeking to live in defendant suburbs, are predominately black. In 1971, 86 per cent of the applicants for family units were black and 73 per cent of applicants for both elderly and family units were black. The defendant suburbs’ refusals to negotiate a Local Cooperation Agreement thus have had the effect of preventing integration of the defendant suburbs through the location of public housing in these suburbs.
Defendant suburbs should have, in light of existing housing segregation and the fact that plaintiffs are predominately black, realized that their refusals would have a racially discriminatory effect. However, they did not advance an explanation for such refusals but merely claimed that the refusals were not solely racially motivated.
In contrast, the plaintiffs did not rest their case on the racially discriminatory effect of the refusal and the lack of explanation. They further showed that there was not a plausible nonracial reason for defendant suburbs’ refusals. In particular, they showed that a need for low income public housing existed and that it was not reasonable to assume, without negotiation, that the construction of low income public housing would result in a loss in revenues to the suburban community permitting it.
1. Need. The need for housing must, under a 1968 Executive Order for racially scattered site housing, be determined on a metropolitan basis. 24 C.F.R. Ch. II, Part 200N. Using the scattered site definition of need, the Cleveland City Planning Commission fixed a need for the County and listed the number of units, varying between 158 and 2105, needed within each of the defendant suburbs. That testimony was substantiated by the fact that approximately 5600 qualified persons are presently on the waiting list for low income public housing and that many of these persons prefer suburban locations.
Assuming for purposes of argument, however, that need must be determined within each suburb, the plaintiffs still were able to show that the need existed. They presented expert testimony to the effect that numerous welfare recipients already living within each suburb were unable to afford adequate housing.
2. Loss or Gain in Revenues. Under both state and federal statutes, low income public housing is exempt from state and local taxes. 42 U.S.C. § 1410(h); Ohio Rev.Code § 3735.34. In lieu of taxes, the housing project pays 10 per cent of its shelter rents to the taxing authority. Id. The public housing projects must, under federal statute, pay the municipality for all services at the same rate as private housing projects. 42 U.S.C. § 1410(i).
The tax loss or gain to the municipality as the result of low income public housing located there will therefore depend on the difference between 10 per cent of the shelter rents and the taxes which would have resulted from an alternative use of the land in question. When, without the public housing, the land would be undeveloped, would be used for a church, street or other tax exempt function, or would be less effectively developed, the municipality would gain revenues as the result of a low income development. Thus, for example, the CMHA developed properties in Cleveland yielded higher revenues after their development than had those properties prior to development.
Because the loss or gain is dependent on so many variables, it is not possible to determine whether a net loss would result without first negotiating with regard to specific parcels of land and specific kinds of housing projects. Thus, the prospect of loss of revenue in this case could not have motivated the defendant suburbs to refuse to negotiate toward the signing of a Local Cooperation Agreement.
The defendant suburbs have not admitted that their refusals to negotiate are racially motivated. However, the situation presented is a clear case of housing discrimination. While there áre *1254a few white prospective tenants and a fraction of a percentage of blacks within defendant suburbs, the situation is significantly one of white versus black. The defendant suburbs have repeatedly refused not only to sign a Local Cooperation Agreement but even to negotiate with defendant CMHA. They have not only failed to state compelling reasons for such a refusal; they have refused to give any reason. Moreover, it appears that no plausible non-racial reason exists.
D. STATE ACTION
I have made a finding of racial discrimination. However, in order to bring the discrimination of defendant suburbs within the Civil Rights Act, 42 U.S.C. § 1983, it is also necessary to find that the officials acted under color of state or local law. District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613 (1973). It is necessary, therefore, to deal with defendants’ contention that their acts were sanctioned by the federal statute requiring a Local Cooperation Agreement prior to funding, 42 U.S.C. § 1415(7) (b) (i), rather than by local law and thus not within the purview of § 1983. The major error with this contention is that it rests on the interpretation of § 1415(7) (b) (i) when it was passed in 1949 rather than the interpretation which must be followed today after subsequent legislation and court decisions in the civil rights field.
As a general rule, when a federal statute conflicts with later legislation or with judicial interpretations of the Constitution, the courts are under a duty to construe the statute in light of prevailing law, where fairly possible, so that it may be preserved. United States v. Thirty-Seven Photographs, 402 U.S. 363, 369, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971); Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285, 76 L.Ed. 598 (1932). In this case, the major legal development since the 1949 enactment of § 1415(7) (b) (i) has been the creation of an affirmative duty to promote racial integration on the part of, the federal government.
In 1949 the federal government had no legal duty to promote racial integration. The federal authorities were then permitted to stand by while segregation was perpetrated by others. Bradley v. School Board of City of Richmond, Virginia, D.C., 338 F.Supp. 67, 217, rev’d on other grounds 462 F.2d 1058 (4th Cir. 1972). In fact, until 1962 federal officials did not object when local public housing authorities planned developments on a racially segregated basis. 338 F.Supp. at 219.
Since 1949, the Court has ruled that local governments may not encourage the continuation of patterns of racial segregation. Hunter v. Erickson, 393 U.S. 385, 89 S.Ct. 557, 21 L.Ed.2d 616 (1969). Furthermore, under the Fair Housing Act of 1968 and the amendment to programs of federal assistance in 1964, the federal government has an affirmative duty to foster and plan integrated housing. 42 U.S.C. §§ 2000d et seq., 3601 et seq.; Shannon v. HUD, 436 F.2d 809, 816 (3d Cir. 1970); Crow v. Brown, 332 F.Supp. 382, 390 (N.D.Ga.1971) , aff’d 457 F.2d 788 (5th Cir. 1972) ; Gautreaux v. Romney, 448 F.2d 731, 735-741 (7th Cir. 1971).
Thus, if § 1415(7) (b) (i) is read to preserve it in light of the changes and amendments by implication, it would sanction only a refusal to negotiate a Local Cooperation Agreement which was nonracial in character and which is consistent with the duty to foster integration. Under its present interpretation it could not and does not sanction the defendant suburbs’ racial discrimination. Thus, the defendant suburbs’ refusals were under their authority as local officials and therefore under color of state law so as to be within the purview of § 1983.
E. CONCLUSION
The evidence here shows that the defendant suburbs, acting under color of *1255local law, have refused to negotiate the signing of a Local Cooperation Agreement. Their refusals have had the effect of preventing the construction of badly needed housing for the predominately black applicants who seek residence away from the squalor of the central city. In face of the tragic effect of the defendant suburbs’ refusals to negotiate, they have advanced no legitimate nonracial reason and, from the evidence presented, it appears that none exists.
The effects of racial segregation are destroying the community. The predominately black inner city is becoming a concentration of high crime and poor schools. If the Court permits acts such as those of the defendants in this case to block any progress in alleviating the ghetto, it will, in effect, license all those who are able to erect political barriers between themselves and the ghettos a few blocks away to practice housing discrimination under the guise of local autonomy and to perpetuate the racial division of our community. For the reasons stated above, I would rule that defendant suburbs, under color of local law, have discriminated against plaintiffs on the basis of race in refusing to negotiate the Local Cooperation Agreement which is required under 42 U.S.C. § 1415(7) (b) (i).
II. CONSTITUTIONALITY OF THE LOCAL COOPERATION AGREEMENT REQUIREMENT
The crucial issue presented by the challenge to the constitutionality of the Local Cooperationg Agreement requirement is the applicability of the doctrine announced in James v. Valtierra, 402 U.S. 137, 91 S.Ct. 1331, 28 L.Ed.2d 678 (1971). I believe that the doctrine does not apply to the statute at issue here and should not be broadened to uphold it.
In James v. Valtierra, the Supreme Court upheld the validity of a California constitutional amendment which required a referendum to approve the development of low income public housing. In so doing, the Court emphasized that it was not dealing with a legislative hurdle required only of low income public housing but rather with a constitutional scheme which required the same legislative hurdle for many other kinds of legislation, several of which were listed by the Court in its opinion. 402 U.S. at 142, 91 S.Ct. 1331. See also Sisters of Prov. of St. Mary of Woods v. City of Evanston, 335 F.Supp. 396, 403 (N.D.Ill.1971). The Court stated:
“Furthermore, an examination of California law reveals that persons advocating low-income housing have not been singled out for mandatory referendums while no other group must face that obstacle.” 402 U.S. at 142, 91 S.Ct. at 1334.
In contrast, the Local Cooperation Agreement requirement which is at issue here is unique to low income public housing. Those federally-assisted housing programs which are not for low income persons do not require a local approval. See, e. g., 12 U.S.C. §§ 1709(b), (h), (i), (m); 1715e, 17151, 1715m, 1715n, u, y, z, z-1; and 1713 (federal homeowner mortgage insurance and mortgage subsidy programs); 12 U.S.C. § 170lq (loans for housing for elderly and handicapped); 38 U.S.C. §§ 801, 1810, 1811 (housing subsidies for veterans). The federally-assisted housing programs for low income persons require local approval or a cooperation agreement. 42 U.S.C. § 1421b (a) (2) (leased housing); P.L. 92-383, 86 Stat. 540 (rent supplement); 42 U.S.C. § 3304(b)(1) (city demonstration).
The fact that local approval is required only for low income housing would require even a mildly cynical person to doubt the general legislative purpose of such a requirement. Moreover, when the reasons advanced for the requirement are examined it is evident that, first, the Local Cooperation Agreement is not required to insure that a local determination of need for low income housing is made. In fact, a local public *1256body, the local housing authority, makes such a determination of need prior to applying for funds. 42 U.S.C. § 1415(7) (b) (ii), (iii). Second, the Agreement is not necessary to the establishment of the tax exempt status provided in the federal statutes. Indeed, such exemption is provided within the Housing Act and reaffirmed by state statute. 42 U.S.C. § 1410(h) ; Ohio Rev.Code § 8735.34. Third, the slum clearance provisions of 42 U.S.C. § 1410(a) have been largely rendered moot by civil rights legislation and the “scattered site” orders which mean that public housing will more often be located in suburban municipalities where no slums exist. 42 U.S.C. §§ 2000d, 3601 et seq.; 24 C.F.R. Ch. II, Part 200N. Fourth, the Agreement does not insure the consent of the municipality to accept lower payments for municipal services, because the public housing projects must, under federal law, pay for municipal services just as private developers. 42 U.S.C. § 1410 (i). Finally, it would be unusual to require the Agreement simply because the receipt of ten per cent of rents paid to by public housing rather than taxes may in some instances result in a loss of revenues. Those developing other tax-exempt land uses, such as churches, federal buildings, and universities, do not sign such an agreement although those uses yield no taxes and no payments in lieu of taxes. Thus, there is no general legislative purpose to justify the Local Cooperation Agreement in this case.
Because low income public housing provides for such a large percentage of blacks when compared with the population as a whole, the added obstacle for low income public housing assists localities not only in excluding low income persons but also in excluding blacks.2 The frequent use of the requirement of local consent to exclude blacks is evidenced by the cases listed below, in which federal courts found that localities trying to prohibit low income housing had racially discriminatory purposes. Dailey v. City of Lawton, 296 F.Supp. 266 (W.D.Okl.1969), aff’d 425 F.2d 1037, 1039, 1040 (10th Cir. 1970); Crow v. Brown, 332 F.Supp. 382 (N.D.Ga.1971) , aff’d 457 F.2d 788 (5th Cir. 1972) ; Kennedy Park Homes Association v. City of Lackawanna, 318 F.Supp. 669 (W.D.N.Y.), aff’d 436 F.2d 108 (2d Cir. 1970), cert. denied, 401 U.S. 1010, 91 S.Ct. 1256, 28 L.Ed.2d 546 (1971); Hawkins v. Town of Shaw, Mississippi, 437 F.2d 1286 (5th Cir. 1971); Banks v. Perk, 341 F.Supp. 1175 (N.D.Ohio 1972) , aff’d 473 F.2d 910 (6th Cir. 1973) ; Southern Alameda Spanish Speaking Organization v. City of Union City, California, 424 F.2d 291, 295-296 (9th Cir. 1970); Gautreaux v. Chicago Housing Authority, 342 F.Supp. 827, 829 (N.D.Ill.1972).
Because the legislation at issue here does not come within the holding of James v. Valtierra, it is incumbent upon the Court to consider the advisibility of applying the doctrine announced in Valtierra, to legislation which clearly classifies on the basis of poverty and places an extra legislative hurdle only for those who are seeking low income public housing. I oppose any such broadening of the Valtierra doctrine, because I believe that it would render the courts ineffective to enforce the national policy of racial integration.
In the past, enforcement of racial integration has been possible through striking down racial classifications for which there was no compelling state interest. More recently, however, as the result of more subtle means of discrimination being adopted, civil rights enforcement has focused upon statutes or acts in which the group treated differently is described without mentioning race to accomplish discriminatory results. Thus, for example, the southern voting districts replaced racial prohibitions with literacy tests and these were struck down, South Carolina v. Katzen*1257bach, 383 U.S. 301, 86 S.Ct. 803, 15 L.Ed.2d 769 (1966); Lassiter v. Northampton County Board of Elections, 360 U.S. 45, 79 S.Ct. 985, 3 L.Ed.2d 1072; and with voting fees and these were struck down, Harman v. Forssenius, 380 U.S. 528, 543, 544, 85 S.Ct. 1177, 14 L.Ed.2d 50 (1965); and with gerrymandering and this was struck down, Gomillion v. Lightfoot, 364 U.S. 339, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960). Employers replaced racial restrictions with intelligence tests and these were struck down. Griggs v. Duke Power Co., 401 U.S. 424, 431, 432, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). In a similar matter, the Local Cooperation Agreement requirement replaced a policy of permitting municipalities to exclude on the basis of race with one permitting exclusion on the basis of poverty — to accomplish the same result.
In conclusion, I agree with the dissenters in Valtierra who warned that it is “too late in the day” to treat provisions classifying on the basis of poverty in the housing field as totally benign technical economic classifications which should not be subject to close judicial scrutiny unless applied to areas recognized by the Supreme Court as “fundamental rights” (criminal proceedings, travel, divorce, voting, or privacy). 402 U.S. 145, 91 S.Ct. 1331, 28 L.Ed.2d 678. The integration of metropolitan housing, schools and government cannot effectively be accomplished independently and, although this integration has not been classified as a “fundamental right” by the Supreme Court, it is certainly basic to racial peace and equality. Lindsey v. Normet, 405 U.S. 56, 74, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972). To fail to scrutinize a poverty classification in housing when it is so frequently used to subvert the courts’ efforts to enforce the Fourteenth Amendment is to ignore the means used by white suburban communities in this decade to exclude blacks from their exclusive enclaves within the nation’s metropolitan areas. Therefore, I would not extend Valtierra to uphold the Local Cooperation Agreement requirement.
I find no basis upon which to order relief and therefore would dismiss the case as to defendant City of Cleveland.
. Garfield Heights is 95.4 per cent white. However, all but two of its black residents live in an area adjacent to the City of Cleveland. These figures are based on the 1970 census.
. National Commission on Urban Problems, Building The American City 114 (U.S. Govt. Printing Office 1968).