Landlord-Tenant—"Section 8" Tenant Misstated Her Income—She Suffered From a Disability, Was the Sole Caretaker of Two Minor Daughters, Both of Whom Had Severe Disabilities—There Was Confusion as to Her Unemployment Benefits, as Well as Her Part Time Employment and Termination of Subsidy Rendered Family Homeless—Penalty Was So Disproportionate That It Shocked One's Sense of Fairness—Matter Remanded for Imposition of Lessor Penalty—Court of Appeals Decision in 'Matter of Perez' Distinguished

The petitioner, a disabled, single mother and primary caretaker of her two disabled minor daughters, sought an order pursuant to Article 78 of the CPLR, annulling the respondent, NYC Department of Housing Preservation and Development's (HPD's) determination, terminating the petitioner's Section 8 subsidy and ordering the respondents to reinstate such subsidy and remanding the matter for imposition of a lesser penalty. HPD asserted that the proceeding should be transferred to the Appellate Division on the grounds that the petition raised a question of substantial evidence; that HPD's determination was "reasonable, rational, supported by substantial evidence, and consistent with the applicable laws"; and that "HPD's determination was not disproportionate as a matter of law."