OAKES, Circuit Judge:

The history of federal aid to the beleagured cities of the United States has seen a transition from urban renewal to the Model Cities Program, which expanded categorical grants for urban needs, to general revenue sharing in the 1970s, with accompanying block grants in general functional areas, such as manpower training, education and law enforcement. One of the more recent block grant programs is that for "community developments grants," authorized by the Housing and Community Development Act of 1974, § 103, 42 U.S.C. § 5303 (Supp. V 1975). This appeal, apparently the first of its kind to be decided under the 1974 Act, requires us to decide whether the Department of Housing and Urban Development (HUD) improperly approved certain applications for community development grants.

The City of Hartford, Connecticut, and two of its low-income residents have sued to enjoin seven suburban communities from receiving or expending grants approved by HUD under the Act, principally on the ground that the grant applications either contained no estimate, or an arbitrary, wholly inaccurate estimate, of the number of lower income persons "expected to reside" within the community, an apparent violation of 42 U.S.C. § 5304(a)(4)(A) (Supp. V 1975). A permanent injunction was entered by the United States District Court for the District of Connecticut, M. Joseph Blumenfeld, Judge. City of Hartford v. Hills, 408 F.Supp. 889 (D.Conn. 1976). The towns of Glastonbury, West Hartford and East Hartford appeal; HUD does not appeal, nor do the other towns that were originally defendants and have been enjoined by the order below. We affirm.

I. FACTS [4] A. The Structure of the Act

Title I of the Housing and Community Development Act of 1974 established a new system of federal assistance for community development activities, to be administered by HUD, and consolidated and superseded previous categorical programs, each of which had specified purposes and particular statutory and administrative restrictions. Title I, in short, was intended to create a streamlined program dealing comprehensively with urban problems previously addressed in a piecemeal fashion. See S.Rep. No. 93-693, 93d Cong., 2d Sess. 1-2, 48-49, reprinted in U.S.Code Cong. Admin.News pp. 4273, 4273-74, 4318-19; H.R. Rep. No. 93-1114, 93d Cong., 2d Sess. 2-3 (1974). The community development grants authorized by the Act may be used by localities in a variety of ways related to improvement of the physical and economic environment, such as for the acquisition of blighted land and historic sites, the construction or improvement of street lights and playgrounds, the enforcement of housing codes in deteriorating areas, and the development of community and management planning capabilities. 42 U.S.C. § 5305 (Supp. V 1975); see 24 C.F.R. § 570.200(a) (1976). The Title I funds may not be used, however, for the construction of housing or the payment of housing allowances, with minor exceptions not relevant here, id. § 570.201(f), (g). These matters are covered elsewhere in the Act, particularly in Title II, codified at 42 U.S.C. § 1437 et seq (Supp. V 1975).

In terms of administrative review, Title I represents a compromise between the Administration's revenue sharing approach, under which communities would have automatically received funds on the basis of objective needs criteria, without any application or review process, and the approach favored by some members of Congress, which would have imposed substantial federal preconditions to grant awards and established elaborate application and review procedures. See generally Fishman, Title I of the Housing and Community Development Act of 1974: New Federal and Local Dynamics in Community; Development, 7 Urban Law. 189, 191-200 (1975). The Act requires that communities apply to HUD, 42 U.S.C. § 5304(a) (Supp. V 1975), but limits HUD's review power in several ways. Cities and counties are declared "entitled" to the grant funds, id. § 5306(a), and an application is deemed approved 75 days after receipt by HUD unless the Secretary gives the applicant "specific reasons for disapproval," id. § 5304(f). The Secretary must approve an application, moreover, unless she determines, inter alia, that the applicant's description of community "needs and objectives is plainly inconsistent with [generally available] facts or data," id. § 5304(c). Finally, with regard to requirements that an applicant comply with certain civil rights laws and provide for citizen participation in the grant planning process, the Secretary may rely upon the "satisfactory assurances" of the applicant, rather than make an independent investigation. Id. § 5304(a)(5), (6).

While community development grants may not be used for housing, Title I was designed in part to "[foster] the undertaking of housing and community development activities in a coordinated and mutually supportive manner." Id. § 5301(d)(4). Moreover, specific objectives of the Title include provision of "a decent home," especially for those with low and moderate incomes, id. § 5301(c)(3), and "the spatial deconcentration of housing opportunities for persons of lower income," id. § 5301(c)(6). In accordance with these goals, the grant application submitted to HUD must include a "housing assistance plan" (HAP) that "accurately surveys the condition of the housing stock in the community and assesses the housing assistance needs of lower-income persons . . . residing in or expected to reside in the community . . .," id. § 5304(a)(4)(A), with "a realistic annual goal" specified for housing assistance, id. § 5304(a)(4)(B). The housing needs detailed in the HAP can then be met with funds available under Title II of the Act. Thus (and this is crucial to the case) the HAP serves as the vehicle tying together the community development and housing assistance portions of the Act, in furtherance of the Act's overall goal of coordination of federal urban efforts, see id. § 5301(d). The critical importance of the HAP in the overall scheme of the 1974 Act is underscored in the Act itself and in the legislative history; it has been recognized by HUD and was fully appreciated by the court below.

B. Appellants' Grant Applications

The three suburban towns here involved submitted applications for community development grants to HUD in the spring of 1975, after having first sent the applications "for review and comment" to the Hartford region's area wide planning agency, the Capital Region Council of Governments (CRCOG), pursuant to 42 U.S.C. § 5304(e) (Supp. V 1975). The CRCOG received adverse comments on the HAP and other aspects of the applications from the City of Hartford and a Hartford civil rights group, and it forwarded these comments to HUD. The HUD regional director in Boston, in a late April memorandum to the director of HUD's Hartford office, found the City's comments in particular to be "well documented and of a very serious nature." In addition, the area director of HUD's Equal Opportunity Division recommended disapproval of all three applications.

While the Hartford office was in the process of reviewing the applications in light of these criticisms, it received a May, 1975, memorandum from HUD's Assistant Secretary for Community Planning and Development. That memorandum recognized that both grant applicants and HUD were having difficulty estimating the number of low-income persons "expected to reside in the community," an estimate central to the HAP, see note 6 supra, and suggested possible sources of data from which HUD might develop its own figures. It also gave applicants an option that eventually led to this case: instead of developing its own "expected to reside" figure or accepting HUD's, a locality could obtain approval of its application simply by "indicat[ing]" the steps it would take to "identify a more appropriate needs figure by the time of its second year submission." The memorandum was quite explicit as to the meaning of this option: HUD would not require the adoption of any "expected to reside" figure on first year grant applications such as those in issue here.

Appellants West Hartford and Glastonbury, along with several other towns, accepted the option offered by HUD and thus submitted zero figures for the "expected to reside" portion of the HAPs in the final applications approved by HUD. The two towns were granted $999,000 and $910,000 respectively. East Hartford's application had been approved prior to receipt of HUD's May memorandum, and it contained an "expected to reside" figure of 131, derived exclusively from the waiting list of the town's public housing authority. East Hartford was granted $440,000.

II. STANDING

Appellants challenge the standing of both the City of Hartford and the low-income plaintiffs to seek the injunction granted by the court below. The district court concluded that both had standing, 408 F.Supp. at 893-97, but it lacked the benefit of our en banc decision in Evans v. Lynn, 537 F.2d 571, 589 (2d Cir. 1976), petition for cert. filed, 45 U.S.L.W. 3346 (U.S. Oct. 29, 1976), which is primarily relevant to the claim of the low-income plaintiffs. We find Evans to be distinguishable from the instant case and affirm the district court's decision upholding the standing of all appellees.

A. The City of Hartford

The standing of the City here is dependent upon a showing both that the City has been injured "in fact" by HUD's approval of the challenged grants and that the interest the City seeks to protect is one "arguably within the zone of interests to be protected . . . by the statute." Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 152-53, 90 S.Ct. 827, 830, 25 L.Ed.2d 184 (1970); see Evans v. Lynn, supra, 537 F.2d at 592. Since the injury in fact test must be met at the threshold, 537 F.2d at 592; see K. Davis, Administrative Law of the Seventies, § 22.02-1, at 487 (1976), we turn first to its application to the City.

The district court found that Hartford had been injured by HUD's approval of the grants because, if the grants had been disapproved, the amounts allocated for them would have been reallocated, pursuant to 42 U.S.C. § 5306(e) (Supp. V 1975), to other Connecticut "metropolitan areas" (defined in id. § 5302(a)(3) to mean "standard metropolitan statistical areas [SMSAs] as established by the Office of Management and Budget"), among which Hartford would have had a priority position. 408 F.Supp. at 894-95. Appellants argue that, under the statute as modified by HUD regulations, 24 C.F.R. § 570.409(f)(1) (1976), Hartford's position is no better than that of all other towns — we would add, except those with disapproved applications — in the Hartford SMSA. But this demonstrates at most that Hartford's financial stake may not be as large as the sum of all the grants involved in this litigation; it is a long way from proving that Hartford lacks a stake altogether. See Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (plaintiff showing "distinct and palpable injury to himself" has standing, even if large group shares the injury); K. Davis, supra, § 22.02-10, at 507 ("The line is not between a substantial injury and an insubstantial injury. The line is between injury and no injury."). Appellant's argument, moreover, does not recognize that HUD is unlikely to reallocate funds to localities that did not apply originally for community development funds in 1975; with these localities and the seven towns enjoined below eliminated from the reallocation pool, only Hartford and two other towns in the SMSA would remain eligible.

Appellants further argue that reallocation funds will be distributed only to applicants with "urgent needs," citing 24 C.F.R. § 570.401(b) (1976) (defining "urgent needs") and id. § 570.409(d), (f) (establishing criteria and priorities for reallocation), and that Hartford has shown no such needs. There is no indication, however, that Hartford — a city with a high concentration of lower income and unemployed persons and welfare recipients, see 408 F.Supp. at 893-94 n. 14, and thus likely to have some of the financial resources problems to which the "urgent needs" definition is addressed, see 24 C.F.R. § 570.401(b) (1976) — will not be able to make the requisite showing when it applies to HUD for reallocation funds, as it has indicated its intention to do, see City of Hartford v. Hills, 408 F.Supp. 879, 885-86 (D.Conn. 1975) (decision granting preliminary injunction). Appellants' argument essentially would require a city to present its reallocation application to the district court, rather than to HUD, before the court makes the decision that releases funds to be reallocated. Such a requirement would be at least wasteful of resources, since the court could decide that HUD had correctly approved challenged grants, and in any event would require a city to make a far more detailed showing of injury than any previous case has required, see Warth v. Seldin, supra, 422 U.S. at 504, 95 S.Ct. at 2208 (plaintiffs need only "allege" facts from which it can "reasonably . . . be inferred that . . . there is a substantial probability" of injury). The strong likelihood that Hartford will receive reallocated funds, while not an absolute certainty, is therefore sufficient to establish that Hartford will "benefit in a tangible way from the courts' intervention." Id. at 508, 95 S.Ct. at 2210; cf. Evans v. Lynn, supra, 537 F.2d at 595 (no injury in fact shown when plaintiffs "claim[ed] only that, had the grants not been approved, the monies could conceivably have gone to some other, as yet totally imaginary project . . . which might have" benefited plaintiffs (emphasis in original)).

There is a second, less quantifiable way in which the City has been injured by HUD's approval of the grants. The district court found that "[t]he housing situation in Hartford is bleak," referring especially to the high concentration of subsidized, low-rent housing in the City relative to the greater Hartford region and to the overcrowding caused by a housing shortage in the City. 408 F.Supp. at 893-94 n. 14. The elimination or amelioration of precisely these sorts of problems is an explicit goal of the Act: 42 U.S.C. § 5301(c) (Supp. V 1975), quoted in full at note 5 supra, declares that the grants authorized are for the support of activities with such objectives as "the elimination of slums and blight" and "conditions . . . detrimental to health, safety, and public welfare," and, most importantly for present purposes,

the reduction of the isolation of income groups within communities and geographical areas and the promotion of an increase in the diversity and vitality of neighborhoods through the spatial deconcentration of housing opportunities for persons of lower income . . ..

See also id. § 5301(a)(1) (declaration of Congress that urban problems arise from, inter alia, "the concentration of persons of lower income in central cities"). This spatial deconcentration objective, the district court found, cannot be met unless an estimate is made of the number of lower income persons "expected to reside" in the community. 408 F.Supp. at 901-02. The Act's legislative history also suggests a close relationship between spatial deconcentration and the "expected to reside" figure. See H.R. Rep. No. 93-1114, supra, at 3, 6-7. It follows that, when the Secretary approved applications without these estimates, she was substantially lessening the probability that the towns would use the funds received to promote spatial deconcentration and related objectives. Since Hartford would have been the direct beneficiary of spatial deconcentration efforts by its suburbs — to take a concrete example, the City's welfare and housing subsidy outlays would be decreased if large numbers of lower income persons moved to the suburbs — the City was plainly injured by the Secretary's approval of grant applications lacking "expected to reside" figures.

In addition to establishing injury in fact, we take it that Hartford must show that the interest it seeks to protect is "arguably within the zone of interests to be protected . . . by the statute." Association of Data Processing Service Organizations v. Camp, supra, 397 U.S. at 153, 90 S.Ct. at 830. The statute here, like the one in Data Processing, "do[es] not in terms protect a specified group. But [its] general policy is apparent. . . ." Id. at 157, 90 S.Ct. at 832. The objectives quoted in the preceding paragraph indicate a concern about persons of low and moderate income, but, contrary to appellants' suggestion, these individuals as individuals are not the only concern of the Act. "The primary objective of [Title I] is the development of viable urban communities . . .." 42 U.S.C. § 5301(c) (Supp. V 1975). In the list of the purposes for which grants are to be awarded, one finds repeated references to this theme, expressed in terms of "the welfare of the community," "improvement of . . . community services," "sound community development," and "the revitalization of . . . neighborhoods." Id. § 5301(c)(1), (4), (6); see note 5 supra. As the legal entity responsible for representation of the community as a community, Hartford plainly has an interest that falls within the zone of interests protected by the Act. We agree with the district court's conclusion: "[T]here can be no doubt that the statute was intended to ameliorate the problems facing the City of Hartford." 408 F.Supp. at 894. Thus, contrary to appellants' suggestion, Hartford is not suing on behalf of its citizens as parens patriae, but is instead seeking to vindicate interests of its own, which also happen to be, to some extent, congruent with the interests of individual city residents. See California v. Automobile Manufacturers Association ( In re Multidistrict Vehicle Air Pollution M.D.L. No. 31), 481 F.2d 122, 131 (9th Cir.), cert. denied, 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973).

B. The Low-Income Plaintiffs

Like the City, the individual plaintiffs — low-income Hartford residents living in substandard housing, according to affidavits accepted by the district court, 408 F.Supp. at 895 n. 18 — must meet both the injury in fact and zone of interests tests in order to have standing to sue. The latter test is easily met here, since the 1974 Act was intended, and the grant funds must be used, to benefit principally "persons of low and moderate income," a phrase repeated throughout 42 U.S.C. § 5301(c) (Supp. V 1975), see note 5 supra. Moreover, the specific statutory requirement at issue here, the HAP requirement, involves an assessment of, and planning for, "the needs of lower-income persons," both residing in and "expected to reside" in the locality. 42 U.S.C. § 5304(a)(4) (Supp. V 1975); see note 6 supra. See also 42 U.S.C. § 5304(b)(2) (Supp. V 1975) (grant applicant must certify that its program will "give maximum feasible priority to activities which will benefit low- or moderate-income families"). It seems clear that Title I's "zone of interests" encompasses the interests of low-income residents of a central city.

The more difficult issue is whether the individual plaintiffs have been injured in fact by the Secretary's approval of appellants' grant applications. The absence of such injury led to findings that low-income plaintiffs lacked standing in Warth v. Seldin, supra, and Evans v. Lynn, supra. Because the facts of both cases were quite different from the facts of the instant case, however, neither is controlling here. In Warth the low-income plaintiffs alleged that they had been excluded from a town's housing market by virtue of the town's "exclusionary" zoning ordinance, which they claimed was constitutionally defective. The Supreme Court ruled that the plaintiffs had failed to show that they "personally would benefit in a tangible way from the courts' intervention," 422 U.S. at 508, 95 S.Ct. 2197, in large part because "their inability to reside in [the town] is the consequence of the economics of the area housing market, rather than of respondents' assertedly illegal acts," id. at 506, 95 S.Ct. at 2209. Plaintiffs here are asserting a specific violation of a statute, not a generalized claim that a law is unconstitutional, a factor of substantial importance in view of the Warth Court's recognition that "[t]he actual or threatened injury required by Art. III may exist solely by virtue of `statutes creating legal rights, the invasion of which creates standing . . .'" Id. at 500, 95 S.Ct. at 2206, quoting Linda R. S. v. Richard D., 410 U.S. 614, 617 n.3, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973). As discussed above, the statute at issue here was designed to protect persons in the plaintiffs' situation, and the approval of applications lacking legitimate "expected to reside" figures in the HAPs appears to have directly injured the plaintiffs, since the HAPs were intended to lead to greater low-income housing opportunities on a deconcentrated, regional basis, see Hills v. Gautreaux, 425 U.S. 284, 304-307 n. 21, 96 S.Ct. 1538, 47 L.Ed.2d 792 (1976). The district court's intervention, moreover, should be of tangible benefit to the plaintiffs, because it is likely to lead to a reallocation of funds to Hartford, see supra, which will be required to use the funds for the benefit of persons of low and moderate income, in accordance with the purposes of the Act.

Evans v. Lynn is also distinguishable. Although the case has some superficial similarity to the instant case, in that it was an attempt to enjoin HUD's award of federal grant funds on statutory grounds, the en banc majority held that the plaintiffs there failed to demonstrate that then had been injured by the grant awards or that court intervention would be of benefit to them. See 537 F.2d at 595. Beyond that, as Judge Mansfield pointed out in his concurring opinion, if the awards to the New York town in Evans had been enjoined, "HUD would presumably [have been] free to use the money to aid construction of sewers and parks in San Francisco." Id. at 598. HUD does not have any such freedom in the instant case; the statute gives reallocation priority to "metropolitan area[s] in the same state," 42 U.S.C. § 5306(e) (Supp. V 1975), and HUD's own regulations give priority "to the same metropolitan area," 24 C.F.R. § 570.409(f)(1)(i) (1976). While "[t]he most" the Evans plaintiffs could expect was "the satisfaction that federal funds will not be misused," 537 F.2d at 598 (Mansfield, J., concurring), plaintiffs here can expect concrete benefits resulting from both reallocation of community development funds and increased attention to the low-income housing improvement and spatial deconcentration objectives of the Act.

III. THE ALLEGED VIOLATIONS OF THE ACT

In considering the substance of plaintiffs' allegations that the Housing and Community Development Act was violated by HUD's approval of the challenged grants, we will examine the claim as to East Hartford separately from that as to West Hartford and Glastonbury, because, as indicated supra, the latter two towns submitted "expected to reside" figures of zero on their HAPs, whereas East Hartford submitted an actual number (131).

A. West Hartford and Glastonbury

In submitting grant applications with zero "expected to reside" figures, the two towns were following the option given to them by HUD in the May, 1975, memorandum. The district court held that this option constituted an invalid waiver of a crucial portion of the 1974 Act, so that the appellants in selecting the option, and HUD in approving the grants, all acted contrary to the Act. 408 F.Supp. at 902. HUD now appears to concur in this holding; its amicus brief explicitly declines even partially to contest the district court's conclusion in this regard and assures us that HUD has modified its regulations to bar zero figures submitted because of an alleged unavailability of data. Brief for Secretary of Housing and Urban Development as Amicus Curiae at 16-18.

We agree with the district court and with the HUD amicus brief. The Act itself could not be more clear: no grant may be made unless the applicant submits an application with six elements, one of which is the housing assistance plan, 42 U.S.C. § 5304(a) (Supp. V 1975); the plan must "accurately" assess the housing needs of low-income persons, "residing in or expected to reside in the community," id. § 5304(a)(4)(A). See note 6 supra. Were this the only statutory statement relating to the grant application, it would probably enable us to find that HUD's memorandum improperly authorized a waiver, for the simple reason that, absent some overriding exigency, an administrative agency may not waive an express statutory requirement. Cf. Morton v. Ruiz, 415 U.S. 199, 232, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974) (agency's decisions must be consistent with governing legislation); American Ship Building Co. v. NLRB, 380 U.S. 300, 318, 85 S.Ct. 955, 967, 13 L.Ed.2d 855 (1965) (courts must prevent "the unauthorized assumption by an agency of major policy decisions properly made by Congress"); Marsano v. Laird, 412 F.2d 65, 69 (2d Cir. 1969) ("an express statutory right cannot be impaired by administrative action").

The Act does give further guidance, however. In the subsection following the application requirements, it allows the Secretary, in certain circumstances, to waive, or accept the applicant's certification as to five of the six requirements. 42 U.S.C. § 5304(b)(3), (4) (Supp. V 1975). The only requirement not listed is that for the HAP. The conclusion is virtually inescapable that the Secretary lacked discretion to waive the HAP requirement. See 408 F.Supp. at 901; text at and notes 7-10 supra.

It is true that, as appellants argue, waiver of submission of the "expected to reside" figure is not waiver of the entire HAP requirement. A reading of the whole statute, however, makes it evident that the HAP's value is substantially undermined by omission of this figure. If an applicant makes no effort to predict the number of lower income persons it expects to reside within its boundaries in the near future, it is difficult to see how the applicant can "specif[y] a realistic annual goal" for assisted housing or indicate with any reliability where the proposed housing will be located, both of which it must do in order to complete the HAP. 42 U.S.C. § 5304(a)(4)(B), (C) (Supp. V 1975); see note 6 supra. In the legislative history of the Act, Congress "emphasize[d]" the importance of communities, "in assessing their housing needs, look[ing] beyond the needs of their residents to those who can be expected to reside in the community as well." H.R.Rep. No. 93-1114, supra, at 7. See also 408 F.Supp. at 901 ("the `expected to reside' figure is the keystone to the spatial deconcentration objective of the 1974 Act" (emphasis in original)). Because of the central role of the "expected to reside" estimate, we think eminently sound Judge Blumenfeld's conclusion that a waiver of this requirement is in effect a waiver of the entire HAP. See id. at 901-02.

Appellants argue in the alternative that the zero figures can be considered legitimate, because the data necessary to make accurate "expected to reside" estimates was not available. The Secretary was thus forced by practical exigencies, they contend, to "defer" this requirement. We believe this argument entirely misunderstands the meaning of a statutory directive. When Congress directs that something be done, it should be done, even if the data base is far from perfect. Cf. Adams v. Richardson, 156 U.S.App.D.C. 267, 480 F.2d 1159, 1164 (1973) (en banc) (per curiam) (lack of agency experience in area does not "justif[y] a failure to comply with a Congressional mandate"); Environmental Defense Fund, Inc. v. Ruckelshaus, 142 U.S.App.D.C. 74, 439 F.2d 584, 592-95 (1971) (agency must take action even if not convinced "beyond a doubt" as to proper course); L. Tribe, Channeling Technology Through Law 33 (1973) (technology assessment frequently amounts to nothing more than "reconciling highly imprecise professional hunches"). Congress was presumably aware of the data collection problems localities might face, see H.R.Rep. No. 93-1114, supra, at 7, but it apparently preferred an administrative decision based on incomplete data to no decision at all. It is clear that a substantial amount of data was available to the towns; the very HUD memorandum that gave them the zero figure option also listed a variety of data sources from which a reasonable figure could be calculated. Educated guesses by the towns as to how many low-income persons might be expected to reside therein would surely have been better than the sham zero figures in promoting the rational community planning with which Congress was concerned.

B. East Hartford

The Town of East Hartford did submit an "expected to reside" figure, but the district court concluded that HUD's review of this figure's validity was so seriously inadequate as to constitute an abuse of discretion. The figure submitted was based upon a projection of the waiting list of the East Hartford Housing Authority, and HUD failed to verify in any way whether this figure was a valid one. While HUD sought to justify this failure by asserting an absence of data, HUD's own regulations, application instructions, and memoranda suggested sources of data that were "generally available," 42 U.S.C. § 5304(c)(1) (Supp. V 1975), and that should have been used by HUD to verify the accuracy of East Hartford's figure. Thus, the district court concluded, "HUD was doubly at fault — it did not obtain the generally available information required for a proper review, and it acted upon the basis of inadequate information." 408 F.Supp. at 903.

As the district court recognized, id. at 903 n. 57, the general proposition that review of agency discretion is narrowly circumscribed, see Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), is particularly compelling in the case of review of approval of community development grants, since the statute's application and approval procedures, as discussed supra, establish a "presumption of approval." See also Ulster County Community Action Committee, Inc. v. Koenig, 402 F.Supp. 986, 990 (S.D.N.Y. 1975); Fishman, supra, 7 Urban Law. at 211. As the Supreme Court stated in Overton Park, however, such a presumption does not "shield [the Secretary's] action from a thorough, probing, in-depth review." 401 U.S. at 415, 91 S.Ct. at 823, see Schicke v. Romney, 474 F.2d 309, 315 (2d Cir. 1973). This court has plainly held, moreover, that "it is `arbitrary or capricious' for an agency not to take into account all relevant factors in making its determination." Hanly v. Mitchell, 460 F.2d 640, 648 (2d Cir.), cert. denied, 409 U.S. 990, 93 S.Ct. 313, 34 L.Ed.2d 256 (1972). At the very least, "ascertainable standards" are required. Holmes v. New York City Housing Authority, 398 F.2d 262, 265 (2d Cir. 1968).

East Hartford argues on appeal that its "expected to reside" figure of 131 was not proven wrong by the district court. This argument misunderstands the role of the courts in reviewing agency action. The district court did not have an obligation, and perhaps lacked the authority, to assess the correctness of East Hartford's figure. Its role was both more limited and more vital to the proper functioning of the administrative process: to determine "whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 416, 91 S.Ct. at 824.

It seems clear that HUD made a major "error of judgment" in not independently investigating East Hartford's figure. A suburban town's attempt to ascertain the housing needs of future residents from a waiting list for a limited supply of public housing units is certainly sufficiently questionable to require some further verification. The Court below found that data was "generally available" from which such a verification could have been made. Essentially for the reasons stated by the district court, 408 F.Supp. at 902-07, we conclude that the Secretary acted arbitrarily and capriciously in approving East Hartford's grant application.

IV. THE REMEDY

The injunction issued by the district court is challenged on the ground that it was directed against appellant towns, rather than against HUD. In view of the fact that HUD had sent letters of credit to the towns by the time the preliminary injunction was issued, so that they were free to obtain grant funds from the Treasury, see City of Hartford v. Hills, supra, 408 F.Supp. at 882 (opinion on motion for preliminary injunction), the court's order restraining the towns (who were defendants) from drawing out or spending these funds appears to be the most direct means of preventing expenditure of unlawfully authorized monies. The injunction provided, moreover, that it could "be lifted upon the filing with the court of . . . a new approval [of the towns' grant applications]." 408 F.Supp. at 907. Such an injunction, combining a practical means to a desired end with a mechanism to take account of future developments, is consistent with the broad, flexible nature of the federal courts' equitable powers. See Hills v. Gautreaux, supra, 425 U.S. at 296-297, 96 S.Ct. at 1545, 1546, and authorities cited therein.

The suggestion is made that the case may be moot as to West Hartford and Glastonbury because they have filed new applications, the 75-day period has run, and they are entitled to funds under the new applications. See 42 U.S.C. § 5304(f) (Supp. V 1975). But the injunction relates only to funds granted prior to the time of its entry and is not mooted by any later grants pursuant to later submissions. The injunction mas be lifted by filing with the district court new HUD approvals of applications with adequate "expected to reside" figures.

Judgment affirmed.

. . . . .

(4) submits a housing assistance plan which —

(A) accurately surveys the condition of the housing stock in the community and assesses the housing assistance needs of lower-income persons (including elderly and handicapped persons, large families, and persons displaced or to be displaced) residing in or expected to reside in the community,

(B) specifies a realistic annual goal for the number of dwelling units or persons to be assisted, including (i) the relative proportion of new, rehabilitated, and existing dwelling units, and (ii) the sizes and types of housing projects and assistance best suited to the needs of lower-income persons in the community, and

(C) indicates the general locations of proposed housing for lower-income persons, with the objective of (i) furthering the revitalization of the community, including the restoration and rehabilitation of stable neighborhoods to the maximum extent possible, (ii) promoting greater choice of housing opportunities and avoiding undue concentrations of assisted persons in areas containing a high proportion of low-income persons, and (iii) assuring the availability of public facilities and services adequate to serve proposed housing projects[.]

OAKES, Circuit Judge:

ON REHEARING EN BANC

OAKES, Circuit Judge:

Appeal from a judgment of the United States District Court for the District of Connecticut, M. Joseph Blumenfeld, Judge, 408 F.Supp. 889 (D.Conn. 1976), enjoining appellants from spending federal funds granted to them under Title I of the Housing and Community Development Act of 1974, 42 U.S.C. §§ 5301 et seq., pending their compliance with one of the requirements of that Act. A divided panel of this Court affirmed. On rehearing en banc, the Court of Appeals reversed and remanded with instructions to dismiss the complaint on the ground that the appellees lacked standing.

Judgment reversed and remanded.

MESKILL, Circuit Judge:

The United States District Court for the District of Connecticut, M. Joseph Blumenfeld, Judge, held that the City of Hartford and two of its low-income residents have standing to challenge the propriety of the Department of Housing and Urban Development's ("HUD") approval of federal grants-in-aid to seven suburban communities in the Hartford area. On the merits, the District Court held that HUD had acted unlawfully in approving the grants. The communities were enjoined from drawing upon the Treasury or spending their funds pending the submission of lawful applications. 408 F.Supp. 889 (D.Conn. 1976). Three of the suburban communities appealed, and on December 23, 1976, a divided panel of this Court affirmed. The appellants petitioned for a rehearing en banc. It was urged that the jurisdictional issue was one of exceptional importance because it involves the standing of a municipality and its residents to challenge federal grants to a separate municipality. It was also urged that a rehearing en banc was necessary in order to secure uniformity of our decisions. A majority of the active judges agreed, and pursuant to Fed.R.App.P. 35(a) a rehearing was ordered on February 8, 1977. The appeal was submitted without further oral argument. We reverse the judgment of the district court, and remand the case with instructions to dismiss the complaint.

I.

The material facts of this dispute have been set forth in the opinions of the panel majority and dissent. Except for a further explanation of the nature of the so-called "expected to reside figure" — which is essential to an understanding of the issue of standing — the facts of this case will not be repeated here.

In order to obtain assistance under the Community Development Block Grant program created by Title I of the Housing and Community Development Act of 1974, 42 U.S.C. §§ 5301 et seq. ("1974 Act"), a town must submit an application to the Secretary of Housing and Urban Development. That application must include, among other things, a "housing assistance plan." According to HUD's general instructions for the completion of the Housing Assistance Plan forms:

The Housing Assistance Plan section of the Community Development Block Grant application consists of four forms and a map, with narrative explanations, showing, respectively: I. Survey of Housing Conditions; II. Housing Assistance Needs of Lower Income Households; III. Annual Goal for Housing Assistance; and IV. General Locations for Lower Income Housing.

Form II is designed to satisfy the community's obligation to "accurately . . . [assess] the housing assistance needs of lower income persons . . . in the community." 42 U.S.C. § 5304(a)(4)(A). That assessment must account for low-income persons who (1) actually reside in the community, (2) are displaced or are to be displaced, or (3) are expected to reside in the community. Id. The "expected to reside figure" at issue in this case represents the number of persons in this third category. Put another way, the expected to reside figure is a relatively small part of a very large application.

The expected to reside figure is merely an educated guess at the number of people who are going to move into the community. HUD's regulations refer to it as an "estimate." 24 C.F.R. § 570.303(c)(2). During 1975, the first year in which the Act was in effect, it became clear that accurate predictions of the future would not be easy to make. The methodologies used by many communities were unsophisticated, and it was difficult to obtain reliable data. These difficulties eventually led HUD to waive the requirement of an expected to reside figure, on the condition that towns indicate on their applications what steps they planned to take in 1976 to arrive at acceptable estimates. The requirement was not waived in later years, and current regulations give applicants considerably more guidance than did those in effect in 1975. Nevertheless, the expected to reside figure remains a guess, albeit a better educated one.

A community's estimate of the number of low-income persons expected to reside within its borders has never been a self-fulfilling prophecy. The figure entered on a community's application does not alter its future population, but merely predicts it. It is theoretically possible for an expected to reside figure to influence the future availability of low-income housing in a given community, because federal housing assistance subsidies are allocated to communities based in part on the anticipated needs reflected in their housing assistance plans. See Title II of the Housing and Community Development Act of 1974, § 213(d)(1), 42 U.S.C. § 1439(d)(1). In this case, however, the housing assistance plans submitted by the defendant towns fully utilized all available Title II funds. Therefore, even if the seven defendant communities had revised their expected to reside figures upward, no additional housing subsidies would have been obtained, because no additional funds were available.

With this background, we turn to the issue of standing.

II.

The plaintiffs in this action challenged the legality of HUD's waiver of the expected to reside requirement. It is our task to determine whether they have standing to make such a challenge. The applicable standards are clear:

The essence of the standing question, in its constitutional dimension, "is whether the plaintiff has `alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf." . . . The plaintiff must show that he himself is injured by the challenged action of the defendant. The injury may be indirect . . . but the complaint must indicate that the injury is indeed fairly traceable to the defendant's acts or omissions.

Village of Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252, 260, 97 S.Ct. 555, 561, 50 L.Ed.2d 450 (1977) (citations omitted). Furthermore, the plaintiff's injury must be one which is "likely to be redressed by a favorable decision." Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 96 S.Ct. 1917, 1924, 48 L.Ed.2d 450 (1976). In other words, a plaintiff must show injury; he must trace it to the defendant's allegedly unlawful acts; and he must show that the remedy he seeks is likely to redress his injury.

Our analysis of this case begins with an examination of the injury alleged by the plaintiffs. The 1974 Act, it is claimed, was intended to benefit the plaintiffs in various ways. Specifically, it is designed to eliminate urban blight and create viable urban communities. 42 U.S.C. § 5301(c). It is also designed to reduce "the isolation of income groups within communities and geographical areas" and to increase "the diversity and vitality of neighborhoods." 42 U.S.C. § 5301(c)(6). These latter objectives are to be achieved by means of "the spatial deconcentration of housing opportunities for persons of lower income" and by means of "attract[ing] persons of higher income." Id. Plaintiffs allege that the Act is designed to encourage the wealthy to return to the cities and to facilitate the movement of the poor into the suburbs.

The plaintiffs claim that the defendants' unlawful acts — the submission and approval of applications without expected to reside figures — caused them injury because it made them less likely to benefit from the 1974 Act. This is said to injure both Hartford, which must bear the heavy burden of caring for its low-income residents, and the low-income residents themselves, who cannot find adequate housing in the suburbs. These claims will not withstand scrutiny.

Assuming arguendo that the plaintiffs have a legitimate, judicially cognizable expectancy interest in the benefits that should accrue to them under the Act, it is impossible to know whether the lack of expected to reside figures on the first year applications submitted by the defendant towns had, or will have, any detrimental effect on that interest.

If this were an appeal from a judgment granting the defendants' motion to dismiss for lack of standing, we would be required to accept as true all of the material allegations of the complaint. Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). However, we are reviewing a final judgment based on a fully developed record, and the issue of standing is one on which the plaintiffs bear the burden of proof. See Simon v. Eastern Kentucky Welfare Rights Organization, supra, 426 U.S. at 45, 96 S.Ct. at 1927. In this context, plaintiffs have either proved a "specific and perceptible harm," United States v. SCRAP, 412 U.S. 669, 689, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973), or they have not. Here, they have not. It is theoretically possible that a failure to comply with any requirement in the Act will have a negative effect on the plaintiffs' expectancy interest. In order to have standing, however, the plaintiffs must show more than a theoretical possibly:

A plaintiff must [prove] that he has been or will in fact be perceptibly harmed by the challenged agency action, not that he can imagine circumstances in which he could be affected by the agency's action.

United States v. SCRAP, supra, 412 U.S. at 688-89, 93 S.Ct. at 2416. Here, it is probable that the lack of compliance with the Act did not affect plaintiffs at all. The defendant towns' housing assistance plans have fully utilized all of the funds available for low-income housing subsidies under Title II of the Act. Because the only effect of the expected to reside figure is indirect — via Title II subsidies — and because no additional Title II subsidies are available, it is unlikely that the lack of expected to reside figures had any effect on the interests of the plaintiffs.

Moreover, it is speculative whether the relief sought by the plaintiffs — an injunction against the use of Title I funds pending the submission of applications complying with the Act — will redress their alleged injury. The only evidence in the record indicating the probable effect of increased expected to reside figures is contained in an affidavit from Lawrence L. Thompson, the Area Director of the Hartford Area Office of HUD. According to his affidavit, an upward revision of the defendant towns' expected to reside figures could not make additional housing subsidies available. Consequently, the prospect that the submission of accurate expected to reside figures sought by the plaintiffs will have a positive effect on the plaintiffs' expectancy interest is at best speculative.

The expected to reside figure is not a goal for the future which communities are required to satisfy, but merely a prediction of what is going to happen. It is a device used to plan for future population changes, not a device for achieving them. A modification of the expected to reside figure would have no greater impact on true number of future residents than a modification of tomorrow's weather forecast would have on tomorrow's weather.

Much has been made in this case of the fact that if the defendant communities fail, or refuse to comply with the Act, their grants will be reallocated. This, it is claimed, will lead to the possibility that the plaintiffs would benefit from the reallocation of funds. This theory also is inadequate to support standing in the instant case. The relief sought and obtained by the plaintiffs left the defendants two choices: they could revise their figures and receive their grants, or they could refuse to comply and forfeit their grants. Inasmuch as the first alternative would produce no benefit for plaintiffs, it is immaterial whether they might benefit from the second — at least absent a "substantial probability" that the second alternative will in fact be chosen. Warth v. Seldin, supra, 422 U.S. at 504, 95 S.Ct. 2197. Here, there was not the slightest showing that any of the defendant towns would choose to forfeit their grants rather than modify their applications.

Thus, we conclude that the plaintiffs have failed to trace their alleged injury to the allegedly unlawful conduct of the defendants, and they have failed to demonstrate that the relief they seek would serve to redress that injury.

Accordingly, the judgment of the district court is reversed, and the cause is remanded with instructions to dismiss the complaint on the ground that the appellees lack standing.

MESKILL, Circuit Judge:

OAKES, Circuit Judge (dissenting), with whom Judges SMITH, FEINBERG and GURFEIN concur: