Court upholds mobile home rent controls
Laws controlling how much mobile home park owners can charge for monthly site rentals don’t infringe on constitutionally protected property rights, a federal appeals court ruled Wednesday.
The U.S. 9th Circuit Court of Appeals rejected the argument of Daniel and Susan Guggenheim of Goleta, Calif., that the city was engaged in an unconstitutional “taking” of their property by limiting how much space rentals can grow.
The Guggenheims bought the land in 1997, five years before Goleta was incorporated as a city but well after Santa Barbara County adopted the original rent-control measure in 1979. The couple had no “investment-backed expectations” taken away from them, the appeals court said, because rent control already was the law when they bought Rancho Mobile Home Estates.
The decision, though split 8 to 3, could foretell the outcome of renter-owner disputes elsewhere in the nine-state region covered by the court, as other mobile home parks have become arenas of contention between landowners wanting to charge what the market will bear and homeowners of the often not-so-mobile dwellings having to pay more or disassemble and relocate their homes.
Goleta’s ordinance imposes strict limits on rental increases for existing tenants and caps rent increases at 10% for new buyers of mobile homes already situated in residential clusters within the city.
The Guggenheims argued that the rent-control limits unjustly transferred the value of their property to the tenants because mobile home owners could sell their homes for almost nine times as much when the buyers could count on paying fixed monthly rent for the space rather than market value.
An expert’s report said homes at the park would sell for an average of $14,000 without rent control and $120,000 with it, enriching the homeowner at the landowner’s expense. Space rentals could earn $13,000 a year on the open market, the expert said, while under the city controls the same space costs less than $3,300 annually.
Those disparities didn’t amount to an unconstitutional “taking” in violation of due process and equal protection, the court said, because the Guggenheims knew of the controls when they bought the property.
Judge Carlos T. Bea, joined by Chief Judge Alex Kozinski and Judge Sandra S. Ikuta, dissented. The trio, all appointees of Republican presidents, said the majority ignored other U.S. Supreme Court findings and disputed that Goleta’s ordinance was a legitimate rent-control policy.
