A West Hollywood landlord, Letizia Gelles, filed a lawsuit in Los Angeles Superior Court to exempt her 15-unit apartment building from the city's freeze on rents.
After the city's incorporation its council voted not only to freeze the prices on rents but also rolled them back to what they were on Aug. 6, 1984. In doing so, the city denied this landlord the right to rent her apartment units at the free market-value prices, which is so fundamental in our marketplace economy and which is taken for granted by all other enterprises (such as) stores, gasoline stations, cleaners and equipment rentals.
The question is: Under what constitutional provision can a city single out a rental housing enterprise and subject it to the price controls?
As a matter of fact, the opposite is true. The 14th Amendment of the U.S. Constitution prohibits discriminatory treatment of an individual or a business enterprise under its clause of equal protection.
Although it's true that a city has a police power of government to regulate many aspects of a property's usage, the imposition of price controls on rents, food, drugs or any other type of goods and services does not fall under this power. That power belongs to the state and federal governments.
Likewise, the legitimate purpose of providing cheap rents to the tenants (at the expense of the landlords) is an admirable and a noble act by the city. However, the Constitution does not permit a penalization of the rental housing enterprise while all other type of enterprises enjoy a freedom to set the prices of their goods and services at a free market level.