Court Order Sets Up Mobile Home Rent Control Test

The U.S. Supreme Court set the stage Monday for a trial in Los Angeles on the constitutionality of rent control ordinances for mobile home dwellers, a case that could affect laws in more than 40 California communities.

Under Monday’s order, a federal judge will be called upon to decide whether a 1984 Santa Barbara law is a reasonable method of limiting rent increases or whether instead it illegally benefits mobile home tenants at the expense of park owners.

The legality of rent control has not only split city councils in California and elsewhere, but also has driven a wedge between conservatives on the Supreme Court. Two weeks ago, Chief Justice William H. Rehnquist said that rent control in general is a “legitimate exercise” of local government power, while Justice Antonin Scalia denounced it as an illegal government move that takes money from one group of citizens and gives it another.

Santa Barbara Issue

This case arose in 1984 when the Santa Barbara City Council enacted a rent control ordinance for “mobile home and recreational vehicle parks” that limits rent increases for spaces to increases in the consumer price index and in the cost of operations. In addition, if a mobile home owner sells his home to another person, the park owner can raise the new owner’s rent on the space where it is parked by no more than 10%.

The city said that this law ended the “threat of economic devastation” faced by elderly and low-income people who could not afford to move their homes when confronted by steep rent increases. One court brief noted that mobile homes are mobile in name only.

But Williams and Jean Hall, owners of Los Amigos Mobile Home Estates, filed suit against the city, contending that the new law gave their tenants a property right on the owners’ land. This, they said, violates the Fifth Amendment, which says that no government may take “private property . . . for public use without just compensation.”

Suit Dismissed

A district judge dismissed the suit, but a panel of the U.S. 9th Circuit Court of Appeals reinstated it in 1986. Judge Alex Kozinski, siding with the view expressed by Scalia, said that the Santa Barbara law gives mobile home owners “a right to occupy their property in perpetuity while paying only a fraction of what it is worth in rent.”

Kozinski, joined by two other judges, ordered a full trial in the Santa Barbara case (Santa Barbara vs. Halls, 87-220). Monday, the Supreme Court dismissed an appeal by the city attorney and ordered the trial to proceed.

Steven Amerikaner, city attorney for Santa Barbara, said Monday that rent control laws have been upheld by most courts and he predicted that a judge will also uphold the mobile home ordinance.

“We think it strikes a reasonable compromise between the interests of the mobile home tenants and the park owners,” he said.

Two weeks ago, the high court dismissed a broad challenge to a San Jose rent control law, as Rehnquist and five other members of the court endorsed such local regulations. But the justices left open the possibility that a land owner could demonstrate that such a regulation had the effect of taking his property, and Monday’s order gives the Halls that opportunity.