Ruling Favors Mobil Home Dwellers, Cities
In a major victory for California cities and their mobile home dwellers, the Supreme Court on Wednesday unanimously upheld an Escondido ordinance allowing the city to limit rents charged to mobile home tenants, even when tenants sell their coaches to new buyers.
“It is by sticking to one’s guns and philosophy and by being consistent that it is possible for justice to be done in this country,” said Escondido Mayor Jerry Harmon, a longtime supporter of mobile home rent control.
The 9-0 decision removes a legal threat that could have subjected cities throughout California to large damage awards from lawsuits.
The ruling also marked another sharp disappointment for conservatives who had hoped the Supreme Court would force the government to pay compensation when it severely restricts the use of private property. They rely on the Constitution’s 5th Amendment, which says “just compensation” must be paid when property is “taken for public use.”
But the justices said the park owner’s property was not “taken” but merely regulated.
Cities have “broad power” to “regulate the landlord-tenant relationship without paying compensation for all economic injuries that such regulation entails,” said Justice Sandra Day O’Connor for the court.
Escondido officials expressed their pleasure with the ruling, saying it justified enduring the nearly 40 lawsuits that the city has faced to defend the rent control ordinance.
Mobile home tenants were elated with their victory.
“We just keep winning and winning and winning,” said Gerald Lenhard, president of the Escondido Mobilehome Positive Action Committee, which represents the people who live in the more than 3,100 rental spaces in the 28 mobile home parks in the city.
“Rents were going up three or four times the consumer price index every year. And, when 90% of tenants are seniors and 40% of them are widows, it made it very hard,” Lenhard said.
Robert Jagiello, the attorney who argued the case for the mobile home park owners before the Supreme Court in January, seemed unfazed when he heard the news.
“Well, we couldn’t have done much worse than that, now could we,” Jagiello said of the unanimous decision against the park owners.
Although the ruling affects laws in several states, including New Jersey and Arizona, its greatest impact is in California, where an estimated 800,000 residents live in mobile homes. Because these homes are hard to move, city and state officials have decided that the mobile home dwellers need special protections from sharp rent increases or unjustified evictions.
Wednesday’s ruling stemmed from a 1988 law enacted by Escondido voters that requires mobile park owners to get permission from a city board before raising rents. As soon as the law went into effect, John and Irene Yee, owners of the Sunset Terrace and Friendly Hills Mobile Home Parks, challenged the ordinance as unconstitutional.
The state courts in San Diego rejected the Yees’ complaint without a trial. But the high court agreed to hear the case of Yee vs. Escondido, 90-1947, because the federal and state courts in California were divided on the issue.
The dispute became a high-stakes battle pitting two top appointees of the Ronald Reagan Administration against each other. Former Judge Robert Bork, the failed Supreme Court nominee, appeared on behalf of the Yees urging that the city law be declared unconstitutional, while the law firm of former U.S. Solicitor Gen. Rex Lee defended the city.
The Yees “voluntarily rented their land to mobile home dwellers,” Justice O’Connor said. For decades, the court has given government wide latitude in regulating business arrangements, from setting minimum wages for workers to regulating apartment rents, she added.
An attorney for the Golden State Mobilehome Owners League that represents tenants of the parks applauded the decision and said it will end legal challenges to rent control throughout California. “This is a victory for literally thousands of people. The sellers of mobile homes will now be protected from the huge rent increases that can kill their sale,” said Bruce E. Stanton, a San Jose attorney.
“This sounds very good for us,” Los Angeles Deputy City Atty. Gwendolyn Ryder Poindexter said. City lawyers can cite Wednesday’s ruling as a basis for dismissing a $1-million verdict handed down in November.
About 87 cities in California, including Los Angeles, restrict rent increases by mobile home park owners, and the state has forbidden the owners from forcing tenants to move, except for reasons such as a failure to pay rent.
Unlike most rent-control laws covering apartments, these mobile home ordinances typically maintain the lower rents even when a coach and the pad on which it sits are sold to a new buyer.
But, in a 1986 case from Santa Barbara, a federal appeals court concluded that these laws give mobile home tenants an undeserved “windfall” when they sell their coaches, money that should go to the park owner. As property values in California soared, the mobile home spaces soared in price too. Lawyers for the park owners cited the example of a woman who, since she could count on having a low rent, willingly paid $77,000 for a mobile home site with coach that had a view of the Pacific, then sold the old coach for only $5,000. By transferring this profit from the owner of the land to the coach owner, the cities were violating the private property rights of the park owners, said Judge Alex Kozinski for the appeals court.
Based on this rationale, a federal judge handed down a $1-million verdict against the city of Los Angeles in November. The owner of the Tahitian Terrace Mobile Home Park in Pacific Palisades said tenants received an average $20,000 windfall each time a coach was sold. Because nearly 50 coaches had changed hands, the judge said the city must pay $1 million in damages.
Savage reported from Washington. Gaw reported from Escondido.
* ESCONDIDO HAPPY: City leaders celebrated their victory by promising to enforce mobile-home rent control with renewed vigor. B1
