Judge Rules Malibu Can Curb Rent Increases : Housing: Law limiting raising of fees for two city mobile home parks is upheld. But rollback and freeze provision is found to be unconstitutional.

A federal judge has upheld Malibu’s right to regulate rents in the city’s two mobile home parks but struck down a rent rollback and other provisions of the 1992 rent-control law.

U.S. District Judge Mariana R. Pfaelzer on Monday upheld part of Malibu’s law limiting future rent increases for current and prospective residents, saying the city had a right to protect low-income residents and the investments park tenants have made in their homes.

But Pfaelzer found unconstitutional a provision that rolled back rents in the two parks to 1984 levels and froze rents for two years. She also struck down part of the law barring owners from raising rents for three years after long-term leases run out. Pfaelzer ruled that the city had not proved that rents were too high or had risen unfairly.

About 550 residents live in the two seaside mobile home parks, Paradise Cove and Point Dume, leasing spaces for between $200 and $600 a month, depending on ocean views.

Residents are a mix of seniors living on fixed incomes and wealthy people who bought mobile homes as investments or second homes. Homes with prime views have sold for as much as $600,000.

The law was written to protect residents from what some said was a limited supply of mobile home park spaces, allowing for unfair rent increases. The city spent nearly $400,000 defending the law, making it the most expensive litigation in Malibu’s three-year history.

City Atty. Christi Hogin said the decision allows the city to control future rent increases but conceded it will have to rewrite the law.

“We are kind of in limbo,” Hogin said. “(Pfaelzer) emphasized that the City Council has the right to make certain legislative choices between competing interests, and in this case those choices favored the residents.”

After the law was enacted in 1991, the mobile home park owners challenged it in state and federal courts. The city lost in the state court suit, which claimed Malibu did not follow proper procedures when adopting the law, and is awaiting word on its appeal.

Kissel Co., owner of the Paradise Cove park, plans to seek in federal court more than $1.5 million in damages plus attorney fees as a result of Pfaelzer’s ruling, said company attorney Garrett L. Hanken. The company filed for bankruptcy protection last year, saying the law had ruined it financially, said chief financial officer Steve Dahlberg. Kissel had considered closing the park, but Pfaelzer’s ruling may make that unnecessary, Dahlberg said.

An attorney for the Adamson Cos., which owns Point Dume mobile home park, said the company will seek unspecified damages.

Both firms are considering challenges to the parts of the ruling upholding the rent law.