HomeMy WebLinkAbout09/15/1992, 1 - PROPOSED AMENDMENTS TO THE MOBILE HOME PARK RENT STABILIZATION ORDINANCE CONCERNING RENT INCREASES UPON CHANGE OF OWNERSHIP, AND CERTAIN EXEMPTIONS ONES
�I �y� MEETING DATE:
���w�I�lpl� city of SA1 l L%AIS OBISPO I9-15-92
TEM NUMBER:
nu COUNCIL AGENDA REPORT
FROM: Jeffrey G. Jorgensen, City Attorney
SUBJECT: Proposed Amendments to the Mobile Home
Park Rent Stabilization Ordinance Concerning
Rent Increases Upon Change of Ownership, and
Certain Exemptions
i
RECOMMENDATION: Receive a Report Regarding Proposed Amendments
to the Mobile Home Park Rent Stabilization
Ordinance, and Provide Staff with Direction as
to Any Preferred Amendments. Two Ordinances
are Included for Council Consideration.
DISCUSSION:
At the June 16, 1992 Council Meeting, Councilman Roalman presented
a communication item to the Council on the issue of mobile home
park vacancy control, in response to a request from Mr. Bill Henson
and a petition signed by 239 mobile home owners. The Council
directed staff to bring back a report on the legal validity of
mobile home park vacancy control regulations in light of the recent
Supreme Court decision in the case of Yee v. City of Escondido, and
to draft a proposed ordinance reestablishing mobile home park
vacancy control in the City of San Luis Obispo. Since the June
16th meeting, the City has received additional requests to
reinstitute vacancy control, as well as to delete the exemptions
from the rent stabilization ordinance for parks with 66. 67 percent
of spaces under lease agreements (SLOMC 5.44 . 030F) , and parks with
condominium ownership (SLOMC 5.44 . 030 (G) . (Copies of the various
citizen requests are included as Attachment 1. )
BACKGROUND:
In July 1989, the U.S. District Court entered its final decision in
the case of Hall v. City of Santa Barbara, holding that the vacancy
control provisions of the City of Santa Barbara Mobile Home Rent
Control Ordinance constituted an unconstitutional "physical" taking
of property. (The Santa Barbara ordinance was substantially
similar to San Luis Obispo's ordinance at the time, limiting rent
increases on sale to no more than 10%. ) The City of Santa Barbara
settled the case, and it therefore became binding law in the
federal courts, at least with respect to California.
In January 1990, the City received a request from Western Mobile
Home Association to amend the City's rent stabilization ordinance
to delete its vacancy control provisions in light of the Hall
-decision. In June 1990, the City Council amended the Mobile Home
Rent Stabilization Ordinance to delete vacancy control. A minor
Agenda Report
Page Two
technical revision was also adopted in July 1990 to establish a
process for determining fair market rent on decontrol.
After the Hall decision, the federal courts continued to strike
down vacancy control regulations as "physical" takings. However,
several California state courts refused to follow the logic of
Hall. As a result, the Supreme Court accepted the case of Yee v.
City of Escondido in order to resolve the conflict. In April 1992 ,
the Supreme Court upheld the constitutionality of the vacancy
control provisions of the Escondido mobile home rent control
ordinance against the argument that such provisions constitute a
"physical" taking of the park owners property. The decision is a
logical one to the extent that it is difficult to imagine how a
regulation can ever be' considered a physical occupation of land.
At the same time, the Court left the door open, under the proper
set of circumstances, for an argument that vacancy control
provisions constitute a regulatory taking. (A copy of Yee v.
Escondido is attached for your information, as attachment 2. ) The
Yee decision has been hailed as a victory by both sides. Mobile
home tenants claim it is a complete vindication for the legal
validity of vacancy control. Park owners assert it was practically
an invitation to relitigate the issues on a "regulatory" taking
theory. Since Yee, several cities have adopted or readopted
vacancy control provisions. Not surprisingly, the Yee decision
has generated extensive litigation throughout the State. (Mr.
Louis Shuster, a mobile home park tenant, has submitted extensive
material on vacancy control in other California cities, which is
available in the Clerk's file for further Council review. )
STATUS OF CURRENT LITIGATION:
Attachment 3 is a June 1, 1992 Memorandum from David H. Hirsch,
Lompoc City Attorney and Chairman of the League Mobile Home Rent
Control Committee, on the status of current litigation after Yee.
The memorandum gives an objective overview of the unsettled legal
issues involving vacancy control . Since June 1, the case of
Sandpiper Mobile Village v. City of Carpenteria was set for
reargument under a regulatory taking theory and was heard by the
Court on July 22, 1992 . A decision is pending. The decision in
Azul Pacifico v. City of Los Angeles was vacated by the United
States Court of Appeal on July 23 , 1992 , and therefore the
discussion concerning Azul is no longer relevant.
Within San Luis Obispo County, both the cities of Grover City and
Arroyo Grande have recently established vacancy control. Grover
City was sued in San Luis Obispo Superior Court on August 5, 1992
on various inverse condemnation and civil rights theories in the
case of Le Sage Enterprises v. City of Grover City. The City of
Arroyo Grande has likewise been threatened with litigation, and it
Agenda Report
Page Three
appears that park owners are pursuing their administrative remedies
as a prelude to filing a suit. Morro Bay has received requests to
reinstitute vacancy control but is waiting to see the outcome of
current litigation before proceeding further.
In June 1992, the United States Supreme Court decided Lucas v.
South Carolina Coastal Commission. This case had been carefully
watched by legal scholars because it was anticipated that the
newer, conservative members of the Court would use Lucas as a
vehicle to fashion new rules with respect to regulatory takings,
which could also affect vacancy control. To most observer's
surprise,. the Court issued a narrow decision which, while departing
from traditional takings analysis, was not the sweeping revision
many people had anticipated. It appears now that the Court intends
to proceed in a deliberate and incremental fashion, perhaps waiting
for the right case with the right facts, before making any major
changes. Therefore, it is uncertain at this point whether there
will be significant changes to the law of regulatory takings which
might affect vacancy control .
OPTIONS:
Option 1: In light of the unsettled legal issues concerning
regulatory takings and the high probability that litigation will be
forthcoming if the City reinstates vacancy control, the Council may
wish to defer action until such time as the legal issues have been
clarified. At the very least, it may be prudent to see what the
results are in Sandpiper Mobile Village v. City of Carpenteria and
Le Saae Enteroris-es v. City of Grover City before proceeding
further.
Option 2: If the City Council wishes to reinstate vacancy control,
pass to print the attached ordinance (Exhibit A) . This would
essentially restore the vacancy control provisions deleted in June,
1990.
Option 3: If the Council wishes to delete the exemptions from the
rent stabilization ordinance for parks with 66. 67 percent of spaces
under lease agreements (SLOMC 5.44 . 030F) , and parks with
condominium ownership (SLOMC 5.44 . 030G) , pass to print the attached
ordinance (Exhibit B) .
Option 4: If the Council desires to reinstate vacancy control and
delete the exemptions described above, you should consider adopting
both ordinances simultaneously.
Option 5: If the Council has additional concerns or proposed
revisions to the mobile home park rent stabilization ordinance,
continue this item with additional direction to staff.
/ 3
Agenda Report
Page Four
FISCAL IMPACT:
If the Council decides to reestablish vacancy control, it should be
recognized that there is a high probability of litigation, and a
corresponding commitment of time and money. As the ultimate
resolution of the regulatory taking issue may ultimately be made by
the Supreme Court, it may be a lengthy and expensive process.
Attachments:
Exhibit "A" : Proposed Ordinance
Exhibit "B" : Proposed Ordinance
. Attachment 1:, Copies of Citizen Requests
Attachment 2 : Yee v. Escondido
Attachment 3 : Memorandum from David Hirsch
J-�
ORDINANCE NO. (1992 Series)
An Ordinance of the Council of the City of San Luis
Obispo Amending Chapter 5.44 of the San Luis Obispo
Municipal Code and Section 5.44.060C Relating
to Space Rent Increases in Mobile Home Parks
Upon Change of Ownership
BE IT ORDAINED by the Council of the City of San Luis Obispo:
SECTION 1. Section 5.44 . 010 of the San Luis Obispo Municipal
Code is amended to read as follows:
5. 44. 010 Purpose and intent.
A. There is presently within the city
and the surrounding areas a shortage of spaces
for the location of mobile homes. Because of
this shortage, there is a very low vacancy
rate, and rents have been for several years,
and are presently, rising rapidly and causing
concern among a substantial number of San Luis
Obispo residents.
B. Mobile home tenants, forced by the
lack of suitable alternative housing, have had
to pay the rent increases and thereby suffer a
further reduction in their standard of living.
C. Because of the high cost and
impracticability of moving mobile homes, the
potential for damage resulting therefrom, the
requirements relating to the installation of
mobile homes, including permits, landscaping
and site preparation, the lack of alternative
homesites for mobile home residents, and the
substantial investment of mobile home owners
in such homes, this council finds and declares
it necessary to protect the owners and
occupiers of mobile homes from unreasonable
rent increases, while at the same time
recognizing the need of park owners to receive
a suitable profit on their property with
rental income sufficient to cover increases in
costs of repair, maintenance, insurance,
utilities, employee services, additional
amenities, and other costs of operation, and
to receive a fair return on their property.
D. This council finds that the present
low vacancy rate and frequent increases are
particularly hard upon and unfair to residents
of mobile home parks within the city. Large
numbers of these residents are senior citizens
and others on fixed incomes who installed
their mobile homes in the city when the
EXHIBIT "Alf ��
Ordinance No. (1992 Series)
Page Two
present inflationary rent increases could not
reasonably have been foreseen.
E. Tenants in mobile home parks desiring
to sell their mobile homes have had difficulty
finding buyers because, upon a change of
ownership, the park owner was able to raise
the rent without regard to the city's mobile
home rent stabilization ordinance.
F. This council finds that it is in the
best interests of the citizens of the City of
San Luis Obispo to assist those who are
seeking to sell their mobilehomes and those
who are seeking to buy such homes to have the
same fair rental protection as is afforded to
those who remain in their mobilehomes without
sale. This council further finds that
provisions allowing annual rent increases
together with provisions allowing rent
increases upon a showing of necessity protect
the park owner's right to a fair return on
investment, thus eliminating the need for rent
increases above 10% upon change of ownership.
G. However, this council recognizes that
a rent stabilization ordinance must be fair
and equitable for all parties and must provide
appropriate incentives for mobile home park
operators to continue their parks profitably,
as well as to attract additional investors for
new parks.
SECTION 2 . Section 5. 44 . 060C of the San Luis Obispo Municipal
Code is amended to read as follows:
C. The maximum monthly space rent of a
tenant may be increased by the owner when
there is a change of ownership affecting a
mobile home. However, such increase shall not
exceed ten percent of the then existing space
rent and may not. be relied upon any more often
than once in any thirty-six month period as
the basis to increase rent. In the event of
change of ownership resulting from subletting
of the mobilehome space as may be allowed by
state law, should such become state law, then
upon any such subletting the space rent may be
increased up to ten percent of the then
existing space rent. In the event of change
of ownership resulting from vacation of the
space, then the space rent may be adjusted to .
fair market rent in the community. Nothing in
1�
Ordinance No. (1992 Series)
Page Three
this paragraph shall preclude an adjustment as
may otherwise be provided for in this Chapter.
SECTION 3 . This ordinance, together with the names of council
members voting for and against, shall be published once in full, at
least three days prior to its final passage, in the Telegram
Tribune, a newspaper published and circulated in this City. The
ordinance shall go into effect at the expiration of 30 days after
its final passage.
INTRODUCED AND PASSED TO PRINT by the Council of the City of
San Luis Obispo. at its meeting held on the day of ,
1992; on motion of , seconded by
and on the following roll call vote:
EYES:
NOES:
ABSENT:
Mayor Ron Dunin
ATTEST:
City Clerk, Pam Voges
APPROVED:
City A 'nistrative officer
lt�
A orn ,
Community De lopment Director
l- 7
Legislative Draft of
San Luis Obispo Municipal Code
Section 5. 44 . 010
5. 44.010 Purpose and intent.
A. There is presently within the city
and the surrounding areas a shortage of spaces
for the location of mobile homes. Because of
this shortage, there is a very low vacancy
rate, and rents have been for several years,
and are presently, rising rapidly and causing
concern among a substantial number of San Luis
Obispo residents.
B. Mobile home tenants, forced by the
lack of suitable alternative housing, have had
to pay the rent increases and thereby suffer a
further reduction in their standard of living.
C. Because of the high cost and
impracticability of moving mobile homes, the
potential for damage resulting therefrom, the
requirements relating to the installation of
mobile homes, including permits, landscaping
and site preparation, the lack of alternative
homesites for mobile home residents, and the
substantial investment of mobile home owners
in such homes, this council finds and declares
it necessary to protect the owners and
occupiers of mobile homes from unreasonable
rent increases, while at the same time
recognizing the need of park owners to receive
a suitable profit on their property with
rental income sufficient to cover increases in
costs of repair, maintenance, insurance,
utilities, employee services, additional
amenities, and other costs of operation, and
to receive a fair return on their property.
D. This council finds that the present
low vacancy rate and frequent increases are
particularly hard upon and unfair to residents
of mobile home parks within the city. Large
numbers of these residents are senior citizens
and others on fixed incomes who installed
their mobile homes in the city when the
present inflationary rent increases could not
reasonably
.. have.;;:;been „foreseen.
E ;, Tenantsn mots; a home parks desirang
to sell their mobile hares have hacl difficulty
aAding b' b.s because . upon a change o
osanerslip, the park aWner w;as a3le to raise
tie rerst wsthaut :xegar ..........
ctyfs <;mobiie
13ame .rent. stabaization ordinance'
......... _ ... ._....... ..__...__. ....__....
............................................................................................................................
F This council ;finds ;that .;fit is 1W the
best interests of;the citizens of' the City of
�- S
San hug Obispo; to -:assist those -who ae
seeking to -:sell `their; mabilehomes and those
iaho ar:..e seeking to buy suchhomes to..........
tine
same fair rental ;; protectionas is afforded ':to
those ;who ,Tema}n :in their mobilehdmes :;without
sale This council further finds that
provis<zons allowing annual resit increases
together Lith provisions ailowang rent
increases upon a ;showing of necessaty''protect
the park owner'srigit to a fair return 'on
investment, ;;thus el smi �atang the need for rent
increases aboVe: :.. upon..:.....q.. hange of ownership':
G£. However; this council recognizes
that 'a rent stabilization ordinance must be
fair and equitable for all parties and must
provide appropriate incentives for mobile home
park operators to continue their parks
profitably, as well as to attract additional
investors for new parks.
Legislative Draft of
San Luis Obispo Municipal Code
Section 6.44 .060C
C. The maximum monthly space rent of a
tenant may be increased by the owner when
there is a change of ownership affecting a
mobile home. However, aucb ;increase slat l not
exceed, ten .percent of the 't2en existari space
rent and mazy not be relied upon any. more often
than once n any themonth period 'as
the basis to inc. ea e :rent In :;the event ;of
change: of ocrnerp:;p Xe'suit g from sub.lettincr
fl'f theobsehome space as ;may b a13..owed by
state >law, shoul3 such:: become state law, 'them
upcan any such su3�lettiq the space rent may ;be
.creased tip to,' teen percent <of tide then
exist.inq space rent iIn the event of' change
of own'ershp resulting frO3li vac....
on of the
space, then :the space rent may be adjusted to
fair tsarket ;rent in the cams una ty Mothing
this paragraph shall precludeasan ad7ustbent :as
nta}# otherwise be provided fad . this chapter
s�a��•��»1•aza=€i���Q
vielatien e€ this ehapter €er an ewner to
intentienally and will€ally ineLaease the
menthiy spaee rent e€ a tenant abeve the-fair
market rent in the eemmunity fer the purpese
e€ €ereing the tenant to sell his mebile
to the—ewner, his agent, er representative.
The—ewner—shall use nermal and prudent
business—praetiees in establishing the new
fair market rent ameunt €er eaeh spaee. T-
eity eesneii reeegefaes that the ad hee
1 -�
establishment e€ a €atm-nai-ket rent ameent €e=
.L...n..yeLe there
is a eh e f
lead to faveritism, diser-lmfnatfen,evasien e€
the rens—stabillo,3tlen ergi Ree, and-
substantial
mssubstantial eeememle eneertalaty beth-
buyersers and sellers of mile cremes.
There€erre, the ewners eff eaeh mebileheme par
shall epee, and net mere than--enee at the
beginning efea epi-eal eat-}year,pest f ereaeh
spaee lm the park the new €air marketrent
amount *bleu will be established upen the
€er--the mobile home—situated_pen any �iuPr►
spate. The ewneE shall pEevides- -net
to the--elty elerk, and shall pest
said list In tine-eftlea e€ the mebile heme
parte. Ne rent shall be impesed ereleetea
i I
ORDINANCE NO. (1992 Series)
An Ordinance of the Council of the City of San Luis
Obispo Amending Chapter 5. 44 of the San Luis Obispo
Municipal Code to Delete Exemptions 5.44 .030F
and G from Mobile Home Park Rent Stabilization.
BE IT ORDAINED by the Council of the City of San Luis Obispo:
SECTION 1. Section 5.44 . 030 Exemptions, is hereby amended to
delete subparagraphs F and G of the San Luis Obispo Municipal Code
so that the new Section 5. 44. 030 shall read as follows:
5..44. 030 Exemptions.
The provisions of this chapter shall not
apply to the following tenancies in mobile
home parks:
A. Mobile home parks spaces rented for
nonresidential uses;
B. Mobile home parks managed or operated
by the United States Government, the state of
California, or the county of San Luis Obispo;
C. Tenancies which do not exceed an
occupancy of twenty days and which do not
contemplate an occupancy of more than twenty
days;
D. Tenancies for which any federal or
state law or regulation specifically prohibits
rent regulation;
E. Tenancies covered by leases or
contracts which provide for a tenancy of more
than a year, but only for the duration of such
lease or contract. Upon the expiration of or
other termination of any such lease or
contract, this chapter shall immediately be
applicable to the tenancy. No rent increases
other than that allowed under the provisions
of the lease shall be allowed during the
duration of such a lease or contract.
SECTION 2. This ordinance, together with the names of council
members voting for and against, shall be published once in full, at
least three days prior to its final .passage, in the Telegram
Tribune, a newspaper published and circulated in this City. The
ordinance shall go into effect at the expiration of 30 days after
its final passage.
EXHIBIT "B" /-Il
Ordinance No. (1992 Series)
Page Two
INTRODUCED AND PASSED TO PRINT by the Council of the City of
San Luis Obispo at its meeting held on the day of ,
1992 , on motion of , seconded by
and on the following roll call vote:
EYES:
NOES:
ABSENT:
Mayor Ron Dunin
ATTEST:
City Clerk, Pam Voges
APPROVED:
City Adm' istrative Officer
t ney
Community Deve o ment Director
LEGISLATIVE DRAFT OF
SAN LUIS OBISPO MUNICIPAL CODE
SECTION 5.44.030
5. 44 . 030 Exemptions.
The provisions of this chapter shall not
apply to the following tenancies in mobile
home parks:
A. Mobile home parks spaces rented for
nonresidential uses;
B. Mobile home parks managed or operated
by the United States Government, the state of
California, or the county of San Luis Obispo;
C. Tenancies which do not exceed an
occupancy of twenty days and which do not
contemplate an occupancy of more than twenty
days;
D. Tenancies for which any federal or
state law or regulation specifically prohibits
rent regulation;
E. Tenancies covered by leases or
contracts which provide for a tenancy of more
than a year, but only for the duration of such
lease or contract. Upon the expiration of or
other termination of any such lease or
contract, this chapter shall immediately be
applicable to the tenancy. No rent increases
other than that allowed under the provisions
of the lease shall be allowed during the
duration of such a lease or contract.
F. Spa-es in a mebile hemeparr3e eh
at least 66. 67—perQent of said spaeesare
-
gevevned by-a lease with an initial te,�m ef
meEe than
G. Mebile heee panes whieh selllets €e=
€aeterry built eE eaeti€aetuLced heusing, e-
lets, even if eve—er mere heves to the
develepeent are rented--er!eased eut.
1-13
July 6 , 1992
Mr.Bill Roalman
City of San Luis Obispo
P.O. Box 8100
San Luis Obispo, CA 93401-8100
Dear Councilman Roalman:
When rent control was removed from the San Luis Obispo
Ordinance Chapter 5 . 44 , . the result has been a large increase
in rent when a mobilehome is sold . This has had a negative
Affect on mobilehome sales . As -.rc know house sales arc slo:: .
Sale of a mobilehome is almost impossible .
The mobilehomc owners who did not; sign a lease becaus
they did not feel it was in thier best interests sore left
with no protection .
Mobilehome owners effected by ordinance 5 . 414 . 30 para-
graph 'IF" deserve the same protection as other mobilehome
owners in our community .
I would like to make a proposal that the vacancy control
limitation to protect mobilehome residents from c_ccessirc
rent- increases when a vacancy occurs be roes ablisized .
I , ould like to propose that; I;he exemption 3 . 44 . 30 be
removed from the San Luis Obispo Pc.nt Stabilization Ordi.iance .
These are very important to mobilehomc o,�Tncrs . I ,:oulkc-
appreciate yur giving them your ser:ieus consideration .
Since/r,,ely ,
J Gid
Earl Clcster
3960 S. I iguera 4-_ .,. 2
San Luis Obispo , C:\
93401-7453
( 805 ) 543-6115
CE � V -
AIIU a 1992
CITY GLERK
:,AN LUfc^.,ODI�PO,CA
ATTACFib1ENT 1 1���'
RECEIVED
JUN 2 t 1992 June 22, 1992
CITY CLERK
SAN QUI; OB SPO.CA
Ms. Penny Rappa, Vice Mayor
City of San Luis Obispo
P.O. Box 8100
San Luis Obispo, CA 93403-8100
Subject : Rent Stabilization for Mobilehome Resident$
Dear Ms. Rappa:
This communication seeks to inform you of recent
developments in community control of rent adjustments
for mobilehome residents. Copies of Rent Control
Ordinances were obtained from the following cities:
San Jose Escondido
San Bernardino Yucaipa
Lancaster Grover City
Oxnard Ventura (County)
A. Vacancy Control of Mobilehome Rents
Review of the ordinances for these communities
reveals that all but one of these ordinances require a
Board's approval or specifically limit increases in
mobilehome space rents when a vacancy occurs. In the
City of Oxnard reinstatement of vacancy control has
been recommended by the city attorney, and may have been
enacted as an ordinance amendment at this writing.
B. Exclusion of "Condominium" Parks from Rent Control
Only two of the ordinances cited above contain
exemptions or exclusions from rent control protection
for tenants in mobilehome parks. Ordinances for the
City of Oxnard and the County of Ventura include a list
of exemptions identical in wording to that found in
ordinances for both the County and City of San Luis Obispo.
C. A Proposal for Council Action
Given this sampling of rent control ordinances pro-
tecting mobilehome residents in communities similar to
San Luis Obispo, the following requests are proposed :
1 . That vacancy control limitation be reestablished
in the San Luis Obispo Rent Stabilization Ordinance
to protect mobilehome residents from excessive rent
increases when a vacancy occurs.
City of San Luis Obispo June 22, 1992
Page 2
2. That the exemption of tenancies in mobilehome
parks with 66. 67% of the rental spaces governed by
a lease, or in parks which provide condominium
ownership of lots, be removed from the San Luis
Obispo Ordinance (5 . 44 . 030) . Mobilehome owners
renting spaces in mobilehome parks affected by these
exemptions are deserving of the same protection
accorded all other mobilehome tenants in our com-
munity.
Should you wish to review a copy of the ordinances
cited herein, they are in the possession of Ms. Cindy
Clemons, Assistant City Attorney.
Res ectfully,
Louis J. uster
1032 Murl Drive
San Luis Obispo, CA 93405
(805) 544-2260
cc: Jeff Jorgenson, City Attorney
Jim Wills
1-l0
MFFTING AGENDA
(TEM # OM
►►iii!�����►�i��►lill►�II!�Ilil��►�ii► ' �► i !IIcity of sAn lues oBispo
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100
June 15, 1992
COMMUNICATION ITEM
TO: Council Colleagues
FROM: Councilman BR , ' n -
SUBJECT: MOBILEH011fE PARK V XkNCY CONTROL
I have received a communication from Mr. Bill Henson requesting that the Council place
on its agenda the issue of vacancy control as an amendment to the City's Rent Stabilization
Ordinance.
A copy of a petition signed by 239 mobilehome owners is attached. I believe it warrants
some discussion or review by the Council.
I, therefore, request that Council direct staff to bring this back with a report examining the
recent Supreme Court's decision allowing a city to prohibit an increase in mobilehome
space rent at the time the mobilehome is sold and draft an ordinance similar to the one the
City had before.
Also attached are recent newspaper articles reviewing this issue.
Thank you.
BR/PV:cm
Attachments
c: . John Dunn, City Administrative Officer (w/o attachments)
Ken Hampian, Assistant City Administrative Officer (w/o attachments)
Jeff Jorgensen, City Attorney (w/o attachments)
Pam Voges, City Clerk (w/attachments)
H7
What Does The Decision rnedlif r
7 cissa 4$"newt eoisratu Counsel G4MOL'1 Supreme Court brief and a
Nuw nuu the Suprema Coun has member 9(0a firm of Shuu,Mihaly A
M?4crod ha long-awated decision in Weinbetger.raeoVirrathsLWawoul"
yer v Lit, d Frnndidtr. the most• be the park owners'logtoul sat move.
opted question for OSMOL member, "If they wish to continue Heir buulr
u:"Who does it W!m nar followed against vuwcy control regulatums.
Dy:-How dos the care apply to mer they will have to ehallange Nese pro-
Yaw need look no further far theantwer terbium under it regulatory taking
10 there questiortl theory:the said.
Don Liacoln also notes that this it 11
Of one thing there is no doubt.Jut• duces to be taken seriously.
lice O•Connnr's unenincruz opinion 'AlthwgbX=cIeartylifted'he Yall
cloudy held that on its face.ere Escon• •shadow�ft did not speeifteally rule Out
dido Otdlaawco did NOT result In a other cballaagcs, Int slid. "ht fust. N J
"physical Inking'Of the pork Owrw's within twatyfour hours of the X-a
property.As a result,bus wa11• en___.:...."am` decision.Escondido was sued aguln in +� C7.
s
bay-std all oho onhkb have a caw cearendin that les mobilehomo r Ir u7
relied upwdte-Physicaltaking•Ncory g .,
Of Jilin, are OVERRULED. As Sao UJ
prat ordtaaam cwsdmtrd a denial of t Q' f, O
Diego attorney Don Lincoln d Endo. sebstamlvc due process and a reguLa- C%,
ran. saeala.TtntkR ad." so can. tart
takIng.It is Clone that although the N
eftoly waled:"blah Y dead' municipalities cob residents have won � G U J
The Issue el'physienl talon=•was a major bade the war is not over.While
ft primary laws spitted b ss vacancy we can teJacc that kM Is no more.we
eermnl eases to dam.7M Supreme cannot alfotdlobecome Svc wafidetn
(our,.as the highest even Ice the land. but must be ever vigilant and be pre-
has now wee and for all derided thisptuod to defend against anY new ehal-
issue against the Park owncn• Italics.'
But what about the ituw Of•Yegula- But what chance doer the"regula•
torymWngrMnnypark"net Orimtl- tory taking"thooryhave ofweeeedingY
when ad otnmeyt ate grasping this Why wasn't it ralud in the SuMne
Luuo in on Mrap1 m selvage some• Court alongwith the park owncts'rnhcr
thing from the('nun's dedsien,They claims? Thcro is speculation that
point our that berawe the Cwn failed Monera ia;Wlo and Roth.-hu pre
to rule upon-msulutvry acting:but tuned the Yai ante.knew Llut the
talked se much cheat it.an open Invite- votes were not there to support H.Itul
dun has been eatendcd for park ownuas thus did net ensue[he'negulnturY 1"'
to continue their chuliwge GO a new, ins lasue.ln IM.the Supreme L'utltt
and even mtneprnini.Ing.11wry. In. deeidedaenseealtedbpllOCY.C'alilra•
deed, Fran Layton, co-author of Canriauedanpage 4
I'
Pape 4 Spedal Supmme Court Edlllon May,1992
What does the decision mean?
Cwt4mrd from Page! Fran Layton has noted that Judge would have usai is rOL;t now repro. theory of"IcgulalorY UUM" should
�ent
in Calls", ,Inn ta.l w which shop 1Coeiotki.the Otelnrrees Of x{811,�Abr tau ran B."soli b oalt'bang are- not bb enough m IJR7rat g
ougWYdiseuasedeegutarorptaWngtIn cagymt9'bave&rbdyeesaiedIlia 4 plOyadbomwa"P1mAwfailydUnlit Is from protsdngIsSandy cidsras.
a nos-imrMOW wires+.While Jus• nest•replworrMkirtg"theerywillna mss y decided wbiah finds veo®q• IehuedOdaEla_tho[�GdiGaOedO-
tice0•Caoamiswcometlynatadthu succeed. `Remember that14dge evawltoboenaneesmiotrloaW"Mga• cideauhincscotmaetodwith vacancy
Katitttkt'tdecision in&mLB&Wka•. luory wklag.' It is eon thmdannl- no roatroLBut itWon llmppasedtalTha
r,0 California fcph M hue previouslyWY' cep• rtv f r n. a A•rkv finds Lhm Lo masa bow mmry,new them sto made mea did dcdb ft Issues that went
Pined s ittace. n takings tutalysis is �-.�—
ntm ordtttartee, trvmuous California Angola' •aeaney eottttd provision by park eaaati bdmo it.and by a umaimous want
daetsions have Issued decisions which substantially advances ft Qry's feihi' How does the XM decision apply to held in favor of mobilabome owners.
fwmlectdgevanmmtrnguletioa mnngovetnmmtpuepmeofl>��i you?Theassuerdeptsdsolroswhethaf The padeown==tow"behind the 8
"PhysiW taking"analyw requires a eaitting homroweeo from dernmsed you
Use>e a)uriadietioa with a]pas Dalt"is L LIOt who face a staep uphill
stria look at ore simple sae "la then mobilehome vnlacs due to 1e?gats• tmatnl erdtrtartei 1f you d0 tet Ih0 climb.The lido In this watts has taken
a toWng a aotr If NO.He Landowner ins."she said'He also amcludod ear "dacLhave be�eleared'ioryeurary O defiatta web and tddeagh the pork
mumbecempatut-rd ifbMCatodosed hof In ole ,,In*Rri-rye vcity of of Col. to ear snow ad adopt owns have mxwod tbcif ew,.'t the
as to camiderfng a-ngWuc:Y mk- LWAL w tbm a vysaolly idendmt my eon'YAMWYComdprotcedaowadd road to It total vktory is dearly visible
ung.'a toms but me sbt➢ty to look at bllchm"vscana ce"pntevlsionwas be a key part of sew such erdiaanra ahead.
may boAM Including Me Intended rndmbpy tdated to the legld=l ow- If your sits hay a fpm eonud W&
purpae andPubtb policy behind the tnamom puep so of kccpios olobt7o. nan brad did nZ semova W voeelssy'
t pAwimif.culawlogacomplesetook homercolimabcoamingprokibifh'dY eonndprafadeaatmr$piINOYsEaald
In fthien.the law k sem as going ten high ttnd thtudidata triolule Pnfkown- be mngrawlyed Tbcir twill trona
fan a will be held to be a'tic¢alatory tat aabsmattvc liar Tavern rights' hen bees dodk ad,tend they bad do
U Wag."Tents.by 1114 very nature Of she tt Nus acerae fair m eoaehtde shot nothlei /y�
thraty.It should beeagainst atleforcidatto dshoaghfhcvraellMove&the tougb If youfdrydldmonovavacmeycoe- I'�1C7
ddtnd a 9cgalatory ratios' emboWebntbmafougbtesdwaa(fa rmLil"IdbcrdaSw¢
tmrdalITCU
mrdt than 4 was to defend O&W= 'tegalstory taking"was the bma av- your,rep esramtivta aha[Sa and Is
all mese of mmck for eOH owners.the. offspdttiarndeadanddtutlretmrard
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T O d Nt9 W 1170al Nd W 1 I O1-4f100 0b = T NOW Z6 - S T - Nn r
June 9 , 1992
Dear City Councilman Jerry Reiss :
Enclosed please find 239 signatures from mobilehome owners .
These signatures represent a request that "vacancy control"
be placed on your agenda and considered for reinstatement
to the Rent Stabilization Law.
We were limited by time from gathering more signatures . No
one we approached refues to sign. If the number is not
sufficient, please advise us of the addition numbers which
are needed and we will supply them.
Sincerely,
Bill Henson
� -ao
�TO: CITY COUNCIL .MEMBER
i
SUBJECT: Reinstatement of "vacancy control" to Rent
Stabilization Law:
On April 1 , 1992, the Supreme Court ruled that Escondido or any
other jurisdiction could prohibit an increase in mobilehome space
rent at the time the mobilehome is sold. A new buyer may occupy
the mobilehome at the same rent charged to his seller. We request
that vacancy control be added to Section 5 . 44 .060C of the San
Luis Obispo Municipal Code. A number of cities and counties
have already added vacancy control to their ordinances and some of
these are listed below:
City of San Jose
City of San Bernardino
Ventura County
City of Oxnard
Union City
City of Yucaipa
City of Morgan Hill
Please consider ,adding San Luis Obispo to the list.
Sincerely,
Vacancy Control was removed from the Rent Stabiliza-
tion Law due to a court case in Santa Barbara in
1990 .
Some mobile homes change hands far more often than
others , so as .a result of this change, large
variations in rent often exist in mobile homes
which sit side by side. (Often a difference of
$60 or more a month exists. ) At present, an
increase in rent is allowed when a mobilehome
is sold.
A recent Supreme Court decision empowers cities
to outlaw the rent increase when a mobilehome
is sold. This allows rents to be more equitable
and fair.
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TO: CITY COUNCIL .MEMBER
SUBJECT: Reinstatement of "vacancy control" . to Rent
Stabilization Law:
On April 1, 1992 , the Supreme Court ruled that Escondido or any
other jurisdiction could prohibit an increase in mobilehome space
rent at the time the mobilehome is sold. A new buyer may occupy
the mobilehome at the same rent charged to his seller. We request
that vacancy control be added to Section 5 .44 . 060C of the San
Luis Obispo Municipal Code. A number of cities and counties
have already added vacancy control to their ordinances and some of
these are listed below:
City of San Jose
City of San Bernardino
Ventura County
City of Oxnard
Union City
City of Yucaipa
City of Morgan Hill
Please considet adding San Luis Obispo to the list.
Sincerely,
Vacancy Control was removed from the Rent Stabiliza-
tion Law due to a court case in Santa Barbara in
1990 .
Some mobile homes change hands far more often than
others , so as a result of this change, large
variations in rent often exist in mobile homes
which sit side by side. (Often a difference of
$60 or more a month exists. ) At present, an
increase in rent is allowed when a mobilehome
is sold.
A recent Supreme Court decision empowers cities
to outlaw the rent increase when a mobilehome
is sold. This allows rents to be more equitable
and fair.
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1322 112 SUPREME COURT REPORTER
under the takings clause only if conSidera-
John K. YEE, et al., Petitioners tions such as the purpose of the regulation .
�•, or the extent to which it deprives the owner
' CITY OF ESCONDIDO, CALIFORNIA. of the economic use of the Properly sug-
gest that the regulation has unfairly Sin.
No. 50'1947• gled out the property owner to bear burden
Argued Jan. 22, 1992. that should be borne by the public as a
whole. U.S.C.A. ConSt.A.:,end. 5.
i Decided April 1, 1992.
3. Eminent Domain X2(1)
ac-home park owners brought The government effects physical tak-
g in only where it requires the landowner to
tion and claimed that local rent control submit to the physical occupation of his
ordinance, when viewed against backdrop land. U.S.C.A. Const-Amend. 5.
of California's Mobilehome Residency Law,
amounted to physical Occupation of their 4. Eminent Domain X20.1, 10)
property entitling them to compensation Whether the government floods land-
under the_ takings clause. The Superior ou•ner's'proper,y or does no more than
Court of San Diego County, No. ' 42268, require landowner to Suffer installation of
Don Martinson, J., sustained city's demur- cable, the takings clause recuires compen.
rer to complaint and dismissed the action. sation if the gover.;mert authorizes com-
pelleddobile home park owners appealed. Elev_ physical invasion of propery.
en other cases were consolidated with the U.S.C.A. Const-Amend. 5.
mobile home park owners' case. The Court 5. Eminent Domain X2(1.1)
of Appeal, 224 Cal.App.3d 1349, 274 Cal. Landlord and Tenant e=200.11
Rptr. 551, affirmed. Petition for certiorari
was filed in eight of the tx eh a cases. The Local rent control ordinance, when.
Supreme Court, Justice O'Connor, held viewed against backdrop of California Mo.
rent control ordinance did not bilehome Residency Law, which limited the
that (1e
amount to physical taking of park owners' bases upon which mobile home park own.
property; (2) whether ordinance violated ers could terminate mobile home Owner's
tenancy, did not amount to compensable
Park owners' substantive due process
rights was not properly before the Su- king of mobile home park owners prop.
preme Court; arty;ordinance did not compel park owners
rt and (3) whether ordinance� suffer physical occupation of their prop-
constituted
er]y before the .regulatory
CourtrL tory taking not prop erty since owners voluntarily rented their
land to the mobile home owners, and noth.
Affirmed. ing on face of regulatory scheme compelled
•j Justices Blackmun and Souter con- park owners to continue renting property
1 curred in the judgment and filed opinions. to tenants. U.S.C.A. Const-Amend. 5;
West's Ann.Cal.Civ.Code §§ 798 et seq.,
I. Eminent Domain 0--2(1) 799.55(a).
Where government authorizes physical 6 Federal Courts 4511
occupation of property, or actually takes Whether statutory procedure for
ititle to the property, the takings clause changing use of mobile home park was in
generally requires compensation. U.S.C.A. practice "a kind of gauntlet" that prevent.
CorstAmend. 5. ed mobile home park owners from chang•
ing the use of their land and terminating
2. Eminent Domain d2(]) mobile home owner's tenancy could not be
Where government merely regulates considered on petition for certiorari which
use of property, compensation is required claimed that local rent control ordinance,
i
ATTACHMENT 2
i I
FEE v. CITY OF ESCONDIDO, CAL. 1523
Cite u 112 S.CL ISZ2 (1992)
when viewed against backdrop of Califon mobile home park owners of ability to
nia's Mobilehome Residency Laws, amount- choose incoming tenants did not mandate =
ed to physical occupation of mobile home determination that ordinance amounted to
park owners' property entitling the park compensable physical taking of park own-
owners to compensation under the takings ers' property; because park owners volun-
clause; park owners did not claim to have tarily opened their property to occupation
fun that gauntlet U.S.C.A. ConstAmend. by others, park owners could not assert per
5;-West's Ann.Cal.Civ.Code § 798 et seq. se right to compensation based on their
7. Eminent Domain 0-2(1.1) inability to exclude particular individuals.
When landowner decides to rent ]and U.S.C.A. Const.Amend. 5; West's Ann.Cal.
Civ.Code § 798 et seq.
to tenant, government may place ceilings _
on rent landowner can charge, or require 11. Federal Courts c-508
landowner to accept tenant he does not Whether local rent control ordinance
like, without automatically having to pay violated mobile home park owners' substan-
compensation under the takings clause. five due process right could not be con-
U.S.C.A. ConstAmend. 5. sidered on petition for certiorari which
claimed that local rent control ordinance
S. Eminent Domain 0-2(1.]) when viewed against backdrop of Califor-
Landlord and Tenant 0-200.71 nia's Mobilehome Residency Law, amount-
Fact that local rent control ordinance, ed to compensable physical taking of mo-
when viewed against backdrop of Califor- bile home park owners' property; owners
nia's Mobilehome Residency Law, transfers did not raise substantive due process claim
wealth from mobile home park owners.to in the state courts, and even if rule against
Incumbent mobile home owners did not addressing questions not raised below were
mandate determination that local rent con- prudential, adherence to the rule would
trol ordinance amounted to compensable have been appropriate. U.S.C.A. Const
physical taking of mobile home park own- Amends. 5, 14.
ers'. property; ordinance did not compel
moble home park owners to suffer physi- 12. Constitutional Law 0-46(1)
cal occupation of their property. U.S.C.A. Claim that local rent ordinance,. when
ConstAmend. 5; West's Ann.Cal.Civ.Code viewed against backdrop of California's
§ 798 et seq. Mobilehome Residency Law, amounted to
regulatory taking was ripe for judicial re-
9._.
e-
9. Eminent Domain 0-2(1.1) view even though mobile home park own-
'. Allegation that local rent control ordi- ers had not sought rent increases; claim
narice, when viewed against backdrop of amounted to facial challenge to ordinance,
California's Mobilehome Residency Law, and mobile home park owners alleged that
beaefited incumbent mobile home owners ordinance did not substantially advance ]e
without benefiting future mobile .home gitimate state interest no matter how it
owners had nothing to do with whether the was applied. U.S.C.A. ConstAmend. 5;
ordinance caused compensable physical tak-_ West's Amn.Cal.Civ.Code § 798 et seq.
ing of mobile home park owners' property; 13. Federal Courts 0-508
ordinance did not require mobile home park
owners to submit to the physical occupa- Although it was unclear whether mo-
tion of their land. U.S.C.A. ConstAmend. bile home park owners made regulatory
5; West's Ann.Cal.Civ.Code § 798 et seq. taking argument below in action which as-
serted physical taking challenge to local
10. Eminent Domain «2(1.1) rent control ordinance, regulatory taking
Claim that local rent control ordinance, argument could have been raised on peti-
when viewed against backdrop of Califor- tion for certiorari; arguments that ordi-
nia's Mobilehome Residency Law, deprived nance constituted taking by physical occu- i
F
t
124 112 SUPREME COL
REPORTER
pation and by regulation were not separate a park owner may terminate a mobile home
claims,. but, rather, were Separate argu- owner's tenancy are limited to, inter alia,
wments in support of single claim. U.S.C.A. nonpayment of rent and the park owner's
ConstAmend. 5. desire to change the use of his land. The
.i require the removal of
w may not
owner m
- ark o } q
a
14. Federal Courts x511
P
r, R ] and may
a mobile home
when it is sold
�i Once fader] claim is properly
present—neither charge a taansfer fee for the sale
ed, party can make any argument in SUP- nor disapprove of a purchaser who is able
port of that claim; parties are not limited to pay rent The state law does not limit
to precise arguments they made below. the rent the park owner may charge, brat
15. Federal Courts X511 Escondido has a rent control ordinance set-
Whether local rent control ordinance, ting mobile home rents back to their 1956
when dewed against backdrop of Califor- levels and prohibiting rent increases
.a
w
ith
-
n•a s Mobilehome Residency the'City Council's approval. The Sure-
:
wsiis filed by p
et-
ed tocon ensable re ulato } takin of mo- nCourt dismissed l
r.e home Park owners. property not
tioners and others challenging the o
rdi-
nance rejecting the argumentinvent that the
or-
be considered on petition for certiorari
taking a h�_ical .o1.in b de-
dinance effected y.
+.•hich claimed that ordinance amounted to
P g
com ensable physical takin of owners' pricing park owners of all use and occupan-
P .. P } , g
property; regulatory taking question was cy of their property and granting to their
not fairly included in question on which tenants, and their tenants' successors, the
certiorari was granted, and prudence dic- right to physically permanently occupy a:
t;
toted,awaiting case in which issue was use the property. The Court of Appea_
fully litigated below. U.S.C.A. Const. affirmed.
Amend.: 5; U.S.Sup.CLRule 14.1(a), 28 Held
i U.S.C.A. 1. The rent control ordinance does not
t authorize an unwanted physical occupation
Syllabusof petitioners' property and thus does not
The Fifth Amendment's Takings amount to a per se taking. Petitioners'
Clause generally .requires just compensa- argument—that the rent control ordinance
tion where the government authorizes a authorizes a physical `Liking because, cou-
physical- occupation of property. But pled with the state law's restrictions, it
where' the Government merely regulates increases a mobile home's value by giving
the property's use, compensation is re- the homeowner the right to occupy the pad
I; ouired only if considerations such as the indefinitely at a sub-market rent—is unper-
i' regulation's purpose or the extent to which suasive. The government effects a physi-
_ it deprives the owner of the property's cal taking only where it requires the land-
i� econorme use suggests that the regulation owner to submit to the physical occupation
has unfairly singled out the property owner of his land. Here, petitioners have volun-
to bear a burden that should be borne by tartly rented their land to mobile home
the public as a whole.. Petitioners, mobile owners and are not required to continue to
home park owners in respondent Escondi- do so by either the City or the State. On
j do, California, rent pads of land to mobile their face, the laws at issue merely regu-
II home owners. When the homes are sold, late petitioners' use of their land by regu-
the new owners generally continue to rent lating the relationship between landlord
the pads. :- Under the California Mobile- and tenant Any transfer of wealth from
home Residency Law,the bases upon which park owners to incumbent mobile home
The syllabus constitutes no pari of the opinion reader. See Unired Steres v.Defroil Lumber C
of the Court but has been prepared by the Re- 200 U.S. 321, 337, 26 S.Ct. 292, 287, 50 LF- .
j porter of Decisions for the convenience of the 499.
i
11
Wj
'1
YEE v. CITY OF ESCONDIDO, CAL. 1525
Cltt"Ili s.cL is= (IM) FI
< that
owners in the form of sub-market rent does argument they liked in support of
not itself concert regulation into physical claim. Nonetheless, the claim will not be a
invasion. Additional contentions made by considered because, under this Court's
petitioners—that the ordinance benefits Rule 14.1(x), only questions set forth, or
current mobile home owners but not future fairly included, in the petition for certiorari
owners, who must purchase the homes at are considered. Rule 14.1(x) is prudential,
premiums resulting from the homes' in- but is disregarded only where reasons of
creased value, and that the ordinance de- urgency or economy suggest the need to
privies petitioners of the ability to choose address the unpresented question in the
their incoming tenants—might have some case under consideration. The Rule pro-
bearing on whether the ordinance causes a vides the respondent with notice of the
iegulatory taking, but have nothing to do grounds on which certiorari is sought, thus
.,with whether it causes a physical taking. relieving him of the expense of unneces- P
Moreover, the finding in Loretto v. Tele- sary litigation on the merits and the burden
prompter Manhattan CATV Corp., 458 of opposing certiorari on unpresented ques-
U.S. 419, 439, n. 17, 102 S.Ct 3164, 3178, n. tions. It also assists the Court in selecting z
17; 73 L.Ed.2d 868—that a physical taking the cases in which certiorari will be grant-
-claim cannot be defeated by an argument ed. By forcing the parties to focus on the
tliat a landlord can avoid a statute's restric- questions the. Court views as particularly }
tions by ceasing to rent his property, be- important, the Rule enables the Court to 'a
cause his ability to rent may not be condi- use its resources efficiently. Petitioners'
tioaed on forfeiting the right to compensa- question presented was whether the lower
tion for a physical occupation—has no rete- court erred in finding no physical taking,
vance here, where there has been no physi. and the regulatory taking claim is related
cal taking. Since petitioners have made no to; but not fairly included in, that question. s
attempt to change how their land is used, Thus, petitioners must overcome the very
this case also presents no occasion to con- heavy presumption against consideration of s
cider whether the statute, as applied, pre. the regulatory taking claim, which they
vents them from making a change. Pp. have not done. While that claim is impor-
1528-1531. tant, lowei courts have not reached con- r
2: Petitioners' claim that the ordi- flitting results on the claim as they have on
nance constitutes a denial of substantive the physical taking claim. Prudence also QV
due process is not properly before this
dictates awaiting a case in which the issue t
Court because it was not raised below or was fully litigated below, to have the bene-
addressed by the state courts. The ques- fit of developed arguments and lower court ;
tion whether this Court's customary refus- opinions squarely addressing the question.
al: to consider claims not raised or ad-
Thus,the regulatory taking issue should be
=dressed below is a jurisdictional or pruden- left for the California courts to address in
tial rule need not be resolved here, because the. first instance. Pp. 1531-1534.,
even if the rule were prudential, it would 224 Cal.App.3d 1349, 274 Cal.Rptr. 551
be adhered to in this case. Pp. 1531-1532. (1990), affirmed. ,
3.' Also improperly before this Court O'CONNOR, J., delivered the opinion
is petitioners' claim that the ordinance con- of the Court, in which REHNQUIST, G.J.,
strtutes a regulatory taking. The regula- and WHITE, STEVENS, SCALIA,
tory taking claim is ripe for review-, and KENNEDY, and THOMAS, JJ., joined. 5
the fact that it was not raised below does BLACKMUN, J., and SOUTER, J., filed . r
not mean that it could not be properly opinions.concurring in the judgment
raised' before this Court, since once peti-
'tioners properly raised a taking claim, they Robert J.Jagiello,Running Springs, Cal.,
•eould have formulated, in this Court, any for petitioners.
-Y7
1I2 SUPREME
REPORTER
1526
Carter G. Phillips, '�i'ashington, D.C., for nently in parks; once in place, only abo;:t
respondent one in every hundred mobile homes is ever
moved. Hirsch & Hirsch, Legal-Economic
1- Justice O'CO\\OR delivered the opinion Analysis .of Rent Controls in a Mobile
V 9 ,i
of the Court Home Context: Placement Values and Va-
1 [1,21The Takings Clause of the Fifth cancy Decontrol, 35 LCLk L.Rev. 399, ;05
jAmendment provides: ."[N]or shall private (198£). A mobile home owner typically
property be taken for public use, without rents a plot of .end, called a pad, fro
m
just compensation." Most of our cases in- the owner of a mobile home park. The
terpreting the Clause fall within two dis- park owner provides private roads within
tinct classes. Where the government au- the park, common facilities such as wash.
horizes a physical occupation of property ing machines or a s-A--mmi: pool, and ef-
(or actually takes title), the Takings Clause ten utilities. The mobile home owner often
generally requires compensation. See, e.g., invests in site-specific improvements such
Loretto a Teleprompter .Vanhattan as a driveway, steps, walkways,porches, or
C.417 Corp., 458 U.S. 419, 426, 102 S.CL landscaping. When the mobile home own-
3164, 3171, 73 L.Ed.2d 868 (19£2). But er wishes to move, the mobile home is
where the government merely regulates usually sold in place, and the purchaser
the use of property, compensation is re- continues_to rent the pad on which the
quired only if considerations such as the mobile home is located.
.'
purpose of the regulation or the extent to In 1978, California enacted its Mobile.
which it deprives the owner of the econom- home Residency Law, Cal.Civ.Code Am
is use of the property suggest that the § 798 et seq. (West 1982 and Supp.1991).
regulation has unfairly singled out the The Legislature found "that, because of
property owner to bear a burden that the high cost of moving mobilehomes, the
should be borne by the public as a whole. potential for damage resulting therefrom,
See, e.g., Penn Central Tran-sp. Co. v. New •the requirements relating to the ins U- 1a.
I York City, 438 U.S. 104, 123-125, 98 S.Ct tion of mobilehomes, and the cost of land-
2646, 2659, 57 L.Ed.2d 631 (1978). The soaping or lot preparation, it is necessary.
first category of cases requires courts to that the owners of mobilehomes occupied
apply a clear rule; the second necessarily within mobilehome parks be provided with
entails complex factual assessments of the the unique protection from actual or con-
purposes and economic effects of govern- structive eviction afforded by the provi-
i
ment actions. sions of this chapter." § 798.55(a).
! Petitioners own mobile home parks in The Mobilehome Residency Law limits
Escondido, California. They contend that a the bases upon which a park owner may
'• local rent control ordinance, when viewed terminate a mobile home owner's tenancy.
1 against the backdrop of California's Mobile- These include the nonpayment of rent, the
home Residency Law, amounts to a physi- mobile home owner's violation of law or
cal occupation of their property entitling park rules, and the park owner's desire to
them to compensation under the first tate change the use of his land. § 798.56.
fu
gory of cases discussed above. While a rental agreement is in effect, how-
ever, .the park owner generally may not
I require the removal of a mobile home when
ii The term "mobile home" is somewhat it is sold. § 798.73. The park owner may
'i misleading. Mobile homes are largely im- neither charge a transfer fee for the sale,
mobile as a practical matter, because the § 798.72, nor disapprove of the purchaser,
cost of moving one-is often a significant provided that the purchaser has the abilit-
fraction of the value of the mobile home to pay the rent, § 798.74. The Mobilehom.
itself. They are generally placed perma- Residency Law contains a number of other
t:
I
I:
1EE v. CITY OF ESCO\DIDO; CAL. 1527
cue m 112 s.cf- 1522 (wrs)
detailed provisions, but none limit the rent control ordinance is unconstitutional, and 1
the park owner may charge. an injunction barring the ordinance's en- j
In the wake of the 'vlobilehome Residen- forcement. Id at 54.
cy Law, carious communities in California In their opposition to the city's demurrer,
adopted mobilehome rent control ordi- the Yees relied almost entirely on Hall t%
dances. See Hirsch g Hirsch, supra, at City of Santa Barbara, S33 F.2d 1210
408-411. The voters of Escondido did the (CA9 1987), cert_ denied, 485 U.S. 940, 108
same in 1958 by approving Proposition K, S.Ct. 1120, 99 L.Ed.2d 281 (19SS), which
the rent control ordinance challenged here. had held that a similar mobile home rent
The ordinance sets rents back to their 1986 control ordinance effected a physical taking
levels, and prohibits rent increases without under Loretto v. Teleprompter.Vanhaitan ¢
the approval of the City Council. Park CATV Corp., 458 U.S. 419, 102 S.Ct. 3164,
owners may apply to the Council for rent 73 L.Ed.2d 868 (1982). The Yees candidly
increases at any time. The Council must admitted that "in fact, the Hall decision
approve any increases it determines to be was used [as] a guide in drafting the
"just, fair and reasonable," after consider. present Complaint." 2 Tr. 318, Points g
ing the following nonexclusive list of Authorities in Opposition to Demurrer 4.
factors: (1) changes in the Consumer Price The Superior Court nevertheless sustained
Index; (2) the rent charged for comparable the city's demurrer and dismissed the Yees'
mobile home pads in Escondido; (3) the complaint. App. to Pet. for Cert. C-42
ngth of time since the last rent increase; ,
t4j the cost of any capital improvements The Yees were not alone. Eleven other
park owners filed similar
related W the pad or pads at issue; (5) ilar suits against the
changes in property taxes; (6) changes in cityshortly afterwards, and all were dis-
any rent paid by the park owner for the missed. By stipulation, all 12 cases were
land; (7) changes in utility charges; he consolidated for appeal; the parties agreed
that all would be submitted for decision by
changes in operating and maintenance ex-
penses; (9) the need for repairs other than the California Court of Appeal on :the
for ordinary v ear and tear, (10) the briefs and oral argument in the Yee case.
amount and quality of services pro,6ded to The Court of Appeal affirmed, in an opin-
the affected tenant; and (11) any lawful ion primarily devoted to expressing the
existing lease. Ordinance § 4(g), App. 11- court's disagreement with the reasoning of
12 Hall. The court concluded: "Loretto in no
Petitioners John and Irene Yee own the way suggests that the Escondido ordinance _;
Friendly Hills and Sunset Terrace Mobile authorizes a permanent physical occupation
Home Parks, both of which are located in of the landlord's property and therefore
the city of Escondido. A few months after constitutes a per se taking." 224 Cal.
the adoption of Escondido's rent control APp•3d 1349, 1358,274 Cal.Rptr.551 (1990).
ordinance, they filed suit in San Diego The California Supreme Court denied re- 1
County Superior Court According to the view. App. to Pet. for Cert B-41.
complaint, "[t]he rent control law has had Eight of the twelve park owners, includ-
the effect of depriving the plaintiffs of all ing the Yees,joined in a petition for certio-
use and occupancy of [their] real property rari. We granted certiorari, 502 U.S. —,
and granting to the tenants of mobile- 112 S.Ct. 294, 116 L.Ed.2d 239 (1991), to
homes presently in The Park, as well as the resolve the conflict between the decision
successors in interest of such tenants, the below and those of two of the federal to
*Ight to physically permanently occupy and Courts of Appeals, in Hall, supra, and 3
se the real property of Plaintiff." Id., at : Pinewood Estates of Michigan V. Barne- fi
3, 11 6. The Yets requested damages of six gat Toumship Leveling Board, 898 F.2d
million dollars, a declaration that the rent 347 (CA3 1990).
r
i
1528 112 SUPREME COURT REPORTER
- lI cases, cannot be squared easily with our
1' Petitioners do not claim that the ordinary cases on physical t.akir.gs. The govern-
'�• rent conol statutes regulating housing ment effects a Physical taking only
where
throughout the country violate the Takings it requires the landowner to submit to the
Clause. Brief for Petitioners 7, 10. Cf. physical occupation of his land. "This ele-
Pennell v. San Jose, 4S5 U.S. 1, 12, n. 6, ment of required acquiescence is at the
108 S.Ct 549, 558, n. 6, 99 L.Ed.2d 1 (MS); heart of the concept of occupation." FCC
Loretto supra, 458 U.S. at 440, 102 S.Ct at v. Flor,'da Power Corp., 480 U.S. 245, 252,
3178. Instead, their argument is predicat. 107 S.Ct 1107, 1112, 94 L.Ed.2d 212 (1987).
Thus whether the overnment floods a
- economic relator_ht g
ed on the unusual p
between park owners and mobile home landowner's property,roperty Pum ell y v. Green
owners. Park owners may no longer set Say Co., 13 ','all. 166, 20 L.Ed. 557 (15721,
rents or decide who their tenants will be. or does no more than require the land-
As a result; according to petitioners, any owner to suffer the installation of a cable,
r reduction in the rent for a mobile homeP ad Loretto, supra, the Takings Clause re
causes a corresponding increase in the val- quires compensation ;f the gove-nment au-
��I li ue of a mobile home, because the mobile thorizes a compelled physical invasion of
home owner now owns, in addition to a property.
mobile home, the right to occupy a pad at a But the. Escondido rent control ordi-
rent below the value that would be set by nance, even when considered in conjunction
the free market Cf. Hirsch & Hirsch, 35 with the California Mobilehome Residency
UCLA L.Rev., at 425. Because under the Law, authorizes no such thing. Petitioner!
California Mobilehome Residency Law the voluntarily rented their land to noble
park owner cannot evict a mobile home horse owners. At least on the face of the
owner or easily convert the property to regulatory scheme, neither the City nor the
other uses, the argument goes, the mobile Stats compels petitioners, once they have
home owner is effectively a perpetual ten- rented their property to tenons, to contin-
ant of the park, and the increase in the ue doing so. To the contrary, the Mobile-
mobile home's value thus represents the home Residency Law provides that a park
right to occupy a pad at below-market rent owner who wishes to change the use of his
indefinitely. And because the Mobilehome land may evict his tenants, albeit with six
Residency Law permits the mobile home or twelve months notice. Cal.Civ.Code
owner to sell the mobile home in place, the Ann. § 798.56(g). Put bluntly, no govern-
mobile home owner can receive a premium men.t has required anyphysical invasion of
: from the purchaser corresponding to this petitioners' property. Petitioners' tenants
!j increase in value. The amount of this pre- were invited by petitioners, not forced upon
mium is not limited by the Mobilehome them by the government See Florida
Residency Law or the Escondido ordinance. Pou+er, supra, 4S0 U.S. at 252-253, 107
As a result, petitioners conclude, the rent S.Ct at 1112-1113. While the "right to
control ordinance has transferred a discrete exclude" is doubtless, as petitioners assert,
interest in land—the right to occupy the "one of the most essential sticks in the
j.. land indefinitely at a sub-market rent— bundle of rights that are commonly charac-
from the park owner to the mobile home terized as property," Kaiser Aetna r.
ii owner. Petitioners contend that what has Lrnited States, 444 U.S. 164, 176, 100 S.Ct.
ij been transferred from park owner to mo- 353, 391, 62 L.Ed.2d 332 (1979), we do not
bile home owner is no less than a right of find that right to have been taken from
physical occupation of the park owner's petitioners on the mere face of the Escondi-
land. do ordinance.
l [3-51 This argument, while perhaps [6] Petitioners suggest'that the statu
!s within the scope of our regulatory taking tory procedure for changing the use of a
I: I
5
YEE v. CITY OF ESCO':DIDO, CAL. 1529
ci,e„uz s.cL 1522 000:1
mobile home park is in practice "a kind of out automatically having to pay compensa-
gauntlet," in that they are not in fact free tion. See also Pruneyard Shopping Cen-
o
to change the use of their ]and. Reply ter t. Robins, 447 U.S. 74 S244, 100 S.Ct
Brief for Petitioners 10, n. 16. Because 2035, 2041-2042, 64 L.Ed.2d 741 (19£0). _
petitioners do not claim to have run that Such forms of regulation are analyzed by
gauntlet, however, this case provides ,no engaging in the "essentially ad hoc, factual
occasion to consider how the procedure has inquiries" necessary to determine whether
been applied to petitioners' property, and a regulatory taking has occurred. Kaiser
we accordingly confine ourselves to the Aetna, supra, 444 U.S., at 175, 100 S.Ct.,
face of the statute. See Keystone Eitumi- at 390. In the words of Justice Holmes,
nous Coal Assn. n DeBened-laic, 4S0 U.S. "while property may be regulated to a cer-
410, 493-195, 107 S.Ct 1232, 1246-1247, 94 twin extent, if regulation goes too far it will
L.Ed.2d 472 (19£7)_. A different case would be recognized as a taking." Pennsylvania
be presented were the statute, on its face Coal Co. r. Mahon, 260 U.S. 393, 415, 43
or as applied, to compel a landowner over S.Ct. 158, 160, 67 L.Ed. 322 (1922).
objection to rent his property or to refrain
in perpetuity from terminating a tenancy. [8] Petitioners emphasize that the ordi-
See Florida Power, supra, 480 U.S., at nance transfers wealth from park owners
251-252, n. 6, 107 S.Ct., at 1111-1112, n. 6; to incumbent mobile home owners. Other
see"also Nollan v. California Coastal forms of land use regulation, however, can
•+mm.'n, 483 U.S. 825, 531-832, 107 S.Ct also be said to transfer wealth from the
1, 31954146, 97 L Ed.2d 677 (1957); one who is regulated to another. Ordinary
Fresh Pond Shopping Center, Inc u Cal- rent control often transfers wealth from
lahan, 464 U.S. £75, 677, 104 S.Ct 218, landlords to tenants by reducing the land-
219, 78 L.Ed.2d 215 (1953) (RFH%Quis�r, J., lords' income and the tenants' monthly pay-
dissenting). ments, although it does not cause a one-
time transfer of value as occurs with mo-
[7] On their face, the state and local bile homes. Traditional zoning regulations
laws at issue here merely regulate petition- can transfer wealth from those whose ac-
ers' use of their land by regulating the tivities are prohibited to their neighbors;
relationship between landlord and tenant when a property owner is barred from min-
"This Court has consistently affirmed that ing coal on his land, for example, the value
States have broad power to regulate Nous- of his property may decline but the value
ing conditions in general and the landlord- of his neighbor's property may rise. The
tenant- relationship in particular without mobile home owner's ability to sell the mo-
paymIK compensation for all economic inju- bile home at a premium may make this
ries that such regulation entails." Loretto, Wealth transfer more risible than in the
458 U.S., at 440, 102 S.Ct., at 3178. See ordinary case, see Epstein, Rent Control
also Florida Power, supra, 480 U.S., at and the Theory of Efficient Regulation, 54
252, 107 S.Ct.,at 1112("statutes regulating Brooklyn L.Rev. 741, 758-759 (1968), but
the economic relations of landlords and ten- the existence of the transfer in itself does
ants are not per se takings"). When a not convert regulation into physical inva-
landowner decides to rent his land to ten- sion.
ants, the government may place ceilings on
the rents the landowner can charge, see, [9] Petitioners also rely heavily on their
e.g., Pennell, supra, 485 U.S., at 12, n. 6, allegation that the ordinance benefits in-
108 S.Ct_, at 557-858, n. 6, or require the cumbent mobile home owners without ben-
landowner to accept tenants he does not efWng future mobile home owners, who
e, see, a g., Heart of Atlanta Motel, Ine. will be forced to purchase mobile homes at
United States, 379 U.S. 241, 261, 65 premiums. Mobile homes, like motor ve-
S.Ct 348, 359, 13 L.Ed.2d 258 (1964), with- hicles, ordinarily decline in value with age.
1 -SI
L
1530 112 SUPRE.NSE COURT. REPORTER
But the effect of the rent control ordi- ing court would wish to consider in deter-
nance,'coupled with the restrictions on the mining xhether the ordinance unjustly im-
reject new ten- poses a burden on petitioners that should
park oxmer s freedom W p r
c government, rath-
-� significantly the value be compensated by the o err ,
ants is to increase _ y F g
, g
' of the mobile home. This increased value er tHan remain[Ing] disproportionately con-
normally benefits only the tenant in posses- centrated on a few persons." Penn Cen-
sion at the time the rent control is imposed. tral Tramp. Co. v. Yew York City, 43S
See Hirsch d. Hirsch, 35 UCLA, L.Rev., at U.S., at 124, 98 S.Ct., at 2659. But it dges
430-431. Petitioners are correct in citing not convert regulation into the unwanted
the existence of this premium as a differ- physical occupation of land. Because they
ence between the alleged effect of the Es- voluntarily open their property to occupa-
condido'ordinance and that of an ordinary tion by others, petitioners cannot assert a
apartment rent control statute. Most per se right to compensation based on their
apartment tenants do not sell anything to inability to exclude particular individuals.
their successors (and are often prohibited See Heart of Atlanta Motel, Inc. V. L'nitcd
X charging "key money"), so a typical States, 3i9 U.S., at 261, 55 S.Ct., at 359,
rent control statute will transfer wealth see also id.,-at 259, S5 S.Ct., at 35S ("appel-
from the landlord to the incumbent tenant ]ant has no 'right' to select its guests as it
and all.future tenants. By contrast, peti- sees fit, free from governmental regula-
tioners-contend that the Escondido ordi- tion"); Pruneyard Shopping Cente
nance_transfers wealth only to the incum- Robins, 447 U.S., at 52-84, 100 S.Ct
bent mobile home owner. This effect 2041-2042.
might have some bearing on whether the Petitioners' final line of argument rests
ordinance causes a regulatory taking, as it on a footnote in Loretto, in which we re-
may shed some light on whether there is a jetted the contention that "the landlord
sufficient nexus between the effect of the could avoid the requirements of [the stat-
] ordinance and the objectives it is supposed ute forcing her to permit cable to be perma-
w advance. See :�'ollan r. California nently placed on her property] by ceasing
Coastal Comm'n, supra, 483 U.S., at 534- to rent the building to tenants." We found
535, 107 S.Ct., at 3147-3148. But it has this possibility insufficient to defeat a
nothing to do with whether the ordinance physical taking claim,because "a landlord's
causes a physical taking. Whether the ability to rent his property may not be
ordinance benefits only current mobile conditioned on his forfeiting the right to
ij home owners or all mobile home owners, it compensation for a physical occupation."
s; does not require petitioners to submit to Loretto, 458 U.S., at 439, n. 17, 102 S.Ct.,
l the ph}.sical occupation of their land. at 3178 n. 17. Petitioners argue that if
:I
+i [10] The same may be said of petition- they have to ]ease the mobile home park
erscontention that the ordinance amounts business in order to avoid the strictures of
1 to compelled physical occupation because it the Escondido ordinance, their ability to
deprives petitioners of the ability to choose rent their property has in fact been condi-
their incoming tenants.' Again, this effect tioned on such a forfeiture. This argument
may be relevant to a regulatory taking fails at its base, however, because there
argument, as it may be one factor a review- has simply been no compelled physical oc-
1. Strictly speaking, the Escondido rent control that before the adoption of the ordinance they.
ordinance only limits rents. Petitioners'inabili. were able to influence a mobilehome owner.s
' ty to select their incoming tenants is a product selection of a purchaser by threatening
of the State's Mobilehome Residency Law, the crease the rent for prospective purchaser;
I constitutionality of which has never been at disfavored. To the extent the rent control �..,..-
issue in this case. (The State, moreover, has nance deprives petitioners of this type of influ-
never been a parry.) But we understand peti. ence,petitioners argument is one we must con.
ei
tioners to be making a more subtle argument— sider.
is
YEE v. CITY OF ESCONDIDO, CAL. 1531 _
Clue u 112 S.CL 1':2 (1992) �
I
cupztion giving rise to a right to compensa- raised or addressed below, and the second ='
tion that petitioners could have forfeited. is not fairly included in the question on =
Had the city required.such an occupation, which we granted certiorari.
of course, petitioners would have a right to
compensation, and the city might then lack A
the power to condition petitioners' ability to [11] The Ye es did not include a due
run mobi,e homeirks on their waiver of
P process claim in their complaint Nor did
this right Cf. I5'ollorz 4S3 U.S., at 537, -
107 S.Ct., at 3148. But because the ordi•
Court of Appeal. It was not until their
Petitioners raise a due process claim in the
Hance does not effect a physical taking in e
the first place, this footnote in Loretto Petition for review in the California Su-
does not help petitioners. preme Court that petitioners finally raised
a substantive due process claim. But the AWith respect to physical takings, then, California Supreme Court denied discretion-
this case is not far removed from FCC v. ary review. Such a denial, as in this Court,
Florida Power Corp., 480 U.S. 245, 107 expresses no view as to the merits. See
S.Ct. 1107, 94 L.Ed.2d 282 (1987), in which People v. 7r ogs, 8 Cal.3d SS4, 890-891, 106
the respondent had voluntarily]eased space Cal.Rptr. 408, 412, 506 P.2d 232, 336 (1913).
on, its utility poles to a cable television Tn short, petitioners did not raise a sub-
company for the installation of cables. The stantive due process. claim in the stats S
Federal Government, exercising its statu- courts, and no state court has addressed
tory authority to regulate pole attachment 'such a claim.
agreements, substantially reduced the an-
In reviewing the. judgments of stats
nual rent We rejected the respondent's ;F
claim that "it is a taking under Loretto for courts under the jurisdictional grant of 28
a tenant invited to lease at a rent of $7.15 U.S.C. § 1257, the Court has, with very
to remain at the regulated rent of S1.79." rare exceptions, refused to consider peti-
Td, 480 U.S., at 252, 107 S.Ct., at]112. We
claims that were not raised or ad-
explained that "it is the invitation, not the dressed below. Illinois v. Gates, 462 U.S.
rent, that makes the difference. The line 213, 218-220, 103 S.Ct 2317, 2321-2323, 76
which separates [this case] from Loretto is L.Ed.2d 527 (1983). While we have ex-
the unambiguous distinction between a ... pressed inconsistent views as to whether
lessee and an interloper with a government this rule is jurisdictional or prudential in
license." Id., at 252-253, 107 S.Ct, at cases arising from state courts, see ibid.,
1112' The distinction is equally unambig- we need not resolve the question here. (In
uous here. The Escondido rent control or- cases arising from federal courts, the rule
-dinance, even considered against the back- is prudential only. See, e.g., Carlson a `
drop of California's Mobilehome Residency Greerz, 496 U.S. 14; 17, n. 2, 100 S.Ct 1968; -a
Law, does not authorize an unwanted phys- 1470, n. 2, 64 L.Ed.2d 15 (1980).) Even if h
ical occupation of petitioners' property. It the rule were prudential, we would adhere
is a regulation of petitioners' use of their to it in this case. Because petitioners did i
property, and thus does not amount to a not raise their substantive due process
per se taking. claim below, and because the stats courts 1.
did not address it, we will not consider it
III here.
In this Court; petitioners attempt to chal-
lenge the ordinance on two additional B
grounds: They argue that it constitutes a [12] As a preliminary matter, we must
denial of substantive due process and a address respondent's assertion that a regu-
regulatory taking. Neither of these claims latory taking claim is unripe because peti-
is properly before us. The first was not tioners have not sought rent increases.
1
1532 112 SUPREME COURT REPORTER
While respondent is correct that a claim Bankers L?fe & Casualty Co. v. Crer.-
that the ordinance effects a regulatory tak- sham, 456 U.S. 71, 78, n. 2, 108 S.CL 1645,
ing as. applied to petitioners' property 1650, n. 2, 100 L.Ed.2d 62 (1955); Gates,
would be unripe for this reason, see Wil- supra, 462 U.S., at 219-M, 103 S.Ct., at
liamson County P.egional Planning 2322-2323; Dewey v. Des Aloines, 173 U.S.
z Comm'n_v.- Y.amillon Bank of Johnson 193, 197-199, 19 S.Ct 379, 350-3S1, 43
City,-etS U.S. 112, 1S6-197, 105 S.CL 3108, L.El 665 (1699). Petitioners' arguments
2116-312 87 L.Ed.2d 126 (1950, petition- that the ordinance constitutes a taking in
ers moiunt a fo.cial challenge to the ordi- two different ways, by physical occupation
r.ance: They allege in this Court that the and by regulation, are not separate ciciras.
ordinance does not " 'substantially ad- They are rather separate arguments in
vancellI' a " 'legitimate state interest'" no support of a single clai —t at the crci-
matter how it is applied. See Nollan v. nonce_effects an unconstitutional taking.
California Coastal Comnz'n, supra, 483 Having raised a taking claim in the state
U.S., at 834, 107 S.Ct., at 3147; Agins v. courts, therefore, petitioners could have
Tiburon,.447 U.S. 255, 260, 100 S.Ct. 2138, formulated any argument they liked in sup-
2141,65 L.Ed.2d 106 (1950). As this allega- port of that claim here.
tion does not depend on the extent to which
petitioners.are deprived of the economic A litigant seeking review in this Court of
use of their particular pieces.of property or a claim properly raised in the lower courts
_ the extent to which these particular peti- thus. generally possesses the ability to
tioners are compensated, petitioners' facial frame the question to be decided in r
challenge is ripe. See Keystone Bitumi- way he chooses, without being limited
nous Coal Assn. v. DeBenedictis, 4S0 U.S., the manner in which the question was
at 495, 107 S.Ct, at 1247; Agins, supra, framed below. While we have on occasion
447 U.S., at 260, 100 S.Ct., at 2141. rephrased the question presented by a peti-
[13] ' We must also reject respondent's tioner, see, e.g., Ankenbrandt v. Pi chords,
contention that the regulatory taking argu- 002 U.S. —, 112 S.Ct 855, 116 L.Ed.2d
ment is not properly before us because it 164 (1992), or requested the parties to �d-
i was not made below. It is unclear whether dress an important question of law not
petitioners made this argument below: raised in the petition for certiorari, see,
Portions of their complaint and briefing e.g., Payne v. Tennessee, 498 U.S.—, 111
can be read either to argue a regulatory S.Ct 2031, 112 L.Ed.2d 1032 (1991), by and
taking or to support their physical taking large it is the petitioner himself who con-
argument.' For the same reason it is equal- trots the scope of the question presented.
ly ambiguous whether the Court of Appeal The petitioner can generally frame the
addressed the issue. Yet petitioners' regu. question as broadly or as narrowly as he
i� latory taking argument stands in a posture sees fit
different from their substantive due The framing of the question presented
process claim. has significant consequences,however, be-
1141 Petitioners unquestionably raised a cause under this Court's Rule 14.1(a),
takingclaim in the state courts. The ques- "[o]nly the questions set forth in the peri-
" tion whether the rent control ordinance tion, or fairly included therein, will be con-
took their property without compensation, sidered by the Court" While "[t]he state-
in violation of the Fifth Amendment's Tak- ment of any question presented will be
Iings Clause, is thus properly before us. deemed to comprise every subsidiary ques-
Once a federal claim is properly presented, tion fairly included therein," ibid., we ordi-
i a party can make any argument in support narily do not consider questions outs
A of that claim; parties are not limited to the those presented in the petition for certio7-
1' precise_ arguments they made below, ri. See, e.g., Berkemer v. McCarty, 468
t! -
'1
a.
a
TEE v CITY OF ESCONDIDO, CAL. 1533 til
Che u 112 S.CL 15:2 (1492)
i i f
U.S. 420, 443, n. 38, 104 S.CL 3138, 3152, n. forces the parties to focus on the questions
38; 82 L.Ed.2d 317 (1984). This rule is the Court has viewed as particularly impor- ' I
prudential in nature, but we disregard it tont, thus enabling us to make efficient use
only in the most exceptional cases,"Store of our resources.
v. Powell, 428 U.S. 465, 1131, n. 15, 96 S.Ct [15] We granted certiorari on a single
3037, 3046, n. 15, 119 L.Ed.2d 1067 (197x6), question pertaining to the Takings Clause:
w.ttere reasons of urgency or of economy ,T,,%.o federal courts of appeal have held
suggest the need to address the unpresent- that the transfer of a premium value to a
ed question in the case under consideration. departing mobilehome tenant, representing -
Rule. 14.1(a) serves two important and the value of the right to occupy at a re-
related purposes. First, it provides the re- duced rate under ]oral mobilehome rent
spondent with notice of the grounds upon control ordinances, constitute[s] an imper-
which the petitioner is seeking certiorari, missible taking. Was it error for the state
and enables the respondent to sharpen the appellate court to disregard the rulings and -
arguments as to why certiorari should not hold that there was no taking under the
be granted. Were we routinely to consider fifth and fourteenth amendments?" This
questions beyond those raised in the peri- was the question presented by petitioners. .
tion, the respondent would lack any oppor- pet. for Gert. i. It asks whether the court
iunity,in advance of litigation on the merits below erred in disagreeing with the hold-
to argue that such questions are. not wor- ings of the Courts of Appeals for the Third
thy of review. Where, as is not unusual, and Ninth Circuits in Pinewood Estates of
the decision below involves issues on which Michigan v. Barnegat Township Lercling
the petitioner does not seek certiorari, the Board, 898 F.2d 347 (CA3 1990), and Hall
'respondent would face the formidable task v. City of Santa Barbara, 833 F.2d 1270
of opposing certiorari on every issue the (CA9 1987), cert. denied, 485 U.S. 940, 108
Court might conceivably find present in the S.Ct. 1120, 99 L.Ed.2d 281 (1986). These
rase. By forcing the petitioner to choose cases, in turn, held that mobile home ordi-
his questions at the outset, Rule 14.1(a) nances effected physical takings, not regu-
relieves the respondent of the expense of latory takings. Fairly construed, then, pe-
unnecessary litigation on the merits and titioners' question presented is the equiva-
the burden of opposing certiorari on unpre- lent of the question "Did the court below
sented questions. err in finding no physical taking?"
Second, Rule 14.1(a) assists the Court in Whether or not the ordinance effects a
selecting the cases in which certiorari will regulatory taking is a question related to
be granted. Last Term alone we received the one petitioners presented, and perhaps
over 5,OOO.petitions for certiorari, but we complementary to the one petitioners
have the capacity to decide only a small presented, but it is not "fairly included F
fraction of these cases on the merits. To therein." Consideration of whether a regu- p
use our resources .most efficiently, we latory taking occurred would not assist in
must grant certiorari only in those cases resolving whether a physical taking oc-
that will enable us to resolve particularly curred as well; neither of the two ques- t
important questions. Were we routinely to tions is subsidiary to the other. Both h
entertain questions not presented in the might be subsidiary to a question embrac-
petition for certiorari,much of this efficien ing both—Was there a taking?—but they = .
cy would vanish, as parties who feared an exist side by side, neither encompassing the
inability to prevail on the question present- other. Cf. American National Bank &
ed would be encouraged to fill their limited Trust Co. of Chicago v. Haroco, Inc., 473
briefing space and argument time with dis- U.S. 606, 608, 105 S.Ct. 3291, 3292, 87
cussion of issues other. than the one on L.Ed.2d 437 (1965) (question whether com-
which certiorari was granted. Rule 14.1(a) plaint adequately alleges conduct of racke-
IIS �
1534 112 SUPRE.1fE COURT REPORTER
teering enterprise is not fairly included in regulatory taking issue for the California
question whether statute requires that courts to address in the first instance.
s plaintiff suffer damages through defen-
dant's conduct of such an enterprise). IV
Rule 14.1(x) accordingly creates a heavy We. made this observation :n Loretto:
presumption against our consideration of
petitioners' claim that the ordinance causes "Our holding today is very narrow.
a regulatory taking. Petitioners have not We affirm the traditional rule that a
overcome that presumption. While the permanent physical occupation of proper-
regulatory taking question is no doubt im- ty is a taking. In such a case, the prop-
portant, from an institutional perspective it erty owner entertains a historically root-
is not as important as the physical taking ed expecurtion of compensation, and the
q iestion. The lower courts have not character of the invasion is cualitative'.v
1;
reached conflicting result, so far as we more intrusive than perhaps any other
know, on whether similar mobile home rent category of property regulation. 1','e do
control ordinances effect regulatory tak- not, however, question the equally sub-
ings. They have reached conflicting re- stantial authority upholding a State's
_ sults over whether such ordinances cause broad power to impose appropriate re-
physical takings; such a conflict is, of strictions upon an owner's use of his
course, a substantial reason for granting . property." 458 U.S., at 441, 102 S.Ct., at
certiorari under this Court's Rule 10. 3179.
5foreever, the conflict is between two We respected this distinction again in
' courts whose jurisdiction includes Califon Florida Pourer, where we held that no tak-
nia, the State with the largest population ing occurs under Loretto when a tenant
and one with a relatively high percentage invited to lease at one rent remains at a
of the nation's mobile homes. Forum-shop- lower regulated rent. Florida Power, 460
ping is thus of particular concern. See U.S., at 252-253, 107 S.Ct., at 1112-1113.
Azul Pacifico, Inc. v. City of Los.4 ngeles, We continue to observe the distinction to-
948 F.2d 5575, 579 (CA9 1991) (mobile home day. Because the Escondido rent control
park owners may file physical taking suit ordinance does not compel a landowner to
in either state or federal court). Prudence suffer the physical occupation of his prop-
also dictates awaiting a case in which the erty, it does not effect a per se taking
' issue was fully litigated below, so that we under Loretto. The judgment of the Court
`1 will have the benefit of developed argu- of Appeal is accordingly
i ments on both sides and lower court opin- Affirmed
t ions squarely addressing the question. See
Lytle v. Household Manufacturing, Inc-,
494 U.S. 545, 552, n.3, 110 S.CL 1331, 1336, Justice BL.4CKMTJN, concurring in the
n. 3, 108 L.Ed.2d 504 (1990) ("Applying our judgment
i analysis .._ to the fact of a particular I agree with the Court that the Escondi-
case without the benefit of a full record or do Ordinance is not a taking under. this
l lower court determinations is not a sensible Court's analysis in Loretto v. Tele
�{ exercise of this Court's discretion"). In prompter Manhattan CATV Corp., 458
1 fact, were we to address the issue here, we U.S. 419, 102 S.Ct 3164, 73 L.Ed.2d 868
would apparently be the first court in the (1982). I also conclude that the substantive
nation to determine whether an ordinance due process and regulatory taking claims
like this one effects a regulatory taking. are not properly raised in this Court For
We will accordingly follow Rule 14.1(a), that reason, 1, unlike the Court, do not
and consider only the question petitioners decide whether the regulatory taking claim
raised in seeking certiorari. We leave the is or is not ripe, or which of petitioners'
i
is
_56-
0
JACOBSON v. U.S. 1535
Cite"112 S.CL 1535 (1092)
arguments would or would not be relevant 1. Criminal Law 037(5), 1222
to such a claim. Government may use undercover
agents to enforce the law.
Justice SOUTER, concurring in the.-
2. Criminal Law 0-37(3, 4) 1
judgment, - _. In their zeal to enforce the law,
I concur in the judgment and would join government. agents may not originate a
the Court's opinion except for its referent- criminal design, implant in an innocent Per-
es to the relevance and significance of peti- son's mind the disposition to commit a crim-
tioners' allegations to a claim of regulatory inal act, and then induce commission of the
taking. crime so that the Government may prose-
cute.
o FUYWUM81csrm, 3. Criminal Law 0-330, 569
- r Where Government has induced indi-
ndual to break the law and defense of
entrapment is at issue, prosecutor must
prove beyond reasonable doubt that defen-
dant was disposed to commit the criminal
Keith JACOBSON, Petitioner act prior to first being approached by
government agents.
V.
UNITED STATES. 4. Criminal Law 0-37(3, 8) .
Agent deployed to stop traffic in il-
No. 90-1124. legal drugs may offer the opportunity to
buy or sell drugs and, if offer is accepted,
Argued Nov. 6, 1991. make an arrest on the spot or later.
Decided April 6, 1992. 5. Criminal Law 0-37(6), 569
Government did not establish that de-
fendant had a predisposition, independent
Defendant was convicted in the United of government action, to receive child-por-
States District Court for the District of nography through the mall where evidence
Nebraska of receiving child pornography showed that he was ready and willing to
through the mail and he appealed. The commit the offense only after Government
Court of Appeals for. the Eighth Circuit, 'had engaged in two and one-half years of
893 F.2d 999, reversed but, on rehearing en undercover activity consisting of communi-
banc,affirmed 916 F.2d 467, and certiorari -cations from fictitious organizations and
was granted.. The Supreme Court,-Justice persons attempting to convince defendant F
White, held that Government did not estab- that he had the right or should have the
lish that defendant, who had received mail- right to engage in behavior proscribed by
ings from the Government purporting to be the law. 18-U.S.C.4. § 2252(a)(2)(A).
from- organizations asserting individual
rights, was predisposed to commit the of- 6. Criminal Law 0-347, 569
fense prior to first contact by Government Evidence that defendant had ordered
Reversed. and received, at a time when it was legal to
do-so, two magazines showing nude teen-
Justice O'Connor dissented and filed age boys was of little probative value in
nion in which Chief Justice. Rehnquist establishing. his predisposition to receive
.old Justice Kennedy joined, and in which prohibited child pornography through the
Justice Scalia joined in part mails. 18 U.S.C.A. § 2252(a)(2)(A).
}
YVECEiVED
MEMORANDUM JUN 031992 ■
OFrfc[of
June 1, 1992 crrr.- .
To: City Attorney Departnent
Mobilehome Rent Control Corinittee
From: David H. Hirsch, Connittee Chairperson and
City Attorney, City of Lonpoc
Subject: Post Yee GSMOL Attorney Strike Force Meeting
As was indicated at the League Cracker Barrel Session on April 23 ,
15921 a reefing had been called by the General Counsel for GS 'OL
to discuss life after Yee. At the Cracker Barrel Sessicn I advised
that I would be attending that meeting, and would repert to the
Committee afterward. Accordingly, the following are some of the
highlights.
Update on Significant Cases
.At the meeting, which was attended by attorneys handling cost of
the major cases, it was reported that new suits were being filed
or threatened in cities throughout the State. Apparently, park
owner attorneys are at various stages of "regrouping" . Sone are
reportedly advising their clients to go through the administrative
process of seeking increases, and then bring regulatcry taking
lawsuits. Others are irianediately filing new suits, or reframing
old ones to include regulatory taking challenges. Others are
apparently advising their clients that in their view, there is nct
much hope in pursuing a regulatory taking theory. Still others are
renewing efforts to force execution of long-term leases which would
be exempt from rent controls.
As far as specific cases , several should be mentioned. Michelle
Kenyon reported that a Petition for Writ of Certiorari has been
filed w1th U.S. S'uprene Cc'-,rt in. a.^. effort to reverse Sierra Take
Reserve v. City of Rocklin, 938 F. 2d 951 (9th Cir. 1.991) , since it
is contrary to the new Supreme Court precedent. set in Yee v. City
of Escondido.
Don Lincoln reports that he is representing several cities in what
he called a "full panoply" of cases . This includes new suits
against Escondido that have been filed on the basis of regulatory
taking. It was noted that in two of these cases park owners are
operating at a loss, so plaintiff ' s attorney, Robert Jagiello, nay
want to take them "all the way" .
1
ATTACHMENT 3
Don also has been representing the City of Carpenteria in a Hall-
type taking case, Sandpiper Mobile village v. City of Carrenteria ,
which has been pending before Division 6 of the 2nd rppellate
District for the last few months . Shortly after Yee was decided ,
Mr. Jagiello requested that the Court allow the case to be reargued
on the basis of a regulatory taking challenge. Carpenteria ' s
supplemental brief in response was filed on May Sth, and contains
an excellent analysis of our side of the regulatory taking issue.
While the appellate court may simply sidestep the question because
it had not been raised at the trial court, that issue is before
them and there is at least a possibility that they could confront
it. Shelley Browne reported that she also has several cases with
Mir. Jagiello on the other side, that are at various stages in State
and federal court, including the appellate level . re is apparently
also trying to bring regulatory taking challenges into these cases.
Gwen Poindexter reported on the status of. Azul Pacifico v. Citv of
Los Anceles. There is currently a Petition for Rehearing Lending
before the 9th Circuit Court of Appeals . As you know, in
discussing vacancy control Judge Kozinski, citing Nollan, did say
that
" . . . The correctness of the city' s decision to insure
coach owners against unscrupulous landlords in this way
is a legislative question, not a judicial one. . . there
is a sufficient nexus between the challenged provision
and a legitimate justification. "
One concern is that rehearing may be granted. Judge Kozinski could
then potentially rewrite his opinion in some manner that in effect
says, "Opps, I made a mistake - it' s not a physical occupation
taking - it' s a regulatory taking. " While this scenario may not
occur, it is at least a possibility. Those at last week' s meeting
seemed to express considerable concern that Judge Kozinski' s
ideological motives nay cause him to rewrite his opinion in some
manner that will not be favorable to cities . It' s not clear when
the Court will make a decision on the Petition for Rehearing.
There was also considerable discussion regarding the expectation
that major future areas of litigation %:,ill be over park conversions
(Shelley Browne indicated she currently has a number of park
closure cases pending) and long-term leases . Also, in addition to
actions being brought by tenants to get out of long-tern leases,
some cities are litigating prospective tenant protection
ordinances. In fact, Jeffrey Epp reported that Escondido had
recently won such a case at the trial court level on the basis of
there being no preemption.
2
Threatened Litigation and SLAYS •
Cities that adopted vacancy decontrol based upon threats of
litigation are taking varying approaches as to what to do after
Yee. Sore, such as San Jose, Frenont, and San Bernardino, have
immediately adopted new ordinances providing vacancy control .
Others are getting advice from their city attorneys that they
should hold off and see what happens in the regulatory taking cases
that are being brought. At the sane time, tenant croups in ,.-,any
cities are beginning to bring significant pressure on city councils
to readopt vacancy control. The bottom line is that city councils
are being placed in a very difficult position with respect to how
to proceed after the Yee decision.
In the course of discussing natters, one of the attorneys who
represents tenants, made an in„passicned plea . He urged that GSMOL
should rally its zembers and use the political process to bring
pressure on cities to readopt vacancy control . This suggestion was
balanced by attorneys representing cities who were at the neeting.
It was explained that each city has to make its own decision. This
led to an extensive discussion about how the reality facing cities
is that regardless of the nerits, they can expect to be sued by
mobilehome park owners. Threatened litigation is being used quite
effectively as a tactic to discourage cities from adopting
ordinances. One of the attorneys in attendance went so far as to
state that he believed that there was a conscious program to make
it economically unfeasible for cities to have rent control. A
parallel was drawn to "SLAPP" suits, and Don. Lincoln suggested a
new acronym: 11SLAYL11 (Strategic Litigation Against Municipalities) .
The result of this discussion was the suggestion that there needed
to be some form of legislative remedy, possibly son.ething along the
lines of prevailing party attorney 's fees that allow cities to
recover their costs of defending meritless lawsuits. Since legal
challenges to vacancy control are constitutionally based, it would
appear there may be a possible preemption problem. At any rate,
at the n,.eeting it was indicated that this proposal could be brought
to the attention of the City Attorney ' s Department Legislative
Committee. Accordingly, I have recently written the Department' s
President, Stave Eck-is, to bring this suggestion to.his attention.
New Law Review Articles
There are two new law review articles that have been published on
the subject of rent control and takings. One is by Ken Baar, and
appears in the Winter 1992 Volune of the Urban Lawyer. This
article is entitled "The Right to Sell the ' In'nobile Manufactured
Home in Its Rent Controlled Space in the ' Im'nobile ?lone Park:
Valid Regulation or Unconstitutional Taking?" . The other article
appears in a recent edition of the Southwestern University Law
Review and is entitled "Regulatory Takings Law in the 19901s: The
Death of Rent Control?" . This article was written by R. S . Radford,
3
• an attorney affiliated with the Pacific Legal Foundation.
It nicht also be noted that the GSMOL has reported t.-at their
anicus brief in Yee, that was prepared by Fran Layton, UC Berkeley
Professor Joseph Sax, and their General Counsel Bruce Stantcn, is
going to be published in an upcening edition of the Lcycla Law
Review.
Ken Baar' s Urban Lawyer article and the publication of the GSMOL
brief are significant in that they provide some citable analysis
regarding the problems that vacancy control is seeking to address
(i. e. , the "sunk costs" in the form of the investment of the
tenants, potential abuses, etc. ) . This relates to another -,atter
discussed at the meeting. There was significant disagreement as
to the wisdom of including "findings" as part of the adoption of
any new ordinance. There was more of a consensus, however, that
it was desirable to at least develop a record when adopting a new
vacancy control ordinance, to better withstandd -pote-ntial regulatory
taking challenges. GSMOL is going to try to create so-,e empirical
information to help in that respect.
Document Bank
At the Cracker Barrel Session it was agreed that the Con=ittee
should create a new "post-Yee" document bank, and otherwise
continue to provide a vehicle through which information can be
coordinated. Accordingly, please remember to send copies of
relevant pleadings and ordinances. In this respect, JoAnne Speers
has suggested that a certain amount of judgment should be used to
only submit documents that are relevant and do not duplicate other
materials (i.e. , those that contain new arguments or other material
that has particular nerit) . Also, when submitted, please include
a brief sunnary so that the League is in a position to better
advise as to what is available.
Confirmation for Mailing List
In order to better manage those that are on the nailing list for
the Committee, at your earliest convenience please complete the
enclosed form confirming that you want to continue to remain on the
list. Copies of this confirmation should be sent to both JoAnne
Speers at the League headquarters in Sacramento and to my office.
4
SEP 14 '92 16:39 SWANSON AND DOWDALL 695 P02
MEETING AGENDA
DATE - ITEM #
SWANSON AND DOWDALL
C. BRENT SWANSON
TERRY R. 00—DA66 ATTORNEYS AT LAW
T"OMAS M. CICGER' ••ROV[SSIONILL COR.01IIA710N .
LINDA J. LCSTCR P. O. BOY 2604
JIM P. MANACCR 4 MUTTON CENTRE ORIVC
MAUREEN A, NATCMELL LEVINE SUITE 200
ROBERT O. WILLIAMSON, JR.
NATHRTN L. BRUNNrR SANTA ANA, CALIFORNIA 92707-0504 OUR FILE NO.
ROBIN 0. CIFLER
TCLC.n ONE 17141 766. 600
DOWN C. JOHNSON
FACSIMILE I7t47 766•350S
MTLENC M. 0. CHOW
ADMINISTRATOR ..
September 14, 1992
COPIS TO:
❑•Dewoes Acdon , El Fr
/
5e C='W e[I CDDDIX
Clerk of the City Council CAO ❑ FIN.DIX
City of San Luis Obispo ACAO ❑ RRECIW
990 Palm Street gea.ERK/ c. 0 EY PO�CR
San Luis Obispo, California 93401 ❑ MCMT.TFAM ❑ PJ3r—DIR
❑ C READ FII.E ❑ UTIL DIR
Re: Request for Distribution of Informatio Lf 'g
to City Council Members
Dear Clerk of the City Council:
Enclosed is my letter to the City Council regarding proposed amendments
to .the City-Is Mobilehome Park Stabilization Ordinance. As said
amendments will be considered by the Council at their September 15th
meeting, I. would very much appreciate your distributing the enclosed to
each of the Council members as far in advance of that meeting as
possible. Please understand that because the City did not notify our
client of these amendments until quite late, it was impossible for me to
prepare this letter any earlier. Because of the short time available to
make the requested distribution, I would be pleased to fax the enclosed
to such of those City Council members as may have fax facilities
available to them. Therefore, please notify me or my Legal Assistant,
Lisa DiBenedetto, of the names. and fax numbers of those Council members
having fax facilities so that I may accomplish this as early today as
possible.
Thank you very much fo yo r In\lyssiustance..and cooperation.
t
C. B
For th Firm
CBS:s j:0l0LT55 X91170
Enclosure
cc: Ed Evans SEP 1 .5 1992
CITY CLERK
SAN LUIS OBISPO,CA
SEP 14 192 16:40 SWANSON AND DOWDALL 695 P03
SWANSON AND DOWDALL
C. 50ENT SWANSON
TEmRY R. DOWDALL ATTORNEYS AT LAW
T"OMAS M. DIESER A V.OTCtSICMAL CQ"0'ATI04
P. 0. sox ZSOA
LINDA J. LCSTER
JIM P. MAMACCK 4 nUTTON CENTRE DRIVC
MAUREEN A HATCrCLL LEVINE SUITE 200
ROBERT 0. WILLIAMSON, JR.
KATHRYN L. eNUNNs� CAPITA APAA, CALIFn D.NIi.w
ROBIN O, EIVLER TELEOMONE 1710) 755-3500
DAWN E. JOHNSON
FACSIMILE 17141 755-3505
MTLENE N. 0. CHOW
ADMIN•STRATOR
September 14, 1992
City Council
City of San Luis Obispo
990 Palm Street
San Luis Obispo, California 93401
Re: Arguments In Opposition to Proposed Amendments to
the Mobilehome Park Rent Stabilization Ordinance
Dear Mayor and Members of the City Council:
Our firm represents the owner of the Creekside Mobilehome Community.
The purpose of this letter is to provide basic reasons as to why the
Council should reject the proposed amendments to the City's Mobilehome
Park Rent Stabilization Ordinance. Please understand that because the
City did not notify our client and the other park owners of the City's
consideration of these proposed amendments, it was not possible for me
to prepare and transmit this letter earlier. Since the points made in
this letter explain the significant risk and expenses which the City
will incur if the proposed amendments are adopted, I would hope that
each of you would nonetheless find time to give serious consideration to
what follows.
SUMMARY OF REASONS
1. Historically the Ordinance has worked without problems and the City
cannot point to abuses by park owners: At the meetings this past
week between San Luis Obispo park owners and members of the City
Council and the City's staff, it was clear that the present
ordinance is operating without problems .and the City is unable to
point to abuses by park owners. Thus, the proposed amendments are
unnecessary.
2. The City faces significant litigation expenses and risks if the
proposed amendments are adopted: The City Attorney's report to the
Council clearly identifies that there is a high probability the
City will be sued if these amendments are adopted. That same
report explains that these litigation expenses will be very
substantial and the City will run the risk of substantial exposure
to damages.
SEP 14 192 16:40 SWANSON AND DOWDALL 695 PO4
City Council/City of San Luis Obispo
September 14, 1992
Page 2
3. The elimination of the "Safe Harbor" exemption is illegal: The
present ordinance provides, in effect, that if a park owner obtains
the voluntary consent of two-thirds or more of his residents to a
long-term lease, the entire park is exempt from the ordinance. Our
client has qualified for this exemption by offering a long-term
lease to Creekside residents which includes substantial economic
ooa0000iono by our chant. (Thaae leaoeoo westes, In tact, negorl&Tea
by our client with the residents. ) Those concessions were made in
reliance on the present "safe harbor" exemption. Thus, our
client's right to have this exemption is vested and any attempt to
withdraw that exemption would constitute an invalid impairment of
an established economic/property interest without due process of
law.
4. The procedures the City is utilising to consider adoption of the
proposed amendments are unfair: The absence of any notice to park
owners of the City's consideration of these amendments is unques-
tionably unfair.
DETAILED DISCUSSION OF ISSUES
What follows is a detailed discussion of the four issues outlined above.
As will be seen from what follows, your decision to reject the proposed
amendments not only makes imminently good common sense; you really have
no alternative in today's recessionary environment which is adversely
affecting the City's budget.
THE ORDINANCE NOW WORKS
It is my understanding from my discussions with our client that in the
mootingo ho and o+-hov para owneva had xith mombero cf the Cvuaaa.11 aaaLl
the City's staff this past week, no one connected with the City was able
to identify any significant problem or reason as to why the present
Ordinance was not functioning properly. No abuses by park owners of the
present vacancy decontrol provision were identified. Nor were any
substantive reasons given to support the amendment which would eliminate
the "safe harbor" exemption. The fact that the Ordinance is functioning
properly is further supported by the absence of any information to the
contrary in the report by the City Attorney to the Council. Another key
fact to be remembered is .that the Ordinance was negotiated with the
City's assistance by the park owners and the residents.
LITIGATION EXPENSE AND RISK
The City Attorney's report to the Council makes this point far better
than I ever could. The City Attorney clearly. puts the Council on notice
that the legal issues connected with the proposed amendments are
unsettled and will likely not be resolved for several years until a case
SEP 14 192 16:41 SWANSON AND DOWDALL 695 P05
City Council/City of San Luis Obispo
September 14, 1992
Page 3
reaches the United States Supreme Court. The City Attorney also warns
the City Council of the "high probability of litigation" if these
amendments are adopted. That same report points out that litigation of
this type is extraordinarily expensive; in my experience and in the
experience of other attorneys representing park owners throughout
California, the City will spend several hundreds of thousands of dollars
litigating the "taking" .and other issues which will result from adoption
of the amendments. A current audit of rent control administrative and
litigation expenses in the City of Escondido discloses that, to date,
that city has spent more than $1 million on mobilehome park rent
control.
The City's Attorney's report makes yet another important point.
Specifically, other cities and counties throughout California have and
are making the decision not to adopt similar amendments because of the
expense and risk connected with the inevitable litigation. What they
are doing is.making a smart business decision to sit back and wait until
these issues are decided in the Courts.
ELIMINATION OF THE SAFE HARBOR EXEMPTION IS ILLEGAL
Several years ago, our client offered long-term leases to all residents.
That offer was deliberately designed to take advantage of the
Ordinance's "safe harbor" provisions. This lease was extensively
negotiated with our client's residents. Our client structured the lease
to include a number of significant economic concessions so that a suffi-
cient number of residents would be induced to sign the lease and Creek-
side would fall within the safe harbor provisions. One major concession
in the lease was to limit "vacancy decontrol" rent increases much more
than allowed by the Ordinance. Over 70% of the homesites in Creekside
accepted the lease, thereby qualifying all of the homesites in Creekside
for the safe harbor exemption.
.The illegality of eliminating the safe harbor provisions is best
dmwnstrated by a recent case involving an apartment purchase which was
rubject to the City of Palm Springs rent control ordinance. That case
is known as Palacio de Anza v. Palm 'Springs Rent Review Commission
(1989) 209 Cal.App.3d 116, 120. In the Palacio de Anza decision, the
California Court of Appeal dealt with a situation where an apartment was
purchased at a time when the Palm Springs rent control ordinance
provided for rent adjustments based on certain operating expense
increases. That rent control ordinance was later amended to eliminate
those provisions. The Court of Appeal held the apartment owner's rights
to rent adjustments under the repealed provisions were "vested. "
Therefore, the apartment owner was still entitled to receive those rent
adjustments as to do otherwise would constitute an invalid impairment of
an established economic/property interest without due process of law.
SEP 14 192 16:42 SWANSON AND DOWDALL 695 P06
City Council/City of San Luis Obispo
September 14, 1992
page 4
those of our
Substantively, the Palacio de Anza facts are identical uroapartment was
client. In pala .io de Ani, a decision to purchase an
made based upon the allowability-Of certain operating expenses under the
Palm Springs rent control ordinance. Our client made a similar decision
by locking himself into rent adjustment limitations in his long-term
lease. In making that decision, our client depended on the safe harbor
provisions allowing him to obtain those same rent adjustments from the
residents who did not sign 'the lease. Thus, elimination of the safe
harbor provisions has the same illegal effect on our client as they did
on the apartment owner in Palacio de Ate•
Further, in our client's lease are a number of rent adjustment
provisions which are essentially the same as allowed by the Ordinance
and are necessary to provide for sufficient
ff min tiincofeto the sadequately
Thus
maintain and operate Creekside. r
provisions will have the effect of depreciating the value of the homes
of all Creekside residents and making Creekside a much less desirable
place to live. The fact that 70% of the residents will pay more rent
than their neighbors also creates unacceptable conflicts.
THE CITY'S PROCEDURES ARE UNFAIR
Failing to disclose the City's consideration of amendments to the
ly be justified. Certainly
Ordinance to the park owners cannot logical
the' City knew the park owners would be extremely concerned about any
amendment to the Ordinance; therefore, non-disclosure is unjustified.
CONCLUSION
Your City is one of the few in California which has enacted mobilehome
park rent control and substantially escaped the trauma, expense and
risks many, many other cities and counties have experienced. There is
really quite a simple reason for this. Your Ordinance Was negotiated
:between the park owners and residents and attempts to take somewhat of
a middle ground. Adoption of these amendments will dramatically change
t'�k►o ,praeont situ+atinn. This is true because, as shown above, the
expenditures and risks connected with these amendments cannot lie
justified under any conceivable set of circumstances. The fact is that
mobilehome residents are not being detrimentally impacted in any
significant way by the Ordinance as it now operates.
Thank you very much for your kind attention and consideration of the
points made in this letter. Please understand that if our client or I
SEP 14 '92 16:43 SWANSON AND DOWDALL 695 P07
City Council/City of San Luis Obispo
September 14, 1992
Page 5
may be of further assistanceIForthe
uncil or the City's staff, we
would be more than pleased `
L
,
irm
CBS:sj :009LT55
cc: Jeffrey G. Jorgensen, City Attorney
Ed Evans
David Evans - WMA
MEETil1AGENDA
11 September 1992 DATE S TEM #
San Luis Obispo, Ca . .
Mayor Ron Dunin
P.O. Box 8100
San Luis Obispo, Ca. 93403-8100
Dear Mr. Dunin:
My wife, Jo Ellen, and I live at 1032 Kerry, San Luis Obispo Ca . , in
Laguna Lake Mobile Estates .
This letter asks for your support of amendments to the City Mobilehome
Park Rent Stabilization Ordinance which are the subject of public
hearing, Agenda item #1 , for the September 15 , 1992 City Council
meeting.
The residents of San Luis Obispo adopted Ordinance 1117 at the June 7 ,
1988 , Special Municipal Election. This Ordinance contained Section
5 . 44. 060C which provided for vacancy control , (Controls what rent a
park owner may charge a new mobilehome owner and . tenant ) , when a
tenant in a mobilehome park sells their mobilehome. On June 6 , 1990 ,
the City Council gave final passage to Ordinance No . 1168 amending
this Secion of Ordinance 1117 providing for vacancy decontrol of rents
when a tenant sells a mobilehome. This was done under threat of suit
by mobilehome park owners based on certain rulings by State and lower
Federal courts. This summer the Supreme Court ruled unaminmously that
vacancy control is not the taking of property as had been ruled by the
lower courts . Please support the return of vacancy control to the
City Mobilehome Park Rent Stabilization Ordinance.
Section 5 . 44 . 030(F) provides an exemption to the provisions of this
Ordinance for mobilehome parks which sell lots for factory-built or
manufactured housing, or which provide condominium ownership of such
lots . The owner of our mobilehome park proposes to convert our rental
park to a condominium for mobilehomes . Thus , the park will be exempt
from the provisions of the Ordinance. I am sure that the thought
behind this exemption was that residents that own their mobilehomes
and the space on which it sits do not need rent stabilization. This
presumes that there will be no tenants in a mobilehome park where
there is condominium ownership. In our case, because of the proposed
price and age of our tenants, there are likely to be many more tenants
than resident owners for many years to come. These people will be
just as vulnerable as tenants in a rental park. It seems strange that
other forms of resident ownership, such as stock cooperatives, are not
exempt . Please consider amendment to this section to cover all forms
of resident ownership, but tie the exemption to ercenta a of the
park that is resident owned. O�D�aesActlon FYnl❑
CAO W
2r Camd1 7CDDDIR
R POP- IV
❑' 0 ❑ F N.DIR
G �TPORNEY ❑ FW DiR
11 MCMI.TEAM ❑ RHC DIRE
IN-91M
9 , ❑yC�RE�AD FILE ❑ U[7FL DIR
I CLERK
SAN LUIS OBISPO,CA
The State determines that a park becomes a ' resident owned park' when
seventy percent ( 70%) of the park is owned by the residents . This
will permit a more even application of the Ordinance.
Thank you for your consideration of my proposals .
esp ctful
J,gfieA R. Wills
Box 8128
San Luis Obispo , Ca . 93403
MEETING AGENDA
DATE.. 9: --�--r
September 8 , 1992
San Luis Obispo City Council
P.O. Box 8100
San Luis Obispo, CA 93403-8100
Dear Council Members :
At the September 15 meeting on rent stabilization,
I would appreciate it if you would please consider removing
5.44. 30 "F" pertaining to the exemption of all residents
who did not sign the lease due to not agreeing to some of
the conditions of the lease.
This leaves these residents of the parks with no pro-
tection. These mobilehome owners-.deserve : the _ same:protection
accorded all other mobilehome owners in our city.
Thank you,
J�/ /443
Mildred Netolicky
3960 S. Higuera
San Luis Obispo, CA
93401
COPIESTO:
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SE 0 1992 9.ATTORNEY ❑ FW DR
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DATE.MEETING
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��reek�ide
Mobilehomo C Mmoeity
3960 SOUTH HIGUERA • SAN Luis OBISPO • CALIFORNIA 93401 • PHONE 805/543.7113
SALES RECORDS- 1983-1991 (ALL HOMES SOLD IN CREEKSIDE)
YEAR HOMES SOLD AVERAGE SELLING PRICE
1983 SINGLEWIDES- 14 $201,300
DOUBLEWIDES- 5 $41 ,975
1984 SINGLEWIDES- 35 $20,900
DOUBLEWIDES- 8 $42,400
1985 SINGLEWIDES•- 19 $25,400
DOUBLEWIDES- 9 $43,600
1986 SINGLEWIDES- 22 $25,800
DOUBLEWIDES- 9 $54,200
1987 SINGLEWIDES- 14 $29,515
DOUBLEWIDES- 3 $54,833
1988 SINGLEWIDES- 14 $31 ,057
DOUBLEWIDES- 5 $60, 625
1989 SINGLEWIDES- 19 $35,638
DOUBLEWIDES- 2 $71 ,750
1990 SINGLEWIDES- 13 $41 ,000
DOUBLEWIDES- 4 $80,950
1991 SINGLEWIDES- 12 $42,867
DOUBLEWIDES- 3 $67,000 (Range $49,000-$87,000)
RECEIVED i
SEP 1 w 1992
CITY COUNCIL COPISM
SAN LUIS OBISPO�CA ❑•DmotmAaim ❑ FYI
gr Council CDDDM
WCAO KFIN.DIR
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� READ FILE El
- 1
ISE• JG AGENDA
DATE -Ls Z.9 iTEM #
CoPIESTO.
❑• Amo, ❑ Fyr
August 25 , 192�12r0 ❑ CDpDIX
cao O ��aIEF
u��
p
To City Council Members , San Luis Obispo ❑ 'R EA ❑ RSCDiR
c/o City Hall , San. Luis Obispo, CA 9340.1 �� ��,L
Many mobile park residents have signed petitions to ask you
to reinstate vacancy control . Many California cities have
already done so. The Supreme Court judges. gave their
unanimous approval to the legality of vacancy control .
I feel the council members of our city should protect its
mobilehome owners from the abuses which occur when rents are
raised merely because a mobilehome is sold. It works a hardship
on the buyer as well as the seller, and delivers a windfall to
the park owner which he doesn' t need and has not earned.
Please correct this injustice.
Sincerely,
C7VLLLVA e4-4�
Cr E
If LRECEIVED
SEP - If 1992
CLERK
SAN LUIS OBISPO,CA
RECF !"
25 August, 1992 SEP ` ' 1992
IpP(Y CLERK
SAN LUIS 6B,spo.CA
Members of San Luis Obispo City Council
City Hall, San Luis Obispo, CA 93401
To all Council Members:
Mobilehome owners in parks of this City request that vacancy
control be added. to the rent stabilization law. This will
do a great deal to restore Fairness to rents in mobilehome
parks. At this time; there is great disparity in rents.
between spaces where mobilehomes sit side by side. The
frequency of sale of a particular mobilehome should have
nothing to do with the rent. The resulting. hardship to the
buyer makes his rent higher, and the seller finds his home
far more difficult to sell. This is particularly Harmful in
times of economic downturns such as we now experience.
we hope you will understand the unfairness and delay no further
in seeing this wrong is corrected.
Remember,. the Supreme Court has said this measure is needed and
deserved by mobilehome owners!
,Respectfully
..
o •
len
/ _
y
�ro(r'-4
ECVE
SER e 1 1992
August 25 , 1992
CITE QLEF%
SAN LUIS 651SPO,CA
To City Council Members , San Luis Obispo
clo City Hall , San Luis Obispo, CA 9340.1
Many mobile park residents have signed petitions to ask you
to reinstate vacancy control . Many California cities have
already done so. The Supreme Court judges gave their
unanimous approval to the legality of vacancy control .
I feel the council members of our city should protect its
mobilehome owners from the abuses which occur when rents are
raised merely because a mobilehome is sold. It works a hardship
on the buyer as well as the seller, and delivers a windfall to
the park owner which he doesn' t need and has not earned.
Please correct this injustice .
Sincerely, CJ7orf 0 S
' S
J
Y3 � or
/040