There's nothing new in the California Court of Appeal's opinion in Rancho de Calistoga v. City of Calistoga, No. A138301 (July 7, 2015), which is probably why the court didn't designate it for publication.
But read it anyway, since there's some interesting bits. Nothing in the details, mind you, but in the overall vibe of the opinion.
It's a mobile home rent control case, so you shouldn't expect much from a California court, and this decision certainly meets those low expectations: it goes through the usual analysis dealing with the park owner's argument that the city -- at the northern end of the Napa Valley -- didn't agree to increase the rent to $625 per month from the $471 average which tenants were paying. The city permitted an increase of only $60, so the owner sued, asserting among other things that the failure to increase the rent to $625 was a taking.
The owner took a different tack than the usual takings claim. It didn't argue that increasing the rent only $60 denied it economically beneficial use of its property (the owner reserved its federal claims for federal court review), or that it denied it a "just and reasonable return on [its] property" under California law. Instead, it asserted that the purpose of the rent control scheme is to prevent predatory rent increases, and the sought-after $625 was not predatory or above-market.
No dice, held the court, you're just the property owner. The city dictates how much you can charge, and unless you can show the city-permitted rent makes you a damn fool economically for owning a mobile home park, you're outta luck:
Rancho has not presented authority establishing a landlord has a constitutional right to charge a rate higher than that necessary to provide a fair return, or a right to insist that every individual rent-setting decision taken pursuant to a valid ordinance must itself be essential to achieving the purposes that led to the ordinance’s enactment. Rancho’s true quarrel appears to be with the whole idea of rent control, not with how City administered its duly enacted rent control ordinance in this case.Slip op. at 10.
And the $60 increase? More than enough. Slip op. at 11 ("Every reasonable and realistic investor knows that conditions affecting valuation not only may change but will after the point of initial purchase. The takings clause provides no refuge from that reality whenever some form of governmental action—short of confiscation, and otherwise constitutional—brings about a post-investment change in such conditions.").
Like we said, nothing new here.
Note: we filed an amicus brief in support of Rancho in its federal case. That brief deals only with the procedural posture of the federal case, which was dismissed for failing to state a claim. Our brief argues that Rancho's complaint adequately gave notice of its takings and related claims.
Rancho de Calistoga v. City of Calistoga, No. A138301 (Cal. App. July 7, 2015)
