Here is the video of last Friday's oral arguments in a case we've been following, in which the owners of a mobile home park successfully challenged a California municipality's rent control ordinance as a taking.
In Colony Cover Properties v. City of Carson, a U.S. District Court for the Central District of California jury awarded the park owner just compensation, concluding that under Penn Central, the rent control ordinance was a compensable taking. The total award to the park owner, including damages for lost rental income, attorneys' fees, and interest, was over $9 million. As far as we can tell, this is the first case in which a mobile home park owner has succeeded in obtaining compensation for a taking for rent control.
Predictably, the city went ballistic, and its brief in the Ninth Circuit argues the City is the aggrieved party:
In April 2006, Plaintiff Colony Cove Properties, LLC made a highly leveraged purchase of a rent-controlled, senior-citizen mobilehome park, Colony Cove Mobile Estates, with $5 million down and $18 million in financing. Plaintiff wagered that it could obtain a rent increase to force the residents of the park to bear the cost of 3Plaintiff’s enormous debt service—some $1.2 million per year. When Defendant City of Carson refused to allow that, Plaintiff turned to the Fifth Amendment’s Takings Clause to conscript the City’s taxpayers as insurers of Plaintiff’s investment.
Opening Br. at 1. The City also argues that the jury verdict threatens the very existence of rent control.
Read the remainder of the city's Preliminary Statement and see if the rent control board's process doesn't make it seem like the city -- and not the owner -- is the entity actually calling the shots on how the park is financed and operated, and how much if "enough" for the owner to make off of his investment. In short, it really looks like the City owns and operates the park like a public housing project, doesn't it?
Last Friday, the court convened in Pasadena for oral argument. Check out the video above and see whether you can predict the outcome.
Here are the merits and amicus briefs in the case:
When can we expect a decision? Your guess is as good as ours. Stay tuned, as always.
