Florida law makes it really difficult for municipalities to adopt rent controls. State statutes and the Florida Constitution erect all sorts of substantive and procedural hurdles that must be crossed. For example, a statute requires findings that any such measures are responding to an emergency, a "grave ... menace to the general public," and places the burden on the municipality to not just make findings, but back up those findings with facts, and show that rent control will actually "eliminate" the emergency. Single-family properties cannot be rent controlled. And any ordinance adopted by a municipality must be approved by the voters.
Facing what it concluded was a problem -- a shortage of 26,500 housing units and a population increase of 25% in the last decade - Orange County's County Commission voted, 3-2, to control rents. The measure limited the frequency and amount of rent increases.
After the measure was placed on the ballot for [today's] general election, the Realtors Association sued to declare the ordinance unconstitutional and to prevent the measure from being placed on the ballot. It sought an injunction, and even though the trial court concluded the Association had a substantial likelihood of winning on the merits, it declined to remove the measure from the ballot because even if invalid, a vote would allow the public to offer its opinion on rent control. Both parties appealed.
In Florida Ass'n of Realtors v. Orange County, No. 5D22-2277 (Oct. 27, 2022), the Florida District Court of Appeal agreed that the measure was likely to be illegal, but reversed the trial court's allowing it on the ballot. The court concluded that Orange County could not meet its burden to show that there is a housing emergency, nor its burden to prove that rent control would alleviate any such emergency. "Emergency" means a "sudden or unexpected" and temporary condition, and here, the housing shortage is the result of "historical structural issues" and not a surprise. Things like population growth, and longstanding housing shortages are not sudden. Moreover, the "County Attorney warned the County that these factors would be legally insufficient before it enacted the Ordinance." Slip op. at 18.
Even if the housing shortage qualified as an emergency, the County didn't prove that that it was "so grave as to constitute a serious menace to the general public." Slip op. at 19. To be a "menace," the threat must be a "grave threat or danger to the Orange County citizens as a whole." Slip op. at 20. "At most, the County cites to a low rental vacancy rate and low availability of affordable housing." Slip op. at 21. Yes, this affects renters in Orange County, but that isn't enough. It has to affect everyone.
Next, the court concluded that even if such conditions exist, the rent control measure would not address or remedy the problems. Not only would the measure not "eliminate" the problem as the statute requires, testimony at trial showed that it would have little effect, and even the County's consultant report conclude that rent control "may actually hurt rental conditions by 'imped[ing] the objective of speeding overall housing deliveries as well as creat[ing] a number of unintended consequences.'" Slip op. at 23.
"In sum, for this third and independent reason, the trial court correctly concluded that the Association satisfied its burden to demonstrate a substantial likelihood of success on the merits of its challenge to the Ordinance's validity." Slip op. at 24.
The court of appeal also concluded the ballot summary was misleading: "[t]he summary is misleading not because of what it says, but because of what it does not say." Slip op. at 27. The summary stated:
Rent Stabilization Ordinance to
Limit Rent Increase for Certain
Residential Rental Units
Shall the Orange County Rent Stabilization Ordinance, which limits rent increases for certain residential rental unites in multifamily structures to the average annual increase in the Consumer Price Index, and requires the County to create a process for landlords to request an exception to the limitation on the rent increase based on an opportunity to receive a fair and reasonable return on investment, be approved for a period of one year?
The summary "only advises the voter about the amount of rent control, but not its frequency," even though the actual ordinance limits increases to once in a twelve-month period. Slip op. at 27. The summary thus makes the measure appear less extensive than it actually is.
Finally, the court of appeal disagreed with the trial court's refusal to enjoin the election and keep the issue from the voters:
No public interest can be served by allowing the potential enforcement of a rent control ordinance that fails to meet the facial requirements of section 125.0103, and Article 8, section 1 of the Florida Constitution. We recognize that a local government's aim to enact legislation to address a complex, multifaceted issue is noble, and citizens might believe that rent control is a harmless was to accomplish that aim. But as we stated at the outset of this opinion, the power of local government is limited, and a critical limitation on this power is the Florida Constitution.Similarly, no public interest can be served by having the electorate vote on a misleading ballot measure.
Slip op. at 32-33.
Fla. Ass'n of Realtors v. Orange County, No. 5D22-2277 (Fla. Dist. Ct. App. Oct. 27, 2022)
