Ninth Circuit Throws Out Rent Control Challenge

By Dean Preston

Earlier today, an en banc panel of the Ninth Circuit Court of Appeals threw out a challenge to the City of Goleta’s mobilehome rent control ordinance. This closely watched case is a major victory for mobilehome residents and rent control.

Tenants Together, National Housing Law Project and other allies had submitted an amicus brief in support of the City of Goleta.

The Ninth Circuit panel squarely rejected the park owners' argument that the rent control law somehow denied them their "investment backed expectation." The court found that the owners knew exactly what they were buying – a property subject to rent control -- and could not now challenge the rent control law as a taking. The court also noted that "the people who really do have investment-backed expectations that might be upset by changes in the rent control system are tenants who bought their mobile homes after rent control went into effect. Ending rent control would be a windfall to the Guggenheims, and a disaster for tenants who bought their mobile homes after rent control was imposed in the 70’s and 80’s."

Speculators like the Guggenheims routinely buy property cheap because of rent control and then turn around and try to invalidate rent control laws claiming that these laws deny them their ‘investment backed expectations’. The court's opinion will make it far more difficult for speculators to use these disingenuous arguments in the future.

Today's decision reverses Judge Jay S. Bybee’s decision from last year. In that decision, Bybee wrote that mobilehome park owners had a constitutional right to compensation by the City because the rent control ordinance constituted a “regulatory taking” under the Fifth Amendment. Despite the fact that the park owner bought the park with full knowledge of the rent control law, Judge Bybee, joined by Nixon-appointee Judge Alfred T. Goodwin, found that the law improperly interfered with the park owner’s “investment backed expectation.”

Judge Bybee, of course, was controversial long before his poorly reasoned anti-rent control decision. Bybee authored the torture memos while at the Office of Legal Counsel under George W. Bush, after which he was appointed to the Ninth Circuit Court of Appeals. When his responsibility for the torture memos was exposed, there were widespread calls for his impeachment. In April, 2009, The New York Times called for Bybee’s impeachment, stating: "These memos make it clear that Mr. Bybee is unfit for a job that requires legal judgment and a respect for the Constitution." Bybee was not impeached and remains on the Ninth Circuit Court of Appeals.

Bybee’s Goleta ruling angered many advocates for renters’ rights who saw the court bending over backwards and contorting the law to find in favor of park owners and against those protected by rent control.

Today's en banc decision is an encouraging sign that the Ninth Circuit recognizes the right of cities to adopt and enforce their rent control laws, even if conservative activist judges like Judge Bybee do not.

As a result, many working families and seniors in Goleta and beyond will rest a little easier this holiday season.