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Ninth Circuit Court to Rehear Goleta Rent-Control Case
Goleta’s rent-control ordinance may yet be valid, if an 11-member panel of judges decides to overturn a recent decision on the matter.
Last Friday, the Ninth U.S. Circuit Court of Appeals voted to rehear a case between the city of Goleta, and Daniel Guggenheim and co-owners of the Rancho Mobile Home Park in western Goleta.
The en banc hearing — meaning the full panel of the court — was requested by the city after a three-judge panel of the court, on a 3-1 vote, ruled that the city’s rent-control ordinance was unconstitutional.
“We’re going to have a full hearing,” Goleta city attorney Tim Giles said. “They’re going to pick 11 judges to rehear the case.”
By the previous decision, the city was ordered to compensate Guggenheim for loss of profit because of what the three-judge panel saw as regulatory takings. A local federal district court had been ordered to determine the amount.
Now it seems that the city’s rent-control ordinance might still have a chance, with a hearing scheduled in June at the Pasadena branch of the Ninth Circuit Court of Appeals. If the ordinance is deemed unconstitutional, Giles said, the decision could make rent-control ordinances in other municipalities — Ventura and Thousand Oaks — that are similar to Goleta’s unconstitutional and vulnerable to the same actions.
This last turn of events is the latest twist in the fight over mobile home rent control in the city, a fight that goes back to Goleta’s incorporation.
The city’s rent-control ordinance is identical to Santa Barbara County’s ordinance, which was in effect in 1997, when the owner bought the mobile home park. When Goleta incorporated in 2002, the adoption of the ordinance, to Guggenheim, constituted a new law, and one that violated his property rights: While the coach owners paid rent-controlled rents for the spaces they lived on, they were allowed to turn around and sell their units at market rate.
Initially, the presiding district court ruled in favor of Guggenheim. But the decision was reversed when a decision was overturned in a case upon which the argument against rent control was based.
Guggenheim’s legal counsel appealed to the Ninth Circuit court, after which the three-judge panel, in September, sided with Guggenheim.
For Rancho Mobile Home Park residents, who have been living with the tug of war between the city and the landlord for nearly a decade, the news is good — but far from a victory.
“Everything’s still in limbo,” said Ken Tatro, spokesman for the Goleta Mobile Homeowners Coalition. He said he and other park residents were “encouraged” by the recent turn of events, especially since it’s rare that the Ninth Circuit would rehear a case that has already been presided over by a three-judge panel.
“It’s really unfortunate that the city of Goleta has expended vast resources of taxpayer money,” Robert Coldren, attorney for the Guggenheim family, said about what he calls an “ill-founded price-fixing scheme.”
Despite what looks like a setback, he is convinced his client will still come out on top.
“There’s no question that ultimately the city will have to pay for stripping the property owner in excess of 80 percent of the value of the property,” he said.
If the court decides to side with the city, however, the landowner still will have a chance to appeal to the U.S. Supreme Court.
The regulatory takings challenge to the city’s mobile home rent-control ordinance is one of several legal skirmishes on the issue in the past decade. Four other lawsuits levied at the city regarding a conversion of the mobile home park to tenant-owned spaces have been resolved, as the city last year agreed to a development agreement related to the conversion effort. One lawsuit filed by the residents against the city challenging its support of the conversion is still pending in Santa Barbara County Superior Court.
— Noozhawk staff writer Sonia Fernandez can be reached at .(JavaScript must be enabled to view this email address).
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» on 03.19.10 @ 08:24 AM
You know, I wish this article would have reviewed Goleta’s rent control ordinance because I am unfamiliar with it. I will say that I am generally in favor of rent control and I wish Santa Barbara had it. (When I was in LA, all my friends wanted to live in Santa Monica because of the rent control.)
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