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Goleta’s Rent-Control Case Gets Full-Court Hearing

An 11-judge Ninth Circuit panel will decide the constitutionality of the city's ordinance

Goleta’s rent-control ordinance got another day in court Tuesday, this time with the full panel of 11 judges.

The en banc — full panel — hearing of the Ninth U.S. Circuit Court of Appeals was at the request of the city, after a three-member panel reversed a previous decision that upheld Goleta’s ordinance against litigation by Daniel Guggenheim and family, land owners of Rancho Mobile Home Park in western Goleta.

The hearing was the latest in a series of legal tennis between the city and the landowners, who first contested Goleta’s adoption of the existing Santa Barbara County rent-control ordinance in its 2002 incorporation.

Calling it a new ordinance, the Guggenheims called the rule a taking, since it didn’t allow them to increase profits from their land, while the tenants could turn a sizable profit by selling their coaches at high prices based on the rent-control incentive.

The district court ruled in favor of the landowners, but the decision was reversed when a ruling was overturned in a case upon which the argument against rent control was based. The case was then appealed to the Ninth Circuit panel of three judges, who split in favor of ruling the ordinance unconstitutional, after which the city requested the full panel hearing.

It could take months for the panel to render its decision.

“You can have a broad range of decisions,” City Attorney Tim Giles said.

The court may rule that the ordinance is constitutional and Goleta would not have to compensate, Giles said. The court may rule that there is a taking and could set another trial at the district level to determine the amount to compensate, factors that may be determined by the value of the property right around incorporation, or how much the tenants made from the sales of their coaches. The outcome of the case also might affect rent-control ordinances in other municipalities in California, such as Ventura and Thousand Oaks.

City officials say they are guardedly optimistic that they might win this one.

“It’s always difficult to predict what the court’s ruling may be,” said Giles, adding that his impression was that in its questioning of the Guggenheims’ attorney, the panel was persuaded that the landowner “had never lost anything by the city’s actions.”

Robert Coldren, attorney for the landowners, was unreachable by phone Friday.

If the Guggenheims lose, they have a right to appeal to the U.S. Supreme Court, an action Giles says they have indicated they would do.

Meanwhile, the residents or Rancho Mobile Homes are hopeful.

“We’re encouraged that the en banc has decided to hear it,” said Ken Tatro, president of the Monarch Country Mobile Home Owners Association. “The fact that they are hearing it leads us to believe that they think there are flaws in the decision made by the three-judge panel.”

The rent-control ordinance suit is just one of several that have been filed around the status of the small mobile home park at 7465 Hollister Ave. Four cases, filed by the landowners against the city for Goleta’s issuance of a moratorium on park conversion, and the requirement of an environmental impact report, and the damages claims related to each, were resolved when the city adopted the Guggenheims’ development plan.

Another case is pending, filed by park residents for supporting the development plan. That case will be heard Aug. 13 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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