Park Owner Has a Right to a “Taking” Trial in California
The City of Capitola is a text book example of how rent control ordinances have been used to confiscate private property by “the tyranny of the majority.” Castle Mobilehome Park, in Capitola, is walking distance from the Santa Cruz boardwalk. It is located upon some of the most valuable real estate in America. Castle has space rents of $210.00 a month, about one-tenth of market rent. Thus, the City has confiscated 90 percent of the property value through rent control. The recent decision in Los Altos El Granada Investors v. City of Capitola holds that the City may face liability for that taking.
Mobile home rent control is popular with politicians because it allows them to please large blocks of voters by taking advantage of a very small number of park owners. Typically, there is little “downside” because park owners have been limited to “writ petitions,” narrow legal challenges which do expose the cities to damage claims. That may be changing with Los Altos. In the newly issued decision, the Sixth District Court of Appeal grudgingly affirmed the right of a park owner who does not succeed in overturning a rent control decision to proceed with a taking claim.
The result is a substantial victory for park owners, particularly since it comes from a pro-city, pro-rent control California state court. Recent federal rulings have severely limited access to the federal courts in rent control litigation and California courts have had a well earned reputation as being unsympathetic to property rights.
My Firm represents the plaintiff in the Los Altos case and many other park owners throughout California. Public entities consistently fight tooth and nail to avoid a true trial on the merits of a takings claim. A trial represents exposure to damage claims against the City as well as the significantly higher cost of defending traditional litigation. Many courts throughout California have limited park owners to writ of mandamus litigation, which is the equivalent of an appeal, with no discovery, no witnesses called and no evidence except what was presented at the administrative hearing. The “trial” consists of a relatively short hearing, with the normal remedy a “remand order,” sending the decision back to the same administrative body to reconsider. The Court of Appeal in Los Altos ruled that the trial judge could not simply dismiss the park owner’s taking claim; that the park owner must have an opportunity to proceed in court with an inverse condemnation cause of action.
The ruling is significant for property owners because it is a reported case that can impact other courts throughout the state. I will keep you up-to-date on the progress of the case. Feel free to contact me if you would like further information about the decision.