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Mobile Home Dilemma

Rent Control Ordinance Ruled Unconstitutional


Thursday, October 1, 2009

In a 2-1 decision on Monday, a three-judge panel on the 9th U.S. Circuit Court of Appeals-citing a passage from John Steinbeck’s Travels with Charlie portraying mobile homes as anything but mobile-ruled a Goleta mobile home park rent-control ordinance to be unconstitutional.

An effort to protect mobile home park tenants from inordinately high rents, the ordinance was established by Santa Barbara County in 1979. After it was renewed in 2002 by the newly incorporated City of Goleta, the ordinance was challenged by Daniel and Susan Guggenheim, who purchased Rancho Mobile Home Park in Goleta in 1997 after a one-year statute of limitations had originally prevented them from doing so. “The dissent says the Guggenheims knew they were buying a park with rent control. They paid a rent-controlled park price for it,” said James Ballantine, an attorney representing Rancho’s tenants. The majority decision, however, found that the ordinance constitutes a regulatory taking from the Guggenheims, giving them entitlement to compensation, the amount of which has not yet been specified.

The case, which has been enmeshed in legal proceedings, was remanded back to the District Court, and Circuit Court judges have ordered that the amount of compensation due the Guggenheims be determined. It is as yet unclear what the impact of the decision will be on Rancho’s tenants and upon the City of Goleta, which may be on the hook for recompensing the park owners. City attorney Tim Giles is currently reviewing the 75-page decision and is expected to make a report to the City Council next Tuesday.

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