In a hard-fought legal battle that has implications for mobile home parks across California, one of the nation’s highest courts decided this morning to protect rent control in such settings, reversing an earlier decision in a case that centers on the Rancho Mobile Home Estates in the City of Goleta.
The park’s homeowners and the City of Goleta — which fought to keep the three decades-old rent control ordinance in place to ensure such parks would remain a bastion of affordable housing — found themselves on the winning side of the Wednesday, December 22 decision, along with the estimated one million other mobile home park residents in the Golden State.
On the losing side was Rancho’s owner, Daniel Guggenheim — a property rights proponent who purchased the park in 1997 and used the City of Goleta’s incorporation in 2002 as a window to test the ordinance, which the County of Santa Barbara had enacted many years earlier.
The court, however, sided with a government’s ability to regulate in order to protect residents and did not offer much sympathy to Guggenheim.
“The Guggenheims bought a trailer park burdened by rent control, and had no concrete reason to believe they would get something much more valuable, because of hoped for legal changes, than what they had,” wrote Judge Andrew J. Kleinfeld. “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.”
Goleta’s city attorney, Tim Giles, was pleased with the outcome. “The ruling specifically recognizes that it is a legitimate function for local governments to protect mobile home owners from the economic impacts of uncontrolled rent increases,” he said on Wednesday. “The court recognized that Mr. Guggenheim got exactly what he purchased, a mobile home park subject to rent control. To force a change at this time would provide a financial windfall to Guggenheim at the expense of tenants who purchased their coaches in the park with the expectation that rents would only increase at reasonable rates.”
Giles continued, “This is a significant victory for the City of Goleta and validates as constitutionally sound the decision of the City Council to protect its residents and to defend this reasonable regulation.”
“This case is a victory for the little guy,” said Ken Tatro, president of the homeowners association in the Rancho park. “We homeowners are just that, homeowners. Our home is, as it is with most homeowners of all kinds, a very substantial part of our net worth. We own the homes we live in, and the included expenses of the mortgage, insurance, property taxes, and all home repairs and maintenance.”
Tatro, whose organization is still in court fighting the issue of converting the park to a condo setup, continued, “This entire mobile home park is a very small portion of Mr. Guggenheim’s, and that of the many mega-wealthy real estate/investor park owners and corporations who own large numbers of the parks statewide. They are the ones driving this incessant litigation campaign, all across the state, against small cities with pad rent stabilization ordinances.”
An email sent yesterday to Guggenheim’s attorney Robert Coldren has not been answered yet. It remains unknown whether they plan to appeal.