## THEA~TORNEYGENERAL OFTEXAS

June22, 1949

Hon. Beauford H. Jester Governor of Texas Capitol Building Austin, Texas Opinion No. V-847.

Re: Whether under H. B. 808 (1) Federal rent control will be terminated and (2) cities andtowns may establish emergency rent control within their limits.

Dear **Governor** Jester:

Your letter of June 14, 1949, states that House Bill 808 relating to rent decontrol has been passed bye the Legislature andis on **your** desk. Your letter further states:

“As I construe this Act, the Legislature has undertaken in it to accomplish two things:

(1) To abolish federal rent control in the State of Texas under the provisions of Subsection j-2 of the Housing andRent Act of 1949.

(2) To provide for the imposition of local rent control by municipalities, by action of their governing bodies.

“I would be grateful for your ,opinion as towhether these two objectives are or may be accomplished under the terms of House Bill 808 ,in the light of existing federal law andthe Texas Constitution and Statutes.”

House Bill 808 is brief. The substance of the bill is contained in Sections 1andla: :

“Section 1. Rent control as established by the Act of the Eighty-first Congress of the United States, extending rent control for aperiod offifteen (15)months from andafter March 31, 1949, as further described in Housing andHon. Beauford H. Jester, Page 2 (V-847)

Rent Act of 1949, H. R. 1731, is hereby abolished in the State of Texas andis declared to be **x10**longer needed in the State of Texas, and all Federal rent controls are hereby declared no longer needed **in** the State of Texas.

“Sec. la. Itis further provided however thatthe govern&g body of any city or ’ townmay, by ordinance duly passed, finding that ahousing emergency exists, establish rent control in such city or townfor the duration of’such housing emergency provided that the ordinance so passed is approved by the Governor of the State of Texas.*

The answer to the first part of **your** question is in the affirmative. The bill, if signed, will bring about ‘theend of Federal rent control in Texas. This will be true regardless of
our answer toyour second question, since thebill contains aproper severability clause.

Without going into the technicalities of the greatly involved Federal Rent 

### Control Act, as applicable’here, it provides thatif a state: (1)declares by law that Federal rent control is no longer necessary, snd (2) so notifies the Federal Housing Expediter, all rent controls under the Federal act with reference to housing accommodations *shall be terminated **on** the 15th day after receipt of such advice.‘1 ‘,
TThis is the substance of Section 204j(2) ofthe Housing andRent Act of 1947 as amended by Public Law 31, Blst Congress (1949). That section reads:

“If any state by law declares thatFederal rent cantrol is nolonger necessary in such State or anypart thereof andnotifies the Housing Expediter ofthatfact, the Housing Expediter shall immediately make public announcement to the effect thathe has been so advised. At the
same time all rent controls under this act, **is** amended, with respect to housing accommodaWonswith&such State ofpart thereof shall be terminated on the fifteenth day after receipt of such advice.*Hon. Beauford H. Jester, Page 3 (V-847)

Section 1of House Bill 808 declares that “Federal rent controls

. . . are nolonger needed inthe State of Texas.“” In this manner the Legislature accomplishes all that is required to come within the terms of the quotedparagraph. If andwhen this bill becomes law, all thatwould be necessary to accomplish the first objective would be the notification to the Housing Expediter of the legislative action, thus bringing into effect the provisions of Section 204j(2) of the Federal act.

. Thereupon, the Federal control, under existing law, will be terminated, If this bill ‘becomes law and the State is decontrolled, the Federal Housing Expediter cannot, under existing law, recontrol rents anywhere in Texas. This is because the Federal act also provides:

“(6) No maximum rents shall be established or reestablished under this subzction for anyhousing accommodations

. . . in ztate, city, town, village or locality in which rent controls under this title have bzn terminated pursuant to section 204(j).“‘ (Emphasis added).

Assuming the end of Federal control, we pass to your second inquiry as towhether the State can set up its own rent control in the manner directed by Section la of H. B. 808. We will first consider the matter directly from the standpoint of the power of the State itself.

Itnow appears to be generally est~ablished that when, as a result of an emergency, an acute andunprecedented shortage of housing accommodations is found to exist, legisla

### tion intended .toprohibit the exaction of unjust and unreasonable rent during.the emergency has been held to be alegitimate exercise of the police.power of a state.3 The State of New York 

### sftar both World Wars has enacted legislation setting up rent control inNew York City during the emergency, Its highest court andthe

2Subsection 6of Section 204i. 3Block v, Hirsh, 256 U.S. 135 (1921); Brown Holding Co. v. Feldman, 256 U.S. 170 (1921);‘32 Am. Jur. 867; 52 C.J.S. 293; Annotations, 16A.L.R. 178,,~86A&R. 1546, and 162A.L.R. 202.Hon. Beauford H. Jester, Page 4 (V-847)

Supreme Court of the United States have upheld such legislation.4 Congress also enacted similar legislation for the City of Washington, D.C., andthe act was declared tobe constitutional.5 The validity of such legislation rests entirely uponthe state of the emergency.
The Federal rent control law is based on thewar power of Congress andthe emergency situation created by the War. Its validity was upheld onthatbasis.6 The United States Supreme Court in 1948 held thatthe emergency was not over with the termination ofhostilities, andthatthe extension of the Federal rent control law was constitutionsI.7 The Court tookjudicial no-. tice that there existed sufficient facts to uphold the Congressional declaration thatthe emergency still existed.

The power of the states to act is notbased onwar power. but, as pointed out. upontheir general police powers. This police power, in the rent control cases. has been held to depend also onthe existence of an actual emergency, not merely ahousing shortage unconnected with the general welfare, health, and safety of the people as awhole,

So the question as towhether there is an emergency is of primary importance. With regard to Federal rent control, the United States Supreme Court after the first World War held in 1924 (many years after the cessation of hostilities in 1918)thatthe Congressional declaration thatthere was still an emergency was notbinding on the courts, andthat such fact issue should be tried out on evidence tobe presented. There are three
cases by the Texas Courts which have invalidated legislation con4Twentieth Century Associates v. Waldman, 294 N.Y. 571, 63 N. E.2d 177 (1945), appeaople (Durham Realty Co.) v. La Fetra. 230 N.Y. 429. 138NE. 6011921); Edgar A. Levy Leasing Co. v. Siegel. 258 U.S. 242 (1922); Brown Holding Co..v. Feldman. 256 US, 170 (1921); Finn v. Fifth Avenue Co., 153 F.2d

‘wA.2d 1946, cert. den. 328 US. 838); Application of Zohlman, 76 N,Y.S.2d 388 (N.Y. Sup. 1947). 5Block v. Hirsh, 256 U.S. 135 (1921).
6Bowles v. Willingham, 321U.S. 503 (1944).

7Woods L &ler, 333 U.S. 138.(1948).

..*Won, Beauford H. Jester, Page 5 (V-847)

trolling rents where the courts foundno emergency to exist.8

The Texas cases involved thevalidity of legislation enacted in 1915which was designed to aid the tenant farmer. Itprovided among other things that any rental in excess of onethird of thevalue of the grain andone-fourth of the cotton would be+*,: thatthe landlord would lose his lien, andthatthe tenant could recover double its full amount of the rent so paid, The act was not based on emergency police power. Itwas held that the statute was void as a taking ofproperty without compensation and without “the due course of the law of thelandWwithin Sections 17 and 19of Article Iofthe Texas Constitution, Itwas also held to be aviolation ofthe Fourteenth Amendment of the Federal Constitution.

InCulberson v0Ashford, one of the cases referred to above, the Texas Supreme Court recognized theholdings of the United States Supreme Court cases in the rent control cases above mentioned. Those cases were distinguished as being based “purely on the ground thatthey were emergency enactments andof limited duration q
. ,I

An earlier Texas case9 onthe same statute dlstinguished the two situations:

“To differentiate this case from the
cases of People v. La Fetra andBlock v. Hirsh it is necessary only tobear inmind that no abnormal si.tuationprevailed calling for regulating contracts between rural landlords andtenants as was doneby our Legislature. andthat no pretense was made to repress awide-spread evil arising out of an emergency andafflicting the entire public, impairing the public welfare; whereas, the other two acts were passed to relieve cru-

‘Cdberson v. Ashford, 118Tex. 491. 18S.W,2d 585 (1929); Miller
v. Branch, 233 SW. 1032 (Tex. Civ. App. 1921); Rumbo v. Winterrowd. 228 SW. 258 (Tex. Civ. App. 1921), 9. Miller v, Branch, 233 SW. 1032 (Tex, Civ, App. 1921).Hon. Beauford H. Jester, Page 6 (V-847)

cial afflictions, pressing downuponthe public out of a grave abnormality, superinduced by unprecedented and almost universal warfare, do*And, as said, the legislative acts in bothinstances cited expressly recognized these conditions. andresorted to the police power as a temporary means of dealing with
a temporary exigency, in its nature apresent emergency demanding action for the public welfarc.‘”

This case was cited with approval by the Texas Supreme Court in Culberson v. Ashford, supra.

Taking the cases together, therefore, it is our conclusion thatwhere there are foundto be facts sufficient to constitute an actual emergency, the enactment of legislation regulating rent is avalid exercise of the police power of the State. The decisions are based not only onthefact thathousing was so critical
as tobecome affected with the public interest, but also upon the emergency situation affecting the health andwelfare of the community,lO Where citizens are without shelter, or are forced to live in a crowded condition, or where great numbers of people are not able to obtain or retain healthful living quarters~, there is a problem ofhealth andwelfare for thewhole community **wliieb the**  **courts** say the State is not impotent to deal with. But the emergency must exist in fact, andit is so specified in Section la of H. B. 808, Having concluded that rent control is a subject uponwhich the State may constitutionally act’in certain far-reaching emergencies, we turnto the second part ofyour question: Does H. B. 808, in the light of the Texas Constitution andlaws, accomplish its purpose. “‘toprovide for the imposition of local rent control by municipalities, by action oftheir governing bodies ?”

loIn upholding the New York Rent Law, Justice Crane wrote: “This is not a case where the Legislature has undertaken to regulate housing rates because such abusiness has become charged with a public interest. DDFCircumstances due to war conditions have created aperil to life andhealth. andwith this the state has attempted to deal until the peril has passed.’ GuttagV*Shatnkin. 130N.E. 929 (Ct. of App. N.Y. 1921).Hon. Beauford H, Jester, Page 7 (V-847)

In 1912 the people of Texas adopted whatis known
as the “Home Rule Amendment’ to their Constitution. Art. XI, Section 5. It is applicable to cities of over 5,000 population which have elected to come under its provisions. Under the Amendment and statutes enacted in harmony with it, those cities have very broad powers.11 Such cities may not enact or enforce ordinances which violate any statutory or constitutional provisions. Nor may they enter afield of legislation thathas been entered and occupied by general legislative enactments.12

Among the powers possessed by such cities is the general police power delegated to them by the people in the “Home Rule Amendment” andby the Legislature in Articles 1165to 1176, V.C.S. Section 34 of Article ll75 empowers cities “to enforce all ordinances necessary to protect health, life andproperty0 andto prevent and summarily abate and remove all nuisances and topraserve and enforce the good government, order and security of the city andits inhabitants.’ ,. *’

Article Ilf6 further provides ~that“the enumeration of powers hereinabove made shall never be construed to preclude, by implication or otherwise. any such city from exercising the powers incident to the enjoyment of local self-government, provided that such powers shall notbe inhibited by the State Constitution.*
This power is to be used, among other things, for the public health, safety, andmorals, andmany related purposes. As related to the problem athand, the police power is commonly

1L Beyond all question ahome rule city acts by authority directly conferred by the Constitution nndnot through power conferred by the Legislature.” City of El Paso v. Ascarate. 209 S.W,2d 989 (Tex. Civ. App. 1947. error ref”d.) ““Theamendment constitutes the rule of the local inhabitants of the cityDandit is no longer necessary for theLegislature to confer powers on them to act, or is it necessary to look to the acts of the Legislature for a grant of power; only limitations on thepower to act need be considered.” Yellow Cab Transit Co. vs Tuck, 115S.W,2d 455 (Tex. Civ. App. 1938, error ref’d,)
12Prescott v. City ,ofBorger, 158 S.W.Zd 578 (Tex. Civ. App. 1942.
error ref’d.)Hon. Beauford H. Jester, Page 8 (V-847)

used to regulate the sine, height. andlocation of buildings in certain areas, tofix zones, to require sanitary facilities inbuildings. to require fire exits andfire escapes in public buildings, to provide for slum clearance andlow cost public housing, to promulgate and carry out regulations to safeguard public morals, to control indecent practices, gambling, lotteries, to prevent.extortion and oppression, toregulate public conveyances, andso forth.

The police power of “Home Rule” cities has been tested in our courts. andwhere it has been reasonably exercised, it has been **very** generally upheld.13 For example, cities have been upheld in their power to provide for zoning.14 to inspect food,15 andto enact various other ordinances for the public health andwelfare.16 The Texas Supreme Court in Lombard0 v. City of Dallas, 124 Tex. 1, 73 S.W.2d 475, adopted the following language:

“The doctrine has long been establ&shedthatthe municipality may, under delegated police power, exercise reasonable supervision and control over all kinds of business andproperty within the corporate limits whenever necessary for the public health, safety, morals, or general welfare.

Though their powers are not as broad or extensive, cities andtowns which are not ‘Home Rule.” but are incorporated under the general laws, Articles 961V.C.S. et seq., have been delegated appropriate police powers by the Legislature. 17 Thus Article 962 provides that such incorporated cities:

13 3 McQuillan onMunicipal Corporations (Rev. Ed. 1943) 57, et seq,; 30 Tex. Jur, 119, et seq, 14Lombardo v. City of Dallas. 124 Tex. 1, 73 S,W.td 475(1934). %lty of Dallas v. City Packing Co.. 86 S.W.2d 60 (Tex. Civ. App. 1935. error dism”&)

‘6city of Dallas v*Smith, 130Tex. 225p 107S.W.2d 872 (1937).
17Such **powers** may be delegated by the Legislature tomunicipalities. 3 McQuillan on Municipal Corporations (Rev. Ed. 1943) 108; 11Am. Jur. 943, Constitutional Law, Sec. 223; 16C.J.S. 546, **Con** stitu&mol Law, Sec. 178; Stoutenburgh v. Hennick. 129 U.S 141 (1889); Cox v. City of Kinston, 8 S;E.2d 252 (N.C, Sup. 1940).HOI-I, Beauford H. Jester, Page 9 (V-847)

”

. . . may ordain andestablish such acts, laws, regulations andordinances, not inconsistent with the Constitution andlaws of this State, as shall be needful for the government, interest, welfare andgood order of said body politic andunder the same name shall be knowninlaw ~. .‘”

They have other enumerated powers in Article 1015. Section la of H. B. 808 would be considered as an addition to such specifically enumerated powers, Itwould constitute an additional delegation of the police power to act in a housing emergency.

Itis notnecessary to decide whether either or both these types of cities could independently enact rent control ardinances in a dire emergency by exercise of their general police power. House Bill 808 delegates thatpower to them. The specific provisions of Section la, when added to their broad police powers, would enable boththese types of cities andtowns to so act. Of **course,** the Legislature does not undertake to apply Section la to unincorporated towns andvillages, since it is limited to those cities andtowns which can act by “ordinance” of its “governing body.”

We wish to repeat here that this power to enact housing control ordinances is wholly dependent uponthe actual existence of some great emergency. And the emergency must, under the cases, be closely associated with and affect the public health, safety, morals, or general welfare, For example, it is recited in sn opinion of New York’s highest court thatwhen New York in 1920 enacted its rent laws, there were upwards of 100,000 eviction suits actually pending in the courts of New York City; each proceeding involved afamily averaging 4 or 5 persons; large numbers of people were forced tolive in such crowded conditions that actual health 2nd moral problems were presented; construction of housing facilities was at a standstill or was greatly insufficient because of the shortage of material due to thewar; many landlords were taking advantage of the situation; andthose tenant&who could,paid exorbitant rents rather thanto take the risk ofbeing unable tofind other places of abode. The situation
was critical enough towarrant a special session of the New York Legislature.18 Inupholding the law, itwas pointed outthat it was 18People ex rel. Durham Realty Co. v. La Fetra, 230 N.Y. 429. 130N.E. 681.Hon. Beauford H. Jester, Page 10 (V-847)

an emergency measure which by its ownterms was to remain in force for only twoyears.

On the other hand, where Congress sought to control rent in Washington, D.C.. some six years after the end of World **War** I, andthevalidity of such action was challenged in the Supreme Court of the United States, Mr. Justice Holmes wrote concerning theweight to be given to the declaration by Congress that a sufficient emergency existedr

“We repeat whatwas stated in Block
vs Hirsh, 256 U.S. 135, 154, as to the respect dimto a declaration of this kind by the legislature so far as it relates topresent facts. But even as to them a Court is not at liberty to shut its eyes to an obvious mistake, when the validity of the law depends upon the truth of what is declared

. . . . And still more, obviously so far as this declaration looks to the future it can be no more thanprophecy and is liable tobe controlled by events. A law depending uponthe existence of an,emergency or other certain state offacts to uphold it may cease to operate if the emergency ceases carthefacts change even thoughvalid when passed.

. . ,

u s
. . Inour opinion it is open to inquire whether the exigency still existed upon which the continued operation of the law depended. Itis amatter ofpublic knowledge that the Government has considerably diminished its demand for employees thatwas one of the great causes of the sudden afflw of people to Washington, andthat other causes have lost at least much of their power, Itis conceivable that, as is, shown in an affidavit attached to the bill, extensive activity in building has added to the ease of finding an abode. Ifabout all that remains ofwar conditions is the increased cost of living, that is not in itself ajustification of the act.“18

“Chastleton Corp. v. Sinclair, 264 U.S. 543 (1924).Hon. Beauford H. Jester, Page 11(V-847)

Inthis regard, the Texas Supreme Court wrote:

*A law which assumes to be a police regulation but deprives the citizen ofthe use of his property under the pretense of preserving the public health, safety, comfort, or welfare, when it **is** manifest that such is not the real object andpurpose of the regulation, will be set aside as a clear anddirect invasion of the right of property without any compansatoiy *dVantagesT* Spannv, City of D&s, 111 Tex. 513, 235 S.W. at 513 (1921).

Again, the Texas Supreme Court has declared void the fixing of rents where there was no emergency. Culberson v. Ashford, 118Tex. 491, 18S.W.2d 585. This will serve to emphssize that thevalidity of these ordinances will absolutely depend uponthe existence of a grave emergency, and that they will be valid only so long as such emergency exists. We are not here dealing with the regulation of rents as an ordinary measure to meet an ordinary housing shortage **or** high rents. The Texas Supreme Court has held that this may notbe done, and the Legislature has not attempted to regulate housing under ordinary circumstances, House Bill 808 authorizes such action only upon a “finding that ahousing emergency exists,’ andthe courts will inquire into the actualities of such afinding. We have pointed outthe type of emergency which must be found in order to justify use of the police powers of a city for such purposes, A mere “housing emergency” unconnected with the public health. welfare, safety or mor**als,** would notjustify such extraordinary use of,the police powers to interfere with, take or regulate private property. Rent control in the latter case would be unconstitutional, andit is presumed thatthe Legislature intended to authorize control only in thattype of “housing emergency’ which would serve as abasis for constitutional exercise of such powers.

Assuming the finding of such a grave emergency as to warrant andjustify the exercise of the police power to control housing, the ordinance of a city imposing such control would have to be very carefully drawn in order to be valid. **It** would have to provide adequate standards for the operation of the ordi-Han, Beauford H. Jester, Page 12 (V-847)

nancel9 andprovide for afair rental andfair return on investments, andfor adjustments in new and **unusual** situations; it must provide for trials on contested cases, with adequate pr~i.isions for notice, hearing andappeals, et cetera, Since H. B0808 uses theword “housing, ” it is evident that the Legislature did not intend for commercial rent property tobe controlled, What types of “housing”
are to be controlled would have tobe determined by the city depending on the type and extent of the emergency, Finally, the ordinance must be reasonable andmust be executed in a reasonable
manner. As stated by the Court of Civil Appeals:

““While a city has the power to enact ordinances to protect. the public health, and while ordinances are avalid exercise of the city”6 delegated police power under the Home Rule amendments, the power authorized under such ordinance cannot be exercised arbitrarily andunreasonably,‘P City of Dallas v, City Packing Co,, 86 S.W.2d 60 (1935, error dism’d,)

House Bill 808 contains a severability clause. So regardless of the validity or invalidity of Section la, the provision in Section 1for the end of Federal rent control will stand, Inany event, if andwhenthis bill is signed andbecomes effective, Federal rent control will be at an end in Texas.

suMh4ARY

1. House Bill 808, 51st Legislature, if andwhen signed and effective, will bring about the end of Federal rent control in Texas.

191nSpannv, City of Dallas; 111Tex. 513, 235 SW, 513‘(1921); an ordinance prohibited any commercial building in a residential area except under certain circumstances. Among other reasons, the ordinance was held void because, ““Norule or standard is given to govern the applicant in fashioning the design of his building or to govern the inspector in approving or rejecting it B00 This leaves the right to construct the building subject tothe arbitrary discretion of the inspector andofitself renders the ordinance void.“” 235 **S.W.** at 517,Hon. Beauford H. Jester, Page 13 (V-847)

This is true regardless of the validity **of** Section la of the bill providing for municipal rent .control where ahousing emergency is found to exist inincorporated cities.

2. Section la of H. B. 808 authorizes incorporated cities andtowns in Texas to establish rent control uponafinding that ahousing emergency exists. That bill, together with their general police powers, give the cities the power to regulate housing only where there is such a grave emergency as to affect the health, welfare, safety or morality ofthe people of the city as awhole. This power may not be exercised in the absence of a clear showing of such a grave emergency. Whether such emergency exists is a question of fact to be determined by the governing body of the city or townin the first place. Inthe event of suit. the court may reexamine such finding, because thevalidity of such ordinances absolutely depends upon anemergency andis valid only so long as the emergency exists.
Yours very truly,

APPROVED: ATTORNEY GENERAL OF TEXAS
%LdikLp g.&J&Jwc ATTORNEY GENERAL BY JoeR, Greenhill First Assistant

Assistant JRG:EJ:erc