Opinion ID: 181572
Heading Depth: 3
Heading Rank: 3

Heading: The Character of the Government's Action

Text: The majority opinion also ignores the final Penn Central factor, the character of the governmental action, which likewise cuts in favor of the Guggenheims. In analyzing this factor, a court looks at the purpose of the regulation, the effect it has in practice, and the distribution and magnitude of the burdens and benefits it places on private citizens. Penn Central, 438 U.S. at 130-34, 98 S.Ct. 2646. The stated purpose of Goleta's mobile home rent control ordinance was to protect owners and occupiers of mobile-homes from unreasonable rents brought about by a shortage of housing and the high cost of moving mobile homes. Ordinance § 11A-1 (emphasis added). Rent control measures also have the claimed ancillary benefit of allowing stable communities to form. See Jay M. Zitter, Validity, Construction, and Application of Inclusionary Zoning Ordinances and Programs, 22 A.L.R.6th 295, § 13 (2007). However, as discussed below with regard to the substantive due process claim, this Ordinance does not serve its stated purposes because of the way it is structured and written. The Ordinance restricts only the amount the landowner can charge a tenant for rental of the mobile home parcel; it does not limit the amount which that tenant, in turn, can demand for sale or lease of the mobile home to other owners or tenants. The designed structure and working of the ordinance amounts to nothing more than a wealth transfer from the landowner to the original tenant, and indisputably does nothing to curb housing costs or provide a stable population once the original tenant has sold or leased the mobile home. The Ordinance unquestionably places a high burden on a few private property owners instead of apportioning the burden more broadly among the tax base. See Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960) ([The Takings Clause] was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.); see also Lingle, 544 U.S. at 542-43, 125 S.Ct. 2074; First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 318-19, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987). Similar laws concentrating the cost of affordable housing on a small group of property-owners have been found unconstitutional. In Cienega Gardens, developers of low-income apartments were able to secure low-interest, forty-year loans from private lenders because the Department of Housing and Urban Development provided the developers with mortgage insurance. Cienega Gardens, 331 F.3d at 1325. Two federal statutes eliminated the developers' contractual rights to prepay their forty-year mortgage loans after twenty-years. Id. at 1326-27. The purpose of the statutes was to prevent the developers from exiting the low-rent housing programs in which they were required to participate while carrying the loans, but not once they paid off the loans. See id. at 1323. But the statutes caused a 96% loss of return on equity for the developers. Id. at 1343. The developers brought suit against the government, claiming that the federal statutes restricting their right to prepay their mortgage loans effected a regulatory taking under the Fifth Amendment. The Federal Circuit, applying Penn Central, found that the character of the government action was to place the expense of low-income housing on a few private property owners (those who had previously participated in the federal loan program but now wanted to pay their way out), instead of distributing the expense among all taxpayers in the form of incentives for developers to construct more low-rent apartments. Id. at 1338-39. Similarly, here it is undisputed that the Ordinance applies only to mobile home park owners. The district court found that the City did not impose such extreme costs for providing affordable housing on any other property owners in the City, except as a condition of new development. In contrast to the burden of renting all the low-rent housing property at an 80% discount, the burden on new developers was to make only 20% of their housing available at below-market rates. There is nothing in the record to suggest why the Federal Circuit's reasoning should not be applied to the facts of this case; substituting Goleta for Congress: Unquestionably, Congress acted for a public purpose (to benefit a certain group of people in need of low-cost housing), but just as clearly, the expense was placed disproportionately on a few private property owners. Congress' objective. . . preserving low-income housing and methodforcing some owners to keep accepting below-market rents is the kind of expenseshifting to a few persons that amounts to a taking. This is especially clear where, as here, the alternative was for all taxpayers to shoulder the burden. 331 F.3d at 1338-39. This analysis, ignored by the majority opinion, weighs heavily in favor of finding a regulatory taking under Penn Central.