Opinion ID: 2175297
Heading Depth: 1
Heading Rank: 2

Heading: The Constitutionality of the Ordinance.

Text: The plaintiffs contend that the ordinance is unconstitutional because it eliminates an owner's right to possess his condominium unit, and the owner is not compensated for this deprivation. Such a deprivation, claim the plaintiffs, is unduly oppressive and arbitrary in its allocation of rights of possession to persons other than the owner. We do not agree. The ordinance does deny a condominium owner the right to occupy his unit if it was used for rental housing on and not converted before the effective date of the ordinance. There are two classes of owners who are affected. The first class, those owners who purchase their condominium units after the effective date of the ordinance, are on notice that they have no right to use their property as owner-occupied housing. They are fairly warned that they are purchasing property which may be used for rental housing only, and presumably the purchase price reflects this use restriction. Since these owners were notified that they had no right to occupy their unit, they were not denied a right to which they had a legitimate expectation. Clearly the government is not required to compensate an individual for denying him the right to use that which he has never owned. The second class of owners is comprised of those owners whose units were purchased prior to, and which were being used for rental housing on, the effective date of the ordinance. These owners, under prior law, did have a right to occupy their unit. That right is now denied them. However, the submission that [plaintiffs] may establish a `taking' simply by showing that they have been denied the ability to exploit a property interest that they heretofore had believed was available for development is quite simply untenable.... `Taking' jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a particular governmental action has effected a taking, [the focus is] rather both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole (emphasis added). Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 130-131 (1978). In Penn Cent. two factors persuaded the Court that no taking had occurred: the governmental action did not interfere with the owner's primary expectation concerning the use of the property, and the owner was still able to obtain a reasonable return on its investment. Id. at 136. The presence of these two factors in this case likewise convinces us that no taking has occurred. By definition, any owner in the second class of owners was using his unit for rental housing on the effective date of the ordinance, so his primary expectation has not been frustrated. While the use restrictions subsequently enacted undeniably diminish the value of the property, this alone does not establish a taking. See Euclid v. Ambler Realty Co., 272 U.S. 365 (1926); Hadacheck v. Sebastian, 239 U.S. 394 (1915). Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922). In addition, the owner of a controlled rental unit is assured by § 7 ( a ) of c. 36, of the right to receive a fair net operating income for his unit. It is not disputed that the ordinance serves a legitimate public purpose. We conclude that there has been no taking. In similar cases, analysis of the factors that we have considered herein has led to identical conclusions. See, e.g., Agins v. Tiburon, 447 U.S. 255, 261 (1980); Andrus v. Allard, 444 U.S. 51, 64-68 (1979); Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 136 (1978). Judgment affirmed.