In Rancho De Calistoga v. City of Calistoga, published September 3, 2015, the 9th Circuit affirmed dismissal of a mobile home park's as-applied challenge to a city's mobile home park rent-control ordinance. The ordinance included an annual rent increase of a set amount, and a mechanism for park owners to seek a higher increase. After the park sought an increase, and received an increase smaller than the amount it sought, it sued the city for violation of the takings clause and equal protection. Applying the Penn Central regulatory takings factors, the court concluded that the regulatory takings claim could not succeed. A mere diminution of value of the park was not a taking. The park had no reasonable investment-backed expectation of being free from regulation, including rent control, given that this was a highly-regulated field. The park could not argue that its right to a fair rate of return was being taken, because the ordinance included a formula for providing a fair rate of return. Further, the court has long given its imprimatur to rent-control ordinances.
The court then rejected the park's alternative theory that the ordinance was a "private taking" because any public purpose of the ordinance was pretextual. A true private taking is where the government takes property from one person and gives it to another. That did not occur here. The park could not use a "private taking" theory to evade the Penn Central analysis for regulatory takings.
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