A three-judge panel of the Ninth Circuit Court of Appeals in Pasadena has upheld SLO County's rent control ordinance, in the latest step in a long-running court battle.
The voter-approved rent control ordinance for residents of mobile home parks has been challenged by the owner of Sea Oaks Mobile Home Park in Los Osos, Equity Lifestyle Properties, Inc. Nine elderly residents of the park were told five years ago after signing a new lease that their space rent would be increased to market rates, and the county has been fighting on their behalf ever since.
"It's another victory for the tenants," said County Counsel Tim McNulty after receiving the federal appeals court's Sept. 17 decision.
"The county went to some great effort to uphold rent control in the face of a very vigorous lawsuit by Equity Lifestyle, which spent a lot of time and money to prepare the case in an attempt to have the court agree that rent control didn't apply to those nine," McNulty added.
The county's rent control ordinance was enacted by voter initiative in 1984.
The Chicago-based company, controlled by multi-billionaire Sam Zell, expanded the scope of its lawsuit to argue that rent control is unconstitutional because it cuts down on the owners' profits. Their arguments were dismissed by the federal panel of judges.
"It's good news any time you get judges to slap their hands," said Jim McCallum, president of the residents' association at Sea Oaks.
Eight of the affected people still live at Sea Oaks, and are facing up to $40,000 in accrued back rent if Equity Lifestyle succeeds in revoking the county's rent control ordinance, he said.
"They can't sell their places until it's resolved. They're stuck there," McCallum noted.
An appeal in state court is expected to be argued next summer, McNulty said. Equity Lifestyle may also appeal the recent federal judges' decision, by asking for a decision by the full nine-member court, or by taking the issue to the U.S. Supreme Court.
A Los Angeles lawyer for the company, Steve Fleishman, would not comment on the decision, citing pending litigation.