Earlier this month, Constitutional Accountability Center (CAC) filed a brief in the U.S. Court of Appeals for the Ninth Circuit in Guggenheim v. City of Goleta, a case that asks whether a municipal rent control ordinance in Goleta, California constitutes a “taking” under the Fifth Amendment. On June 22, an en banc panel of the Ninth Circuit will rehear the case, having vacated a prior decision written by Judge Jay Bybee that held the City of Goleta’s rent control ordinance was unconstitutional on its face under the Takings Clause.  CAC was joined on the brief by the American Planning Association (APA), APA California, and the Western Center on Law and Poverty.

In Guggenheim, Daniel and Susan Guggenheim have sued the City of Goleta alleging that a rent control ordinance aimed at protecting mobile home residents and ensuring affordable housing is an unconstitutional “taking” of their property.  They claim the ordinance prevents them from extracting the maximum profits from the mobile home park they own.  The problem with this claim, however, is that the Guggenheims purchased the park with the rent control plan in place and, accordingly, the price they paid for it reflected a discount based on the reduced rental profits.  Thus, they got exactly what they paid for: a mobile home park subject to rent control.  The City took nothing from what they bought.

As even Judge Bybee admitted in his ruling, the Supreme Court has never found a rent control regulation–or any regulation of any kind–to be unconstitutional on its face.  Courts have considered the constitutionality of rent control ordinances for years, under several different theories, and not a single court has found rent control to be a taking (without being overruled by the Supreme Court, that is).  As CAC’s brief explains, this is not all that surprising, as it is wholly appropriate for courts to exercise particular restraint in declaring regulatory takings, given that the text and history of the Fifth Amendment indicate that the Founders intended to limit only physical takings of property for public use without just compensation.  Nonetheless, Judge Bybee found a taking on a facial challenge, breaking new jurisprudential ground, under facts where such a result could hardly be more unjustified.

Stay tuned to Text & History for more analysis of the case as we approach oral argument.