Oceanside Mobilehome Park Owners' Ass'n v. City of Oceanside

The City of Oceanside appeals an order preliminarily enjoining it from applying and enforcing its mobilehome park rent control ordinance. The trial court held the ordinance facially unconstitutional because it believed the formula for setting initial rents and providing for adjustments fails to consider the property’s fair market value and existing general market conditions and deprives park owners of a fair rate of return on their property. The city also challenges the trial court’s finding other provisions facially invalid, but alternatively argues they are of subordinate importance and even if invalid they may be severed from the remainder of the ordinance.

For the reasons which follow, we conclude: (1) the reasonable return on fair market value standard is not constitutionally required; (2) the fair or maintenance of net operating income standard effectively allows property owners a just and reasonable return; (3) the ordinance insures a just and reasonable return under general market conditions; (4) by limiting the restriction of an annual adjustment (except for certain passthrough adjustments) to only permissive adjustments, the ordinance is not constitutionally…