Tyree

Appellants, who are tenants of respondent Housing Authority of the City of Pleasanton, sued to enjoin an increase in rents and to obtain a judicial declaration that the housing authority may not operate its residential properties at a profit.

The housing authority was formed under the provisions of the Housing Authorities Law (Health & Saf. Code, § 34200 et seq.) Both as originally enacted, and as later codified in Health and Safety Code section 34321, the statute provided that each housing authority formed under its provisions “shall manage and operate its housing projects in an efficient manner so as to enable it to fix the rentals for dwelling accommodations at the lowest possible rates consistent with its providing decent, safe, and sanitary dwelling accommodations. . . .” In the same section it is declared that “[n]o housing authority shall construct or operate any such project for profit, or as a source of revenue to the city or the county.” Section 34321 contains no exemption applicable to facilities acquired in one way as opposed to another (e.g., by gift, purchase or lease, whether or not implementation of any federal public housing program is involved).

In…