MHC Operating Limited Partnership v. City of San Jose

Introduction

This consolidated appeal arises out of administrative and judicial proceedings involving San Jose’s mobilehome rent control ordinance.

The Parties: Appellants and cross-respondents are the City of San Jose and its department of parks, recreation, and neighborhood services (collectively the City). The City has enacted and administers a mobilehome rent control ordinance (the Ordinance). Respondent and cross-appellant is MHC Operating Limited Partnership (MHC). MHC owns and operates a 725-unit mobilehome park within the City known as Westwinds Manufactured Home Community mobilehome park (the Park), which it purchased in 1997. There is also one intervener on appeal, cross-respondent Wallace Sucholas (Sucholas), who is a resident of the Park.

The Ordinance: The Ordinance permits mobilehome park owners a fair and reasonable return. (San Jose Mun. Code, tit. 17, ch. 17.22, § 17.22.020.) The Ordinance operates on the rebuttable presumption that net operating income (NOI) provided owners with a fair return in the base year. (§§ 17.22.480, 17.22.510.) The Ordinance therefore defines fair return as the amount needed to maintain base year NOI, as adjusted for…