Apartment Ass'n of Greater Los Angeles v. Santa Monica Rent Control Board

In this case, we consider the facial validity of a Santa Monica Rent Control Board regulation which prohibits landlords who purchased rental property after the inception of rent control from seeking an adjustment in base rents. Appellant Santa Monica Rent Control Board (the Board) contends that the regulation draws a rational distinction between those who purchased before and those who purchased after rent control, based on their differing investment-backed expectations. Respondents counter that landlords are constitutionally entitled to have base rents that are substantially below market adjusted to base date market levels. While we do not accept respondent’s position, we conclude that the regulation as written is constitutionally infirm. We therefore affirm the grant of summary judgment in favor of respondents.

Background

Rent control is a proper exercise of a city’s police power if the regulation is “reasonably calculated to eliminate excessive rents and at the same time provide landlords with a just and reasonable return on their property.” (Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 165 [ 130 Cal.Rptr. 465 , 550 P.2d 1001 ], hereinafter Birkenfeld.)

The…