Donohue

Government Code section 66427.5 requires the subdivider of a mobilehome park converted to resident ownership to avoid the “economic displacement” of “nonpurchasing residents” by, among other things, limiting the time period over which space rents “may increase from the preconversion rent to market levels . . . .” (Gov. Code, § 66427.5, subd. (d)(1).) The City of Santa Paula (City) has adopted, by initiative, a mobilehome space rent stabilization ordinance (Santa Paula Mun. Code, ch. 8.48), that allows smaller rent increases over the same period of time (the initiative).

This case involves a failed attempt by residents to convert the Santa Paula West Mobile Home Park (the Park) to resident ownership and the Park owner’s subsequent attempt to increase rents to the level allowed under section 66427.5. The question is whether section 66427.5 applies where, as here, the conversion to resident ownership does not occur. If the statute applies, we must determine whether it preempts the initiative. If the initiative applies, we must determine whether it denies a fair return on investment to park owners and is, therefore, facially unconstitutional.

Following a court trial on…