Surf and Sand, LLC v. City of Capitola

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

I. INTRODUCTION

The residents of a typical mobile home park own their homes but lease the spaces on which the homes sit. Because the cost of relocating a mobile home generally makes it economically unfeasible to do so, rising space rental rates pose a particular threat to mobile home owners. California municipalities have attempted to minimize that threat by enacting rent control ordinances and other measures designed to ensure that mobile home owners do not lose the investment they make when purchasing mobile homes.

Plaintiff Surf and Sand, LLC owns Surf and Sand Mobile Home Park (“the Park”), which is located on ocean front property in the City of Capitola. Although the value of a mobile home structure typically is measured in tens of thousands of dollars, mobile homes in the Park have changed hands for prices in the neighborhood of $500,000. Plaintiff contends that this difference in value is a “premium” created by rent control, which effectively represents the future value of below-market rental rates. Defendants contend it is nothing more than “placement value” — additional value resulting from the scarcity of…