In El Rovia Mobile Home Park, LLC v. City of El Monte, published April 23, 2020, the Second District Court of Appeal, Division 5 affirmed a trial court decision denying a writ of administrative mandamus challenging the defendant city's grant of a rent increase. Before 2012, the city did not control rent in its mobilehome parks. In 2012, the city enacted an ordinance limiting rent increases in the two largest parks in the city. In 2015, the city enacted an ordinance that extended rent control to all mobilehome parks in the city. The ordinance states that no rent can be charged in excess of the rent in effect as of 2015, unless the city grants an application for the increase. It also identifies 2012 as the base year for rent, and rebuttably presumes the net operating income the operator received in 2012 was fair and reasonable. One of the grounds for authorizing a rent increase is maintenance of a fair return standard, evaluationed with a maintenance of net operating income formula. The owner of the plaintiff park purchased the park in 2013, when the park had no rent control, and bought it with the intention of gradually raising rents to market levels. In 2016, the park applied to increase rents from up to $550 a month to $665 a month. The city concluded that based on the fair rental value for the park spaces in 2012, the fair rental value as of the date of the decision (2017) was $575. At an administrative hearing, a state administrative law judge agreed that 2012 was the proper base year for consideration. The trial court denied the plaintiff's challenge to the ALJ's decision.
The appellate court denied the plaintiff's contention that 2015, not 2012, should be the base year for rent increases. The law requires that a property owner be permitted to start rent calculations with a base date similar to other comparable properties. The city's ordinance reasonably identified 2012–a year in which the city's mobilehome parks had no rent control–as the base year. That was a year when the market controlled rents, allowing the city to assess comparable properties and determine whether exceptional circumstances exist to depart from the actual rent charged in 2012. The plaintiff presented no evidence that 2015, rather than 2012, should be the base year; and failed to show that the law compelled the city to use 2012 as the base year. Substantial evidence supported the city's rent control determination.
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