Posted on September 30, 2009 by Mark Alpert
The good guys win one in a rent control case. (Ok, I’m a bit biased since this is our client) In a ground breaking decision in Guggenheim v. the City of Goleta, a three judge panel of the Ninth Circuit has concluded that the City of Goleta’s adoption of rent control in 2002 caused a taking of the Guggenheims’ Rancho Mobile Home Park property. The Court found that the adoption of the rent regulation was a taking because it had resulted in a huge wealth transfer from the park owner to tenant. The Court cited evidence that space rents were at 20 percent of fair market and mobile homes were selling at huge premiums because of rent control. The Court also found that when the government imposes such onerous regulation in the name of advancing affordable housing, it is improperly imposing a burden on an individual property owner that should be borne by the community as a whole. The Court left the decision of how much compensation to be paid to the District Court. The Guggenheim decision is the first state or federal appellate decision which has found the adoption of rent control caused a compensable taking. I am proud to be a part of the legal team representing the park owners.
Filed under: Current Decisions, Rent Control | 4 Comments »
Posted on August 26, 2009 by Mark Alpert
Mobile home park owners suffering under unfair and extreme rent control have been, in increasing numbers, seeking an exit strategy which will allow them to recover the underlying value of their land. One such exit strategy is converting rental mobile home parks to subdivisions, allowing the individual lots to be sold at fair market value, unburdened by rent control. State law is generally very supportive of this strategy, allowing park owners to subdivide without the typical impact fees and improvements demanded by local governments in conjunction with a subdivision. This strategy has become highly controversial and political, as tenants who believe they have a permanent entitlement to rent control, influence local governments, who ignore the limitations of state law. But that may be coming to an end with the decision of the First District Court of Appeal in Sonoma County Park Associates v. County of Sonoma. The County of Sonoma had adopted its own “conversion ordinance” designed to stop conversions except with the approval of residents and included numerous onerous conditions designed to make the process as difficult and expensive as process. The notably left of center court, in an exhaustive and well thought out analysis, found the County’s conversion ordinance was preempted by the state law. This reported decision is a major victory for many park owners, including several I represent. The Court of Appeal, however, showed its true feelings in essentially telling the state legislature that it should change the law to give local jurisdictions more authority to hinder conversions.
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Posted on July 27, 2009 by Mark Alpert
Tom Malloy owns 320 acres of property in the Mojave Desert. He would like permission to create a fields wants to carve out a course for racing, driving and testing cars. The proposed Fairmont Butte Motorsports Park would be used primarily for events sponsored by car clubs and racing organizations. One would think the middle of the Mojave Desert would be an ideal location for such a project. Apparently not. Local environmentalists complain the site is a threat to poppyseed fields a mile away. The LA Times quotes Milt Stark, president of the Poppy Reserve/Mojave Desert Interpretive Assn., a volunteer group that gives tours and talks at the wildflower sanctuary. He complains: “It’s a terribly inappropriate business for that area. Visitors who come to see the poppies come out there to have peace and quiet.” Never mind that Malloy promises to clean up a site that is littered with shell casings and trash from trespassers. Never mind the construction and operation of the project would likely boost the local economy. We can’t disturb the poppy watchers!
Filed under: Current Events, Viewpoints | 2 Comments »
Posted on July 15, 2009 by Mark Alpert
We know Sotomayor is a liberal on civil rights issues, but what about the civil right to protection of your property? Not surprisingly, it does not appear she will be much of an advocate for property rights, at least based on her decision in Didden v. Village of Port Chester. I would describe Didden as a step beyond the roundly hated Kelo case because it implicitly approved condemnation undertaken to benefit a private party where the local government clearly allowed itself to be used as a tool of of a private redeveloper. The City condemned a private property where the owners had proposed to develop a drug store after the property owners refused an extortive demand of the redeveloper for a payment of $800,000 or a 50 percent partnership interest. See a good discussion of the case on this blog. It seems, post Kelo, any action authorized by a government is, by definition a valid public purpose. That kind of government power is scary.
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Posted on May 11, 2009 by Bill Dahlin
In late January 2009 State Farm Insurance in Florida announced it was entirely withdrawing from providing homeowners’ insurance in the state of Florida. The decision to withdraw from that market came roughly two weeks after the state’s “insurance commissioner” denied a request for a rate increase. The insurance company, presumably after analyzing its exposure and rate structure, determined that the liability exposure and cost of doing business in Florida was not warranted by the potential (premiums) revenue to be obtained.
Insurance commissioners and “rate structures” have been adopted in a number of jurisdictions, including, for example, California. While all of us have observed that so-called “predatory” pricing may occur in certain circumstances the overall concept and theory for doing business in the United States is the ability to set prices for your product or service. If no one wants to pay that price, they shop elsewhere. This is what has made Walmart and Rolls Royce cultural icons. When the right to set prices at what the market will pay is removed through price fixing or other regulation the incentive to remain in a business can be largely eliminated. The homeowners in Florida will, in all probability, be the single biggest “losers” as a result of a government agency decision that is purportedly justified on behalf of consumers. The repeated weather and forest fire related emergencies in Florida, Louisiana and California impact the cost of doing business. That fact cannot be escaped. Will California suffer a similar fate for homeowners’ insurance, auto insurance, commercial liability insurance? Time will tell.
Regulations frequently lead to unanticipated results. Enacting legislation without a thorough analysis of its probable impact, intended and otherwise, leads to bizarre results. Unwinding the maze of regulation can have unintended consequences. The collapse of Enron in the national economy arose, in large part, out of the deregulation of portions of a utility that as much as invited nefarious activity by persons with a criminal mindset. Price regulation, whether for Mobilehome spaces (rent control) or for services like insurance always leads to additional collateral damage.
Filed under: Regulation Nightmares | 1 Comment »
Posted on May 3, 2009 by Mark Alpert
We have an opening coming on the Supreme Court and President Obama repeated his campaign promise that empathywill be key to his choice of a replacement for Justice Souter. We value empathy in our personal relationships. It is part of what makes us human and anyone without empathy is very ill. But is empathy something we should highly value in a Supreme Court Justice? Do we want Supreme Court Justices deciding cases based on empathy or the law? In fact, don’t we want just the opposite–someone who will apply the law regardless of his or her personal feelings about a party? It is the role of a judge to exercise dispassionate justice, not empathize with the parties.
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Posted on April 24, 2009 by Mark Alpert
The politicization of science has scary implications for property rights. Indeed, the religion of man made global warming has practically no limit on its reach. On April 17, 2009, the Obama administration announced the EPA’s formal finding that carbon dioxide and several other greenhouse gases “endanger” public health and welfare as a landmark and long overdue step toward slowing global warming. The finding gives the EPA the authority to regulate emissions under the Clean Air Act. I’m still trying to figure out why we are planning to incur hundreds of billions of dollars in green technology costs based on a science with models that can predict rain with a 50 percent accuracy the next day. But the reach of the global warming crowd knows no limit. Researchers at the London School of Hygiene and Tropical Medicine have issued a study which concludes that obesity contributes to global warming. I have to draw a line in the sand. I am officially revoking my citizenship when the government starts regulating my intake of In-N-Out Burgers.
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Posted on July 30, 2008 by Mark Alpert
The environmental movement has been hijacked by anti-growth, anti-business and really anti-free market radicals, who oppose the very idea of individual property rights and view private business as the enemy. These causes are also hijacked by “NIMBY’s” who have no true environmental concern, but oppose a project they don’t want in their area. For them, the environmental cause of the day is just a tool. Global warming is a perfect tool for these activists because one can argue that almost any new project will result in some activity that could result in additional use of evil fossil fuels or electricity that will cause more greenhouse gas emissions.
Enter California Attorney General Jerry Brown. The Associated Press reports that Brown is suing to stop a water bottling plant, which has already been subject to extensive environmental scrutiny. Brown’s opposition is based on his contention that the environmental analysis “failed to include an examination of whether the operation will contribute to global warming through the production of plastic bottles, the operation’s electrical demands and the diesel soot and greenhouse gas emissions produced by trucks traveling to and from the plant.” Why don’t we require an environmental impact report be submitted for all the enormous resources which are wasted as a result of this kind of ridiculous litigation?
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Posted on July 3, 2008 by Mark Alpert
James Madison was a principal author of the United States Constitution. He was also a great proponent of property rights. Thus, it is particularly sad and ironic that property rights seem to have received short shrift for reasons of political expendiency. Indeed, this was a fear of Madison. I thought the Fourth of July was a good time to remind people of Madison’s wisdom on property rights and the role of government:
“Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions.”
“The rights of persons, and the rights of property, are the objects, for the protection of which Government was instituted.”
“As a man is said to have a right to his property, he may be equally said to have a property in his rights.”
“In Republics, the great danger is, that the majority may not sufficiently respect the rights of the minority.”
A quote for all the Judicial Activists out their attempting to make a living Constitution—This is what the author of the Constitution thought about that:
“Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government.”
And as many of you set off on your summer vacations, consider this quote:
“Let me recommend the best medicine in the world: a long journey, at a mild season, through a pleasant country, in easy stages.”
Happy Fourth of July!!!
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