## Facts

- Santa Barbara County adopted a mobile-home rent control ordinance in 1979 and later amended it to further limit rent increases.
- The ordinance capped space rents in mobile-home parks and allegedly shifted much of the parks’ locational value to tenants through below-market rents and resale premiums.
- In 2002, Daniel and Susan Guggenheim and Maureen H. Pierce purchased Ranch Mobile Estates, a mobile-home park already subject to the rent control regime.
- After the City of Goleta incorporated in 2002, it adopted the County’s ordinances, including the rent control ordinance.
- The park owners brought a federal facial challenge asserting (1) a regulatory taking under the Fifth and Fourteenth Amendments and (2) substantive due process and equal protection violations.

## Issues

1. Whether the City’s adoption of the mobile-home rent control ordinance effected a facial regulatory taking under the Penn Central factors.
2. Whether the owners’ facial takings claim was justiciable (ripeness/standing) without pursuing state compensation procedures.
3. Whether the ordinance violated substantive due process as arbitrary or irrational.
4. Whether the ordinance violated equal protection by irrationally singling out mobile-home park owners.

## Decision

- The en banc Ninth Circuit held the facial takings claim was justiciable.
- Applying Penn Central, the court held the ordinance did not effect a facial regulatory taking.
- The court emphasized that the owners purchased the property after the rent control regime was in place, undermining reasonable, investment-backed expectations of freedom from rent regulation.
- The court concluded the property remained economically viable and that asserted diminution in value was not, by itself, sufficient to establish a taking.
- The court characterized the ordinance as traditional regulation of the landlord–tenant relationship rather than a physical occupation or appropriation.
- The court affirmed rejection of the substantive due process and equal protection claims under rational-basis review.

## Legal Principles

- A facial regulatory-takings claim is assessed under Penn Central by examining economic impact, interference with reasonable investment-backed expectations, and the character of the government action.
- Post-enactment acquisition is highly relevant to the expectations inquiry; purchasers generally cannot claim reasonable expectations to be free of a longstanding, known regulatory regime.
- Significant economic impact does not establish a taking where the property retains productive, profitable use and there is no total deprivation of value.
- Rent control is typically treated as an adjustment of economic benefits and burdens within the police power, not a per se taking absent physical occupation or equivalent appropriation.
- Under rational-basis review, rent control aimed at protecting mobile-home tenants facing high moving costs is a legitimate governmental objective, and differentiating mobile-home parks from other landlords may be rational.

## Conclusion

The en banc Ninth Circuit upheld Goleta’s mobile-home rent control ordinance against a facial takings challenge and related due process and equal protection claims, chiefly because the owners bought the park subject to the existing regime, retained economically viable use, and the ordinance functioned as ordinary economic regulation rather than a physical appropriation.


Guggenheim v. City of Goleta, 638 F.3d 1111 (9th Cir. 2010) (en banc)