U. S. Supreme Court Refuses to Hear Equity LifeStyle Properties Appeal

Capping a 14-year legal battle between the city of San Rafael, California and Contempo Marin manufactured housing community (MHC), the United States Supreme Court let stand a lower court ruling that favored the city’s rent control ordinance. A U. S. district court ruled in favor of the Contempo, owned by Equity LifeStyle Properties, Inc. (NYSE:ELS) in 2009, saying rent control constituted a “taking” of private property. The 9th U. S. Circuit Court of Appeals overturned that ruling in April of last year, and ELS subsequently asked the Supreme Court to review that decision. Mayor Gary Phillips is relieved the Supreme Court has effectively ended more court time dealing with this issue. “We anticipated that would be their ruling and we’re quite pleased it has come to a conclusion,” Phillips said.

Meanwhile, ELS spokeswoman Jennifer Ludovice, noting rent control does not make the housing more affordable, said, “The ordinance forces new residents to pay more up front to get into the community than they would have to pay without the ordinance. Our customers are overwhelmingly satisfied with the quality and pricing of the communities and lifestyle we provide without the need for rent control.”

While the ordinance was enacted in 1989, in 1993 and 1999 it was revised to limit the owner to increases no more than 75 percent of the change in housing prices per the Consumer Index for the 396 home site community. It also allowed new tenants moving in the same site rental as the previous resident, MHProNews understands, leading to a lawsuit by ELS against San Rafael in 2000, alleging the company was losing 81 percent of the value of the community by disallowing rent increases. That triggered a series of lawsuits that went back and forth over 14 years. As marinij.com reports, ELS has suggested it may close the community, perhaps converting it to another use.

(Image credit: Equity LifeStyle Properties, Inc.)

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