CALISTOGA — The owners of the Rancho de Calistoga mobile home park are pressing their effort to hike the rent on tenants and overturn Calistoga’s Rent Stabilization Ordinance.
The lawyer for Novato-based HCA Management served city officials with copies of two related lawsuits earlier this week, one in federal court and one in Napa Superior Court. Both ask the courts to allow the owner to institute a hotly contested rent hike, up to $625 per month on all 184 lots, which was denied by an arbitrator earlier this year.
Both suits go further, however, and ask the courts to declare the city’s rent ordinance, designed to control the size of annual rent increases, illegal under the state and federal constitutions, which ban the government from taking control of private property without compensation.
By forcing the park owners to charge less than what the open market would allow, the lawsuits argue, the city is costing them almost $250,000 per year in revenue and depressing the value of the land by almost $4 million.
“Because mandating below-market rents in perpetuity is not rationally related to any legitimate government purpose,” lawyer Anthony Rodriguez wrote, “the Calistoga ordinance has been applied in a manner that violates” the constitutional protection for property.
City Manager Richard Spitler declined to comment on the suit, saying the city has not had time to study it in detail.
It’s not yet clear when the lawsuits might come before a judge, but Rodriguez said it is likely to be well into next year before the schedule takes shape.
The lawsuits stem from a decision in July by retired Judge W. Scott Snowden awarding a $60-per-month rent increase to the owners. Snowden had been hired by the city to arbitrate a dispute between HCA and the mobile home park tenants over a proposed rent hike.
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Rents vary at the park, but the average after Snowden’s decision is $537 per month. HCA had asked to raise the rent to a uniform $625 per lot, $25 per month less than what it claims would be a fair market rent for a mobile home lot in the area.
Both the state and federal lawsuits ask the courts to overturn Snowden’s decision and allow the larger rent increase.
Residents, all of whom are seniors and many of whom live on fixed incomes, had argued that the full rent hike was unreasonable. They also complained that the owners had decreased services in recent years, including closing down an old Victorian house that had served as a clubhouse and community center, and therefore didn’t deserve such a large rent hike.
Snowden declined to rule on the constitutionality of the city’s ordinance during the arbitration. He did, however, agree with the park ownership that the ordinance had not provided a reasonable rate of return over the years with the smaller incremental raises that are permitted by the law.
In the lawsuit, HCA says Snowden ignored evidence that the $625-per-month rent was not unreasonable and that there are other mobile home spaces available in the region, so the park was not in a position of forcing tenants to pay exorbitant rents.
The lawsuit concedes that rent control ordinances might make sense in cases where park owners were extracting unreasonable rents from tenants with no other living options, but it argues that this is not the case in Calistoga.
“Rather, the Calistoga ordinance is being applied arbitrarily and impermissibly in order to provide each and every one of the 184 tenants with a monthly subsidy, whether they need it or not,” Rodriguez wrote.
In addition to asking the court to strike down the ordinance and allow the $625 rent, the suits also ask for an unspecified amount in damages and lawyers’ fees from the city.
The lawsuits also name all the residents of the mobile home park as defendants, but Rodriguez said this week that is a technical matter and HCA has no intention of seeking any damages from the residents beyond the larger monthly rent increase.
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