Article: A Review Of Brookside Investments Versus the City of El Monte

Introduction

In this article, we review the court decision in Brookside Investments Versus the City of El Monte. In this case, Brookside Investments, the owner of a large mobile home park in the City of El Monte, sues the City government over the passage of Ordinance #2829, which imposed restrictions on the amount of rent and rent increases in its mobile home park.

The court decision, in this case, has important lessons on land use regulation passed by voters and raises interesting questions about rent control and the local government agencies role in promoting rent control as a tool to fight the lack of affordable housing.

This case was heard before the Second District, Division 7 of the California Court of Appeals.

About

This article is part of a series of articles Landon writes about court decisions from California related to land use planning. In this article, Landon reviews the decision in the 2016 Appeals Court Case Brookside Investments Versus the City of El Monte. In this case, the owners of a trailer park challenge a rent control ordinance implemented by the City of El Monte.

Facts Of The Case

The following facts were undisputed in this case:

1 Brookside Mobilehome Park has 421 spaces. Two other parks in the City had over 101 spaces.

2 The City approved spending money on the special election. This spending included legal notices and tra

Timeline

1998: The City passes Ordinance #2216. In this ordinance, the City attempts to curb excessive rent increases in mobile home parks by mandating arbitration of rent disputes through its Mobile Home Park Rent Review Commission.

1990: City citizens pass an initiative to prohibit the City Council from passing any form of mobile home rent control. They also establish a rent assistance program for mobile home owners. The program is known as the Mobilehome Tenant Rent Assistance Program or “MTRAP”.

2012: The City Council sponsors a second initiative to repeal the 1990 ordinance and calls a special election to consider the proposed ordinance. This initiative passes, and becomes Ordinance #2804.

2012: The City Council passes Ordinance #2811, which imposes a temporary limit on mobile home rents. The limit remains in place until September 2013, when Ordinance #2829 is passed.

2013: The City Council enacts Ordinance #2829, the “Mobile Home Space Rent Stabilization Ordinance”.

Legal Questions

Here are the narrow legal questions examined in this court decision:

1 Did the language contained in the MTRAP initiative prohibit the City Council from placing Ordinance #2804 before the city voters?

2 Was the money spent by the City Council on the special election to Approve Ordinance #2804 illegally spent in violation of the MTRAP initiative?

Here are the broader legal questions examined in this court decision:

1 Does the language in Section 9222 conflict with Article 2, Section 11 of the California State Constitution? Are city council’s prohibited from taking action to repeal an ordinance established by voter initiative?

Ordinance Details

Ordinance #2216: This ordinance was established by the City Council. It required rent increases in mobile home parks with more than 60 spaces to be reviewed by a Rent Review Commission established by the City.

MTRAP Ordinance: This ordinance was approved by City voters in a municipal election. It repealed Ordinance #2216 and established the rental assistance program known as MTRAP. MTRAP required that 10% of the spaces in a mobile home park be rented out at a 10% discount, but gave mobile home park owners the sole right to determine the overall amount of rents. It also placed a prohibition on the City Council against the passage of any ordinance that would regulate the way mobile home park owners determined space to rent. It also prohibited the City from spending any tax revenue on the passage of such an ordinance.

Ordinance #2804: This ordinance, known as the “El Monte Fairness for Mobilehome Owners Guidance” was enacted by City voters in a special election, but was placed before voters by the City Council. It repealed MTRAP and allowed the City to investigate the need to impose mobile home rent control.

Ordinance #2811: This ordinance was passed by the City Council. It limited rent increases in mobile home parks until Ordinance #2829 was passed.

Ordinance #2829: This ordinance was passed by the City Council. It limited mobile home space rent to $760 a month, and limited rent increases for rents below this amount to $50 a year. These restrictions applied to mobile home parks with 101 or more spaces.

The Court’s Decision

Let’s consider the answer to the narrow legal questions first:

Did the language contained in the MTRAP initiative prohibit the City Council from placing Ordinance #2804 before the city voters?

No. To reach this conclusion the court made a close examination and interpretation of the actual language in the ballot measure that established MTRAP. In its decision, the court said:

“Brookside contends the usual and ordinary meaning of the words used in section 10 of MTRAP "defined the unwanted city council action as broadly as possible" and prohibited the El Monte City Council from taking "any hostile action" against the initiative. However, the actual language approved by the voters was far narrower: Section 10 barred only "the passage of any ordinance" concerning mobile home park rents and the expenditure of city funds in connection with "any such ordinance." That language, particularly when viewed in the context of an initiative that repealed an existing rent regulation scheme enacted by the vote of the El Monte City Council, reasonably connotes adoption of a new law concerning mobile home rents by the City Council itself.”

Essentially, the court found the language in the measure that established MTRAP didn’t prohibit the City Council from proposing a repeal of MTRAP and placing that repeal before voters in a special election. In its decision, the Court seemed to emphasize that voters in El Monte had a right to repeal or modify the measure that established MRTAP, even though the City Council didn’t. It said:

“Brookside acknowledges in its first amended complaint that the voters of El Monte, acting through the initiative process as defined in the Elections Code, had the authority to determine whether MTRAP should be reconsidered, modified in any way or repealed. No principled reason exists based on the language of section 10 of MTRAP or the initiative's statement of purpose to distinguish between a voter-sponsored, voter-approved reconsideration of MTRAP pursuant to the procedures set forth in sections 9201 through 9220 and a city council-sponsored, voter-approved reconsideration pursuant to section 9222.”

Was the money spent by the City Council on the special election to Approve Ordinance #2804 illegally spent in violation of the MTRAP initiative?

No. The court found the City’s placement of the measure to repeal MTRAP on the special election ballot to be legal. As a result, the City’s expenditures on this effort were also found to be legal.

Now let’s briefly consider what we can learn from the court’s decision on the broader legal question raised:

Does the language in Section 9222 conflict with Article 2, Section 11 of the California State Constitution? Are city council’s prohibited from taking action to repeal an ordinance established by voter initiative?

No. The court found no conflict between Article 2, Section 11 of the California State Constitution and Section 9222 of the California Elections Code. To reach this conclusion, the court looked carefully at the language and legislative history of each.

Article 2, Section 11 enables the voter initiative/referendum at the state and local level. It doesn’t give the state legislature the power to place before voters a measure to modify previous voter initiatives. (That ability was added by Proposition 12 in 1946.) It did, however, empower the legislature to write rules regarding the local initiative process. These rules became, in part, Section 9222 of the California Elections Code. Section 9222 specifically allows a local legislative body to propose to the voters a measure that repeals or modifies a previously voter-approved law. Because Section 9222 leaves the ultimate decision on the repeal or modification of a law in the hands of the voters, and because of Article 2, Section 11 allowed for local voter initiative procedures to be defined by the legislature, our court found no conflict between the two sections of law.

Unanswered Questions

The court leaves a big, unanswered question in its decision. It reiterates that a legislative body can’t pass laws or rules that prohibit further decisions by the same legislative body. It seems to also indicate a voter initiative couldn’t restrict repeal by future voter initiative. However, it doesn’t answer this important question:

Would Section 9222 of the California Elections Code allow a local ordinance to restrict a local government legislature from placing a measure before voters that modified or repealed a previously approved voter initiative?

If the court had found the language in the measure establishing MTRAP had prohibited the City Council from placing Ordinance #2804 before the voters in a special election, I believe it would have been compelled to answer this question. It said, however, that:

"…We need not decide in this case whether the type of restriction on city council action

advocated by Brookside impermissibly conflicts with section 9222, for we agree with the trial court that section 10 of MTRAP did not prohibit the El Monte City Council from proposing the city's voters adopt Ordinance No. 2804 in 2012.”

The legal issues here could get very murky. For example: If a local initiative did prohibit a local legislative body from proposing a voter measure that would repeal the local initiative, could members of that local legislative body propose, fund and support such measures as private citizens? How would this line between private actions and public actions be drawn?

Lessons

This court decision has a couple of important lessons about land user regulation at the local level.

Lessons for Local Governments:

1 Land use regulations passed by voter initiative or referendum will receive special treatment and deference by the California Courts. Your ability to repeal or modify land use regulations enacted by voters will be very limited. When dealing with land use regulations related to voter initiatives, trade carefully.

2 Consider carefully the language in proposed land-use regulation voter initiatives in your jurisdiction. The exact wording and details of that language can have very important consequences after a measure passes. If possible, work with legislative proponents to create clear wording and definite boundaries of the legislation. Gray areas in land use regulation created by voter initiatives cause harm to the greater community and should be avoided.

3 When a voter initiative related to land use is passed, a serious and thorough review of current regulations, policies and practices should be made. How does the new regulation impact the work of the planning department, building department, and public works department? How does it impact the communities overall land development and economic development goals, and how city staff will help the community reach those goals. Voter initiatives are powerful legislative tools, and land use regulation passed by voter initiatives could have major impacts on the way land use planning and land development is conducted in your departments and agencies.

Lessons for Land Development Supporters/Opponents

1 Land use regulations passed by voter initiative or referendum will receive special treatment and deference by the California Courts. They are a powerful way to achieve change that is opposed by the local government and may provide immunity to tampering by local legislative bodies.

2 Ensure that language in local land use measures you propose or support is clear and unambiguous. Gray areas in land use regulation created by voter initiatives cause harm to the greater community and should be avoided. They can also be used by opponents to your measure. Say what you mean, and mean what you say. Consult with a good land attorney (and land surveyor/land use planner) when drafting your measure’s language.

Policy Implications

This court decision also raises interesting questions about land use policy. I think the questions it brings to mind about rent control and the role of mobile home parks in an affordable housing strategy deserve consideration in a separate article.

This court decision also illustrates the power of voter initiatives in our California legal system and the way those initiatives can be wielded as powerful tools (or weapons) in the land use planning arena at the local level. Local politics can be messy, and local elections can be massaged and manipulated by powerful interest groups or intelligent agents. It will be interesting to see how local voter initiatives are used to shape land use planning and land development in California communities moving forward.

A Review of the Court’s Decision

Overall, I think the court’s decision, in this case, was a good one. I believe its interpretation of Article 2, Section 11 of the California Constitution and Section 9222 of the California Election Code was correct. I believe that its finding of no conflict between these 2 sections of law was correct. I believe the deference the court indicated should be given to local voter initiatives is correct.

My only slight disagreement with the court, in this case, is related to its interpretation of the language in the voter initiative that created MTRAP. Although I understand the court sought to interpret the plain language meaning of the measure, it seems obvious to me that the intent of the measure was to prohibit the very type of action by the City Council the court allowed in this case. I’m sure the court was trying to strike the right balance between looking at plain language meaning and considering intent, but in this particular case, it feels like the voters that passed MTRAP were shorted. On the other hand, the opponents of rent control that proposed the MTRAP measure could have easily made clear their prohibition on City Council action included placing a proposal for a repeal measure on the ballot before voters.

In summary, this was a good decision by the court of appeals that dealt with more than one complicated legal question. I especially appreciate the care the court took in examining the wording of Article 2, Section 11, of Section 9222, of the MTRAP ballot measure, and of the legislative history of all the laws.