hopkins Carley March 30, 2017 Via Electronic Mail & U.S. Mail

Transcription

1 hopkins Carley San Jose 70 South First Street San Jose, CA T F Palo Alto 200 Page Mill Road, Suite 200 Palo Alto, CA T F Via Electronic Mail & U.S. Mail 200 East Santa Clara Street San Jose, CA RE: Mobilehome Ordinances, Policies, and General Plan Text Amendments City Council Agenda April 11, 2017 Dear Mayor Liccardo and Members of the City Council: On behalf of the Manufactured Housing Educational Trust (MHET) and the owners of mobile home parks in San Jose, we submit the following objections to the proposed General Plan changes, the Council Policy 6-33 changes, the Mobilehome Park rent control ordinance, the Mobilehome Park conversion ordinance, the zoning code changes and the Mobilehome Park closure ordinance: THE CLOSURE ORDINANCE AND THE CONVERSION ORDINANCE AND POLICIES ARE INCONSISTENT WITH AND PREEMPTED BY STATE LAW: State law specifies that the steps required to be taken to mitigate the adverse impacts of a park conversion or closure "shall not exceed the reasonable costs of relocation." (Government Code section ); and, Requiring a private landowner to subsidize other private citizens in their housing needs for years after they no longer are tenants is simply not reasonable costs of relocation as intended by the state Legislature; and, The draft ordinance ignores the limits specified in state law and allows the city discretion to decide what park owners must pay based on what the city deems reasonable and ignores the express legislative intent of the statute; and, The draft ordinance will require a park owner to spend far more than the "reasonable costs of relocation." For example, a Rent Subsidy plus Sale at In-Place Value plus a 835\ Hopkins &Carley A Law Corporation hopkinscarley.com

2 Page 2 Moving Allowance plus Accessibility Improvements would be far more than the "reasonable costs of relocation"; and, State law does not allow the city to require the park owner to pay the tenant the value of the mobile home if it is in excess of the "reasonable costs of relocation." This was prohibited by the state legislature in limiting the scope of permissible mitigation. Limits on city authority to required mitigation payments from mobilehome park owners were placed into state law in 1985 though Senate Bill 316 which amended Government Code section to cover mobilehome park closures as well as conversions. First, the legislature added the following language: "The steps required to be taken to mitigate shall not exceed the reasonable costs of relocation." Government Code section (e). Then, the legislature deleted a section that had allowed local agencies to enact more stringent measures. The changes are shown in Senate Bill No. 316 as Amended in Assembly July 15, 1985 (additions are in italics, deletions are underlined): I convcrs~on, clos~r~, or c t vn of use carp thc~ ability of ais[~iacec~ tttobll~hotl~e ~aark re~id~c~cs to find adegtzat~ 3 e houspng ~n s mobile~om~ peak. the st~perequtred ~ to.be t~rken t~~ r~itig~~tc sf7t~i1 trot exce~rl the r~~san~bl~ ~ c~rsts oi'r~rr~s~i~~. 6 If the closure nr c~ssution cif use of ~ mat~il~hame~ park 7 res-~~its [rc~m ~n ~c~jud gat vn of bankruptcy, the provisions 8 of fai!~ sect~ts~ shall not be ~~plieabl~. 9 ~ e~h~~ e rt~~tt~rt~~ ~t 3~ 10 t ter e~ of er e rr e~ e i I ~ # c~kser mew t ~reve~ e ~e~e~* 12 ire ~ ~ State law is clear. Whatever mitigation measures might be required by the city for a mobilehome park conversion or closure, they are limited to the "reasonable costs of relocation." The ordinances are in direct contradiction with state law. The ordinances must be changed to comply with state law or else the ordinances are preempted by state law and invalid. Under article XI, section 7 of the California Constitution, "[a] county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general [state] laws." [ ] "If otherwise valid local legislation conflicts with state law, it is preempted by such law and is void." Coyne v. City and County of San Francisco (filed 3/21/17) A145044, A146569, First District Court of Appeal, p8-9, citing (O'Connell v. Ciry of Stockton (2007) 41 Ca1.4th 1061, 1067.)

3 Page 3 In the Coyne case, the City's enhanced relocation payment regulations for displaced tenants were on their face preempted as categorical infringements which imposed a prohibitive price on a landlord's right to exercise his rights to go out of the residential rental business in contradiction of state law. A county ordinance that added requirements for mobilehome park conversions beyond what was allowed by state law (Government Code section ) was invalid and not enforceable because it was preempted by state law. Sequoia Park Assocs, v. County of Sonoma (2009) 176 CA4th The City's Mobilehome Park closure ordinance and the conversion ordinance attempt to enact more stringent measures for mobilehome park conversions and closures on top of the reasonable costs of relocation. More stringent measures have been specifically prohibited by state law since (Government Code section (e)) The City's actions are in conflict with state law, preempted by state law and void. THE CITY'S PACKAGE OF INFRINGEMENTS ON PROPERTY RIGHTS VIOLATE THE UNITED STATES CONSTITUTION The City's package of infringements on mobilehome park owner property rights, the General Plan changes, the Council Policies, the Mobilehome Park rent control ordinance, the Mobilehome Park conversion ordinance and the Mobilehome Park closure ordinance effectuate a facial taking in violation of the Fifth Amendment to the United States Constitution and Article I, Section 19 of the California Constitution. The City's package of infringements is a regulatory deprivation of economic use that is unconstitutional because it has "unfairly singled out the property owner to bear a burden that should be borne by the public as a whole." Yee. V City of Escondido (1992) 503 U.S. 519, at , 112 S. Ct.1522 The City's package of infringements deprives mobilehome park owners of the right to make a fair return on their investments and then effectively prohibits them from changing the use or going out of business. The City's package of infringements attempts to allow the City to do indirectly what it cannot do directly, confiscate mobilehome park owners' property without just compensation. The package of infringements creates a system of confiscation by regulatory taking that lacks the essential nexus and rough proportionality to the impacts of a mobilehome park conversion or closure and the system is unconstitutional. Nollan v. California Coastal Commission, 483 U.S. 825 (1987), Dolan v. City of Tigard, 512 U.S. 374 (1994), Koontz v. St. Johns River Water Management District, 133 S.Ct (2013), Coyne v. City and County of San Francisco (filed 3/21/17) First District Court of Appeal, A145044, A The City's package of infringements implements a system of regulation that makes it impossible for mobilehome park owners to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risks they have assumed, which violates the constitutional right to due process. When considering whether a regulation violates due process, a "court must 835\

4 Page 4 determine whether the [regulation] may reasonably be expected to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risks they have assumed, and yet provide appropriate protection for the relevant public interests, both existing and foreseeable." Kavanau v Santa Monica Rent Control Board (1997) 16 Cal4th 761, p 772, quoting Permian Basin, 390 U.S. 747 at p. 792 [88 S.Ct. at p. 1373].) THE CLOSURE ORDINANCE ALONE VIOLATES THE UNITED STATES CONSTITUTION Even without considering the cumulative impacts of the entire package of infringements, the City's closure ordinance alone imposes huge procedural and financial barriers to closure of a mobile home park, irrespective of its financial viability, effectively deprive mobilehome park owners of their constitutional protected property right to go out of business. The closure ordinance makes it extraordinarily expensive to go out of business. The extreme expense of complying with the ordinance deprives park owners of a constitutionally protected property right to go out of business; and, Forcing Mobilehome Park Owners to make a "payment of a rent subsidy of up to thirtysix (36) months if needed to offset increased housing cost" as a condition of going out of business is an exorbitant and unconstitutional burden on the park owners' constitutional rights; and, Requiring the Mobilehome Park Owner to "purchase the Mobilehome at one hundred percent (100%) of its in-place value" as a condition of going out of business is an exorbitant and unconstitutional burden on the park owners' constitutional rights; and, Park owners have a constitutional right to receive just compensation when their property is taken for public use; and, The cumulative impacts of the mobilehome park rent control ordinance, the conversion ordinance, Council Policy on Conversion, the General Plan text amendments, and the closure ordinance effectively make park owners provide a public service, subsidized housing, without just compensation; and, The draft ordinance creates monetary exactions for the exercise of a right to close a park that lack the essential nexus and rough proportionality to the effects of the closure that are required by the U. S. Constitution. Under the doctrine of unconditional conditions, the City may not extract money from a mobilehome park owner to pay for a broad public problem in exchange for a permit to go out of business, which is exactly what the City is doing here. 835\

5 Page 5 "Under the well-settled doctrine of `unconstitutional conditions,' the government may not require a person to give up a constitutional right here the right to receive just compensation when property is taken for a public use in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property." Dolan v. City of Tigard, 512 U.S. 374 (1994). "[T]he doctrine comes into play when the government demands a private payment in exchange for granting a landowner permission to make a different use of her property." Levin v. City and County of San Francisco (N.D. Cal. 2014) 71 F.Supp.3d 1072, [San Francisco's enhanced relocation assistance scheme requiring payments "twenty-four times the difference between the units' current monthly rate and an amount that purports to be the fair market value of a comparable unit in San Francisco was an unconstitutional taking.] A similar requirement for property owners to pay rental subsidies to tenants evicted from rent controlled housing was recently invalidated by the First District Court of Appeal in Coyne v. City and County of San Francisco. The court concluded: "the City's ordinances place the burden of paying rent subsidies to displaced tenants, to advance the City's public policy objective, on the shoulders of certain private parties who do not draw on public funds to pay the subsidies. Our prohibitive price analysis reflects this distinction. A property owner's lawful decision to withdraw from the rental market may not be frustrated by burdensome monetary exactions from the owners to fund the City's policy goals." Coyne v. City and County of San Francisco (filed 3/21/17) First District Court of Appeal, A145044, A146569, p The City's proposed exactions to be levied on mobilehome park owners go far beyond the impacts of a mobilehome park closure. The City seeks to remedy the impacts of market forces caused by a chronic shortfall of housing production, which are caused by government decisions, not by a mobilehome park owner or a decision to close a mobilehome park. That's precisely what San Francisco was trying to do in the Coyne case and was ruled unconstitutional. A rent hike a tenant may experience upon losing a rent controlled tenancy is not an adverse impact caused by an eviction. Coyne v. City and County of San Francisco (filed 3/21/17) First District Court of Appeal, A145044, A146569, Levin v. City and County of San Francisco (N.D. Cal. 2014) 71 F.Supp.3d Such a rent hike is the result of the City's policy decision to impose rent control, creating a rent differential which "purposefully causes a tenant's rent to be artificially below market." Coyne, at p 16. The City seeks to extract money from a mobilehome park owner to close the gap between market rents and the rents in arent-controlled mobilehome park. Mobilehome park owners did not cause that gap. It was caused by the City's rent control ordinance. Now the City wants the mobilehome park owners to pay for the gap through rent subsidies or purchases at in-place value as a condition of closure. That is unconstitutional. 835\

6 Page 6 The City's exactions under the closure ordinance lack essential nexus and rough proportionality to the impacts of a mobilehome park closure. Consequently, they are unconstitutional conditions. Nollan v. California Coastal Commission, 483 U.S. 825 (1987), Dolan v. City of Tigard, 512 U.S. 374 (1994), Koontz v. St. Johns River Water Management District, 133 S.Ct (2013), Coyne v. Ciry and County of San Francisco (filed 3/21/17) First District Court of Appeal, A145044, A THE USE OF POLICY GUIDELINES TO AVOID AMENDING THE MOBILEHOME PARK CONVERSION ORDINANCE IS A VIOLATION OF CONSTITUTIONAL RIGHTS TO DUE prnrfcc San Jose has elected to adopt policy guidelines in lieu of formally amending or clarifying its long-standing conversion ordinance (Zoning Code Chapter et seq. ). The use of policy guidelines in lieu of legislative amendment raises a significant question of due process. The zoning ordinance is obviously superior to anything less than an amendment. The proposed policy guidelines substitute the word "may" with the word "should" in an attempt to impose additional conditions on conversion without actually amending the code. Owners object to the use of policy resolution and re-interpretations to accomplish what would normally be done by legislative amendment (and which would entail resort to formal legislative process). It is clear that San Jose wishes to avoid a legislative action on changes to the existing conversion requirements. Instead, it proposes to re-interpret the S.J. conversion ordinance to create new requirements and burdens. While there are no California cases addressing this issue, challenges have successfully been raised in New Mexico and New Hampshire. In those states, under the doctrine of administrative gloss (essentially, administrative interpretation of local ordinances), if an ordinance has been interpreted a certain way, it may not be re-interpreted without legislative action. As High Ridge Hinkle Join Venture v. City of Albuquerque (N.M. 1998) 970 P.2d 599, 603 noted, landowners should be able to rely on existing interpretations. THE CONVERSION ORDINANCE VIOLATES THE UNITED STATES CONSTITUTION PROHIBITION OF TAKING PROPERTY WITHOUT JUST COMPENSATION San Jose's conversion policy guidelines make the City's intent clear. Under the conversion ordinance, the City seeks to extract money from a mobilehome park owner to close the gap between market rents and the rents in arent-controlled mobilehome park. Mobilehome park owners did not cause that gap. It was caused by the City's rent control ordinance. The City wants to force the mobilehome park owners to pay for the rent gap through rent subsidies or purchases at in-place value as a condition of conversion. That is unconstitutional whether it is done through ordinance, policy guidelines or the General Plan. The City's exactions under the conversion ordinance lack essential nexus and rough proportionality to the impacts of a mobilehome park conversion. Consequently, they are unconstitutional conditions. Nollan v. California Coastal Commission, 483 U.S. 825 (1987), 835\

7 Page 7 Dolan v. City of Tigard, 512 U.S. 374 (1994), Koontz v. St. Johns River Water Management District, 133 S.Ct (2013), Coyne v. City and County of San Francisco (filed 3/21/17) First District Court of Appeal, A145044, A CEQA REQUIRES ENVIRONMENTAL REVIEW BEFORE THE CLOSURE ORDINANCE CAN BE ADOPTED AND BEFORE THE GENERAL PLAN CAN BE CHANGED: The cumulative impacts of the package of infringements on mobilehome park owner property rights, the General Plan changes, Council Policies, the Mobilehome Park rent control ordinance, the Mobilehome Park conversion ordinance and the Mobilehome Park closure ordinance, will cause deterioration of infrastructure in some parks because revenues are not sufficient to justify capital investments and the parks will not be allowed to convert to other uses or to close. As infrastructure deteriorates, the incidents of leaks and spills of drinking water, storm water and sewerage will increase, along with use of diesel generators when electrical systems fail. These incidents will have an impact on the environment. The Ordinance will have a reasonably foreseeable indirect physical change in the environment as defined in California Environmental Quality Act section Therefore, the City's adoption of the Ordinance constitutes a project subject to CEQA and environmental impact analysis must be done of the cumulative impacts of all the city actions. Under the CEQA Guidelines a zoning ordinance is a project if it creates a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The potential for the ordinance to have a physical impact on the environment has to be considered along with the cumulative incremental impact of the entire package of infringements on mobilehome park owner property rights. "Cumulative impacts" refers to two or more individual effects which, when considered together, are considerable or which compound or increase other environmental impacts. (a) The individual effects may be changes resulting from a single project or a number of separate projects. (b) The cumulative impact from several projects is the change in the environment which results from the incremental impact of the project when added to other closely related past, present, and reasonably foreseeable probable future projects. Cumulative impacts can result from individually minor but collectively significant projects taking place over a period of time. CEQA Guidelines The proposed general plan amendments, zoning code changes, and City Council Conversion Policy guidelines, and the Closure Ordinance have been determined to not be subject to any form of CEQA analysis based on the bare conclusion that they do not constitute a project, involve no changes in the physical environment, and "have no potential for causing a significant effect on

8 Page 8 the environment." Yet, the record is devoid of any analysis of the potential environmental impacts of any of the actions, let alone analysis of the cumulative impacts of the package of actions. Any action adopting the general plan amendments, ordinances and policies will be invalid for failure to conduct environmental analysis required by CEQA. It is well settled that general plan amendments are subject to CEQA analysis and are categorically considered a "project" requiring "first tier" environmental review (Cal. Code Regs., tit. 14, 15378(a)(1). Moreover, zoning and other changes that are designed to bar closure of mobile home parks and/or impede the ability to accomplish a change of land use present a distinct possibility for long-term urban decay. As infrastructure deteriorates, the incidents of leaks and spills of drinking water, storm water and sewerage will increase. These incidents will have an impact on the environment. Therefore, CEQA analysis is required. Under CEQA, a "project" includes an activity that "may cause... a reasonably foreseeable indirect physical change in the environment, and... is [ ]...directly undertaken by any public agency." Adoption and amendment of general plans and zoning codes are projects subject to CEQA. (CEQA Guidelines, 15378, subd. (a)(1).) "Guidelines section interprets "Project" to mean "the whole of an action, which has a potential for resulting in a physical change in the environment, directly or ultimately," and includes enactment and amendment of zoning ordinances, and the adoption and amendment of local General Plans or elements thereof pursuant to Government Code sections " (Lee v. City of Lompoc (1993) 14 Ca1.App.4th 1515, ) In finding the general plan amendment and the corollary actions to not be a "project," Staff bypassed the process for evaluating the potential environmental impacts of any effort to "preserve" mobile home parks. Moreover, imposing substantial barriers to future conversion of all mobile home parks raises a substantial potential for environmental impacts, including the potential for long term urban decay associated with aging infrastructures, in particular when considered in conjunction with the disincentives to capital improvement caused by restrictive rent control regulations. "Because general plans embody fundamental land use decisions that guide future growth and development of cities and counties, they have the potential for resulting in ultimate physical changes in the environment. Therefore, the adoption and amendment of general plans and their elements are projects within the meaning of CEQA." Black Property Owners Association v City of Berkeley (1984) 22 Ca1.App.4th 974, 984. "An amendment to a general plan applying a land use designation falls within the scope of CEQA and an EIR or negative declaration is required as an adjunct to approval." Christward Ministry v Superior Court (1986) 184 Ca1.App.3d 180, 186. The burden of establishing an exemption from CEQA rests with the government. Davidon Homes v San Jose (1997) 54 Ca1.App.4th 106, 112, 113. The present record is devoid of any analysis whatsoever of the potential environmental impacts of the general plan amendments and the corollary policy changes. Conversely, imposing substantial barriers to future land use 835\

9 Page 9 conversions raise a substantial possibility of a cumulative impact resulting in decay to the environment. The proposed actions are designed to freeze the land in its current use, which includes aging facilities which cannot be feasibly maintained without the ability to raise rents or pass the costs through. Accordingly, there is far more than a fair argument that CEQA review is required. CEQA review would force San Jose to confront the reality of what it is attempting to do. On one hand, forcing the parks to remain as they are will lead to urban decay because maintaining them may not be feasible given the burdensome regulatory scheme that owners now confront. For the foregoing reasons, the Council should reject the General Plan text changes, the Council Policy 6-33 changes, the Mobilehome Park rent control ordinance, the zoning code changes, and direct the staff to prepare amendments to the conversion ordinance to bring it into compliance with the law. Sincerely, HOPKINS & CARLEY A Law Corporation M R RET NANDA 835\