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DOWDALL LAW OFFICES A PROFESSIONAL CORPORATION ATTO R N EYS AT LAW City Council of the City of Santa Ana City of Santa Ana September 16, 2021 Page 31 a new environment when banking of increases is not permissible, to protect their investors, their families, and their investments. The ordinance encourages Park owners to seek a fair return on their investment. The ordinance guarantees that opportunity. Thus, initials rents whenever sought, must be based upon a "Vega" finding of the prevailing rents it applied at the inception of rent control. To obtain initial fair base rent to protect their investments, park owners and all landlords may (and many will) promptly seek such an adjustment or possibly waive the right to do so. It consists of the adjustment of rent to reflect prevailing general market conditions. Vega v. City of West Hollywood. Vega holds that the critical question is whether the base rents can reasonably be deemed to reflect general market conditions. The question is not whether or not there were exceptional circumstances. The question is not whether or not there were exceptional cost or unexpected operating expense. The Vega issue has nothing to do with rate of return. The question is how high must the rents be to show and reflect prevailing market conditions. Particularly where rent control is not necessary, the initial Vega adjustments will show a substantial spike in rental rates as park owners rush to protect the assault on their properties with constitutional exercises of powers and actions to attain general market conditions at the inception of rent control. Accordingly, the question is not whether the base date rents establish a fair and reasonable return and whether the base date rents are within a range of rents which can be charged. This according to the California appellate courts: "The critical questions are not whether the base date rents establish a fair and reasonable return and whether the base date rents are within a range of rents which can be charged. Rather the question is whether the base date rents can reasonably be deemed to reflect general market conditions. ( Vega v. City of West Hollywood (1990) 223 Cal. App. 3d 1342, 1351 [273 Cal. Rptr. 243].) [1415] After base date rents are established which reflect general market conditions, the rents which are then established must provide the landlord with the requisite just and reasonable return. (Ibid.) "[A] property owner must be permitted, pursuant to the principles discussed in Birkenfeld .... to start rent calculations with a base date rent similar to other comparable properties." ( Id. at p. 1352.)" Concord Communities v. City of Concord, 91 Cal. App. 4th 1407, 1414-1415, 111 Cal. Rptr. 2d 511, 517, 2001 Cal. App. LEXIS 698, 13, 2001 Cal. Daily Op. Service 7748, 2001 Daily Journal DAR 9533 (Cal. App. 1st Dist. 2001) In Santa Ana, this adjustment will result in markedly higher and market rents, across the board for all park owners and landlords, as opposed to the continuing under -market rents charged before this proposed law by the predominant number of the park owners and landlords which you are forcing to be assertive for the protection of their property rights by this unnecessary proposition. -31-