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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 39 additional mandatory rent control. In other words, there is not a single constitutional fact upon which the City might rely in consideration of further restrictions imposed in a rent control law. 9. THE FAILURE TO PROVIDE FOR VACANCY DECONTROL IS A REGULATORY TAKING IN THE CASE OF PARK OWNERS THAT OWN THE PROPERTY AT THE TIME OF INCEPTION OF RENT CONTROL. VACANCY CONTROLS RESULT IN SIGNIFICANT INCREASES IN THE COST OF HOUSING FOR FIRST-TIME HOMEBUYERS, AS WELL AS GENERATES A SIGNIFICANT PREMIUM (TAKING)— ESSENTIALLY "KEY MONEY" WHICH IS NOT JUST AGAINST PUBLIC POLICY BUT ILLEGAL IN RENT CONTROL JURISDICTIONS SUCH AS NEW YORK. Section 9 of the ordinance provides that rents may not be increased upon in -place sale of a mobile home. (b) Restrictions on Initial Rent for New Tenancies. To the maximum extent permitted by state law, the initial Rent for new tenancies shall be subject to the restrictions of this Chapter. The Rent Board shall issue rules and regulations to govern the restrictions on the initial Rent for new tenancies where such restrictions are permitted by state law. However, in the case of Mobilehomes, a Park Owner is prohibited from raising Rent upon re -rental or re -lease of a Mobilehome on -site to a Prospective Mobilehome Owner/or current Mobilehome Owner. This includes Mobilehome spaces that are New Construction as defined in Civil Code section 798.7, or as exempted in accordance with Civil Code section 798.45. This section of the law is unconstitutional. The park owners in Santa Ana owned their parks before the onset of vacancy control premiums set forth in the proposed ordinance. Unlike the Guggenheim case, the owners in Gardena are long term park operators. The reasons Guggenheim was decided against the park owner do not apply in Santa Ana. Vacancy controls transform what may be an old-fashioned rent control law, into simply, a wealth transfer ordinance. If the price of housing is not regulated, rent control rent becomes a premium sold at profit together with the home. It is so simple, so evident, and so clear. Empirically tested in recent studies, it shows that the effective rent control is to exacerbate the cost of housing for new home buyers. It does not preserve affordable housing, it destroys affordable housing. Please see attached report .15 The summary of which is as follows: " An Examination of the Impact of Rent Control on Mobile Home Prices in California By David Dale -Johnson, Yonghengg Deng, Peter Gordon, Diehang Zheng: Lusk Center for Real Estate, University of Southern California, 2004. -39-