California Legal Brief

The Rule of Western Manufactured Housing Communities Association v. City of Santa Rosa is that during a declared state of emergency, Penal Code section 396's definition of "rental price" for rent-controlled mobilehome spaces occupied at the time of the emergency declaration refers to the rental amount authorized under the local rent control ordinance at the time of the emergency declaration, not at any given time thereafter, and mobilehome park owners cannot "recoup" suppressed rent increases by using those increases as a baseline for post-emergency rent calculations, under circumstances where rent-controlled mobilehome spaces are subject to both local rent control ordinances and section 396's 10-percent cumulative cap during a multi-year emergency declaration.

Appeal from judgment after summary judgment in Sonoma County Superior Court.

Plaintiff Appellants were Western Manufactured Housing Communities Association and Rincon Valley Mobile Home Park — a nonprofit organization representing mobilehome community interests and a 230-space mobilehome park owner/operator seeking to implement Consumer Price Index-based rent increases during a wildfire state of emergency.

Defendant Respondents were City of Santa Rosa, the Department of Housing and Community Services of the City of Santa Rosa, and Megan Basinger — the municipal entities and official who denied the requested rent increases based on section 396's emergency price gouging restrictions.

The suit sounded in declaratory and injunctive relief and petition for writ of mandate challenging the City's interpretation of emergency rent control provisions. The case involved cross-claims for summary adjudication.

The key substantive facts leading to the suit were a multi-year wildfire state of emergency in Sonoma County from October 2017 through December 2021 that triggered Penal Code section 396's price gouging protections, during which Rincon sought to implement a 1.6% annual rent increase based on Consumer Price Index changes as authorized by Santa Rosa's rent control ordinance, but the City denied the increase because it would exceed section 396's cumulative 10% cap from the pre-emergency rental rate.

The procedural result leading to the Appeal: The trial court granted summary judgment for the City, ruling that section 396's definition of "rental price" for rent-controlled spaces refers to amounts authorized at the time of emergency declaration rather than at any given time, and that mobilehome park owners cannot recoup suppressed increases by using them as baselines for post-emergency rent calculations.

The key questions on Appeal: 1. Whether Penal Code section 396's definition of "rental price" for rent-controlled mobilehome spaces creates a variable definition allowing continued rent increases during emergencies so long as they comply with local ordinances. 2. Whether mobilehome park owners may "recoup" rent increases suppressed during the emergency by using those increases as baselines for calculating post-emergency rents.

The Appellate Court held that section 396's definition of "rental price" as "the amount authorized under the local rent control ordinance" refers to the amount authorized at the time of the emergency declaration, not at any given time thereafter, because Western's interpretation would create internal statutory conflicts and nullify the 10-percent protection for existing tenants, and that mobilehome park owners cannot recoup suppressed increases as post-emergency baseline adjustments because such increases would violate the local rent control ordinance's restrictions on annual increase amounts and Western failed to establish any legal entitlement to such relief.

The case is inapplicable when mobilehome spaces are not subject to local rent control ordinances, when no declared state of emergency is in effect, when the emergency declaration lasts 30 days or less without extensions, or when mobilehome spaces were vacant at the time of the emergency declaration.

The case leaves open whether mobilehome park owners can obtain relief through local rent control ordinance procedures for seeking fair return determinations, what other legal mechanisms might be available to address claimed economic hardship from emergency rent restrictions, and how section 396 applies to rent increases imposed after emergency declarations end in circumstances not involving attempts to incorporate suppressed increases.