Pennell v. City of San Jose, 485 U.S. 1 (1988)

Citation: Pennell v. City of San Jose, 485 U.S. 1 (1988)
Parent Document: Pennell v. City of San Jose, 485 U.S. 1 (1988)
Jurisdiction: United States (federal)
Effective Date: 1988-02-24
Original Source: https://www.courtlistener.com/opinion/112009/pennell-v-city-of-san-jose/ ↗

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*13We reject this contention, however, because we have long recognized that a legitimate and rational goal of price or rate regulation is the protection of consumer welfare. See, e. g., Permian Basin Area Rate Cases, supra, at 770; FPC v. Hope Natural Gas Co., 320 U. S. 591, 610-612 (1944) (“The primary aim of [the Natural Gas Act] was to protect consumers against exploitation at the hands of natural gas companies”). Indeed, a primary purpose of rent control is the protection of tenants. See, e. g., Bowles v. Willingham, 321 U. S. 503, 513, n. 9 (1944) (one purpose of rent control is “to protect persons with relatively fixed and limited incomes, consumers, wage earners . . . from undue impairment of their standard of living”). Here, the Ordinance establishes a scheme in which a hearing officer considers a number of factors in determining the reasonableness of a proposed rent increase which exceeds eight percent and which exceeds the amount deemed reasonable under either § 5703.28(a) or § 5703.28(b). The first six factors of § 5703.28(c) focus on the individual landlord — the hearing officer examines the history of the premises, the landlord’s costs, and the market for comparable housing. Section 5703.28(c)(5) also allows the landlord to bring forth any other financial evidence — including presumably evidence regarding his own financial status — to be taken into account by the hearing officer. It is in only this context that the Ordinance allows tenant hardship to be considered and, under §5703.29, “balance[d]” with the other factors set out in § 5703.28(c). Within this scheme, § 5703.28(c) represents a rational attempt to accommodate the conflicting interests of protecting tenants from burdensome rent increases while at the same time ensuring that landlords are guaranteed a fair return on their investment. Cf. Bowles v. Willingham, supra, at 517 (considering, but rejecting, the contention that rent control must be established “landlord by landlord, as in the fashion of utility rates”). We accordingly find that the Ordinance, which so carefully considers both the individual circumstances of the landlord and *14the tenant before determining whether to allow an additional increase in rent over and above certain amounts that are deemed reasonable, does not on its face violate the Fourteenth Amendment’s Due Process Clause.8

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