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
Other Sections in This Document (112)
- Pennell v. City of San Jose, 485 U.S. 1 (1988)
- Pennell v. City of San Jose, 485 U.S. 1 (1988)
- Pennell v. City of San Jose, 485 U.S. 1 (1988)
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Full Text
2,636 charsAppellants also urge that the mere provision in the Ordinance that a hearing officer may consider the hardship of the tenant in finally fixing a reasonable rent renders the Ordinance "facially invalid" under the Due Process and Equal Protection Clauses, even though no landlord ever has its rent diminished by as much as one dollar because of the application of this provision. The standard for determining whether a state price-control regulation is constitutional under the Due Process Clause is well established: "Price control is `unconstitutional . . . if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt . . . .' " Permian Basin Area Rate Cases, 390 U. S. 747, 769-770 (1968) (quoting Nebbia v. New York, 291 U. S. 502, 539 (1934)). In other contexts we have recognized that the government may intervene in the marketplace to regulate rates or prices that are artificially inflated as a result of the existence of a monopoly or near monopoly, see, e. g., FCC v. Florida Power Corp., 480 U. S. 245, 250-254 (1987) (approving limits on rates charged to cable companies for access to telephone poles); FPC v. Texaco Inc., 417 U. S. 380, 397-398 (1974) (recognizing that federal regulation of the natural *12 gas market was in response to the threat of monopoly pricing), or a discrepancy between supply and demand in the market for a certain product, see, e. g., Nebbia v. New York, supra, at 530, 538 (allowing a minimum price for milk to offset a "flood of surplus milk"). Accordingly, appellants do not dispute that the Ordinance's asserted purpose of "prevent[ing] excessive and unreasonable rent increases" caused by the "growing shortage of and increasing demand for housing in the City of San Jose," § 5701.2, is a legitimate exercise of appellees' police powers.[6] Cf. Block v. Hirsh, 256 U. S. 135, 156 (1921) (approving rent control in Washington, D. C., on the basis of Congress' finding that housing in the city was "monopolized"). They do argue, however, that it is "arbitrary, discriminatory, or demonstrably irrelevant," Permian Basin Area Rate Cases, supra, at 769-770, for appellees to attempt to accomplish the additional goal of reducing the burden of housing costs on low-income tenants by requiring that "hardship to a tenant" be considered in determining the amount of excess rent increase that is "reasonable under the circumstances" pursuant to § 5703.28.[7] As appellants put it, "[t]he objective of alleviating individual tenant hardship is. . . not a `policy the legislature is free to adopt' in a rent control ordinance." Reply Brief for Appellants 16.