[8] Moreover, LARSO conflict preemption arguments have
failed in two previous federal cases. In Topa Equities, owners
challenged the 1990 Amendments to LARSO, which set the
maximum rent subsequent to an owner’s exit from the federal
program at the amount last charged under the federal pro-
gram, thereby preventing vacancy decontrol and prohibiting
owners from raising the rent to market level. 342 F.3d at
1068-69. As here, owners argued that LARSO is conflict-
preempted by federal law because it impedes federal objec-
tives by disincentivizing private owner participation in section
8 housing. We found that LARSO was not actually preempted
because “[n]othing in the HUD regulations purports to limit
states from enacting their own rent control laws of general
applicability.” Id. at 1072. In concluding that “ ‘federal legis-
lation creating the network of subsidized housing laws is
superimposed upon and consciously interdependent with the
substructure of local law relating to housing,’ ” we placed
special emphasis on the fact that “Congress never indicated—
in either the text or legislative history of the [National Hous-
ing Act of 1934, ch. 847, 48 Stat. 1246 (codified as amended
at 12 U.S.C. §§ 1701-49)] or in any ancillary statute—that it
intended to abrogate state rent control laws.” Topa Equities,
342 F.3d at 1072 (quoting Kargman, 552 F.2d at 11). Thus,
we held that “LARSO is a generally applicable rent control
ordinance that does not unduly interfere with federal housing
programs. It is not expressly preempted by federal law, nor is
it preempted on conflict grounds.”7 Id. at 1067.
7
In a case factually distinguishable from ours (it did not concern a gen-
erally applicable state or local law), the Eighth Circuit held that “[a]ny
BARRIENTOS v. 1801-1825 MORTON LLC 14447
In Independence Park Apartments v. United States, 449
F.3d 1235 (Fed. Cir. 2006), owners successfully argued that
the government’s temporary withdrawal of their right to pre-
pay section 236 loans constituted a regulatory taking and were
awarded damages. Id. at 1238. The government argued that
the damages award should be reduced because after exiting
the federal program, owners would not be able to raise the
rent due to LARSO, and landlords responded that LARSO
was inapplicable because it was conflict-preempted by Con-
gress’s desire to incentivize private development of low-
income housing. Id. at 1243. The Federal Circuit rejected the
owners’ preemption argument. Applying the presumption
against preemption of traditionally local laws, it held that the
government made no guarantees about the effect of local laws
on profitability and so did not intend to preempt the operation
of more protective local laws. Id. at 1243-44. “The National
Housing Act provided certain benefits and imposed certain
burdens on owners of subsidized low-income housing. It did
not, however, provide them with any protection against the