Kavanau v. Santa Monica Rent Control Board, 16 Cal. 4th 761 (1997)

Citation: Kavanau v. Santa Monica Rent Control Board, 16 Cal. 4th 761 (1997)
Parent Document: Kavanau v. Santa Monica Rent Control Board, 16 Cal. 4th 761 (1997)
Jurisdiction: California (state)
Effective Date: 1997-08-26
Original Source: https://www.courtlistener.com/opinion/5607899/kavanau-v-santa-monica-rent-con... ↗

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Under any of the high court’s formulations of the test or factors relevant in assessing whether a regulatory taking has occurred, there has been a compensable taking in this case. When application of a rent control ordinance to a parcel of property is so arbitrary and unreasonable as to be confiscatory and deny due process, by definition that application has denied the owner all economically beneficial use of the property. When a rent ceiling is constitutionally impermissible because it denies a property owner a fair and reasonable return on the property, the owner’s investment-backed expectations have been extinguished as the state has made use of the property “commercially impracticable,” an action which constitutes a taking. (See Penna. Coal, supra, 260 U.S. at pp. 414-415 [43 S.Ct. at p. 160].)3 The character of the government action is placement of the burden of assuring *801affordable rental housing, a burden that should be borne by the public as a whole, unfairly on the individual property owner. The owner is denied a reasonable return on his investment in order to benefit tenants. And, because the opportunity to lease property for an amount that will generate a reasonable return on the owner’s investment is a fundamental aspect of property ownership, application of a rent control ordinance in a manner which denies the owner that opportunity extinguishes that incident of ownership.

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