Birkenfeld v. City of Berkeley

• Decision Date: 16 June 1976
• Docket Number: S.F. 23370
• Citation: 130 Cal.Rptr. 465,17 Cal.3d 129,550 P.2d 1001
• Court: California Supreme Court
• Parties: , 550 P.2d 1001 Trude BIRKENFELD et al., Plaintiffs and Respondents, v. CITY OF BERKELEY, Defendant and Appellant, Fair Rent Committee et al., Interveners and Appellants.

Page 465

130 Cal.Rptr. 465

17 Cal.3d 129, 550 P.2d 1001

Trude BIRKENFELD et al., Plaintiffs and Respondents, v. CITY OF BERKELEY, Defendant and Appellant, Fair Rent Committee et al., Interveners and Appellants.

S.F. 23370.

Supreme Court of California,

In Bank.

June 16, 1976.

[17 Cal.3d 135]

[550 P.2d 1006] Lois L. Johnson, City Atty., Berkeley, Susan Watkins and Kathryn L. Walt, Asst. City Attys., Michael Lawson, Deputy City Atty., Donald P. McCullum, Oakland, and Charles O. Triebel, Jr., Berkeley, for defendant and appellant

Myron Moskovitz, San Francisco, Lawrence L. Duga, Berkeley, Barbara Dudley, San Francisco, Jeffrey J. Carter and W. Dennis Keating, Berkeley, for interveners and appellants.

Edmund L. Regalia, Robert A. Belzer, Leslie A. Johnson and Miller, Starr & Regalia, Oakland, for plaintiffs and respondents.

Rich & Ezer and Mitchel J. Ezer, Los Angeles, as amici curiae on behalf of plaintiffs and respondents.

WRIGHT, Chief Justice.

In this case we consider the validity of an initiative amendment to the Charter of the City of Berkeley providing for residential rent control within that city. In a class action brought by plaintiff landlords the superior court declared the amendment void and enjoined the city from enforcing it principally on the ground that the evidence at a lengthy trial showed that the city was not faced with a serious public emergency of the sort the court deemed constitutionally prerequisite to imposition of rent controls under the police power. As hereinafter explained we have concluded that the existence of such an emergency is no more necessary for rent control than for other forms of economic regulation which are constitutionally valid when reasonably related to the furtherance of a legitimate governmental purpose, and that the facts established at the trial did not preclude the city from legislating on the subject of residential rent control. We have also concluded that [17 Cal.3d 136] state law does not preempt the field of placing maximum limits on residential rents and that an enactment for that purpose could properly take the form of an initiative amendment to the city charter.

However, we also hold for reasons hereinafter stated that the Berkeley Charter amendment transgresses the constitutional limits of the police power not because of its objectives but because certain procedures it provides would impose heavy burdens upon landlords not reasonably related to the accomplishment of those objectives. The amendment would require a blanket

[550 P.2d 1007] rollback of all controlled rents to those in effect on August 15, 1971, (or to any lower rents in effect thereafter) and would prohibit any adjustments in maximum rents except under a unit-by-unit procedure which for reasons to be explained would be incapable of effecting necessary adjustments throughout the city within any reasonable period of time. Even if we were to adopt counsel's suggestion of a judicial postponement of the rent rollback date to one that is more current, the absence of adequate adjustment procedures would leave arbitrary maximum rents in effect far longer than would be reasonably necessary to the amendment's stated purpose of alleviating hardship caused by rising and exorbitant rents exploiting a housing shortage in the city

In addition to controlling rents the charter amendment imposes prerequisites and restrictions upon eviction proceedings. As hereinafter explained we concur with the trial court's view that the charter amendment's requirement that the landlord obtain a 'certificate of eviction' from the city before seeking to recover possession of a rent-controlled unit is invalid in that it conflicts with state law prescribing procedures for evicting tenants. In the absence of these procedural restrictions the charter amendment's prohibition against dispossession of tenants who are in good standing apart from the expiration of their terms would be a permissible means of enforcing validity imposed rent ceilings. However, such prohibition necessarily falls along with the charter amendment's constitutionally defective mechanism for adjusting maximum rents. Accordingly we affirm the judgment.

The parties before us include not only the plaintiff landlords and defendant city but also a group of organizations and individuals who filed a complaint in intervention praying that plaintiffs be denied all relief. The interveners generally represent two types of interests: (1) students, disabled persons and other low-income tenants occupying rental housing in Berkeley and (2) Berkeley residents asserting environmental[17 Cal.3d 137] interests in preserving the existing housing stock and preventing an exodus of low-income residents. The interveners participated in the trial and have filed an appeal separate from that of defendant. The record on appeal is confined to the clerk's transcript.

The regularity of the proceedings by which the charter amendment was adopted is not questioned. The amendment was proposed by initiative, ¹ was adopted by the city electorate on June 6, 1972, and apart from questions of its substantive validity took effect on August 2, 1972, when it was ratified by the Legislature. ² Its full text is printed in the chapter laws (Stats.1972 (Reg.Sess.) res. ch. 96, p. 3372) and is set out in the appendix hereto. ³

[550 P.2d 1008] The charter amendment declares that its purpose is to alleviate the hardships caused by a 'serious public emergency' endangering the public health and welfare, especially that of 'the poor, minorities, students and the aged,' and affecting a substantial proportion of Berkeley tenants. The emergency is declared to consist of '(a) growing shortage of housing units resulting in a critically low vacancy rate, rapidly rising and exorbitant rents exploiting this shortage, and the continuing deterioration of the existing housing stock.' (§ 1.) ⁴

[17 Cal.3d 138] The measure provides for a rent control board (Board) of five popularly elected commissioners (§ 3) to fix and adjust maximum rents for all controlled dwelling units, administer restrictions on eviction proceedings, and exercise other regulatory and enforcement powers. Controls apply to all rented houses, apartments and rooming units other than (1) accommodations rented primarily to transient guests for periods of less than 14 days, (2) rental units in nonprofit homes for the aged or co-operatives, certain religious or medical facilities, or dormitories of an institution of higher learning, and (3) governmentally owned, operated, managed or subsidized rental housing. (§ 2, subds. (c), (h).) ⁵ The Board is required to fix a 'base rent' for all controlled units by 'administer(ing) a rollback of rents' to the lowest level in effect on or after August 15, 1971, or to a comparable prevailing level if the unit was not rented on that date. ⁶ (§ 4, subd. (a).) The rolled-back base rent becomes the maximum rent subject only to 'individual rent adjustments.' (§ 5.)

The Board is prohibited from granting any adjustment of the maximum rent even for an individual unit until it receives a petition from the unit's landlord or tenant and considers the petition at an adjustment hearing. (§ 6, subd. (a).) ⁷ Any landlord's petition must be accompanied by a certification from the city's building inspection service showing full compliance with state and city housing codes based on an inspection made within six months. The certification is only prima facie evidence of compliance and the Board may refuse an upward rent adjustment if it finds from other competent evidence that the rental unit is not in compliance 'due to the landlord's failure to provide normal and [17 Cal.3d 139] adequate housing services.' (§ 5.) ⁸ In considering a landlord's or tenant's petition for rent

[550 P.2d 1009] adjustment the Board must consider 'relevant factors including but not limited to' (1) increases or decreases in property taxes, in operating or maintenance expenses and in rented living space or furnishings; (2) capital improvements; (3) extraordinary deterioration of the rented unit; and (4) any failure by the landlord to provide adequate housing services. (§ 5.)

Although the parties must be given 16 days' notice of the hearing on a rent adjustment petition (§ 6, subd. (b)), there is no expressed limit on the length of time within which the hearing may be held after the petition is filed. Hearings are open to the public and the parties may be assisted by attorneys, tenant union representatives, or any other persons they designate. (§ 6, subds. (d), (e).) The Board's official public record of the hearing, constituting 'the exclusive record for decision,' must include all exhibits required to be filed or in evidence, a list of participants, a summary of testimony, a statement of all materials officially noticed, findings of fact, rulings on exceptions or objections, and all recommenced and final decisions and orders together with the reasons for each. (§ 6, subd. (f).) Any rent adjustment granted must be 'supported by the preponderance of the evidence submitted at the hearing.' (§ 6, subd. (g).) Petitions on rent-controlled units in the same building may be consolidated 'with the written consent of a majority of the tenants.' (§ 6, subd. (h).)

Three commissioners constitute a quorum of the Board and three affirmative votes are required for all rulings and decisions. (§ 3, subd. (i).) The Board must hold two regular meetings a month, and although there is no limit on the number of its special meetings, each commissioner's compensation of $50 per meeting is limited to $2,400 per year. (§ 3, subds. (h), (k).)

The Board is given additional responsibilities of acting upon applications for certificates of eviction submitted by landlords who desire to repossess rent-controlled units. (§ 7.) The charter amendment's provisions for this procedure and for limitations on the grounds for eviction are discussed

hereinafter. [17 Cal.3d 140]

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