The fact that, when it comes to inverse condemnation reportage, the press is unabashedly biased in favor of the regulators, is about as controversial as the assertion that the sun rises in the east. We have noted this fact of life in the past and have written about it repeatedly. See Gideon Kanner, Redwoods, Junk Bonds, and Tools of Cosa Nostra: A Visit to the Dark Side of the Headwaters’ Controversy, 30 Environmental Law Reporter 10756 (2000), and Gideon Kanner, Lucas and the Press: How to Be Politically Correct on the Taking Issue, Chapter 5 in After Lucas: Land Use Regulation and the Taking of Property Without Compensation, at p. 102 (1993, ABA Sec. Urban, State & Local Gov’t. Law).
The first of these articles is of particular interest because it describes a case in which a federal district court threw the feds out of court, charging them with conduct which it characterized as “tools of cosa nostra” for trying to extort a “gift” of a major California redwood grove without compensation, by filing phony charges against its owner, involving some entirely unrelated Texas savings and loan matters, and then offering to dismiss those charges upon receiving the aforementioned “gift.” The property owner’s conduct was also exonerated by a federal administrative judge, and a congressional committee, and in the end the federal trial court imposed multi-million dollar sanctions against the government.
But as far as the press was concerhed the owner was a villain and the feds, in spite of their outrageous conduct, were depicted as pure as the driven snow. That article cites and quotes pertinent press coverage book, chapter and verse so, if you are so inclined, you can see for yourself that we are not making this up.
Now, we have another one of such press capers; this one involving mobile home rent control. This one consists of The Los Angeles Times coverage of the latest Guggenheim decision in favor of the city by the U.S. Court of Appeals for the 9th Circuit. It’s a doozy. It depicts the tenants (who, by the way, are the beneficiaries of six-figure windfalls at the landlord’s expense) as poor unfortunate victims of an avaricious landlord. So what makes the landlord so bad? He is arguing that when a rent control ordinance permits the tenants to charge exorbitant six-figure sums to their successor-tenants (when they move out and the new tenants move in) for the privilege of being able to live in the vacated mobile homes at below-marker rents, that is a taking of the landlord’s property. Sounds reasonable to us. If anybody should be paid for letting the new tenants live in a mobile home park, it should be its owner, not the departing tenants who have no interest in it.
We refrain from plunging into the details of this case and into the extent of the journalistic misdescription of it because Robert Thomas, our fellow blogger, has already done a good job on that one so you can go directly to his post and get the essentials. See Time On Guggenheim – California Rent Control In The (Biased) Spotlight January 16, 2011, at www.inversecondemnation.com Read it!
The bottom line of the Guggenheim controversy is that, except for the tenants who happened to be in place when the rent control ordinance was enacted, none of the tenants — that’s right, tenants — are enjoying low rents. This is so because in order to move into the rent-controlled mobile home park, they had to pay the departing predecessor-tenants a six-figure sum (ostensibly for the mobile home which in reality is not mobile once put in place, and can be worth only a few thousand dollars) that in fact monetizes the advantage of controlled rents, and de facto makes the the new tenant pay full market rents (disguised as the inflated price of the mobile home) which by rights should have gone to the landlord.
We hope that this case will go up to the Supreme Court where the 9th Circuit has not exactly covered itself with glory in the past. So stay tuned.
Follow up. For commentary on the lumps the 9th Circuit has been taking in the U.S. Supreme Court, see the article in today’s Washington Post: Robert Barnes, Recent Decisions Amount to a Dressing Down for 9th Circuit, Washington Post, Jan. 30, 2011.
For the full article go to http://www.washingtonpost.com/wp-dyn/content/article/2011/01/30/AR2011013003407.html?wpisrc=nl_fed