Wisconsin Law Review
Copyright (c) 1989 Wisconsin Law Review.
University of Wisconsin
September, 1989 / October, 1989
1989 Wis. L. Rev. 925
LENGTH: 71402 words
ARTICLE: TENANT EVICTION PROTECTION AND THE TAKINGS CLAUSE.
KARL MANHEIM *
* Associate Professor of Law, Loyola Law School, Los Angeles, California. B.S.
1971, Bradley University; J.D. 1974, Northeastern University School of Law;
LL.M. 1978, Harvard Law School.
The author is grateful to Professors Allan Ides, Larry Lawrence and Christopher
May for their valuable comments on earlier drafts of this article.
... The Supreme Court's denial of certiorari in
Hall, coupled with its failure to address the eviction law in
Pennell v. City of San Jose, leaves many questions unresolved, virtually guaranteeing future litigation.
... Therefore, eviction law challenges are usually based on the property
clauses of the fifth and fourteenth amendments -- takings and due process. ...
Such an approach was used in
Hall, where the court invalidated a tenant eviction law partly because it saw a
discrete economic interest being transferred from landlord to tenant. ...
Thus, the eviction law allowed the tenant, rather than the landlord, to acquire
the interest, thus effectuating a transfer of property. ... But, if an
eviction law survives process and normative scrutiny under the four elements
above, it is not facially imbalanced. ... It upheld an eviction law under
which tenancies for senior citizens and disabled tenants could be extended for
as long as forty-eight years. ...
In each case, the eviction law lacked a definite sunset clause. ... The
eviction law in
Ross also contained a list of causes for lease termination. ... In one case, an
eviction law was invalidated on substantive due process grounds because it
sought to prohibit the landlord from removing his commercial building from the
rental market and converting it to personal use. ... But, in
Rivera, Judge Magruder voted to uphold a commercial eviction law even though it
forbade removals. ...
[*926] I. INTRODUCTION
The modern landlord-tenant relationship has far different dimensions from its
common law ancestors.
n1 What was once a private arrangement regarding estates in land has matured into
a complex multidisciplinary relationship under heavy state supervision.
n2 Legislation may regulate rents, conditions of habitability, selection of
tenants, permitted uses and other terms of the leasehold. Among the more
controversial innovations in this area are laws protecting tenants from
eviction. By creating rights of tenure which extend beyond expiration of the
lease, the state has changed both landlords' and tenants' property rights.
This development has not occurred without cause. Contemporary housing
conditions are fundamentally different from the feudal and agrarian environment
in which landlord-tenant law originated.
n3 Many of America's major urban areas are experiencing severe housing scarcity
which presents a substantial obstacle to renters' efforts to find and
[*927] maintain suitable housing.
n4 Security of tenure was once negotiated between landlord and tenant, and still
can be theoretically.
n5 But, as a practical matter, where housing scarcity exists, tenants lack the
bargaining power necessary to obtain stable housing arrangements.
n6 This imbalance is particularly true with low-income and minority tenants,
millions of whom are displaced from their homes each year.
Faced with the effects of a continuing housing crisis,
n8 many jurisdictions have enacted tenant protection measures in an effort to
stabilize the rental housing market.
n9 Examples include rent control and condominium conversion laws.
"Just cause eviction" laws
n10 often appear as adjuncts to these, or independently, to prevent tenant
hardship caused by dislocation. These efforts to enhance security of tenure
have generally corresponded to an evolving respect for a tenant's personality
and property interests in her home.
n11 The common law heavily favored
[*928] the landlord's possessory rights, due to her superiority of estate. Modern
eviction laws stand in contrast, preferring the possessory interests of tenants
in their homes rather than property owners in their investments.
Statutory eviction protection is related in some respects to the judicially
created defense against retaliatory eviction.
n13 Both recognize tenants' rights of peaceable possession and redefine the
landlord-tenant relationship. But, despite the similarity in purpose between
judicial and statutory eviction remedies, affirmative legislation is often
viewed as more destructive of private property interests. It can have a
greater effect on a landlord's ability to control occupancy. Grounds for
eviction are substantially reduced. A landlord's individual responsibility and
motivation may have little influence on his right to evict.
n14 Also, economic consequences are often farther reaching such as where eviction
laws supplement rent control and condominium conversion regulations. As a
result, eviction laws are subject to intense litigation and exacting scrutiny.
At least until recently, legislative eviction controls have survived most
challenges. Eviction laws were first established by Congress during World War
n15 and were quickly upheld by the Supreme Court in
Block v. Hirsh.
n16 Taking notice of the
"publicly notorious and almost world-wide fact"
n17 of an emergency housing crisis, Justice Holmes reasoned that this
"public exigency will justify the legislature's restriction of property rights
in land to a certain extent without compensation."
[*929] the approach he formulated the following Term in
Pennsylvania Coal Co. v. Mahon,
n19 Justice Holmes stated,
"[T]he only matter that seems to us open to debate is whether the statute goes
n20 For Justice Holmes, the taking question seemed to be answered by the strength
of public policy behind the regulation. Justice McKenna dissented, echoing the
prevailing jurisprudence of the day and warning that rent and eviction controls
were a harbinger of socialism.
By the time rent and eviction legislation next appeared, during World War II,
n22 the Supreme Court had become highly deferential in economic and land use
regulation cases, and had little difficulty in sustaining the laws.
n23 Until recently, the Court has been disinclined to reconsider the validity of
tenant protection measures. Litigation has occurred mainly in state and lower
federal courts. Following the Supreme Court's lead, most courts have sustained
rent and eviction control laws.
Now, after a forty-year quiescence, the Supreme Court has partially reentered
the fray, although its several pronouncements have left the waters unsettled
for the future of eviction laws. In recent terms, the Court affirmed decisions
of the California Supreme Court upholding rent control.
n25 But on several occasions it has refused to hear challenges
[*930] to eviction laws.
n26 Opponents of such laws are fortified by what they see as the Court's renewed
interest in reviewing economic legislation. It has come via the fifth
amendment's takings clause.
n27 While once overshadowed by the due process clause, the takings clause is now
prominent on the Supreme Court's docket.
Suggesting a new order, some recent cases have found land use regulations
unconstitutional. These cases may have a direct bearing on landlords' rights
to evict tenants. For instance, in
Nollan v. California Coastal Commission,
n29 the Court emphasized a property owner's
"right to exclude others" in finding that a beach access requirement constituted a taking of coastal
FCC v. Florida Power Corp.,
n31 the Court questioned, but did not decide, whether a utility pole owner could
"over objection, to enter into, renew, or refrain from terminating" pole attachment leases.
n32 Coupled with other recent cases,
n33 these developments may signal a change in judicial acceptance of eviction
controls. They also have broad implications for review of economic regulation
[*931] At least two lower courts have anticipated an emerging activism in this area.
Hall v. Santa Barbara,
n34 the Ninth Circuit held that eviction provisions in a mobile home rent control
n35 effected a taking of park owners' property. Similarly, in
Ross v. City of Berkeley,
n36 a district court ruled that a commercial rent control law that precluded
eviction for owner occupancy violated the takings clause. The Supreme Court's
denial of certiorari in
n37 coupled with its failure to address the eviction law in
Pennell v. City of San Jose,
n38 leaves many questions unresolved, virtually guaranteeing future litigation.
Eviction laws seldom fall into a convenient analytical format. In one sense,
they are forms of land use regulation because they determine the uses to which
landlords may put their properties.
n39 In another, they are akin to economic regulation, particularly when the
overall scheme for protecting affordable housing includes some form of rent
n40 However presented, the basic constitutional argument is that the landlord's
property rights are too severely restricted or extinguished altogether.
Therefore, eviction law challenges are usually based on the property clauses of
the fifth and fourteenth
n41 amendments -- takings and due process. While judicial review of economic
regulation under the due process clause has, for the last half century,
provided little solace or relief for owners of regulated property, the takings
clause has emerged as a potent weapon.
Eviction laws present a good context in which to examine the developing takings
jurisprudence. They involve nearly every factor that the Court has identified
as relevant to takings analysis: public interest,
[*932] economic impact and interference with possessory rights. Moreover, they are
often perceived as highly controversial social legislation which brings courts
close to the precipice of suffusing economic right into due process liberty.
What the Court once accomplished by its substantive due process activism may
now be available through heightened scrutiny and per se rules of invalidity in
takings cases. This Article will examine existing and emerging models of
takings doctrine using eviction protection laws as the vehicle for analysis.
II. OVERVIEW OF TAKINGS ANALYSIS
A. Housing Regulation and the Police Power
Government has long had the power to regulate and modify private economic
relations for the public welfare. In his sixteenth century treatise, Lord
Chief Justice Hale of England reasoned that when private property
"is affected with a public interest it ceases to be juris privati only."
n43 The Supreme Court adopted this principle in its seminal economic regulation
Munn v. Illinois,
n44 declaring that
"when private property is devoted to a public use, it is subject to public
n45 In essence, the owner has granted
"to the public an interest in that use, and must submit to be controlled by the
public for the common good."
However, shortly after
"laissez faire conservatism"
n47 gripped the Supreme Court in the guise of substantive due process.
Retrenchment of regulatory authority was obvious in the Court's treatment of
n48 For a half-century, social and economic legislation often failed to survive
close judicial scrutiny of what constituted the
"public interest." Laws limiting economic options were seen as deprivations of property without
"due process." This attitude extended to housing, where any governmental role was greatly
[*933] was regarded as a private matter.
n50 However, and perhaps surprisingly, some housing regulations survived
substantive due process review.
n51 The most notable case during this period,
Block v. Hirsh,
n52 sustained rent and eviction controls.
By 1937, the Court renounced its constrictive approach and the
n53 era came to a close.
n54 In following years, not only was the
"public interest" given a more expansive view, but legislative choices were treated as
presumptively valid. Thus, when Congress responded to another severe housing
crisis during World War II,
n55 the Court easily reaffirmed its acceptance of rent control. When President
Nixon ordered an overall wage and price freeze in 1971,
n56 its rent control provisions went mostly unchallenged.
n57 These national efforts were temporary measures tied to war or emergency
Contemporary housing shortages, however, are not caused by dramatic external
factors such as war or recession. Their causes are more deeply rooted in the
economic restructuring of the housing market,
[*934] such as
gentrification and the spread of land use restrictions.
n59 Thus, responsive regulation, such as rent control, is potentially longer
lasting, with a more profound impact on economic interests. Still, when
analyzing such regulations under the due process clause, the Court has been
unswayed from its current deferential approach.
n60 However, less deference and heightened scrutiny may accompany review of the
same regulations under the takings clause.
The reasons for this divergence are twofold. First, takings jurisprudence
employs language and standards of review which developed during the era of
economic substantive due process. But, while analysis under the due process
clause has evolved in the past fifty years from critical to deferential review
of economic legislation, the takings clause has evolved more slowly. Second,
the Court has announced categorical rules which elevate certain property
interests to preferred status, supposedly not amenable to compromise by
and the Emergence of Due Process Takings
The takings clause applies most directly to eminent domain, or where the state
condemns private property and takes it for public use.
n61 When exercising this sovereign prerogative, the state must justly compensate
the owner for her lost property. Property can also be lost, however, in whole
or in part, through the exercise of other state powers, most notably police
power regulation. Economic regulation in all forms invariably affects property
"[g]overnment hardly could go on if to some extent values incident to property
could not be diminished without paying for every such change in the general law."
Lochner experience indicates, the due process clause has proven to be an unsuitable,
or at least a controversial, vehicle for imposing normative checks on the
police power in the area of economic regulation. Instead, use of the takings
clause, with its seemingly stronger directive and built-in remedy (just
compensation), may appear less like judicial legislation -- the inculcation of
substantive values not found in the constitutional text. The takings clause is
neither obviously nor historically applicable to situations other than eminent
domain. But, if excessive exercises of the police power are treated as
[*935] exercises of a state's eminent domain powers, the takings clause can be used
in lieu of the due process clause to check severe governmental interference
with property rights. This approach conceptually merges these two sovereign
powers by calling excessive police power regulation
"inverse condemnation" and reviewing it under the takings clause.
This process generally traces its roots to
Pennsylvania Coal Co. v. Mahon,
n64 the progenitor of modern takings jurisprudence. In
Mahon, Justice Holmes stated that regulation of economic interests which
"goes too far" constitutes a
n65 This would occur if either the economic effect of a law were too great or if
it failed to serve a valid public purpose.
n66 For Justice Holmes, the takings clause was a safer vehicle for oversight of
land use controls than was the due process clause.
n67 It allowed the government greater options
n68 and also avoided the appearance of judicial legislating. But, it still
required a court to identify the public interest and to declare the bounds of
permissible regulation, the point at which interference with economic interests
[*936] this manner, Justice Holmes' doctrine is similar to substantive due process
n70 For instance, the Court will find a taking if
"justice and fairness" require that the
"public at large, rather than a single owner bear the burden of an exercise of
state power in the public interest."
n71 Subjective value choices are inevitable in the application of this
n72 Any doctrine which employs
"too farness" as its central principle eludes manageable standards
n73 and invites unprincipled application.
The use of the takings clause for analysis of economic regulation is
problematic from a practical perspective as well. Although the Supreme Court
believes that the
"framework for examining the [takings] question . . . is firmly established,"
n75 its cases are often marked by a lack of structure.
n76 Frank admissions, such as that in
Penn Central Transportation Co. v. New York,
n77 well illustrate the difficulty in establishing enduring or coherent rules in
this area. Thus, it is not surprising that the Court's recent takings cases
have failed to command a stable majority,
[*937] and have generated strong criticism from commentators
n79 and other courts.
The problem lies not in the Court's endeavors to protect economic property
rights, for at least four constitutional provisions suggest that it should.
n81 Rather, the difficulty lies in that the Supreme Court has adopted divergent
tests and standards of review. When Justice Holmes linked the due process and
takings clauses with his
"too far" imagery, intrusive review was a feature of both. But, while the Court has
abandoned strict scrutiny in due process cases, its takings jurisprudence has
not similarly evolved. There is no conceptual support for this disparate
treatment, particularly if interference with property, a due process concern,
can so easily be labeled
"condemnation" and subjected to the more rigorous demands of the takings clause. Indeed, the
Supreme Court briefly entertained the notion that Justice Holmes' test should
be abandoned entirely in favor of the due process clause for scrutiny of land
n82 The effort failed.
[*938] For the most part, the Court has been careful not to use the takings clause
too loosely. It is rarely used to invalidate land use laws or other economic
regulation. However, the Court still employs language in its takings cases
that permits heightened scrutiny should the need arise.
n84 This is particularly troublesome when controversial measures, such as eviction
laws, are adjudicated. Because the Court has embraced a process which
integrates the takings clause with concepts of substantive economic due
n85 it permits judges to substitute their own theories of economic and social
policy for those of the legislature.
C. The Modern Two-Strand Takings Doctrine
Because of doctrinal ambiguity, takings cases have become
"essentially ad hoc, factual inquiries,"
n87 involving the
"weighing of private and public interests."
n88 Inherent in such a balancing process is the evaluation of private burdens and
public purposes. The first reflects the still undefined normative component of
the compensation requirement; the second is a vestige of the substantive due
process origins of takings law. Thus, economic regulation will cause a taking
"does not substantially advance legitimate state interests
n89 . . . or denies an owner economically viable use of his land."
The Court's ad hoc balancing of benefits and burdens in takings analysis is
often broken into four discrete inquiries: (1) whether the regulation serves a
legitimate public purpose,
n91 (2) whether the means chosen
[*939] reasonably advance that purpose,
n92 (3) whether the burden imposed on the property owner is too great (that is,
the extent to which the regulation interferes with legitimate investment-backed
expectations), and (4) whether the burden is otherwise disproportionate.
This approach bears striking resemblance to that of
Mahon. Indeed, since that case, the Supreme Court has articulated few new principles.
The two most important refinements have underscored analytical uncertainty and
created divergent rules regarding governmental interference with land use. The
first, known as the
"regulatory takings" doctrine, applies to economic regulation as well as most forms of zoning and
other restrictions on land use.
n93 The ad hoc balancing approach applies with greatest force here, although
regulatory takings are seldom, if ever, found. The second refinement, called
"possessory takings," occurs when government itself, or an authorized third party, physically
intrudes upon and occupies the property.
"A 'taking' may more readily be found when the interference with property can be
characterized as a physical invasion."
n94 These rules have matured into diametric lines of analysis creating, in
essence, two different takings doctrines.
Critical to the difference between regulatory and posessory takings are the
attributes of property ownership that are affected and the manner of
"Regulation" often undermines an owner's use and profit, but leaves intact other rights of
ownership such as possession and alienability. In contrast, a
"permanent physical occupation" disposseses the owner and replaces his occupancy with that of another. Since
it denigrates all attributes of private ownership in the occupied part of the
land, it is tantamount to an appropriation of title.
[*940] Court has held that a permanent physical intrusion is a per se taking.
n97 Thus, in the typical land use case, the first focus is on the character of the
governmental action. If it is
"possessory," the analysis is effectively over. If it is
"regulatory," then the due process and economic elements of the balancing test are used.
Because a law may combine regulatory and possessory takings attributes, the
doctrines are not immutable.
n98 Eviction laws often present hybrid cases, requiring that they be analyzed
under both strands: under the regulatory takings doctrine because of their
impact on value and use choices; and, under the possessory takings doctrine
because there is demonstrable physical use of property by tenants. A
superficial two-part model might suggest that such tenant protection laws are
valid under regulatory takings reasoning, but invalid under its possessory
takings counterpart. But that is too simple. Instead, what is required under
both lines of analysis is a realistic appraisal of the law's actual impact on
the property owner. Many opinions do just that. But many others get hung up
on categorical applications of the
"physical occupation" strand or on the due process components of the takings clause -- the
persistent residue of
In the sections that follow, both models are used to analyze the effects of
eviction legislation. First, the regulatory takings doctrine is explored, with
particular emphasis on the four elements used by the Court, described above.
Next, the possessory takings doctrine is discussed. What emerges from this
analysis is the conclusion that eviction restraints are unlikely to cause a
regulatory taking. Also, and perhaps counter-intuitively, a case for
"permanent physical occupation" cannot be made out simply because a tenant is permanently and physically
[*941] III. EVICTION LAWS UNDER THE REGULATORY TAKINGS DOCTRINE
Justice Holmes' formulation in
Mahon (whether a law goes
"too far") has been repeatedly cited as forming the scope of review in regulatory
n99 The Court's basic approach has been to examine the reduction in value caused
by the regulation, although it appears that the Court will tolerate substantial
n100 The Court has also maintained at least nominal adherence to Justice Holmes'
statement that a land use law which fails substantially to serve the public
interest also constitutes a taking. Reciting these requirements has become de
rigueur in takings cases.
Yet, until recently,
Mahon has not been of much practical utility to property owners because the Court
has rarely rejected legislative choices.
n102 While the Court often recited the
"quantitative" elements and analyzed the extent to which the restriction interfered with the
property owner's reasonable
n103 the threshold was never crossed. So long as the property retained
"economically viable use,"
n104 land restrictions were upheld. Also, although often recited, the Court has
seldom actually engaged in Justice Holmes'
"qualitative" analysis of whether the legislation sufficiently advanced a legitimate public
n105 Moreover, the Court has developed a convenient jurisdictional device -- the
exhaustion of administrative remedies requirement -- to often avoid review
n106 Thus, in its summary of the 1983 Supreme Court Term, the
Harvard Law Review declared that the
"takings clause has joined the due process and equal protection clauses as a
generally discredited tool for strict judicial review of socioeconomic
The obituary was premature. The Supreme Court's presumption of a regulatory
takings in the 1986 Term in
First English, and the inculcation
[*942] of possessory takings themes into its analysis of the building regulation in
Nollan, serve as a reminder of the wide discretion the regulatory takings doctrine
makes available to a willing court.
A. The Public Interest in Preserving Affordable Housing and Security of Tenure
According to the Supreme Court, there is no constitutional right to decent
housing in this country,
n108 or any shelter at all for that matter.
n109 Housing has historically been the responsibility of the private market place,
with governmental intervention usually occurring only at the extremes. Thus,
it is not surprising that advocates before the Supreme Court argued in
Block v. Hirsh,
n110 the first constitutional challenge to rent and eviction controls, that housing
was strictly a private affair,
"not affected with a public interest."
n111 Justice Holmes agreed that this had been the prevailing rule, but stated that
circumstances had so changed as
"to clothe with [a public] interest what at other times or in other places would
be a matter of purely private concern."
Indeed, extensive public involvement has come to be expected, not only because
housing has inevitably become a public matter in the modern industrial state,
but also because the public interest itself is an evolving concept. As the
public interest broadens, so too must the police power to accommodate it.
n113 In recent years, all levels of government,
[*943] from Congress on down, have declared the inadequate and dwindling supply of
affordable rental housing to be a matter of public interest.
The public interest lies not only in initially providing rental housing, but
also in providing security of tenure. Loss of one's home is not only an
inconvenience and a financial strain, it often causes severe physical or
n115 particularly among the elderly.
n116 In addition to harming affected tenants, displacement can threaten community
n117 and may contribute to the increasing number of
[*944] homeless persons in our cities.
n118 Indicated by sheer numbers, the breadth of the problem is dramatic.
Thus, despite continuing challenges on this score,
n120 there is now little doubt that housing conditions and landlord-tenant
relations may be regulated in the public interest.
n121 The fact that the immediate beneficiaries of a state program may be individual
"does not condemn [it] as having only a private purpose."
n122 Justice Holmes' observation
[*945] two generations ago is no less accurate today:
"[h]ousing is a necessary of life. All the elements of a public interest
justifying some degree of public control are present."
B. Advancing the Public Interest: Determining Reasonableness
The second element in the Supreme Court's takings formula is whether the
particular means chosen by the legislature furthers the stated public interest.
n124 This means-ends inquiry first requires identification of the appropriate
standard of review, in effect determining the latitude afforded the state in
its selection of means. Then, that standard is applied to the particular
mechanism chosen by the legislature to accomplish its public purpose.
1. SELECTING THE STANDARD FOR JUDICIAL REVIEW
The requirement that the means chosen by the legislature advance its ends is a
basic precept of due process.
n125 It assures the constitutional values of reasonableness and fairness in
governmental action. However, if too rigorous a means-ends nexus test is used,
the range of government options becomes severely constrained. In effect, a
court has substituted its judgment of appropriate means for that of the
n126 Recognizing the danger of judicial subjectivity, the modern Court takes a
deferential approach in determining the reasonableness of means selected for
advancement of the public interest.
n127 The rational basis test stands in contrast to, and in repudiation of, the
intrusive approach of substantive due process review.
n128 The rational basis
[*946] approach is now used in land use
n129 and economic regulation cases
n130 generally. It is also appropriate in assessing tenant protection laws.
However, some courts have departed from rationality review. Disapproval of
legislative choices usually comes by way of dicta
n131 or in isolated opinions.
n132 But, in
Hall v. City of Santa Barbara,
n133 heightened scrutiny of eviction laws was a major theme.
n134 The court stated that
"less deference" to legislative determinations is appropriate when reviewing economic
legislation under the takings clause.
n135 Critical review was also invoked in
Nollan v. California Coastal Commission
n136 where Justice Scalia described
"the condition for abridgement of property rights through the police power as a 'substantial advanc[ing]' of a
[*947] legitimate State interest."
n137 There, coastal property owners were given permission to enlarge their home
only on the condition that they permit public access along the seaward side of
the property. A five-member majority ruled that the access requirement did not
sufficiently serve the public interest.
There are two problems with the heightened scrutiny in
Nollan. The first is that the state would have needed only a
"rational basis" in order to deny the development permit outright. That was easily met here
since the new structure obscured public visibility of the beach. But, if
instead of preventing this public harm the state permits it to occur and seeks
concomitant remediation, its burden of justification is significantly higher.
This poses a disincentive for development approval and inhibits state
flexibility in accommodating development and public needs.
The second problem is in the application of stricter scrutiny. As was apparent
during the era of economic substantive due process, legislative choices can be
too easily overridden. While a
"substantial nexus" requirement may sound good in theory, particularly in the
"exactment" context of
Nollan, it allows judges to substitute their own economic
[*948] policies for those of the legislature. While Justice Scalia saw little or no
relationship between the beach access requirement and the Nollans' development
of coastal property, other justices and the California Coastal Commission did.
Nollan shows, heightened scrutiny could yield any result depending, as it usually
does, on the predilections of individual judges. For instance, some courts
have adopted an economic efficiency model in analyzing takings cases. Thus,
Judge Kozinski in
n140 and Judge Posner in
Chicago Board of Realtors Inc. reasoned that the tenant protection laws before them were counterproductive,
n141 hence unconstitutional.
n142 To them, if government chooses to pursue the goal of housing
[*949] this nation's poor and middle-income families, it must do so directly through
taxing and spending for the general welfare.
n143 To the economist qua jurist, indirect methods, such as regulation, violate the
The higher degrees of justification demanded by the courts in
Nollan, Hall and
Chicago Board of Realtors, Inc. are hallmarks of an earlier era's judicial activism.
Nollan explains its demand in terms similar to a
"suspect class" theory of judicial review; that is, it is suspicious of the legislature's
Hall exhibits similar distrust of majority rule, suggesting that those supposedly
benefiting from legislation do not understand their own best interests.
n147 Strict scrutiny of the means-ends nexus reveals judicial disagreement with
underlying economic policy, in essence requiring the legislature to prove that
its scheme works. However, debates over economic theory belong in journals and
[*950] chambers, not in the courts.
n148 The reason is sound enough. A half-century of judicial second-guessing
legislative means has proved disastrous, primarily because it encouraged judges
to mold social and economic policy in their own images.
Fortunately, the Court has indicated that the
Nollan strict scrutiny approach will likely be limited to
"unconstitutional conditions" and, perhaps, possessory takings cases.
Pennell v. City of San Jose, Chief Justice Rehnquist squarely rejected an invitation for heightened review
of San Jose's rent and eviction law,
n150 suggesting, for the moment at least, deferential review of most economic
n151 If the Court adheres to the standard rationality review, as it should,
eviction laws will fare well.
[*951] 2. DEALING WITH HOUSING SCARCITY: RATIONALITY REVIEW OF EVICTION LAWS
Economists and planners have long debated how best to respond to housing
n153 Increasing supply is the obvious a priori solution, one with the added benefit
of increasing the bargaining power of tenants without the need for additional
government intervention. Unfortunately, the governmental agencies that might
undertake such action, either directly or by assisting the private market, are
often unable or unwilling to pursue that course.
n154 Indeed, government itself has been a prime cause of housing scarcity. Vacant
land in our major population centers is virtually exhausted;
n155 yet, exclusionary zoning and slow-growth movements resist any increase in
density or influx of lower economic groups into the community.
n156 Growth controls contribute to skyrocketing housing prices,
n157 thus slowing the traditional downward cycling of apartments to lower income
groups. The relatively recent recognition of a separate condominium estate has
fueled depletion of rental housing through widespread conversions.
[*952] of central urban areas often results in
gentrification, further reducing the supply of affordable rental housing.
While federal subsidy and incentive programs once provided housing to hundreds
n160 the federal government has also reduced its role in the effort to provide
n161 There has been a dramatic decrease in federal funding for low-income housing,
n162 and changes in tax policy have made housing investment less profitable.
n163 Rather than take a leadership position as it did earlier, the federal
government now mostly defers housing problems to state and local governments,
n164 and often creates disincentives for housing production.
[*953] legislatures are often similarly disinclined to fund, or are prohibited from
n166 housing assistance. Some state legislatures are discouraged from becoming
directly involved in regulation.
n167 A state often sees its role as one of setting broad policy, rather than
n168 In short, state and federal policies are often inefficient, inconsistent and
ill-designed to alleviate the housing crisis.
Local governments are thus squarely confronted with the problem of scarcity in
affordable housing and its attendant consequences.
n170 A city's ability to fund housing is often nonexistent or severely constrained
by anti-growth and exclusionary zoning sentiments or state-imposed restraints.
At the same time, the private production of housing which is affordable to
lower income groups has been severely curbed.
n171 Against this backdrop, local officials have adopted a variety of regulatory
mechanisms to alleviate the effects of housing scarcity. Many communities have
turned to rent control in an effort to preserve affordable housing.
n172 Some have required relocation assistance to
[*954] ameliorate the costs of displacement.
n173 Others have imposed direct restraints on the housing supply by prohibiting
conversion or demolition
n174 of viable housing. A few have required
"inclusionary" housing for development projects or imposed
"in-lieu" fees to fund production of affordable housing.
Statutory eviction protection is also effective in addressing housing scarcity,
either alone or in combination with one of the above schemes. Such laws are
generally intended to serve three broad purposes: (1) aid
[*955] successful operation of underlying economic regulation, such as rent control,
n176 (2) maintain the supply of affordable housing by encumbering conversion,
n177 and (3) protect the tenure interests of tenants in possession.
n178 In the case of mobile home park tenants, who are simultaneously owners with a
financial stake in their possessory interest, eviction laws serve a fourth
purpose: to protect the tenant's investment.
[*957] Most courts agree that eviction controls accomplish these goals and are thus
rationally related to the public interest.
n180 Courts have looked even more favorably on eviction laws tailored to tenants
most harmed by displacement.
n181 Since governmental actions and policies are a primary cause of displacement in
the first place,
n182 ameliorative governmental response is often seen as appropriate.
n183 In sum, eviction protection reasonably and
"substantially" advances the public purposes
[*958] of preserving affordable housing and avoiding the hardship associated with
C. Interference with Reasonable Investment-Backed Expectations
Pennsylvania Coal Co. v. Mahon, the state's mining subsidence act went
"too far" in restricting property interests partly because it made the mining of certain
n184 To Justice Holmes, this had
"very nearly the same effect for constitutional purposes as appropriating or
"very valuable estate."
n185 This reasoning reflects the normative component of the takings clause --
protection of economic value. This normative component has predominated in
n186 Thus, in
Penn Central Transportation Co. v. New York,
n187 the Court stated that its takings cases have identified as a principal
"[t]he economic impact of the regulation on the claimant and, particularly, the
extent to which the regulation has interfered with distinct investment-backed
The Court's current standard for testing economic impact is imprecise.
n189 But, in attempting to differentiate legitimate from excessive regulations,
treating the first as permissible exercises of the police power and the latter
as inverse condemnation, the Court has made it clear that the economic or other
interference must be nearly total.
n190 Drawing the line at any point short of extinguishing the owner's interests
[*959] would require the Court to define the normative meaning of
"taking," a task which it
"quite simply, has been unable to [do]."
n191 Although a property owner's intended use need not be to derive economic
benefit, that is often the case. In the context of eviction laws, it may also
be appropriate to examine the owner's non-economic expectations, such as
personal use of the premises.
1. THE ECONOMIC EFFECT OF EVICTION LAWS
Eviction protection laws can affect value in several ways, primarily when they
accompany rent or removal controls. The concept developed in rent control
cases to describe economic due process concerns is the landlord's right to a
n192 If an adequate return is denied,
[*960] the landlord would be constitutionally entitled either to raise rents or,
where that is infeasible, to discontinue operations by eviction or otherwise.
A parallel doctrine has developed in the area of utility rate regulation. In
Brooks Scanlon Co. v. Railroad Commission,
n193 the Supreme Court held that a regulated utility was entitled to
"discontinue [a particular] use when that use can be kept up only at a loss."
n194 By analogy, eviction laws cannot deny a landlord the right to discontinue
rental operations, or perhaps even change use, when the existing rental format
causes economic loss.
Tenant protection schemes are rarely so draconian. The more common complaint
with eviction laws is that, in combination with removal restrictions, they
prevent the highest and best use of land,
n196 thus preventing full exploitation of inchoate value. In this sense, eviction
and conversion controls are similar to other forms of land use regulation
which, while permitting current uses, prohibit changed or enhanced uses.
n197 Potential appreciation that would be made available by
[*961] conversion must remain unrealized, at least temporarily.
n198 But, because current value is partly the projection of anticipated uses, any
use restriction will have an immediate impact on value. That is why the
Supreme Court tolerates large reductions in value under the takings clause,
lest government be precluded from regulating uses, and instead be made an
insurer of anticipated gains.
This explains why analysis of expectation is so critical in takings cases. It
helps determine whether a frustrated interest constitutes
"property" for fifth amendment purposes. If it does not, an anticipated use can be
expunged entirely without triggering the clause.
n200 Anticipated appreciation, standing alone, is not fifth amendment property.
"Frustration and appropriation are essentially different things."
Yet, not all expectations are mere speculations of gain; some form a reasonable
basis for investment. Indeed, the Court has stated that
"investment-backed expectations" are the essence of property rights.
n203 In particular, those expectations formed under actual or implied government
assurances of permitted use merit protection. Thus, a stronger takings claim
arises where development is commenced prior to imposition of conversion or
eviction controls. Nonetheless, courts are generally unsympathetic to even
large investment losses suffered when development plans are cut off midstream
by intervening regulation.
[*962] because the takings clause does not respond to devaluation unless nearly
n205 courts may prefer to treat the issue of frustrated expectations under due
process, employing a doctrine known as
n206 The methodology bears some similarity to regulatory takings analysis,
n207 but is more likely to provide relief to disappointed developers.
n208 Thus, landlords often rely on this doctrine to challenge eviction restrictions
imposed after conversion or other development is under way.
A landlord's economic loss is more tangible in the case of mandatory relocation
assistance. Many communities condition a landlord's right to evict on the
payment to the tenant of a lump sum to cover moving expenses and increased
n210 Thus, if eviction is
[*963] sought to enable the landlord to convert,
n211 withdraw the unit from rental service,
n212 or take personal occupancy,
n213 he may have to endure a one-time expense.
n214 Prior to
Nollan, the analysis was relatively simple. It had long been held that land
developers seeking to take advantage of a permitted use change would have to
comply with reasonable conditions.
n215 So long as an exaction was reasonably related to the adverse effects of
development, it would meet the rational basis nexus requirement under the due
process and takings clauses.
n216 It would also survive analysis of economic impact since eviction or
development was voluntary. Courts applying this rule to tenant relocation
assistance have had little difficulty in sustaining the constitutionality of
Nollan alters this analysis by imposing a relational standard higher than simple
reasonableness. The Court held the grant of a development permit may not
ordinarily be conditioned on a landowner's acceptance
[*964] of restrictions which, if imposed outright, would constitute a taking. This
was so even if development could otherwise be prohibited.
Nollan to relocation assistance plans means that a court must more closely examine
the nature and extent of required payments. It would be problematic at best if
the state simply mandated that landlords pay for tenants' moving expenses.
Yet, if the state can prohibit dislocation in the first place, the burden of
relocation would not arise. Therefore, so long as the amount of required
"substantially related" to the burden caused by the landlord's discretionary eviction, the payment
scheme should survive. However, if the amount is so high as to constitute a
penalty, or if the landlord otherwise has a constitutional right to evict, the
heightened nexus requirement of
Nollan would probably not be met.
2. IDENTIFYING DISCRETE PROPERTY RIGHTS TO ENABLE FRACTIONAL ECONOMIC ANALYSIS
Despite uncertainty as to how far is too far, it is clear that courts will find
a regulatory taking if property is deprived of substantially all value.
n220 Thus, if a property owner can characterize the quantum of diminished value
caused by regulation as constituting discrete property, that component would be
completely extinguished. Such an approach was used in
Hall, where the court invalidated a tenant eviction law partly because it saw a
discrete economic interest being transferred from landlord to tenant. That
interest was the capitalized value of below-market rents which the park tenant
could theoretically monetize through the statutory right to sell her mobile
home in situ.
The court noted the economic benefits associated with on-site mobile home
sales. Because of severe scarcity in sites,
n222 the market value
[*965] of a mobile home already in a park was substantially greater than its off-site
n223 This enhanced value would enure to whomever was selling an on-site home,
either the vacating tenant, or the park owner who might also be a mobile home
n224 The Ninth Circuit viewed
[*966] the economic fruits of enhanced site value as naturally the property of the
park owner. In contrast, the court in
Eamiello thought that since the state had created the site value through regulatory
scarcity (for example, zoning), it could constitutionally repose the sales
premium in the tenant, rather than the park owner.
n225 Equally important to its analysis,
[*967] the court in
Hall found the interest in site value discrete and severable from the property as a
whole. Thus, the eviction law allowed the tenant, rather than the landlord, to
acquire the interest, thus effectuating a transfer of property.
There is no doubt that price control of any flavor results in a
"transfer of wealth" from provider to consumer. But, it is facile to conceptualize this amount as
a discrete property interest, capable of and subjected to separate quantitative
analysis. In a holistic sense, most economic and land use regulations leave
property economically viable. But, if one considers as discrete property the
margin between uses or profit permitted with and without regulation, the
differential would be, axiomatically, completely expunged. This is a defective
approach which traces its roots to
Mahon. In that case, Justice Holmes treated the mining company's property as
comprised of three separate
"estates," one of which was expunged by regulation.
n227 Justice Brandeis dissented, preferring a unitary approach to analyze the
combined interest retained by the coal company.
The modern Court has likened the aggregate of one's rights in property to a
"bundle of sticks," each corresponding to a different interest.
n229 But the metaphor is not an adaptation of Justice Holmes' compartmental
approach. Rather, it is a technique used to better understand a law's impact
on property. Indeed, the Court has squarely
[*968] rejected Justice Holmes' model of dividing single parcels into discrete
estates, favoring instead Justice Brandeis' approach of looking at a law's
impact on overall property value.
n230 The Court's reasoning is sound. Height restrictions effectively take air
n231 prohibitions on trafficking take the right to alienate,
n232 and so on. If the concept of property were easily subdivided into component
estates, nearly any regulation would fatally expunge one of them and constitute
The Ninth Circuit's approach in
Hall, finding a taking of a quantifiable
"monetized" interest in a mobile home's placement value,
n234 is essentially that of Justice Holmes' repudiated model.
n235 Under the modern unitary approach, the net economic impact of the state law,
even when combined with local rent control, would be insufficient to cause a
n236 The fact that some income transfer is both visible and quantifiable
n237 does not compel a departure from the standard
Penn Central, requiring analysis of overall economic viability.
3. PRIMARY USE EXPECTANCY
"investment-backed expectation" of landlords seeking to evict tenants is not always a monetary one.
n239 Sometimes eviction is sought to enable the landlord to take personal
occupancy. The takings clause protects this form of expectation as well. The
problem does not often arise since most laws authorize owner occupancy as one
"just cause" grounds for eviction.
n240 But, in the context of conversion controls,
[*970] prohibiting eviction for owner occupancy may be an essential device.
The analysis is relatively straightforward where an owner purchases his unit or
building after an eviction protection law is enacted. In such cases, the
ability to take personal occupancy may not be within the owner's reasonable
investment expectations, and
"presumably the purchase price reflects this use restriction."
n242 Thus, condominium owners who purchase with actual or constructive notice
n243 of eviction laws
"are fairly warned that they are purchasing property which may be used for
rental housing only."
n244 The state has, in essence, redefined an owner's rights in residential
property. It had first done so upon recognizing a separate condominium estate.
n245 And it does so again by revising the contours of that estate.
n246 The fifth amendment usually allows great latitude in defining property.
n247 So long as the owner is not caught in between, there should be no objection
that the status quo ante has been partially restored.
[*971] The analysis is necessarily more complex in the case of individuals who
purchase homes prior to an eviction ban. In sustaining just such a
restriction, the court in
Flynn likened the prospect of occupancy to a development right that could no longer
"exploited." Relying on
Penn Central, the court held that the owner's expectancy (of rental use) was undisturbed and
the property was still economically viable.
n249 While this is the appropriate analysis, it seemed to get somewhat short shrift
"primary expectation" for use of a condominium is as an investment (rental) or housing (personal
occupancy) would depend on
"the particular circumstances of that case,"
n250 particularly since nonfungible properties are involved. A court should reason
that the expectations of the long-term owner of a renter-occupied condominium
are hardly disturbed at all by preserving its rental use.
n251 As for those who purchase shortly before a change in the law, they might or
should be aware of impending changes. After all, it is only
"reasonable" expectations that factor in the equation.
n252 When one is
"ensconced in the heavily regulated landlord/tenant area,"
"investment-backed expectations" are necessarily circumscribed.
[*972] The circumstances surrounding eviction for owner occupancy merit careful
inspection. This is usually done in the context of balancing the public and
n255 In some cases, the public interest in security of tenure for tenants outweighs
the occupancy interest of the owner.
n256 But where the equities are otherwise equal and the owner's expectation of
occupancy is reasonable, it is unlikely that many courts will deny an owner
this property right.
n257 Beyond balancing, denial of personal use is also a factor under the possessory
takings doctrine since the landlord's reversionary interests are obviously
n258 However, for purposes of analyzing the owner's expectancy interests, the
particular facts of each case should be examined for such things as the extent
of the regulatory environment already in place at time of purchase, the likely
duration of protected tenancy, and the economic consequences for a purchaser
who has been involuntarily transformed from a homeowner into a landlord. At
least in some cases, eviction bans enacted later might so frustrate an owner's
objective expectancies of occupancy as to tip the balance.
D. Equal Protection in the Takings Clause: Disproportionate Burdens
Like other constitutional guarantees of substantive rights, the takings clause
contains an antidiscrimination principle. Thus, the Supreme Court has paid at
least nominal respect to a rule against disproportionality, in effect grafting
equal protection doctrine onto the clause:
"The Fifth Amendment 'prevents the public from loading upon one individual more
than his just share of the burdens of government, and says that when he
surrenders to the public something more and different from that which is
exacted from other members of the public, a full and just equivalent shall be
returned to him.'"
Proportionality is implicit in the broader concept of fairness which underlies
much of takings jurisprudence.
n261 But fairness has many dimensions, including some degree of economic
redistribution in a vastly unequal economy. To the extent that government has
any role in influencing the distribution of wealth, the selective imposition of
burdens must be tolerated. Therein lies the conflict. While the fifth
amendment seemingly proscribes any discriminatory exaction,
n262 progressive income tax rates, government subsidies and other redistributive
programs -- indeed, price regulations in general -- do just that. These
conflicting principles are reconciled by limiting the proportionality rule of
the takings clause to extreme cases.
The proportionality element does not demand precisely equal treatment;
n263 rather, it proscribes invidious inequality. It is primarily a guarantee of
procedural fairness rather than substantive equality. It is a safeguard
against wholly arbitrary and manifestly irrational governmental action which is
directed at isolated individuals. Thus, it does not prevent regulators from
singling out a particular class, such as landlords, for special treatment.
n264 Social obligations, such as liabilities, taxes and, particularly, price
regulation, are class-specific. It is no objection
[*974] to ceilings on prices for grain storage,
n267 or natural gas,
n268 that other industries or members of the same industry are unaffected.
n269 Otherwise, it would at least be necessary to include in the overall calculus
those benefits which are particularly targeted to the class. In the case of
landlords, one would want to consider depreciation allowances and other tax
benefits which may be unavailable to other businesses and tenants. Other
governmental action, such as beneficial zoning changes, and the statutory
recognition of condominium ownership in the first place,
n270 similarly confers peculiar advantage.
The late Professor Hagman forcibly argued that recapture of governmentally
induced benefits is a corollary of payment for governmentally caused loss.
n271 Similarly, Michelman suggests that the ethical foundation for equality in the
takings clause is a long run proposition. We should demand only
"an acceptable level of assurance that over the life of a society (and within
the expectable lives of any of its members) burdens and benefits will cancel
out leaving something over for everyone."
n272 Perhaps because such assurances are usually implicit in populist
[*975] political processes, the Court has rejected any judicially imposed requirement
for apportionment of benefits and burdens.
n273 Indeed, it routinely accepts land use regulations which bear more heavily on
some property owners than others.
The modern rule for proportionality in the takings clause is best explained in
Penn Central Transportation Co. v. New York.
n275 The owner of Grand Central Terminal had complained that a landmark
preservation law only applied to selected parcels, thereby singling out a few
to bear a burden not shared by other property owners. The Supreme Court
rejected the challenge. Although the law had a
"more severe impact on some landowners than on others,"
n276 it was neither arbitrary, discriminatory, nor isolated in its application.
The fact that it was part of a
"provides assurances against arbitrariness."
The proportionality doctrine can thus best be seen as assuring the efficacy of
political checks against governmental overreaching. If government could fund
public benefit programs by
"loading up" on individual concentrations of wealth, without running the risk of
accountability, majoritarian processes might provide insufficient protection
against abuse. However, where the effect or potential effect, of regulation
touches a broad spectrum of the community, the legislature's natural political
responsiveness ordinarily provides adequate safeguards. Thus, the standard of
review for proportionality under the takings clause is the same as for similar
inquiries under the equal protection clause: the rational basis test.
[*976] Despite its usual lack of applicability and success, the proportionality
element is often raised in tenant protection cases. The language of
proportionality is intrinsically appealing, and it is easy for a court to get
distracted by a formless
"justice and fairness" ethic.
n280 Proportionality analysis is formless because it proves too much,
n281 while at the same time improperly narrowing the inquiry by focusing on burdens
without consideration of offsetting benefits. But, courts using rationality
review necessarily tolerate some degree of regulatory inequality.
Disproportionality is more evident when subclasses of tenants (for example, low
income and elderly) are given special protection, the corollary being special
burdens for landlords of those tenants. Differential rents based on income
level or the like is a common feature under federal housing assistance
n283 Suits challenging income-based rent levels in state programs established
pursuant to the federal acts
[*977] have generally been unsuccessful.
n284 So too have suits challenging rent control programs which provide special
relief for low-income tenants.
In some cases, even eviction protection laws may apply unequally, such as when
elderly tenants are given added protection.
n286 Whether a landlord may convert a unit or evict a tenant may depend
fortuitously on the tenant's age, health or length of tenure. Nonetheless,
special eviction protection is likely to be valid for two reasons. First, the
unequally burdened group (landlords with special status tenants) is fluid
[*978] rather than insular; the burden is likely to be spread over time. Second, the
burdened class is not without effective political power. If the redistribution
of rights goes beyond some generally acceptable leveling of haves and
have-nots, it would soon lose political favor.
n287 In the area of preferential tenure protection, the redistribution of rights
has a definite and appealing equalizing tendency, with benefits targeted to
those persons with the least market power.
As with rent control, eviction relief tailored to elderly or disabled tenants
serves important governmental objectives.
n288 Given the
"special tolerance for 'equalizing' redistributions,"
n289 uniform eviction laws, even those containing class preferences, will usually
survive proportionality analysis.
E. Ad Hoc Balancing
Ultimately, takings analysis is a
"weighing of private and public interests."
n291 This balancing process is an attempt to reconcile the fundamental tension
between constitutional protection of individual property rights and legislative
determinations of public benefit.
n292 Balancing is not often an overt exercise; instead, it is nominally performed
within the four-part analysis described above.
n293 While constitutionality is presumed, if either the public interest is
ill-served or the individual impact too great, the balance would theoretically
tip against the validity of law.
Occasionally, courts literally engage in
"ad hoc" balancing
n294 by attempting to value and compare respective interests.
n295 Sometimes the balancing task is thrust upon courts by the legislature through
[*979] of discretionary standards.
n296 Unless closely guided by legislative values, this approach invites courts to
create their own policy choices. Unfortunately, in accepting judicial
balancing, the Supreme Court has provided little guidance to the lower courts.
It is genuinely difficult to predict when
"justness and fairness" will proscribe particular regulatory action beyond the
"I know it when I see it" standard.
n297 This is particularly problematic with eviction laws because of their
controversial nature. But, if an eviction law survives process and normative
scrutiny under the four elements above, it is not facially imbalanced.
Takings cases actually decided through balancing are rare, primarily because of
the scarcity of fact-specific challenges to a law
"as applied." Most challengers mistakenly prefer the broad brush of facial attacks.
n298 In such cases, the only question before the court is
"whether the mere enactment of the [law] constitutes a taking."
n299 The same rule applies in eviction cases where a law will be stricken at this
stage only if it is incapable of producing constitutional results.
Balancing is most appropriate when it is truly
"ad hoc," such as when a court considers laws as applied rather than in the abstract.
But even there, the judicial role should be secondary. Suppose, for example,
the landlord is low-income, elderly or infirm, while his tenant is ablebodied
and of means. Should regular tenant protections apply or be discarded as an
n301 Surely, the soundest of laws may cause absurd results in extreme cases. But
at what level is rationality to
[*980] be measured and the balance struck? Occasional imbalances must be tolerated
lest mathematical precision become constitutional science. It would hardly be
suggested, for instance, that price regulation be suspended for wealthy
consumers on a case-by-case basis. It mgiht be good social policy, but bad, or
at least cumbersome, law.
The disadvantaged landlord example however, cannot be so easily dismissed.
Perhaps the judicial approach should depend on what the enforcing agency has
done. If it has held a quasi-adjudicative hearing and fairly found that
eviction protections should apply, that determination should be entitled to
n303 However, if the responsible agency has failed to balance competing interests,
then the reviewing court is justified in performing that task.
n304 The public purpose behind the law in the first place should provide the
principled basis for decision. If that purpose, in the case of eviction laws,
is avoidance of hardship caused by displacement, then balancing of hardships
seems singularly appropriate. Nevertheless, the public agency's balancing
should not be routinely discarded.
Balancing is a synthesis of the competing concerns of takings jurisprudence.
In adjusting the benefits and burdens of modern urban society, the legislature
is necessarily granted substantial leeway. Only where such adjustments fail to
serve any legitimate public interest, are manifestly irrational, or work
extreme hardship is a court justified in upsetting legislative choices. The
takings clause should not, any more than the modern due process clause, empower
the judiciary to substitute its views for those of the legislature concerning
the proper balance to be struck.
IV. EVICTION LAWS UNDER THE POSSESSORY TAKINGS DOCTRINE
Whether or not it is analytically useful to treat overregulation of property as
a taking, one species of governmental interference surely is: physical
appropriation of property. The literal
"taking" of tangible
[*981] property is conceptually and doctrinally distinct from regulatory takings.
Where an owner is permanently dispossessed from her property, one need not rely
on legal constructs, such as excessive burdens, to justify judicial concern.
Thus, the Supreme Court has taken a more active role in cases involving
permanent physical occupation of property. Unfortunately, the
"possessory takings" doctrine has grown to embrace regulatory interferences which fall far short of
appropriation. Indeed, it has been used to invalidate laws which have
negligible effect on the property owner's possessory interests.
A. A Hierarchy of Property Rights
United States v. General Motors Corp.,
n306 Justice Roberts defined
"property," for fifth amendment purposes, as the
"group of rights inhering in the citizen's relation to the physical thing."
n307 These include
"the right to possess, use and dispose of" property.
n308 In short,
"every sort of interest the citizen may possess."
n309 This formulation has evolved into a modern metaphor describing a person's
interest in property as a
"bundle of rights."
"bundle" contains sticks or
n311 each corresponding to a different interest.
n312 Proponents of this imagery believe it is a useful tool to evaluate the effects
of government interference with property. It enables the creation of a
hierarchy of property rights according to the importance of the various
[*982] involved. Thus, certain property rights may require greater governmental
justification for interference, or tolerate less intrusion, than others.
n313 For instance, the Court has declared the
"right to exclude others [as] one of the most essential sticks in the bundle of
rights that are commonly characterized as property."
The Court has clearly ascribed greater significance to possessory interests in
property than nonpossessory interests.
n315 Thus, in contrast to the Court's reluctance to view even substantial loss in
value as a regulatory taking, it has readily found a taking when the government
or an authorized third party has taken actual possession of property. The
"possessory takings" doctrine is indeed much closer to the theoretical basis for treating errant
exercises of the police power as
"inverse" exercises of condemnation power under eminent domain. It matters not whether
the state goes through the formality of transferring title if it physically
n316 As a result, early cases held that government action which ousted a property
owner from possession was a taking.
n317 Inverse condemnation could be found in cases of actual
n318 or where a physical occupation of property under government auspices
n319 was accompanied by at least some impediment to the owner's use.
This line of takings jurisprudence assumed new contours in
Kaiser-Aetna v. United States.
n321 In that case, federal authorities subjected privately developed Kuapa Pond on
Oahu Island in Hawaii to a public navigational easement. The Supreme Court
concluded that the requirement of public access constituted a taking.
Kaiser-Aetna from earlier possessory cases is the fact that the property owner was not
ousted or deprived of use; rather, others were granted use rights similar to
those of the property owner. What had been taken was superiority of right.
The difference between exclusivity and commonality gave value to the property.
n322 As the Court reasoned, who would pay for rights in the marina when the imposed
navigational servitude made such rights free to the public? In this sense,
Kaiser-Aetna can be viewed as regulation which extinguished all value.
n323 Yet, the Court announced a categorical
[*984] rule regarding one of the owner's property
"right to exclude" others.
"[W]e hold that the 'right to exclude,' so universally held to be a fundamental
element of the property right, falls within this category of interests that the
Government cannot take without compensation."
The prominence of possessory rights was underscored in
Loretto v. Teleprompter Manhattan CATV Corp.,
n326 where the Court declared a per se rule for possessory takings. Neither the
extent of the property owner's injury, nor the strength of public purpose,
would be material to a finding of inverse condemnation.
n327 The law invalidated in
Loretto affected the full spectrum of property interests.
n328 Yet, the cases spawned by it tend to focus on the owner's possessory rights,
particularly the right to exclude. The per se rule makes the distinction
between regulation and occupation critical and often dispositive. At the same
time, the distinction tends to get obscured whenever a regulated economic
relationship involves the use of one's property by another. The Court
recognized this in
FCC v. Florida Power Corp.,
n329 in which Justice Marshall needed to emphasize the
"very narrow" scope of his opinion in
Florida Power exacerbated the problem.
Florida Power, the Eleventh Circuit had invalidated the Federal Pole Attachments Act,
n331 under which the FCC regulated the rates that utility companies charged cable
operators for leased pole space. The court reasoned that rate regulation in
conjunction with physical occupation of property fell within the
Loretto possessory takings rule. The Supreme Court reversed, holding that nothing in
"required landlords to permit permanent occupation of their property by cable companies."
n332 In a cryptic footnote, the Court stated:
"[w]e do not decide today what the application of
Loretto . . . would be if the FCC in
[*985] a future case required utilities, over objection, to enter into, renew or
refrain from terminating pole attachment agreements."
The per se rule for possessory takings has been variously received,
n334 and even more variously understood.
n335 Although a
"permanent physical occupation" is a taking, plain and simple, the kind of governmental intrusion which
triggers the rule is anything but plain and simple. For instance, physical
presence is not necessarily
"permanency" is a term of art not necessarily tied to duration.
n337 This ambiguity is particularly problematic in eviction cases. Despite
Loretto's favorable citation to early cases upholding eviction regulations,
n338 it has nonetheless served as a basis for evaluating modern eviction laws and
invalidating at least two of them.
B. Emphasis on the Right to Exclude
"right to exclude" has long been an attribute of property in common law countries.
n340 The framers of the Constitution gave one manifestation of it explicit
recognition in the third amendment,
n341 limiting the quartering of soldiers in private homes, in apparent reaction to
"[r]oyal incursions on privacy" during the Revolutionary War.
n342 Another example appears in the fourth amendment's
n343 proscription against warrantless searches and seizures.
n344 These provisions focus
[*986] mostly on privacy in one's home,
n345 such that the right to exclude in that context has greater value than when
applied to other real estate.
n346 However, if a landlord has the constitutional right to exclude others from his
home because it is his
n347 does he have the same constitutional right to evict a tenant from her castle?
The Court's solicitude for the right to exclude, compared to other property
interests, is reminiscent of fundamental rights jurisprudence under the due
process clause. Jurists who pride themselves on
"strict construction" of the constitutional text
n349 caution that rights not explicitly stated in the Bill of Rights are
inappropriate for extraordinary judicial protection from majoritarian political
processes. Yet, to conclude that the fifth amendment's injunction against
governmental takings prohibits any interference with the right to exclude
n350 is to read external meaning into constitutional language.
Ordinarily, the Court goes to great lengths to reject any federal definition of
"Property interests . . . are not created by the Constitution. Rather, they are
created and their dimensions are defined by existing rules or understandings
that stem from an independent source such as state law."
n351 But, when the Court finds a state's definition of property too restrictive, it
will apply its own more protective
n352 To some extent, rejection of state definitions is necessary in order to avoid
evisceration of the takings clause. Without a definition of property having at
least minimum normative dimension, states might be encouraged to defeat
protection by tautology.
The Court has discovered a mid-course between developing a
"federal general common law"
n354 of property on the one hand, and subordination of fifth amendment protections
on the other. Thus, whether an interest in property is protectible under the
takings clause depends on whether it is within the owner's reasonable
n355 It is this frustration of expectation inqury which has guided the Court's
analysis in modern regulatory takings cases. This approach also applies,
occasionally, where possessory takings are alleged. For example, in
Pruneyard Shopping Center v. Robbins,
n356 the Court rejected the claim that the owner's inability to exclude from the
premises persons distributing political pamphlets was a taking, finding that
"[a]ppellants have failed to demonstrate that the 'right to exclude others' is
so essential to the use or economic value of their property that the
state-authorized limitation of it amounted to a 'taking.'"
[*988] Property-based expectations, perhaps once thought inviolable,
n358 necessarily change to accomodate newly recognized societal interests.
n359 Many examples illustrate how the right to exclude has been circumscribed in
modern times. These include fair housing laws which prohibit landlords from
excluding classes of tenants,
n360 unconsented speech,
n361 press access,
n362 labor access,
n363 public use of private navigable waterways,
n364 open accommodation laws under Congress' commerce power,
n365 and eviction limitations themselves.
n366 Thus, the right to exclude may be important,
n367 but not so fundamental as to be beyond abridgment.
Loretto are oblivious to this evolution in property doctrine and to the state's
presumptive right to define the contours of property in the first instance. In
announcing a per se rule in
Loretto, Justice Marshall rejected the balancing approach of
n369 He distinguished between temporary and permanent
"limitations on the right to exclude."
"[T]emporary limitations are subject to a more complex balancing process to
determine whether they are a taking."
n371 This suggests that permanency of occupation has a quality so different from
any other kind of physical intrusion that no further inquiry is necessary.
This means that the
"right of exclusivity" at some point in the future is inherent in the definition of property,
irrespective of whether the existing framework of custom and law renders that a
reasonable expectation. Consistent with its approach toward defining property
generally, one would expect the Court to find authority in state law for its
use of heightened scrutiny where the right to exclude is invoked. Instead, the
Court's per se rule depends only on general principles for its validity.
n372 Indeed, in
Loretto, the Court found a universal right to exclude simply by reference to
C. Permanency as a Link to Inverse Condemnation: Whither the Right to Reverter?
While perhaps logically appealing, the distinction drawn in
Loretto between temporary and permanent interferences with possessory interests
[*990] has two defects. It is too drastic and it is unworkable, at least in the
context of eviction laws. Although permanent occupations are more serious
intrusions than temporary invasions, the Court's bright line distinction
n375 places too much emphasis on the duration factor, which is not always easily
determined at the point when review is undertaken. It seems the Court has
replaced Justice Holmes'
"too far" doctrine with an equally problematic one:
"too long." In the Court's usage, permanency assumes
"metaphysical" contours and serves as a
n376 in the determination of whether
"fairness and justice" preclude imposing a burden on the property owner.
One might argue that temporary eviction controls stand on a different footing
than permanent interference with a landlord's right of possession. Indeed, the
eviction laws approved by the Supreme Court during the world wars were
temporary measures, supposedly lasting only for the duration of the
n378 But, as stated in
Woods v. Cloyd W. Miller Co.,
n379 emergency housing conditions arising from war did
"not necessarily end with the cessation of hostilities."
n380 It was up to Congress to determine when its rent and eviction controls were to
be repealed. Thus, it would be more accurate to describe the wartime measures
n381 They were not drafted using permanent language, nor did they contain sunset
Modern eviction laws are similarly indefinite in duration because they are
usually tied to the continuance of a housing crisis and lapse when the housing
n382 The fact that occupation is by persons, rather than objects as in
Loretto, adds a second level of indeterminacy.
[*991] practical terms, the length of tenancy is determined by the tenant, whose
possession is protected during good behavior. However, it cannot exceed the
finite period of her life span. More likely, possession will revert to the
landlord when the tenant vacates, voluntarily or pursuant to just cause
eviction. Although the term of tenancy is open ended, possession is not
permanent. But, because
Loretto draws such a sharp line between temporary and permanent occupations, it is
crucial to characterize correctly
"indefinite" occupations, such as those resulting from statutory extension of tenancy.
The case law is mixed. In
Troy v. Renna,
n384 the Third Circuit stated that indefinite occupations were not permanent ones.
It upheld an eviction law under which tenancies for senior citizens and
disabled tenants could be extended for as long as forty-eight years.
n385 Since the protected tenancies would terminate upon the occurence of any of
"it is fanciful to imagine that these tenants will occupy their units
Eviction laws of even longer duration than
Troy's half-century limit have been sustained.
n387 For instance, in
Fresh Pond Shopping Center v. Callahan,
n388 Justice Rehnquist was alone in arguing that an eviction law of indefinite
duration was unconstitutional, distinguishing the wartime cases on that ground.
At the same time, however, the temporary/permanent dichotomy was invoked to
invalidate eviction laws in
Hall v. Santa Barbara,
Ross v. City of Berkeley.
n390 The occupations
[*992] in these cases were deemed permanent because they might outlast the tenants in
Hall, the court was troubled by a mobile home owner's right to sell her home on
site. In a sense, this gave the mobile home owner the right to control
succeeding occupancy of the rented park space. The court termed this a
transfer from landlord to tenant of
"[t]he right to occupy property in perpetuity . . . [which is] a recognized
estate in land."
Ross, Berkeley's commercial rent control law
n392 provided eviction protection to corporate as well as individual tenants.
n393 Since corporate tenants did not have ordinary life spans, the district court
viewed this as transferring
"a leasehold interest of indefinite duration."
n394 The corporate tenant could, in essence, select its own successor by sale of
stock or internal change of management.
n395 Theoretically, at least, the landlord was denied the ability to control
succession just as in
Hall. The trial judge distinguished the eviction cases cited in
Loretto because tenancies in those cases were not
Distinguishing the wartime cases based on the longevity of the law or the
duration of protected tenancy seems to misperceive the permanent/temporary
n397 In each case, the eviction law lacked a definite sunset clause. Why should it
matter whether the law
[*993] was terminable by armistice, housing surplus, or some other future event?
Moreover, the distinction between
"indefinite" extension of leasehold, as in
"permanent" tenancy, as in
Ross, is illusory. Not only do all modern eviction laws confer on existing tenants
rights approaching life tenure,
n398 but succeeding tenants will have the same rights, and so on, as long as the
landlord chooses to rent the premises.
n399 The identity of the tenant may change over time, but that affects neither the
duration nor the nature of the occupation.
These decisions failed to recognize that neither laws which focus on tenants in
possession, nor those which appear to grant rights beyond a tenant's own
"permanent" interferences with a landlord's rights. In a doctrinal property sense, the
landlord retains the right of reverter. Thus, in
Troy, the landlord could regain possession upon the occurrence of any of thirteen
statutory grounds (for example, disorderly behavior, breach of
"landlord's rules and regulations" or covenants in the lease).
n401 But, so too could the landlords in
Ross. In the former, the park owner could evict existing tenants on similar grounds,
n402 or refuse to accept a successor tenant for sound business reasons.
n403 The eviction law in
Ross also contained a list of causes for lease termination.
Even without a showing of
"just cause," repossession by the landlord will ultimately occur.
n405 Although the term might be indefinite, it is not infinite.
n406 The distinction between
Hall, Ross and
Troy is that in the latter, reverter was guaranteed, at least to the landlord's
n407 But, if
"a taking does not depend on whether the volume of space [occupied] is bigger
than a breadbox,"
n408 it hardly should depend
[*994] on whether the time occupied is greater than the landlord's life span.
n409 Different degrees of indeterminancy hardly provide a suitable basis on which
to create per se rules in constitutional cases.
As predicted by
Loretto's dissenters, cases following it have treated permanency as a bright line which
is dispositive of the takings question. Yet, permanency for doctrinal purposes
is not synonymous with permanency in a temporal sense.
n410 Rather, it is a label attached to property interference of a sufficiently
severe nature. Thus, in developing its possessory takings doctrine, the
Supreme Court has focused on the quality, not the duration of invasion.
n411 This was true in early cases
n412 and more recent cases.
n413 The Court has even viewed interference with limited term leaseholds as a
n414 Occassional, periodic, or intermittent occupations can also fall within the
rule. In contrast,
[*995] an isolated, or technical trespass
n415 has been viewed as a temporary invasion.
n416 Indeed, the Court's latest land use decisions reject any literal distinction
between temporary and permanent interferences as determinative in either
n417 or possessory
n418 takings cases.
Instead, what matters is whether the physical occupation is equivalent to
ouster -- dispossessing the property owner of essentially all rights in the
parcel occupied. Consider those elements of interference which Justice
Marshall thought important in
Loretto. The cable company had the right to come onto the property in the first
instance, to choose the location of the cable, to expand use to additional
parts of the building, and to assign its rights to a successor company, all
without the consent of, or payment to, the landlord.
n419 Above all, the cable represented a new use, not one that the landlord had
n420 But, where the owner still controls use and succession,
n421 still derives value,
[*996] and still has some reversionary rights, the analogy to appropriation of title
"Permanency" is thus a legal conclusion, rather than an evidentiary fact. However, until
the Supreme Court provides a doctrinal foundation for its special treatment of
"permanency," or at least a workable definition, lower courts are free to manipulate this
element as they see fit.
D. Other Possessory and Liberty Interests in Property
1. VOLUNTARY RELATIONSHIPS AND TENANT SELECTION: POSSESSION BY INVITEES OR
OCCUPATION BY INTERLOPERS
Among a landlord's possessory rights are autonomy interests closely allied with
liberty formulations under the due process clause.
n422 One such interest, which commands enhanced protection under the possessory
takings doctrine, is the landlord's right to select uses for and users of his
property. Occupation of property by an uninvited
"third party" is particularly objectionable. Thus, in
Loretto, Justice Marshall characterized the cable company as a
n423 whose presence on the premises was forced upon the landlord.
n424 Existing tenants, however, are not strangers.
n425 By renting to them initially, the landlord voluntarily yielded certain rights,
notably those associated with possession.
n426 This is the core of the landlord's investment-backed expectation. Thus, in
citing earlier cases upholding eviction restrictions, the Court in
Florida Power noted that
"invitation . . . makes the difference."
"The line which separates these cases from
Loretto is the unambiguous
[*997] distinction between a . . . lessee and an interloper with a government license."
Under this approach, a tenant's presence does not constitute
"occupation" of property because it is, or was, by invitation. Of course at some point,
typically at the end of a lease term, the invitation expires. The once invited
tenant is now a holdover with
"a government license." But, the tenant is still not a
"stranger" in two respects. First, ordinary eviction laws do not interfere with the
landlord's right to determine the identity of occupants. Second, such laws
merely continue an existing use; they do not compel a new one as in
The first factor was squarely addressed in
Hall, where the court stressed that the landlord's right of tenant selection was not
"an important attribute of ownership,"
n429 but a
"fundamental" one at that.
n430 Thus, the law giving a tenant the right to sell her mobile home on-site
constituted a taking because it deprived the park owner of the ability to
select successor tenants.
n431 The Ninth Circuit gave examples of how the right to select tenants enhanced
the landlord's economic return (for example, choosing
"tenants with smaller families over those with larger ones") and noneconomic benefit ("landlords may select attractive pleasant applicants over slovenly belligerent
However, the court's concern for the landlord's ability to control the identity
of tenants was overblown. This property right has waned in significance due to
a plethora of statutory and judicial mechanisms which have arisen to restrict
the landlord's discretion.
n433 Indeed, under modern antidiscrimination laws, the reasons provided in
Hall are impermissible ones on which to base tenant selection.
n434 Such developments
[*998] must surelu influence the sanctity of this possessory interest, as they affect
the owner's expectations and thus redefine the contours of his
Nonetheless, the courts in
Hall were seemingly vexed by the tenants' ability to transfer their leasehold
interests to third parties, that is,
"strangers." But in at least some jurisdictions, tenants may have this right anyway.
n435 Covenants purporting to restrict lease assignment are strictly construed
against the landlord's control of transfer.
n436 A landlord's right to restrict commercial assignment or sublease is limited to
good faith business reasons.
n437 Preferences for the landlord's control
[*999] over assignment seem linked to the common law property oriented concepts of
landlord-tenant relationships, rather than to contemporary contractual
n438 Other courts have shown markedly less solicitude for the landlord's right to
control succession. In
Eamiello v. Liberty Mobile Home Sales,
n439 the Connecticut Supreme Court declined to follow
Hall, stating that
"the modification of the common law right of the lessor to absolute control over
the term of the lease and the identity of his lessee . . . is not sufficiently
analogous to a physical occupation of property to violate the takings clause."
Notwithstanding these developments, if tenant selection is indeed an ingredient
of the landlord's fifth amendment property rights, it can easily be seen how
standard eviction laws survive scrutiny. They provide protection to the tenant
in possession only after her presence is first invited by the landlord. As for
commercial tenants, the landlord will usually be able to include a prohibition
on assignment in the lease. Unconsented transfer would likely be grounds for
termination of tenancy under the just cause standards in eviction laws.
n441 Similarly, the mobile home law in
Hall gave the park owner the same reasons for rejection of assignment as contained
in the state supreme court's
"good faith" rule.
n442 Indeed, allowing the mobile home owner the right to sell his coach on site,
and thereby transfer his tenancy rights in the park, is not dissimilar to the
rule proposed by the
Restatement on Property regarding lease assignment.
[*1000] Canonizing the right of tenant selection makes sense if personalty interests
are at stake, such as in owner-shared housing.
n444 But where the right is invoked for purely economic reasons, as in
Hall, it is hard to see it as any more fundamental than nonpossessory property
n445 Of course, sound business judgment is involved in selecting tenants and that
ought not be denied. Where the landlord has already dedicated the property to
rental use, however, limiting his discretion in choosing tenants is not only
unremarkable, it is also necessary to accomplish a wide range of societal
goals, particularly those that focus on tenants' ability to obtain housing.
2. SELECTING USES: THE RIGHT NOT TO BE A LANDLORD
The other principal liberty interest in property, subsumed in
Loretto's emphasis on third-party occupation, is the right to control the use of one's
property. Denying a property owner the ability to select freely uses for his
property was once thought to be a serious interference
[*1001] with her liberty.
n446 But, in the mid-1920s, several state courts
n447 and then the Supreme Court,
n448 rejected the theory. Now, limitations on land use are common (for example,
zoning), and are typically analyzed under the regulatory takings doctrine,
rather than substantive due process.
n449 This remains true when the use restriction is contained within a comprehensive
tenant protection scheme along with eviction controls.
n450 But the liberty formulation has persisted under the possessory takings
doctrine when the owner seeks to resist, rather than engage, uses. Thus, use
is treated as a possessory/liberty interest when government purports to impose
a particular function contrary to the owner's wishes. This was the gravamen of
the New York cable law in
Loretto and, indeed, an element in the possessory takings cases cited by the Court.
Treating the imposition of an unwanted use as a serious interference with
possessory interests makes sense, particularly if accompanied by other
exercises of dominion, such as selecting users. According to the Court in
"required acquiescence is at the heart of the concept of occupation."
n451 Not only does imposition of a new use defy the property owner's expectations,
it represents a particularly strong manifestation of dominion.
n452 It is exactly the type of appropriation that Justice Marshall warned against
"use" is given a broad sense, many of the Court's physical occupation cases can be
described as impermissible forced uses.
Kaiser-Aetna, for example, is a case where government sought to impose a new use -- a public
navigational servitude -- contrary to the owners' wishes and expectations.
Indeed, the right to exclude may be more workable if it is interpreted to mean
the right to prevent an unwanted use.
Eviction laws do not pose this problem. Statutory extension of term may
prevent the landlord from changing uses, but it does not impose
[*1002] new ones. Nonetheless, the Supreme Court left this an open issue in
Florida Power by questioning whether
Loretto would prohibit government from forcing new or renewed leases.
n454 The answer should depend on the property owner's intended use of the property.
If it is already being used for rental purposes (for example, rental housing
or, in the case of
Florida Power, utility poles made available for use by nonowners), then government control of
that use does not denigrate this possessory interest.
n455 The landlord's possessory/liberty interests are respected so long as continued
rental use does not manifestly frustrate original expectations.
n456 However, if government action forces a change in use, it can easily be seen
how the owner's rights of dominion are denied. For instance, involuntary
conversion of an owner-occupier into a landlord would deny the owner possessory
Thus, there is little doubt that the state may not force a landowner to
dedicate her property to rental purposes in the first instance.
n457 But a property owner who voluntarily enters the rental housing market
necessarily yields a modicum of control. She may not have dedicated her
property to public use in the sense that a public utility does, but she has
surely created a public interest in the offering of the premises for rent.
[*1003] The distinction between new and continued uses is brought into focus by two
recent cases involving
"anti-warehousing" laws. In
Help Hoboken Housing v. City of Hoboken,
n459 the court ruled that the state may require landlords to place units back on
the market after they had been withdrawn.
n460 Unfortunately, the court gave only cursory treatment to the takings issue,
n461 and failed to distinguish the anti-warehousing law from ordinary eviction
n462 In contrast, the court in
Seawall Associates v. City of New York,
n463 invalidated a law prohibiting conversion of single room occupancy (SRO)
dwellings, and requiring owners to rehabilitate substandard vacant units and
rent them out.
n464 The court held the ordinance imposed substantially greater burdens on owners
than standard eviction laws because it
"subject[ed] their properties to a use which they neither planned nor desired"
"forced [them] to accept the occupation of their properties by persons not
already in residence."
n466 The court also found the law constituted a
[*1004] regulatory taking because it deprived the owner of any viable economic use
n467 and did not substantially advance the public interest.
Cases such as these should turn on whether requiring a landlord to rerent
vacant premises constitutes the imposition of a new use or the continuation of
an existing one. If a property has already been lawfully withdrawn from rental
use and is being converted to another one, forced rental comes perilously close
to the situation described in
n469 But, if the landlord intends to leave units vacant only temporarily for
tactical reasons (for example, to drive up rents by suppressing supply), an
anti-warehousing law would not require a new use.
A special case regarding imposed uses is presented by laws which preclude a
landlord from evicting all of her tenants and going out of business. In
Nash v. City of Santa Monica,
n471 a landlord unsuccessfully argued that prohibiting him from evicting his
tenants and converting his property to non-rental use forced him to remain in
the landlord business against his will.
n472 This theory was first advanced by Judge
[*1005] Skelly Wright in
Robinson v. Diamond Housing Corp.
n473 Although sustaining a tenant's defense of retaliatory eviction, Judge Skelly
Wright stated, in dicta, that the landlord could nonetheless evict to cease
"None of this is to say that the landlord may not go out of business entirely if
he wishes to do so. . . . There would be severe constitutional problems with
a rule of law which required an entrepreneur to remain in business against his
Judge Skelly Wright did not explicate the constitutional rights that would be
abridged if a landlord was unable to evict all tenants, rather than just a few.
n475 The most profound claim, involuntary servitude in violation of the thirteenth
amendment, has been rejected.
n476 Claims under the first amendment would also be unavailing, unless perhaps true
privacy or associational interests were at stake, such as with ownershared
n477 Finally, possessory takings concerns should be satisfied since no new uses are
imposed and no strangers occupy the premises.
Yet, denying a landlord the right to close shop strikes a dissonant chord. One
state legislature has even preempted local eviction laws by creating a state
"landlords to go out of business."
n478 A related issue, the regulation of plant closings, has become a major
political issue on the national level.
n479 Despite the pause it has given lawmakers
[*1006] and courts, analysis of this possessory interest should not yield any
different results under the takings clause.
Some early cases suggested that the existence of an escape clause, whereby a
landlord could remove her building from rental service entirely, was critical
to the constitutionality of eviction laws.
n481 In one case, an eviction law was invalidated on substantive due process
grounds because it sought to prohibit the landlord from removing his commercial
building from the rental market and converting it to personal use.
n482 But none of these cases, including
Robinson, have actually found a taking due to a landlord's inability to
"go out of business."
Judge Magruder's opinion in
Rivera v. R. Cobian Chinea,
n483 provides an analytical framework that is consistent with
Loretto. Earlier, in
Wilson v. Brown,
n484 Judge Magruder upheld eviction provisions in the Price Control Act, noting
they did not require the landlord to dedicate his property to rental service.
n485 But, in
Rivera, Judge Magruder voted to uphold a commercial eviction law even though it
forbade removals. His
[*1007] opinions are reconciled by distinguishing laws which extend existing rental
service from those which mandate new service. As Judge Magruder suggested,
there is a qualitative difference between statutory extension of existing
leases and mandatory creation of new ones.
n486 The latter represents a more substantial burden on possessory rights because
"owner may have no control over the timing, extent, or nature of the invasion."
n487 But the former has far less impact on possessory interests.
A common example of regulations which deny a property owner the right to go out
of business is provided by historic preservation laws.
Penn Central, the Court rejected application of the possessory takings doctrine and held
that New York's Landmarks Preservation law
n490 caused insufficient economic interference to warrant a regulatory taking.
n491 Landmarks laws have similarly been sustained against other liberty claims.
n492 Because these demolition laws require property owners to keep buildings in
service, just as eviction and removal laws
[*1008] do, they ought to be analyzed similarly.
n493 Accordingly, most courts have sustained eviction laws, even where a landlord
wanted to leave the business.
Eviction laws are often combined with conversion regulations to facilitate the
latters' efficacy. Such a purpose is valid.
"Going out of business" is but a special instance of changing use. If the landlord seeks to leave the
"landlord business" in order to enter another, such as developing condominiums, economic interests
rather than possessory ones are at stake.
n495 On the other hand, if eviction of all tenants is sought so that the property
may lie fallow, it is hard to see how that property interest, even if
possessory, is entitled to much weight.
n496 Only where continued rental use truly implicates liberty aspects of property
ownership, such as to facilitate owner occupancy,
n497 should the claim be given special consideration.
E. Rethinking the Landlord's Dominion Interests
At common law, the landlord had an absolute right of reverter upon expiration
of the leasehold estate or breach. So strong was the landlord's right that it
"was one of the few areas where the right to self-help was recognized."
n499 Legal devices created for the recovery of possession differed from those
generally available. For example, suits to recover possession are accelerated
and enjoy summary proceedings.
n500 Common law writs of forcible entry and wrongful detainer have been preserved
in most states under the modern procedure of
"unlawful detainer." These devices so favor a landlord's possessory rights that few defenses are
allowed and trial is often immediate.
But the feudal agrarian origins of the landlord-tenant relationship has little
relevance to the modern urban industrial society. Self-help is out.
Independent covenants have given way to dependent ones.
n502 And the landlord's relationship to the land is significantly less
"personal" than it was when livery of seisin
n503 was required for the creation of estates.
n504 Yet, despite substantial changes in landlord-tenant relationships, some still
speak as though a landlord's dominion interests prevail over any other
[*1010] The Supreme Court has stated that property rights are a component of personal
n505 Accordingly, the right to regain possession can easily be deemed fundamental,
far outweighing, for instance, economic interests which the state can regulate
n506 However, such special treatment seems anachronistic in modern landlord-tenant
law, and is far removed from the economic/investment orientation of the
"The view that [landlord] dominion interests are fundamental liberty interests
entitled to heightened protection is based on an abstract, formal conception of
liberty, unrelated to the actual liberty interests at stake in any particular
n508 It also denigrates the tenant's
"liberty interests" in possessing her rented home.
To claim that certain prerogatives, such as the right to exclude, remain
intrinsic in the definition of property,
n509 is reminiscent of discredited natural law theories. The transformation of the
landlord-tenant relationship, from one based on estates to one predominantly
contractual in nature,
n510 suggests the inapplicability of property dominion concepts to modern
tenancies. From a traditional doctrinal property
[*1011] perspective, statutory extension of leaseholds redefines estates in property.
Just cause eviction laws create a new estate, somewhere between a term for
years and a life or defeasible estate.
n511 However, from a modern contractual perspective, such laws merely extend the
period of the mutually dependent obligations of the landland and tenant --
notably, to furnish housing services and to pay rent. The takings and
n512 protect similar interests,
n513 and contain similar elements. The focus in cases alleging impairment of
contract, as in takings cases, is substantiality of governmental interference,
strength of the public purpose, and balancing.
n514 Thus, it is unremarkable that laws which survive one challenge usually survive
In the late 1970s, the Court signaled growing support for both contracts and
takings clause claims.
n516 Yet, while aggressive use of the contracts clause to protect economic
interests waned shortly thereafter,
n517 the takings clause, at least the possessory takings strand, appears headed on
a different route. Perhaps the judicial approach toward protecting
[*1012] economic rights under the possessory takings clause should be reconciled with
analysis of similar interests under the due process, contracts and regulatory
Courts should be wary of construing the
"right to exclude" and
"permanent physical occupation" language of
Loretto literally. Those phrases embody an overly mechanical and formalistic
application of the principles underlying that case. Literal construction
suggests that interference with one particular strand in the
"bundle of rights" is qualitatively equal to appropriation of title.
n518 The approach conflicts with the
"reasonable expectation" approach and totally ignores the other elements of takings analysis.
Loretto's per se rule has already been narrowed,
n520 and ought to be further limited. Instead of an
"indiscriminate . . . bread box rule,"
n521 a realistic appraisal of the net effect of the regulation on all of the
owner's possessory and non-possessory interests should be required.
In their constitutional inquiries, courts ought to focus on the property
owner's loss rather than the occupier's gain.
n523 In other words, what attributes of property ownership remain in spite of
occupation? In some cases, such as
Kaiser-Aetna, loss of the right of exclusivity is associated with destruction of
substantially all value. But if other nonpossessory
[*1013] interests, such as the right to derive economic benefit, remain intact, it can
hardly be said that occupation is tantamount to appropriation of fee.
n524 Indeed, where physical possession by others is the very nature of the
enterprise carried on by the property owner,
"occupation" not only does not interfere with
"investment-backed expectations," it is the essence of them.
V. PHYSICAL OCCUPATION AS A SPECIAL CASE IN REGULATORY TAKINGS THEORY
A. Reconciling the Possessory Takings Doctrine with Principles of Just
Michelman argues that the difference between regulation and occupation is
"[w]ordplay [which] . . . cannot justify any sharp line of distinction."
n526 He is right. If
"permanent physical occupation" constitutes a per se taking, no state interest can outweigh the impact on the
property owner's interest. But, it hardly seems reasonable that a possessory
takings claim is made out simply because the right to reverter (or right to
exclude) is abridged. There must be more to it. That more is an economic
analysis of the law's impact. This is clearly required in regulatory takings
cases. Avoidance of it in the possessory takings cases obfuscates takings
Demonstrating the difference between regulatory and possessory takings, just
compensation is the remedy provided for both constitutional transgressions. No
matter how important possessory rights are to property doctrine, there is no
constitutional restraint on their destruction as such.
n527 As made evident in
First English Evangelical Lutheran Church v. County of Los Angeles,
n528 the state can accomplish either regulatory or possessory takings by paying
compensation. A property owner's constitutional rights are measured in
[*1014] regardless of the nature of the state's interference. With those sticks in
the property bundle representing use, enjoyment and alienability, not all
meddling requires compensation, rather only that which goes too far. It makes
sense then to perform the same analysis on the possessory sticks. In either
"it is the owner's economic interest in land -- his interest in its value --
which is the primary interest compensated by payments of just compensation."
n529 Since it is his economic interest which predominates in regular condemnation
cases, it ought not to be replaced by liberty formulations in inverse
condemnation or possessory takings cases.
Common to the
"permanent physical occupation" cases has been an effective appropriation of all interest in that portion of
the property which has been
"taken," or at least controlled by the government for its own use or possession.
n530 Thus, it is a mistake to view invasion cases as qualitatively different from
regulation cases because both require substantial injury in order to find a
n531 The Court's early ouster cases support this. For instance, in
Pumpelly v. Green Bay Co.,
n532 the Court noted that governmental action resulting in flooding had caused
"almost complete destruction of the [land's] value."
n533 Indeed, in the cases cited in
Loretto which support a per se rule for possessory takings, there was substantial or
complete destruction of value.
n534 This was true
Loretto itself. The apartment owner could not use that part of her building
physically occupied by the cable device, nor could she derive benefit from it
or alienate it. The regulation had deprived her of both possessory and
nonpossessory rights. In short, she had been ousted.
That the economic impact of possession was important in
Loretto is evident not only from the Court's listing of abridged interests,
n536 but from examples it gave of hypothetical dominion that could be imposed if
dispossession went uncompensated.
n537 In describing the right to exclude, it is apparent that Justice Marshall had
in mind the tangible benefits associated with that right.
Kaiser-Aetna v. United States, the Supreme Court first characterized the right to exclude as
"one of the most essential sticks in the bundle of [property] rights."
n539 Developing this theme, the Court drew on Justice Brandeis' statement in
International News Service v. Associated Press,
"[a]n essential element of individual property is the legal right to exclude
others from enjoying it."
n541 That case concerned the right of one news organization to prevent another from
using published stories for profit. The Associated Press did not claim the
right to exclude International News from access to the stories themselves.
Rather, it claimed an exclusive right of commercial access, that is, to derive
profit. Without the ability to prevent others from exploiting the creative
industry of the Associated Press, the commercial value in the stories through
subscription sale to others would be eliminated.
n542 In this sense, the right to exclude was not only essential, it was the only
[*1016] right of property ownership that mattered.
Kaiser-Aetna's citation to Justice Brandeis was entirely appropriate since the only
commercial value to Kuapa Pond was in the ability to charge others for use.
Loretto, Kaiser-Aetna and
International News underscore the role of exclusivity as a property right. It is an
"essential" right, not because of some transcendent value judgment embodied in the just
compensation clause, but because it is critical to the property's value. The
right to exclude is important as a means of securing value. The right to
exclude may be abridged when government orders physical occupation, but so too
are all other attributes of property ownership. In a very real way, possessory
taking is a special, and exaggerated, case of regulatory taking. It
"deprives an owner of all viable economic use"
n544 and destroys all rights in property. The determinative factor in possessory
occupation cases should be whether the landowner is deprived of virtually all
incidents of ownership, not merely possession.
For instance, restricting the right to select one's tenants is indeed
intrusive. In one sense, it
"cuts deeply into a fundamental right normally associated with the ownership of
residential property -- to decide who may reside on his or her property."
n545 On the other hand, it leaves the bulk of the owner's interest and expectancy
for the use of the property undisturbed. Some, but not all, of the rights we
normally associate with property are taken. Whether compensation need be paid
should depend on whether the owner is left with any significant value. It
should be determined pragmatically, not in the abstract.
Between the owner's absolute control over his property and a stranger's
exercise of complete dominion lies a vast range of governmental action which
may deny the owner some options or uses. This is the essence of regulation.
An obvious example occurs when an owner has voluntarily relinquished some
degree of control over his property by opening it up to the public for
n546 While a landlord who is subject to eviction restrictions may lose control over
"timing" of tenant occupancy,
n547 for the most part he still controls the extent and
[*1017] nature of the possession. He also controls other attributes of ownership such
as income. A holdover tenant enjoys far less than the
"complete dominion" found in
B. Possessory Takings and the Proportionality Requirement
Besides its effect on property value,
n548 a second reason supports viewing
"physical intrusion by government [as] a property restriction of an unusually
serious character for purposes of the Takings Clause."
n549 It violates the fifth amendment's antidiscrimination principle.
We are told that the fundamental purpose of the takings clause is
"to bar Government from forcing some people alone to bear public burdens which,
in all fairness and justice, should be borne by the public as a whole."
Penn Central, the Court described the
"justice and fairness" question as essentially one of proportionality. Assuming that the government
may pursue a particular goal, may it choose means which impose the burden
"on a few persons," or must the cost be spread among the public generally?
A permanent physical invasion usually affects only targeted property owners,
rather than a broad segment of the community.
n552 Because a permanent physical occupation imposes unique burdens, it is prone to
arbitrariness and exploitation.
n553 It thus fails the proportionality requirement of the
"justice and fairness" principle. On the other hand, where government action affects a broad
spectrum of property holders, there is greater political accountability and
less likelihood of random or capricious injury. The broader the effect, the
less need for close judicial review.
For instance, payment of compensation to all landowners in a community makes no
sense regardless of the intrusion, since the payments may be recouped through
property taxes. But the same principle that requires property taxes to be
n554 prohibits the selective interference
[*1018] with property rights.
n555 Privacy and liberty interests might not give way to across-the-board burdens,
but large-scale adjustment of economic rights is a principal feature of the
Thus, eviction laws, even those which result in tangible transfer of value to
tenants, lack the central objectionable feature of permanent physical
occupations. They do not single out isolated properties for arbitrary
n556 Rather, they apply to hundreds or thousands of rental units in the
jurisdiction. Indeed, their effect is more widely felt -- and thus more
responsive to political adjustment -- than historic preservation laws upheld in
Penn Central and elsewhere.
Most of the Court's possessory takings cases can be explained in these terms.
Loretto is the notable exception. If
Loretto is confined to cases of actual ouster, it will not cause a radical reshaping
of doctrine. If, however, select property interests, such as the right to
exclude, become sacrosanct, many forms of economic regulation could fall victim
to liberty interests.
Security of tenure and suitable housing are vital goals for all Americans.
n558 But modern housing conditions have made their attainment difficult, if not
impossible, in many areas. While economists disagree over mechanisms to house
our growing numbers, the stark reality is that government funding and the
private market have failed to provide enough affordable housing. Wisely or
not, many cities have found regulation to be their best weapon in the fight
against dwindling rental stocks and the exploitation of tenants, which often
results from housing scarcity.
Prohibition against arbitrary eviction is often seen as an indispensible means
to protect tenants, whether it is intended to facilitate underlying economic
regulation, such as rent control or conversion laws, or simply to prevent the
hardship associated with displacement. Whatever their purpose, just cause
eviction laws represent a bold development in landlord-tenant doctrine. And
because they have demonstrable effects
[*1019] on landlords' property rights, they are subject to scrutiny under the takings
The two strands of moder takings jurisprudence, regulatory and possessory
takings, have seen active development of their own recently. Although the just
compensation clause may be self-executing,
n559 it is not self-defining. In an effort to give meaning to the values it
embodies, the Supreme Court has been caught between government's obvious need
to regulate in the public interest, and the protection of private interests in
property. The models chosen by the Court, one measuring the quantity, the
other the quality of interference, do not provide neat rules or manageable
standards. Nor have the Court's
"ad hoc" decisions provided much guidance. Instead, broad language in leading cases
has lead some courts to apply substantive due process review, and others to
engage mechanistic per se rules.
Both the due process and takings clauses protect interests in property. The
well-established standard of review under the former is the rational basis
test, as it should be under the latter. When reviewed in this manner, eviction
laws are likely to survive regulatory takings analysis unless they
substantially interfere with investment-backed expectations. Typically, they
satisfy the due process, equal protection and normative values contained within
the takings clause.
The parallel between the physical invasions in
Loretto and standard eviction laws is deceptive. By prohibiting a landlord from
evicting a tenant at the expiration of her lease term, not only is there a
n560 it is indefinite, and the right to exclude is denied. Yet, in the
landlord-tenant context, the
"right of exclusivity"
n561 should be only one factor in the overall taking calculus. So long as the
landlord retains other important attributes of property ownership, notably the
right to derive value, statutory extension of lease term is hardly tantamount
to appropriation of title. In sum, possession by a tenant is not the type of
"permanent physical occupation" contemplated by the possessory takings doctrine.
See R. SCHOSHINSKI, AMERICAN LAW OF LANDLORD AND TENANT at v (1980) ("The law of landlord and tenant, which had remained relatively static for
several centuries, has undergone extensive development and modification."); Day
The Condominium Crisis: A Problem Unresolved, 21 URB. L.J. 3, 15 (1981) (tracing the development of landlord-tenant law);
The Transformation of American Landlord-Tenant Law,
23 B.C.L. REV. 503 (1982).
n2. In addition to property law, contemporary landlord-tenant relations have been
analyzed under contract doctrine (R. SCHOSHINSKI,
supra note 1, at 1); civil rights (e.g., Civil Rights Act of 1968,
42 U.S.C. §§ 3601-3631 (1982)); business regulation (e.g.,
Love v. Pressley, 34 N.C. App. 503, 516, 239 S.E.2d 574, 585 (1978) (lease is
"trade and commerce")); due process (e.g.,
Edwards v. Habib, 397 F.2d 687 (D.C. Cir. 1968),
393 U.S. 1016 (1969) (retaliatory eviction defense)); labor law (R. SCHOSHINSKI,
supra note 1, at 17); and even antitrust law (Fisher v. City of Berkeley, 475 U.S. 260 (1986);
Traweek v. County of San Francisco, 659 F. Supp. 1012 (N.D. Cal. 1984)).
See generally Rabin,
The Revolution in Residential Landlord-Tenant Law: Causes and Consequences,
69 CORNELL L. REV. 517 (1984).
n3. The Supreme Court has acknowledged such developments, noting the
"unique factual and legal characteristics of the landlord-tenant relationship
that justify special statutory treatment."
Lindsey v. Normet, 405 U.S. 56, 72 (1972). Although that language was used to uphold a law favoring landlords (summary
proceeding for the recovery of possession), it would also support a substantial
governmental role in protecting tenants from arbitrary eviction.
n4. The availability of rental housing is often measured in terms of vacancy
rates. When rates are low and the market is in disequilibrium, rents escalate
and housing opportunities narrow. At vacancy rates below five percent, market
parity is destroyed; low- and middle-income tenants are forced to pay higher
rents than they can afford. Judson,
Defining Property Rights: The Constitutionality of Protecting Tenants from
18 HARV. C.R.-C.L.L. REV. 179, 189, n.32 (1983); SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS, REGIONAL HOUSING ALLOCATION
MODEL 15 (1977). Vacancy rates in many urban areas continue to decrease.
Nash v. Santa Monica, 37 Cal. 3d 97, 100, 688 P.2d 894, 896, 207 Cal. Rptr. 285, 287 (1984),
470 U.S. 1046 (1985) (noting local vacancy rate of 1.7%) (the author was attorney for Santa Monica).
n5. A residential lease must be for a definite term (see CALIFORNIA REAL ESTATE LAW
§ 151.06(1988)), but may contain renewal options for the tenant.
§ 152.62. In the absence of explicit terms, the renting of residential
property is presumed to be on a monthly basis.
CAL. CIV. CODE §§ 1943, 1944 (West 1985).
Mayes v. Jackson Township Rent Leveling Bd., 103 N.J. 362, 378, 511 A.2d 589, 598 (1986) ("powerful market forces . . . create instability in the rental housing market" which is in a state of
"crisis"). As a rule, residential landlords resist long-term leases and renewal
See CALIFORNIA REAL ESTATE LAW
§ 152.62 (1988).
See generally LeGates
15 CLEARINGHOUSE REV. 207, 210 (1981) ("[d]isplacement affects millions of Americans each year, most of whom are poor
or near poor, elderly, minorities, female headed households, and other
n8. Consensus among planners is hard to reach, but most see housing scarcity
continuing at least into the next decade.
See generally J. HUGHES
& G. STERNLIEB, THE DYNAMICS OF AMERICA'S HOUSING (1987); Note,
Reassessing Rent Control: Its Economic Impact in a Gentrifying Housing Market,
101 HARV. L. REV. 1835 (1988).
n9. For discussions of the legality of condominium conversion laws generally, see
supra note 1; Judson,
supra note 4.
"Just cause eviction laws" are so named because they prohibit eviction except for enumerated
"just cause" reasons such as failure to pay rent, breach of lease covenants (other than a
tenant's quitting of the premises), etc. See Baar,
Guidelines for Drafting Rent Control Laws: Lessons of a Decade,
35 RUTGERS L. REV. 723, 833 (1983), for examples of typical
"just cause" eviction laws.
n11. The development of these tenant rights was an example of the advent of
"new property." This was the term coined by Charles Reich to describe the modern linking of
personality to status, benefits and the like. It reflected an emerging
recognition of rights and expectations not grounded in traditional notions of
contract and property. Reich,
The New Property,
73 YALE L.J. 733 (1964).
See also Radin,
Property and Personhood,
34 STAN. L. REV. 957, 993-96 (1982) (characterizing protection against eviction as an instance of the tenant's
"personhood" interests in her home).
supra note 11, at 995 (suggesting that the tenant has greater personhood interests
in possession than the landlord because the former's leasehold interest is
personal, while the latter's reversionary interest is fungible).
n13. As commonly expressed, the doctrine of retaliatory eviction generally
precludes a landlord from exercising her statutory or contractual right to
terminate a tenancy if, in doing so, her motivation is to retaliate against the
tenant's exercise of his own statutory or judicially created rights.
Edwards v. Habib, 397 F.2d 687 (D.C. Cir. 1968),
393 U.S. 1016 (1969).
See generally Note,
Landlord and Tenant -- Retaliatory Evictions,
3 HARV. C.R.-C.L. L. REV. 193 (1967). In some states, the doctrine has been codified.
CAL. CIV. CODE § 1942.5 (West 1985).
See also UNIF. RESIDENTIAL LANDLORD AND TENANT ACT
§ 5.101, 7B U.L.A. 503 (1985);
Javins v. First Nat'l Realty Corp., 428 F.2d 1071 (D.C. Cir. 1970) (finding an implied warranty of habitability in modern leases). This has
emerged as the majority rule regarding a landlord's duty to maintain the
See RESTATEMENT (SECOND) OF PROPERTY
§§ 5.1-5.6 (1977).
n14. Retaliatory eviction defenses, although also changing the landlord's
reversionary interest from an absolute to a conditional right (Radin,
supra note 11, at 995), may be more palatable to landlords that statutory tenure
rights because invocation of the former can be seen as partially
self-inflicted, while the latter is imposed without fault.
n15. District of Columbia
"Rents Act," ch. 80, 41 Stat. 297 (1919).
256 U.S. 135 (1921).
Id. at 154.
Id. at 156.
260 U.S. 393 (1922).
Block, 256 U.S. at 156.
n21. Justice McKenna, dissenting in
Block, argued that constitutional restraints were not diminished even during
emergency war time conditions. His strongest denunciation came in reference to
"impregnable obligations of contract" (Id. at 163-64) which were repudiated by the regulation
"contrary to every conception of leases that the world has ever entertained."
Id. at 159. The contracts clause issue was more directly addressed in a companion case,
Marcus Brown Holding Co. v. Feldman, 256 U.S. 170 (1921). There, the same five-to-four majority sustained a similar New York law (1920
N.Y. Laws 942-53) which made it a misdemeanor for a landlord to
"intentionally fail to furnish such water, heat, light, elevator, telephone, or
other service as may be required."
Marcus Brown, 256 U.S. at 197. Justice Holmes, relying on the analysis of emergency conditions in
Block v. Hirsh, found the law appropriately responsive to
"the evil to be met."
Marcus Brown, 256 U.S. at 199.
Edgar A. Levy Leasing Co. v. Siegel, 258 U.S. 242, 246 (1922) (again sustaining the New York Emergency Housing Laws based on
Marcus Brown and acknowledging" the notorious fact that a grave social problem has arisen from the
insufficient supply of dwellings in all large cities . . . incident to the war").
Woods v. Cloyd W. Miller Co., 333 U.S. 138 (1948) (sustaining Title II of the Housing and Rent Act of 1947 against the charge
that Congress lacked article I power to enact rent control upon expiration of
the declaration of war);
Bowles v. Willingham, 321 U.S. 503 (1944) (rent control regulations promulgated by the Office of Price Administration
were constitutional even if they failed to guarantee landlords a profit).
Bowles, 321 U.S. 503, 521, 529 (1944) (Rutledge, J., concurring) (Roberts, J., dissenting). Justice Jackson filed a
separate concurring opinion in
Woods, 33 U.S. 138, 146 (Jackson, J. concurring), describing his understanding of the breadth of the
war power upon which the Court had relied to find congressional authority.
See generally Baar,
supra note 10, at 727-28.
Pennell v. City of San Jose, 485 U.S. 1 (1988);
Fisher v. City of Berkeley, 475 U.S. 260 (1986).
Hall v. Santa Barbara, 833 F.2d 1270 (9th Cir. 1987),
485 U.S. 940 (1988);
Nash v. City of Santa Monica, 37 Cal. 3d 97, 688 P.2d 894, 207 Cal. Rptr. 285 (1985),
470 U.S. 1046 (1985);
Fresh Pond Shopping Center v. Rent Control Bd. of Cambridge, 388 Mass. 1051, 446 N.E.2d 1060 (1983),
464 U.S. 875 (1983) (Rehnquist, J., dissenting). In
Pennell, the Court upheld San Jose's rent control law against due process, takings and
equal protection challenges. It specifically declined, however, to address
eviction protections in San Jose's law.
Pennell, 425 U.S. at 11.
n27. U.S. CONST. amend. V ("nor shall private property be taken for public use without just compensation").
Property Rights in the Balance -- The Burger Court and Constitutional Property,
43 MD. L. REV. 518, 525 (1984) ("the Burger Court has devoted more explicit discussion to property concepts than
any Court since the Depression era"); Williams, Smith, Siemon, Mandelker
The White River Junction Manifesto,
9 VT. L. REV. 193, 200 (1984) [hereinafter Williams] ("[s]ince 1974 the Supreme Court has reentered the land use field with a vengeance"). But this is a new development. Between 1928 and 1974, the Court avoided
most land use cases, hearing only two:
Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962), and
Berman v. Parker, 348 U.S. 26 (1954).
483 U.S. 825 (1987).
Id. at 831.
Nollan is an extension of a line of cases applying the
"possessory takings" doctrine, with serious implications for eviction legislation.
See infra text accompanying notes 305-525.
480 U.S. 245 (1987).
Id. at 251-52 n.6.
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987);
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).
First English seems to have settled, in favor of property owners, doubt as to the
applicability of takings analysis to land use and economic regulation. Prior
First English, there was a fair amount of dispute over whether excessive police power
regulation should be analyzed under the takings clause or the due process
clause of the fourteenth amendment. There is less uncertainty now, but the
matter is by no means settled.
See infra note 81.
Loretto announced that
"permanent physical occupations" were per se invalid under the takings clause. Its implications for eviction
laws are explored
infra at text accompanying notes 305-525.
833 F.2d 1270 (9th Cir. 1987).
n35. SANTA BARBARA, CAL., ORDINANCE NO. 4285 (1984) (mobile home and recreational
vehicle park lease ordinance). The Santa Barbara law was based on the
California Mobile Home Residency Law beginning at section 798 of the California
655 F. Supp. 820 (N.D. Cal. 1987).
485 U.S. 940 (1988).
Hall will be further developed in the trial court, along with a spate of other
cases filed in its wake.
See, e.g., Schnuck v. City of Santa Monica, No. 87-05936 (C.D. Cal. Feb. 21, 1989).
485 U.S. 1 (1988).
Block, 256 U.S. at 157 (analogizing rent and eviction control to building restriction);
Tirolerland, Inc., v. Lake Placid 1980 Olympic Games, 592 F. Supp. 304, 311 (N.D.N.Y. 1984) ("jurisprudence which has evolved in the area of zoning regulations is easily
adaptable to" rent regulation).
Birkenfeld v. City of Berkeley, 17 Cal. 3d 129, 160, 550 P.2d 1001, 1023, 130 Cal. Rptr. 465, 487 (1976) (applying
"the same constitutional standards to the regulation of rents that we apply to
the regulation of other consumer prices").
n41. U.S. CONST. amend. XIV,
§ 1 ("nor shall any State deprive any person of life, liberty, or property, without
due process of law").
n42. The Supreme Court has chosen to deal with most land use restrictions under the
takings clause, while analyzing other economic regulation under the due process
clause. There are many theories on how this divergence came about and
substantial criticism of the Court's new direction.
See infra notes 78-79. Cases involving eviction legislation often perpetuate the lack
of doctrinal clarity by interjecting analyses of one constitutional provision
into those of another.
n43. 1 F. HARGRAVE, DE PORTIBUS MARIS 78 (1787) (cited in
Munn v. Illinois, 94 U.S. 113, 126 (1876)).
94 U.S. 113 (1876).
Id. at 130.
Id. at 126. Chief Justice Waite's opinion reflected great deference to the legislature in
such matters. However, where legislation affected
"matters in which the public has no interest, what is reasonable must be
Id. at 134. The public/private dichotomy has persisted in determing the validity of police
power enactments. See
infra text accompanying notes 99-305.
n47. A. PAUL, CONSERVATIVE CRISIS AND THE RULE OF LAW, ATTITUDES OF BAR AND BENCH
Mugler v. Kansas, 123 U.S. 623, 661 (1887) (sustaining a law prohibiting alcohol, but announcing an intent
"to look at the substance of things" to determine if the public interest were truly involved).
Health Dept't v. Rector of Trinity Church, 17 N.Y.S. 510, 515-16 (1892) (New York law requiring landlord to furnish water in tenement house was a
"[t]here is no evidence, nor can the court judicially know, that the presence
and distribution of water on the several floors will conduce to the health of
the occupants"). The court was concerned that upholding the law
"would involve the essential principle of that species of socialism under the
regime of which the individual disappears, and is absorbed by a collective
being called the 'state,' -- a principle utterly repugnant to the spirit of our
political system, and necessarily fatal to our form of liberty."
Id. at 516.
See infra note 109.
Trinity Church was reversed by the
New York Court of Appeals, 145 N.Y. 32, 49, 39 N.E. 833, 839 (1895) (although the court
"ought to inspect with very great care any law in regard to tenement houses," this one was valid since
"opportunities . . . for the use of water in these tenement houses will
unquestionably tend towards, and be followed by, more cleanly living on the
part of the occupants").
256 U.S. 135 (1921).
Lochner v. New York, 198 U.S. 45 (1905).
West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937) (sustaining minimum wage law for female employees).
n55. Act of January 30, 1942, ch. 26, 56 Stat. 28 (repealed 1966).
n56. Exec. Order No. 11,615, 3 C.F.R. 602 (1971),
6 C.F.R. 301.102,
revoked, Exec. Order No. 11,695, 3A C.F.R. 150 (1973). Presidential action was
authorized by the Economic Stabilization Act of 1970,
12 U.S.C. 1904 (1988).
United States v. Lieb, 462 F.2d 1161 (Temp. Emer. Ct. App. 1972) (unsuccessful claim that across-the-board rent freezes ordered by the
President's Cost of Living Council denied landlord procedural due process).
n58. This led to an
"emergency doctrine," long viewed as a necessary justification for rent control. Barr
The Last Stand of Economic Substantive Due Process -- The Housing Emergency
Requirement for Rent Control,
7 URB. LAW. 447 (1975). Thus, in
Chastleton Corp. v. Sinclair, 264 U.S. 543 (1924), the Supreme Court expressed doubts about Congress' ability to renew the Rents
Act because it appeared that the emergency had ceased.
Woods v. Cloyd W. Miller Co., 333 U.S. 138 (1948) (upholding the Housing and Rent Act of 1947 against claim that Congress lacked
article I power to enact rent control upon expiration of the declaration of
Birkenfeld v. City of Berkeley, 17 Cal. 3d 129, 550 P.2d 1001, 130 Cal. Rptr. 465 (1976) (emergency doctrine has been repudiated). According to Baar and Keating, many
modern cases have rejected the emergency doctrine.
See generally LeGates
supra note 7, at 230;
supra note 8.
See also U.S. DEP'T OF HOUSING
& URBAN DEVELOPMENT, DISPLACEMENT REPORT (1979).
Fisher v. Berkeley, the Court stated that rent control was one
"function of government [which] may often be to tamper with free markets,
correcting their failures and aiding their victims."
Fisher v. Berkeley, 475 U.S. 260, 264 (1985).
n61. B. ACKERMAN, PRIVATE PROPERTY AND THE CONSTITUTION 88-167 (1977).
n62. Examples include zoning, price control, environmental controls, health and
safety standards, and regulation of business practices.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).
260 U.S. 393 (1922).
Id. at 415. Controversy has raged over whether Justice Holmes used the term
"taking" literally, to mean a violation of the takings clause, or figuratively to
describe the effect of an invalid use of the police power in derogation of due
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 322 (1987) (Stevens, J., dissenting). Many commentators argue against the literal
See, e.g., Freilich,
"Taking" Equation: Making the Whole Equal the Sum of its Parts,
15 URB. LAW. 447, 464 (1983); Williams,
supra note 28, at 208 ("it is apparent that Holmes used the word 'taking' not to describe an event
requiring payment of just compensation, but as a shorthand description of a
regulation that was invalid, and therefore void ab initio");
id. at 210 ("the metaphorical nature of Holmes's use of the word 'taking' is clear"). Indeed, the previous year, in sustaining wartime rent and eviction
controls, Justice Holmes used the term
"taken" to refer both to
"the doctrine of eminent domain" and to
"that of the police power in its proper sense."
Block v. Hirsh, 256 U.S. 134, 155 (1921). He stated that legislation was not necessarily invalid even if
"property rights may be cut down, and to that extent
taken, without pay."
Id. (emphasis added).
n66. The law challenged in
Mahon, the Kohler Act, suffered from both infirmities.
Mahon, 260 U.S. at 415-16.
n67. Justice Holmes was in general disagreement with the Court's substantive due
process approach to economic regulation cases, as indicated by his classic
Lochner v. New York.
Lochner, 198 U.S. at 75-77 (Holmes, J., dissenting). Yet, he was part of an era of intrusive judicial
Mahon brought him to somewhat of a crossroads. While hoping to avoid the very
practices of which he accused his brethren, he was unwilling to yield
completely to public bodies in the determination of the public welfare. For
instance, in the course of the opinion, Justice Holmes determined that the law
failed to serve a legitimate public purpose, just as the majority had in
Lochner. However, he was careful to rest his holding on
"the complete extinction of a valuable estate," a basis for compensation which seemed in line with prior takings cases.
See infra notes 517-18.
n68. Striking a law on the basis of the takings clause still allows a governmental
entity to accomplish its goal through other means -- condemnation and
compensation. On the other hand, invalidation on the basis of substantive due
process declares it impermissible for the legislature to pursue its goal at
all. In this sense, review under the takings clause is less intrusive than due
n69. Gunther relates that Justice Holmes was concerned about
"the petty larceny of the police power." G. GUNTHER, CONSTITUTIONAL LAW 476 n.3 (11th ed. 1985) (citing a draft opinion
Jackman v. Rosenbaum Co., 260 U.S. 22 (1922)).
Testing the Constitutional Validity of Land Use Regulations: Substantive Due
Process as a Superior Alternative to Takings Analysis,
57 WASH. L. REV. 715 (1982).
Penn Central Transp. Co. v. New York, 438 U.S. 104, 123-24 (1978) (quoting
Armstrong v. United States, 364 U.S. 40, 49 (1960)).
supra note 28, at 216 ("there is no sure way to identify a 'taking' . . . when you see it").
n73. Attempting to distinguish permissible exercises of the police power from those
"too far" has become
"the most haunting jurisprudential problem in the field of contemporary land use
law . . . one that may be the lawyer's equivalent of the physicist's hunt for
the quark." C. HAAR, LAND USE PLANNING 766 (3d ed. 1976).
E.g., Finn v. 415 Fifth Ave. Co., 153 F.2d 501 (2d Cir. 1946) (eviction law
"does indeed take the lessor's property . . . but it does not deny him 'due
Property Owners Ass'n v. North Bergen, 74 N.J. 327, 336, 378 A.2d 25, 29 (1977) (rent control law
"deprive[d] an owner of property without due compensation"). The
"too far" imagery invites other metaphors of even less useful doctrine. See
Chicago Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d 732 (7th Cir. 1987), where landlords claimed that a relatively innocuous landlord-tenant law
"goes too far" in
"the felling of a forest of property rights."
Id. at 739. They warned:
"[a]s courts allow more trees to be felled . . . who can predict which will be
the last tree, leaving but a forest of stumps and decaying logs . . . forever
changing the fabric of our country."
Hodel v. Irving, 481 U.S. 704, 713 (1987).
n76. Professor Humbach describes the morass somewhat poetically.
"[T]he law of police-power takings is a widely acknowledged hodgepodge, its
doctrines a farrago of fumblings which have suffered too long from a surfeit of
deficient theories." Humbach,
A Unifying Theory For The Just-Compensation Cases: Takings, Regulation and
34 RUTGERS L. REV. 243, 244 (1982).
483 U.S. 104 (1978).
"The question of what constitutes a 'taking' for purposes of the Fifth Amendment
has proved to be a problem of considerable difficulty . . . this Court, quite
simply, has been unable to develop any 'set formula' for determining" a taking.
Id. at 123-24.
Hodel, 481 U.S. at 713.
Agins v. Tiburon, 447 U.S. 255 (1980), was the last significant land use takings case without dissent, and even
Agins was not decided on the merits. The Court has been sharply divided in the
seven major cases since then.
Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987);
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987);
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987);
MacDonald v. Yolo County, 477 U.S. 340 (1986);
Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1984);
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982);
San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621 (1981). Four were five-to-four decisions; majority opinions in the remainder each
garnered a sixth vote. Alliances have been very fragile. In no two of the
cases were the same five justices (including predecessors) assembled for an
opinion. Indeed, four-member blocks could only be held together for 2 cases at
a time. Justice Powell was the most consistent, voting with the property owner
six times; Chief Justice Rehnquist-five times, as was the combination of Chief
Justice Burger and Justice Scalia; Justice White-four times; Justice
O'Connor-four times counting her predecessor, Justice Stewart; Justice
Marshall-thrice; Justice Brennan-twice; Justice Stevens-once; Justice
Blackmun-none. Justice Kennedy's record, as a circuit judge, appears to have
been more mixed than Justice Powell's on takings issues. Thus, the personnel
change is unlikely to bring harmony to this area.
supra note 76; Williams,
supra note 28, at 200 ("extraordinary degree of inexperience and even naivete which the Court has
demonstrated in handling land use issues"); B. ACKERMAN,
supra note 61, at 235 n.2 (1977) (taking cases often invoke Justice Holmes' test in
"parody of stare decisis"); Rose, Mahon
Reconstructed: Why The Takings Issue is Still a Muddle,
57 S. CAL. L. REV. 561, 566 (1984) (Court's takings
"test . . . is deeply flawed").
Fred F. French Inv. Co. v. City of New York, 39 N.Y.2d 587, 594, 350 N.E.2d 381, 385, 385, N.Y.S.2d 5, 9 (1976).
n81. In addition to the takings clause, the due process clauses of the 5th and 14th
amendments, and the contracts clause (U.S. CONST. art. I,
§ 10, cl. 1 ("No state shall . . . pass any . . . Law impairing the Obligation of Contracts")) all recognize property rights in some fashion.
Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 185 (1985). There is abundant literature on the question of whether the doctrine of
"inverse condemnation" (i.e., analogizing over-regulation to the exercise of eminent domain) is
supra note 28; C. HAAR,
supra note 73.
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987).
n84. The Burger Court also briefly adopted heightened scrutiny under the contracts
clause, but returned to deferential review a few years later.
Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978)
Exxon Corp. v. Eagerton, 462 U.S. 176 (1983).
supra note 70, at 726 ("the tests that modern courts use to determine whether a land use regulation is
a violation of substantive due process or a taking have become so intertwined
that it is difficult to distinguish between them").
Hall v. Santa Barbara, 833 F.2d 1270, 1281 n.26 (9th Cir. 1987) (casting doubt on
"[t]he rationality of rent control vel non" and remanding for trial of its efficacy)
Lochner v. New York, 198 U.S. 45, 58 (1905) ("[t]here is, in our judgment, no reasonable foundation for holding [a law
limiting working hours to 10 hours a day or 60 hours a week] to be necessary or
appropriate as a health law to safeguard the public health or the health of the
[employee]"). In both cases, the respective courts thought they were applying neutral
principles, and rejected the notion that they were
"substituting the judgment of the court for that of the legislature."
Lochner, 198 U.S. at 56-57;
Hall, 833 F.2d at 1280.
Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1978).
Agins v. Tiburon, 447 U.S. 255, 261 (1980).
Agins, the Court cited to
Nectow v. City of Cambridge, 227 U.S. 183 (1928), as the source of this requirement, although it had been instrumental earlier
Agins, 447 U.S. at 260.
n91. Public interest, public purpose and public welfare are interchangeable terms
relating to the substantive due process requirement that legislation serve
legitimate ends. When the Court disapproves of the legislature's objectives,
it is apt to declare them void of public purpose.
Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 250 (1978) (Minnesota pension protection act invalid under the contracts clause because
"enacted to deal with a broad, generalized economic or social problem");
Lochner v. New York, 198 U.S. 45, 57 (1905) (maximum hour law for employees
"involves neither the safety, the morals, nor the welfare of the public . . .
the interest of the public is not in the slightest degree affected by such an
n92. These first two factors are obvious substantive due process concerns. Thus, a
similar means-ends consideration also appears in property cases under the due
Nectow, 227 U.S. at 188-89;
Schad v. Borough of Mount Ephraim, 452 U.S. 61, 68 (1981) ("an ordinance restrictive of property use will be upheld, against due process
attack, unless its provisions 'are clearly arbitrary and unreasonable, having
no substantial relation to public health, safety, morals or general welfare'").
Williamson County Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 172 (1984) ("regulation [that is] so restrictive that it denies a property owner all
reasonable beneficial use of its property . . . has the same effect as an
appropriation on the property for a public use").
Penn Central, 438 U.S. at 124. As it turns out, a permanent physical occupation of land, however trivial,
will effectuate a taking.
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).
See infra text accompany notes 306-525.
n95. The regulatory and possessory takings strands represent the clearest and
broadest of the Court's approaches. Others have classified takings cases into
as many as six different categories. Williams,
supra note 28, at 194 n.9. The two-strand approach used here seems the most useful
for the subject at hand.
Loretto, 458 U.S. at 435-36 (permanent physical occupation
"effectively destroys each of [the owner's] rights . . . it forever denies the
owner any power to control the use of the property . . . [he] can make no
nonpossessory use . . . [and occuption] will ordinarily empty the right [to
transfer or sell] of any value").
n97. Justice Marshall stated that a physical intrusion is
"a property restriction of an unusually serious character."
Id. at 426. Any such governmental action constitutes a taking
"without regard to the public interests that it may serve"
(id.) and apparently without regard to the quantum of economic harm caused (id. at 436). Thus, Justice Marshall stated emphatically,
"a permanent physical occupation
is unquestionably a taking."
Id. at 435 n.12 (emphasis in original).
Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987), where the Court invalidated a requirement attached to a development permit
under the California Coastal Act that a property owner dedicate a lateral
easement for beach access before she could increase buildable area on the
parcel. The Court invoked its possessory takings cases to justify heightened
scrutiny of the regulation.
Id. at 834.
"too far" principle has also been employed to describe other constitutional safeguards.
Southern Pacific Co. v. Arizona, 325 U.S. 761, 781 (1945) (burden imposed by state regulation of train lengths
"does go too far," thus violating dormant commerce clause).
See infra note 189; Rose,
supra note 79, at 566.
Agins v. Tiburon, 447 U.S. 255, 260 (1980) (land use regulation effects a taking if it
"does not substantially advance legitimate state interests . . . or denies an
owner economically viable use of his land").
n102. Indeed, the Court's first reaction to
Mahon, in the years immediately following the decision, was to ignore it. Note,
Reexamining the Supreme Court's View of the Taking Clause,
58 TEX. L. REV. 1447, 1454-55 (1980). Except for cases involving actual physical invasion of property (or hybrid
cases such as
Nollan) the Supreme Court has not found a land use regulation to be a taking of
Mahon. See Note,
supra note 70, at 724.
Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1978).
Agins, 447 U.S. at 260.
n105. This inquiry appears occasionally in lower court cases.
National Land & Inv. Co. v. Kohn, 419 Pa. 504, 524-25, 215 A.2d 597, 608 (1965).
See infra notes 191
Leading Cases of the 1983 Term, 98 HARV. L. REV. 87, 226 (1984).
Lindsey v. Normet, 405 U.S. 56, 73-74 (1972) ("[w]e do not denigrate the importance of decent, safe, and sanitary housing.
But . . . [we] are unable to perceive . . . any constitutional guarantee of
access to dwellings of a particular quality").
Inganamort v. Borough of Fort Lee, 120 N.J. Super. 286, 327, 293 A.2d 720, 742 (1972) ("[o]ne can detect a movement -- perhaps erratic, but progressive -- towards the
constitutional right to be housed. . . . It is an affront to the dignity of
tenants to provide indecent housing"),
aff'd in part
& rev'd in part,
62 N.J. 521, 303 A.2d 298 (1973). The New Jersey Supreme Court is currently considering whether to recognize a
state constitutional right to decent housing
Rodgers v. Gibson, 218 N.J. Super. 452, 528 A.2d 43 (1987) (appeal pending).
Lindsey, 405 U.S. at 74.
Contra Universal Declaration of Human Rights, Art. 25 (1), 1948-49 U.N.Y.B. 536, U.N. Sales No. 1950.1.11 ("Everyone has the right to a standard of living adequate for the health and
well-being of himself and of his family, including food, clothing, housing and
medical care. . . .").
256 U.S. 135 (1921).
Block v. Hirsh, 256 U.S. 135, 147 (1921) (summary of arguments reported).
Block, 256 U.S. at 155.
Edgar A. Levy Leasing Co. v. Siegel, 258 U.S. 242, 247 (1922) ("existing circumstances clothed the letting of building for dwelling purposes
with a public interest sufficient to justify restricting property rights in them");
Marcus Brown Holding Co., Inc. v. Feldman, 256 U.S. 170 (1921).
Chastleton Corp. v. Sinclair, 264 U.S. 543 (1924).
Miller v. Board of Pub. Works, 195 Cal. 477, 485, 234 P. 381, 383 (1925) ("the police power is not a circumscribed prerogative, but is elastic and, in
keeping with the growth of knowledge and the belief in the popular mind of the
need for its application, capable of expansion to meet existing conditions of
modern life and thereby keep pace with the social, economic, moral, and
intellectual evolution of the human race. In brief, 'there is nothing known to
the law that keeps more in step with human progress than does the exercise of
Lochner mode of judicial review waned, the political branches were given greater
leeway in defining the public interest.
Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 418 n.25 (1983) (if the
"legislature is functioning properly, selection of a public purpose and
determinations of necessity and appropriateness should be left to it") (citing Note,
A Process-Oriented Approach to the Contract Clause,
89 YALE L.J. 1623, 1645 (1980));
Day-Brite Lighting v. Missouri, 342 U.S. 421, 424-25 (1952) ("[t]he public welfare is a broad and inclusive concept . . . our recent cases .
. . leave debatable issues as respects business, economic, and social affairs
to legislative decision").
n114. Congress' findings are illustrative:
"The Congress finds and declares that . . . there is a shortage of adequate and
affordable housing throughout the Nation, especially for low- and
moderate-income and elderly and handicapped persons." Condominium and Cooperative Conversion Protection and Abuse Relief Act of
1980, Pub. L. No. 96-399, 94 Stat. 1672 (1987) (codified at
15 U.S.C. § 3601(a)(1)(1988) [hereinafter Federal Condominium Act].
See also Stewart B. McKinney Homeless Assistance Act, Pub. L. No. 100-77, 101 Stat. 484
(1987) (codified at
42 U.S.C. § 11301 (Supp. 1987)) ("Congress finds that . . . the Nation faces an immediate and unprecedented
crisis due to the lack of shelter for a growing number of individuals and
families, including elderly persons, handicapped persons, families with
children, Native Americans, and veterans").
n115. Justice Douglas' understatement is easily appreciated:
"[b]eing uprooted and put into the street is a traumatic experience."
Lindsey v. Normet, 405 U.S. 56, 82 (1972) (Douglas, J., concurring and dissenting).
Budhu v. Grasso, 125 Misc. 2d 284, 287, 479 N.Y.S.2d 303, 306 (N.Y. Civ. Ct. 1984) ("[e]viction is a serious hardship for senior citizens, long term tenants, and
the disabled. Moving often means harmful amounts of physical effort for senior
citizens and may be nearly impossible for the disabled. . . . Yet, these
people are often singled out by landlords for eviction because they often have
been in the apartment for many years and thus pay lower rents"). On health problems associated with eviction of elderly tenants generally,
Conversion of Apartments to Condominiums: Social and Economic Regulations under
the California Sub-division Map Act,
16 CAL. W.L. REV. 466, 467 (1980).
See also LeGates
& Hartman, supra note 7, at 236 ("[t]he trouble, cost, psychological trauma and political impotence associated
with forced displacement represent a real hardship for the elderly and many
n117. See, for example, the New Jersey Senior Citizens and Disabled Protected
N.J. STAT. ANN. § 2A:18-61.23 (West 1987):
[T]he forced eviction and relocation of elderly persons from their established
homes and communities harm the mental and physical health of these senior
citizens, and . . . these disruptions in the lives of older persons affect
adversely the social, economic and cultural characteristics of communities of
the State, and increase the costs borne by all State citizens in providing for
their public health, safety and welfare. . . . The Legislature, therefore,
declares that it is in the public interest of the State to avoid the forced
eviction and relocation of senior citizen tenants wherever possible. . . .
supra note 8, at 1840-41 ("[t]he luckiest of the displaced suffer only the economic losses of moving [and]
higher rents. . . . Forced to choose between feeding their families and
paying the rent, many are driven into the streets"); Stewart B. McKinney Homeless Assistance Act, Pub. L. No. 100-77,
§ 102, 101 Stat. 484 (1987) ("[t]he Congress finds that . . . the Nation faces an immediate and unprecedented
crisis due to the lack of shelter for a growing number of individuals and
families"); Homeless Relief Pilot Project,
CAL. GOV'T CODE § 15290 (West 1988); N.Y. Times, May 10, 1988, at A30, col. 1;
Rodgers v. Gibson, 218 N.J. Super. 452, 457, 528 A.2d 43, 45, (1987) ("inability [of homeless] to obtain shelter is primarily the result of a profound
scarcity of any kind of living accommodation affordable" to them).
supra note 7, at 236 ("the total number displaced annually is at least 2.5 million"); Note,
supra note 8, at 1840 n.32 (same). The displacement of tenants without readily
available alternate housing has been referred to as the
"most intractable of all the problems spawned by the condominium boom." Proxmire,
Introduction to Symposium on the Law of Condominiums, 48 ST. JOHN'S L. REV. at xi, xiv (1974).
Chicago Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d 732, 737 (7th Cir. 1987) (rejecting suggestion
"that the actual purpose behind the [Chicago Residential Landlord and Tenant]
Ordinance is simply to 'provide one group with an economic advantage over
another group' . . . rather than to protect the public health or welfare").
The most serious recent case of this nature analyzed the
"public use" requirement for a state's exercise of eminent domain. In
Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984), the Court upheld the Hawaii Land Reform Act of 1967, under which the state
condemned and then subdivided concentrated land holdings in an effort to
alleviate a volatile housing market. Property owners claimed that the act
affected the purely private interests of individual tenants by mandating a
transfer of title from each property owner to his tenant.
Cf. R. EPSTEIN, TAKINGS: PRIVATE PROPERTY AND THE LAW OF EMINENT DOMAIN 181
"The [Hawaii] statute allows tenants as a class to take the reversion from the
landlord. These takings do not become something else simply because a large
number of tenants is involved. In no individual case is the property used for
a pure public good. . . ."
The Court rejected this substantive due process inquiry. It reaffirmed the
highly defferential approach of
Berman v. Parker, 348 U.S. 26 (1954). Here, the Court upheld the constitutionality of eminent domain for
"[s]ubject to specific constitutional limitations, when the legislature has
spoken, the public interest has been declared in terms well-nigh conclusive."
Id. at 32.
Miller v. Schoene, 276 U.S. 272, 279 (1928) (that certain private interests may benefit from the restrictions placed upon
the property of others does not establish that those restrictions are not in
the public interest).
n121. It is
"beyond dispute" that the purpose of
"preserv[ing] rental housing opportunities for low and moderate income residents
. . . is within the bounds of the [municipal] police power."
Traweek v. San Francisco, 659 F. Supp. 1012, 1023 (N.D. Cal. 1984).
Tirolerland v. Lake Placid 1980 Olympic Games, 592 F. Supp. 304 (N.D.N.Y. 1984) (rent and tenant selection ordinance served public, not private, purpose);
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 579-80, 414 A.2d 1246, 1251 (Ct. App. 1980) (act benefiting mobile home owners had public purpose);
Eisen v. Eastman, 421 F.2d 560, 567 (2d Cir. 1969) (there is an overriding social interest in adequate housing for the populace);
supra note 28, at 564 n.254 ("it would seem that the owner's use of the premises to provide shelter for
members of the public would amount to 'affecting the premises with a public
Midkiff, 467 U.S. at 243-44.
Block v. Hirsh, 256 U.S. 135, 156 (1921).
Agins v. Tiburon, 447 U.S. 255, 260 (1980).
n125. The fundamental requirement of rationality in legislation may trace its
origins in this country to
McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819), where Chief Justice Marshall issued his now famous statement:
"Let the end be legitimate, let it be within the scope of the constitution, and
all means which are appropriate, which are plainly adapted to that end, which
are not prohibited, but consist with the letter and spirit of the constitution,
Id. at 421.
n126. Chief Justice Marshall recognized this in
the degree of [a law's] necessity, as has been very justly observed, is to be
discussed in another place . . . to undertake here to inquire into the degree
of its necessity, would be to pass the line which circumscribes the judicial
department and to tread on legislative ground. This court disclaims all
pretensions to such power.
Id. at 431.
n127. The Court may not, however, be so deferential in cases of physical occupation.
See infra note 137.
Ferguson v. Skrupa, 372 U.S. 726, 731 (1963) (legislature
"was free to decide for itself" what legislation was needed to advance the public interest);
Williamson v. Lee Optical, 348 U.S. 483, 487 (1955) ("it is for the legislature, not the courts, to balance the advantages and
disadvantages" of a law);
Olsen v. Nebraska, 313 U.S. 236, 246 (1941) ("[w]e are not concerned . . . with the wisdom, need, or appropriateness of the
legislation. There is no necessity for the state to demonstrate before us that
United States v. Carolene Products, 304 U.S. 144, 152-53 (1938) ("the existence of facts supporting the legislative judgment is to be presumed");
Nebbia v. New York, 291 U.S. 502, 537 (1934) ("a state is free to adopt whatever economic policy may reasonably be deemed to
promote public welfare, and to enforce that policy by legislation adapted to
Sproles v. Binford, 286 U.S. 374, 388 (1932) ("debatable questions as to reasonableness are not for the courts but for the
Schad v. Borough of Mount Ephraim, 452 U.S. 61, 68 (1981) (land use laws are valid if
"rationally related to legitimate state concerns");
Penn Central Transp. Co. v. New York, 438 U.S. 104, 133 n.29 (1978) ("judicial inquiry focuses upon whether the challenged restriction can reasonably
be deemed to promote the objectives of the [legislation]").
Andrus v. Allard, 444 U.S. 51, 58-59 (1979): ("[E]ven if there were alternative ways . . . Congress was free to choose the
method it found most efficacious and convenient. 'The legislature is
authorized to pass measures for the protection of the people . . . in the
exercise of the police power, and is itself the judge of the necessity or
expediency of the means adopted.'") (citation omitted).
Secretary of State of Md. v. Joseph H. Munson Co., 467 U.S. 947, 979 (1984) ("rent control is thought to make rental housing less available");
Chicago Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d 732, 741 (7th Cir. 1987) (a
"strong case can be made for the unreasonableness of the [Chicago Residential
Landlord and Tenant] ordinance").
Pennell v. City of San Jose, 485 U.S. 1, 15-16 (1988) (tempering rent increases so as to avoid hardship on low-income tenants does
not substantially advance the legitimate goals of rent control) (Scalia, J.,
Griffin Dev. Co. v. City of Oxnard, 39 Cal. 3d 256, 268, 703 P.2d 339, 346, 217 Cal. Rptr. 1, 8 (1985) (condominium conversion ordinance merely regulates the form of ownership,
"can in no way affect the health, safety, or welfare of the city") (Mosk, J., dissenting). In
Nash v. City of Santa Monica, 37 Cal. 3d 97, 688 P.2d 894, 207 Cal. Rptr. 285 (1984),
470 U.S. 1046 (1985), Chief Justice Bird of the California Supreme Court subjected an eviction law
to strict scrutiny, believing that it burdened a landlord's fundamental right
to go out of business. However, she concluded that the
"ordinance was necessary to serve a compelling governmental objective."
Id. at 110 (Bird, C.J., concurring).
833 F.2d 1270 (9th Cir. 1987).
Id. at 1273. The complaint had alleged a substantive due process violation in that rent and
eviction controls effected a taking of property that was neither for a private
purpose nor justly compensated.
Id. at 1280. This higher standard prompted three judges to dissent from the denial of
rehearing en banc. They saw this substantive due process aspect of the
decision as causing
"even broader turmoil in other fields of economic regulation."
Id. at 1284 (Schroeder, J., dissenting). The dissenters accused the majority of
subjecting constitutional analysis to an
"economists' assessment of . . . practical effectiveness."
Id. The dissent predicted that
Hall would serve as
"authorization for broad, wholesale attacks upon rent control . . . [and other]
economic regulation," (id.) which it has.
See supra note 37.
483 U.S. 825 (1987).
Id. at 841 (emphasis in original). Similar to the majority in
Hall, Justice Scalia emphasized that the nexus requirement in takings cases was
stricter than that in due process and equal protection cases, and read the
"verbal formulations" as imposing different standards.
Id. at 834 n.3. In making this determination, Justice Scalia focused on the adjective
"substantial," long used to describe the nexus requirement in takings cases. He did not
explain, however, why, despite the strong adjective, the Court had not since
Nectow v. City of Cambridge, 277 U.S. 183 (1928), stricken a law for failure to accomplish legitimate state ends. Moreover,
Justice Scalia's use of different rationality requirements under the two
property clauses is not explicable by constitutional theory. Higher standards
are usually associated with preferred constitutional values, such as
fundamental rights or protection of political processes. Of course, these
values may be abridged by land use controls as with any other form of
Schad v. Borough of Mount Ephraim, 452 U.S. 61 (1981);
Moore v. East Cleveland, 431 U.S. 494 (1977). But, unless property itself is a fundamental right under the takings clause
(but not under the due process clause), it is not at all clear how greater
justification can be demanded of the legislature in this particular means-ends
Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211 (1986) (rejecting takings challenge to federal pension law previously upheld against
due process claims).
"Although [the earlier cases] were due process cases, it would be surprising
indeed to discover now that in both cases Congress unconstitutionally had taken
the assets of the employers there involved."
Id. at 223.
Nollan, 483 U.S. at 843 n.1 (Brennan, J., dissenting).
Nollan presents an example of the
"unconstitutional conditions" doctrine. The state may not exact concessions in return for discretionary
privileges if the concession would be independently unconstitutional when
imposed alone. In
Nollan, the state obtained an easement in exchange for permission to rebuild an
existing structure. Since the state could not have simply taken the easement
without payment, making the owner's
"voluntary" grant of the easement a condition to a development permit created a risk that
the permit process was being used as an end-run around the compensation
requirement. Suspicion is overcome if the state can demonstrate a
"substantial" nexus between the condition imposed and the purpose for requiring permit
approval in the first place. The majority found the requisite nexus
"between the condition and the original purpose of the building restriction" lacking.
Id. at 837. The dissent saw a satisfactory relationship between the conditional denial of
permission to rebuild the Nollans' coastal property and the public's need for
"[E]ven under the Court's cramped standard, the permit condition imposed in this
case directly responds to a particular type of burden on access created by a
Id. at 863 (Brennan, J., dissenting).
Hall was partly grounded on the court's
"significant doubt" that rent and eviction controls substantially advance their alleged
Hall, 833 F.2d at 1281. The court stated that giving mobile home owners the right to sell their homes
on site, and their successors eviction protection, could increase the market
price of mobile homes. This would exacerbate, rather than serve, the
legislature's goal to alleviate
"a critical shortage of low and moderate income housing."
Id. See Hirsch
Legal-Economic Analysis of Rent Controls in a Mobile Home Context: Placement
Values and Vacancy Decontrol,
35 UCLA L. REV. 399 (1988) (supporting
Hall from an economist's perspective).
Perhaps, when a court finds legislative means ill-suited to legislative
purposes, it has focused on the wrong ends. Thus, in
Hall, the court did not consider the public interest in protecting mobile home
owners' investments. The discussion of state interests in
Nollan was similarly narrow.
n141. Judge Posner wrote at length regarding the evils of rent control:
"[a] growing body of empirical literature . . . [shows] that the market for
rental housing behaves as economic theory predicts: if price is artificially
depressed . . . supply falls and many tenants, usually the poorer and the newer
tenants, are hurt."
Chicago Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d 732, 742 (7th Cir. 1987) (Posner, J., concurring). Similarly, Judge Kozinsky noted a
"growing concensus that 'rent control . . .' actually exacerbat[es] the problems
it is intended to ameliorate. The rationality of rent control vel non may have
to be reassessed in light of this growing body of thought on the subject."
Hall, 833 F.2d at 1281 n.26.
Many authorities reject Judge Kozinsky's pessimism.
See infra note 172. Indeed, based on the growing popularity of eviction and rent
protection, scores of legislative bodies across the country would have to be
similarly mistaken in their understandings of cause and effect. Seven states,
the District of Columbia and more than 200 other cities, including some of the
nation's largest, containing approximately 3 million units, or 10% of the
nation's privately owned housing supply, are currently subject to rent control.
The Shattered Dream of American Housing Policy -- The Need for Reform,
26 B.C.L. REV. 655, 665 (1985); Baar,
supra note 10, at 725 n.1; Rabin,
supra note 2, at 527. Mobile home protection akin to that afforded under the Santa
Barbara scheme is commonplace. In California alone, more than 75 jurisdictions
control mobile home park rents. Hirsch
supra note 140, at 407. Moreover, few other options for handling contemporary
housing crises are available, at least to local governments who feel the
pressure most acutely.
See infra note 160-75 and accompanying text.
n142. Contrast the majority's statement in
Hall ("there would be significant doubt whether [the state's] purposes [in alleviating
a critical shortage of low- and moderate-income housing] are achieved, or could
rationally be thought achievable, by means of the ordinance" (Hall, 833 F.2d at 1281)) with Justice Douglas' statement in
Williamson v. Lee Optical, 348 U.S. 483, 487-88 (1955), (a
"law may exact a needless, wasteful requirement in many cases . . . [b]ut the
law need not be in every respect logically consistent with its aims to be
constitutional" and Justice Scalia's statement in a recent commerce clause case,
CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 96-97 (1987) (Scalia, J., concurring) ("a law can be both economic folly and constitutional").
See also supra note 128 for other statements of a deferential standard of review under the
due process clause.
Pennell v. City of San Jose, 485 U.S. 1, 21-22 (1988) (Scalia, J., dissenting) ("[u]nless we are to abandon the guiding principle of the Takings Clause that
'public burdens . . . should be borne by the public as a whole,' [taxing and
spending] is the only manner that our Constitution permits" to alleviate tenant hardship).
n144. Sophisticated econometrics can support the conclusion that price regulation
"a taking in the economic sense." Hirsch
supra note 140, at 449. But the fifth amendment does not incorporate any particular
economic model (Ferguson v. Skrupa, 372 U.S. 726, 732 (1963)), especially since the ultimate question in takings jurisprudence -- whether
"justice and fairness" precludes the imposition of particular burdens (Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1978)) -- cannot be answered by economic science alone.
n145. Justice Brennan's dissent in
Nollan accused the majority of imposing
"a standard of precision for the exercise of a State's police power that has
been discredited for the better part of this century."
Nollan, 483 U.S. at 842.
The Attorney General's Draft Guidelines for the Evaluation of Risk and
Avoidance of Unanticipated Takings (May 16, 1988), promulgated under an
executive order, proposed a strict standard of review similar to that adopted
"The proposed policy or action both must have the purpose of furthering, and
must significantly further, the purpose embodied in the statute. It is not
enough that the policy or action or regulation might rationally advance the
purpose purported to be served."
Id. at 15, No. 12,630, 3 C.F.R. 554 (1988). The Attorney General relied
Nollan, Mahon and
Hodel in reaching his conclusion.
Id. at 11. But, as discussed herein, the Attorney General's guidelines take a far
more activist view of the takings clause than is necessary or appropriate.
"We are inclined to be particularly careful about [requiring a substantial
means-ends relationship] . . . where the actual conveyance of property is made
a condition to the lifting of a land use restriction, since in that context
there is heightened risk that the purpose is avoidance of the compensation
Nollan, 483 U.S. at 841.
n147. Of course, this may in fact be true. Still, it is not clear why the takings
clause should be used to police legislative rationality or fairness any more
than the due process and equal protection clauses. Strict scrutiny may be
appropriate where certain interests are systematically excluded from the
political process, as in cases suggested by Justice Stone's famous footnote in
United States v. Carolene Products, 304 U.S. 144, 152-53 n.4 (1938). But, absent compelling reasons for preferring judicial values over legislative
choices, strict scrutiny creates crises in confidence and legitimacy.
See generally J. ELY, DEMOCRACY AND DISTRUST, A THEORY OF JUDICIAL REVIEW (1980).
"Whether the legislature takes for its textbook Adam Smith, Herbert Spencer,
Lord Keynes or some other is no concern of ours."
Ferguson, 372 U.S. at 732.
n149. The heightened scrutiny of
Nollan may only have been intended to apply in possessory takings cases. The Court
indicated it would
"be particularly careful about the adjective [substantial] where the actual
conveyance of property is made a condition to the lifting of a land use
restriction. . . ."
Nollan, 483 U.S. at 841.
Seawall Assoc. v. City of New York, 74 N.Y.2d 92, 542 N.E.2d 1059, 544 N.Y.S.2d 542 (1989) (invoking
Nollan's heightened scrutiny requirement in regulatory takings analysis).
See infra note 468.
n150. Landlords challenging the San Jose law did not dispute the city's interest in
"preventing excessive and unreasonable rent increases" caused by a general housing shortage.
Pennell v. City of San Jose, 485 U.S. 1, 12 (1988). But, they argued that
"alleviating individual tenant hardship is . . . not a 'policy the legislature
is free to adopt' in a rent control ordinance."
Id. (quoting Reply Brief for Appellants at 16). The Court soundly rejected the
contention in broad terms. Chief Justice Rehnquist wrote favorably of efforts
to avoid tenant hardship, and held that San Jose's tenant protection measures
rationally furthered valid consumer protection goals. In dicta, the Chief
Justice suggested approval of other measures that avoid tenant displacement and
"social costs" of dislocation, which could be
Id. at 14 n.8. Justice Scalia dissented.
In another recent case,
Keystone Bituminous Coal v. DeBenedictis, 480 U.S. 470(1987), the Court upheld the modern version of the Pennsylvania subsidence act
invalidated 65 years earlier in
Mahon. In barely avoiding a direct overruling of
Mahon, the Court rejected the notion that, under the takings clause,
"courts 'have a license to judge the effectiveness of legislation, or that
courts are to undertake [a] 'least restrictive alternative' analysis. . . ."
Id. at 487 n.16.
Eisen v. Eastman, 421 F.2d 560, 567 (2d Cir. 1969) ("[w]hether, as some believe, rent control does not prolong the very condition
that gave it birth, is a policy issue not appropriate for judicial concern").
"unconstitutional conditions" doctrine of
Nollan is inapposite in the eviction context. Statutory extension of leasehold is
not an exaction imposed in return for some discretionary privilege. Moreover,
under the doctrine, the exaction must first be adjudged unconstitutional if
imposed alone. Imposing an easement, as in
Nollan, can readily be seen as a taking, although there was some dispute there over
the extent of the Nollans' legal interest in the coastal property. Whether an
eviction law is similarly unconstitutional, standing alone, is what the instant
inquiry is all about.
See infra note 172.
See infra notes 160-68.
Cotati Alliance for Better Hous. v. City of Cotati, 148 Cal. App. 3d 280, 292-93, 195 Cal. Rptr. 825, 833 (1983).
Construction Indus. Ass'n v. City of Petaluma, 522 F.2d 897, 905 n.10 (9th Cir. 1975) ("'exclusionary zoning' is a phrase popularly used to describe suburban zoning
regulations which have the effect, if not also the purpose, of preventing the
migration of low and middle-income persons"). Restrictive zoning and slow growth movements suppress the supply of land
available for high-density housing. This usually translates into fewer rental
units, particularly low-income units. Mobile homes are a special case here as
well. Many communities employ discriminatory zoning, and place mobile homes
"under a virtual quarantine." Note
Mobile Home Parks and Connecticut's Regulatory Scheme: A Takings Analysis,
17 CONN. L. REV. 811, 812 (1985).
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 574, 414 A.2d 1246, 1248 (Ct. App. 1980) ("many communities have enacted zoning regulations which exclude [mobile homes]
entirely or severely limit the areas where they may be placed").
E.g., REAL ESTATE RESEARCH COUNCIL OF SOUTHERN CALIFORNIA, REAL ESTATE AND
CONSTRUCTION REPORT 47 (1987) (average price of single family homes in survey
for Los Angeles County was $ 215,300 in October, 1987). In some areas, prices
increased 25% over the previous year.
Id. at 42. Nationally, the cost of home ownership has gone up 375% since 1967.
Id. at 52.
See also L.A. Times, Aug. 7, 1988, at 8, col. 1 ("75% of California families cannot qualify to buy [the median-priced] home").
n158. Condominium ownership first became widely viable in 1961 with the enactment of
legislation authorizing Federal Housing Authority (FHA) mortgage insurance for
condominiums. National Housing Act, Pub. L. No. 87-70,
§ 104, 75 Stat. 160 (1961). But, it was not until the 1970s that widespread
development of condominium projects began in major urban areas.
Parkchester Apts. Co. v. Lefkowitz, 41 N.Y.2d 987, 988, 363 N.E.2d 712, 712 (1977) (Jasen, J., dissenting).
See generally LeGates
supra note 7, at 230 n.16 (widespread condominium conversions began after 1977);
Condominium Conversion Legislation: Limitation on Use or Deprivation of Rights?
-- A Reexamination,
15 NEW ENG. L. REV. 815, 816 (1980). For studies on the breadth of the conversion problem generally, see J.
SOLOWAY, CONDOS, CO-OPS, AND CONVERSIONS: A GUIDE ON RENTAL CONVERSIONS FOR
LOCAL OFFICIALS (1979); U.S. DEP'T OF HOUSING AND URBAN DEVELOPMENT, THE
CONVERSION OF RENTAL HOUSING TO CONDOMINIUMS AND COOPERATIVES (1980)
[hereinafter HUD CONVERSION STUDY],
reprinted in G. STERNLIEB
& J. HUGHES, THE FUTURE OF RENTAL HOUSING 122 (1981).
See generally Note,
Displacement in Gentrifying Neighborhoods: Regulating Condominium Conversion
Through Municipal Land Use Controls,
63 B.U.L. REV. 955, 961 (1983); Note,
supra note 8.
E.g., National Housing Act, Pub. L. No. 90-448,
§ 236, 82 Stat. 498 (1968) (mortgage subsidies for housing projects built by
non-profit corporations and other entities).
n161. By the mid-1970s, the Department of Housing and Urban Development was failing
to implement the mortgage subsidy program, prompting a flood of lawsuits.
Taylor v. Harris, 452 F. Supp. 88 (D. Conn. 1978);
Abrams v. Hills, 415 F. Supp. 550 (C.D. Cal.),
547 F.2d 1062 (9th Cir. 1976).
n162. Federal assistance for low-income housing programs fell from $ 27 billion in
1981 to $ 11.6 billion in 1986. Pear,
Replacing Lost U.S. Funding, N.Y. Times, Oct. 4, 1987, at 8, col. 1. Federal funding fell to less than $ 7
billion in 1987. Myers,
The Affordability Gap, L.A. Times, May 15, 1988, at
§ VIII (Real Estate), at 9, col. 4. The federal government has, of course, been
the greatest provider of housing subsidies through the Existing Housing
Assistance Payments Program, under section 8 of the Housing and Community
Development Act of 1974.
42 U.S.C. § 1437f (1982
& Supp. 1987). The program is implemented by regulations found at 24 C.F.R. 882
(1989). Yet, as many as 1.4 million households may lose their federal rent
subsidies by the turn of the century. Stout,
Rental Subsidies in Doubt, N.Y. Times, May 8, 1988, at 8, col. 1.
"Since 1981, Federal assistance for adding low- and moderate-income housing
units declined almost 70 percent."
Id. at 8, col. 5.
n163. See, for example,
United States v. Wells Fargo Bank, 485 U.S. 351 (1988), which upheld the Deficit Reduction Act of 1984, Pub. L. No.
§ 98-369, 98 Stat. 939 (1984), which eliminated the estate tax exemption for
public housing agency bonds; Tax Reform Act of 1986, Pub. L. No. 99-514,
§ 251, 100 Stat. 2183 (1986) (reducing investment tax credit for housing
rehabilitation expenditures). The 1986 act also eliminated several tax
incentives for low-income housing, such as tax-exempt multifamily rental
housing bonds, accelerated depreciation schedules, and deductions for
construction interest and taxes. These were replaced by a unitary low-income
§ 252(b). One real estate analyst has stated that the act has
"effectively eliminated the possibility of any major future housing program that
requires public participation." N.Y. Times, May 20, 1988, at A30, col. 3. For further analysis of the net
effect of tax changes for housing, see RESEARCH INST. OF AMERICA, COMPLETE
ANALYSIS OF THE '86 TAX REFORM ACT 254-78 (1986).
n164. Local government has long been the principal regulator of housing and housing
conditions. Federal involvement has generally been limited to emergency
conditions (for example, wartime rent control) and setting broad policy. Even
with respect to the latter, the federal role appears to be declining. In 1970,
Congress enacted a national housing policy of a
"decent home" for every American,
42 U.S.C. § 1441 (1970), and conditioned housing grants to municipalities on the latter's
enactment of housing codes. As the housing crisis worsens (e.g., COMPTROLLER GENERAL, RENTAL HOUSING: A NATIONAL PROBLEM THAT NEEDS IMMEDIATE
ATTENTION 29-30 (1979)), Congress increases its preference for local solutions.
See Federal Condominium Act,
15 U.S.C. § 3601(a) (1988). The act mostly recommends the enactment of state and local laws.
§§ 3610-3612. One salient exception is with public and federally supported
housing projects where tenants are protected against arbitrary eviction.
24 C.F.R. 866.4(1) (1977).
Staten v. Hous. Auth. of Pittsburgh, 469 F. Supp. 1013 (W.D. Pa. 1979);
Tyson v. New York City Hous. Auth., 369 F. Supp. 513 (S.D.N.Y. 1974). The requirements of procedural due process provide additional protection
against arbitrary eviction from public housing.
See generally R. SCHOSHINSKI,
supra note 1, at 755-57.
See supra notes 162-63.
E.g., CAL. CONST. art. XIIIA (restriction on property taxes); art. XIIIB (voter
approval required for spending increase); art. XXXIV (voter approval required
for housing projects).
See generally Judson,
supra note 4, at 180 n.4. But, approximately one-half of the states provide some
form of minimal protection to tenants as part of the condominium conversion
CAL. GOV'T CODE § 66452.8 (West 1989);
CONN. GEN. STAT. § 47-88(c) (1981);
FLA. STAT. § 718.503 (1979); Condominium Property Act
§ 22, ILL. REV. STAT. ch. 30 para. 322 (1974). New Jersey appears to be an
exception to the general trend, having enacted statewide eviction controls.
N.J. STAT. ANN. § 2A: 18-61.1 (West 1989). For a comprehensive analysis of the New Jersey law, see
Beyond URLTA: A Program for Achieving Real Tenant Goals,
11 HARV. C.R.-C.L. L. REV. 1, 39-44 (1976).
n168. For instance, in California, the legislature has in several places recognized
the problem and has set forth policy and minimum requirements for cities to
CAL. GOV'T CODE § 66452.50 (West 1989). Where the state itself exercises direct authority over land use,
such as in the coastal zones, it has enacted regulations regarding conversion
CAL. PUB. RES. CODE § 30610 (West 1989).
supra note 141, at 656.
"Most land use controls are still adopted and imposed at the local level." Williams,
supra note 28, at 203.
n171. REPORT OF THE PRESIDENT'S COMMISSION ON HOUSING 199-209 (1982) [hereinafter
See also DePalma,
Baby Boomers Reshaping the Housing Market, N.Y. Times, Mar. 6, 1988,
§ 10 (Real Estate), at 1, col. 2 ("construction has lagged so far behind demand over the last decade that there
remains a burdensome shortage of nearly all types of housing" in New York City).
See supra note 141. Some analysts believe that rent control has a long-term deleterious
effect on the housing supply.
E.g., PRESIDENT'S COMMISSION,
supra note 171, at 91-92; Hoeflich
supra note 140, at 664; Comment,
Challenging Rent Control: Strategies for Attack,
34 UCLA L. REV. 149, 150-53 (1986). Indeed, an economist's model might support that conclusion.
supra note 140. But the vast systemic changes that are necessary to yield a more
efficient housing market are beyond the scope of municipal powers and
resources. Until serious programs are undertaken at the federal level, rent
control is likely to spread as a symptomatic remedy for housing scarcity.
For contrary views regarding the economic aspects of rent control, see
Economics and Rent Regulation: A Call for a New Perspective, 13 REV. L.
& SOC. CHANGE 975, 976 (1984) ("basic supply and demand model is inadequate for an understanding of the
residential rental housing market . . . there is little empirical data to
support many of the economic criticisms made about the new generation of rent
regulations"); HARBRIDGE HOUSE, A STUDY OF RENT AND EVICTION CONTROLS IN THE COMMONWEALTH
OF MASSACHUSETTS ES-2 (1974) ("statistical evidence analyzed in this study indicates that there is no sound
justification for the repeal of [rent control]. None of the available data
demonstrates that rent control harms more people than it helps, or that it
significantly impairs the supply of rental housing"); Marcuse, The Uses and Limits of Rent Regulation (Dec. 12, 1986) (report to
the New York State Division of Housing and Community Renewal (rent control does
not deter new construction; abolition of rent control would drive the poor out
of New York City); Baar,
Facts and Fallacies in the Rental Housing Market, WESTERN CITY, Sept. 1986, at 47 (multifamily housing construction in San
Francisco Bay area communities with rent control exceeds that in communities
without rent control); Gilderbloom,
Moderate Rent Control: Its Impact on the Quality and Quantity of the Housing
Stock, 17 URB. AFF. Q. 123 (1981) (rent controls do not deter new construction or
See generally THE RENT CONTROL DEBATES (P. Niebanck ed. 1985); Baar,
Peacetime Municipal Rent Control Laws in the United States: Local Design Issues
and Ideological Policy Debates, IN HOUSING AND NEIGHBORHOODS: THEORETICAL AND EMPIRICAL CONTRIBUTIONS 271-72
See infra notes 212-13.
n174. Restrictions on demolition are related to conversion controls. They would
typically be invoked where conversion from apartments to condominiums proceeds
in two steps: the razing of an existing structure and its replacement by
condominiums (rather than new apartments). Not all demolitions are injurious
to the rental housing supply. Where a building has reached the end of its
physical life, it is no longer useful for housing. Thus, the type of
demolition controls that cities enact to preserve rental housing focuses on
buildings that are still physically and economically viable as apartments.
Buildings can almost always be repaired. But at some point the cost of
rehabilitation cannot be recouped through increased rents and results in
negative economic return. This inevitable phenomenon must be distinguished
from that of recycling properties to higher and more profitable uses. The term
physical life is used here in distinction to economic life. A property has
reached the end of its economic life whenever it is more profitable to convert
the property to some other use. Even relatively young buildings can be at the
end of their economic lives as apartments if demolition and reconstruction of
condominiums or commercial uses would be economically advantageous. As
Midkiff illustrates, condemnation is also within the government's options to secure
housing opportunities. Unfortunately, the eminent domain power is most often
used to deplete housing as the history of urban renewal in this country
Berman v. Parker, 348 U.S. 26 (1954).
E.g., SANTA MONICA, CAL., MUNICIPAL CODE
§ 9420 (1988) (requiring new multifamily projects of five or more units to set
aside 15% of the units for low- or middle-income tenants);
§ 9046.1 (housing impact of new office construction must be
"mitigated" by providing low- or moderate-income housing). Either requirement may be
satisfied by payment of development fees.
n176. Justice Holmes recognized that limiting the landlord's ability to evict
tenants is important to the successful operation of rent control.
"If the tenant remained subject to the landlord's power to evict, the attempt to
limit the landlord's [rent] demands would fail."
Block v. Hirsh, 256 U.S. 135, 157-58 (1921).
Taylor v. Brown, 137 F.2d 654, 662-63 (Emer. Ct. App. 1943) (prohibition on eviction was
"appropriate . . . and not unreasonable" in furthering the purposes of rent regulations contained in the Emergency
Price Control Act of 1942); Act of Jan. 30, 1942, ch. 26, 56 Stat. 28;
Parker v. Fleming, 329 U.S. 531, 536-37 (1947) (affirming Emergency Price Control Act; purpose of eviction law was to prevent
certain speculative or manipulative
"renting or leasing practices" including practices relating to the recovery of the possession of premises);
The New Residential Tenancy Law -- Are Landlords Public Utilities,
60 NEB. L. REV. 707, 727 (1981) ("rent control would be unworkable without controlling the right to refuse renewal"). New Jersey has taken the opposite tack, establishing rent control as an
adjunct to its eviction law, and not the reverse which is typical.
N.J. STAT. ANN. § 2A:18-61.1(f) (West Supp. 1987).
n177. Preserving existing rental housing is usually pursued by laws prohibiting
condominium conversion or other
"removal" of units from the stock of rental housing. But, there is an interdependency
among rent control, removal laws and eviction protection, each of which
reinforces the others and may be indispensable to their effectiveness.
Flynn v. City of Cambridge, 383 Mass. 152, 158, 418 N.E.2d 335, 338-39 (1981);
Santa Monica Pines v. Rent Control Bd., 35 Cal. 3d 858, 868, 679 P.2d 27, 34, 201 Cal. Rptr. 593, 600 (1984) (noting that eviction protection may be crucial to the regulation of rents)
(the author was attorney for the Rent Control Board of Santa Monica).
Troy, Ltd. v. Renna, 727 F.2d 287 (3d Cir. 1984). Such an approach is particularly necessary in many eastern cities which do not
have police power authority to regulate the conversion process itself.
Hampshire House Sponsor Corp. v. Fort Lee, 172 N.J. Super 426, 412 A.2d 816 (1979);
Grace v. Town of Brookline, 179 Mass. App. Div. Adv. Sh. 2257, 399 N.E.2d 1038 (1979);
GA. CODE ANN. § 85-1605e(A) (1986);
MD. REAL PROP. CODE ANN. § 11-122(b) (1988). These cities can regulate conversions only indirectly by prohibiting
n178. In addition to just cause eviction laws, other measures respond to tenancy
interests. The most common is the judicially created defense against
Edwards v. Habib, 397 F.2d 687 (1968) (tenant may establish as a defense to an otherwise proper eviction that the
landlord's motive was in retaliation for the tenant's withholding of rent
because of housing code violations).
See also UNIF. RESIDENTIAL LANDLORD AND TENANT ACT
§ 5.101, 7B U.L.A. 503 (1985) (landlord may not increase rent, decrease services
or bring an action for possession in retaliation for protected tenant
42 U.S.C. § 1437f(d)(1)(B) (1982);
24 C.F.R. § 882.215 (1989).
See generally R. SCHOSHINSKI
supra note 1, at 717-48
& Supp. 324-31.
Eamiello v. Liberty Mobile Home Sales, 208 Conn. 620, 546 A.2d 805, 819 (1988),
109 S. Ct. 1104 (1989) (Connecticut mobile home eviction law
"serves a substantial public purpose in protecting the economic interests of
mobile home tenants in selling their homes on-site"). Special treatment of mobile home parks is often necessary because of the
unusual circumstance of mobile home residents, who are simultaneously owners
Id. at 647-48, 546 A.2d at 819; Note,
Mobilehomes: Present Regulation and Needed Reforms,
27 STAN. L. REV. 159, 166-67 (1974) [hereinafter Note,
Mobilehomes: Present Regulation] ("the most striking difference between the landlord-tenant relationships of
mobile homes and of apartments is the ramifications of eviction. Although
eviction may be traumatic for apartment dwellers, the consequences of evicting
mobile homeowners are usually more upsetting; the evicted homeowner must not
only move himself but must also move his home. The owner, in effect, faces the
options of abandoning the home, attempting to sell it, or moving it into
storage until a new pad is obtained. All these options may destroy the
homeowner's equity in his unit"); Note,
The Community and the Park Owner Versus the Mobile Home Park Resident:
Reforming the Landlord-Tenant Relationship,
52 B.U.L. REV. 810 (1972).
The actual mobility of mobile homes is largely illusory.
California Rent Controls: Rent Increase Standards and Fair Return, 8 CEB Real Property Law Reporter, No. 5, at 97 (July 1985) ("'mobile homes' are very immobile because they cost from $ 5,000 to $ 10,000 to
move" even if a replacement site can be located);
CAL. HEALTH & SAFETY CODE § 18250 (West 1984) ("[b]ecause of the high cost of moving manufactured homes and mobile homes, most
owners . . . reside within mobile home parks for substantial periods of time"); HAMILTON, RABINOVITZ, SZANTON
& ALSCHULER, INC., THE LOS ANGELES RENT STABILIZATION SYSTEM: THE MOBILE HOME
SECTOR 7 (1985) [hereinafter L.A. MOBILE HOME STUDY] ("mobile home households are significantly less mobile than other renters, with
mean lengths of tenure in their current pad locations of 9.1 years, two-thirds
longer than their counterparts in rental apartments").
CAL. HEALTH & SAFETY CODE § 18551 (West Supp. 1989) (governing
"physical removal" of mobile homes from their foundations);
CAL. VEH. CODE § 35790 (West 1985) (regulating mobile home transport).
A preponderance of mobile home owners are retired, elderly or on fixed income.
L.A. MOBILE HOME STUDY,
supra, at 6 ("mean age of the head of household in mobile home tenant families is 67 years,
25 years more than for apartment renters");
id. at 7 ("[m]obile home residents are typically of quite limited means. . . . Average
[household] income is $ 19,937, significantly less than the $ 23,634 average
for other renters"). And they have considerable investment in their homes. Modern mobile homes
"cost between $ 30,000 and $ 75,000." Note,
supra note 156, at 813. Accordingly, displacement from a park may not only have
severe psychological effects, it can mean economic ruin for a mobile home
Responding to these factors, many states provide special tenure rights for
mobile home owners, protecting them against conversions (E.g.,
CAL. GOV'T CODE §§ 7070.7(5), 65863.7 (West 1987);
CAL. CIVIL CODE § 798.56 (West Supp. 1989) (conversion of mobile home parks)) and eviction. (E.g.,
CAL. CIVIL CODE § 798.55(b) (West Supp. 1989) ("[t]he management shall not terminate or refuse to renew a tenancy, except for a
reason specified in this article and upon the giving of written notice")). The legislature's findings of necessity and public purpose appear in
CAL. CIVIL CODE § 798.55(a) (West Supp. 1989); Note,
supra note 156, at 817-18.
Several states also give mobile home owners the right to sell their homes on
CALIF. CIVIL CODE § 798.73 (West Supp. 1989);
CONN. GEN. STAT. ANN. § 21-79 (West 1985).
See also Note,
supra note 156, at 818;
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 575-76, 414 A.2d 1246, 1248 n.5 (Ct. App. 1980). This statutory right to transfer one's leasehold is thought necessary because
an uncooperative park owner could deplete a mobile home of much of its value by
requiring it to vacate the park upon sale. The difficulty in finding
alternative sites would translate into a substantially reduced price.
"[E]victed homes are worth much less when offered for sale." Note,
supra note 156, at 815 (describing how some evicted owners have lost the full value
of their homes). In an economic sense, vacant spaces carry a substantial
premium which would be capitalized into the value of the mobile home itself,
just as a pleasure boat might be worth considerably more if it came with a
slip, as opposed to the new owner having to obtain one.
Granat v. Keasler, 99 Wash. 2d, 564, 663 P.2d 830 (1983) (analyzing Seattle boat moorage eviction ordinance).
As further protection, many localities have also enacted mobile home rent
control. This enhances the premium value associated with park space since the
new owner can be assured of stable (and below market) housing costs. Put the
other way, without rent control, a park owner could raise rents so high as to
recapture any added value in the mobile home created by scarcity of sites. In
a free market, the park owner would do just that -- increase rents in that
amount whose capitalized value equaled the space premium. The mobile home
buyer (assuming a rational, well-informed investor) would be willing to pay
less for the mobile home by an amount equivalent to the space's separate value.
supra note 156, at 830 n.101 ("[b]ecause [Connecticut's] statute is designed to prevent the part owner from
depriving the home owner of his home's increase in value secured by its
location in a mobile home park, increased rents intended to recover that value
would be prohibited"). Presently, many states regulate mobile home parks, even where similar
regulation of residential tenancies is absent. For a comprehensive analysis of
the economic effects of mobile home ownership and rent control, see Hirsch
supra note 140.
Flynn v. City of Cambridge, 383 Mass. 152, 157, 418 N.E.2d. 335, 338 (1981) (accepting a legislative finding that
"[u]nless residential rents and eviction of tenants are regulated and
controlled, [a housing] emergency and the further inflationary pressures
resulting therefrom will produce serious threats to the public health, safety
and general welfare of the citizens of Cambridge");
Nash v. City of Santa Monica, 37 Cal. 3d 97, 207 Cal. Rptr. 285, 688 P.2d 894 (1984),
470 U.S. 1046 (1985) (noting the relationship of eviction and removal legislation to the public
welfare; the need to preserve low and moderate cost apartment housing
"is both 'real and substantial'").
Parker v. Fleming, 329 U.S. 531, 536-37 (1947);
Taylor v. Brown, 137 F.2d 654, 662-63 (Emer. Ct. App. 1943);
Loeterman v. Town of Brookline, 524 F. Supp. 1325, 1329 (D. Mass. 1981);
Birkenfeld v. City of Berkeley, 17 Cal. 3d 129, 148, 130 Cal. Rptr. 465, 479, 550 P.2d 1001, 1015 (1976);
Heubeck v. City of Baltimore, 205 Md. 203, 212, 107 A.2d 99, 104 (Ct. App. 1954);
Stamboulos v. McKee, 134 N.J. Super. 567, 572, 342 A.2d 529, 533 (App. Div. 1975).
Other regulatory schemes are often justified in terms of the state's interest
in preventing displacement.
Sadowsky v. City of New York, 732 F.2d 312 (2d Cir. 1984) (restricting the conversion of residential hotels was reasonably related to
legitimate state interest of preventing harassment and displacement of
Terminal Plaza Corp. v. City and County of San Francisco, 177 Cal. App. 3d 892, 910, 223 Cal. Rptr. 379, 389 (1986) ("there can be little dispute that the [conversion and demolition] ordinance
serves a legitimate governmental interest, and does so by means reasonably and
directly related to its goals");
Mayo v. Boston Rent Control Adm'r, 365 Mass. 575, 314 N.E.2d 118 (1974).
See also, Baar
supra note 10, at 10.
Pennell v. City of San Jose, 485 U.S. 1, 14 n.8 (1988) ("[t]he consideration of tenant hardship also serves the additional purpose . . .
of reducing the costs of dislocation that might otherwise result if landlords
were to charge rents to tenants that they could not afford. Particularly
during a housing shortage, the social costs of the dislocation of low-income
tenants can be severe"). See also
Edgewater Inv. Assoc. v. Borough of Edgewater, 103 N.J. 227, 510 A.2d. 1178 (1986), where a unanimous (one justice not participating) New Jersey Supreme Court
sustained the Senior Citizens and Disabled Protected Tenancy Act (N.J. STAT. ANN. § 2A:18-61.11(d) (West Supp. 1983)) and was impressed by
"the salutary goal of protecting from eviction those elderly or disabled tenants
who lack the financial resources to relocate."
Id. at 235, 510 A.2d at 1182. Earlier, in
Troy v. Renna, 727 F.2d 287 (3d Cir. 1984), the Third Circuit had upheld the same law against contracts clause and takings
"[T]here is no question but that the state has justified [the law] by showing a
broad remedial purpose in protecting the mental and physical health of citizens
who could suffer greatly by evictions."
Id. at 298. The court noted that the Tenancy Act
"amply satisfies the requirement of a legitimate and reasonable public purpose" under contracts clause doctrine.
Id. The court similarly rejected the takings claim.
See infra notes 382, 383
Pennell, 485 U.S. at 15 (sustaining rent control ordinance which reduces rent increases in cases of
Perhaps one reason for the particular popularity of mobile home rent control is
that a high percentage of mobile home residents are elderly. Hirsch
supra note 140, at 402. They are generally
"poorer and older than their apartment dweller counterparts."
Id. at 413.
n182. F. ROISMAN, COMBATTING
"PRIVATE" DISPLACEMENT at iii (1981) ("there is no such thing as 'purely private' displacement. Displacement
invariably is fueled by government policies and actions").
supra note 159, at 956.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414 (1922).
Id. Justice Holmes observed that
"[g]overnment hardly could go on if to some extent values incident to property
could not be diminished without paying for every such change in the general law."
Id. at 413. But, the Kohler Act obviously exceeded the limits of his judicial tolerance.
n186. As noted
supra, at notes 65 to 67,
Mahon had alternative holdings, the first focusing on the state's interests (finding
them insufficient), the second analyzing the effects on the property owner's
interests (finding them too burdensome).
438 U.S. 104 (1978).
Id. at 124.
Hodel v. Irving, 481 U.S. 704, 713 (1987);
Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 225 (1986). This formulation might appear to encompass distinct inquiries: economic impact
and frustration of expectation. They indeed have different dimensions in some
contexts, including eviction laws. However, since economic value is largely a
function of expectation that is dependent upon existing and anticipated uses,
economic impact may be considered a subset of a broader expectation analysis.
n189. The now familiar formulation for assessing economic impact appeared in
Agins v. Tiburon, 447 U.S. 255, 260 (1980), where the Court stated it would find a taking if a land use regulation
"denies an owner economically viable use of his land." In performing this quantitative analysis, the Court usually recites a litany
of earlier cases to compare the economic effects of regulation.
Penn Central, 438 U.S. at 131.
Euclid v. Ambler Realty, 272 U.S. 365 (1926) (75% diminution caused by zoning law did not constitute a taking);
Hadacheck v. Sebastian, 239 U.S. 394 (1915) (87% loss in value resulting from zoning law requiring landowner to
discontinue brickmaking operations did not constitute a taking);
Haas v. San Francisco, 605 F.2d 1117, 1120 (9th Cir. 1979) (95% diminution in value did not constitute taking).
Hudson Water Co. v. McCarter, 209 U.S. 349 (1908) (height restriction could render property wholly useless).
Agins, 447 U.S. at 260. Thus, in presuming a taking (for pleading purposes) in
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987), Chief Justice Rehnquist's opinion stressed that a temporary building
moratorium in a newly designated flood plain was alleged to have deprived the
"all use" of the property.
Id. at 322. Because of the vigor of this requirement, the Court has generally been adamant
about requiring the owner to first exhaust all administrative remedies so that
the precise nature of the use permitted under the regulation is certain. This
exhaustion requirement has caused the Court to abandon four of its recent
efforts to examine particular legislation.
MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340 (1986);
Williamson County Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985);
San Diego Gas & Elec. Co. v. San Diego, 450 U.S. 621 (1981);
Agins v. Tiburon, 447 U.S. 255 (1980). Exhaustion is now a firm ingredient of any taking claim, particularly those
depending upon an examination of economic consequences.
Lai v. Honolulu, 841 F.2d 301 (9th Cir. 1988).
supra note 10, at 781-816. The requirement of fair return assures against economic
"goes too far," thereby avoiding a regulatory taking. However, some have seen the standard as
one which provides the equivalent of
"just compensation." Under this approach, eviction laws do constitute a taking, but a compensated
Rivera v. R. Cobian Chinea, 181 F.2d 974, 979 (1st Cir. 1950) (Magruder, C.J., dissenting) (even if critical property interests are taken by
"the 'just compensation' called for would be the equivalent of" the rent paid by the tenant). This is also how the Pennsylvania Coal Co.
attempted to reconcile rate regulation and rent control in
Mahon. It argued
"[w]hen the State regulates railroad rates, the fair return which the
Constitution guarantees to the stockholders is really, when analysed, the just
compensation required in condemnation proceedings. . . . The Rent Laws . . .
constituted virtually a condemnation by the sovereign of the [extended] term .
. . and a transfer of this term to the tenant at a reasonable cost, the just
compensation provided by the constitution."
Mahon, 260 U.S. at 401-03. Justice Holmes' opinion did not adopt this characterization, noting instead
that the Rent Law cases
"fell far short of the present act."
Id. at 416.
If this characterization is accurate, regulated rents would have to be at or
near market value, which would be the equivalent of just compenstation. While
some courts once experimented with such a requirement (e.g.,
Troy Hills Village v. Township of Parsippany-Troy Hills, 68 N.J. 604, 613-14, 350 A.2d 34, 43 (1975)), they have generally recognized the logical circularity in requiring market
rates in regulated enterprises.
Troy Hills was reversed just three years later in
Helmsley v. Borough of Fort Lee, 78 N.J. 200, 394 A.2d 65 (1978).
Cotati Alliance for Better Hous. v. City of Cotati, 148 Cal. App. 3d 280, 287, 195 Cal. Rptr. 825, 829-30 (1983) (noting the
"fatal flaw" in market rate return requirements, which
"thoroughly undermine rent control. . . . Rent control utilizing this standard
is no rent control at all").
Thus, the view that eviction laws are constitutional (despite effecting a
taking) because they guarantee just compensation, would mean that meaningful
rent and eviction controls could not co-exist. This proposition has been
Baker v. City of Santa Monica, 181 Cal. App. 3d 872, 226 Cal. Rptr. 755 (1986),
479 U.S. 1073 (1986) (reversing trial court holding that city may impose rent or removal controls,
but not both) (the author was attorney for Santa Monica);
Flynn v. City of Cambridge, 383 Mass. 152, 158, 418 N.E.2d 335, 338 (1981);
Birkenfeld v. City of Berkeley, 17 Cal. 3d 129, 148, 550 P.2d 1001, 1015, 130 Cal. Rptr. 465, 479 (1976).
The Supreme Court has also clearly stated that the
"fair return" necessary to avoid a taking need not be the equivalent of fair market value.
Penn Central, the Court's analysis of the economic viability of Grand Central Terminal
included discussion of the transferable development rights (TDR) provided in
exchange for the lost air rights above the terminal. Penn Central argued that,
although the TDRs were valuable, they did not fully compensate for lost value.
The Court rejected the argument.
"While these rights may well not have constituted 'just compensation' if a
'taking' had occurred, the rights nevertheless undoubtedly mitigate whatever
financial burdens the law has imposed . . . and . . . are to be taken into
account in considering the impact of regulation."
Id. at 137.
251 U.S. 396 (1920).
Id. at 399. The previous rule had been that the state could require continued service from
a public utility.
Chesapeake & O. R.R. v. Public Serv. Comm'n, 242 U.S. 603, 607 (1917). That rule is still valid where the
Brooks-Scanlon doctrine does not apply.
United Gas Pipe Line Co. v. Federal Power Comm'n, 385 U.S. 83 (1966).
Brooks-Scanlon is applicable only where continuing the enterprise actually results in
economic loss. Reduction in profitability, by itself, is not objectionable.
Andrus v. Allard, 444 U.S. 51, 66 (1979) ("loss of future profits -- unaccompanied by any physical property restriction --
provides a slender reed upon which to rest a takings claim"). But, if the property has no or negative value as a rental, it would no
"economically viable," thus satisfying the
Agins test for quantitative interference.
Kirby Forest Indus. v. United States, 467 U.S. 1, 14 (1984) (a
"radical curtailment of a landowner's . . . ability to derive income from his
land may give rise to a taking");
Hornstein v. Barry, 530 A.2d 1177 (D.C. Ct. App. 1987) (denial of conversion permit would constitute a taking if no viable
alternative economic uses were available).
n196. In tight urban housing markets, the value of a dwelling unit as a for-sale
condominium, or similar form attractive for owner occupancy, can be
substantially higher than its value as a rental unit. Judson,
supra note 4.
n197. Thus, in
Penn Central, the Court noted that
"[z]oning laws generally do not affect existing uses of real property."
Penn Central, 438 U.S. at 125.
Sadowsky v. City of New York, 732 F.2d 312 (2d Cir. 1984) (inability to convert residential hotel, resulting in displacement of tenants,
was not a taking since property could be returned to rental status).
Terminal Plaza Corp. v. City and County of San Francisco, 177 Cal. App. 3d 892, 912, 223 Cal. Rptr. 379, 390 (1986) (sustaining conversion ban, in part, because no
"reduction in market value of the property [has] been established").
n199. The proposition that a taking exists whenever landowners have
"been denied the ability to exploit a property interest that they heretofore had
believed was available for development is quite simply untenable."
Penn Central, 438 U.S. at 130.
n200. The Court often analyzes the nature of the claimed interest as a preliminary
step to determine whether it constitutes
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001 (1984) (expectation of confidentiality in reporting trade secrets to federal agency);
Penn Central, 438 U.S. at 124-25;
Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979) (expectation of exclusive use of marina);
United States v. Willow River Power Co., 324 U.S. 499 (1945) (interest in highwater level of river for runoff for tailwaters to maintain
power head is not property).
Penn Central, 438 U.S. at 130;
United States v. Powelson, 319 U.S. 266, 282 (1943);
Peick v. Pension Benefit Guar. Corp., 724 F.2d 1247, 1275 (7th Cir. 1983). Anticipated future gain is generally excluded for valuation purposes in
condemnation proceedings because it is too speculative.
See 5 J. SACKMAN, NICHOLS' THE LAW OF EMINENT DOMAIN
§ 19.07 (3d ed. 1989).
United States v. Grand River Dam Auth., 363 U.S. 229, 236 (1960) (citing
Omnia v. United States, 261 U.S. 502, 513 (1923)).
Ruckelshaus, 467 U.S. at 1005-06 (1984) ("[a] 'reasonable investment-backed expectation' must be more than a 'unilateral
expectation or an abstract need'") (citing
Webb's Fabulous Pharmacies v. Beckwith, 449 U.S. 155, 161 (1980)).
Penn Central, 438 U.S. 124. Patterson,
supra note 28, at 526 ("[p]rotection of 'expectations' is a prevalent element of constitutional
but see Brest,
The Fundamental Rights Controversy: The Essential Contradictions of Normative
90 YALE L.J. 1063, 1088-89 (1981) (criticizing expectations analysis).
Edgewater Inv. Assoc. v. Borough of Edgewater, 103 N.J. 227, 510 A.2d 1178 (1986) (eviction act passed after conversion of apartments to condominiums could be
Haas v. City and County of San Francisco, 605 F.2d 1117 (9th Cir. 1979) (upholding conversion moratorium reducing value of parcel to $ 100,000
although original price of $ 2 million reflected premium due to development
potential at time of purchase). In cases involving large conversion projects,
courts may implicitly subscribe to the economists' maxim that
"the risk is the rate." In real terms, this means that the greater the anticipated profit margin,
corresponding to a large project, the more likely it is that the project will
generate controversy and possible regulation (or other adverse economic
consequence). Thus, some degree of risk is inevitable, and should be factored
into the overall equation by the wise investor. If and when the risk
materializes, even after purchase at an enhanced price, it simply highlights
See supra note 190.
n206. The vested rights doctrine is
"predicated upon estoppel of the governing body . . . where justice and fairness
Santa Monica Pines v. City of Santa Monica, 35 Cal. 3d 858, 866-67, 679 P.2d 27, 32, 201 Cal. Rptr. 593, 598 (1984). The terminology traces back to
Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), where Chief Justice Marshall stated that the judiciary would defend a
"vested legal right" from destruction by governmental whim.
See generally Cunningham
Vested Rights, Estoppel, and the Land Development Process,
29 HASTINGS L.J. 625 (1978).
n207. For instance, estoppel against a government agency requires a careful weighing
of the public and private interests involved, just as in takings cases.
City of Long Beach v. Mansell, 3 Cal. 3d 462, 496-97, 476 P.2d 423, 448, 91 Cal. Rptr. 23, 48 (1970); Cunningham
supra note 206, at 687-88.
n208. In land use
"vested rights" cases, courts will often measure the amount of at-risk capital irrevocably
devoted to a development project in good faith reliance on prior governmental
Santa Monica Pines, 35 Cal. 3d. at 864, 201 Cal. Rptr. at 597 (expenditure of small sums toward conversion of apartments into condominiums
prior to enactment of conversion law did not give developers a
"vested right" to evict existing tenants). But, if that amount is substantial, at least in
relation to the total cost of the project, the court is likely to find a
subsequently imposed land use restriction invalid
Sierra Club v. California Coastal Zone Conserv. Comm., 58 Cal. App. 3d 149, 159, 129 Cal. Rptr. 743, 749 (Ct. App. 1976) ("[i]t is sufficient to show that the work completed and the liabilities incurred
have been 'substantial'")
Cooper v. County of Los Angeles, 69 Cal. App. 3d 529, 538, 138 Cal. Rptr. 229, 233 (1977) ("[I]f the percentage [of completion] is 'substantial' in terms of common sense
and ordinary logic, then the project is to be validated")
Rogin v. Bensalem Township, 616 F.2d 680, 691 (3d Cir. 1980) (retroactive application of eviction and conversion limitations did not cause
Santa Monica Pines, 35 Cal. 3d at 864, 201 Cal. Rptr. at 597 (analyzing whether expenditures toward conversion of apartments into
condominiums were sufficient to give developer a vested right to evict existing
E.g., Uniform Relocation Assistance Act,
42 U.S.C. §§ 4601-4638 (1971). The requirement of relocation assistance furthers the public
purpose of avoiding tenant hardship. It may be less appropriate, however,
where eviction protection serves primarily to maintain the housing stock (for
examples, as an adjunct to conversion regulations). In such a case, the law's
focus is on community, rather than individual, needs.
CAL. GOV'T CODE §§ 66410-66499.30 (West 1983) (Subdivision Map Act); LOS ANGELES COUNTY, CAL.,
ORDINANCE No. 12148
§ 1 (1980) ($ 500 moving costs, plus
"compensation for anticipated rent increase" of $ 1,000 or
"the current monthly rental times the number of years . . . a tenant has
occupied the unit"). Non-monetary relocation assistance may also be required.
E.g., id. (landlord must provide information concerning the availability of comparable
rental housing in the area and transportation to assist tenants in inspection
of replacement units).
CAL. GOV'T CODE § 65863.7(e) (West 1989) (closure of mobile home park may be conditioned on payment of
"reasonable costs of relocation" to park tenants); LOS ANGELES, CAL., MUNICIPAL CODE
§ 47.06 (1980) (conversion to condominium or commercial use requires relocation
assistance fee of $ 1,000 per tenant, or $ 2,500 if tenant is elderly,
disabled, or head of household).
CAL. GOV'T CODE § 7060.1(c)(1) (West 1989) (cities may mitigate adverse impact on tenants evicted when
landlord goes out of business).
E.g., SANTA MONICA, CAL., MUNICIPAL CODE
§ 4850-4862 (1986) (relocation payment up to $ 4,000 required upon eviction to
enable owner or relative occupancy).
n214. The major cause of displacement, rent increases beyond the tenant's ability to
pay (see LeGates
supra note 7, at 216) are typically not covered by relocation assistance plans. One
way to ameliorate or prevent such displacement is by regulating the rents in
the first place.
Pennell v. City of San Jose, 485 U.S. 1, 11-14 (1988).
Ayers v. City Council of Los Angeles, 34 Cal. 2d 31, 42, 207 P.2d 1, 7 (1949).
"The cost of shelter almost always rises after displacement, sometimes modestly,
sometimes quite dramatically. There is evidence that lower income residents
bear particularly heavy rent increase burdens." LeGates
supra note 7, at 227.
People v. H & H Properties, 154 Cal. App. 3d 894, 901, 201 Cal. Rptr. 687, 690 (1984) (relocation assistance for tenants
"who are displaced by condominium conversions and are forced back into the
housing market" is related to the valid purpose of tenant protection);
Kalaydjian v. City of Los Angeles, 149 Cal. App. 3d 690, 693, 197 Cal. Rptr. 149, 151 (1983) ("City could reasonably conclude that changes in use of residentially zoned
property adversely affect the community's rental stock [and] that the fee
exacted from those benefitting from the changed use cushions the displacement
effect of that changed use");
Briarwood Properties v. City of Los Angeles, 171 Cal. App. 1020, 217 Cal. Rptr. 849 (1985) (relocation assistance ordinance was constitutional).
San Telmo Ass'n v. City of Seattle, 108 Wash. 2d 20, 25, 735 P.2d 673, 675 (1987) ("[T]hose who plan to develop their property from low income housing to other
uses cannot be penalized by being required to provide more housing").
San Telmo and Rockville Grosvenor, Inc. v. Montgomery County, 289 Md. 74, 422 A.2d 353 (1980), local relocation assistance ordinances were invalidated, but on the grounds of
Nollan, 483 U.S. at 836-37. The Court reasoned that unless the restriction was
"substantially related" to a public burden caused by the development, there was a danger that the
state would use the permit process to exact property rights for which it would
otherwise have to pay.
Id. at 841. The Court openly applied heightened scrutiny in analyzing the means-end nexus.
See supra note 137.
n219. Relocation programs providing payments to tenants dislocated as a result of
government property acquisitions are also common, but do not raise similar
E.g., Uniform Relocation Assistance and Real Property Acquisition Policies for
Federal and Federally Assisted Programs, Pub. L. No. 91-646, 84 Stat. 1895
CAL. GOV'T CODE §§ 7260-7276 (West 1980
& Supp. 1989).
However, as indicated by
Alexander v. United States Dep't of Housing and Urban Dev., 441 U.S. 39 (1979), government relocation assistance funding is inadequate to cover the effects of
displacement in most cases.
Agins v. Tiburon, 447 U.S. 255 (1980).
n221. The court also found a taking because the law authorized a
"permanent physical occupation."
Hall v. Santa Barbara, 833 F.2d 1270, 1276-77 (9th Cir. 1970).
See L.A. MOBILE HOME STUDY,
supra note 179, at 56-57. Most areas employ discriminatory zoning, and place mobile
"under a virtual quarantine." Note,
supra note 156, n.400, at 812;
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 574, 414 A.2d 1246, 1248 (1980) ("many communities have enacted zoning regulations which exclude [mobile homes]
entirely or severely limit the areas where they may be placed"); Hirsch
supra note 140, at 442 ("pad vacancy rate . . . is about zero for the vast majority of mobile home parks
But see id. at 418-19 (offering a different interpretation of mobile home vacancy rates).
n223. The difficulty in finding sites translates into substantially higher prices
for sited mobile homes, and correspondingly lower prices for unsited units.
"[E]victed homes are worth much less when offered for sale." Note,
supra note 156, at 815 (describing how some evicted owners have lost the full value
of their homes). In an economic sense, vacant spaces carry a substantial
premium which is capitalized into the value of the mobile home itself, just as
a pleasure boat might be worth considerably more if it came with a slip, as
opposed to the new owner having to obtain one.
Granat v. Keasler, 99 Wash. 2d 564, 663 P.2d 830 (1983) (describing Seattle boat moorage eviction ordinance).
As further protection, many localities have also enacted mobile home rent
supra note 179, at 97; Hirsch
supra note 140, at 407. This enhances the premium value associated with park space
since the new owner can be assured of stable (and below-market) housing costs.
Werner and Joel Hirsch have quantified this amount for mobile homes sold on
site in parks subject to rent control.
Id. at 443-44 ("[a]pproximately $ 8,800 [of average sales price] would be attributable to the
increased placement value due to rent controls").
From the tenant's perspective, rent control prevents the park owner from
appropriating a large share of the mobile home's value. Without rent control,
a park owner can raise rents high enough to recapture any added value in the
mobile home created by scarcity of sites and the cost of relocating a mobile
home to a vacant site. In a free market, the park owner would do just that --
charge, in addition to normal rent, the
"quasi-rent;" that is, the owner would charge an amount whose capitalized value equalled the
See id. at 419-20. In other words, where rents are unregulated, the park owner can
"placement value" component of a mobile home by raising rents. A prospective buyer would
substract the capitalized value of increased rents from the price she would be
willing to pay for the mobile home. Under the Hirsch model, this would cost
the seller approximately $ 8,800. Note,
supra note 156, at 830 n.101 ("[b]ecause [Connecticut's] statute is designed to prevent the park owner from
depriving the home owner of his home's increase in value secured by its
location in a mobile home park, increased rents intended to recover that value
would be prohibited").
n224. It is apparently a common practice for park owners to condition a new tenant's
entry into the park upon purchase of a mobile home from the park owner (as
dealer) or from a third-party dealer with economic ties to the park owner.
This practice allows the park owner/dealer to inflate the price of a mobile
home by thousands of dollars because of site scarcity; in essence, to exploit
"monopoly power." Hirsch
supra note 140, at 438. Because this side-business can be far more lucrative than
the principal business of renting pad spaces, it provides the park owner with
an economic incentive to evict tenants or to require voluntarily vacating
tenants to remove their homes upon sale. This is one reason that nearly half
the states afford special eviction protection to mobile home owners whose
sizeable investments can be wiped out by forced removal of their homes from
Cider Barrel, 287 Md. at 574, 414 A.2d at 1248 ("mobile home owners often have been forced to buy mobile homes from the park
owner in order to obtain a site, to pay excessive entrance fees, to buy
specified commodities from specified dealers, to pay the park owner a
commission on the sale of the mobile home, or, upon sale, to remove it and pay
an exit fee"); Note
supra note 156, at 815 (prevailing market conditions
"have allowed some park owners to make substantial profits by evicting home
owners and their homes"); Note,
Mobilehomes: Present Regulation, supra note 179, at 167 n.49 ("[c]omplicating the problem is the fact that the mobile home parkowner may have
strong incentives to evict his tenants whenever possible," in part because
"parkowners are often mobile home dealers . . . [who] obviously desire to sell
as many new homes as possible").
The practice of
"tying" space rental to mobile home purchases is also illegal as a violation of
section 4 of the Clayton Act
(15 U.S.C. 15 (1988)), and related state laws.
Ware v. Trailer Mart, Inc., 623 F.2d 1150 (6th Cir. 1980) (reversing summary judgment for park owner on allegation that defendant
violated Clayton Act by illegal
Suburban Mobile Homes, Inc. v. AMFAC Communities, Inc., 101 Cal. App. 3d 532, 161 Cal. Rptr. 811 (1980) (tying arrangement by park owner and mobile home dealers violated state
antitrust law (CAL. BUS. & PROF. CODE § 16700 (West Supp. 1989)));
People v. Mobile Magic, 96 Cal. App. 3d 1, 157 Cal. Rptr. 749 (1979) (conditioning the rental of sites on the purchase or lease of mobile homes
from certain retail dealers was illegal);
Sherman v. Mertz Enterprises, 42 Cal. App. 3d 769, 117 Cal. Rptr. 188 (1974) (agreement between park owner and mobile home dealers providing kickback of
profits from tied mobile home sale and space lease were in restraint of trade);
Jomicra v. California Mobile Home Dealers' Ass'n, 12 Cal. App. 3d 396, 90 Cal. Rptr. 696 (1970) (describing growing practice of
"closed parks" where entry is conditioned on purchase of home from approved dealers, raising
"a serious issue of illegal conduct to restrain trade and competition").
Bigos v. Nationwide Mobile Home Parks, Inc., 105 Mich. App. 11, 306 N.W.2d 373 (1981) (fee levied by park operator for transferring lot tenancy of mobile homes to
buyers did not violate antitrust laws because there was no showing of adverse
effect on competition).
Eamiello v. Liberty Mobile Home Sales, 208 Conn. 620, 649, 546 A.2d 805, 820 (1988) ("[i]n choosing the tenant rather than the mobile home park operator as the
recipient of this economic advantage arising from the near-monopoly status of
the industry, the legislature, by allocating its benefit to those who generally
are more in need, has not violated any constitutional principle"). The contrary results in
Eamiello may simply reflect the courts' differing economic theories. Or it may reflect
different views on the normative definition of
"property" for fifth amendment purposes. But the
Eamiello court seems to have the better of the argument. For instance, in California,
leasehold value is usually considered property of the tenant, not the landlord.
Kendall v. Pestana, 40 Cal. 3d 488, 709 P.2d 837, 220 Cal. Rptr. 818 (1985) (rejecting the claim that
"any increase in the market value of real property during the term of a lease
property belongs to the lessor, not the lessee") (citing 4 H. MILLER
& M. STARR, CURRENT LAW OF CAL. REAL ESTATE
§ 27:92 (1977
& Supp. 1984)).
Werner and Joel Hirsch argue to the contrary. Hirsch
supra note 140. They assert that enhanced
"placement value" is a product of the intangible
"right of the landlord to set his rents."
Id. at 446-47 n.136. Thus, reposing the value in the tenant constitutes a
"transfer of wealth" from the park owner.
Id. But, this begs the question; that is, whether the concept of
"property" protected by the fifth amendment includes the right to charge
"quasi-rent" (the amount attributable to space scarcity and moving costs).
A similar issue appeared in
Penn Central, where the Court discussed whether
"the publicly 'created components' of the value of the property -- i.e., those
elements of its value attributable to the 'efforts of organized society' or the
'social complex'" were includable in a takings analysis.
Penn Central, 438 U.S. at 121 n.23 (citing Costonis,
The Disparity Issue: A Context for the Grand Central Terminal Decision,
91 HARV. L. REV. 402, 416-17 (1977)). Because the record in that case was insufficient, the Court did not decide
"whether it is permissible or feasible to separate out the 'social increments'
of the value of property."
Penn Central, 438 U.S. at 121 n.23. But, the New York Court of Appeals had excluded this component in its
decision, crediting the property owner only with the
"privately created and privately managed ingredient" of value.
Penn Cent. Transp. Co. v. New York, 42 N.Y.2d 324, 328, 366 N.E.2d 1271, 1273 (1977).
This would seem to follow from Professor Hagman's thesis, that value created by
scarcity does not naturally belong to the landlord, or to the tenant, not being
the product of either of their labors. In a similar vein, the district court
Gateway Apartments v. Mayor of Nutley, 605 F. Supp. 1161 (D.N.J. 1985), held that the state could require landlords to pass 75% of any property tax
rebates through to tenants, since the monies were not preexisting landlord
property. Otherwise, it
"would result in a windfall to landlords and deny to tenants the right to
participate in a refund which they in large measure created."
Id. at 1163.
Rue-Ell v. City of Berkeley, 147 Cal. App. 3d 81, 194 Cal. Rptr. 919 (1983).
n226. Judge Kozinski objected that
"the tenant is given an economic interest in the land that he can use, sell or
Hall v. Santa Barbara, 833 F.2d 1270, 1276 (9th Cir. 1987).
Ross was to the same effect.
"By granting a permanent tenancy at below-market rents to the corporation, the
ordinance transfers the value of the 'rent control premium' -- a concrete and
significant asset -- to the corporation itself and allows defendant lessees to
monetize its value through the sale of stock."
Ross v. City of Berkley, 655 F. Supp. 820, 838 (N.D. Cal. 1987).
n227. In analyzing the company's takings claim, Justice Holmes conceptualized three
"property rights" equal to the three estates recognized by Pennsylvania law: a surface estate,
an estate in the subsurface minerals and an estate in the physical support of
the surface and structures.
Penman v. Jones, 256 Pa. 416, 428, 100 A. 1043, 1046 (1917). The Kohler Act required mining companies to leave sufficient coal to support
superadjacent structures. The company argued that it had retained the
subsidence rights in the parcel (right to physical support of the surface) when
it had sold the surface rights. Thus, Mahon, the owner of the surface
"estate," had no property interest in the physical support of the surface (subsidence
estate). The Kohler Act, in effect, transfered this
"estate" from Pennsylvania Coal Company to Mahon.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414 (1922).
supra note 79, at 563-67, for a fuller analysis of the Kohler Act and its
n228. Viewed in this manner, the act had a much smaller effect on the company's
property, diminishing the whole value rather negligibly, instead of completely
extinguishing a discrete interest.
Mahon, 260 U.S. at 416, 419.
See infra text accompanying notes 306-25.
n230. For instance, in
Penn Central, 438 U.S. 104, 124 (1978), the Court declined to view common law air rights above Grand Central Terminal
as a discrete property right. Although the particular rights were greatly or
completely extinguished, the property as a whole retained significant value.
"Taking jurisprudence does not divide a single parcel into discrete segments and
attempt to determine whether rights in a particular segment have been entirely
Id. at 130.
id. at 130 n.27 ("dispos[ing] of any contention that might be based on Pennsylvania Coal" that the taking analysis proceeds
"irrespective of the impact of the restriction on the value of the parcel as a
Id. at 124.
Andrus v. Allard, 444 U.S. 51 (1979) (upholding law prohibiting sale of American Indian avian relics).
n233. For instance, a parcel of land might derive value both from rents and
appreciation. If these were discrete property rights, a use restriction might
be unconstitutional if it caused any amount of depreciation since it would have
completely expunged discrete property.
supra note 28, at 518 (under the
"bundle of rights interpretation" the judicial difficulty in defining property is complicated because
"the concept of property has been subdivided into potentially infinite component
Hall v. Santa Barbara, 833 F.2d 1270, 1279 (9th Cir. 1987) ("the tenant gets an interest that he can liquidate and take with him when he
leaves the property, or even the City of Santa Barbara"). The court in
Ross reached essentially the same conclusion because the leasehold's increased
value could be captured and severed from the realty by sale of stock.
Ross v. City of Berkeley, 655 F. Supp. 820, 838 (N.D. Cal. 1987).
n235. Jutice Holmes' approach in
Mahon was at least supported by the statutory creation of separate estates. Its
continued validity even in that limited context is doubtful.
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987) (upholding modern version of the Kohler Act).
California does not, as apparently suggested in
Gregory v. City of San Juan Capistiano, 142 Cal. App. 3d 72, 88-89, 191 Cal. Rptr. 47, 58 (1983), recognize separable rights of property ownership in landlords.
Fisher v. City of Berkeley, 37 Cal. 3d 644, 686, 209 Cal. Rptr. 682, 716 (1984) (disapproving of
n236. The California Court of Appeal declined to use the Ninth Circuit's methodology
in a condominium conversion case, requiring instead deprivation of
"substantially all reasonable use of . . . property" in order to find a taking.
Terminal Plaza Corp. v. City and County of San Francisco, 177 Cal. App. 3d 892, 911, 223 Cal. Rptr. 379, 390 (1986).
n237. It is suggested (Hirsch
supra note 140, at 447-48) that mobile home rent control laws differ from controls
on apartment rents in that departing tenants who sell their mobile homes on
site can monetize the placement value and take it with them.
Hall, 833 F.2d at 1279. A mobile home
"tenant gets an interest that he can liquidate and take with him when he leaves
the property, or even the City of Santa Barbara."
Id. Apartment tenants, however, benefit only during their tenancy.
"enjoy the benefits of rent control only so long as they remain tenants, not
beyond. . . . [i]f [the tenant] wants the benefits of the rent control
ordinance, he must stay put. If he wants to leave, he must give up a good thing").
It is not clear why this distinction is important, let alone dispositive, in
takings analysis. Perhaps it bolsters the notion that placement value is a
discrete property right, since it may be severed from the realty. By this
view, transfering value to a tenant
"appurtenant" is just fine, but transfering it
"in gross" is unconstitutional. R. POWELL
& P. ROHAN, ON REAL PROPERTY
§ 405 (1988) [hereinafter R. POWELL] ("[A]n easement in gross is one which belongs to its owner independently of his
ownership or possession of other land. In this sense, it can be said to be a
'personal' right of the owner, in order to distinguish it from appurtenant
But, the state does not treat the right of occupancy, reflected in placement
value, as a dicrete property right. It may not be sold or transferred, except
as incident to the sale of the mobile home, and even then subject to park owner
See infra note 436 (discussing the owner's right to reject incoming tenants). Also, it
may only be enjoyed by fulfilling reciprocal obligations to the park owner,
such as payment of rent. Standing alone, the right of occupancy has no worth,
either to the outgoing or incoming tenant.
A second reason for distinguishing the two types of rent and eviction controls
is given by Hirsch
supra note 140, at 432, 448. The authors argue that the Santa Barbara scheme
defeats the purpose of rent control. The right to sell on-site allows the
vacating tenant to capitalize future rent savings, including that which would
otherwise be enjoyed by the incoming tenant. This results in a wealth transfer
from future to existing tenants.
Again, accepting the validity of the analysis, it is hard to see why this makes
the law unconstitutional. Many tenant protection laws benefit only those in
possession at the time of enactment.
Troy v. Renna, 727 F.2d 287 (3d Cir. 1984) (eviction protection for existing tenants);
Gateway Apartments v. Mayor of Nutley, 605 F. Supp. 1161, 1163 (1985) (upholding ordinance requiring property tax rebates to current tenants even
though landlord might have passed tax burden through to previous tenants).
Indeed, the scheme preferred by Hirsch and Hirsch, vacancy decontrol -- the
suspension of rent control when a new tenant moves in -- is equally (or more)
disadvantageous to future tenants.
n238. Eviction cases which consider economic impact typically view the law's effect
in the aggregate.
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 582-83, 414 A.2d 1246, 1252 (1980).
n239. Eviction in condominium conversion cases is often sought prior to sale to
enhance the unit's marketability. In such cases, courts are unlikely to be
sympathetic to a takings claim.
Edgewater Inv. Assoc. v. Borough of Edgewater, 103 N.J. 227, 239, 510 A.2d 1178, 1185 (1986).
E.g., block v.
Hirsh, 256 U.S. 135, 154 (1921) (District of Columbia Rents Act provided that
"the owner shall have the right to possession 'for actual and bona fide
occupancy by himself, or his wife, children, or dependents'"). In his dissent from dismissal in
Fresh Pond Shopping Center v. Callahan, 464 U.S. 875 (1983), Justice Rehnquist turned a similar feature in the Cambridge law completely
around. Since the landlord in that case was a corporation, it was incapable of
occupancy for personal use. To Justice Rehnquist, this meant that the shopping
center was deprived of all use, thus causing a taking.
Id. at 876-77 (Rehnquist, J., dissenting). This conclusion ignores the standard economic
analysis in cases of investment purchase.
See supra note 179. Eviction based on owner occupancy can often be a subterfuge to
avoid the salutory purposes of eviction protection. This is not uncommon since
most jurisdictions do not monitor use subsequent to eviction. If a building
already contains a vacant unit, which is at least nominally fungible with the
target unit, eviction for owner occupancy may be unsupportable. Similarly,
where only certain tenants enjoy eviction protection (for example, the
elderly), the landlord may be unable to evict and move in to her apartment of
Budhu v. Grasso, 125 Misc. 2d 284, 290, 479 N.Y.S.2d 303, 308 (N.Y.Civ. Ct. 1984) (prohibiting eviction of elderly tenant, noting
"the landlord is not barred or prevented from obtaining another apartment, so
that apartment is not occupied by a senior citizen") (emphasis in original).
Flynn v. City of Cambridge, 383 Mass. 152, 160, 418 N.E.2d 335, 339 (1981).
n243. Constructive notice might also arise if purchase is made shortly before
enactment of a law, if its effects are being publicly debated at the time.
See infra note 252.
Flynn, 383 Mass. at 160, 418 N.E.2d at 339.
n245. A condominium is normally the combination of fee simple ownership of specific
units, tenancy-in-common of common areas, and the right of occupancy.
See 1A P. ROHAN
& M. RESKIN, CONDOMINIUM LAW AND PRACTICE (1978) (apendix B). Other forms of
legal ownership, where title recognizes each owner's right to exclusive
occupancy of a designated dwelling unit, include
"cooperative apartment" and
See 25 Hous.
& Dev. Rep. (BNA) 11 (Reference File 2) (1978) for the respective legal
descriptions. Before a state recognized such creatures, these forms of
subdivision would likely have been unlawful and an investor would have had no
right to possession.
Silver v. Silver, 280 U.S. 117, 122 (1929) ("the Constitution does not forbid the creation of new rights, or the abolition
of old ones recognized by the common law, to attain a permissible legislative
Munn v. Illinois, 94 U.S. 113, 134 (1877) ("the great office of statutes is to remedy defects in the common law as they are
developed, and to adapt it to the changes of time and circumstances").
See infra notes 351-55.
n248. Since a post-enactment owner
"had no right to occupy [his] unit . . . the government is not required to
compensate . . . for denying him the right to use that which he has never owned."
Flynn, 383 Mass. at 160, 418 N.E.2d at 339.
Id. at 160-61, 418 N.E.2d at 339-40.
Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1978).
Flynn, 383 Mass. at 160, 418 N.E.2d at 339.
n252. For example, in
Edgewater Inv. Assoc. v. Borough of Edgewater, 103 N.J. 227, 510 A.2d 1178 (1986), the court found that since the owner's conversion plan was filed while the
eviction law was being publicly debated, realization of the investment was a
Id. at 240-41, 510 A.2d at 1185-86. Development projects which proceed while zoning or use changes are being
contemplated often fail to give rise to reasonable expectations of use as
Russian Hill Improvement Ass'n v. Board of Permit Appeals, 66 Cal. 2d 34, 38 n.5, 423 P.2d 824, 827 n. 5, 56 Cal. Rptr. 672, 675 n.5 (1967) (developers who were
"fully on notice" of proposed planning changes had no reasonable reliance on existing plans);
Spindler Realty Corp. v. Monning, 243 Cal. App. 2d 255, 264-65, 53 Cal. Rptr. 7, 12-13 (1966) (development while new zoning regulations pending was calculated risk).
The same theory applies to individuals who purchase condominiums for the
purpose of personal residency.
Loeterman v. Town of Brookline, 524 F. Supp. 1325 (D. Mass. 1981),
& remanded, No. 81-1857 (1st Cir. July 28, 1982) (for reconsideration in light of
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)),
on remand, No. 80-670-MC (D. Mass. Dec 1, 1982) (upholding eviction ban on remand),
709 F.2d 116 (1st Cir. 1983). The Loetermans entered into a purchase agreement prior to a new eviction law,
but escrow did not close until 10 days after the law's effective date. Based
on this, the new owners
"knew of the enactment of the amendment at the time they took title to their
Loeterman, 524 F. Supp. at 1327. Thus, the court found it unnecessary to resolve the more difficult questions
of applying the eviction law
"to persons who purchased their units with the intent to occupy them in
accordance with then applicable" law.
Id. at 1326. Accordingly, the court only discussed the usual economic factors. Since
"the Ban Amendment [did] not operate to deny the Loetermans an economically
viable and reasonable use of their property," it was constitutional.
Id. at 1329.
Gateway Apartments v. Mayor of Nutley, 605 F. Supp. 1161, 1171 (D.N.J. 1985).
Chicago Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d 732, 736 (7th Cir. 1987) ("[w]e are certain that the landlord-tenant relationship is, if nothing else,
Gateway Apartments, 605 F. Supp at 1171.
n255. What the court in
Flynn did not do, because it could not be done in a facial case, was to determine
whether any individual purchaser's reasonable primary expectation was to evict
and occupy, and the extent to which that expectation was frustrated. But the
analysis has been done elsewhere. For instance, in
Grace v. Town of Brookline, 379 Mass. 43, 399 N.E.2d 1038 (1979), the same court discussed the effect of a short-term eviction moratorium
enacted after the plaintiff had purchased a condominium. Perhaps because
"the condominium purchaser [could] take possession eventually" (id. at 57, 399 N.E.2d at 1046), was already subject to some delay when he purchased (id.), and was partially compensated by the developer, the court declined to find a
taking. See also
Chan v. Town of Brookline, 484 F. Supp 1283 (D. Mass. 1980), where the district court denied preliminary injunctive relief to persons who
had purchased condominiums for intended occupancy prior to enactment of the
Brookline law. The court later dismissed the action, however, on account of
Puttrich v. Smith, 170 N.J. Super. 572, 407 A.2d 842 (1979), where the New Jersey Appellate Court denied to a landlord the right to evict a
tenant for personal use of the premises.
"[T]he legislature could constitutionally decide . . . that an owner's right to
utilize his property must yield to a tenant's interest in keeping his home. . .
Id. at 575, 407 A.2d at 843.
Hazon-Iny Dev. Inc. v. City of Santa Monica, 128 Cal. App. 3d 1, 10, 179 Cal. Rptr. 860, 865 (1982);
Stamboulos v. McKee, 134 N.J. Super. 567, 342 A.2d 529 (1975) (it was constitutional to preclude a landlord from evicting so that a member
of the owner's family could reside in the apartment).
Granat v. Keasler, 99 Wash. 2d 564, 663 P.2d 830 (1983) (Seattle boat moorage ordinance constituted a taking because it prohibited
eviction for owner occupancy);
Kennedy v. City of Seattle, 94 Wash. 2d 376, 617 P.2d 713 (1980) (same).
See infra text accompanying notes 446-50.
n259. It is important that examination of the landlord's expectation interests be
objective, rather than subjective. All real estate investment decisions are
made against a backdrop of extensive regulation, particularly in the
landlord-tenant area. A rational buyer will consider the prospect of further
regulation, which will affect the reasonableness of her investment-backed
See generally Shulman,
Real Estate Valuation Under Rent Control: The Case of Santa Monica, 9 AM. REAL EST.
& URB. ECON. ASS'N J. 38 (1981). Thus, someone who purchases a tenant-occupied
dwelling, which has been continuously used for rental purposes over a long
period, might not have formed a sufficient enough interest as to invalidate an
anti-eviction provision on an as-applied basis.
Pruneyard Shopping Center v. Robbins, 447 U.S. 74, 83 n.7 (1980) (citing
United States v. Rands, 389 U.S. 121, 126 (1967)).
n261. Michelman argues that fairness is, ultimately, the only
"correct" test for determining when just compensation is required. Michelman,
Property, Utility, and Fairness: Comments on the Ethical Foundations of
"Just Compensation" Law,
80 HARV. L. REV. 1165, 1171 (1967).
"It is axiomatic that the Fifth Amendment's just compensation provision is
'designed to bar Government from forcing some people alone to bear public
burdens which, in all fairness and justice, should be borne by the public as a
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 318-19 (1987) (citing
Armstrong v. United States, 364 U.S. 40, 49 (1960)).
n263. Although the equality principle of the takings clause differs from that of the
equal protection clause, the latter's focus on
"treatment as an equal," rather than
"equality of treatment," is instructive.
See L. TRIBE, AMERICAN CONSTITUTIONAL LAW 1437 (2d ed. 1988) ("any such universal demand for sameness would prevent government from
discriminating in the public interest").
Pennell v. City of San Jose, 42 Cal. 3d 365, 372, 721 P.2d 1111, 1116, 228 Cal. Rptr. 726, 731 (1986),
485 U.S. 1 (1988) ("[w]e have often confirmed the propriety of local rent control legislation that
in effect placed the burden of 'subsidizing' tenants . . . on local landlords").
Munn v. Illinois, 94 U.S. 113 (1877).
Nebbia v. New York, 291 U.S. 502 (1934).
Minden Beef Co. v. Cost of Living Council, 362 F. Supp. 298 (D. Neb. 1973).
FPC v. Natural Gas Pipeline Co., 315 U.S. 575 (1942).
Permian Basin Area Rate Cases, 390 U.S. 747 (1968) (rejecting challenge to a rate regulation formula which created separate
classes of suppliers and rates);
Woods v. Cloyd W. Miller Co., 333 U.S. 138, 145 (1948) (Congress
"need not control all rents or none. It can select those areas or those classes
of property where the need seems the greatest").
n270. Since conversion may be seen as a benefit conferred by the state, it may be
apparently distributed unequally, other than in a
"patently arbitrary or irrational way."
United States R.R. Retirement Bd. v. Fritz, 449 U.S. 166, 177 (1980).
n271. D. HAGMAN
& D. MISCZYNSKI, WINDFALLS FOR WIPEOUTS at xxx (1978) ("windfalls should be partially recaptured to help compensate for wipeouts, thus
See also id. at 18 (in
"recapturing windfalls . . . [t]he community is asking only for a return of
wealth it creates"). Hagman and Misczynski cite Winston Churchill for a particularly relevant
application of this principle:
The landlord who happens to own a plot of land on the outskirts of a great city
. . . watches the busy population around him making the city larger, richer,
more convenient . . . and all the while sits still and does nothing. Roads are
made . . . services are improved . . . and all the while the landlord sits
still. . . . To not one of those improvements does the land monopolist
contribute, and yet by every one of them the value of his land is enhanced. .
. . The greater the population around the land, the greater the injury the
public has sustained by its protracted denial, the more inconvenience caused to
everybody, the more serious the loss in economic strength and activity, the
larger will be the profit of the landlord when the sale is finally
accomplished. In fact, you may say that the unearned increment on the land is
reaped by the land monopolist in exact proportion, not to the service, but to
the disservice done.
Id. at 17-18 (citing Churchill as quoted in HOUSE AND HOME, Aug. 1960, at 126).
See also H. GEORGE, PROGRESS AND POVERTY 132-39 (1879) (advocating that all local
revenue be obtained from taxes on the
"monopolistic profits" of land speculators, thus recapturing undeserved gains).
supra note 261, at 1179.
Mahon suggested that
"average reciprocity of advantage" often mitigates against the finding of a taking (Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922)), a principle which occasionally appears in modern cases (e.g.,
Hodel v. Irving, 481 U.S. 704, 715 (1987)), it is by no means required.
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 491 n.21 (1987) ("[t]he Takings Clause has never been read to require the States or the courts to
calculate whether a specific individual has suffered burdens . . . in excess of
the benefits received").
Kirby Forest Indus. v. United States, 467 U.S. 1, 14 (1984).
438 U.S. 104 (1978).
Id. at 133.
Id. at 132.
Tirolerland v. Lake Placid 1980 Olympic Games, 592 F. Supp. 304, 316 (N.D.N.Y. 1984) (motel owner subject to rate regulation
"share[d] with other owners the benefits and burdens of the [state's] exercise
of its police power") (citing
Agins v. City of Tiburon, 447 U.S. 255, 262 (1980)).
Penn Central, 438 U.S. at 135 n.32.
n279. Except in cases falling within Justice Stone's famous footnote 4 in
United States v. Carolene Products, 304 U.S. 144, 152, 153 n.4 (1938) (that is, suspect class, fundamental right, blocked access to political
processes), the Court employs the highly deferential rational basis test in
economic regulation cases under the equal protection clause. Similarly, in
land use cases, the presence of a fundamental right is the dividing line
between use of rational basis or a higher standard.
Belle Terre v. Boraas, 416 U.S. 1, 8 (1974) (exclusion of unrelated family living arrangements under zoning ordinance was
instance of ordinary
"economic and social legislation" requiring only a rational basis)
Moore v. City of East Cleveland, 431 U.S. 494, 499 (1977) (intrusive regulation of family choices under guise of zoning invokes
heightened scrutiny). It is possible, of course, for a land use regulation to
fail even the rational basis test.
City of Cleburne v. Cleburne Living Center, 473 U.S. 432 (1985) (state justifications for unequal treatment of mentally handicapped were
inadequate and lacked any rationality). But, failure on equal protection
grounds is rare. Similarly, the antidiscrimination component of the takings
clause requires only a reasonable means-ends relationship (minimum rationality)
in removal and eviction laws, unless some fundamental right of property
ownership is abridged.
n280. See, for example,
San Telmo Assoc. v. City of Seattle, 108 Wash. 2d 20, 735 P.2d 673 (1987), involving the Seattle Housing Preservation Ordinance, enacted to temper the
steady erosion of low-income housing. The law required a converter either to
provide replacement housing or, in-lieu thereof, make payments to a housing
fund. The Washington Supreme Court held that either exaction constituted a
"tax" prohibited by the state constitution. Yet, in dicta, the court expressed
"grave reservations" that the exactions might deprive a developer of any
"profitable use of its property [which would] constitute a taking."
Id. at 24-25, 735 P.2d at 675. It added,
"the City may not constitutionally pass on the social costs of the development
of the downtown Seattle area to current owners of low income housing. The
problem must be shared by the entire city, and those who plan to develop their
property [sic] from low income housing to other uses cannot be penalized by
being required to provide more housing."
Id. at 25, 735 P.2d at 675.
The court did not explain how these conditions on a conversion license were
more onerous than the city's unchallenged power to deny conversion rights in
the first place. Nor did it explain why the very developers who were
responsible for housing depletion could not be singled out for remediation.
n281. If the ethic is taken too literally, most regulatory programs would fall for
n282. See, for example,
Terminal Plaza Corp. v. City and County of San Francisco, 177 Cal. App. 3d 892, 223 Cal. Rptr. 379 (1986), where the court was
concerned that [a removal moratorium] places a disproportionate share of the
burden of providing low cost housing upon residential hotel property owners,
rather than fairly dispersing the cost of conferring such a social benefit upon
society as a whole. But we cannot intrude upon the legislative decisionmaking
process by substituting our views for the wisdom of the Board.
Id. at 912, 223 Cal. Rptr. at 391 (citation omitted).
n283. Housing and Community Development Act of 1974,
42 U.S.C. § 1437(a) (1982
& Supp. V 1987); National Housing Act,
12 U.S.C. 17151(d)(3) (1988). In both cases, to accomplish the goal of special assistance for
low-income families, Congress authorized differential limits on rent levels for
tenants in publicly assisted housing.
24 C.F.R. § 221.531(c)(1989).
Ballard v. Rockville Centre Hous. Auth., 605 F.2d 1283, 1287 (2d Cir. 1979) (sustaining a provision in the New York Public Housing Law which scheduled
rents in public-assisted housing according to tenant income levels:
"[T]he objective of the rent differential -- spreading the cost of public
housing among those best able to absorb it -- is clearly a legitimate
Frischman v. Durand, 350 F. Supp 79, 84 (S.D.N.Y. 1972) (noting the legitimacy of governmental purpose and rationality of means in
setting differential rents based on tenant income:
"A classification based on income in these circumstances is so clearly
reasonable as to be beyond serious question. . . . Keeping the rent level of
the low income group down is a salutary purpose").
Pennell, landlords claimed that a provision for limiting rent increases based on tenant
hardship placed an unequal burden on landlords of low-income tenants. Similar
claims had been unsuccessful under the equal protection clause.
Moore v. Fowinkle, 512 F.2d 629, 631 (6th Cir. 1975);
Sidberry v. Koch, 539 F. Supp. 413, 419-20 (S.D.N.Y. 1982);
Rodriguez v. Towers Apartments, Inc., 416 F. Supp. 304, 307 n.7 (D.P.R. 1976);
Fenner v. Bruce Manor, Inc., 409 F. Supp. 1332, 1346 (D. Md. 1976);
Kennedy v. City of Seattle, 94 Wash. 2d 376, 382, 617 P.2d 713, 717 (1980) ("moorage lessors are sufficiently different from other landlords to warrant
regulation of them as a separate class");
Farrell v. Drew, 19 N.Y.2d 486, 492, 227 N.E.2d 824, 827, 281 N.Y.S.2d 1, 5 (1967) (special rent abatement provisions for welfare tenants did not deny equal
protection to landlords of such tenants);
Ballard, 605 F.2d at 1283;
Frischman, 350 F. Supp. at 79.
Rent Control for the Elderly with Low Incomes,
51 B.U.L. REV. 690 (1971).
But, the challengers in
Pennell had hoped the Supreme Court would use greater scrutiny by coupling their
fourteenth amendment claim to the proportionality requirement of the takings
clause. They were wrong. In considering the equal protection claim, the Court
applied the rational basis test, and held that differential treatment of
landlords furthered the salutary purposes of the law.
"[W]e can hardly conclude that it is irrational for the Ordinance to treat
certain landlords differently on the basis of whether or not they have hardship
tenants. The Ordinance distinguishes between landlords because doing so
furthers the purpose of ensuring that individual tenants do not suffer
Pennell v. City of San Jose, 485 U.S. 1, 14 (1988). The Court did not offer a separate analysis of the issue under the takings
Pennell, similar claims in state courts had mixed results.
Pennell v. City of San Jose, 42 Cal. 3d 365, 372, 721 P.2d 1111, 1116, 228 Cal. Rptr. 726, 731 (1986) (upholding San Jose law that was affirmed by Supreme Court);
Parrino v. Lindsay, 29 N.Y.2d 30, 272 N.E.2d 67, 323 N.Y.S.2d 689 (1971) (upholding the New York Senior Citizen Rent Increase Exemption Law which
imposed a 17-month freeze on rents of low-income seniors);
Park Avenue Corp. v. City Rent Agency, 39 A.D.2d 694, 332 N.Y.S.2d 522,
rev'd on other grounds,
31 N.Y.2d 330, 291 N.E.2d 141, 338 N.Y.S.2d 901 (1972) (upholding a six-month extension of the freeze);
Hirschel v. City of New York, 117 Misc. 2d 190, 460 N.Y.S.2d 438 (Sup. Ct. 1983) (invalidating an unlimited extension of the New York law);
Property Owners Ass'n v. Township of North Bergen, 74 N.J. 327, 378 A.2d 25 (1977) (rigid application of rent relief for needy tenants might reduce a landlord's
earning below the constitutional minimum of a just and reasonable rate of
Helmsley v. Borough of Fort Lee, 78 N.J. 200, 239, 394 A.2d 65, 84-85 (1978) (invalidating ordinance which limited rent increases to elderly tenants).
Troy Ltd. v. Renna, 727 F.2d 287 (3d Cir. 1984) (sustaining New Jersey's Senior Citizens and Disabled Protected Tenancy Act).
n287. The electorate appears far less tolerant of
"socialist" economic programs than does the judiciary. Thus, while it is of
"no concern" to the Court whether
"the legislature takes for its textbook Adam Smith, Herbert Spencer, Lord Keynes
or some other" (Ferguson v. Skrupa, 372 U.S. 726, 732 (1963)), it surely is to the voters.
See supra note 116.
supra note 261, at 1181.
n290. Equal protection challenges to preferential eviction protections have also
Budhu v. Grasso, 125 Misc. 2d 284, 479 N.Y.S.2d 303 (N.Y. Cir. Ct. 1984);
Reiner-Kaiser Assoc. v. McConnachie, 104 Misc. 2d 750, 429 N.Y.S.2d 343 (N.Y. Cir. Ct. 1979).
Agins v. Tiburon, 447 U.S. 255, 261 (1980).
supra note 28, at 519 (every property rights case
"involves a balancing of the competing constitutional interests in democracy and
But see Michelman,
supra note 261, at 1193-96 (arguing against balancing on utilitarian grounds).
See supra text accompanying notes 91-92.
Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1978).
n295. In sustaining the New Jersey eviction law in
Edgewater Inv. Assoc. v. Borough of Edgewater, 103 N.J. 227, 510 A.2d 1178 (1986), the court applied a
"manifest injustice" standard to test the validity of retroactive application of the eviction law,
which it described as a
Id. at 240, 510 A.2d at 1185.
Budhu v. Grasso, 125 Misc. 2d 284, 479 N.Y.S.2d 303 (N.Y. Civ. Ct. 1984) (sustaining retroactive eviction ban on elderly tenant upon balancing.
n296. For instance, in
Radin v. Bartolomei, 195 N.J. Super. 626, 481 A.2d 313 (1984), the court applied a discretionary standard, and granted a tenant limited
eviction protection for five years, rather than the full 40-year period
permitted by statute. The New Jersey law permitted a court to grant
"some or all" of the act's protections to tenants, based on
"concepts of fundamental fairness or due process."
Id. at 631-32, 481 A.2d at 316. In
Radin, the court provided a relatively short term because the tenant had assets of $
200,000 and the eviction law did not become effective until six months after
the plaintiff had purchased the condominium unit.
Id. at 632-33, 481 A.2d at 316-17.
supra note 28, at 220 ("If the question of whether there has been a taking is to depend on a weighing
of private and public interests by the judiciary, then there will be no
reliable way to predict whether a particular action will ultimately be held to
be a 'taking'").
Pennell v. City of San Jose, 485 U.S. 1 (1988);
MacDonald v. Yolo County, 477 U.S. 340 (1986);
Williamson County Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985);
San Diego Gas & Elec. v. San Diego, 450 U.S. 621 (1981);
Agins v. Tiburon, 447 U.S. 255 (1980);
Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1978).
Agins, 447 U.S. at, 260.
Birkenfeld v. City of Berkeley, 17 Cal. 3d 129, 165, 550 P.2d 1001, 1027, 130 Cal. Rptr. 465, 491 (1976). In
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987), the Court stressed the
"especially steep" hill which facial challengers must overcome.
Id. at 495. One reason why the hill is so steep is that balancing -- the Court's ultimate
determinant in takings cases -- cannot be adequately performed in the abstract.
n301. The example is drawn from Schnuck v. City of Santa Monica, No. 87-05936 (C.D.
Cal. Feb. 21, 1989), involving an 89-year old landlord in ill health seeking to
evict a tenant from an apartment more suitable to the landlord. Under
applicable law, a landlord may not evict for owner occupancy if a unit in the
building is already owner occupied. The district court ruled against the
n302. Indeed, in
Pennell, landlords argued that regulatory redistribution was invalid when tailored to
individual cases, rather than applied across broad categories.
Pennell, 485 U.S. at 9.
n303. Judicial review of agency decisions is often had by way of administrative
CAL. CIV. PRO. CODE § 1094.5 (West 1980
& Supp. 1989).
n304. It has been suggested that a law that does not vest sufficient agency
discretion is facially invalid because
"its terms will not permit those who administer it to avoid confiscatory results" in at least some instances.
Birkenfeld, 17 Cal. 3d at 169, 550 P.2d at 1029, 130 Cal. Rptr. at 493 (rent control law
"drastically and unnecessarily restricts the rent control board's power to
adjust rents, thereby making inevitable the arbitrary imposition of
unreasonably low rent ceilings").
n305. Judicial balancing is less appropriate where the competing interests are not
easily comparable. Thus, when the public interest in maintaining an adequate
stock of affordable housing and the private interest in maximizing returns
cannot be balanced, facially or as applied, without some external value
choices, it is best left to the legislature as policymaker.
323 U.S. 373 (1945).
Id. at 377-78. This appears to have followed a similar understanding in the
Restatement of Property referring to property as legal relations among persons respecting things,
rather than the things themselves.
RESTATEMENT OF PROPERTY 3-4 (1936) (introductory note).
supra note 261, at 1185 n.41.
General Motors, 323 U.S. at 378.
Id. Professor Costonis traces the origins of this language to
Wynehamer v. People, 13 N.Y. 378, 433 (1856), which was subsequently incorporated by Justice Smith in his highly regarded
opinion for the New Hampshire Supreme Court in
Eaton v. B.C. & M.R.R., 51 N.H. 504 (1872). Costonis,
Presumptive and Per Se Takings: A Decisional Model for the Taking Issue,
58 N.Y.U. L. REV. 465, 531 (1983). The search for a definition of constitutional property was ongoing. See, for
Munn v. Illinois, 94 U.S. 113 (1877), where the Court considered whether
"property" was the existence and title to a physical object, or the manner in which the
thing could be employed and its resulting value. In sustaining a grain
elevator rate law, the Illinois Supreme Court stated that a constitutional
violation occurred only if the law
"virtually take[s] away and destroy[s] those rights in which property consists.
This destruction must be, for all substantial purposes, total."
Munn v. Illinois, 69 Ill. 80, 89 (1873). The Supreme Court affirmed, but with Justice Field dissenting, arguing that
"property" included enjoyment and use of the thing possessed.
Munn, 94 U.S. at 141-43. The Court still struggles with attempts to define property, usually deferring
to states in the first instance.
See infra notes 351-55.
Andrus v. Allard, 444 U.S. 51, 65-66 (1979).
Id. Justice Roberts' metaphor was slightly different, referring to government
"does not take [the owner's] entire interest, but by the form of its proceeding
chops it into bits. . . ."
General Motors, 323 U.S. at 382.
n312. This has been described as the
"Hohfeldian theory of property." Williams,
supra note 28, at 217.
n313. But see
Gorieb v. Fox, 274 U.S. 603 (1927), where the Court seemed to reject any hierarchy of interests or difference in
the various forms of government restrictions on property:
Each interferes in the same way, if not to the same extent, with the owner's
general right of dominion over his property. All rest for their justification
upon the same reasons which have arisen in recent times as a result of the
great increase and concentration of population in urban communities and the
vast changes in the extent and complexity of the problems of modern city life.
Id. at 608 (citations omitted).
Nollan v. California Coastal Comm'n, 483 U.S. 825, 831 (1987). At least one other
"stick" has achieved preferential status, that to devise property.
Hodel v. Irving, 481 U.S. 704, 716 (1987) ("[i]n one form or another, the right to pass on property -- to one's family in
particular -- has been part of the Anglo-American legal system since feudal
times"). The Court may have created a second per se takings rule, since the value of
these interests in
Hodel was marginal or de minimus. Ordinarily, the Court defers to state definitions
of property, but may not do so with respect to certain rights.
See infra note 352.
n315. There are by no means accepted definitions of possessory and nonpossessory
interests, or agreement as to what distinguishes them. For purposes of this
Article, possessory interests are those commonly associated with the identity
of user or occupier, while nonpossessory interests include those associated
with the manner or benefits of use, whether by oneself or another. Thus,
ouster of a landowner clearly implicates possessory interests because it
precludes his use (whether or not use by another is accomplished). Conversely,
zoning regulates nonpossessory interests because identity of user is
irrelevant; only the nature of the use is regulated. Thus, ordinary eviction
laws implicate possessory interests because they regulate who may occupy the
property, while rent control normally affects only the nonpossessory interest
in monetary benefit derived from use. When eviction regulations form part of a
comprehensive legislative scheme to preserve affordable housing, many of a
landlord's interests are affected to some degree. For an excellent and
comprehensive description of different interests in property, and their
treatment in takings cases, see Humbach,
supra note 76.
supra note 261, at 1186; Sax,
Takings and the Police Power,
74 YALE L.J. 36, 46-48 (1964).
Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166 (1872) (dam constructed pursuant to state act caused Lake Winnebago to overflow
rendering 640 acres of land unusable).
Pumpelly was decided before the just compensation clause was incorporated through the
fourteenth amendment to be applicable to the states. Instead, the Supreme
Court construed an identical provision in the Wisconsin Constitution. The
Court rejected the suggestion that appropriation of title was required to
trigger the clause:
It would be a very curious and unsatisfactory result, if . . . [the Court] held
that if the government refrains from the absolute conversion of real property
to the uses of the public it can destroy its value entirely, can inflict
irreparable and permanent injury to any extent, can, in effect, subject it to
total destruction without making any compensation, because, in the narrowest
sense of that word, it is not taken for the public use.
Id. at 178-79. Thus, the Court subscribed to doctrine then in circulation that
"a serious interruption to the common and necessary use of property may be . . .
equivalent to the taking of it, and that under the constitutional provisions it
is not necessary that the land should be absolutely taken."
Id. at 179.
Pumpelly, the Court limited its holding:
[W]here real estate is actually invaded by superinduced additions of water,
earth, sand, or other material, or by having any artificial structure placed on
it, so as to effectually destroy or impair its usefulness, it is a taking,
within the meaning of the Constitution. . . . Beyond this we do not go, and
this case calls us to go no further.
Id. at 181.
St. Louis v. Western Union Tel. Co., 148 U.S. 92, 98-99 (1893) ("permanent and exclusive" physical occupation of municipal property by Western Union pursuant to a
federal franchise was compensable).
United States v. Causby, 328 U.S. 256, 262-63 (1946) (finding a taking resulting from continuous Air Force overflights above a
chicken farm, rendering it valueless; the government had not merely destroyed
property [but was] using a part of it for the flight of its planes).
444 U.S. 164 (1979).
n322. In developing the pond, Kaiser-Aetna had expended substantial sums in dredging
and creating what it had expected to be a private marina. The 1,500 persons
purchasing waterfront lot leases on the marina had similar expectations. The
premium prices they paid for their lots and the fees they paid for use and
upkeep of the marina created investment-backed expectancies of private use.
Without the ability to exclude the nonpaying public, the rental value of the
marina, and the lessees' investments, were destroyed.
Id. at 174-80. Furthermore, the investment-backed expectations were reasonable, having been
based on prior assurances from the Army Corps of Engineers that the pond would
n323. The pond was, of course, still usable, perhaps to the same extent as before
imposition of the navigable servitude; but its rental value had been reduced to
Id. at 179.
Id. at 179-80 (citations omitted).
Vaughn v. Vermillion Corp., 444 U.S. 206 (1979) (privately held canals were not open to public use).
458 U.S. 419 (1982).
"We conclude that a permanent physical occupation authorized by government is a
taking without regard to the public interests that it may serve."
Id. at 426.
n328. New York had authorized cable television companies to install and maintain
lines in apartment buildings upon payment to the owner of a $ 1 annual fee.
The Court saw this unconsented
"physical invasion" of property by cable lines as interference with the landlord's bundle of
rights because the property so occupied by the cable company was rendered
valueless to the owner. The owner could not occupy that part herself, she
could not exclude, and she could not derive benefit either from the user or
through sale of the property. The Court viewed the regulation as
"chop[ping] through the bundle [of rights], taking a slice of every strand."
Id. at 435.
480 U.S. 245 (1987).
Id. at 251.
Florida Power Corp. v. FCC, 772 F.2d 1537 (11th Cir. 1985).
Florida Power, 480 U.S. at 251 (emphasis in original).
Id. at 251 n. 6.
n334. E.g., Costonis,
supra note 309, at 529 (Loretto
"is so anachronistic that the opinion can only be characterized as aberrational").
See infra text accompanying notes 340-73.
n336. Michelman suggests that
"the magic of physical invasion is rooted in wordplay." Michelman,
supra note 261, at 1185.
See infra note 409-11.
"This Court has consistently affirmed that States have broad power to regulate
housing conditions in general and the landlord-tenant relationship in
particular without paying compensation for all economic injuries that such
Loretto, 458 U.S. at 440. It specifically distinguished
Block v. Hirsh, 256 U.S. 135 (1921), and
Edgar A. Levy Leasing v. Siegel, 258 U.S. 242 (1922), reading those cases as not involving government action which
"authoriz[ed] the permanent occupation of the landlord's property by a third
Loretto, 458 U.S. at 440.
Hall v. Santa Barbara, 833 F.2d 1270 (9th Cir. 1987);
Ross v. City of Berkeley, 655 F. Supp. 820 (N.D. Cal. 1987).
n340. H. TIFFANY, REAL PROPERTY 714 (3d ed. 1939).
Block, 256 U.S. at 157 ("[t]he preference given to the tenant in possession . . . is traditional in
n341. U.S. CONST. amend. III ("[n]o soldier shall, in time of peace be quartered in any house, without the
consent of the Owner, nor in time of war, but in a manner to be prescribed by
law"). In his dissent in
Block v. Hirsh, Justice McKenna analogized a landlord's right to evict tenants to third
Block, 256 U.S. at 165.
supra note 28, at 535.
n343. U.S. CONST. amend. IV ("[t]he right of the people to be secure in their persons, houses, papers, and
effects, against unreasonable searches and seizures, shall not be violated. .
n344. According to Patterson,
"John Adams attributed the origins of the independence movement to discontent
with official intrusions on privacy, exemplified by the writ of assistance." Patterson,
supra note 28, at 535 n.86 (citing Thomas Hutchinson's Draft of a Writ of
Assistance, in 2 LEGAL PAPERS OF JOHN ADAMS 144, 146 (L. Wroth
& H. Zobel eds. 1965)).
FCC v. Pacifica Found., 438 U.S. 726 (1978) (right to exclude offensive radio broadcasts).
Donovan v. Dewey, 452 U.S. 595, 598-99 (1981) ("the expectation of privacy that the owner of commercial property enjoys in such
property differs significantly from the sanctity accorded an individual's home").
supra note 28, at 536 n.96 (relating that Adams described the principle contained in
"a man's house is her castle" as
"one of the most essential branches of English liberty").
Lindsey v. Normet, 405 U.S. 56, 82 (1972) ("[m]odern man's place of retreat for quiet and solace is the home. Whether
rented or owned, it is his sanctuary") (Douglas, J., concurring and dissenting).
Cf. J. ELY,
supra note 147. Ely prefers the term
"clause bound interpretivist" to describe those who narrowly construe the Constitution in discovering
n350. Under a per se approach, the right would be nearly absolute since no
countervailing public interest could justify its abridgement.
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001 (1984) (quoting
Board of Regents v. Roth, 408 U.S. 564, 577 (1972)).
Pruneyard Shopping Center v. Robbins, 447 U.S. 74, 84 (1980) ("as a general proposition . . . the United States, as opposed to the several
States, [is not] possessed of residual authority that enables it to define
'property' in the first instance"); United States
ex rel. TVA v. Powelson, 319 U.S. 266, 279 (1943) (meaning of property
"will normally obtain its content by reference to local law");
United States v. Willow River Power co., 324 U.S. 499, 502 (1945) ("not all economic interests are 'property rights'; only those economic
advantages are 'rights' which have the law back of them"). The Court also uses this approach to define property for purposes of due
Roth, 408 U.S. at 577, and the fourth amendment,
Payton v. New York, 445 U.S. 573, 598-600 (1980). This has been referred to as the
"new property," whereby
"the Court appears to use positive law and contract as the exclusive sources for
constitutionally recognized expectations." Patterson,
supra note 28, at 530 n.53.
Powelson, 319 U.S. at 279 ("the meaning of 'property' . . . in the Fifth Amendment is a federal question");
Pruneyard, 447 U.S. at 93 ("[t]he constitutional terms 'life, liberty, and property' do not derive their
meaning solely from the provisions of positive law. They have a normative
dimension as well, establishing a sphere of private autonomy which government
is bound to respect") (Marshall, J., concurring).
See also Humbach,
supra note 76, at 247-48.
The Court appears more willing to defer to state definitions of property for
procedural due process purposes.
Bishop v. Wood, 426 U.S. 341 (1976);
Roth, 408 U.S. at 564. It is not clear why such a dichotomy should exist.
Pruneyard, 447 U.S. at 88 (Marshall, J., concurring). Perhaps it is because the Court still subscribes,
sub silentio, to the rights/privileges distinction in procedural due process
cases, particularly those involving statutory entitlements. Conversely,
concepts of property retain much of their natural rights origin.
See infra note 372.
Webb's Fabulous Pharmacies v. Beckwith, 449 U.S. 155 (1980). In
Webb's, interpleader funds deposited in state court were not credited with interest
earned while on deposit. The Supreme Court rejected the state's argument that
the funds were
"public monies" while temporarily held by the state court.
"[A] State, by ipse dixit, may not transform private property into public
property without compensation. . . ."
Id. at 164. In
Hughes v. Washington, 389 U.S. 290 (1967), the Court held that a state could not redefine seaward boundaries of coastal
property. Although the decision was on nonconstitutional grounds, Justice
Stewart's concurrence rejected the state's attempt to define property.
"[A] State cannot be permitted to defeat the constitutional prohibition against
taking property without due process of law by the simple device of asserting
retroactively that the property it has taken never existed at all."
Id. at 296-97 (Stewart, J., concurring).
Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938) ("Congress has no power to declare substantive rules of common law . . . [a]nd no
clause in the Constitution purports to confer such a power upon the federal
courts"). Justice Brandeis' opinion assumed that such power did exist
"in matters governed by the Federal Constitution."
Penn Central Transp. Co. v. New York, 438 U.S. 104, 125 (1978) (court will examine whether interests affected are
"sufficiently bound up with the reasonable expectations of the claimant to
constitute 'property' for Fifth Amendment purposes").
447 U.S. 74 (1980).
Pruneyard, 447 U.S. at 84. Justice Marshall specially concurred to emphasize that state-imposed access
for speech did not
"constitute 'an unwarranted infringement of property rights.'"
Id. at 90 (Marshall, J., concurring). He previously had rejected any
"overly formalistic view of the relationship between the institution of private
ownership of property and the First Amendment's guarantee of freedom of speech."
Hudgens v. NLRB, 424 U.S. 507, 542 (Marshall, J., dissenting).
n358. At common law, rights in property were often seen as sacrosanct. John Locke's
suggestion that the very foundation of civil government was to protect the
accumulation of property, (J. LOCKE, THE SECOND TREATISE ON CIVIL GOVERNMENT 70
(Prometheus Books 1986)), and Blackstone's discovery of property rights as
"founded in nature" (1 W. BLACKSTONE, COMMENTARIES 138 (1882)) were instrumental in enhancing its
n359. For instance, no one would now contend, as the Supreme Court once ruled, that
"a negro of the African race [is] an article of property, and held, and bought
and sold as such."
Dred Scott v. Sandford, 60 U.S. (19 How.) 393, 408 (1856). Neither is real property immune from redefinition:
[T]he fact that tangible property is [involved] tends to give a rigidity to our
conception of our rights in it that we do not attach to others less concretely
clothed. But the notion that the former are exempt from the legislative
modification required from time to time in civilized life is contradicted . . .
by . . . the police power in its proper sense, under which property rights may
be cut down, and to that extent taken, without pay.
Block v. Hirsh, 256 U.S. 135, 155 (1921).
See, e.g., Civil Rights Act of 1866,
42 U.S.C. §§ 1981-1982 (1982); Fair Housing Act,
42 U.S.C. §§ 3601-3631 (1982
& Supp. 1987); California Fair Employment and Housing Act,
CAL. GOV'T CODE §§ 12900-12996 (West 1980
& Supp. 1989); California Unruh Civil Rights, Act,
CAL. CIV. CODE § 51 (West 1982
& Supp. 1989).
Pruneyard Shopping Center v. Robbins, 447 U.S. 74 (1980).
Marsh v. Alabama, 326 U.S. 501, 509 (1946) ("When we balance the Constitutional rights of owners of property against those
of the people to enjoy freedom of press and religion, as we must here, we
remain mindful of the fact that the latter occupy a preferred position").
Central Hardware Co. v. NLRB, 407 U.S. 539 (1972) (limitations on an employer's right to exclude uninvited, nonemployee labor
supra note 309, at 539 n.304.
United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 62 (1913) (Congress may
"forbid the use of the bed of the river by the owner in any way which in its
judgment is injurious to the dominant right of navigation").
Katzenbach v. McClung, 379 U.S. 294 (1964);
Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964).
Bowles v. Willingham, 321 U.S. 503 (1944);
Block v. Hirsh, 256 U.S. 135 (1921).
supra note 76, at 255 ("[m]ost prominent [of property interests] is the possessory owner's right to . .
. exclusive control over who has access to his land and the conditions of such
The Constitutionality of Rent Control Restrictions on Property Owners' Dominion
100 HARV. L. REV. 1067 (1987) (criticising the treatment of dominion interests in property as fundamental
liberty interests entitled to heightened protection).
"[A] permanent physical occupation . . . is a taking without regard to the
public interests it may serve."
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426 (1982). Justice Marshall used the term
"permanent physical occupation" 21 times in his opinion, thus emphasizing the importance of this element to
what was otherwise a
"very narrow" holding.
Id. at 441.
Id. at 435 n.12.
Id. Marshall added:
"[t]he rationale is evident: they do not absolutely dispossess the owner of his
rights to use, and exclude others from, his property."
Id. See also
National Bd. of YMCA v. United States, 395 U.S. 85 (1969) (temporary intrusion by U.S. troops was not a compensable taking);
Transportation Co. v. Chicago, 99 U.S. 635, 642 (1878) (temporary flooding caused by construction not a taking).
n372. It is entirely plausible that most or all states treat the right to exclude as
reflecting some fundamental interest. But, even if they do, should not that
interest be compared to the interests the state seeks to advance through the
property regulation at issue? In other words, is there any analytical way
around the necessity to consider both private and public interests at stake?
Kaiser-Aetna, Justice Marshall had joined Justice Blackmun in disputing the majority's
treatment of the right to exclude. Justice Blackmun wrote,
"I think this question requires a balancing of private and public interests."
Kaiser-Aetna v. United States, 444 U.S. 164, 188 (1979).
Loretto, 458 U.S. at 436 ("property law has long protected an owner's expectation that he will be
relatively undisturbed at least in the possession of his property"). Justice Marshall did not explain the source of his
"property law." But it is consistent with his approach in
Pruneyard, allowing for a
"normative dimension" of property which the Court could define, even beyond
"statutory or common law."
Pruneyard Shopping Center v. Robbins, 447 U.S. 74, 93 n.2 (1980) (Marshall, J., concurring).
Loretto, 458 U.S. at 442 (Blackmun, J., dissenting) (terming the distinction
"strained and untenable").
n375. It is a bright line because it results in dichotomous treatment of government
action; on one side the court uses a
"multifactor balancing test" (Loretto, 458 U.S. at 444 (Blackmun, J., dissenting)), while on the other, it uses a rule of per se
Id. at 450.
Armstrong v. United States, 364 U.S. 40, 49 (1960).
Block v. Hirsch, Justice Holmes stated,
"The regulation is put and justified only as a temporary measure. A limit in
time, to tide over a passing trouble, well may justify a law that could not be
upheld as a permanent change."
Block v. Hirsch, 256 U.S. 135, 157 (1921) (citations omitted). However, the existence of a war emergency was critical
to the validity of the
"Rents Act" primarily because it was the source of federal power.
supra note 4, at 207 n.97.
333 U.S. 138 (1948).
Id. at 143. As indicated by
Woods, the war emergency requirement for price and use regulation has been abandoned.
See supra note 58. But its functional equivalent in eviction cases (only temporary
measures are valid) might reemerge if the permanent/temporary dichotomy
n381. Physical intrusion by the tenant was thus temporary in a dual sense: the
landlord could regain possession when the tenant eventually vacated or when the
law was repealed by Congress.
E.g., SANTA MONICA, CAL., CITY CHARTER
§ 1803(r) (1984) (controls terminate if the vacancy rate exceeds five percent).
supra note 309, at 510 (distinguishing between intrusions by persons and those by
727 F.2d 287 (3d Cir. 1984).
n385. New Jersey Senior Citizens and Disabled Protected Tenancy Act,
N.J. STAT. ANN. § 2A:18-61.11(d) (West Supp. 1983).
Troy, 727 F.2d at 301. Several of the tenants were over 85 years old, with average life expectancies
of five years or less. Reply Brief of Defendants 10,
Troy, 727 F.2d at 287 (Nos. 83-5077, 83-5097).
Loeterman v. Town of Brookline, 524 F. Supp. 1325 (D. Mass. 1981).
Loeterman was a similar challenge to Brookline's
"Ban Amendment" prohibiting evictions for owner occupancy, on the ground that a grant of
"life tenancy" to tenants violated due process. The claim that the law
"compels a property owner to dedicate his property indefinitely to the rental
market" was rejected.
Id. at 1328. The fact that the eviction ban was indefinite and might prevent owner
"for the lifetime of the current tenant, a lifetime which in some instances may
extend beyond that of the owners," did not render the law unconstitutional.
Id. at 1329-30. Other jurisdictions similarly provide indefinite eviction protection to
D.C. CODE ANN. § 45-1616 (1981);
N.Y. GEN. BUS. LAW § 352-eee (McKinney Supp. 1982).
388 Mass. 468, 446 N.E.2d 1060 (1983),
464 U.S. 875 (1983) (Rehnquist, J., dissenting). The City of Cambridge had enforced its removal
and eviction ban against the new owner of a six-unit apartment building, who
had desired to raze the structure and turn the parcel into a parking lot for
its adjoining shopping center. The Cambridge Rent Control Board's denial of
permission to demolish the structure was upheld by the Superior Court. This
decision was affirmed by an equally divided Massachusetts Supreme Judicial
833 F.2d 1270 (9th Cir. 1987).
655 F. Supp. 820 (N.D. Cal. 1987).
Hall, 797 F.2d at 1498. Similar results were reached in two earlier mobile home eviction cases.
Palm Beach Mobile Homes, Inc. v. Strong, 300 So. 2d 881 (Fla. 1974);
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 414 A.2d 1246 (Ct. App. 1980). In the former case, the Florida court narrowly construed the state's eviction
law to allow termination of tenancy without cause after a substantial period.
Strong, 300 So. 2d at 888. In the latter, the Maryland Court of Appeals construed its state statute not
to require renewal of an expired lease.
Cider Barrel, 287 Md. at 581, 414 A.2d at 1252. Both courts felt that such constructions were necessary to avoid
n392. BERKELEY, CAL., MUN. CODE ch. 13.82 (1986) (Telegraph Avenue Area Commercial
Rent Mediation and Arbitration Ordinance).
n393. Somewhat similar eviction protection is provided to lessees of gasoline
CAL. BUS. & PROF. CODE § 20999.1 (West 1987);
CAL. CIV. PROC. CODE § 1174(a) (West 1982
& Supp. 1989).
Ross, 655 F. Supp. at 837.
n395. The court stated that
"the protected leasehold is potentially endless in light of the perpetual
existence of corporations under California law."
Id. at 837.
Loretto Court therefore did not foreclose the possibility that a particular eviction
control regulation could constitute a taking if it authorized a permanent
occupation of the rented premises"). Even if the court in
Ross was correct in its temporary/permanent distinction, it misapplied it. Since
the tenants had agreed to vacate after four years, thereby surrendering any
property estate conferred by law, the tenancies were far more definite than
other eviction cases. While this may not have cured any perceived
constitutional deficiencies (id. at 836 n.18) it rendered the issue premature for adjudication.
MacDonald, Sommer & Frates v. County of Yolo, 477 U.S. 340, 348 (1986).
n397. It has already been noted (supra note 378) that the cases cited in
Loretto cannot be distinguished based on the now abandoned war emergency doctrine.
While such an emergency might enlarge congressional or state powers, or figure
prominently in the balance of interests, it cannot suspend constitutional
rights, particularly those protected by a per se doctrine.
See supra notes 387-95 and accompanying text.
See supra note 396
infra note 435.
n400. According to the
Loretto Court, permanency is not disproved simply because the landlord might terminate
his rental business when a tenant vacates, or at any other time.
Loretto, 458 U.S. at 439 n.17.
Troy v. Renna, 727 F.2d 287, 289 n.1 (3d Cir. 1984).
CAL. CIV. CODE § 798.56 (West 1982
& Supp. 1989).
See also Note,
supra note 179, 167-68.
CAL. CIV. CODE §§ 798.73
& 798.74 (West 1982
& Supp. 1989). This is fairly common.
supra note 179, at 173.
Ross v. City of Berkeley, 655 F. Supp. at 820, 826 n.6 (N.D. Col. 1987).
n405. In contrast, the property owner in
Loretto was forever denied the right to reenter that portion of her property occupied
by cable equipment.
n406. This is
"[t]he heart of the landlord-tenant relationship . . . the right to possession
for some period less than infinity." C. DONAHUE, T. KAUPER
& P. MARTIN, PROPERTY 561 (1974).
n407. If the courts in
Ross meant to distinguish temporary from permanent occupations on differences in
common law estates in property (for example, fee vs. term for years with right
of reversion), neither adequately developed its reasoning.
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 438 n.16 (1982).
Ross, the district judge felt the protected tenancies under the Berkeley law were
"permanent" because they might endure past the owner's lifetime, citing Berger
Thoughts on the White River Junction Manifesto: A Reply to the
"Gang of Five's" Views on Just Compensation for Regulatory Taking of Property,
19 LOY. L.A.L. REV. 685, 744-45 (1986) ("[O]ne must abandon abstract calculations which obfuscate the problem by
attempting to relate use prohibitions for periods of years to the perpetual
life of the realty"). Yet, rather than support the court's conclusion, Berger
& Kanner's analysis points the other way, suggesting that duration is immaterial
in evaluating invasions. The authors argue that temporary takings are every
bit as objectionable as permanent ones. To them,
Troy or any eviction law, would be no different than the indefinite ones in
That the landlord might not be able to regain possession during his lifetime
did not dissuade the court in
Loeterman from upholding Brookline's eviction law.
See supra note 252.
"[W]hen the Court speaks in terms of a permanent physical occupation, it does
not necessarily mean that the occupation is one which will last forever."
Florida Power Corp. v. FCC, 772 F.2d 1537, 1544 (11th Cir. 1985),
rev'd on other grounds,
480 U.S. 245 (1987).
See also Costonis,
supra note 309, at 543-47. The Court's choice of
"temporary" labels is not based on temporal duration.
Id. at 545 n.341. Costonis is critical of
Loretto because the Court's use of
"'permanent' in this durational sense" is original to that case, and not one derived from precedent."
Id. (citations omitted).
"Permanency" surely does not mean
"constant" in a physical sense. Even intermittent uses are treated by the Court as
permanent if they are persistent.
Nollan v. California Coastal Comm'n, 483 U.S. 825, 832 (1987) ("[A] 'permanent physical occupation' has occurred, for purposes of that rule,
where individuals are given a permanent and continuous right to pass to and fro").
n412. Costonis provides an interesting illustration contrasting
Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327 (1922), with
Peabody v. United States, 231 U.S. 530 (1913). In the former, the firing of a single shot over a private resort constituted a
taking, because of an intent to continue doing so; while, in the latter, two
shots over a private resort did not constitute a taking because there was no
intent to continue firing. Costonis,
supra note 309, at 543.
United States v. Causby, 328 U.S. 256 (1946).
Causby involved frequent, but intermittant, military overflights above a chicken farm
which so disturbed the chickens that they became unproductive. The Court felt
this destroyed the value of the land
"as complete[ly] as if the United States had entered upon the surface of the
land and taken exclusive possession of it."
Id. at 261.
United States v. General Motors Corp., 323 U.S. 373 (1945) (involving measure of compensation for appropriation of successive short-term
Devines v. Maier, 665 F.2d 138 (7th Cir. 1981) (government order requiring tenant to vacate unsafe premises was a taking of
leasehold estate requiring just compensation).
Schultz v. United States, 5 Cl. Ct. 412, 418 (1984).
supra note 309, at 544 ("The Court's precedents do not indicate that permanent intrusions will
invariably be takings, although those that have been so characterized have
consistently had substantial effects on the claimant's land").
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987). Until
First English, it was uncertain whether temporary intereference, no matter how severe, could
constitute a regulatory taking.
San Diego Gas & Elec. v. County of San Diego, 450 U.S. 621 (1981).
Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987). Occupation was not permanent in the sense that a particular person or
instrument was always on the property. Yet, sufficient
"permanency" was shown by continuity from one occupier to another:
We think a 'permanent physical occupation' has occurred, for purposes of that
rule, where individuals are given a permanent and continuous right to pass to
and fro, so that the real property may continuously be traversed, even though
no particular individual is permitted to station himself permanently upon the
Id. at 832.
Pruneyard Shopping Center v. Robbins, 447 U.S. 74 (1980).
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).
n420. This factor was critical to the court in
Eamiello v. Liberty Mobile Home Sales, 208 Conn. 620, 546 A.2d 805 (1988),
109 S. Ct. 1104 (1989), in sustaining the Connecticut Mobile Manufactured Home Parks, Owners, and
Residents Act. The court declined to follow
Hall because it thought the Ninth Circuit had misread
Loretto the building, or portions thereof where the cable equipment was to be
installed, had never previously been used for that purpose and the owner was
being compelled to allow the attachment of objects to his building for the
purpose of supplying a service to which he had never agreed. A mobile home
park operator, however . . . has already devoted the land upon which the mobile
home being sold is situated to the same use for which the land will continue to
be occupied beyond the original term of the lease by the same lessee or his
transferee. He is not being compelled to permit his land to be occupied for a
use to which he never consented.
Id. at 642, 546 A.2d at 816-17. The Connecticut law was again sustained in
Gibbs v. Southeastern Inv. Corp., 705 F. Supp. 738 (D. Conn. 1989), using similar reasoning.
n421. This factor sets eviction laws apart, for instance, from the escheat
provisions of the Indian Land Consolidation Act of 1983 declared
Hodel v. Irving, 481 U.S. 704 (1987). There, a rule of escheat of small fractionalized Indian land holdings to the
tribe, totally abrogated the owner's right to control the ultimate disposition
of property, in that case by descent and devise. Since
"the right to pass on property -- to one's family in particular" was a valuable
"stick in the bundle of [property] rights" (id. at 716), its extinction amounted to a taking.
n422. This was the prevailing jurisprudence in land use cases until the mid-1920s.
See infra note 447.
Loretto, 458 U.S. at 420.
But see Costonis,
supra note 309, at 518 (Loretto might more properly be considered the
"tenants' business invitees").
n424. Possessory interests were seen as personal, rather than property, rights in
Loretto. Indeed, the
"complete dominion" exercised by the cable company could be expressed in anthropomorphic terms; it
"add[ed] insult to injury."
Loretto, 458 U.S. at 436. Professor Michelman similarly describes the reaction to another's dominion
over one's property:
"psychological shock, the emotional protest, the symbolic threat to all property
and security. . . ." Michelman,
supra note 261, at 1228.
n425. The early eviction laws were distinguished in
Loretto because they did not
"authorize the permanent occupation of the landlord's property by a third party."
Loretto, 458 U.S. at 440.
See also Loeterman v. Town of Brookline, No. 80-670-MC (D. Mass. Dec. 1, 1982)
(upholding Brookline's eviction ban on remand and distinguishing
Loretto on this ground).
n426. He has also yielded certain prerogatives regarding selection of tenants, for
example, discrimination based on race, or the presence of children.
Marina Point, Ltd. v. Wolfson, 30 Cal. 3d 721, 723, 640 P.2d 115, 117, 180 Cal. Rptr. 496, 498 (1982).
See infra note 433.
FCC v. Florida Power Corp., 480 U.S. 245, 252 (1987) (citing
Fresh Pond Shopping Center v. Callahan, 464 U.S. 875 (1983)) (dismissing appeal);
Bowles v. Willingham, 321 U.S. 503 (1944);
Block v. Hirsh, 256 U.S. 135 (1921)).
See also Patterson,
supra note 28, at 539 ("the scope of the constitutional property interest does not encompass protection
against intrusion by invitees").
Florida Power, 480 U.S. at 252-53.
Hall v. Santa Barbara, 797 F.2d at 1502 n.23.
Id. at 1501.
n431. Rent control and eviction protection laws do not normally allow for transfer
of occupancy rights.
Sullivan v. Brevard Assoc., 66 N.Y.2d 489, 488 N.E.2d 1208, 498 N.Y.S.2d 96 (1985) (succession in rent controlled buildings not authorized by state law);
Tagert v. 211 East 70th Street Co., 63 N.Y.2d 818, 472 N.E.2d 22, 482 N.Y.S.2d 246 (1984) (same under rent stabilization program).
Hall, 797 F.2d at 1501-02 n.23.
n433. More than half the states have enacted mobile home park antidiscrimination
"designed to prohibit [park owners'] abusive practices."
Cider Barrel Mobile Home Court v. Eader, 287 Md. 571, 575, 414 A.2d 1246, 1248 (1980). See
id. at 575 n.5, 414 A.2d at 1248 n.5 for a list of state statutes.
Schweiso v. Williams, 150 Cal. App. 3d 883, 1248, 198 Cal. Rptr. 238, 240 (1984) (in lease assignment cases,
"denying consent solely on the basis of personal taste, convenience or
sensibility or in order that the landlord may charge a higher rent than
originally contracted for have been held arbitrary reasons failing the tests of
good faith and reasonableness");
Marina Point Ltd. v. Wolfson, 30 Cal. 3d 721, 640 P.2d 115, 180 Cal. Rptr. 496 (1982) (unlawful for landlord to exclude families with children);
CAL. CIV. CODE § 51.2 (West Supp. 1989) (age discrimination in housing prohibited).
See generally Hoeflich
supra note 141, at 675 n.115; M. MOSKOWITZ, K. BOAR, D. BUCHALTER, R. JAVOR, R.
SOLOMON, B. SUSMAN
& W. WARE, CALIFORNIA RESIDENTIAL LANDLORD-TENANT PRACTICE 71-126 (1986)
[hereinafter LANDLORD-TENANT PRACTICE]. Even where the landlord may lawfully
employ subjective factors such as those listed by the court in
Hall, it may be risky to do so.
Id. at 75, 78-79.
See 2 R. POWELL,
supra note 237, at 160 ("[t]he lessee, having an estate for years, normally has an interest which is
freely and completely transferable, in the absence of some restrictive
provision contained in the lease") Powell explains that the right to assign leases is normally withheld only
"lessor has made the lease because of reliance on the personal characteristics
of the lessee," (id.) an option with reduced utility these days.
See also LANDLORD-TENANT PRACTICE,
supra note 434, at 179-87 n.430. In the case of a commercial tenant, it can change
"by a change in the personnel of the lessee partnership [or] by a sale of the
controlling stock in the lessee corporation." R. POWELL,
supra note 237, at 163;
Eamiello v. Liberty Mobile Home Sales, 208 Conn. 620, 646, 546 A.2d 805, 818 (1988),
109 S. Ct. 1104 (1989) ("[t]he additional right to transfer to a mobile home purchaser the right to
continued occupancy of the site, subject to rejection of the transferee for
good cause . . . is quite similar to the common provision that a landlord may
not unreasonably withhold his consent to the assignment of a lease by a tenant").
n436. LANDLORD-TENANT PRACTICE,
supra note 434, at 184-85; R. POWELL,
supra note 237, at 246; R. SCHOSHINSKI,
supra note 1, at
Chapman v. Great W. Gypsum Co., 216 Cal. 420, 14 P.2d 758 (1932). The rule is even stronger in California, where restrictions on transfer are
void as contrary to public policy expressed in the rule prohibiting restraint
Kendall v. Pestana, 40 Cal. 3d 488, 709 P.2d 837, 220 Cal. Rptr. 818 (1985) (consent to assignment may not be unreasonably withheld).
Prestin v. Mobil Oil Corp., 741 F.2d 268 (9th Cir. 1984) (applying California law). For other jurisdictions adopting this rule, see
When Lessor May Withhold Consent Under Unqualified Provision in Lease
Prohibiting Assignment or Subletting of Leased Premises Without Lessor's
21 A.L.R.4th 188 n.9 (1983). The common law excepted leases from the rule prohibiting restraints on
alienation because the interests of the fee owner were thought paramount.
But see R. POWELL,
supra note 237, at 246 ("[w]hether this reasoning retains full validity can well be doubted.
Relationships between lessor and lessee have tended to become more and more
impersonal. Courts have considerably lessened the effectiveness of restraint
clauses by strict construction and liberal applications of the doctrine of
waiver. With the shortage of housing and, in many places, of commercial space
as well, the time may soon come when the allowance of lease clauses forbidding
assignments and subleases will be curtailed by statutes").
Kendall, 40 Cal. 3d at 500, 709 P.2d at 844, 220 Cal. Rptr. at 825. The California Supreme Court explained that
"the values that go into the personal selection of the tenant . . . [are]
protected by the lessor's right to object to a proposed assignee on reasonable
commercial grounds." Such grounds include not only the obvious objections to an assignee's
financial stability or proposed use of the premises, but a variety of other
commercially reasonable objections as well.
Id. Thus, the court approved the rule of
Laguna Royale Owners Ass'n v. Darger, 119 Cal. App. 3d 670, 681, 174 Cal. Rptr. 136, 142 (1981) (in exercising
"power to approve or disapprove transfers or assignments [a landlord] must act
reasonably, exercising its power in a fair and nondiscriminatory manner and
withholding approval only for a reason or reasons rationally related to the
protection, preservation and proper operation of the property"). While
Laguna Royale concerned a condominium lease, the state high court did not necessarily extend
its rule to assignment restrictions contained in residential leases.
See R. POWELL,
supra note 237, at 246 n.13; LANDLORD-TENANT PRACTICE,
supra note 434, at 181-82.
208 Conn. 620, 546 A.2d 805 (1988),
109 S. Ct. 1104 (1989).
Id. at 641, 546 A.2d at 816.
Gibbs v. Southeastern Inv. Corp., 705 F. Supp. 738 (D. Conn. 1989) (also sustaining Connecticut's on-site mobile home sale law);
Thompson v. Merlino, 208 Conn. 656, 545 A.2d 1094 (1988),
109 S. Ct. 829 (1989) (same). The courts in
Gibbs also distinguished
Hall on the ground that the Connecticut statute did not control rents as rigidly as
did the Santa Barbara ordinance.
See LANDLORD-TENANT PRACTICE,
supra note 434, at 20 (recommending such lease provisions in rent-controlled
jurisdictions). For instance, there was nothing in the Berkeley commercial
rent control law, nor the court's opinion in
Ross, to suggest that the landlord could not have crafted a lease which would have
avoided perpetuation of protected leasehold through internal stock transfers.
The Berkeley ordinance did not define tenant in any corporate sense. The
eviction law would seem to have allowed the landlord to lease the premises to
named individuals, rather than artificial entities. Any transfer would then
have been grounds for eviction under section 9(b) as a substantial lease
Ross v. City of Berkeley, 655 F. Supp. 820, 826 n.6 (N.D. Cal. 1987).
Kendall v. Pestana, 40 Cal. 3d 488, 709 P.2d 837, 220 Cal. Rptr. 818 (1985)
Hall, 797 F.2d at 1493, 1496 n.2.
n443. RESTATEMENT (SECOND) OF PROPERTY
§ 15.2(2) n.14 (1977). A comment to the section explains:
The landlord may have an understandable concern about certain personal
qualities of a tenant, particularly his reputation for meeting his financial
obligations. The preservation of the values that go into the personal
selection of the tenant justifies upholding a provision in the lease that
curtails the right of the tenant to put anyone else in his place by
transferring his interest, but this justification does not go to the point of
allowing the landlord arbitrarily and without reason to refuse to allow the
tenant to transfer an interest in leased property.
Id. at comment a. The reporter's note further explains that the lessor's interest
in the character of her tenant is protected by the lessor's right to object to
a proposed assignee on reasonable commercial grounds.
Id. at 112-13.
n444. Most just cause eviction laws exempt small buildings and community housing in
recognition of the landlord's greater associational rights in such cases.
Moore v. City of East Cleveland, 431 U.S. 494 (1977) (invalidating on substantive due process grounds zoning ordinance prohibiting
certain family living arrangements)
Nash v. City of Santa Monica, 37 Cal. 3d 97, 688 P.2d 894, 207 Cal. Rptr. 285 (1984),
470 U.S. 1046 (1985) (eviction law did not implicate liberty interests where landlord was engaged
in rental business).
Sabato v. Sabato, 135 N.J. Super. 158, 342 A.2d 886 (1975) (owner of three-unit building had a constitutional right to evict for owner
occupancy, but owners of larger buildings might not). The Chicago Residential
Landlord and Tenant Ordinance is illustrative. It exempts owner-occupied
buildings of six or fewer units; dwelling units in hotels, motels, boarding
houses, hospitals, nonprofit shelters, school dormitories and cooperatives
occupied by holders of proprietary leases. CHICAGO, ILL., MUNICIPAL CODE
§ 193.1-1 (1986).
The transformation of the landlord-tenant relationship to one based primarily
on contract also suggests that the possessory right in tenant selection should
merit preferred status only in situations involving the landlord's personalty
interests. The analogy is to the contract law of assignment, where executory
obligations may ordinarily be assigned except if they involve personal service.
Tirolerland v. Lake Placid 1980 Olympic Games, 592 F. Supp. 304, 316 (N.D.N.Y. 1984) (rejecting takings challenge to ordinance limiting room rates and tenant
"the Court has serious doubts whether an interference with the right to select
one's tenants can amount to an unconstitutional taking").
Hirsh v. Block, 267 F. 614 (D.C. App. 1920) (eviction controls impermissibly interfere with right of reversion),
256 U.S. 135 (1921).
Miller v. Board of Pub. Works, 195 Cal. 477, 488, 234 P. 381, 385 (1925) ("[a]lthough one owns property, he may not do with it as he pleases, any more
than he may act in accordance with his personal desires. As the interest of
society justifies restraints upon individual conduct, so also does it justify
restraints upon the use to which property may be devoted").
Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926).
See supra notes 61-98.
n450. It has already been noted (supra note 179) that just cause eviction laws may be employed to discourage or
prevent removal of rental units and their conversion to another use, such as
owner-occupied housing. Conversion of apartments into condominiums may be
considered a change in use.
Griffin v. City of Oxnard, 39 Cal. 3d 256, 268, 703 P.2d 339, 346, 217 Cal. Rptr. 1, 8 (1985).
FCC v. Florida Power Corp., 480 U.S. 245, 252 (citing
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 440 (1982)).
n452. It would be akin to the sovereign's commandeering of private dwellings for the
quartering of soldiers in peacetime, a practice that is specifically proscribed
by the third amendment.
Loretto, 458 U.S. at 439 n.17.
Florida Power, 480 U.S. at 251 n.6. The court of appeals had concluded that the FCC routinely intervened to
prevent pole operators from evicting their cable tenants.
Florida Power Corp. v. FCC, 772 F.2d 1537 (11th Cir. 1985).
n455. This would be a classic case of regulating use and appropriately analyzed
under the regulatory takings doctrine.
Eamiello v. Liberty Mobile Home Sales, 208 Conn. 620, 645-46, 546 A.2d 805, 818 (1988) (statutory extension of voluntarily assumed use
"is not equivalent to a governmentally sponsored physical invasion").
n456. Thus, in
Florida Power, the Court found no objection to a regulation permitting
"a tenant invited to lease at a rent of $ 7.15 to remain at the regulated rent
of $ 1.79 . . . it is the invitation, not the rent, that makes the difference."
Florida Power, 480 U.S. at 252. This reasoning suggests that once the landlord has invited the tenant onto his
property, continued occupancy may be regulated without running afoul of
Grace v. Town of Brookline, 379 Mass. 43, 399 N.E.2d 1038 (1979) (noting that a property owner is not compelled to devote new units to rental
housing; only that existing units could not be removed).
n458. This notion dates back to
Munn v. Illinois, 94 U.S. 113 (1887):
Property does become clothed with a public interest when used in a manner to
make it of public consequence, and affect the community at large. When,
therefore, one devotes his property to a use in which the public has an
interest, he, in effect, grants to the public an interest in that use, and must
submit to be controlled by the public for the common good, to the extent of the
interest he has thus created. He may withdraw his grant by discontinuing the
use; but, so long as he maintains the use, he must submit to the control.
Id. at 126.
Reitman v. Mulkey, 387 U.S. 369, 385-86 (1967) ("urban housing is in the public domain . . . like restaurants, inns, and
carriers, or like telephone companies, drugstores, or hospitals, [housing] is
affected with a public interest in the historic and classical sense").
Most courts have also upheld laws denying eviction for owner occupancy, where
the unit was being used as a rental at time of purchase, on the theory that
continued rental did not frustrate the owner's investment-backed expectations.
See supra note 252.
650 F. Supp. 793 (D.N.J. 1986).
n460. The city determined that a local housing emergency was exacerbated by a
"warehousing" vacant units.
"[A] substantial and increasing shortage of rental housing . . . [is]
exacerbated by reason of the withholding by owners of available affordable
housing units from the rental market in order to increase the value of their
property at the expense of persons desiring to rent such housing units."
Id. at 796. The city levied a $ 500 per day fine on units withheld from rental use for
more than 60 days without cause.
n461. In sustaining the law, the district court declined to find a possessory taking
"[t]he ordinance does not contemplate the city's physical occupation of property."
Id. at 797. The court also saw insufficient economic impact to cause a regulatory taking
and was persuaded that the ordinance substantially served legitimate state ends
so as to satisfy substantive due process.
Id. at 799. Finally, it read
Troy as holding that the takings clause was simply inapplicable to landlord-tenant
regulations, at least in the Third Circuit.
Id. The court's takings analysis may be regarded as dicta since the court relied
principally on ripeness grounds in rejecting the claims.
n462. Not all the public purposes underlying ordinary eviction laws would apply to
the Hoboken scheme. Displacement and its attendant hardships are fully
protected by prohibiting eviction in the first place, although it might be
argued that the warehousing law creates an additional disincentive to evict
existing tenants, and therefore advances that purpose as well. While the
public purposes which are served -- ameliorating the housing shortage and
proscribing predatory market practices (i.e., the withholding of units for the
purpose of artificially restructuring the market) -- are important in their own
right, they stand alone in the balance against the property owner's interests.
In most cases, this public purpose will be sufficient and the landlord's burden
minimal, but the analysis should not be rejected as unnecessary.
See infra n.468
74 N.Y.2d 92, 542 N.E.2d 1059, 544 N.Y.S.2d 542 (1989).
n464. N.Y. CITY LOCAL LAW 9
§ 27-2151 (1987).
Seawall, 74 N.Y.2d at 105, 542 N.E.2d at 1065, 544 N.Y.S.2d at 548.
Id. at 103, 542 N.E.2d at 1063, 544 N.Y.S.2d at 546. The court did not hold that a law allowing transfer of tenancy interests, as
Ross, would be unconstitutional without more.
Id. at 106, 542 N.E.2d at 1065, 544 N.Y.S.2d at 548 ("[i]t is the forced occupation by strangers under the rent-up provisions of the
law, not the identities of the new tenants or the terms of the leases, which
deprives the owners of their possessory interests and results in physical
Id. at 109-10, 542 N.E.2d at 1067, 544 N.Y.S.2d at 550. The combined conversion/warehousing law wholly frustrated the owners'
investment expectation; they had apparently acquired their buildings in
reliance on an earlier New York policy
"of encouraging the demolition and redevelopment of SRO properties," and had intended to do just that.
Id. at 99, 542 N.E.2d at 1061, 544 N.Y.S.2d at 544.
See supra notes 203-04.
Id. at 111-12, 542 N.E.2d at 1068-69, 544 N.Y.S.2d at 551-52. In analyzing whether the law sufficiently served the public interest, the
court applied the
"'close-nexus' test which requires 'semi-strict or heightened judicial scrutiny
. . .' as articulated in Nollan."
Id. at 111, 542 N.E.2d at 1068, 544 N.Y.S.2d at 551. The problem with such intrusive inquiry in economic regulation cases is
well-illustrated by this case. New York had found that conversion of SRO units
contributed to the growing homeless problem. The Second Circuit agreed in
Sadowsky v. City of New York, 732 F.2d 312, 318 (2d Cir. 1984) (law limiting ability to demolish SRO buildings in New York City, specifically
intended to protect the poor and elderly occupants of these buildings, had
"a valid, even admirable, purpose"). But the court in
Seawall concluded otherwise:
"there is simply no assurance that [renovated SRO] units will be rented to
[homeless low-income families] . . . [I]t is by no means clear that [an
increased supply of low-cost housing] would actually benefit the homeless."
Seawall, 74 N.Y.2d at 111-12, 542 N.E.2d at 1068, 544 N.Y.S.2d at 551. The dissent thought the majority's speculation reminiscent of
Id. at 117-18, 542 N.E.2d at 1072, 544 N.Y.S.2d at 555. (Bellacosa, J., dissenting)
See supra notes 125-52.
Seawall, plaintiffs claimed they had
"purchased their properties solely to turn them into profitable investments by
tearing down and replacing existing structures with new ones."
Seawall, 74 N.Y.2d at 108, 542 N.E.2d at 1066, 544 N.Y.S.2d at 549. In contrast, the law in
Help Hoboken Housing permitted conversions. It
"merely prohibit[ed] the withholding of vacant apartments" so long as a building remained in rental use.
Help Hoboken Hous. v. City of Hoboken, 650 F. Supp. 793, 798 (D.N.J. 1986).
n470. Where a property's existing use is occupancy by others, preserving that use
neither interferes with an owner's right of possession, nor frustrates his
37 Cal. 3d 97, 688 P.2d 894, 207 Cal. Rptr. 285 (1984),
470 U.S. 1046 (1985).
Id. at 102-04, 688 P.2d at 898-99, 207 Cal. Rptr. at 289-90 (inability to evict tenants and go out of the
"apartment-rental business" imposed only an
"indirect and minimal burden" on liberty interests).
463 F.2d 853 (D.C. Cir. 1972).
Id. at 867. Judge Skelly Wright relied on dicta in
Textile Workers Union v. Darlington Mfg., 380 U.S. 263 (1965) (nothing in federal labor law prevented an employer from terminating his
business in order to avoid unionization, but a
"partial closing" would be an unfair labor practice). That decision was clearly based on
statutory, not constitutional grounds.
Darlington, 380 U.S. at 270.
n475. The principal issue before the court was whether, in attempting to evict its
tenant, the landlord was
"motivated by some legitimate business purpose rather than by the illicit motive" of retaliation for the tenant's assertion of a judicially created rent
Robinson, 463 F.2d at 865.
Robinson reaffirmed the rule of
Edwards v. Habib, 397 F.2d 687 (D.C. App. 1968). Thus, Judge Skelly Wright did not find it necessary to describe or analyze the
Marquam Inv. Corp. v. Beers, 47 Or. App. 711, 615 P.2d 1064 (1980) (statute prohibiting landlords from decreasing level of housing services did
not create involuntary servitude). Justice Holmes also rejected a thirteenth
amendment claim to an eviction law in
Marcus Brown v. Feldman, 256 U.S. 170 (1921).
supra note 4, at 210.
Moore v. City of East Cleveland, 431 U.S. 494 (1977) (land use law affecting family living arrangements implicated privacy rights);
Eamiello v. Liberty Mobile Home Sales, 208 Conn. 620, 625 n.4, 546 A.2d 805, 808 n.4 (1988),
109 S. Ct. 1104 (1989) (rejecting claim that eviction law violated landlord's first amendment right
n478. California Ellis Act,
CAL. GOV'T CODE § 7060 (West Supp. 1989).
City of Santa Monica v. Yarmark, 203 Cal. App. 3d 153, 249 Cal. Rptr. 732 (1988). Federal bankruptcy law might also permit landlords to terminate their
businesses, thus preempting local eviction statutes.
Going Out of Business, CAL. LAW., Jan. 1985, at 47.
n479. S. 2527, 100th Cong., 2d Sess. (1988) requires large companies to provide 60
days notice of plant closings or layoffs, or face fines. President Reagan
vetoed such legislation when first presented to him, but he allowed a second
bill to become law without his signature. For analysis of the history and
constitutionality of plant closing laws generally, see Millspaugh,
State and Local Plant Closing Laws Confront Constitutional Hurdles,
3 DET. C.L. REV. 615 (1984).
n480. This theory should be distinguished from the
Brooks-Scanlon doctrine discussed
supra notes 194-95, which derives from interference with economic, not liberty,
n481. For instance, in
Wilson v. Brown, 137 F.2d 348 (Emer. Ct. App. 1943), the Emergency Court of Appeals upheld a provision in the World War II Price
Control Act, which permitted the landlord to terminate rentals entirely, rather
than evict single tenants (ostensibly for ulterior purposes such as raising
"Nothing in this Act shall be construed to require any person to sell any
commodity or to offer any accomodations for rent."
50 U.S.C. § 904(d) (1942). A similar provision was contained in the Housing and Rent Act of
1947, as amended by the Acts of 1948 and 1949. Act of March 30, 1948, ch. 161,
§ 302, 62 Stat. 99; Act of March 30, 1949, ch. 42,
§ 301, 63 Stat. 29.
Rivera v. R. Cobian Chinea, 181 F.2d 974 (1st Cir. 1950), where the First Circuit invalidated section 12 of the Puerto Rico Reasonable
1946 P.R. Laws 464, at 1326, regulating rents and removals of business, commercial and industrial
buildings. The court noted that the Puerto Rico Legislature had the power to
regulate rents and to
"adopt such measures as it thought appropriate" toward that purpose. Thus, eviction regulations designed to prevent landlords
from circumventing rent ceilings were entirely constitutional. However, the
court had a different view of the law as applied in a case where removal of the
building was contemplated. Since the prohibition against removal for personal
"did not have any reasonable relation to the establishment and maintenance of
the rent ceilings," its application in that case was beyond the police power.
Rivera, 181 F.2d at 978. Having disposed of the case on due process grounds, the court noted it need
not reach the takings issue. But, in dicta, the court stated:
"[f]or the Legislature to compel the plaintiff against his will to keep his
property in the rental market and to prevent him from using it in his own
personal business for the duration of the emergency would appear to be a
A similar, but better articulated, holding appeared in a vacated opinion by the
California Court of Appeal.
Nash v. City of Santa Monica, 143 Cal. App. 3d 251, 191 Cal. Rptr. 717 (1983),
37 Cal. 3d 97, 688 P.2d 894, 207 Cal. Rptr. 285 (1984),
470 U.S. 1046 (1985).
181 F.2d 974, 979 (1st Cir. 1950) (Magruder, C.J., dissenting).
137 F.2d 348 (Emer. Ct. App. 1943).
n485. Judge Magruder commented that
the Act does not require the landlord to continue his property in the market
for housing accommodations. . . . [he may] occupy the property himself, or
devote it to some commercial enterprise, or utilize it any other way. This
serves to emphasize that there has been no 'taking' of his property in the
Wilson, 137 F.2d at 352.
n486. Of course, the present case raises no question as to the power of the
legislature generally to force an individual to engage in a controlled business
against his will; nor as to the power of the legislature to evict owners and
force them to
place dwelling houses or commercial buildings on the rental market.
Rivera, 181 F.2d at 979-80 (emphasis in original). This appears to be a recognized distinction in
economic regulation cases. See, for example,
Atchison, Topeka and Santa Fe Ry. Co. v. Railroad Comm'n, 173 Cal. 577, 160 P. 828 (1916), and
Del Mar Water Co. v. Eshleman, 167 Cal. 666, 680, 140 P. 591, 596 (1914), where the California Supreme Court noted a difference between requiring a
business to provide service to existing customers and requiring it to expand
and assume new obligations.
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 436 (1982).
n488. The Supreme Court implicitly adopted this reasoning in
Parker v. Fleming, 329 U.S. 531 (1947), where it upheld regulations in the Price Control Act which prohibited
purchasers of stock in a cooperative apartment arrangement from evicting
tenants and occupying their own units.
Id. at 537 n.8. Although the act contained an escape clause, as noted by the court in
Wilson v. Brown, in Bowles v. Willingham, 321 U.S. 503 (1944), the Supreme Court viewed the clause, not as permitting evictions adjutant to
removing a unit, but as precluding the Price Control Administrator from
requiring that a unit be made available as a rental in the first place. Thus,
the Court read section 4(d) to mean that
"[t]here is no requirement that the apartments in question be used for purposes
which bring them under the Act."
Id. at 517.
"[A]ll 50 States and over 500 municipalities have enacted laws to encourage or
require the preservation of buildings and areas with historic or aesthetic
Penn Central Transp. Co. v. New York, 438 U.S. 104, 107 (1978).
Id. at 135. The New York law required owners of designated landmarks to keep the
buildings' exterior features in good repair and obtain approval before altering
or improving them.
See also 900
G Street Assoc. v. Dep't of Hous. & Community Dev., 430 A.2d 1387 (D.C. 1981);
Figarsky v. Historic Dist. Comm., 171 Conn. 198, 368 A.2d 163 (1976);
Bohannon v. City of San Diego, 30 Cal. App. 3d 416, 106 Cal. Rptr. 333 (1973);
Annapolis v. Anne Arundel County, 271 Md. 265, 316 A.2d 807 (1974).
Groch v. City of Berkeley, 118 Cal. App. 3d 538, 173 Cal. Rptr. 534 (1981) (rejecting substantive due process challenge to a neighborhood preservation
Society for Ethical Culture v. Spatt, 51 N.Y.2d 449, 415 N.E.2d 922, 434 N.Y.S.2d 932 (1980) (historic district ordinance prohibiting demolition of church property did not
infringe first amendment).
n493. Indeed, some cities regulate demolitions as an adjunct to eviction control.
Terminal Plaza Corp. v. City & County of San Francisco, 177 Cal. App. 3d 892, 223 Cal. Rptr. 379 (1986);
Nash v. City of Santa Monica, 37 Cal. 3d 97, 105, 688 P.2d 894, 900, 207 Cal. Rptr. 285, 291 (1984),
470 U.S. 1046 (1985) ("demolition controls may be viewed as an adjunct to limitations upon eviction
which have generally been upheld by the courts").
Fresh Pond Shopping Center v. Callahan, 388 Mass. 468, 446 N.E.2d 1060,
464 U.S. 875 (1983) (Rehnquist, J., dissenting);
Taylor v. Bowles, 147 F.2d 824 (9th Cir. 1945) (contempt proceeding for failure to obtain eviction certificate from Office of
Price Administration prior to removing housing accomodations from rental
Grace v. Town of Brookline, 379 Mass. 43, 399 N.E.2d 1038 (1979) (purchaser of condominium could not evict tenant in order to take personal
Mayo v. Boston Rent Control Adm'r, 365 Mass. 575, 581, 314 N.E.2d 118, 122 (1974) (upholding agency ruling that a landlord could not evict tenants in order to
upgrade rental units and effectively remove low and moderate priced units from
n495. Courts are generally unreceptive to the claim that an individual or firm
should be free to terminate a particular activity as a means of changing
Flood v. Kuhn, 316 F. Supp. 271 (S.D.N.Y. 1970),
443 F.2d 264 (2d Cir. 1971),
aff'd on other grounds,
407 U.S. 258 (1972) (professional baseball player cannot
"go out of business" yet continue playing in the major leagues);
Sheeran v. Nationwide Mut. Ins. Co., 80 N.J. 548, 404 A.2d 625 (1979) (insurance company may be required to continue offering automobile insurance);
Leon Handbag Co. v. Local 213, 276 Cal. App. 2d 240, 81 Cal. Rptr. 63 (1969) (employer cannot go out of business temporarily to avoid union contract);
People v. Greene, 264 Cal. App. 2d 274, 70 Cal. Rptr. 818, 821 (1968) (dam owner cannot simply
"cease to operate his dam, abandon his work, and do nothing").
Rivera, Judge Magruder thought the Puerto Rico law furthered the rational purpose of
"existing tenants a stability of tenure . . . even as against a landlord who . . .
desires to withdraw the property from the rental market."
Rivera v. R. Cobian Chinea, 181 F.2d 974, 979 (Emer. Ct. App. 1943) (emphasis in original).
See supra text accompanying notes 239-59.
n498. This would be an unlikely occurence. A property owner
"remains free to minimize his personal involvement" in running his rental business.
Nash, 37 Cal. 3d at 103, 688 P.2d at 898, 207 Cal. Rptr. at 289. As explained by Justice Holmes in
Marcus Brown Holding Co. Inc. v. Feldman, 256 U.S. 170, 199 (1921), the services required of a landlord
"although involving some activities are so far from personal that they
constitute the universal and necessary incidents of modern apartment houses."
Marquam Inv. Corp. v. Beers, 47 Or. App. 711, 615 P.2d 1064 (1980).
Lindsey v. Normet, 405 U.S. 56, 71 (1972).
CAL. CIV. PRO. CODE §§ 1167.3, 1172 (West 1982) (summons returnable in five days and precluding most
See generally Note,
The Unwarranted Implication of Warranty of Fitness in Commercial Leases -- An
41 VAND. L. REV. 1057 (1988).
n501. See, for example, Oregon's Forcible Entry and Wrongful Detainer Statute (OR. REV. STAT. §§ 105.105-105.165 (1983)) involved in
Lindsey. Under Oregon law, trial may be held three days after service, which may be
made if the tenant is 10 days late in rent. The Supreme Court held that such
summary proceedings did not offend due process.
Hancich v. Gopoian, 815 F.2d 883 (2d Cir. 1987) (Connecticut summary eviction proceeding was constitutional).
n502. At common law, the obligations or
"covenants" on both sides of a lease were independent, meaning that breach by one party
did not excuse the other's performance. Thus, once the landlord had conveyed
possession, the tenant was obligated for the rent regardless of any breach by
the landlord. This doctrine has evolved, such that now the tenant's covenant
to pay rent may be offset or excused by the landlord's breach of the warranty
supra note 500, at 1059-61. Other aspects of the landlord-tenant relationship have
similarly evolved since feudal times.
The Law of Landlord-Tenant: A Critical Evaluation of the Past with Guidelines
for the Future,
38 FORDHAM L. REV. 225, 227-35 (1969).
n503. Livery of seisen was a common law ceremony for the transfer of legal interest
in, and possession of, land. It has been replaced in American jurisdictions by
FLA. STAT. § 689.09 (1987) ("possession . . . shall be deemed and adjudged to be transferred [by deed] . . .
as perfectly as if such . . . person entitled to the use had been enfeoffed by
livery of seisin of the land conveyed by such deed").
Marcus Brown Co. v. Feldman, 256 U.S. 170, 199 (1921) ("the universal and necessary incidents of modern apartment houses" involve landlord services that are
"far from personal");
Nash v. City of Santa Monica, 37 Cal. 3d 97, 688 P.2d 894, 207 Cal. Rptr. 285 (1984),
470 U.S. 1046 (1985) (eviction law did not implicate landlord's liberty interests because personal
involvement was minimal);
Marquam Inv. Corp. v. Beers, 47 Or. App. 711, 718-20, 615 P.2d 1064, 1071 (1980) (same).
Lynch v. Household Fin. Corp., 405 U.S. 538, 552 (1972) ("[p]roperty does not have rights. People have rights. The right to enjoy
property without unlawful deprivation, no less than the right to speak or the
right to travel, is, in truth, a 'personal' right. . . . In fact, a
fundamental interdependence exists between the personal right to liberty and
the personal right in property").
Hall v. Santa Barbara, 797 F.2d 1498 (9th Cir. 1986) ("the right to own and enjoy property is a fundamental aspect of personal liberty");
Florida Rock Indus. Inc. v. United States, 8 Cl. Ct. 160, 168 (1985),
aff'd in part, vacated in part on other grounds and remanded,
791 F.2d 893 (Fed. Cir. 1985).
n506. The sharp distinction between regulatory and possessory takings doctrines
corresponds to the Court's hierarchical ordering of liberty and economic
interests under the due process clause. However, the residential landlord's
possessory interests are typically economically based and do not reflect
genuine liberty concerns.
See infra text accompanying notes 526-47.
Nash, 37 Cal. 3d at 97, 688 P.2d at 894, 207 Cal. Rptr. at 285.
supra note 368, at 1077. Landlord-tenant law, as it has evolved, suggests that
"tenants, as well as owners, may have an occupancy interest in property." Judson,
supra note 4, at 182.
See also Patterson,
supra note 11, at 995 (tenant has greater personhood interests in possession than
the landlord because the former's leasehold interest is personal, while the
latter's reversionary interest is fungible).
n509. There is no prohibition as such against reframing common law property doctrine
since it is the very essence of legislating to modify preexisting rules and
Munn v. Illinois, 94 U.S. 113, 134 (1877) ("[a] person has no property, no vested interest, in any rule of the common law");
United States v. Causby, 328 U.S. 256, 260-61 (1946) ("[c]ommon sense revolts at the idea" that legislatures cannot alter common law rights).
Pruneyard Shopping Center v. Robbins, 447 U.S. 74, 93 (1980) (Marshall, J., concurring) (to
"freeze the common law as it has been constructed by the courts, perhaps at its
19th century state of development . . . would allow no room for change in
response to changes in circumstances. The Due Process Clause does not require
such a result").
Lindsey v. Normet, 405 U.S. 56, 86-87 (1972) (Douglas, J., concurring
& dissenting) (the
"feudal notion of landlord-tenant law -- rooted in the special needs of an
agrarian society -- has not been a realistic approach to landlord-tenant law
for many years, and has been replaced by what eminent authorities have
described as 'a predominantly contractual' analysis of leasehold interests").
Javins v. First Nat'l Realty Corp., 428 F.2d 1071, 1075 (D.C. Cir. 1970) ("leases of urban dwelling units should be interpreted and construed like any
CAL. CIV. CODE §§ 819, 820 (West 1982) ("[a] tenant for years . . . may occupy the buildings, take the annual products .
. . [but] has no other rights to the property than such as are given to him by
the agreement or instrument by which his tenancy is acquired")
§ 818 ("[t]he owner of a life estate may use the land in the same manner as the owner
of a fee-simple, except that he must do no act to the injury of the inheritance"). Transformation of estate may also be true, but to a lesser extent, of the
judicially created retaliatory eviction defense.
See R. SCHOSHINSKI,
supra note 1, at 44.
n512. U.S. CONST. art. I,
§ 10, cl. 1 ("[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts").
n513. Professor Tribe describes the clauses as protecting
"settled expectations," thus furthering
"the idea that government must respect 'vested rights' in property and contract." L. TRIBE,
supra note 263, at 587.
Energy Reserves v. Kansas Power & Light Co., 459 U.S. 400, 411 (1983) (contracts clause cases involve three elements:
"whether the state law has, in fact, operated as a substantial impairment of a
contractual relationship," whether the state has a
"significant and legitimate public purpose behind the regulation," and
"whether the adjustment of 'the rights and responsibilities . . . [is]
appropriate to the public purpose justifying'" the law).
Edgar A. Levy Leasing Co. v. Siegel, 258 U.S. 242 (1922) (sustaining New York rent and eviction law against due process and takings
Marcus Brown Holding Co. v. Feldman, 256 U.S. 170 (1921) (sustaining same law against contract clause claim).
Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934) (rejecting a contracts clause challenge to the Minnesota Mortgage Moratorium
Law of 1933 -- a Depression era law which extended the mortgagor's redemption
period from mortgage foreclosure sales
"for such additional time as the [local] court may deem just and equitable)."
Allied Structural Steel v. Spannaus, 438 U.S. 234 (1978) (Court would carefully scrutinize nature and prupose of state legislation and
its economic impact in contracts clause claims);
Kaiser-Aetna v. United States, 444 U.S. 164 (1979) (creating per se rules and preferred interests under the takings clause).
Exxon Corp. v. Eagerton, 462 U.S. 176 (1983) (the clause was inapplicable where a law merely had the underlying effect of
imparing contractual rights, rather than being specifically directed at
See also L. TRIBE,
supra note 263, at 623 (Court has abandoned the
"born-again contract clause analysis" of
n518. This approach is typically rejected in takings cases.
Andrus v. Allard, 444 U.S. 51, 65-66 (1979) (the
"denial of one traditional property right does not always amount to a taking.
At least where an owner possesses a full 'bundle' of property rights, the
destruction of one 'strand' of the bundle is not a taking, because the
aggregate must be viewed in its entirety");
Pruneyard Shopping Center v. Robbins, 447 U.S. 74 (1980) (a taking of one stick in the bundle of property rights does not create a
"taking" in the constitutional sense);
Hodel v. Irving, 481 U.S. 704, 717-18 (1987) (elimination of the right to devise property constitutes a taking) (Scalia,
n519. Even in so-called per se cases, it is hard to avoid this analysis. Even
physical occupation cannot constitute a taking if it does
"not interfere with interests that were sufficiently bound up with the
reasonable expectations of the claimant to constitute 'property' for Fifth
Penn Central Transp. Co. v. New York, 438 U.S. 104, 125 (1978).
Monsanto v. Ruckelshaus, 467 U.S. 986, 1006 (1984).
FCC v. Florida Power Corp, 480 U.S. 245, 251-53 (1987) (reaffirming the
"very narrow" reach of
Loretto and suggesting that its per se rule is inapplicable when occupation is
initially by invitation).
Gibbs v. Southeastern Inv. Corp., 705 F. Supp. 738, 742-43 (D. Conn. 1989) (statutory extension of leasehold not proscribed by
n521. This is Professor Costonis' appellation, referring to Justice Marshall's
Loretto that, in the case of a permanent physical occupation, the space occupied need
"bigger than a breadbox" to constitute a taking. Costonis,
supra note 309 at 410.
n522. Usually, the Court does not announce a per se rule until after considerable
experience in the area points to consistent results. This is the approach in
Broadcast Music, Inc. v. Columbia Broadcasting Sys., 441 U.S. 1, 19-20 (1979). Similarly, the Court should shun a per se rule with respect to possessory
occupations not previously considered invalid.
White Motor Co. v. United States, 372 U.S. 253, 263 (1963) ("we need to know more than we do about the actual impact of these arrangements
on competition to decide whether they have such a 'pernicious effect . . . and
lack . . . any redeeming virtue'").
n523. This parallels the analysis in condemnation proceedings, true exercises of the
state's eminent domain power.
n524. This accentuates the provision in most, if not all, just cause eviction
statutes that the landlord is entitled to reasonable rents or a fair return.
See supra note 192;
Loeterman v. Town of Brookline, 524 F. Supp. 1325, 1329 (D. Mass. 1981) (it is
"significant that the Ban Amendment does not operate to deny the Loetermans an
economically viable and reasonable use of their property . . . plaintiffs here
are entitled to a fair net operating income from their unit and retain other
economic benefits ordinarily associated with the ownership of rental property" (citations omitted)).
Amalgamated Food Emp. Union Local 590 v. Logan Valley Plaza, 391 U.S. 308, 325 (1968) ("[o]wnership does not always mean absolute dominion. The more an owner, for his
advantage, opens up his property for use by the public in general, the more do
his rights become circumscribed by the statutory and constitutional rights of
those who use it" (citing
Marsh v. Alabama, 326 U.S. 501, 506 (1946))).
supra note 261, at 1186-87.
Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229, 241-43 (1984) (rejecting limitation on a state's right to condemn private property).
482 U.S. 304 (1987).
supra note 76, at 252.
n530. Unlike regulatory takings cases, where severity of injury is determined by
reference to the entire parcel,
Penn Central Transp. Co. v. New York, 438 U.S. 104 (1978), in physical
"occupation" cases, injury may be measured by reference to nondiscrete fractions of
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).
n531. The rule formulated by the Oregon Supreme Court reflects this congruence of
regulatory and possessory takings.
Fifth Avenue Corp. v. Washington County, 282 Or. 591, 614, 581 P.2d 50, 63 (1978) ("owner is not entitled to compensation for inverse condemnation unless: (1) he
is precluded from all economically feasible private uses . . .; or (2) the
[law] results in such governmental intrusion as to inflict virtually
irreversible damage"). Justice Brennan drew a similar parallel in
San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 652 (1981) ("[f]rom the property owner's point of view, it may matter little whether his
land is condemned or flooded, or whether it is restricted by regulation to use
in its natural state, if the effect in both cases is to deprive him of all
beneficial use of it") (Brennan, J., dissenting).
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 517 (1987) (Rehnquist, C.J., dissenting). ("[p]hysical appropriation by the government leaves no doubt that it has in fact
deprived the owner of all uses of the land").
80 U.S. (13 Wall) 166 (1871).
Id. at 177.
United States v. Lynch, 188 U.S. 445, 469 (1903) (government-caused flooding
"deprived [the land] of all value");
Maryland Port Admin. v. QC Corp., 310 Md. 379, 529 A.2d 829, 838 (1987) ("we shall assume that
Causby is not explained as being primarily a physical invasion case; rather, we shall
assume that the controlling feature in
Causby was the fact that the overflights killed the landowner's chickens in numbers
which destroyed the use of the property as a chicken farm").
n534. Even in
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), which is viewed by Costonis as a possessory takings case (Costonis,
supra note 309, at 536 n.291), there was virtually complete destruction of the coal
company's separate easement in gross in the superadjacent property.
Id. at 546 ("I have been unable to find any precedent by the Court to support
Loretto's bread box rule that a per se takings rule governs a continuing trespass by
object that has only a minor effect on the owner's dominion or economic
interest in the property. Nor did the Court cite one").
Loretto, 458 U.S. at 427-28 (relying on pre-Mahon terminology and case law).
But see Patterson,
supra note 28, at 565 n.264:
It is very unlikely that the Court of this era would have applied the
'practical ouster' rule to a situation such as that presented in
Loretto -- the ouster from eight cubic inches of space on the exterior of a multistory
building. In a case after
Green Bay Co., 80 U.S. (13 Wall.) 166 (1871) (inundation of land due to damming of a creek pursuant to state law was a
taking)] it was said that
Pumpelly represented the 'extremest qualification' placed on the state's police power
by the Constitution.
Loretto, 458 U.S. at 435-36.
Id. at 439 n.17 ("Teleprompter's . . . argument . . . would allow the government to require a
landlord to devote a substantial portion of his building to vending and washing
machines, with all profits to be retained by the owners of these services and
with no compensation for the deprivation of space").
n538. Indeed, legal realists might explain
Loretto as an economic struggle between cable companies and landlords. Prior to
enactment of the law, the standard rate paid for building access was five
percent of gross revenues. This potentially sizeable sum had been reduced to
the flat rate of $ 1.
But see Costonis,
supra note 309, at 522 (claiming that the cable law's
"principal beneficiaries are tenants and cable subscribers statewide").
Kaiser-Aetna v. United States, 444 U.S. 164, 176 (1979).
248 U.S. 215 (1918).
Id. at 250 (Brandeis, J., dissenting).
Ruckelshaus v. Monsanto, 467 U.S. 986 (1984).
n543. While the owners of the marina could still use it, the federal government's
designation of it as a navigable waterway opened up its use to the general
public, thereby diminishing the quality of plaintiffs' use. More important,
the governmental action completely extinguished plaintiffs' financial
investment and ability to alienate, for who would pay valuable consideration
for what they could use for free?
United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53 (1913) (government acquisition of power company's fee interest in navigable river did
not require compensation for speculative value)
Deltona Corp. v. United States, 657 F.2d 1184 (Ct. Cl. 1981) (inability to use two of five inlets, which were subject to navigational
servitude, did not result in a
"taking" of the two segments since the parcel as a whole provided a reasonable use).
Agins v. Tiburon, 447 U.S. 255, 260 (1980).
Moore v. City of East Cleveland, 431 U.S. 494, 520 (1977) (Stevens, J., concurring).
See supra text accompanying notes 505-08.
n547. However, he loses it only in one direction. He is not required to devote
property to rental use before he willingly undertakes to do so.
See supra note 416
& text accompanying notes 539-47.
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426 (1982).
Armstrong v. United States, 364 U.S. 40, 49 (1960).
Penn Central Transp. Co. v. New York, 438 U.S. 104, 124 (1973).
n552. For instance, where the government takes properties along a new highway route.
The Court has drawn a distinction between laws of general application and
those causing unique interference to property.
Penn Central, 438 U.S. at 132-35.
Property and Its Relation to Constitutionally Protected Liberty,
134 U. PA. L. REV. 741, 766-67 (1986) ("the physical occupation of a particular piece of real property usually advances
purposes that could be equally well served by occupying any of numerous other
pieces of property. A decisionmaker's choice of which property to occupy will
usually involve enough discretion to create a real danger that the choice will
reflect an unjustified desire to burden (or favor) particular people.
Requiring just compensation avoids much of the danger of individualized
exploitation in this context").
Allegheny Pittsburgh Coal Co. v. Webster County, 109 S. Ct. 633 (1989).
n555. The decision in
Nollan might be explained in these terms. While it was impermissible to impose beach
access easements on just those property owners desiring to remodel their homes
without a showing of cause and effect, the requirement would likely be valid if
imposed on all coastal properties. At the very least, the state probably could
have imposed a coastal assessment fee, and then used the proceeds to purchase
easements from the taxed property owners. The prohibition of spot zoning is
another example of this principle.
supra note 553, at 766 n.56 ("Such particularized exploitation, of course, does not occur in general
landlord/tenant law -- even though the law may impose requirements that involve
physical occupation of portions of the property").
n557. Neither landlords in particular, nor property owners in general, comprise a
suspect class which needs extraordinary protection from majoritarian political
See A. HESKIN, TENANTS AND THE AMERICAN DREAM 3-4 (1983).
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987).
"The tenant is, by definition, in possession of the property of the landlord."
Lindsey v. Normet, 405 U.S. 56, 72 (1972).
n561. This is Humbach's term for those rights which enable one
"to invoke the government's power to retain or regain actual physical possession." Humbach,
supra note 76, at 256.
Prepared: January 24, 2003 - 5:02:29 PM
Edited and Updated, January 25, 2003
Kristen A. Stelljes