Inverse Condemnation Lawsuit: City Of Palo Alto's Requirements That Mom & Pop Mobile Home Park Operator Pay $8 Million In Tenant Relocation Fees Amount To Unconstitutional "Shakedown" That Prevents Them From Closing Business & Selling Land
- The family that owns the Buena Vista Mobile Home Park is suing the city of Palo Alto, claiming that the city's requirements over tenant relocation fees amount to an unconstitutional "shakedown" that prevents them from closing the business that they've operated for decades.
The lawsuit, filed in federal court  by Sacramento-based Pacific Legal Foundation, is the latest twist in a land-use drama that has garnered international attention. The Jisser family, which owns the park, has been working toward closing the park and redeveloping it for the past several years. But Buena Vista is a rare bastion of naturally affordable housing in the middle of Palo Alto's sky-high residential market, and housing advocates have rallied behind efforts to prevent its closure.
The debate has raged as other mobile home parks have also faced closure, owing to a couple of factors: Longtime, mom-and-pop owners are retiring, and the market for residential land in Silicon Valley is exceptionally strong, spurring redevelopment interest. In San Jose, the Winchester Ranch Mobile Home Park is also facing closure, with homebuilder PulteGroup in contract to buy it from the longtime family ownership. San Jose's city council has imposed a moratorium on mobile home park conversions in response, and this week San Mateo County did the same thing.
City officials approved the Buena Vista's closure earlier this year, which is largely a procedural affair. But they imposed new relocation fees that the Jisser's attorneys say amount to roughly $8 million. "Put simply, the City demands that the Jisser Family pay massive sums of money to their tenants or be forced to continue operating a business they want to close, including the unwanted permanent occupation of their land by tenants," attorneys write in the suit.
The involvement of the Pacific Legal Foundation is notable because the group has a history of winning property-rights cases involving the legal concept of "takings," or the idea of taking property for public use.(1)
Most recently, PLF has entered the fight over San Jose's inclusionary housing ordinance, [...].
See also, Family-Owned Mobilehome Park Sues Palo Alto to Stop Shakedown (PLF lawsuit challenges city’s unconstitutional demand; that Jisser family pay millions for the right to close their business):
- PLF’s lawsuit on the Jissers’ behalf charges that this staggering financial demand violates the U.S. Constitution’s Fifth and Fourteenth Amendment limitations on taking private property for public use,(2) and also violates a California state law prohibiting conditions on the closure of mobilehome parks that “exceed the reasonable costs of relocation” of a park’s tenants. The U.S. Supreme Court has repeatedly held that government may not force individual property owners to bear the costs of public benefits which, in fairness, should be paid for by the public as a whole.
- Inverse condemnation is a term used in the law to describe a situation in which the government takes private property but fails to pay the compensation required by the 5th Amendment of Constitution. In some states the term also includes damaging of property as well as taking it.
In order to be compensated, the owner must then sue the government. In such cases the owner is the plaintiff and that is why the action is called inverse – the order of parties is reversed, as compared to the usual procedure in direct condemnation where the government is the plaintiff who sues a defendant-owner to take his or her property
The taking can be physical (e.g., land seizure, flooding, retention of possession after a lease to the government expires, deprivation of access, removal of ground support) or it can be a regulatory taking (when regulations are so onerous that they make the regulated property unusable by its owner for any reasonable or economically viable purpose).
The latter is the most controversial form of inverse condemnation. It is considered to occur when the regulation of the property's use is so severe that it goes "too far," as Justice Holmes put it in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), and deprives the owner of the property's value, utility or marketability, denying him or her the benefits of property ownership thus accomplishing a constitutionally forbidden de facto taking without compensation. Reference: Wikipedia.