Trude BIRKENFELD et al., Plaintiffs and Respondents, v. CITY OF BERKELEY, Defendant and Appellant, and Fair Rent Committee et al., Intervenors and Appellants.
This case presents a number of issues concerning the constitutionality and validity of a Berkeley City Charter amendment that empowers the city to establish a rent control board with authority to set maximum rents on certain residential rental properties. The charter amendment,1 which was enacted by the process of initiative and is Article XVII of the Berkeley City Charter, also gives the rent control board power to prohibit a landlord from evicting a tenant from a rent-controlled unit if there are ‘outstanding Code violations' on the premises, violations which are unrelated to enforcement of rent controls.
In determining the constitutionality and validity of a legislative enactment by the process of initiative, the courts may, in order to ascertain the immediate objective and ultimate effect of the act, consider the events and conditions that led to its enactment. (See Mulkey v. Reitman (1966) 64 Cal.2d 529, 533–534, 50 Cal.Rptr. 881, 413 P.2d 825, affirmed Reitman v. Mulkey (1967) 387 U.S. 369, 87 S.Ct 1627, 18 L.Ed.2d 830; Parr v. Municipal Court (1971) 3 Cal.3d 861, 864–865, 92 Cal.Rprt. 153, 479 P.2d 353.)
In the summer of 1969, the Berkeley City Council appointed a committee, consisting of nine persons who represented a cross-section of the community, to investigate and study problems of rental housing and rent levels in Berkeley and to make recommendations. During the next 16 months, the committee, which was headed by Councilman Warren Widener, collected data, consulted experts, conducted numerous public hearings, and prepared an exhaustive report which recommended certain remedial measures, but did not recommend rent controls.
In early 1972, a group of Berkeley residents drafted a rent control amendment to the Berkeley City Charter and presented it to the Berkeley City Council for placement on the ballot at the next general election. On February 8, 1972, the Berkeley City Council, with one member dissenting, decided not to place the proposed rent control amendment on the ballot.
Proponents of the rent control amendment then succeeded in placing the proposed amendment on the June 1972 ballot by the process of initiative. (see Cal.Const., art. XI, § 3(b); Gov.Code, § 34459; Elections Code, §§ 4080–4085.) On June 6, 1972, a majority of the Berkeley electorate approved the proposed charter amendment by a vote of 27,915 to 25,301. And, on August 2, 1972, the state Legislature approved the charter amendment, pursuant to Article XI, section 3(a), of the state Constitution.
In October 1972, six owners of rental properties affected by the Berkeley rent control amendment commenced a class action against the City of Berkeley, an action that developed into an action for declaratory relief to determine the constitutionality and validity of the rent control measure. Three tenants and seven organizations identified as the Fair Rent Committee, Associated Students of the University of California at Berkeley, Berkeley Tenants Organizing Committee, Tenant Action Project, Oceanview Committee, People's Architecture, and the Center for Independent Living, Inc., were allowed to intervene. (see Code Civ.Proc., § 387.)
Trial before the Alameda County Superior Court commenced in February 1973. Plaintiffs challenged the constitutionality of the rent control amendment on twenty or more grounds. The principal issue, however, was whether a ‘serious public emergency,’ consisting of a severe shortage of rental housing and exorbitant rents, in fact existed in Berkeley at the time the charter amendment was enacted. The court found that no such ‘emergency’ in fact existed. The trial court also found: (1) local rent control regulations are not preempted by either state or federal law; (2) the initiative procedure in this case violated the landlords' right to due process of law by failure to give them notice and a hearing on the merits of the initiative proposal; (3) the charter amendment failed to provide a method for terminating emergency rent controls, and thus invalidated the amendment; (4) sections 7 and 10 of the charter amendment are preempted by state law as embodied in Code of Civil Procedure sections 1159–1179a; and (5) the ‘freezing’ of rent levels from the effective date of the charter amendment (August 2, 1972) to the date of judgment (June 22, 1973) was, because of equitable considerations involving parties to pending unlawful detainer actions, declared valid as to those parties.
Consistent with these findings and conclusions, the trial court rendered a judgment declaring Berkeley City Charter Article XVII unconstitutional and void, except as to the freezing of rent levels from August 2, 1972 to June 22, 1973. The City of Berkeley and the Intervenors appeal from that judgment. Authority of Charter City to Impose Rent Controls
The City of Berkeley operates under a charter, known historically as a ‘Freeholders Home Rule Charter,’ as authorized by Article XI, section 3(a) (formerly § 8), of the California Constitution. Section 3(b)2 of this Article provides that amendment of a city charter may be proposed by initiative.3 Before it was amended in 1974, section 3(a) of Article XI provided that a charter amendment became effective upon approval of the state Legislature. Once the state Legislature approved the charter amendment, it became the law of the state and in effect a legislative enactment.4 (Taylor v. Cole (1972) 201 Cal. 327, 257 P. 40; Whitmore v. Brown (1929) 207 Cal. 473, 481, 279 P. 447; Stern v. City of Berkeley (1941) 25 Cal.App. 685, 688–689, 145 P. 167.)
Article XI, section 3(a) of the state Constitution provides that a city may adopt a charter ‘for its own government.’ As a general rule, a city charter may include provisions pertaining to ‘municipal affairs,’ as distinguished from matters of state-wide concern. (see Wilson v. Beville (1957) 47 Cal.2d 852, 858–859, 306 P.2d 789.) As to municipal affairs, a charter city has the power, within the limits of its charter and the state Constitution, to govern without interference from the state. (Butterworth v. Boyd (1938) 12 Cal.2d 140, 147, 82 P.2d 434.) Where a charter provision concerning a municipal affair conflicts with general state law, the charter provision prevails. (see Butterworth v. Boyd, supra.) On the other hand, where a charter provision conflicts with general state law on a matter of state-wide concern, the general law of the state may prevail under the concept of preemption.5 (Wilson v. Beville, supra; see also, Healy v. Industrial Acc. Comm. (1953) 41 Cal.2d 118, 122, 258 P.2d 1.)
Because the availability of rental housing and the level of rents varies from municipality to municipality, the need for rent control measures is essentially a ‘municipal affair’ to be determined and administered by local government.6 It follows that a city charter may be amended to provide for rent controls, at least in the absence of state legislation preempting the field. Since the state Legislature has enacted no general rent control law, this case presents no question of conflict between the rent control provisions of the Berkeley City Charter and state law, and hence no issue of preemption.7 Nor is the field of rent controls preempted by federal law at this time.8
Respondents contended, and the trial court declared, that the initiative process failed to give persons adversely affected by the proposed charter amendment, notably landlords, reasonable notice and a hearing on the merits of the proposal, and hence denied them due process of law. Thereafter, however, the California Supreme Court filed its opinion in San Diego Building Contractors Association v. City Council of the City of San Diego (1974), 13 Cal.3d 205, 118 Cal.Rptr. 146, 529 P.2d 570, holding: (1) the provisions of the San Diego City Charter authorize the enactment of all ordinances, including zoning ordinances, by the process of initiative, and (2) under the due process clause of the United States Constitution, general zoning legislation may be enacted by initiative without affording affected landowners notice and hearing. The court explained that due process requires ‘notice and hearing’ only in quasi-judicial or adjudicatory settings and not in the adoption of general legislation. Accordingly, it is clear from the foregoing case that the initiative process in the instant case was not unconstitutional for failure to give the affected landlords notice and hearing. Judicial Review; Emergency Rent Control Legislation as Valid Exercise of Police Power; Constitutional Standard
The law governing judicial review of the constitutionality of statutes, ordinances, and city charters is well established in this state. (see 13 Cal.Jur.3d, Constitutional Law, §§ 53–80.) In reviewing legislation for the purpose of determining its constitutionality under the police power, a court is limited to determining whether the subject of the legislation is within the state's power, that is, whether it is reasonably necessary to promote the public health, safety, morals, or general welfare of the people of the community, and if so whether the means adopted to accomplish the objective of the legislation are reasonably designed for that purpose.9 (Miller v. Board of Public Works (1925) 195 Cal. 477, 484–485, 234 P. 381; Serve Yourself Gas etc. Assn. v. Brock (1952) 39 Cal.2d 813, 817–818, 249 P.2d 545; Consolidated Rock Products Co. v. City of Los Angeles (1962) 57 Cal.2d 515, 522, 20 Cal.Rptr. 638, 370 P.2d 342; Candlestick Properties, Inc. v. San Francisco Bay etc. Com. (1970) 11 Cal.App.3d 557, 571, 89 Cal.Rptr. 897; G & D Holland Construction Co. v. City of Marysville (1970) 12 Cal.App.3d 989, 994, 91 Cal.Rptr. 227.) Determination of the need for given regulations under the police power is primarily a legislative and not a judicial function, and once a court finds a reasonable basis for the legislation it will not weigh the wisdom of the legislation or interfere with legislative policy. (Consolidated Rock Products Co. v. City of Los Angeles, supra; Candlestick Properties, Inc. v. San Francisco Bay etc. Com., supra.) If the reasonableness of the regulation is ‘fairly debatable’ the courts will not interfere with the legislative determination. (Hamer v. Town of Ross (1963) 59 Cal.2d 776, 787, 31 Cal.Rptr. 335, 382 P.2d 375.) These rules have been applied to judicial review of legislation enacted through the process of initiative. (see, e. g., Higgins v. City of Santa Monica Monica (1964) 62 Cal.2d 24, 41 Cal.Rptr. 9, 396 P.2d 41.)
No California case has been cited, or found by independent research, wherein a California court has ruled on the constitutionality of rent control legislation under the police power, that is, under the power of the state and its political subdivisions to impose rent controls for protection of the health, safety, and general welfare of the public. In a number of other jurisdictions, however, the courts have upheld the constitutionality of rent control legislation, as a valid exercise of the police power, where the Legislature or governing body of the municipality had declared a serious housing emergency caused by, or consisting of, an acute shortage of rental housing and unreasonable or exorbitant rents. (Block v. Hirsh (1921) 256 U.S. 135, 41 S.Ct. 458, 65 L.Ed. 865 and Chastleton Corp. v. Sinclair (1923) 264 U.S. 543, 44 S.Ct. 405, 68 L.Ed. 841, involving rent control laws in District of Columbia; see Heubeck v. City of Baltimore (1954) 205 Md. 203, 107 A.2d 99, recognizing the rule; Russell v. Treasurer & Receiver General (1954) 331 Mass. 501, 120 N.E.2d 388; Marshal House, Inc. v. Rent Control Board of Brookline (1971) 358 Mass. 686, 266 N.E.2d 876; Jamouneau v. Harner (1954) 16 N.J. 500, 109 A.2d 640; Brookchester, Inc. Section 1 v. Ligham (1955) 17 N.J. 460, 111 A.2d 737; Inganamort v. Borough of Fort Lee, supra, 62 N.J. 521, 303 A.2d 298; Albigese v. Jersey City (1974) 127 N.J.Super. 101, 316 A.2d 483, modified at 129 N.J.Super. 567, 324 A.2d 577; Teeval Co. v. Stern (1950) 301 N.Y. 346, 93 N.E.2d 884, cert. den., 340 U.S. 876, 71 S.Ct. 122, 95 L.Ed. 637; see Bucho Holding Co. v. Temporary State Housing Rent Com'n. of N.Y. (1962) 11 N.Y.2d 469, 230 N.Y.S.2d 977, 184 N.E.2d 569; see also Marcus Brown Co. v. Feldman (1921) 256 U.S. 170, 41 S.Ct. 465, 65 L.Ed. 877, and Levy Leasing Co. v. Siegel (1922) 258 U.S. 242, 42 S.Ct. 289, 66 L.Ed. 595, involving constitutionality of New York rent control laws; see also, Israel v. City Rent and Rehabilitation Administration of City of New York (1968) 285 F.Supp. 908; Warren v. City of Philadelphia (1955) 382 Pa. 380, 115 A.2d 218; Kress, Dunlap & Lane, Ltd. v. Downing (1961, Virgin Islands) 193 F.Supp. 874; Bowles v. Willingham (1944) 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892, upholding rent control measures under Emergency Price Control Act of 1942; Woods, Housing Expediter v. Cloyd W. Miller Co. (1948) 333 U.S. 138, 68 S.Ct. 421, 92 L.Ed. 596, upholding rent control measures under Housing and Rent Act of 1947. See also, 52 C.J.S. Landlord and Tenant §§ 551.3–551.5; 50 Am.Jur.2d, Landlord and Tenant, § 1249.)
Although early rent control legislation was enacted to deal with a housing emergency caused by shortages during and after World Wars I and II (see, e. g., Block v. Hirsh, supra; Marcus Brown Co. v. Feldman, supra; Bowles v. Willingham, supra; Woods v. Cloyd W. Miller Co., supra), the constitutionality of rent control legislation has been upheld in recent years where the state legislatures and municipal governing bodies found that a housing emergency continued to exist for other reasons (see, e. g., Marshal House, Inc. v. Rent Control Board of Brookline, supra, 358 Mass. 696, 266 N.E.2d 876; Inganamort v. Borough of Fort Lee, supra, 62 N.J. 521, 303 A.2d 298; see Amsterdam-Manhattan, Inc. v. City Rent & Rehabilitation Administration (1965) 15 N.Y.2d 1014, 260 N.Y.S.2d 23, 207 N.E.2d 616). The constitutionality of rent control legislation has been upheld over arguments that it violated the landlords' right to due process of law (Block v. Hirsh, supra; Bowles v. Willingham, supra.), equal protection of the law (Woods v. Cloyd W. Miller Co., supra), protection from impairment of the obligations of contract (Marcus Brown Co. v. Feldman, supra; Huard v. Forest Street Housing, Inc. (1974) 366 Mass. 203, 316 N.E.2d 505), or that it took their property without compensation (Teeval Co. v. Stern, supra).
Appellants argue that the existence of a housing ‘emergency’ is no longer required in order to uphold the constitutionality of rent control legislation. Relying on a number of non-rent control cases such as Nebbia v. New York (1934) 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940 (involving regulations of milk prices), Olsen v. Nebraska (1941) 313 U.S. 236, 61 S.Ct. 862, 85 L.Ed. 1305 (involving state statute limiting fee a private employment agency could charge), and similar cases involving the constitutionality of regulations of prices and use of property under the police power, appellants argue that the regulation of rents is no different than regulating the price of any other commodity or service, and therefore the constitutionality of the Berkelev rent control measure should be upheld if there is a rational basis for it. (Compare this argument with the dissenting opinion in Amsterdam-Manhattan, Inc. v. City Rent & Rehabilitation Administration (1965) 15 N.Y.2d 1014, 260 N.Y.S.2d 23, 207 N.E.2d 616.)
In this case, however, the stated purpose of Article XVII of the Berkeley City Charter is to impose rent controls to deal with a ‘serious public emergency’ consisting of a critical shortage of housing and exorbitant rents exploiting that shortage. (see appendix, Article XVII, section 1.) Thus the validity of the Berkeley rent control provisions in Article XVII, as an expression of the will of the Berkeley electorate, must be judged in light of its stated purpose.
Moreover, apart from the stated purpose of the rent control Article, there are good reasons for treating rent controls as ‘emergency’ measures. While these reasons are not always articulated clearly, they are implicit in the effect that rent controls have on the community. The purpose of rent controls is to protect tenants from unreasonable or exorbitant rents during a shortage of rental housing, and at the same time provide landlords with reasonable rents. The purpose is not, as even proponents of rent control measures generally concede, to alleviate the cause of a housing shortage. To the contrary, rent controls tend to exacerbate a shortage of rental housing. Uncertainty about receiving a fair return on capital investment tends to discourage the construction of new rental units and the replacement of old, deteriorated rental units. Thus in contrast to the myriad of regulations of businesses and use of property under the police power, rent control regulations adversely affect not only the owners of the regulated property, but also the community at large.
These are the principal reasons why state legislatures, governing bodies of municipalities, and the courts have treated rent control measures as only temporary measures necessary to deal with a serious public emergency consisting of an acute housing shortage and exorbitant rents.10 As the New York Court of Appeals said in Lincoln Building Associates v. Barr (1956), 1 N.Y.2d 413, 153 N.Y.S.2d 633, 639, 135 N.E.2d 801, 806, appeal dismissed, 355 U.S. 12, 78 S.Ct. 12, 2 L.Ed.2d 20, ‘Rent controls, all will agree, ought not achieve a status of permanence in our economy. They have no justification except in periods of emergency.’
Accordingly, we concluded that the constitutionality of Berkeley City Charter Article XVII, under the police power, depends on the existence of a ‘serious public emergency’ consisting of a critical shortage of rental housing and the existence of exorbitant rents, as stated in section one of the Article. In light of established principles of judicial review, as previously stated, and the foregoing cases, Berkeley City Charter Article XVII is, except for certain eviction provision in section 7, constitutional on its face. A serious public emergency consisting of a critical shortage of rental housing and the existence of exorbitant rents is a legitimate concern of municipal government, and rent controls are recognized as a reasonable, though temporary, means of dealing with those problems.
Proof that Housing Emergency Did Not Exist
Where the constitutionality or validity of legislation depends on the existence of certain facts, the courts presume that the legislative body has investigated and ascertained the existence of those facts before enacting the law. (City of Ojai v. Chaffee (1943) 60 Cal.App.2d 54, 61, 140 P.2d 116.) However, the constitutionality of legislation predicated upon the existence of a particular state of facts may be challenged by showing to the court that those facts have ceased to exist. (Brown v. Merlo (1973) 8 Cal.3d 855, 869, 106 Cal.Rptr. 388, 506 P.2d 212, citing Chastleton Corp. v. Sinclair (1924), 264 U.S. 543, 44 S.Ct. 405, 68 L.Ed. 841, a rent control case; see also, 17 Southern Cal.L.Rev. 335, ‘Consideration of Facts in Constitutional Cases,’ by the Hon. Emmet Wilson.) Thus where the valid operation of legislation depends upon the existence of an emergency, its validity can be challenged by showing that the emergency ceases to exist. (see In re Blaney (1947) 30 Cal.2d 643, 657, 184 P.2d 892.)
Accordingly, in a number of rent control cases the courts in other jurisdictions have upheld the right of an interested party (landlord) to challenge the validity of rent control legislation by presenting evidence that a serious housing emergency, which is the basis of rent control legislation, either did not exist at the time the legislation was enacted, or no longer exists. (Chastleton Corp. v. Sinclair, supra; Hawaii v. Akase (1958) 43 Hawaii 84; Jamouneau v. Harner, supra; Albigese v. Jersey City (1974) 127 N.J.Super. 101, 316 A.2d 483; see Lincoln Building Associates v. Barr (1956) 1 N.Y.2d 413, 153 N.Y.S.2d 633, 135 N.E.2d 801, 804, involving commercial rent control laws; Warren v. City of Philadelphia (1956) 387 Pa. 362, 127 A.2d 703; Kress, Dunlap & Lane, Ltd. v. Downing, supra.) The burden is on the person challenging the legislation to show there is no rational basis for the legislative body's declaration of a housing shortage constituting a serious public emergency. (cf. Lincoln Building Associates v. Barr, supra; Warren v. City of Philadelphia, supra; Kress, Dunlap & Lane, Ltd. v. Downing, supra.)
The fundamental issue in this case is, therefore, whether the respondents-landlords sustained their burden of showing that no critical shortage of rental housing resulting in exorbitant rents, constituting a serious public emergency, in fact existed at the time the charter amendment in question was enacted. The record on appeal does not include a reporter's transcript of the trial. Thus the issue before this court is not whether the trial court's findings of fact are supported by the evidence, but whether the trial court's conclusion that no housing emergency existed is supported by the court's findings of fact.
Briefly stated, the essential facts as found by the trial court are as follows. At the time the charter amendment was enacted, the population of Berkeley was approximately 116,000 people. Of this number, approximately 63 percent were tenants. The vacancy rate for residential rental units in Berkeley was 3.1 percent, or approximately 500 actual vacancies. Because Berkeley is part of a ‘continuous urban geographical and transportation area,’ the trial court also received evidence of the vacancy rates in the adjoining City of Oakland and other nearby cities, including Richmond. The court found the rental vacancy rate in Oakland to be in excess of 6.0 percent, or actual vacancies of approximately 3,000 units. The rental vacancy rate in Richmond was also found to exceed 6.0 percent, or approximately 450 actual vacancies. On the question of availability of student housing, the court found that dormitory housing at the University of California had increased substantially and that dormitory housing was available for most students requiring it. There were 23 actual vacancies in dormitory housing in 1973. On the question of availability of rental units in Berkeley, the trial court also found that between 1960 and 1970, the number of new rental units had increased at a faster rate than the increase in population, that between 1971 and 1972 the vacancy rate had increased from 2.6 percent to 3.1 percent, and that additional vacancies would occur when certain institutions, such as the Berkeley School of Religion and the State Department of Public Health, moved from Berkeley.
In determining that a rental housing emergency does in fact exist, it is necessary that the rental housing availability in the adjacent incorporated and unincorporated areas, as well as the subject municipality, be considered.11
In this case, the demand for rental housing in Berkeley is due primarily to the presence of the University of California with its large number of students, faculty, and other personnel. Housing of University students and personnel is not limited to geographical boundaries of Berkeley, but extends into cities immediately adjacent to Berkeley. It was proper for the trial court, in realistically determining the existence of a housing emergency in Berkeley, to consider the availability of rental housing in other municipalities in the immediate area.
Although it was proper for the trial court to consider the availability of rental housing in areas outside the boundaries of Berkeley, the trial court also found, as stated in its memorandum of decision, that the evidence of exorbitant rents in Berkeley was ‘minimal.’ The trial court cited the opinion testimony of a witness who estimated that no more than five percent of the rents in Berkeley could be considered ‘exorbitant.’ The trial court also specifically found that in South Berkeley 98 percent of all rental housing was available for $200 or less per month, that in Southeast Berkeley 85 percent of all rental housing was available for $200 or less per month, and in Central Berkeley 88 percent of all rental housing was available for $200 or less per month.
The court found that of the total population of Berkeley approximately 30,000 persons comprised a group which spends in excess of 35 percent of its income for housing, that approximately 25,000 persons in that group were either students, young nonstudents, aged, disabled, or low income minorities. The court made further findings, however, concerning the availability of financial aid to students, federal housing units for minorities, the increases in minority-owned homes in Berkeley, and median income of Berkeley residents. The court pointed out that little evidence was presented concerning the aged and disabled residents of Berkeley, but the court noted their problem, common to many aged and disabled persons, in finding low-cost housing.
The trial court concluded that while the rental vacancy rate in Berkeley was low, and while housing conditions for certain low-income persons were serious, there was not such a widespread rental housing shortage and exorbitant rents as to constitute a ‘serious public emergency’ within the meaning of section 1 of Article XVII of the Berkeley Charter. We conclude that the trial court's findings of fact support its conclusion. (cf. Warren v. City of Philadelphia (1956) 387 Pa. 362, 127 A.2d 703.)
Validity of Eviction Provisions
Section 7 of Berkeley Charter Article XVII contains a number of provisions governing the grounds for evicting a tenant from a rent-controlled unit, and the procedure for obtaining a certificate of eviction from the rent control board. (see appendix.) The trial court concluded that these provisions were preempted by state law and hence invalid. We agree.
As a general rule, city charter provisions cannot control in matters of state-wide concern where the state law occupies the field. (Wilson v. Beville (1957) 47 Cal.2d 852, 859, 306 P.2d 789; Eastlick v. City of Los Angeles (1947) 29 Cal.2d 661, 665–666, 177 P.2d 558.) Although a charter city may, under some circumstances, enact measures that supplement state law, the city may not impose requirements in a field preempted by state law. (Wilson v. Beville, supra; cf. In re Hubbard (1964) 62 Cal.2d 119, 127, 41 Cal.Rptr. 393, 396 P.2d 809; Galvan v. Superior Court (1969) 70 Cal.2d 851, 859, 76 Cal.Rptr. 642, 452 P.2d 930, and Bishop v. City of San Jose (1969) 1 Cal.3d 56, 61–62, 81 Cal.Rptr. 465, 460 P.2d 137, involving validity of local ordinances, as distinguished from charter provisions, which conflicted with state law.) Determination of the question whether the Legislature has undertaken to occupy exclusively a given field of legislation depends upon an analysis of the statute and a consideration of the facts and circumstances upon which it was intended to operate. (Wilson v. Beville, supra.) Where the Legislature has adopted statutes governing a particular subject, its intent with regard to occupying the field to the exclusion of all local regulation must be determined in light of the whole purpose and scope of the legislative scheme. (Wilson v. Beville, supra; see also, In re Hubbard, supra, 62 Cal.2d 127–128, 41 Cal.Rptr. 393, 396 P.2d 809, and Galvan v. Superior Court, supra, 70 Cal.2d 859–860, 76 Cal.Rptr. 642, 452 P.2d 930, stating the tests in determining whether a given subject has been preempted by the Legislature.)
In this state there is a considerable body of law governing the rights and obligations of landlords and tenants (see Civil Code, §§ 1941–1952.6; 3 Witkin, Summary of California Law, 8th ed., Real Property, §§ 409–542, pp. 2099–2213), including remedies for recovery of possession of rented property by either the landlord or tenant (see Code Civil Procedure, §§ 1159–1179a; 3 Witkin, supra §§ 524–541, pp. 2199–2213). In 1970, the state Legislature enacted a number of new statutes intended to give tenants greater protection. Among these statutes is a provision as to the landlord's duty to keep a dwelling in tenantable condition (Civil Code, § 1941.1). Also, in 1970, the Legislature enacted a statute giving a tenant a remedy against ‘retaliatory eviction’ (Civil Code, § 1942.5), which is in substance a codification of the holding in Schweiger v. Superior Court (1970) 3 Cal.3d 507, 90 Cal.Rptr. 729, 476 P.2d 97, upholding a tenant's defense of retaliatory eviction.
Section 7(a) of Berkeley Charter Article XVII precludes a landlord from bringing any action to recover possession of a rent-controlled unit except on the grounds stated in that subdivision. (see appendix.) Although those grounds do not materially conflict with existing grounds under state law, subdivision 7(a) conflicts with state law insofar as it limits a landlord's right to recover possession of his property only on the grounds stated.
Section 7(b) of Berkeley Charter Article XVII requires a landlord seeking to recover possession of a rent-controlled unit to first obtain a certificate of eviction from the rent control board. (see appendix.) To obtain a certificate of eviction, the landlord must submit to the rent control board an application declaring under penalty of perjury that (1) there are no outstanding ‘Code violations' on the premises or, if there are any, they were all substantially caused by the present tenants; (2) the landlord served the tenant with proper notice of termination of the tenancy, and (3) there exist facts which justify issuance of a certificate of eviction under subdivision (a) of section 7. Subdivision (e) provides that no certificate of eviction shall be issued if the landlord fails to prove that no ‘Code violations' exist on the premises.
Although it may be proper for a rent control measure to require a certificate of eviction as evidence of compliance with the rent levels set by the rent control board, section 7(b) in effect vests the rent control board with power to determine whether the landlord has grounds for evicting a tenant for reasons wholly unrelated to enforcement of rent controls. Moreover, the reference to ‘Code violations' is vague and uncertain. A landlord might have a legal ground for evicting a tenant, for any of the reasons stated in subdivision (a) of section 7, but if the landlord fails to declare or show there exist no ‘Code violations,’ a certificate of eviction would not be issued to him. Thus there may be no rational connection between a ‘Code violation’ and the ground for evicting a tenant. The existence of ‘Code violations' may be relevant in examining the conditions of the rental unit for the purpose of setting the rent level for that property. However, to preclude a landlord from evicting a tenant for reasons wholly unrelated to ‘Code violations' or enforcement of rent controls clearly conflicts with the general law of the state.
The procedures prescribed by section 7, subdivisions (b) through (g), in effect require the landlord to go through two proceedings to recover possession of his property, one before the rent control board and a second action in court. This procedure clearly conflicts with general state law concerning unlawful detainer actions.
Furthermore, the judicial power of this state is vested in the courts. (Cal.Const., art. VI, § 1.) The Legislature may not give judicial powers to any other state or local board, except where the Constitution so provides. (see 5 Witkin, Summary of California Law, 8th ed., Constitutional Law, § 77, p. 3314.) Although certain administrative agencies or boards may exercise ‘quasi-judicial’ power to determine facts (see 5 Witkin, supra, § 80, pp. 3316–3317), an administrative board may not be given powers to make judicial determinations in violation of the courts' judicial powers under the state Constitution.
Section 7 of Article XVII of the Berkeley Charter gives, in substance, the rent control board the power to determine whether a landlord has the legal right to evict a tenant for reasons wholly unrelated to the question of compliance or noncompliance with rent controls. Section 7 is, therefore, an unconstitutional invasion of the courts' powers to adjudicate the rights and obligations of landlords and tenants. (cf. Teeval Co. v. Stern (1950) 301 N.Y. 346, 93 N.E.2d 884, cert. den. 340 U.S. 876, 71 S.Ct. 122, 95 L.Ed. 637.) Nor is section 7 saved by the fact subdivision (g) provides for judicial review of the rent control board's decision concerning the granting or withholding of a certificate of eviction.
Accordingly, we conclude that section 7 of Berkeley City Charter Article XVII is invalid because: (1) it is preempted by state law dealing with the rights and obligations of landlords and tenants and state law prescribing the procedures for recovery of possession of real property (cf. Leone Management Corp. v. Board of Comm'rs of Town of West New York (1974) 130 N.J.Super. 569, 328 A.2d 26, 32); and (2) it is an unconstitutional interference with the powers of the courts to adjudicate the rights and obligations of landlords and tenants. (cf. Teeval Co. v. Stern, supra.)
Validity of Provision for Civil Remedies
The judgment declares section 10 of Berkeley Charter Article XVII invalid on the ground it contains eviction procedures preempted by state law. However, except fot subdivision (f), section 10 does not involve eviction procedures. (see appendix.) Rather, it provides civil remedies against a landlord who violates rent levels set by the rent control board. These remedies are necessary to enforce rent controls. They do not conflict with, and are not preempted by, state law pertaining to eviction procedures. Subdivision (d) of section 10 expressly provides that the courts shall have jurisdiction of these actions, and thus there is no unconstitutional interference with the judicial powers of the courts.
Lack of Method for Terminating Rent Controls
The judgment declares Article XVII of the Berkeley Charter invalid because it ‘does not contain within its terms a method by which it can be determined when the purported emergency described therein has terminated.’ As previously discussed, rent control legislation is generally regarded as temporary, emergency legislation, enacted for a limited period of time. (see, for example, Annotated Code of Maryland, 1974 Cumulative Supplement, Art. 53, § 45, Acts 1973, Ch. 794; Laws of Maryland 1974, Chapter 741, pp. 2255–2558; Annotated Laws of Massachusetts, Acts 1970, Ch. 842; McKinney's New York Unconsolidated Laws, Title 23, Ch. 3, § 8581; New York City Rent and Rehabilitation Law, Section Y51–1.0 et seq.) When the limited period is about to expire, the legislative body may review the rental housing situation and determine whether the housing emergency still exists; if so, the emergency rent control legislation can be extended for another limited period.
Failure of Article XVII of the Berkeley Charter to provide a termination date or method for terminating rent controls would in effect make rent controls a permanent provision of the Berkeley Charter, contrary to the fundamental purpose of rent control measures, and subject to repeal or amendment only by established procedures.12 In that rent control derives its constitutionality from the existence of a rental housing emergency, it is necessary that all municipal legislation enacting rent controls provide for its termination. Such termination may be at fixed dates or upon the happening of certain events which would negate the existence of the housing emergency. A judicial inquiry would always be available, to the affected, to demonstrate the lack of a rental housing emergency, as previously discussed. (In re Blaney, supra, 30 Cal.2d at p. 657, 184 P.2d 892; Chastleton Corp. v. Sinclair, supra, 264 U.S. at p. 547, 44 S.Ct. 405.)
Lack of Standard for Establishing Reasonable Rents
Sections 4 and 5 of Article XVII of the Berkeley Charter give the rent control board power to set maximum rent, with the rent in effect on August 15, 1971, as the base rent. (see appendix.) Although section 5 enumerates certain factors the rent control board may consider in setting rent levels, the Article does not clearly establish a standard for establishing reasonable rents. That power is vested in the rent control board, and thus the legal question would be whether there is an unconstitutional delegation of legislative authority to the rent control board. (see, generally, Kugler v. Yocum (1968) 69 Cal.2d 371, 375–377, 71 Cal.Rptr. 687, 445 P.2d 303; Whitmire v. Eureka (1972) 29 Cal.App.3d 28, 32, 105 Cal.Rptr. 185; San Francisco Street Artists Guild v. Scott (1974) 37 Cal.App.3d 677, 112 Cal.Rptr. 502.) Since the respondents have not raised this issue on appeal, it is not necessary to decide the question. Nevertheless, we point out that the failure of the rent control board to set rents at reasonable levels, however that might be calculated, would result in unlawful confiscatory rates. (see Marshal House v. Rent Control Board of Brookline (1971) 358 Mass. 686, 266 N.E.2d 876.)
The judgment declaring Berkeley City Charter Article XVII unconstitutional is affirmed, except so far as it declares the initiative process unconstitutional. It is ordered that respondents recover costs on appeal.
CHARTER OF THE CITY OF BERKELEY
Section 1. Statement of Purpose.
A growing shortage of housing units resulting in a critically low vacancy rate, rapidly rising and exorbitant rents exploiting this shortage, and the continuing deterioration of the existing housing stock constitute a serious public emergency affecting the lives of a substantial proportion of those Berkeley residents who reside in rental housing. These emergency conditions endanger the public health and welfare of the City of Berkeley and especially the health and welfare of the poor, minorities, students and the aged. The purpose of this Article, therefore, is to alleviate the hardship caused by this emergency by establishing a Rent Control Board empowered to regulate residential housing and rentals in the City of Berkeley.
Section 2. Definitions.
The following words or phrases as used in this Charter Amendment shall have the following meanings:
The Rent Control Board established by Section 3 of this amendment.
Commissioners of the Rent Control Board established by Section 3 of this amendment.
c) Controlled Rental Units.
All rental units in the City of Berkeley except:
(1) rental units in hotels, motels, inns, tourist homes and rooming and boarding houses which are rented primarily to transient guests for a period of less than fourteen (14) days;
(2) rental units in non-profit cooperatives;
(3) rental units in any hospital, convent, monastery, extended medical care facility, asylum, non-profit home for the aged, or dormitory owned and operated by and institution of higher education;
(4) rental units which a governmental unit, agency or authority either owns, operates, manages or subsidizes.
d) Housing Services.
Housing services include but are not limited to repairs, replacement, maintenance, painting, providing light, heat, hot and cold water, elevator service, window shades and screens, storage, kitchen, bath and laundry facilities and privileges, janitor services, refuse removal, furnishings, telephone, and any other benefit, privilege or facility connected with the use or occupancy of any rental unit. Services to a rental unit shall include a proportionate part of services provided to common facilities of the building in which the rental unit is contained.
An owner, lessor, sublessor or any other person entitled to receive rent for the use and occupancy of any rental unit, or an agent or successor of any of the foregoing.
The consideration, including any bonus, benefits or gratuity demanded or received for or in connection with the use or occupancy of rental units or the transfer of a lease for such rental units, including but not limited to monies demanded or paid for parking, pets, furniture, subletting and security deposits for damages and cleaning.
g) Rental Housing Agreement.
An agreement, verbal, written or implied, between a landlord and tenant for use or occupancy of a rental unit and for housing services.
h) Rental Units.
Any building, structure, or part thereof, or land appurtenant thereto, or any other real property rented or offered for rent for living or dwelling purposes, including houses, apartments, rooming and boarding house units, and other properties used for living or dwelling purposes, together with all housing services connected with the use or occupancy of such property.
A tenant, subtenant, lessee, sublessee or any other person entitled under the terms of a rental housing agreement to the use or occupancy of any rental unit.
Section 3. Rent Control Board.
There shall be in the City of Berkeley a Rent Control Board. The Board shall consist of five elected Commissioners. The Board shall elect annually as chairwoman or chairman one of its members to serve in that capacity.
Residents of the City of Berkeley who are duly qualified electors of the City of Berkeley are eligible to serve as Commissioners of the Rent Control Board.
c) Full Disclosure of Holdings.
Candidates for the position of Rent Control Board Commissioner, in addition to fulfilling the requirements of Article III, Section 6 1/2, when filing nomination papers, shall submit a verified statement listing all of their interests and dealings in real property, including but not limited to its ownership, sale or management, and investment in and association with partnerships, corporations, joint ventures and syndicates engaged in its ownership, sale or management, during the previous three (3) years.
d) Method of Election.
Commissioners shall be elected at general municipal elections in the same manner as set forth in Article III, except that the first Commissioners shall be elected within 180 days after approval of this Article by the State Legislature in accordance with the provisions of Article III.
e) Term of Office.
Commissioners shall be elected to serve terms of four years, except that of the first five Commissioners elected in accordance with Section 3(d), the two Commissioners receiving the most votes shall serve until the first general municipal election held more than three years after their election and the remaining three Commissioners shall serve until the first general municipal election held more than one year after their election. Commissioners shall serve a maximum of two full terms.
f) Powers and Duties.
The Rent Control Board is empowered to set maximum rents for all residential rental units in the City of Berkeley with the exception of those classes of units exempted under Section 2(c). The Board is empowered to roll back tents to a base rent established under Section 4(a). The Board is empowered to adjust maximum rents either upward or downward after conducting appropriate investigations and hearings as provided under Section 6. The Board may make such studies and investigations, conduct such hearings, and obtain such information as is necessary to carry out its powers and duties. The Board may seek injunctive relief under the provisions of Section 11 in order to carry out its decisions and may settle civil claims in accordance with the provisions of Section 10.
g) Rules and Regulations.
The Rent Control Board shall issue and follow such rules and regulations, including those which are contained in this Article, as will further the purposes of this Article. The Board shall publish its rules and regulations prior to promulgation in at least one newspaper with general circulation in the City of Berkeley. All rules and regulations, internal staff memoranda, and written correspondence explaining the decisions and policies of the Board shall be kept in the Board's office and shall be available to the public for inspection and copying. The Board shall publicize this Charter Amendment through the media of signs, advertisements, flyers, leaflets, announcements on radio and television, newspaper articles and other appropriate means, so that all residents of Berkeley will have the opportunity to become informed about their legal rights and duties under rent control in Berkeley.
The Board shall hold two regularly scheduled meetings per month. Special meetings may be called upon the request of at least two Commissioners. All meetings shall be open to the public. Maximum rent adjustment and eviction hearings shall be conducted in accordance with the provisions of Sections 6 and 7.
Three Commissioners shall constitute a quorum. Three affirmative votes are required for a decision, including all motions, orders, and rulings of the Board.
The Board shall maintain and keep in its office rent adjustment and eviction certificate hearing dockets. Said dockets shall list the time, date, place of hearing, parties involved, the addresses of the buildings involved, and the final disposition of the petitions heard by the Board.
Each Commissioner shall receive for every meeting fifty dollars ($50.00), but in no event shall any Commissioner receive in any twelve month period more than twenty-four (24) hundred dollars for services rendered.
If a vacancy shall occur on the Board, the Board shall appoint a qualified person to fill such a vacancy until the following general municipal election when a qualified person shall be elected to serve for the remainder of the term.
Commissioners may be recalled in accordance with the provisions of Article IV of the Charter of the City of Berkeley.
The Board shall employ, subject to the approval of the City Council, such staff as may be necessary to perform its functions. Board staff shall not be subject to the requirements of Article VII, Section 28(b) and (c) and Article IX, Section 56 of the City Charter.
Section 4. Maximum Rent.
a) Base Rent.
The base rent shall be the rent in effect on August 15, 1971 or any rent in effect subsequent to this date if it was less. If no rent was in effect on August 15, 1971, as in the case of newly constructed units completed after this date, the base rent shall be established by the Board based on the generally prevailing rents for comparable units in the City of Berkeley. The base rent shall take effect ninety (90) days after the election of the Board and the Board shall administer a rollback of rents in all controlled units to this level and shall determine, where necessary, the actual rent level in effect on August 15, 1971. Upon approval of this Charter Amendment by the California State Legislature and pending the establishment of base rents and the rollback of rents to the base rent level, no landlord shall increase rents in a rent controlled unit.
The Board shall require registration of all rent-controlled units, their base rents, and the housing services provided on forms authorized and voted by the Board.
Section 5. Maximum Rent Adjustments.
The Board may make individual rent adjustments, either upward or downward, of the maximum rent established as the base rent for rent-controlled units under Section 4(a). The Board shall receive petitions from landlords and tenants for such adjustments, and shall conduct hearings in accordance with the provisions of Section 6 to rule on said petitions.
In reviewing such petitions for adjustments, the Board shall consider relevant factors including but not limited to the following: a) increases or decreases in property taxes; b) unavoidable increases or decreases in operating and maintenance expenses; c) capital improvement of the rent-controlled unit, as distinguished from ordinary repair, replacement and maintenance; d) increases or decreases in living space, furniture, furnishings or equipment; e) substantial deterioration of the rent-controlled unit other than as a result of ordinary wear and tear; and f) failure on the part of the landlord to provide adequate housing services.
Any landlord who petitions the Board for an upward rent adjustment shall file with such petition a certification from the City of Berkeley Building Inspection Service which states that the premises in question are in full and complete compliance with the applicable State of California Health and Safety Codes and the City of Berkeley Housing Code based on an inspection made no more than six months prior to the date of the landlord's petition. Such certification shall be prima facie evidence of the non-existence of Code violations, rebuttable by other competent evidence introduced by the tenant, certification notwithstanding. The Board may refuse to grant an upward adjustment if it determines that the rent-controlled unit in question does not comply with the requirements of the aforementioned Codes and if it determines that such lack of compliance is due to the landlord's failure to provide normal and adequate housing services.
Section 6. Maximum Rent Adjustment Hearings.
The Board shall consider an adjustment of rent for an individual rent-controlled unit upon receipt of a petition for adjustment filed by the landlord or tenant of such a unit on a form provided by the Board. No such adjustment shall be granted until after the Board considers the petition at an adjustment hearing.
The Board shall notify the landlord, if the petition was filed by the tenant, or the tenant, of the petition was filed by the landlord, of the receipt of such a petition. The Board shall schedule a hearing no earlier than the sixteenth (16th) day after the postmark of the notice of the hearing sent to the parties and shall notify both parties as to the time, date and place of the hearing. Hearings shall be scheduled for times most convenient for all parties, including evenings and weekends. Hearings may be postponed or continued for good cause provided that all parties receive timely notice of such action.
The Board may required either party to a rent adjustment petition to provide it with all pertinent books, records and papers. Such documents shall be made available to the parties involved at least seven days prior to the hearing at the office of the Rent Control Board.
d) Open Hearings.
All rent adjustment hearings shall be open to the public.
e) Right to Assistance.
All parties to a hearing may have assistance in presenting evidence and developing their position from attorneys, legal workers, tenant union representatives or any other persons designated by said parties.
f) Hearing Record.
The Board shall make available for inspection and copying by any person an official record which shall constitute the exclusive record for decision on the issues at the hearing. The record of the hearing, or any part of one, shall be obtainable for the cost of copying. The record of the hearing shall include: all exhibits, papers and documents required to be filed or accepted into evidence during the proceeding; a list of all participants present; a summary of all testimony accepted in the proceeding; a statement of all materials officially noticed; all findings of fact; the ruling on each exception or objection, if any are presented; all recommended decisions, orders or rulings; all final decisions and/or orders; and the reasons for each recommended and each final decision, order or ruling.
The Board shall make a final decision no later than fifteen days after the conclusion of the hearing. No rent adjustment shall be granted unless supported by the preponderance of the evidence submitted at the hearing. All parties to a hearing shall be sent a notice of the Board's decision and a copy of the findings of fact and law upon which said decision is based. At the same time, parties to the proceeding shall also be notified of their right to judicial review of the decision pursuant to Section 9 of this Charter Amendment.
The Board may consolidate petitions relating to rent-controlled units in the same building with the written consent of a majority of the tenants and all such petitions may be considered in a single hearing.
Notwithstanding any other provision of this Section, the Board may, without holding a hearing, refuse to adjust a maximum rent level upward for an individual rental unit if a hearing has been held with regard to the rental level of such unit within the prior twelve months.
j) Inadequate or False Information.
If information filed in a petition for rent adjustment or in additional submissions filed at the request of the Board is inadequate or false, no action shall be taken on said petition until the deficiency is remedied.
Section 7. Evictions.
a) No landlord shall bring any action to recover possession of a rent-controlled unit unless (1) the tenant has failed to pay the rent to which the landlord is entitled under the rental housing agreements; (2) the tenant has violated an obligation or covenant of her or his tenancy other than the obligation to surrender possession upon proper notice and has failed to cure such violation after having received written notice thereof from the landlord; (3) the tenant is committing or permitting to exist a nuisance in, or is causing substantial damage to, the rent-controlled unit, or is creating a substantial interference with the comfort, safety or enjoyment of the landlord or other occupants of the same; (4) the tenant is convicted of using or permitting a rent-controlled unit to be used for any illegal purpose; (5) the tenant, who had a rental housing agreement which has terminated has refused after written request or demand by the landlord, to execute a written extension or renewal thereof for a further term of like duration and in such terms as are not consistent with or violative of any provisions of this Charter Amendment and are materially the same as in the previous agreement; (6) the tenant has refused the landlord reasonable access to the rent-controlled unit for the purpose of making necessary repairs or improvement required by the laws of the United States, the State of California or any subdivision thereof, or for the purpose of inspection as permitted or required by the rental housing agreement or by law or for the purpose of showing the rental housing unit to any prospective purchaser or mortgagee; (7) the tenant holding at the end of the term of the rental housing agreement is a subtenant not approved by the landlord; (8) the landlord seeks to recover possession in good faith for use and occupancy of herself or himself, of her or his children, parents, brother, sister, father-in-law, mother-in-law, son-in-law or daughter-in-law; or (9) the landlord seeks to recover possession to demolish or otherwise remove the rent-controlled unit from housing use.
b) A landlord seeking to recover possession of a rent-controlled unit shall apply to the Board for a certificate of eviction. Such application shall include a copy of the notice to quit served on the tenant(s) and must contain statements made under pains and penalties of perjury that: (1) there are no outstanding Code violations on the premises or, if there are any, they were all substantially caused by the present tenants; (2) the landlord or her or his agent has properly sent to or personally served on the tenant a notice terminating the tenancy and said notice has taken legal effect; and (3) there exist facts which justify issuance of a certificate of eviction under Section7(a).
c) The Board shall notify all concerned tenants of the landlord's application for a certificate of eviction and of their right to contest issuance of such a certificate by requesting a hearing within five (5) days after receiving such notification from the Board. Said notification shall include a copy of the landlord's application and statements and attachments.
d) If the tenant requests such a hearing, the Board shall schedule such a hearing within seven (7) days after receipt of the tenant's request and notify all parties as to the time, date and place of the hearing.
e) At said hearing the burden of proof is on the landlord to prove the facts attested to in her or his application. No eviction certificate shall be issued if: (1) the landlord fails to prove that no Code violations exist on the premises or that any violations which do exist were substantially caused by the present tenant(s); or (2) the eviction is in retaliation for reporting Code violations or violations of this Article, or for organizing other tenants, or for enforcing rights under this Charter Amendment. The provisions of Section 6 (d), (c), (f), (g), (h), (i) and (j) apply in a similar manner to eviction hearings.
f) The Board shall grant or deny the certificate of eviction within five (5) days after a hearing is held on the landlord's application.
g) A landlord who seeks to recover possession of a rent-controlled unit without first obtaining a certificate of eviction or who recovers possession without first obtaining a certificate of eviction shall be in violation of this Article and shall be subject to the civil penalties available to the Board, the City or the tenant under Section 10. This subsection shall not apply if, after the landlord has applied for a certificate of eviction, the tenant voluntarily abandons the rent-controlled unit. The provisions of this Section shall be construed as additional restrictions on the right to recover possession of rent-controlled units. No provision of this Section shall entitle any landlord to recover possession of such a rent-controlled unit. Upon a decision of the Board concerning the granting or withholding of a certificate of eviction, either party may seek judicial review of this decision in accordance with the provisions of Section 9.
Section 8. Non-Waiverability.
Any provision whether oral or written, in or pertaining to a rental housing agreement whereby any provision of this Article for the benefit of a tenant is waived, shall be deemed to be against policy and shall be void.
Section 9. Judicial Review.
A landlord or tenant aggrieved by any action, regulation, or decision of the Board may seek judicial review by appealing to the appropriate court within the jurisdiction.
Section 10. Civil Remedies.
a) Any landlord who demands, accepts, receives, or retains any payment of rent in excess of the maximum lawful rent, in violation of the provisions of this Article or any rule, regulation or order hereunder promulgated, shall be liable as hereinafter provided to the tenant from whom such payment is demanded, accepted, received or retained, for reasonable attorney's fees and costs as determined by the court, plus damages in the amount of two hundred dollars ($200.00) or not more than three (3) times the amount by which the payment or payments demanded, accepted, received or retained, whichever is the greater.
b) If the tenant from whom such payment is demanded, accepted, received, or retained in violation of the provisions of this Article or any rule, regulation or order hereinunder promulgated fails to bring an action under this Section within thirty days from the date of the occurrence of the violation, the Board may settle the claim arising out of the violation or bring such action. Thereinafter, the tenant on whose behalf the Board acted is barred from also bringing action against the landlord in regard to the same violation for which the Board has made a settlement. In the event the Board settles said claim, it shall be entitled to retain the costs it incurred in the settlement thereof, and the tenant against whom the violation has been committed shall be entitled to the remainder.
c) A judgment for damages or on the merits in any action under this Section shall be a bar to any recovery under this Section against the same landlord on account of any violation with respect to the same tenant prior to the institution of the action in which such judgment was rendered. Action to recover liquidated damages under the provisions of this Section shall not be brought later than one year after the date of the violation.
d) The Municipal or Superior Court, as the case might be, within which the rent-controlled unit affected is located shall have jurisdiction over all actions and complaints brought under this Section.
e) Any tenants who have paid in excess of the maximum rent set by the Board as determined at a hearing held by the Board or whose rent was suspended due to a violation of this Article shall be entitled to a refund in the amount of the excess payment. Tenants may elect to deduct such amount of the refund due them from their future rent payments, rather than pursuing the remedy provided under Section 10(a), provided that they inform the landlord in advance in writing as to their intention to do so. Tenants shall not be penalized by landlords for deducting their refund pursuant to this Section.
f) If a landlord evicts a tenant without a certificate of eviction obtained from the Board, the tenant's obligation to pay rent to the landlord during the period beginning with the date of the actual eviction and continuing for the period in which the tenant is dispossessed for a maximum of one year is automatically suspended and the tenant is entitled to a refund of rent in accordance with the provisions of Section
10(c). Section 11. Injunctive Relief.
The Board and tenants and landlords of rent-controlled units may seek relief from a Municipal or Superior Court to restrain by injunction any violation of this Article and of the rules, regulations and decisions of the Board.
Section 12. Partial Invalidity.
If any provision of this Article or application thereof to any person or circumstances is held invalid, this invalidity shall not affect other provisions or applications of this Article which can be given effect without the invalid provision or application, and to this end the provisions of this Article are declared to be severable.
I concur with the lead opinion in the affirmance of the judgment; but I base my concurrence on the lack of method of termination of rent controls, or put in another way, the lack of a gauge by which to adjudge the continuance of emergency conditions. I believe the question of whether an emergency exists should not be decided or put before the court unless there were no means of stating the limits of the exigency in terms of time or of other standards. I would not affirm on the ground that no emergency existed. For courts to state that there is not an emergency, against the legislative finding that there is, is a result which ought to be avoided if at all possible, not only because of the judicial deference to legislative acts, but also because this procedure largely involves the subjective opinion of a trial judge, even though he acts most conscientiously. It involves an appellate court in deciding upon vague or arbitrary norms. For what standard does a judge use as his measure? The charter amendment states none. Here, the judge found a 3.1 percent vacancy rate. Is this rate high enough to preclude emergency? How are judges to know? There were 23 dormitory vacancies. Is this number (of the duration of vacancy we are not informed) sufficient to contradict the existence of emergency? Additional vacancies were expected when certain institutions would move from Berkeley. Would the unnumbered and speculative vacancies exclude emergency? The judge found that the evidence of exorbitant rents is minimal. The ordinance states that shortage has been exploited by exorbitant rents. But what is ‘exorbitant’ is not explained in the ordinance or the decision. The fact that a large percentage of housing is available at $200.00 a month or less does not mean much by itself; what sort of housing is spoken of—flats, studio apartments, or single rooms, perhaps shared? These questions and others which could be put show, I think, that judicial determination against existence of a declared emergency ought to be made only when the declaration clearly is opposed to any reasonable assessment of the facts. Moreover, the judgment necessarily is limited to deciding whether there was an emergency on the declared effective date (although, as said, some evidence of prospective change was utilized). If, in response to an annulling decision, the same ordinance were passed again, would not the protracted procedure of judicial decision upon the existence of emergency be undertaken again?
It is my opinion that an emergency is required, possibly by constitutional standards, but surely because the initiative amendment itself, as it was placed before the electorate, refers (three times) in its statement of purpose to the existence of an emergency. Therefore, I cannot accept as applicable to this case, even if it were sustainable generally, appellants' and intervenors' position now that the ordinance has been enacted, that the valid exercise of the police power to rent control does not require an emergency.1 I cannot accept the proposition that what was enacted as legislation to deal with an emergency can be converted at once to legislation of the same character of permanency as that of any other which is enacted under the police power.2
It must be recognized that exigent conditions may be found to have continued, indeed, to have worsened, as time goes on, or on the other hand, that they have disappeared or have been ameliorated. There are ways of meeting this problem. A) A statute ordinance may be reenacted after a fixed termination date, presumably upon reflection by the legislative body, whether a council or the electorate itself. As an example, termination at end of one year period beginning with adoption of rules. (District of Columbia Rent Control Act of 1973; District of Columbia Code Encyclopedia, section 45–1627.) B) A local governing board may at any time declare the emergency wholly or partially abated and may remove one or more classes of accommodations from regulation and the emergency must be declared at an end once the vacancy rate exceeds five percent. (1 McKinney's Session Laws of N.Y. (1074) Emergency Tenant Protection Act of Nineteen Seventy-Four, § 3, [c. 576], p. 770)3 C) Provision for general adjustment by percentage of rental levels within a city and for removal of maximum levels where, in judgment of board or administrator, need no longer exists because of availability of new units a demand has been met. (State Enabling Act enacted in 1970 expired in 1975; Ann.Laws Mass., Acts 1970, ch. 842.)
The foregoing are but examples of possible limitations. The fact that the Berkeley amendment was passed by initiative4 and that this followed rejection of rent control by the city council might cause the proponents to be reluctant to place fact finding powers in the council, does not eliminate the necessity for providing either a means of termination or a periodic decision that the emergency continues as to all or as to particular classes of regulated housing. The determination could be placed in the hands of an independent body or in those of the Rent Control Board itself. As the amendment stands, the Board is under no duty to survey the housing situation at large with a view to effecting decontrol if and when emergency conditions disappear.
The replies by appellants and intervenors to the proposition that limitation must be expressed in the statute together with my conclusions, may now be stated:
1) It is said that when the need for controls disappears, any one of several city agencies may call this to the attention of the voters or the landlords themselves may do so and thus the process by initiative may be commence. This proposition is referred to in the dissent and there is cited Higgins v. City of Santa Monica (1964), 62 Cal.2d 24, 30, 41 Cal.Rptr. 9, 396 P.2d 41. I think it is not sufficient to say that this legislation like any other is subject to repeal. There is no duty imposed on the city agencies to take the initiative or indeed to do anything at all by way of determining the end or the amelioration of exigent conditions. Although, as held in Higgins, an ordinance passed by initiative is not invalid merely because the process for repealing it is cumbersome, the point in the present case is that property owners may become entitled constitutionally to withdrawal of controls by reason of abatement of emergency before the repeal or without the repeal. In Higgins there was no involvement of property owners' rights. The city of Santa Monical simply decided not to lease tidelands for drilling for oil.
2) It is said that it is probable that rent control will be gradually lifted as conditions improve and that this procedure was endorsed in Lincoln Building Associates v. Jame (1960), 8 N.Y.2d 179, 203 N.Y.S.2d 86, 168 N.E.2d 528. But the opinion in the Lincoln Building Associates case points out that the Legislature, mindful of an earlier admonition by the Court of Appeals of New York, and in recognition of the diminishing intensity of the emergency had implemented a program of gradual relaxation of controls. This is just what is lacking in the Berkeley amendment: any stated means for termination or relaxation of controls.
So long as the amendment remains in effect, there is no way in which the Board may relieve owners as a whole , or owners of particular classes, from controls; upward adjustments may be made only upon individual applications, and these shall be supported by certification from the city's Building Inspection Service that the premises are in full and complete compliance with both sate and city housing codes based on inspection made within six months of the landlord's petition. The tentative prediction made by the intervenors that rent control will ‘wither away’ with better conditions even while the ordinance remains is not consistent with the stringent and inflexible terms of the ordinance itself.
3) Appellants cited the cases of Jersey Maid Milk Products Co. v. Brock (1939), 13 Cal.2d 620, 91 P.2d 577; Adler v. City Council of Culver City (1960), 184 Cal.App.2d 763, 7 Cal.Rptr. 805 and People v. Title and Mortgage Guarantee Co. (1934), 264 N.Y. 69, 190 L.E. 153 162, for the proposition that failure to limit the operation of a law to a definite term does not render the law invalid so long as the conditions for justification for passage remain. But the Jersey Maid case has to do with control of prices of milk. The milk business, it was said in the opinion (p. 637, 91 P.2d 577) is clothed with the public interest and it was also said (p. 638, 91 P.2d 577) that the statute was to protect an industry from a perilous condition which was permanent in character. Moreover, as was said above, limitation to a definite term of years or months is not the only way in which the continued existence of critical conditions can be ascertained or dealt with. The Adler case held only that a zoning ordinance need not describe a method for amending its own provisions. The People v. Title and Mortgage Guarantee Co. case had to do with postponement of creditors' remedies during the depths of the Great Depression by act of the Legislature of New York. Lack of a termination date was held not to invalidate the statute. As in Home Building & Loan Ass'n v. Blaisdell (1933), 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413, upon which the decision largely relied, the immediately dangerous conditions to the community were recognized. No doubt the universality of the economic cataclysm would make its extent and duration appear immeasurably unlike the case of rent control within a single city.
I believe it does not suffice to say that an owner may have recourse to the courts when enactments are no longer necessary and there is failure of the electorate to act. In the first place there is no standard set forth in the amendment by which the courts could decide that the statute is ‘no longer necessary.’ The courts would be placed in the same position that they have faced in this case. They would have to decide on their own judgment upon the necessity, a matter which really is for legislative determination and which can be determined in advance by any one of the flexible means suggested above or by a combination of them In the second place, if the amendment stands as an exercise of the general police power as appellants say it should without reference to emergency, each owner who deems that a ruling of the Board has been confiscatory and has deprived him without property without due process of law, must undertake separate litigation no matter what the vacancy rate in the city or other conditions may be.
It may not be amiss to confirm what is suggested in the lead opinion about lack of standards for adjustment of rentals, should a new amendment be devised. The amendment as drawn sets forth on standards whatever for increasing or reducing rents. It does mention evidentiary matters to be taken into account (changes in taxes in operating expenses; deterioration, etc.),5 but it does not give ultimate criteria. The Board's decision, it is declared, must be supported by the preponderance of the evidence (Ordinance, § 6(g)) and this is subject to judicial review. But the preponderance of evidence of what? The ordinance does not say. Intelligent review would be impossible.
I concur with the other two opinions that the eviction process has been preempted by state statute, but because of my decision as to the invalidity of the whole amendment I do not discuss severability.
In my opinion, Article XVII of the Berkeley City Charter is constitutional and valid except for the eviction provisions, which, I agree, are preempted by state law and hence invalid. The invalid eviction provisions, however, are unrelated to enforcement of rent controls, and thus they can be severed without invalidating the remainder of the article. (See § 12 of Article XVII; see, generally, Hamer v. Town of Ross (1963) 59 Cal.2d 776, 789, 31 Cal.Rptr. 335, 382 P.2d 375; 5 Witkin, Summary of Cal.Law (8th ed.) Constitutional Law, §§ 65, 66 pp. 3304–3306.)
The majority of this court in declaring Article XVII of the Berkeley City Charter unconstitutional are in agreement only as to two matters, i. e., that it is unconstitutional because it fails to provide a method of termination of the rent controls when conditions requiring such controls no longer exist, and further, that the measure does not establish ‘a gauge by which to adjudge the continuance of emergency conditions.’ I do not believe the omissions causing concern to the majority of this court are fatal to the initiative measure. First, if future conditions do not warrant rent controls, those controls may be eliminated by again presenting the issue to the electorate. Article XVII having been enacted by the initiative process would require its repeal in the same manner. (Cal.Const., art. IV, § 24(c); Penziner v. West American Finance Co. (1937) 10 Cal.2d 160, 171, 74 P.2d 252; Kugler v. Yocum (1968) 69 Cal.2d 371, 375, fn. 2, 71 Cal.Rptr. 687, 445 P.2d 303.) Second, Article XVII was enacted under the general police power of the Berkeley community. It is basic when enactments under the police power of the governing body are no longer necessary and there is a failure of the electorate to act, the courts may be resorted to. (Consolidated Rock Products Co. v. City of Los Angeles (1962) 57 Cal.2d 515, 20 Cal.Rptr. 638, 370 P.2d 342.)
While it may have been preferable to include in Article XVII a means of termination, other than by resorting to the initiative, this right of repeal by initiative and the inherent power of our courts to review the exercise of police power are, in my opinion, sufficient safeguards to property owners.
It is recognized that the majority of voters fall within the renter classification and that the landlords are in the minority. This might indicate that self-interest would make repeal difficult by reference to the voters. It would seem far better to face this tenuous difficulty rather than leave tenants to the mercy of marked rentals in a market where the standards for such a market are practically nonexistent.
It may also be reasonably argued that to resort to the courts for a declaration that the reasons for rent controls have disappeared is also cumbersome and impractical. Our courts have answered this argument. In Higgins v. City of Santa Monica (1964), 62 Cal.2d 24, 41 Cal.Rptr. 9, 396 P.2d 41, the question presented was whether an initiative ordinance which prohibited, with criminal sanctions, the drilling or prospecting for oil in a specified area, was constitutional. It failed to provide a method of termination. The purpose of this ordinance was to protect the public from the inconvenience of noise and potential dangers from the exploration for oil. The court said at page 30, 41 Cal.Rptr. at page 13, 396 P.2d at page 45: ‘The fact that accomplishment of amendment or repeal through the initiative process may be cumbersome or difficult is not the product of the alleged restriction of future discretion; it is merely a characteristic of the kind of legislative system the Constitution of this state has ordained. . . . The ordinance, therefore, no more limits future discretion than does any other prohibitory ordinance admittedly within a city's power to enact.’ (Emphasis added.)
Again, the court in Jersey Maid Milk Products Co. v. Brock (1939) 13 Cal.2d 620, 91 P.2d 577, was faced with a similar issue. There an attempt was made to declare the Milk Stabilization Act unconstitutional. The act did not limit its duration. The court said at page 638, 91 P.2d at page 587: “Failure by the Legislature to limit the operation of the law to a definite term does not render the law invalid so long as the conditions which justify the passage of the law remain.” I would conclude, therefore, that, although the methods for repeal may be cumbersome and difficult, they are adequate.
The majority also suggest, without deciding, that Article XVII may be invalid because it fails to provide an adequate standard for setting reasonable rents. While more specificity would be preferable, I feel that it sufficiently states the matters to be considered in determining rental values. I would not declare the measure unconstitutional for that reason.
Also, Article XVII of the Berkeley City Charter (§§ 4–6) requires that the base rent shall be the rent in effect on August 15, 1971. The board, however, is empowered (§ 5) to make reasonable adjustments either upwards or downwards. The fixing of rents is a complex task. Since August 15, 1971, taxes, the cost of construction and other items have risen. These factors, of course, will be a matter of consideration for the board in the fixing of rents, allowing a reasonable return on the investment to a landlord. Also, landlords who might complain of unreasonably low rents set by the rent control board would have an adequate remedy by judicial review. (Cf. Marshal House, Inc. v. Rent Control Board of Brookline (1971) 358 Mass. 696, 266 N. E.2d 876.)
I also disagree with the position of the trial court and the majority of this court that the existence of a ‘serious public emergency’ is always essential to uphold the constitutionality of rent control legislation under the police power. (See Eisen v. Eastmen, 2 Cir., 421 F.2d 560, 567.) The words ‘serious public emergency’ defy precise definition. In my opinion, the existence of a shortage of rental housing and the existence of exorbitant or unreasonable rents for a substantial number of rental units in the community would be sufficient to sustain the constitutionality of rent control legislation in the absence of a declared ‘emergency.’
Even assuming, however, that the constitutionality of Article XVII of the Berkeley City Charter must be determined in light of the ‘serious public emergency’ as declared in the preamble of that article, I disagree with the conclusion that the respondents (landlords) in this case sustained their burden of proving there was no rational basis for finding that no housing emergency in fact existed. In my opinion, the trial court, in determining whether a rental housing shortage existed in Berkeley, erred in considering the availability of rental housing in other cities or areas outside the boundaries of Berkeley. (Cf. Albigese v. Jersey City (1974) 127 N.J.Super. 101, 316 A.2d 483.) When evidence of the vacancy rates in cities other than Berkeley is disregarded, the facts clearly show, as the trial court virtually conceded, a serious shortage of rental housing in Berkeley. The trial court found a vacancy rate of 3.1 percent in Berkeley, or actual vacancies of approximately 534 units out of a total of about 16,750 units. While it may be debatable whether this evidence showed the existence of a serious housing ‘emergency,’ it at least established a rational basis for upholding the constitutionality of the rent control measure under the police power. (Cf. Lincoln Building Associates v. Barr (1956) 1 N.Y.2d 413, 153 N.Y.S.2d 633, 135 N.E.2d 801, 804.)
The courts of this state have long recognized that the validity of an initiative measure should be liberally construed to promote the democratic process (Farley v. Healey (1967) 67 Cal.2d 325, 328, 62 Cal.Rptr. 26, 431 P.2d 650), and that the courts should not interfere with legislative judgment where there is a rational basis for the legislation. (Higgins v. City of Santa Monica (1964) 62 Cal.2d 24, 30–31, 41 Cal.Rptr. 9, 396 P.2d 41.) The court in In re Blaney (1947), 30 Cal.2d 643, 672, 184 P.2d 892, 910 said: ‘The courts are not absolute architects of public policy. That function resides primarily in the Legislature [or the People], whose enactments the courts may not override except in cases of clear violation of constitutional guaranties.’ In this case, the trial court's findings of fact pertaining to the existence of a serious housing shortage and the existence of exorbitant rents were inconclusive. In my opinion, the trial court abused its discretion in finding that no housing ‘emergency’ in fact existed, or that the Berkeley rent control measure was a wholly arbitrary and unreasonable exercise of the police power.
It is further argued that the recitals in the present enactment were not made by a legislative body buy rather by the electorate voting on the initiative and, therefore, they are not entitled to judicial deference. This is not the law. In Higgins v. City of Santa Monica, supra, 62 Cal.2d 24, 30, 41 Cal.Rptr. 9, 396 P.2d 41, the usual rules of judicial deference were applied to testing the constitutionality of an ordinance passed by initiative. As the Supreme Court pointed out in San Diego Bldg. Contractors Assn. v. City Council (1974), 13 Cal.3d at page 211, 118 Cal.Rptr. 146, 529 P.2d 570, the electorate when passing upon an initiative is legislative body.
In summary, I conclude, therefore, that the failure to provide a method of termination and the lack of specificity as standards for increasing or reducing rents does not render this initiative measure unconstitutional. I disagree with the determination that the landlords sustained their burden of establishing that conditions in Berkeley did not support the enactment of rent controls and I believe that the trial court erred in considering the availability of housing outside the City of Berkeley in reaching its conclusion.
Accordingly, I would reverse the judgment insofar as it declares Article XVII of the Berkeley City Charter unconstitutional and void, except as to sections 7 and 10(f) which are invalid because preempted by state law.
1. The charter amendment in question is set out in the appendix of this opinion. Background and Statement of the Case
2. The Berkeley City Charter provides, as authorized by Article XI, section 5, of the State Constitution, for the ‘right and power to make and enforce all laws and regulations in respect to municipal affairs, subject only to the restrictions and limitations provided in this Charter.’ (Berkeley City Charter, Article XVI, § 115.)
3. Government Code section 34459 provides that amendment of a city charter may be proposed by petition signed by a certain percent of the registered or qualified electors. And, Elections Code sections 4080–4085 prescribe the form and contents of the petition for amendment of freeholders' charters. No issue is raised concerning the question of compliance with these provisions. Article XIII of the Berkeley City Charter also provides for the power of initiative. That Article, however, applies to enactment of ordinances and not to amendment of the charter.
4. As amended in 1974, Article XI, section 3(a) of the state Constitution provides that a charter amendment is effective when filed with the Secretary of State. The amendment eliminated the procedure for state legislative approval or disapproval of charter amendments. However, added to section 3(a) is the sentence that the ‘provisions of a charter are the law of the State and have the force and effect of legislative enactments.’
5. Similar rules have been applied in numerous cases in this state involving conflicts between city ordinances, enacted under a charter city's ‘home rule’ powers, and the general law of the state. (see, for example, West Coast Advertising Co. v. San Francisco (1938) 14 Cal.2d 516, 521–522, 95 P.2d 138; Pipoly v. Benson (1942) 20 Cal.2d 366, 369, 125 P.2d 482; Agnew v. City of Los Angeles (1958) 51 Cal.2d 1, 5, 330 P.2d 385; Bishop v. City of San Jose (1969) 1 Cal.3d 56, 61–62, 81 Cal.Rptr. 465, 460 P.2d 137; Baron v. City of Los Angeles (1970) 2 Cal.3d 535, 86 Cal.Rptr. 673, 469 P.2d 353; Rivera v. City of Fresno (1971) 6 Cal.3d 132, 98 Cal.Rptr. 281, 490 P.2d 793.)
6. We do not suggest that rent control measures may not become a matter of state-wide concern to be dealt with by the state Legislature. We express no opinion on what effect state rent control legislation might have on a charter city's rent control laws.
7. In the trial court, respondents argued that the rent control amendment was preempted by general state law dealing with landlord and tenant relationships. There is, however, no substantial merit to that argument. (cf. Inganamort v. Borough of Fort Lee (1973) 62 N.J. 521, 303 A.2d 298.)
8. For a brief period in 1972 and 1973, the Federal government imposed rent controls under the Economic Stabilization Act of 1970, as part of its efforts to combat inflation. Those regulations, however, are no longer in effect. Constitutionality of Initiative Process—Notice and Hearing
9. An exception is made where statutes or ordinances involve curtailment of First Amendment rights. In reviewing the constitutionality of such statutes or ordinances, the courts apply the ‘clear and present danger’ test. (see Adams v. Shannon (1970) 7 Cal.App.3d 427, 86 Cal.Rptr. 641.)
10. By declaring rent control legislation to be an ‘emergency’ measure under the police power, legal problems involving the unconstitutional impairment of existing leases were thereby avoided. (see, generally, 5 Witkin, Summary of California Law, 8th ed., Constitutional Law, § 629, pp. 3927–3928.)
11. Albigese v. Jersey City (1974) 127 N.J.Super. 101, 316 A.2d 483, 488, suggests that only rental housing availability within the corporate limits of the municipality can be considered. We do not agree with this view, as it appears to ignore the realities of intercity mobility in metropolitan areas. Although not necessary for determination of this case, we also believe it to be the better view that if the rental housing within a municipality is adequate to negate the existence of a rental housing emergency, rent control legislation within that municipality would be constitutionally prohibited as being in excess of the police power of the municipality, regardless of the condition of rental housing outside the municipality.
12. Article XI, section 3(b), of the state Constitution provides that amendment or repeal of a city charter may be proposed by initiative or by the governing body. Under this section, the Berkeley City Council, for example, could propose amendment or repeal of the rent control article. However, because the article was enacted by the process of initiative, it could not be repealed or amended without submitting the issue to the electorate. (Cal.Const., art. IV, § 24(c); see Penziner v. West American Fina. Co. (1937) 10 Cal.2d 160, 171, 74 P.2d 252; Kugler v. Yocum (1968) 69 Cal.2d 371, 375, fn. 2, 71 Cal.Rptr. 687, 445 P.2d 303.)
1. Eisen v. Eastman, 2 Cir., 421 F.2d 560 referred to in the dissenting opinion, held that a landlord may not invoke the Civil Rights Act, 42 U.S.C.A. § 1983 against a rent control ordinance. The opinion goes on to say that ‘extraordinarily exigent’ circumstances are no longer necessary to justify price control other than in public utility areas. But in the same paragraph the court refers to the ‘impressive recital’ in the New York City Rent Control Law of the conditions deemed called for in its enactment. The impressive recital describes conditions which although not catastrophic, and perhaps not ‘extraordinarily exigent,’ nevertheless are critical. Moreover, the New York law as stated above does provide for termination when the emergency ends and this must be done when the vacancy rate exceeds 5%.
2. The word ‘emergency’ a applied to housing conditions obviously does not mean, as it would as applied to some other situations, a sudden, unexpected, almost calamitous event.
3. Although it may be legitimate to consider the vacancy rate in adjacent cities as was done here when the court undertakes to decide the flat question whether emergency exists, it seems to me that the conditions within the City of Berkeley alone might be taken as the basis for a carefully limited rent control ordinance; i. e., one limited by time or by reference to designated factual situations.
4. Incidentally, it seems to have been the one law in the history of rent control legislation so enacted.
5. The list is almost literally that contained in section 7 of the Massachusetts statute. But that statute requires the administrative officers to make such adjustments as will yield to landlords a fair net operating income for their rental units. The Berkeley amendment merely provides that the Board may make individual rent adjustments and sets forth no requirement that the owner receive even so generally described recompense as a ‘fair net operating income.’
SCOTT, Associate Justice.