Rent Control Returns
The California Supreme Court Speaks
A week following the June 8, l976 election and four years after the successful campaign to pass Berkeley’s Rent Control Charter Amendment, the California Supreme Court handed down the final word: “NO”.
The unanimous ruling in Birkenfeld v. the City of Berkeley (l976) l7 Cal.3d. l29, l30 Cal.Rptr. 465 was simultaneously a tremendous victory for the principles of rent control and a defeat for Berkeley’s l972 rent control initiative. The opinion was written by Chief Justice Wright, a Reagan appointee who turned out to be shockingly liberal. (Reagan learned from this mistake, later appointing only conservatives.) On every contested issue involving the rights of California cities and their voters to adopt rent control in general, the Supreme Court held in favor of the rent control option:
- The State of California could preempt the rent control field, but it had not done so. Cities were therefore free to act.
- Enactment of rent control by initiative was permissible (overruling Superior Court Judge Bostick).
- No housing emergency was required as a pre-condition for the adoption of rent control. No rent control termination provisions following the end of the emergency were therefore necessary (overruling both Judge Bostick and the Court of Appeals).
- Requiring specified “just causes” for the eviction of a tenant was a valid method to implement rent control and did not conflict with state law.
However, the Supreme Court then held the Berkeley rent control law to be unconstitutional:
“But under the charter amendment as it now stands the combination of the rollback to base rents and the inexcusably cumbersome rent adjustment procedure is not reasonably related to the amendment’s stated purpose of preventing excessive rents and so would deprive the plaintiff landlords of due process of law if permitted to take effect.”
Thus, the Charter Amendment’s mechanism of individual rent adjustments by the Rent Control Board, intended to make rent hikes difficult, instead invalidated the entire legislation because the process was deemed intrinsically unworkable and unfair to landlords. This is the precise issue on which the drafters of Measure I were warned by John Denton and others that excess stringency could be legally fatal. The warnings were ignored and Measure I was declared void.
The Birkenfeld decision also included guidelines for now a legally valid rent control law should be drafted. The key was procedural flexibility, with mechanisms such as a general rate adjustment for all covered units plus individual rent adjustments that could be handled by hearing officers, with an appeal to the Rent Board, rather than requiring all decisions to be made exclusively by the board.
Myron Moskovitz, representing the pro-rent control interveners, did his best to convince the Supreme Court that the necessary administrative flexibility could be found under the existing law. He was unsuccessful because the exact text of the measure undercut Myron’s arguments. But on all the general rent control issues, the Birkenfeld decision represented a triumph for Myron and the other attorneys who had worked for the defense.
The State Legislature Responds: AB 3788
The road was now open for new attempts to adopt rent control according to the Birkenfeld guidelines, not just in Berkeley, but throughout California. To the real estate people and apartment house owners, the Birkenfeld decision threatened a rent control avalanche. They had to act fast.
Since the Birkenfeld ruling acknowledged the state’s power to preempt local rent control laws, the solution was simple. The anti-rent control forces already had a bill in the Legislature, AB 3788, to declare rent control a matter of exclusive state concern and preempt all of California’s local governments from ever passing any kind of rent control laws. AB 3788 narrowly passed both the Assembly and the State Senate while tenants groups belatedly mounted a lobbying effort to try and stop it.
AB 3788 landed on Governor Jerry Brown’s desk as pro-tenant organizations from throughout the state, including BCA, CCC, the Berkeley Tenants’ Union (BTU), tried to pressure Brown into vetoing it. Berkeley people active in this effort included BTU’s Dan Lambert and CCC’s Patti Harper, among many others. The Governor was under siege from both tenants and landlords, with no one knowing whether he would sign the bill, veto it, or let it become law without his signature. If AB 3788 became law, a successful legal challenge to the statute would be a real longshot. Thus, only Governor Jerry Brown’s veto could save rent control.
Brown was notorious for waiting until the absolute, final deadline to make up his mind on difficult matters. AB 3788 posed a special problem for Brown because he supported neither rent control nor the blanket preemption of local government powers. September 30, l976 was Jerry Brown’s last day to veto legislation and as the midnight deadline approached, the Governor was in his office working on the bills. Myron Moskovitz, Brown’s appointee as chairman of the State Housing and Community Development Commission, was in the office too, standing vigil over the Governor to insure that Brown did his duty on behalf of California’s tenants. The rest is legend. At approximately two minutes before midnight, with Myron exerting the maximum legal, moral, and political pressure, Governor Jerry Brown vetoed AB 3788. Rent control was saved.
Years later the anti-rent control forces tried to get a Federal law passed preempting the states from adopting rent control. This scheme was beaten by a combination of tenant lobbying at the national level, including Berkeley’s own Carole Selter Norris, and opposition from principled states rights advocates of both parties. The landlords next serious preemption effort was back in Sacramento in l984. It also failed, thanks to State Senator David Roberti.
Thus in spite of continued legislature close calls in the years since Birkenfeld, California localities have remained free to adopt rent control. The political struggles to pass rent control laws have been fought city by city and county by county. Berkeley’s next battle came in the April l977 election.
Overturning the Will of the Voters: the Council Majority v. Measure Q
The Ocean View Committee and its allies never expected the BRA/Council majority to graciously accept the decision of Berkeley’s voters passing initiative ordinances P &Q. Contempt for successful initiatives was too entrenched as a part of municipal politics for the conservatives to change now, especially on such a bitterly contested issue as the West Berkeley Industrial Park.
So it came as no surprise when the independent Berkeley Redevelopment Agency Board promptly filed a lawsuit against the City of Berkeley on June l5, l976 to invalidate P and Q on the grounds that under state law, only the City Council, not the voters, had decision-making powers over redevelopment. Judge Barber immediately granted the BRA a temporary restraining order against the measures.
Since the Berkeley City Attorney had already issued an opinion agreeing with the BRA that P and Q were void, we anticipated that the city could never seriously defend the initiatives. Therefore, the Ocean View Committee formally intervened in the case of BRA vs. the City of Berkeley to provide a real defense of P & Q and prevent a mockery of justice. Once again I was their attorney.
It was obvious early in this case that BRA attorney Don McCullum would have little trouble convincing Alameda County Superior Court Judges to overturn P & Q. The campaign scare tactics that Q meant fiscal disaster, while rejected by the voters, went over much better in the courts. My vigorous defensive efforts and even City Attorney Michael Lawson’s low-key opposition proved futile. After oral argument, Judge Barber issued a preliminary injunction against the initiatives on July 29, l976.
We had already decided to concentrate on the City Council, not the courts. If the Council could be persuaded to adopt Measure P itself, to become the Redevelopment Agency by passing an ordinance, that should have the effect of terminating the lawsuit. Obviously the Council couldn’t sue itself.
Measure P, the voters’ desire that the appointed BRA Board be replaced by the elected Berkeley City Council, was much less offensive to the Council majority than Measure Q, with its complicated pro-housing land use, zoning, and redevelopment directives. Thus, the Council finally passed both readings of an ordinance declaring itself to be the Berkeley Redevelopment Agency, 7-0 on July 22, l976 and 5-0 on July 27, l976, effective thirty days later. The balance of Measure P, establishment of a Community Redevelopment Commission to advise the Council, was adopted soon afterwards. Measure P therefore went into effect in the form of Council-passed ordinances, and any legal challenge to its validity as an initiative became irrelevant.
For good measure, the Council took this opportunity to also become the Berkeley Housing Authority (BHA), 5-0 on July 27, l976. The Housing Authority was a parallel agency to the BRA, operating the city’s public housing program. The Housing Authority and Redevelopment Agency Boards included many of the same people. Now they were both permanently out of business.
That left the BRA vs. the City of Berkeley lawsuit for the Council to deal with. Now the Berkeley political/legal absurdity level reached to perhaps its all-time high, rivaled only by the l977 campaign reform horror show. On July 22, l976, the Council voted 5-l to urge the BRA to dismiss its P & Q lawsuit against the city. Shirley Dean and Carole Davis joined Loni, Ying, and John in voting “Yes”, while Widener cast the lone “No” vote. This motion had to be a “request” because the Council’s ordinance declaring itself to be the Redevelopment Agency did not become effective until the end of August. The request was ignored by the lame duck BRA Board.
Finally, at the meeting of September 8, l976, the Berkeley City Council was legally constituted as the Berkeley Redevelopment Agency. John Denton made the motion that the Council, as the BRA, now dismiss the lawsuit against itself, and the motion failed 3-2. Hone and Widener voted “No”, while Shirley Dean refused to vote. Another attempt to pass this same motion was defeated 3-3 on October 6, l976, with Dean, Hone, and Widener voting “No”. In fact, all six members of the Council majority were perfectly satisfied to continue suing themselves in order to invalidate Measure Q passed by the voters.
Although Dean and Davis had voted to “urge” that the BRA drop its legal action against the city, they contemptuously refused to follow their own recommendation once their votes counted. Loni, Ying, and John were the only Councilmembers to ever vote to dismiss the BRA lawsuit, while no Council/BRA member ever made a motion to continue it.
They didn’t have to. City Manager Elijah Rogers, as executive head of both the city and the BRA, knew exactly what the Council majority wanted and he gave it to them. The litigation entitled Berkeley Redevelopment Agency vs. the City of Berkeley lived on, with the Berkeley City Council majority now represented as plaintiff by BRA Attorney Don McCullum and as defendant by City Attorney Michael Lawson, a pair of anti-Q advocates in obedient response to the Council majority’s wishes. Legally, such a lawsuit involving a plaintiff suing itself could not exist, but this one did.
The case was now a nightmarish theater piece to me as an attorney. I felt Kafka, Joseph Heller, and Rod Serling were writing the script and my character was trapped as counsel for the intervener. My attempt to get a dismissal by demurrer failed. If the Ocean View Committee now withdrew from the case, we would waive our right to later object or appeal. If we stayed in and actively participated, we ran the risk of legitimizing a collusive legal farce.
The case came to trial on September l7, l976. On behalf of the Ocean View Committee, I boycotted the proceeding, filing a written declaration to the judge explaining that since the Berkeley City Council could not legally sue itself, the case had to be dismissed. Harvey Myman’s story on the “trial” in the September l8, l976 Berkeley Gazette best captured the unreal aspects of this event:
City sues itself – Judge Bostick baffled
Robert Bostick, a superior court judge of formidable credentials, was confused.
“Where is the distinction in your views?” he asked the opposing attorneys in Berkeley Redevelopment Agency v. City of Berkeley. “I’m trying to pin you down and you don’t want to be pinned.”
Judge Bostick declined to dismiss the case “in light of the significance of the issues raised in the dispute”. City Attorney Michael Lawson had formally declared that there was a dispute suitable for adjudication. On October 22, l976 Judge Bostick found that Measure Q conflicted with California Redevelopment Law because the voters rather than the City Council had acted. He issued a permanent injunction against the initiative. Measure Q was thus legally dead.
On October 26, l976, John Denton moved that the Berkeley City Council, nominally the defendant, appeal Judge Bostick’s decision. The Council majority defeated this attempt 3-l-5, as Rumford voted “No” while the rest of the majority abstained. In other lawsuits challenging the validity of a voter-passed measure, the City of Berkeley at least appealed adverse lower court decisions. But there would be no city appeal of the judgment invalidating Measure Q.
The case would have been over, but for the Ocean View Committee’s continuing status as an intervener, technically a full-fledged party in the litigation with the right to appeal. On January 26, l977, I filed an appeal on behalf of the Ocean View Committee. The Appellate Courts would now have to rule on BRA vs. the City of Berkeley in addition to the still pending demolition permits and Neighborhood Preservation Ordinance case, Kehoe vs. the City of Berkeley.
Loni, Ying, and John also attempted to have the Council/BRA adopt selected provisions of Measure Q, the same approach that worked with P. However, the Council majority seemed unwilling to consider any revisions to the West Berkeley Industrial Park Plan, regardless of what the voters wanted.
A John Denton motion to initiate the rezoning of Q’s six square blocks from Special Industrial and Manufacturing to residential, as provided by the initiative, was defeated 3-3 on October 6, l976. A similar motion to adopt portions of Measure Q lost 4-2 on November 3, l976, with Shirley Dean voting in favor. But the Council majority still prevailed and no sections of Measure Q could receive the necessary five votes. Mayor Wallace Johnson’s WBIP plan remained intact as the Council majority and the courts once again overturned the will of Berkeley’s voters.