The California Apartment Association today filed a lawsuit alleging that the Pasadena rent control initiative adopted in the November election is invalid.
The lawsuit, filed in Los Angeles Superior Court, comes just days after the Pasadena City Council certified the election results, situating Measure H to take effect as soon as Thursday, Dec. 22. CAA also intends to seek a preliminary injunction to prevent the measure from being fully implemented while the lawsuit is considered by the court.
Though rent control itself has generally been upheld as a valid exercise of local government powers, CAA’s lawsuit targets the process used to adopt the ordinance and discrete elements of the law.
The lawsuit alleges that the measure, which was placed on the ballot as an amendment to the city’s charter, nearly doubles the length of the charter and effectively restructures the city government with the creation of an independent rent board. In so doing, the measure fundamentally changes the city charter and effects a so-called “charter revision,” the lawsuit claims. Though the difference in terminology may sound insignificant, the distinction between a charter amendment and charter revision carries serious legal consequences. Charter amendments may be proposed by citizens’ initiative – as Measure H was – but under the state constitution, charter revisions can only be put forward by the city council or a charter review commission.
In addition to attacking the measure as an unlawful revision to the city’s charter, CAA’s lawsuit claims that several provisions of the new law itself are illegal. For example, CAA’s suit challenges a relocation assistance requirement that would apply to units exempt from local rent control.
Under the measure, owners of rent control-exempt units would need to pay relocation assistance to tenants who choose to vacate after receiving a rent increase that’s more than 5% above the limit for rent controlled units. Measure H limits annual increases for qualifying units to a rate lower than inflation, just 75% of CPI. The relocation assistance requirement will almost exclusively affect owners of units protected from local rent control under the Costa-Hawkins Rental Housing Act. The lawsuit alleges the relocation assistance requirement penalizes owners who exercise their rights under Costa-Hawkins, creating an invalid restriction on those rights.
If successful, the lawsuit could result in Measure H being declared wholly invalid, though the court also could strike just portions of the measure found to result in a charter revision or to violate state law.
The filing of the lawsuit does not, in and of itself, stop the new law from taking effect, but if CAA’s request for a preliminary injunction is granted that would stall some or all of the law from being implemented while the court considers CAA’s challenge.