Pennell v. City Of San Jose

485 U.S. 1, 108 S.Ct. 849, 99 L.Ed.2d 1 (1988)

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Nature of the Case

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Facts

The rent control ordinance at issue was enacted to address a rise in the cost of housing due to greatly increased demand. The ordinance provides that a landlord is automatically entitled to raise rent by as much as eight percent. If a tenant objects to a raise greater than eight percent, there must be a hearing to determine whether the landlord's proposed increase is reasonable under the circumstances. The ordinance sets out seven criteria by which a hearing officer is to determine the reasonableness of the proposed increase. The first six are related either to the landlord's cost of providing an adequate rental unit or to the condition of the market. The seventh factor, the hardship that the increase would work on the tenant, is the subject of this challenge. The plaintiff argues that consideration of such a factor forces private individuals to assume the public burden of housing the poor. It does not purport to eliminate excessive rents, and to the extent that the factor is used to limit the amount by which a landlord may increase a particular tenant's rent, it constitutes a taking.