The Superior Court of Orange County has ruled that Santa Ana’s Rental Housing Board – a critical component of the city’s draconian rent control law – is unconstitutional, OC Independent has learned.
The ruling stems from a lawsuit filed in February 2023 by the Apartment Association of Orange County, alleging the tenant-dominated rent control board violates property owner’s due process rights under the Fourth and Fourteenth Amendments to the U.S. Constitution.
“The effect of this ruling is to find the Rental Housing Board’s composition unconstitutional,” stated the order by Judge William Claster.
“Moreover, by not including explicit language in the 2024 RSO regarding tenants not being eligible to be at-large members, there is a strong argument that the reenacted regulations contradict the voter-approved RSO on this point,” wrote Claster. “That being said, even if the post-election regulation limiting tenant Board membership is valid, the fact remains that the Rental Board is intentionally unbalanced in favor of tenants.”
There will be another hearing in December determine if the Rental Housing Board is severable from the rent control/just cause eviction ordinance, which may lead to the entire ordinance being thrown out.
READ: Lawsuit Alleges Santa Ana Rent Control Law Violates Federal, State Constitutions
The Rental Housing Board, as engineered by rent control advocates, is very powerful. The quasi-judicial body is appointed by the city council and consists of three tenant members, two “at-large” members who are not supposed to have any financial interest in rental property, and two landlord members.
Renters can petition the rent control board to roll-back rent increases or attempts by landlords to pass certain capital improvement expenses to tenants. Tenants can even petition to have their existing rent reduced. Landlords are allowed to file “fair return petition” if they believe the law stringent rent increase limits prevent them from earning a fair return.
Deliberately stacking the rental board in favor of tenant interests impairs apartment owners’ 14th Amendment right to due process by depriving them of fair and impartial hearing, the AAOC contended in its lawsuit.
According to the U.S. Supreme Court, procedural due process “demands impartiality on the part of those who function in judicial or quasi-judicial capacities.”
As much as 91% of Santa Ana’s rental stock is subject to the rent control law, giving the tenant voting bloc on the rent control board an financial interest in blocking rent increases, claims the lawsuit.
“The Rental Housing Board is by design imbalanced in favor of tenants and tenant interests. At any given time, at least five of the voting Board Members are inclined to either be actively opposed to, or indifferent to, property owner interests,” says the lawsuit.
This bias has been evident since at least 2023, when Councilman Ben Vazquez appointed rent control activist Tracy La to one of the no-financial-interest positions on the rent control board – even though she was a tenant with a financial interest. La runs a progressive political action group called VietRise and was a leading lobbyist for passage of Santa Ana’s rent control law. Earlier this year, she was moved to one of the tenant positions on the rent control board.
This reality clearly contradicted claims made in court by the city that renters could not occupy those at-large/no-financial-interest seats.
The lawsuit also alleged he structure of the city’s rent control board also violates Article 1, Section 22 of the California Constitution – a prohibition on using a property qualification as a condition for holding office.
Eligibility for a seat on the rental housing board is explicitly conditioned on a either a positive or negative property qualification. For example, renters have a property interest in their rental agreements, while the property qualification for serving as an at-large member of the rental board is to have no financial interest in rental property.
OC Independent will update the story as additional information comes in.
