9th Circuit upholds Santa Barbara's mobile home vacancy rent control, ruling park owner had no…

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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 21 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT 1210 CACIQUE STREET, LLC, a No. 24-7728 California limited liability company, D.C. No. 2:23-cv-08152-PA-RAO Plaintiff - Appellant, v. MEMORANDUM* CITY OF SANTA BARBARA, a public entity; DOES, 1 through 50, inclusive; CITY COUNCIL OF THE CITY OF SANTA BARBARA, Defendants - Appellees. Appeal from the United States District Court for the Central District of California Percy Anderson, District Judge, Presiding Argued and Submitted April 20, 2026 Pasadena, California Before: FRIEDLAND and MILLER, Circuit Judges, and VITALIANO, District Judge.** Dissent by Judge MILLER. * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Eric N. Vitaliano, United States District Judge for the Eastern District of New York, sitting by designation.  Plaintiff 1210 Cacique Street, LLC, the owner of the Flamingo Mobilehome Park in Santa Barbara, California, appeals the district court’s dismissal with prejudice of its regulatory takings claim against Santa Barbara (“the City”). Cacique challenges the City’s reenactment of a vacancy rent control provision, which imposes a rent increase cap of 10% upon the transfer of mobile home ownership to a new tenant.1 We have jurisdiction under 28 U.S.C. § 1291 over the appeal from the district court’s final judgment. We review the dismissal de novo, Benavidez v. County of San Diego, 993 F.3d 1134, 1141 (9th Cir. 2021), and we affirm. To survive a motion to dismiss, a complaint must allege sufficient facts to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A regulatory takings claim under Penn Central Transportation Company v. City of New York, 438 U.S. 104 (1978), requires showing that the government has imposed a burden on private property rights “so onerous that its effect is tantamount to a direct appropriation or ouster.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005). Courts assess that burden through consideration of three factors: (1) “[t]he economic impact of the regulation on the claimant”; (2) “the extent to which the regulation has interfered with distinct investment-backed 1 As is typical for mobile home parks, Plaintiff leases spaces to individuals who own their mobile homes as personal property. 2 24-7728 expectations”; and (3) “the character of the governmental action.” Id. at 538-39 (quoting Penn Central, 438 U.S. at 124). Although takings claims are necessarily fact-specific, that “does not foreclose [their] resolution on a motion to dismiss.” Hotel & Motel Ass’n of Oakland v. City of Oakland, 344 F.3d 959, 966 (9th Cir. 2003), abrogated on other grounds by Lingle, 544 U.S. at 536. 1. On the first factor, Penn Central requires a comparison of the value taken from property with the value that remains. Murr v. Wisconsin, 582 U.S. 383, 395 (2017). The Complaint alleged that the property suffered a 92.5% reduction in value. Notwithstanding our observation that we have held in some cases that an economic impact “ranging from 75% to 92.5% [did] not constitute a taking,” Colony Cove Props., LLC v. City of Carson, 888 F.3d 445, 451 (9th Cir. 2018), no case from our court or the Supreme Court establishes a legal floor for economic impact. We assume without deciding that the complaint has plausibly pleaded a 92.5% diminution in the value of the property as a result of the City’s enactment of the rent control ordinance. We also assume that a 92.5% diminution, if proven, could support a takings claim and that the first prong of the Penn Central test is satisfied here. 2. “To form the basis for a taking claim, a purported distinct investment- backed expectation must be objectively reasonable.” Id. at 452. Relying on the Supreme Court’s statement that “those who do business in [a] regulated field 3 24-7728 cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the legislative end,” Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 645 (1993) (citation modified), we have held that a mobile home park owner “cannot reasonably expect [their] property to be free of government regulation such as zoning, tax assessments, or, as here, rent control,” Rancho de Calistoga v. City of Calistoga, 800 F.3d 1083, 1091 (9th Cir. 2015). Here, the City’s longstanding rent control ordinance expressed the City’s interest in “regulat[ing] the rent charged for mobilehome and recreational vehicle spaces used on a permanent basis to prevent severe and inordinate rent increases.” Santa Barbara Municipal Code § 26.08.020(D). In light of that expressed intent, one could not reasonably be surprised that the City would buttress the rent control ordinance by later amendment. Cacique purchased the Park twenty-six years after the Supreme Court held in Yee v. City of Escondido, 503 U.S. 519 (1992), that limits on rent increases in mobile home parks, even when applied during a period of vacancy between tenants, did not establish a per se taking. Id. at 532, 538-39. Although the Supreme Court left open the possibility that such mobile home rent control could constitute a regulatory taking, at the time of Cacique’s purchase our court had consistently and uniformly rejected arguments to that effect. See, e.g., Guggenheim v. City of Goleta, 638 F.3d 1111, 1124 (9th Cir. 2010) (en banc) (Bea, 4 24-7728 J., dissenting) (noting that the challenged ordinance, which the en banc panel majority upheld over a regulatory taking challenge, “provided for a maximum of 10% rent increases upon the sale of the mobile home to a new tenant”). The dissent contends that Rancho de Calistoga’s holding does not control here because Cacique alleged that vacancy control is categorically distinct from the rent control already in place at the time of purchase. We disagree. Although it is of course true that not every regulatory change within a heavily regulated field is permissible, the specific regulatory change at issue here was not unforeseeable. Vacancy control is not a novel regulatory concept: the City had previously enacted an identical provision to the one at issue here, repealing it only when intervening legal authority so required, and the City had consistently maintained its broader rent stabilization framework. Vacancy control acts as a supplemental mechanism to further the City’s long-standing goals rather than a departure in kind from the regulatory actions it had previously taken. Cacique argues that the decades-long period in which the City declined to reenact vacancy control, as well as comments by the then-Mayor of Santa Barbara expressing uncertainty as to the legality of vacancy control, support reasonable investment-backed expectations that the City would not implement the challenged provision. Given the regulatory context described above, the period of City inaction that Cacique identifies could not create a reasonable expectatio

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