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Laurel Park Community, LLC, A v. City of Tumwater

October 29, 2012

LAUREL PARK COMMUNITY, LLC, A WASHINGTON LIMITED LIABILITY COMPANY; TUMWATER ESTATES INVESTORS, A CALIFORNIA LIMITED PARTNERSHIP; VELKOMMEN MOBILE PARK, LLC, A WASHINGTON LIMITED LIABILITY COMPANY; AND MANUFACTURED HOUSING COMMUNITIES OF WASHINGTON, A WASHINGTON NONPROFIT CORPORATION,
PLAINTIFFS-APPELLANTS,
v.
CITY OF TUMWATER, A MUNICIPAL CORPORATION, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Western District of Washington Benjamin H. Settle, District Judge, Presiding D.C. No. 3:09-cv-05312-BHS

The opinion of the court was delivered by: Graber, Circuit Judge:

FOR PUBLICATION

OPINION

Argued and Submitted August 8, 2012-Seattle, Washington

Before: John T. Noonan, Susan P. Graber, and Johnnie B. Rawlinson, Circuit Judges.

Opinion by Judge Graber

12955

OPINION

Defendant City of Tumwater enacted two ordinances that seek to preserve the existing stock of manufactured home parks within the municipality by limiting the uses of certain properties. Plaintiffs are three of the affected property owners -Laurel Park Community, LLC; Tumwater Estates Investors; and Velkommen Mobile Park, LLC-and a nonprofit entity, Manufactured Housing Communities of Washington. Plaintiffs allege that the ordinances, on their face, violate various constitutional provisions. The district court held that the facial constitutional challenges fail and granted summary judgment to Defendant. On de novo review, Strategic Diversity, Inc. v. Alchemix Corp., 666 F.3d 1197, 1205 (9th Cir. 2012), we affirm.

FACTUAL AND PROCEDURAL HISTORY

A. Manufactured Homes

The term "manufactured homes" describes a type of housing that typically is not constructed at the installation site. See generally Werner Z. Hirsch & Joel G. Hirsch, Legal-Economic Analysis of Rent Controls in a Mobile Home Context: Placement Values and Vacancy Decontrol, 35 U.C.L.A. L. Rev. 399 (1988). Originally called "mobile homes," early versions were no more than travel trailers hitched to the back of a car. Mobile homes can be moved from one site to another, allowing the owner to change locations without changing housing.

Over time, however, the predominant use of this type of housing began to shift toward a more fixed use. Occupants installed a "mobile" home in a fixed location and lived in it year-round. In 1974, recognizing that these homes were more akin to permanent dwellings than to travel trailers, Congress enacted the National Mobile Home Construction and Safety Standards Act of 1974, Pub. L. No. 93-383, 1974 S. 3066, §§ 601-628 (now codified at 42 U.S.C. §§ 5401-5426). That statute authorized the Department of Housing and Urban Development to regulate the construction and safety of mobile homes. In 1980, Congress replaced nearly all references to "mobile home" with "manufactured home." Pub. L. No. 96-399, § 308(c).

As the Supreme Court has noted, "[t]he term 'mobile home' is somewhat misleading." Yee v. City of Escondido, 503 U.S. 519, 523 (1992).

Mobile homes are largely immobile as a practical matter, because the cost of moving one is often a significant fraction of the value of the mobile home itself. They are generally placed permanently in parks; once in place, only about 1 in every 100 mobile homes is ever moved.

Id.; see also Manufactured Hous. Cmtys. of Wash. v. State, 13 P.3d 183, 206 (Wash. 2000) (Talmadge, J., dissenting) ("Mobile homes are not mobile. The term is a vestige of earlier times when mobile homes were more like today's recreational vehicles. Today mobile homes are designed to be placed permanently on a pad and maintained there for life." (internal quotation marks omitted)).

The Supreme Court has described the typical arrangement between a mobile home's owner and a mobile home park's owner:

A mobile home owner typically rents a plot of land, called a "pad," from the owner of a mobile home park. The park owner provides private roads within the park, common facilities such as washing machines or a swimming pool, and often utilities. The mobile home owner often invests in site-specific improvements such as a driveway, steps, walkways, porches, or landscaping.

Yee, 503 U.S. at 523; see also Manufactured Hous., 13 P.3d at 206 (Talmadge, J., dissenting) ("In most instances a mobile home owner in a park is required to remove the wheels and anchor the home to the ground in order to facilitate connections with electricity, water and sewerage." (internal quotation marks omitted)).

Given the "site-specific improvements," Yee, 503 U.S. at 523, and the fact that "mobile homes are designed to be placed permanently on a pad and maintained there for life," Manufactured Hous., 13 P.3d at 206 (Talmadge, J., dissenting), it is not surprising that the costs of relocating a mobile home are very high. "Once 'planted' and 'plugged in,' [mobile homes] are not easily relocated." Id. (internal quotation marks omitted). For example, "[p]hysically moving a double- or triple-wide mobile home involves unsealing; unroofing the roofed-over seams; mechanically separating the sections; disconnecting plumbing and other utilities; removing carports, porches, and similar fixtures; and lifting the home off its foundation or supports." Id. (internal quotation marks omitted).

Because they cost less than traditional homes (less even than rental housing in some circumstances), manufactured homes are an attractive option for lower-income and poorer residents. "Mobile home residents are typically poorer than the average rental household, with incomes lower by one-third." Id. at 207 (internal quotation marks omitted).

The combination of those factors-the "immobility of mobile homes," id. at 206, the resulting high costs of relocation, the fact that mobile home owners typically do not own their pads, and the limited financial resources of many owners of mobile homes-has led to a well-documented problem when the owner of a mobile home park wants to convert the property to a different use:

The effects on mobile home owners . . . faced with moving because mobile home park owners . . . want to convert a mobile home park to another use can be devastating. A home owner owns the mobile home, but only rents the land on which it sits. Closure and conversion of a mobile home park force the owner either to move, or to abandon what may be his most valuable equity investment, a mobile home, to the developer's bulldozer. Displacement from a mobile home park can mean economic ruin for a mobile home owner.

. . . [Moreover,] there is a major shortage of space for mobile homes. Thus the owner who needs to rent a lot for his mobile home has no choice but to enter the "park owner's market" in which the demand for space far exceeds the supply of available lots.

Id. at 206-07 (citations and internal quotation marks omitted).

As a result, many states and municipalities have enacted laws aimed at protecting owners of manufactured homes. Those actions, though, often impinge on the property rights of the owners of mobile home parks, sometimes to such a degree that the legislation amounts to a constitutional violation.

In the state of Washington, an average of 5.8 mobile home parks closed every year between 1989 and 2002. That average rose to 14 park closures per year between 2003 and 2008. The number of closures is not surprising, given the high level of residential development during those years. As some of the Plaintiffs here candidly admit, one investment strategy for mobile home parks is to purchase land located in the path of development. The rental income from the mobile home pads provides steady income and, if the land's value rises as development surrounds the park, the park's owner can sell the land or convert it to other, more profitable uses, such as multi-family housing.

The Washington legislature responded to the large number of park closures by enacting, first, the Mobile Home Reloca- tion Assistance Act, Wash. Rev. Code ยง 59.21, 1989 Wash. Sess. Laws, ch. 201. "When a mobile home park is closed, this law requires the park owner to contribute money toward the tenants' relocation costs." Guimont v. Clarke, 854 P.2d 1, 3 (Wash. 1993). The Washington Supreme Court held that "the Act is unduly ...


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