Settled: A just end to property rights shakedown in Palo Alto

The Jisser family owned and operated the Buena Vista Mobilehome Park in Palo Alto for 30 years. When it became apparent the park needed substantial investment to renovate and update sewer, electrical, and other systems, the Jissers decided they would rather retire, close the business, and eventually put that land to another use. California law allows mobile home park owners to withdraw their property from the rental market so long as the owners pay tenants the “reasonable costs of relocation” to a comparable mobile home park. When the Jissers applied to the city for a permit to close their park, however, Palo Alto invoked a city ordinance that required “enhanced” relocation payments and demanded the Jissers pay $8 million directly to the tenants, who could use it for any purpose whatsoever. The permit condition forced the Jissers to choose to submit either to an uncompensated taking of their right to exclusive possession of their property, or to a taking of an extraordinary sum of money for the private benefit of their tenants.

PLF sued on behalf of the Jissers, arguing that the ordinance worked an unconstitutional taking and asking the court to declare the $8 million payment invalid and to stop the city from demanding it. The city asked the court to dismiss the lawsuit on procedural grounds, arguing that the Jissers had to pursue their claims in state court before suing in federal court. The district court agreed with the city and PLF appealed to the Ninth Circuit. Before the appeal proceeded very far, the city agreed to purchase the mobile home park itself, for the fair market price of $40 million, thus allowing the Jissers to exit the mobile home park business with their constitutional rights intact.