Santa Monica Beach, Ltd. v. Superior Court

BAXTER, J.

I respectfully dissent.

The majority err in holding that the complaint in this case does not state a cause of action for inverse condemnation. The error results in part from the mistaken notion that the separation of powers doctriné somehow precludes the plaintiff from introducing evidence in support of its takings clause claim that the stated purpose of the Santa Monica, rent control ordinance¹ has not been substantially advanced over time. In the end, the majority refuse to direct the court below to carry out its constitutionally mandated judicial obligation to determine, on the basis of evidence to be presented, whether application of the Santa Monica ordinance has taken property from plaintiff without just compensation.

In so doing, the majority address the wrong question, arrive at the wrong answer, and fail to differentiate between the distinct judicial roles of assessing the validity of the ordinance against a claim that it violates substantive due process and in determining whether the impact of the ordinance constitutes a taking of private property for which just compensation must be paid. In short, I agree wholeheartedly with Justice Chin’s conclusion that the majority “inappropriately conflates takings jurisprudence with due process jurisprudence.” (Dis. opn. of Chin, J., post, at p. 1018.) As a result they not only deny plaintiff the opportunity to present evidence necessary to support its inverse condemnation claim, but also leave California takings jurisprudence in a state of confusion.

A statute may be a proper exercise of the police power and yet create a taking for which just compensation must be paid under the takings clause of the Fifth Amendment to the United States Constitution.² Although deference is accorded legislative judgment when a statute is challenged as exceeding the permissible scope of the police power, no question of deference or, as stated otherwise by the majority, level of judicial scrutiny arises when just compensation is sought under the takings clause, because a takings claim presents “ ‘essentially ad hoc, factual inquiries.’ ” (Hodel v. Virginia Surface Mining & Recl. Assn. (1981) 452 U.S. 264, 295-296 [101 S.Ct. 2352, 2370, 69 L.Ed.2d 1]; Kaiser Aetna v. United States (1979) 444 U.S. 164, 175 [100 S.Ct. 383, 390, 62 L.Ed.2d 332].)

The Supreme Court has consistently recognized the distinct nature of the due process and takings clause inquiries. “[H]owever ‘rational’ the exercise of the [police] power may be, that inquiry is quite separate from the question [of] whether the enactment takes property within the prohibition of the Fifth Amendment.” (United States v. Security Industrial Bank (1982) 459 U.S. 70, 75 [103 S.Ct. 407, 410-411, 74 L.Ed.2d 235]; see also Eastern Enterprises v. Apfel (1998) 524 U.S. 498 [118 S.Ct. 2131, 2161, 141 L.Ed.2d 451] (dis. opn. of Breyer, J.) [The takings clause “refers to the taking of ‘private property ... for public use without just compensation.’ U.S. Const., Arndt. 5. As this language suggests, at the heart of the Clause lies a concern, not with preventing arbitrary or unfair government action, but with providing compensation for legitimate government action that takes ‘private property’ to serve the ‘public good.’ ”].)

Failure to recognize this distinction fuels the majority’s effort to ascertain what deference to accord to, or the level of judicial scrutiny to apply to, the Santa Monica rent control ordinance. That effort is misguided, for, as I explain below, the question of deference and/or level of judicial scrutiny simply does not arise in this takings clause claim.

As also will be discussed at greater length below, the majority’s reasoning rests on a series of faulty premises:

(1) That plaintiff seeks to invalidate the Santa Monica rent control ordinance. It does not. The complaint seeks a declaration that the ordinance effects an uncompensated taking of plaintiff’s property rights and seeks monetary compensation for the taking. If a taking is found, compensation is due even if the ordinance is valid.

(2) That recognizing a right to just compensation because the ordinance does not substantially advance its stated purpose would constitute a judicial repeal of the ordinance. Recognition that the imposition of rent controls on plaintiff’s property is a taking and awarding compensation therefor would not repeal the ordinance. It would instead constitute a proper exercise of a judicial power recognized since the decision of Marbury v. Madison (1803) 5 U.S. (1 Crunch) 137 [2 L.Ed. 15]—the power to construe, apply, and enforce rights guaranteed to all citizens by the United States Constitution.

(3) That a takings clause claim for inverse condemnation may be rejected because the rent control ordinance has a rational basis and is not arbitrary and discriminatory. As Justice Chin observes, a takings clause claim for just compensation may not be rejected on that ground, which is an aspect of due process, not takings, analysis. Here, too, the majority address the wrong question and give the wrong answer. The takings clause has different and more stringent criteria than those applied under the majority’s attempt to morph the deferential due process rational basis test into a takings clause test.

Moreover, whether at the time the Santa Monica rent control ordinance was enacted in April 1979 it was reasonable for the enacting body to believe that the ordinance would substantially advance the legislative purpose is not the question posed by this 1995 complaint. The question is whether at the time the complaint was filed in 1995, after 16 years of implementation, the ordinance had, in fact, substantially advanced its stated purpose.

(4) That the “substantially advance” test enunciated by the United States Supreme Court need not be applied to the stated legislative purpose underlying the ordinance if the ordinance may advance some other, unstated, purpose. Again, the majority err in suggesting that the court may sanction the uncompensated taking brought about by the imposition of rent control if the Santa Monica ordinance substantially advances any government purpose the court imagines may have justified the regulation if the legislative body had thought of that purpose.

Once the faulty assumptions underlying the majority’s reasoning are eliminated and the issues actually raised in this case identified, it is apparent that the holding of the majority lacks a foundation in takings clause jurisprudence. The complaint does state a cause of action for inverse condemnation on plaintiff’s theory that the ordinance has not substantially advanced and does not presently substantially advance the purpose offered in justification for abridgment of the rights of the owners of rental properties.

The complaint also states facts sufficient to demonstrate plaintiff’s entitlement to compensation on a second theory—the ordinance goes “too far” both on its face and as applied to plaintiff’s property. In order to provide a stock of rental housing affordable to persons with low incomes, young families, minorities, and the elderly, as well as other Santa Monica renters, plaintiff and all owners of Santa Monica rental property are compelled to bear a burden—subsidizing rentals—that in fairness and justice should be borne by the general public. That being so, just compensation must be paid to the owners of rental properties to which the ordinance is applied.

The Court of Appeal recognized that the tests enunciated in Agins v. Tiburon (1980) 447 U.S. 255, 260 [100 S.Ct. 2138, 2141, 65 L.Ed.2d 106] (Agins) and Penn Central Transp. Co. v. New York City (1978) 438 U.S. 104, 125-127 [98 S.Ct. 2646, 2660, 57 L.Ed.2d 631] (Penn Central) are still the measure by which a court determines if a property restriction goes too far and thus constitutes a compensable taking. The court then held that the complaint in this action states facts which, if proven, would show that the Santa Monica ordinance does go too far and thus constitutes a compensable taking. Under article VI, section 12, subdivision (b), of the California Constitution this court reviews decisions of the Court of Appeal, but nowhere in the majority opinion do we find a review of this holding or the analysis which supports it.³

No one can reasonably dispute that ensuring the availability of affordable housing for persons unable to pay market rate rents for clean, safe, and suitable housing is not only a proper, but also a laudable governmental purpose. However, the means by which a governmental entity achieves that purpose is circumscribed by not only the due process clause of the Fifth and Fourteenth Amendments to the United States Constitution, but also the takings clause of the Fifth Amendment which mandates that just compensation be paid when the government takes a private property right. My reasons for concluding that the complaint states a cause of action and that the judgment of the Court of Appeal should be affirmed follow in greater detail below.

I

The Inverse Condemnation Complaint

This mandamus action arises out of a ruling by the Los Angeles County Superior Court sustaining the demurrer of the Santa Monica Rent Control Board to a complaint in inverse condemnation seeking to recover “just compensation” from the board for a “taking” of plaintiffs property through application of the city’s rent control ordinance.

In ruling on the sufficiency of a complaint to withstand a demurrer, i.e., to state a cause of action, the court assumes the truth of all well-pleaded allegations. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 635 [49 Cal.Rptr.2d 377, 909 P.2d 981].) The ability of the plaintiff to prove the allegations is irrelevant at this stage of the proceedings. We must, therefore, accept as true plaintiff’s allegations. Briefly restated, the complaint alleges the following:

Santa Monica Beach, Ltd., owns a 12-unit apartment building on Sixth Street in Santa Monica. Rental of those units is subject to the provisions of a rent control ordinance that has been in effect since 1979 when it was adopted as part of article XVIII, in an amendment to the Santa Monica City Charter. Pursuant to the rent control ordinance a rent board establishes maximum allowable rents, provides for annual general adjustments, and may permit individual adjustments of allowable rents. Leave of the board, which may only be granted if a property subject to the ordinance does not produce a fair rate of return, is necessary before a controlled property may be removed from the rental market by demolition, conversion, or any other means. Eviction of a tenant is permissible only if the tenant fails to pay rent, violates a covenant of tenancy other than one requiring surrender of the property, causes a nuisance or substantial damage, uses or permits use of the unit for unlawful purposes, has refused at the termination of a tenancy to execute a written extension, denies reasonable access to the landlord, at the end of a tenancy the person in possession is a subtenant not approved by the landlord, or the unit is to be occupied by a close relative of the landlord.

Article XVIII, section 1800, constitutes the “Statement of Purpose” of the rent control ordinance, stating in pertinent part, and as amended in 1984:

“A growing shortage of housing units resulting in a low vacancy rate and rapidly rising rents exploiting this shortage constitute a serious housing problem affecting the lives of a substantial portion of those Santa Monica residents who reside in residential housing. In addition, speculation in the purchase and sale of existing residential housing units results in further rent increases. These conditions endanger the public health and welfare of Santa Monica tenants, especially the poor, minorities, students, young families, and senior citizens. The purpose of this Article, therefore, is to alleviate the hardship caused by this serious housing shortage by establishing a Rent Control Board empowered to regulate rentals in the City of Santa Monica so that rents will not be increased unreasonably and so that landlords will receive no more than a fair return.

“Through this Article, the city exercises its police power in order to address the serious housing problem recognized in the original enactment of this Rent Control Law in 1979 and still existing in 1984. The 1984 Amendment to the Rent Control Law is . . . intended to enable the Board to provide relief to persons facing particular hardship and to protect and increase the supply of affordable housing in the city. Termination or erosion of the protections of this Article would have serious disruptive consequences for persons in need of protection and the supply of affordable housing in the city.”

The rent board denied plaintiff’s March 27, 1992, application for a rent adjustment and on a subsequent March 30, 1993, application granted an increase of $3 per unit and temporary rent increases averaging $58 per month.⁴

A fair reading of those allegations of the complaint and the rent control ordinance is that, but for the limits imposed under the rent control ordinance, plaintiff could receive higher, market rate, rents for its apartments.

The complaint next contends that the rent control ordinance violates plaintiff’s rights under the takings clause of the Fifth and Fourteenth Amendments to the United States Constitution and article I, section 19 of the California Constitution⁵ because it fails to substantially advance a legitimate governmental interest. It fails because application of the ordinance has reduced the availability of private rental housing in Santa Monica and has made it more difficult for low-income renters, young families, and the elderly to find affordable rental housing.

From 1980 to the end of the decade, under rent control, the number of low-income-renter households decreased by 775, or 12 percent, while the number increased in every comparable city in Southern California that did not have rent control. The number of very-low-income households decreased by 285 during the decade. At the same time very-high-income households increased by 37 percent, although their number dropped in Los Angeles County as a whole.

During the decade of the 1980’s, the number of family households with children in Santa Monica fell by 1,299, a 6 percent decline, while there was no loss in comparable cities in Southern California without rent control. Female-headed households with children under 18 fell by 593, a 27 percent decrease, while the number increased in Los Angeles County as a whole.

The population of elderly in Santa Monica declined by 1.7 percent during the decade, while during the same period it increased in Los Angeles County by more than 15 percent, and it increased in comparable cities without rent control in Southern California.

Plaintiff asserted, on this basis, that denial of its application for a rent adjustment did not substantially advance a legitimate governmental interest and there was not a close nexus between the denial of the application for a fair rate of return on its capital investment and any public harm that might result from unregulated operation of the property. Unregulated use of the property would not have resulted in the problems Santa Monica sought to address through adoption of the rent control ordinance.

Plaintiff also alleged that even if the ordinance does substantially advance a proper governmental purpose, denial of its application seeking a fair rate of return had the effect of making application of the ordinance to its property “confiscatory.” Moreover, the ordinance has denied petitioner essential attributes of ownership of the property, including the right to exclude others and the right to determine the terms on which leasehold interests in plaintiff’s property will be alienated.

Arguing that for all of the above reasons the rent control board’s application of the ordinance to its property comprises a regulatory taking for public use without just compensation, plaintiff sought a trial at which it could offer evidence in support of its claims.

Plaintiff’s inverse condemnation claim thus rested on three different theories under any of which it was entitled to just compensation for the regulatory taking of its right to unregulated use of its rental units:

1. After a decade of implementation the Santa Monica rent control ordinance not only failed to substantially advance the stated governmental purpose, it made the problem it sought to address worse. Under this theory, application of the ordinance to any property for which higher rent could be obtained absent regulation would constitute a taking for a public purpose for which just compensation must be paid.

2. Application of the ordinance to plaintiff’s property did not substantially advance the stated governmental purpose because there was no basis for concluding that unregulated rental of plaintiff’s apartments would contribute to the shortage of affordable rental units in Santa Monica. Therefore, plaintiff’s property has been taken for a public purpose and plaintiff is entitled to just compensation for the taking.

3. Because the rent adjustments allowed plaintiff by the board did not ensure a fair rate of return on investment, application of the ordinance to plaintiff’s property was confiscatory. This claim is not presently before the court. It should be resolved in the pending administrative mandamus action.

The superior court did not consider whether the ordinance on its face created a constitutionally impermissible taking without just compensation, but ruled that the complaint failed to state a cause of action for inverse condemnation on plaintiff’s theories. The superior court rejected plaintiff’s argument that Nollan v. California Coastal Comm’n (1987) 483 U.S. 825 [107 S.Ct. 3141, 97 L.Ed.2d 677] (Nollan), in which the court applied the “substantially advance” test in finding a regulatory taking, mandated a heightened standard of review, and ruled that the appropriate standard of review was the “rational basis” standard. Thus, it impliedly concluded that plaintiff could not prevail because the city had a rational basis for finding that the public health and welfare, and particularly that of the identified groups, was endangered by unregulated rents and that the ordinance would prevent or minimize the threatened harm.

The Court of Appeal, reviewing the superior court order on petition for writ of mandate, disagreed with that reasoning and ordered that a peremptory writ of mandate issue commanding the superior court to set aside its order and overrule the board’s demurrer. The Court of Appeal reasoned that the question raised by the complaint was whether continued application of the ordinance to plaintiff’s property constituted a compensable taking for a public purpose because absent just compensation, in the words of the United States Supreme Court, “it went too far” to be a constitutionally permissible interference with plaintiff’s rights as an owner of property. That question could not be resolved on demurrer. The Court of Appeal also recognized that Nollan, supra, 483 U.S. at page 834, footnote 3 [107 S.Ct. at page 3148], had expressly rejected application of the rational basis test in takings cases, stating: “To the contrary, our verbal formulations in the takings field have generally been quite different. We have required that the regulation ‘substantially advance’ the ‘legitimate state interest’ sought to be achieved, Agins v. Tiburon, 447 U.S. 255, 260 (1980), not that ‘the State “could rationally have decided!’’ that the measure adopted might achieve the State’s objective.’ ” (Original italics.)

Although whether on its face this ordinance exceeds the permissible scope of the police power could be resolved by the court without taking evidence, the question posed by plaintiff in the complaint is whether over time the ordinance has substantially advanced the legislative purpose. This question cannot be decided on demurrer. If plaintiff can prove that the rent control ordinance has not substantially advanced its purpose, or that application of the ordinance to its property does not substantially advance the purpose, the “compensable taking” element of a cause of action for inverse condemnation would be established. This is true notwithstanding that the city may be able to show that there was a rational basis for the law when it was adopted.

II

Price Control and Zoning

In their misguided attempt to identify a level of judicial scrutiny that will satisfy the takings clause, the majority suggest that price controls and zoning legislation are sufficiently analogous to rent control to warrant placement of these types of government action in a continuum of levels of judicial scrutiny. Again, they err. The price control and zoning standards to which they look are those developed in due process challenges to the validity of legislation, not takings clause claims for just compensation because property has been subjected to those laws. The level of judicial scrutiny accorded legislation subjected to due process challenges is irrelevant in a takings clause claim.

That regulation of prices other than rents is a proper exercise of the police . power is well established. This was recognized by the Supreme Court more than a century ago in Munn v. Illinois (1876) 94 U.S. 113, 124 [24 L.Ed. 77]. The validity of an Illinois statute fixing the maximum charge for storage of grain in private warehouses was in issue. It was argued that the restrictions took property without due process of law. There, speaking for the court, Chief Justice Waite explained the due process source of authority for the statute:

“When one becomes a member of society, he necessarily parts with some rights or privileges which, as an individual not affected by his relations to others, he might retain. ‘A body politic,’ as aptly defined in the preamble of the Constitution of Massachusetts, ‘is a social compact by which the whole people covenants with each citizen, and each citizen with the whole people, that all shall be governed by certain laws for the common good.’ This does not confer power on the whole people to control rights which are purely and exclusively private, [citation]; but it does authorize the establishment of laws requiring each citizen to so conduct himself, and so use his own property, as not unnecessarily to injure another. This is the very essence of government, and has found expression in the maxim sic utere tuo ut alienum non laedas. From this source comes the police powers, which, as was said by Mr. Chief Justice Taney in the License Cases, 5 How. 583, ‘are nothing more or less than the powers of government inherent in every sovereignty, . . . that is to say, . . . the power to govern men and things.’ Under these powers the government regulates the conduct of its citizens one towards another, and the manner in which each shall use his own property, when such regulation becomes necessary for the public good. In their exercise it has been customary in England from time immemorial, and in this country from its first colonization, to regulate ferries, common carriers, hackmen, bakers, millers, wharfingers, innkeepers, &c., and in so doing to fix a maximum of charge to be made for services rendered, accommodations furnished, and articles sold. To this day, statutes are to be found in many of the States upon some or all of these subjects; and we think it has never yet been successfully contended that such legislation came within any of the constitutional prohibitions against interference with private property. With the Fifth Amendment in force, Congress, in 1820 conferred power upon the city of Washington ‘to regulate ... the rates of wharfage at private wharves, ... the sweeping of chimneys, and to fix the rates of fees therefor, . . . and the weight and quality of bread,’ [citation]; and, in 1848, ‘to make all necessary regulations respecting hackney carriages and the rates of fare of the same, and the rates of hauling by cartmen, wagoners, carmen, and draymen, and the rates of commission of auctioneers,’ [citation].

“From this it is apparent that, down to the time of the adoption of the Fourteenth Amendment, it was not supposed that statutes regulating the use, or even the price of the use, of private property necessarily deprived an owner of his property without due process of law. Under some circumstances they may, but not under all. The amendment does not change the law in this particular: it simply prevents the States from doing that which will operate as such a deprivation.” (94 U.S. at pp. 124-125.)

The court recognized in Munn v. Illinois, supra, 94 U.S. 113, that it is necessary to understand the principles underlying exercise of the police power in order to determine when the power is exercised in a constitutionally permissible manner, and explained that when property is affected with a public interest the property is no longer wholly private. “When, therefore, one devotes his property to a use in which the public has an interest, he in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control.” (Id. at p. 126.)

The court addressed exercise of the police power to regulate prices again in Nebbia v. New York (1934) 291 U.S. 502, 525 [54 S.Ct. 505, 525, 78 L.Ed. 940, 89 A.L.R. 1469]: “The Fifth Amendment, in the field of federal activity, and the Fourteenth, as respects state action, do not prohibit governmental regulation for the public welfare. They merely condition the exertion of the admitted power, by securing that the end shall be accomplished by methods consistent with due process. And the guaranty of due process, as has often been held, demands only that the law shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the object sought to be attained. . . . [¶] . . . [¶] The court has repeatedly sustained curtailment of enjoyment of private property, in the public interest. The owner’s rights may be subordinated to the needs of other private owners whose pursuits are vital to the paramount interest of the community.” (Fns. omitted.)

After an exhaustive survey of the areas of private rights theretofore held to be subject to regulation under the police power, the court turned to the New York statute before it, a law which fixed minimum prices for milk. The court found a proper governmental purpose—preventing demoralizing competitive conditions and unfair trade practices which reduced the income of producers below the cost of production. It then rejected an argument that price control was per se unreasonable and unconstitutional except as to business affected with a public interest, i.e., one in which the property is devoted to a purpose which the public as such might undertake, or one dependent on a public grant or franchise, or is bound to serve all comers—public utilities and/or monopolies. “The due process clause makes no mention of sales or of prices any more than it speaks of business or contracts or buildings or other incidents of property. The thought seems nevertheless to have persisted that there is something peculiarly sacrosanct about the price one may charge for what he makes or sells, and that, however able to regulate other elements of manufacture or trade, with incidental effect upon price, the state is incapable of directly controlling the price itself. This view was negatived many years ago. Munn v. Illinois, 94 U.S. 113.” (291 U.S. at p. 532 [54 S.Ct. at p. 514].)

Retreating from the language in Munn which suggested that regulation of prices was justified only when the property had been devoted to a public use, the court held: “The statement that one has dedicated his property to a public use is . . . merely another way of saying that if one embarks in a business which public interest demands shall be regulated, he must know regulation will ensue.” (Nebbia v. New York, supra, 291 U.S. at p. 534 [54 S.Ct. at p. 514].) “[T]here can be no doubt that upon proper occasion and by appropriate measures the state may regulate a business in any of its aspects, including the prices to be charged for the products or commodities it sells. [¶] So far as the requirement of due process is concerned, and in the absence of other constitutional restriction, a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without authority either to declare such policy, or, when it is declared by the legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial determination to that effect renders a court functus officio. ‘Whether the free operation of the normal laws of competition is a wise and wholesome rule for trade and commerce is an economic question which this court need not consider or determine.’ ” (Nebbia v. New York, supra, 291 U.S. at p. 537 [54 S.Ct. at p. 516], italics added.) “The Constitution does not secure to anyone liberty to conduct his business in such fashion as to inflict injury upon the public at large, or upon any substantial group of the people. Price control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty.” (Id. at pp. 538-539 [54 S.Ct. at pp. 516-517].)

This continues to be the rule insofar as price controls in general are concerned. As the court acknowledged in Nebbia v. New York, supra, 291 U.S. 502, 537 [54 S.Ct. 505, 516], however, it is so only “in the absence of other constitutional restriction.” The takings clause is another constitutional restriction. A law restricting property rights may be valid as a proper exercise of the police power, but nonetheless violate the takings clause unless just compensation is paid by the government for the diminution of those rights.

Zoning laws, too, have long been upheld under the deferential, rational basis, level of judicial scrutiny applied in due process based challenges to economic and social legislation. Before a general zoning ordinance will be declared unconstitutional the court must conclude that the law is “ ‘clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.’ ” (Eastlake v. Forest City Enterprises, Inc. (1976) 426 U.S. 668, 676 [96 S.Ct. 2358, 2363, 49 L.Ed.2d 132]; Euclid v. Ambler Co. (1926) 272 U.S. 365, 394 [47 S.Ct. 114, 120, 71 L.Ed. 303]; see also Consolidated Rock Products Co. v. City of Los Angeles (1962) 57 Cal.2d 515, 522-523 [20 Cal.Rptr. 638, 370 P.2d 342].)

There is no comparable level of judicial scrutiny when it is claimed that a zoning law takes property for which compensation must be paid, however. This is so because determining whether a zoning law brings about a compensable taking can be determined only after considering a variety of evidentiary factors. (Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 1030-1031 [112 S.Ct. 2886, 2901, 120 L.Ed.2d 798]; Hansen Brothers Enterprises, Inc. v. Board of Supervisors (1996) 12 Cal.4th 533, 531 [48 Cal.Rptr.2d 778, 907 P.2d 1324].) As this court recognized in Landgate, Inc. v. California Coastal Com. (1998) 17 Cal.4th 1006, 1016-1017 [73 Cal.Rptr.2d 841, 953 P.2d 1188], unless a takings claim is based on denial of all beneficial use or physical invasion of the property, whether a compensable taking exists requires a “case-specific inquiry.”

Ill

Rent Control and the Takings Clause

The majority proceed on an assumption that it has also been settled that rent control does not bring about a compensable taking. Again they err. Neither the United States Supreme Court nor this court has held in a takings clause challenge that a rent control law like the Santa Monica ordinance is constitutionally permissible absent payment of just compensation. The United States Supreme Court has upheld rent control as an exercise of Congress’s war powers or to confront an emergency arising during or out of a world war. Neither the Supreme Court nor this court has ever applied contemporary takings clause jurisprudence to a peacetime rent control law of indefinite duration enacted simply to address a problem created by rising rents.

The analytical focus in assessing whether rent control constitutes a taking for which the takings clause mandates just compensation must be directed to the means by which rent control accomplishes its purpose. Rent control differs from and cannot be equated to other forms of price control because it encroaches on property rights in ways that price control does not. The Santa Monica rent control ordinance takes from the property owner the right to charge market rent for the owner’s property and by so doing compels the owner to subsidize the tenant. Price control creates no comparable direct transfer of a property interest to a third person. The ordinance in question depresses the value of the rent-controlled property. Unlike property used to manufacture price-controlled items, rental housing cannot easily be used for other purposes and the Santa Monica ordinance severely limits the ability of the owner to go out of the rental housing business. Finally, the ordinance tranfers to the tenant the right to occupy the property for an indefinite period. Again, none of this is true of other forms of price control. Thus we cannot assume that decisions upholding other forms of price control are authority for rejecting a takings clause challenge to a rent control ordinance.

The Supreme Court first addressed takings clause challenges to the validity of rent control laws enacted as federal wartime emergency legislation. (See Block v. Hirsh (1921) 256 U.S. 135 [41 S.Ct. 458, 65 L.Ed. 865, 16 A.L.R. 165] (Block); Woods v. Miller Co. (1948) 333 U.S. 138 [68 S.Ct. 421, 92 L.Ed. 596] (Woods); Bowles v. Willingham (1944) 321 U.S. 503 [64 S.Ct. 641, 88 L.Ed. 892] (Bowles).) None of those decisions upheld application of rent control without payment of just compensation in a challenge such as that made here.

Block, the first of the decisions which are sometimes relied on in support of the proposition that rent control is constitutionally permissible, addressed the claim of a Washington, D.C., property owner that the Act of October 22, 1919 (41 Stat. 297, 301) was a constitutionally invalid attempt to authorize the taking of property not for public use and without due process of law insofar as it permitted a lessee to refuse to surrender the premises on expiration of the lease. The law, which was to expire in two years unless sooner repealed, gave the owner the right to retake the property for his own occupancy on thirty days’ notice, but the owner had not given that notice before seeking to recover possession. The statute included a declaration that the restrictions were made necessary “by emergencies growing out of the war, resulting in rental conditions in the District dangerous to the public health and burdensome to public officers, employees and accessories, and thereby embarrassing the Federal Government in the transaction of the public business.” (256 U.S. at p. 154 [41 S.Ct. at p. 459].) The court noted that “Congress stated a publicly notorious and almost world-wide fact. That the emergency declared by the statute did exist must be assumed . . . .” (Id. at pp. 154-155 [41 S.Ct. at p. 459].)

The Supreme Court concluded that the circumstances were such as to clothe the rental of buildings in the District of Columbia with a public interest great enough to justify regulation, noting, however, that what may create that interest at one time may at others be purely a matter of private concern. At the time of this legislation, a “public exigency” justified “restricting property rights ... to a certain extent without compensation.” (Block, supra, 256 U.S. at p. 156 [41 S.Ct. at p. 459].)

The court then considered whether the statute went “too far,” recognizing that “just as there comes a point at which the police power ceases and leaves only that of eminent domain, it may be conceded that regulations of the present sort pressed to a certain height might amount to a taking without due process of law. Martin v. District of Columbia [(1907)] 205 U.S. 135 [27 S.Ct. 440, 51 L.Ed. 743].” (Block, supra, 256 U.S. at p. 156 [41 S.Ct. at p. 460].) The court did not have to draw that line, however, as “[t]he regulation is put and justified only as a temporary measure. [Citations.] A limit in time, to tide over a passing trouble, well may justify a law that could not be upheld as a permanent change.” (Id. at p. 157 [41 S.Ct. at p. 460].)

The high court next considered a challenge to rent control in the District of Columbia in Chastleton Corp. v. Sinclair (1924) 264 U.S. 543 [44 S.Ct. 405, 68 L.Ed. 841], The plaintiff sought to restrain enforcement of a rent commission order reducing rents under the authority of a 1921 law declaring that the emergency still existed and purporting to continue the law upheld in Block. The court, impliedly accepting the plaintiff’s theory that if the emergency had ended the restriction would violate the takings clause, remanded the case to the District of Columbia courts for an evidentiary hearing to determine whether conditions had changed, stating that “If about all that remains of war conditions is the increased cost of living, that is not in itself a justification of the act.” (264 U.S. at p. 548 [44 S.Ct. at p. 406], italics added.)

Subsequently, in New State Ice Co. v. Liebmann (1932) 285 U.S. 262, 277 [52 S.Ct. 371, 374, 76 L.Ed. 747], the court again emphasized that rents may not be subjected to legislative regulation “except as to temporary measures to tide over grave emergencies.” (See also Tyson & Brother v. Banton (1927) 273 U.S. 418, 437-438 [47 S.Ct. 426, 431, 71 L.Ed. 718, 58 A.L.R. 1236] [“[T]he business of renting houses and apartments is not so affected with a public interest as to justify legislative fixing of prices unless some great emergency exists. Block v. Hirsh, supra, 256 U.S. at p. 157 [41 S.Ct. at p. 460]; Chastleton Corp. v. Sinclair, 264 U.S. 543, 548 [44 S.Ct. at p. 406]. And even with the emergency, the statutes ‘went to the verge of the law.’ ”].)

During the Second World War, in Bowles, the Emergency Price Control Act of 1942 (56 Stat. 23, 50 U.S.C. Appen. (Former supp. II) § 901) was challenged as a constitutionally impermissible delegation of legislative authority and as a deprivation of property without due process. Congress had expressly invoked its war powers as authority for the legislation and that power was not challenged. The court concluded that the standards for fixing rents were sufficiently definite and accorded property owners due process, relying in part on Block. The court also stated: “Moreover, there would be no constitutional objection if Congress as a war emergency measure had itself fixed the maximum rents in these areas. We are not dealing here with a situation which involves a ‘taking’ of property. Wilson v. Brown, [⁶] By § 4 (d) of the Act it is provided that ‘nothing in this Act shall be construed to require any person to sell any commodity or to offer any accommodations for rent.’ There is no requirement that the apartments in question be used for purposes which bring them under the Act. Of course, price control, the same as other forms of regulation, may reduce the value of the property regulated. But as we have pointed out in the Hope Natural Gas Co. case ([(1944)] 320 U.S. [591,] 601 [64 S.Ct. 281, 88 L.Ed. 333]), that does not mean that the regulation is unconstitutional. Mr. Justice Holmes, speaking for the Court, stated in Block v. Hirsh, supra, p. 155: ‘The fact that tangible property is also visible tends to give a rigidity to our conception of our rights in it that we do not attach to others less concretely clothed. But the notion that the former are exempt from the legislative modification required from time to time in civilized life is contradicted not only by the doctrine of eminent domain, under which what is taken is paid for, but by that of the police power in its proper sense, under which property rights may be cut down, and to that extent taken, without pay.’ A member of the class which is regulated may suffer economic losses not shared by others. His property may lose utility and depreciate in value as a consequence of regulation. But that has never been a barrier to the exercise of the police power. [Citations.] And the restraints imposed on the national government in this regard by the Fifth Amendment are no greater than those imposed on the States by the Fourteenth.” (Bowles, supra, 321 U.S. at pp. 517-518 [64 S.Ct. at pp. 648-649].)

This broad language in Bowles was immediately qualified, however, by the court’s further observation: “We need not determine what constitutional limits there are to price-fixing legislation. Congress was dealing here with conditions created by activities resulting from a great war effort. [Citation.] A nation which can demand the lives of its men and women in the waging of that war is under no constitutional necessity of providing a system of price control on the domestic front which will assure each landlord a ‘fair return’ on his property.” (Bowles, supra, 321 U.S. at p. 519 [64 S.Ct. at p. 649], italics added.)

In Woods the district court had enjoined enforcement of title II of the Housing and Rent Act of 1947 (61 Stat. 193, 196) on the ground that Congress’s power to regulate rent ended with a presidential proclamation terminating hostilities. The high court reversed, holding that the 1947 legislation was a valid exercise of the war power of Congress and rejected a claim that exemption of some classes of housing violated the Fifth Amendment.

Although the Supreme Court subsequently stated in Pennell v. San Jose (1988) 485 U.S. 1, 12, footnote 6 [108 S.Ct. 849, 857-858, 99 L.Ed.2d 1], that it saw “no need to reconsider the constitutionality of rent control per se,” and such reexamination may not have been necessary in that case, in fact the court has not upheld rent control against a takings clause challenge other than in wartime emergency circumstances. Those decisions do not uphold peacetime, nonemergency, rent control legislation of indefinite duration against a takings clause challenge either as to the denial of the property owner’s right to receive whatever rent the free, competitive market will produce, or as to the restriction on the rights of the owner to use the property for any purpose, withdraw it from the rental market, or terminate tenancies. Bowles made it clear that whether a permanent rent control scheme constitutes a compensable taking under the Fifth Amendment is still an open question.⁷

More recently the Supreme Court has abandoned the concept of property clothed with a public interest the use of which could be restricted through exercise of the police power without compensation, turning instead in Fifth Amendment cases to an ad hoc determination of whether, because a particular regulation goes too far, a compensable taking has occurred. Penn Central, supra, 438 U.S. 104, and Hodel v. Irving (1987) 481 U.S. 704 [107 S.Ct. 2076, 95 L.Ed.2d 668] (Hodel) exemplify this approach. The “taking” for which just compensation must be paid is not a taking of the entire property but of any of the interests in property, the “sticks” which make up the “bundle of rights” which an owner may claim. (See, e.g., Hodel, supra, 481 U.S. at p. 716 [107 S.Ct. at p. 2083] [right to devise property]; Kaiser Aetna v. United States, supra, 444 U.S. at p. 176 [100 S.Ct. at p. 391] [right to exclude others].)

The concept of compensable regulatory taking, hinted at in the early rent control cases, had been expressly recognized' earlier in Penna. Coal v. Mahon (1922) 260 U.S. 393 [43 S.Ct. 158, 67 L.Ed. 322, 28 A.L.R. 1321] (Pennsylvania Coal), which confirmed that Block and its wartime rent control progeny were not a Supreme Court imprimatur for rent control legislation. There, owners of surface rights to property under which the coal company had reserved the right to remove all coal, with the surface owners waiving all claims for resulting damages, sought to prevent mining that would cause subsidence. They claimed that the company’s rights had been abrogated by a state statute which forbade mining in a manner that would cause subsidence of a home. The company argued that if applied retroactively the statute would be unconstitutional. The state court upheld the statute as a legitimate exercise of the police power. The Supreme Court, in an opinion by Justice Holmes, reversed, stating as a general rule “that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. It may be doubted how far exceptional cases, like the blowing up of a house to stop a conflagration, go—and if they go beyond the general rule, whether they do not stand as much upon tradition as upon principle. [Citation.] In general it is not plain that a man’s misfortunes or necessities will justify shifting the damages to his neighbor’s shoulders. [Citations.] We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change. As we already have said this is a question of degree—and therefore cannot be disposed of by general propositions. But we regard this as going beyond any of the cases decided by this Court. The late decisions upon laws dealing with the congestion of Washington and New York, caused by the war, dealt with laws intended to meet a temporary emergency and providing for compensation determined to be reasonable by an impartial board. They were to the verge of the law but fell far short. . . .” (260 U.S. at pp. 415-416 [43 S.Ct. at p. 160], italics added.)

This limitation on uncompensated taking was echoed in Armstrong v. United States (1960) 364 U.S. 40, 49 [80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554], where the court adopted the ultimate test of a compensable taking, one which is still applicable: “The Fifth Amendment’s guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

The court’s first attempt to establish guidelines for determining whether a land use regulation goes too far and thus becomes a compensable taking came in Penn Central, supra, 438 U.S. 104. The court acknowledged that the constitutional concern recognized by Justice Holmes in Pennsylvania Coal, supra, 260 U.S. 393, and applied in Armstrong v. United States, supra, 364 U.S. 40, to government conduct which destroyed the value of privately held liens—whether in light of the nature of the restriction and its purpose, the property owner has been forced to bear public burdens which, in fairness and justice should be borne by the public as a whole—determines whether a land use regulation goes so far as to constitute a compensable taking.

In Penn Central the court then made it clear that the ultimate purpose of balancing the factors it has identified as relevant in deciding if a land use regulation goes too far is to ensure that land use regulations are not used to compel individuals to assume burdens that should be borne by the public as a whole. “While this Court has recognized that the ‘Fifth Amendment’s guarantee . . . [is] designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,’ Armstrong v. United States, 364 U.S. 40, 49 (1960), this Court, quite simply, has been unable to develop any ‘set formula’ for determining when ‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.” (438 U.S. at pp. 123-124 [98 S.Ct. at p. 2659].) Thus, regardless of the manner in which the factors identified by the court as relevant to determining if a land use restriction is valid are applied, the question to be answered is always the same—is this landowner being forced to assume what should be a public burden. The court has repeatedly recognized this as the litmus test of a compensable taking. (See Dolan v. City of Tigard (1994) 512 U.S. 374, 384 [114 S.Ct. 2309, 2316, 129 L.Ed.2d 304] (Dolan); Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1018 [112 S.Ct. at pp. 2894-2895]; Pennell v. City of San Jose, supra, 485 U.S. at p. 9 [108 S.Ct. at p. 856]; First Lutheran Church v. Los Angeles County (1987) 482 U.S. 304, 318-319 [107 S.Ct. 2378, 2388, 96 L.Ed.2d 250]; Hodel, supra, 481 U.S. at p. 714 [107 S.Ct. at p. 2082]; Kaiser Aetna v. United States, supra, 444 U.S. at p. 176 [100 S.Ct. at p. 391].)

In Penn Central, the court identified two factors whose relevance had been recognized in earlier cases as important in determining whether application of a land use regulation constitutes a taking:

1. The economic impact of the regulation on the property owner, particularly the extent to which the regulation interferes with distinct investment-backed expectations.

2. The character of the governmental action—physical invasion is more readily found to be a taking than interference caused by a public program which adjusts the benefits and burdens of economic life to promote the common good. Restrictions designed to enhance the quality of life by preserving desirable aesthetic features and zoning laws were given as examples of laws which prohibit beneficial uses and may cause substantial individual harm, but nonetheless have been upheld as permissible because they promote the health, safety, morals, or general welfare of the public. (Penn Central, supra, 438 U.S. at pp. 125-129 [98 S.Ct. at pp. 2659-2661].)

Application of a landmarks preservation law to the Grand Central Terminal property in New York City was upheld because the law was substantially related to promotion of the general welfare, it permitted beneficial use of the property as it did not interfere with the existing use, it was not shown that all use of the air space above the terminal was prohibited, and the owner was granted transferable development rights which could be used to develop other properties.

The economic impact of the regulation, its interference with investment-backed expectations and the character of the governmental action are factors which the high court continues to recognize as having particular significance. (Hodel, supra, 481 U.S. at p. 714 [107 S.Ct. at p. 2082]; Kaiser Aetna v. United States, supra, 444 U.S. at p. 175 [100 S.Ct. at p. 390].) In Hodel, supra, 481 U.S. at page 715 [107 S.Ct. at pages 2082-2083], the court also recognized another factor which is particularly significant in the rent control arena and was first applied in Pennsylvania Coal, supra, 260 U.S. at page 415 [43 S.Ct. at page 160]—the “reciprocity of advantage” between the government and the owner whose property rights are restricted.⁸

Finally, regardless of the relative weight of these factors, a land use restriction will constitute a taking for which just compensation must be paid if it does not “ ‘substantially advance legitimate state interests.’ ” (Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1016 [112 S.Ct. at p. 2894]; Agins, supra, 447 U.S. at p. 260 [100 S.Ct. at p. 2141].)

This court has upheld local rent control, but only against due process based challenges. (See Fisher v. City of Berkeley (1984) 37 Cal.3d 644 [209 Cal.Rptr. 682, 693 P.2d 261]; Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129 [130 Cal.Rptr. 465, 550 P.2d 1001].) While the court has concluded that such legislation is a proper exercise of the police power even in the absence of an emergency, the court has never applied takings clause jurisprudence to such laws.

The assumption of the majority that just compensation need not be paid for the application of rent control to private property thus finds no support in the authorities on which they rely.

IV

Does This Complaint State Facts to Show That the Santa Monica Ordinance Has Not Substantially Advanced Legislative Goals?

The majority make no effort to address this crucial question, digressing instead into the effort to determine whether Nollan, supra, 483 U.S. 825, and Dolan, supra, 512 U.S. 374, somehow establish a level of judicial scrutiny applicable in takings clause cases in which it is claimed that a land use regulation fails to substantially advance a legitimate governmental purpose. The “substantially advance” test, the aspect of takings clause jurisprudence on which plaintiff relies, is not new. It was applied in Agins, supra, 447 U.S. at page 261 [100 S.Ct. at pages 2141-2142], and is derived from Nectow v. Cambridge (1928) 277 U.S. 183, 188 [48 S.Ct. 447, 448, 72 L.Ed. 842], Nollan and Dolan did no more than demonstrate the effect of the test in an “as applied” challenge to an administrative adjudicative application of a land use regulation. In so doing, the United States Supreme Court made it clear beyond any question that the protection of property rights guaranteed by the takings clause is independent of and broader than the protections afforded by the due process clause. The court also made it clear that whenever a takings clause claim is before a court, the role of the court is to hear or consider evidence and make factual findings to support a ruling on a well-pleaded takings claim.

The complaint in this action alleges facts which, if proven, will establish that the uncompensated taking of plaintiff’s property rights brought about by the Santa Monica rent control ordinance cannot be justified under the takings clause because, after a reasonable period of implementation, the ordinance has not substantially advanced the goals which justified the restrictions on plaintiff’s rights. Instead of preserving affordable housing for tenants unable to pay market rents, the ordinance has created a haven for tenants regardless of their ability to pay while decreasing the number of rental units occupied by tenants intended to be benefited.

The Santa Monica rent control ordinance has now been in effect for 20 years, a long enough period to evaluate whether it does, in fact, substantially advance its purpose. The majority nonetheless hold that the complaint does not state a cause of action and deny plaintiff the right to attempt to prove that the Santa Monica rent control ordinance has not preserved the supply of affordable rental housing for low-income tenants, families with children, the elderly, or other tenants in need of “affordable” rental housing.

The majority do so on the basis of their erroneous conclusion that a deferential standard of review is permissible, and in the erroneous belief that the complaint fails to state facts sufficient to support the claim that the ordinance has not substantially advanced a legitimate goal.⁹ The majority also express concern that declaring that a rent control law which has not achieved its purpose constitutes a taking for which compensation must be paid would be a “judicial repeal” of the law. Unwilling to recognize our obligation to consider whether a once valid law may over time or in light of changed circumstances no longer advance its purpose, the majority defer to legislative judgment in justification of its refusal to permit this action to go to trial. None of the majority’s reasons supports the result they reach.

A. Deference.

Plaintiff’s claim that the Santa Monica ordinance has not substantially advanced the legislative purpose is not a facial attack on the Santa Monica ordinance. Nor is it a traditional “as applied” attack claiming that a newly enacted ordinance may not be applied to plaintiff’s property without compensation. Instead plaintiff assumes the initial validity of the law on its face and as applied, and claims that the ordinance has not substantially advanced the purpose the enacting body believed would justify restricting the rights of rental property owners. For purposes of analyzing the merits of this claim it is not necessary to pigeonhole this plaintiff’s claim as a “facial challenge” or an “as applied challenge” because, as I have suggested above, deference to the legislative judgment that the means selected in a land use regulation to achieve a public welfare goal will achieve that goal is not warranted in any takings clause claim.

Deference to the legislative body’s choice of means by which to achieve a public welfare goal is generally required not only to maintain proper balance under the- separation of powers doctrine, but also in recognition that a legislative body seeking a solution to problems affecting the public welfare must be afforded a reasonable opportunity to experiment with possible solutions. The reasons for and importance of judicial deference for this purpose are perhaps best expressed by Justice Brandeis, albeit in dissent, in New State Ice Co. v. Liebmann, supra, 285 U.S. 262: “There must be power in the States and the Nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs. . . . HD To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation. It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country. The Court has the power to prevent an experiment. We may strike down the statute which embodies it on the ground that, in our opinion, the measure is arbitrary, capricious or unreasonable. We have power to do this, because the due process clause has been held by the Court applicable to matters of substantive law as well as to matters of procedure. But, in the exercise of this high power, we must ever be on our guard, lest we erect our prejudices into legal principles.” (285 U.S. at p. 311 [52 S.Ct. at pp. 386-387] (dis. opn. of Brandeis, J.), fn. omitted.)

When a claim for just compensation is made under the takings clause, however, deference is neither appropriate nor permitted. Under our system of government, the court, not the legislative body or the electorate, must determine whether governmental action impermissibly invades rights protected by the constitution. “As stated by this Court in West Virginia State Bd. of Educ. v. Barnette, 319 U.S. 624, 638 [63 S.Ct. 1178, 1185, 87 L.Ed. 1628, 147 A.L.R. 674], ‘One’s right to life, liberty, and property . . . and other fundamental rights may not be submitted to vote; they depend on the outcome of no elections.’ A citizen’s constitutional rights can hardly be infringed simply because a majority of the people choose that it be.” (Lucas v. Colorado Gen. Assembly (1964) 377 U.S. 713, 736-737 [84 S.Ct. 1459, 1473-1474, 12 L.Ed.2d 632], fns. omitted.) While the court may defer to the judgment of a legislative body or the electorate that a rent control ordinance is necessary to address a social or economic problem, the court may not do so when it is claimed that the impact of the ordinance is a compensable taking.

A claim based on the theory that just compensation is due because a rent control ordinance has not substantially advanced the legislative purpose advanced in justification of the resulting restriction of property owner’s rights is one of first impression in this court. It is not novel, however. The Supreme Court recognized that an owner of rent-controlled property may offer evidence to demonstrate that the circumstances which once justified imposition of rent control no longer do so in Chastleton Corp. v. Sinclair, supra, 264 U.S. 543. There a Fifth Amendment-based challenge to a rent control order was brought after the war emergency which initially justified rent control allegedly had ended. The rent control order had been made under the authority of statute purporting to extend the act upheld in Block, supra, 256 U.S. 135. In a context closely analogous to the instant case the court said: “The order, although retrospective, was passed some time after the latest statute, and long after the original act would have expired. In our opinion it is open to inquire whether the exigency still existed upon which the continued operation of the law depended. It is a matter of public knowledge that the Government has considerably diminished its demand for employees, that was one of the great causes of the sudden afflux of people to Washington, and that other causes have lost at least much of their power. It is conceivable that, as is shown in an affidavit attached to the bill, extensive activity in building has added to the ease of finding an abode. If about all that remains of war conditions is the increased cost of living that is not in itself a justification of the act. Without going beyond the limits of judicial knowledge, we can say at least that the plaintiffs’ allegations cannot be declared offhand to be unmaintainable, and that it is not impossible that a full development of the facts will show them to be true. In that case the operation of the statute would be at an end.” (264 U.S. at p. 548 [44 S.Ct. at p. 406].)

It seems clear, therefore, that plaintiff may pursue its claim that the Santa Monica ordinance has not substantially advanced the legislative purpose and must be allowed to introduce evidence to support its claim. When plaintiff does so the evidence must be weighed by the trier of fact. There is no room for deference in this factual determination.

Nollan and Dolan confirm that the “substantially advance” test is not a standard of review, but a fact-based inquiry.¹⁰ Both assessed administrative application of land use regulations to a particular property. Neither gave any deference to or even considered whether the original legislative judgment that the enabling legislation would advance the legislative body’s stated purpose was reasonable. Instead both Nollan and Dolan recognized that in an “as applied” challenge under the takings clause, the state bears the burden of demonstrating that the fit or nexus between the legislative goal and application of the law to the property in question meets the constitutional standard for an uncompensated taking, i.e, that the regulation substantially advances that goal. (Dolan, supra, 512 U.S. at p. 386 [114 S.Ct. at p. 2317]; Nollan, supra, 483 U.S. at p. 837 [107 S.Ct. at pp. 3148-3149].)

The “substantially advance” test thus establishes an evidentiary burden the government must carry in the trial court or administrative proceeding to justify application of a land use regulation to an individual parcel of property, not a standard of judicial review or level of judicial scrutiny. To the extent that a standard of review by an appellate court is implicated the law is settled. Because the claim involves taking a vested right in property the court must exercise its independent judgment on the evidence. (Halaco Engineering Co. v. South Central Coast Regional Com. (1986) 42 Cal.3d 52, 64, fn. 10 [227 Cal.Rptr. 667, 720 P.2d 15].) Here, therefore, the court must exercise its independent judgment in determining whether plaintiff has demonstrated that the Santa Monica ordinance has not substantially advanced the purpose offered by the city in justification of the restriction on plaintiff’s property rights. That can be done only after plaintiff is allowed to present evidence on the question.

The takings clause permits no less as demonstrated by Nollan and Dolan where the court did not defer to legislative judgment in an “as applied” challenge and Agins in which it did not do so in a facial challenge to restrictions on property rights. Instead in Nollan, supra, 483 U.S. at page 838 [107 S.Ct. at page 3149], and Dolan, supra, 512 U.S. at page 395 [114 S.Ct. at pages 2321-2322], the court held, based on the evidence, evidence that the majority will not permit plaintiff to offer here, that the nexus between the property restriction and the legislative goal did not meet the constitutional mandate that the restriction substantially advance that goal. Therefore the restriction was a compensable taking. In Agins, supra, 447 U.S. at page 462 [100 S.Ct. at page 2291], the court held that the zoning ordinance in question there did not, in fact, prevent the best use of the affected land or extinguish a fundamental attribute of ownership.

The majority are correct in holding that generally when a facial challenge to the validity of a statute is made on the ground that a legislative body has exceeded the proper scope of the police power, the role of the court is simply to determine whether (1) the. legislative body has identified the existence of a problem affecting the health, safety, or general welfare of the public, thus justifying exercise of the police power to regulate individual conduct, and (2) has selected means reasonably related to achieving the legislative goal. In those inquiries deference to the legislative body’s findings and judgment is proper. Deference is not appropriate or permitted when the statute is challenged as violative of the takings clause, however. As I have shown, Nollan, supra, 483 U.S. 825, and Dolan, supra, 512 U.S. 374, do not support the contrary conclusion reached by the majority.

Moreover, the nature of the inquiry mandated by the takings clause precludes another aspect of the analysis by which the majority rejects plaintiff’s claim. When determining if the restriction on the property owner’s rights substantially advances the legislative goal, the inquiry of necessity requires that the stated goal of the legislative body be the object of the inquiry. The court may not, as the majority do, follow due process jurisprudence to uphold uncompensated application of a land use regulation on the ground that the regulation serves another purpose. When a law restricting property rights without affording compensation has a stated goal, the judiciary is under no compulsion and has no authority to uphold the continued denial of compensation on the basis that the law might serve another unstated legislative goal. Were that the rule, it would be an open invitation to judicial legislation, and the “substantially advance” test enunciated in Agins would be meaningless. Agins assumes that the legislative purpose to be advanced by a land use regulation is that contemplated by the body which enacted the regulation.

Additionally, even when a property regulation passes the “substantially advance” test, compensation may be required. In a challenge based on the takings clause the court must also independently determine whether the law goes too far. “The determination that governmental action constitutes a taking is, in essence, a determination that the public at large, rather than a single owner, must bear the burden of an exercise of state power in the public interest.” (Agins, supra, 447 U.S. at p. 260 [100 S.Ct. at p. 2141]; see also Nollan, supra, 483 U.S. at p. 835, fn. 4 [107 S.Ct. at p. 3148].) This mixed question of law and fact cannot be resolved through deference to the legislative judgment. Instead, whether a land use regulation goes too far requires, as the high court explained in Penn Central, supra, 438 U.S. 104, an ad hoc factual determination in every case to determine whether the regulation forces a property owner to bear public burdens which in fairness and justice should be borne by the public. In a takings clause challenge to the facial validity of a law regulating private property, the court may first inquire whether the regulation is a permissible exercise of the police power. Only in that inquiry, basically a due process inquiry, is deference to legislative findings appropriate. Agins established the standard of review to be applied to the additional inquiries a court must undertake when the takings clause is invoked, however—whether the property rights restriction will “substantially advance” the legislative goal and whether the regulation goes too far and imposes public burdens on the property owner. These factual questions do not permit a deferential inquiry.

Nowhere in the majority opinion is there a critical examination of whether, in light of the facts alleged, the Santa Monica rent control ordinance has substantially advanced the purpose offered by the legislative body in .justification of the restrictions the ordinance places on owners of rental property.

I conclude that the facts alleged in the complaint are sufficient to state a cause of action on the theory that the Santa Monica rent control ordinance has not substantially advanced its purpose, and, as discussed below, on the theory that it imposes on owners of rental property a burden that should be borne by the general public. The complaint does state á cause of action in inverse condemnation.

The majority’s conclusion that the complaint fails to state a cause of action because plaintiff does not allege that that the Santa Monica ordinance has failed to substantially advance the broad legislative purpose of protecting all tenants of rental property also lacks merit. If plaintiff can show that the principal goal of the legislation—preserving affordable housing for low-income tenants, minorities, families with children, and the elderly—has not been met, it cannot be said that the law has substantially advanced the legislative purpose simply because some tenants now benefit.¹¹

B. Judicial “Repeal.”

As noted above, the plaintiff here does not seek to invalidate the Santa Monica ordinance. It seeks only just compensation for application of the ordinance to its property. A holding that compensation must be paid would not repeal the ordinance.

Moreover, a land use regulation which has a legitimate governmental purpose may be valid notwithstanding a conclusion that compensation must be paid because the regulation goes too far. The property may be taken or the property right restricted under the regulation, but just compensation must be paid when the regulation is applied.

This is so because the takings clause does not bar a governmental taking of private property. (First Lutheran Church v. Los Angeles County, supra, 482 U.S. at p. 315 [107 S.Ct. at p. 2386]; Williamson Planning Comm’n v. Hamilton Bank (1985) 473 U.S. 172, 195 [105 S.Ct. 3108, 3121, 87 L.Ed.2d 126]; Hodel v. Virginia Surface Mining & Recl. Assn., supra, 452 U.S. at p. 297, fn. 40 [101 S.Ct. at p. 2371].) The due process clause does so if there is no proper governmental purpose, but the takings clause simply mandates that just compensation be paid if property is taken or physically invaded, if a regulation of property goes too far, or if a regulation does not substantially advance the governmental purpose.

Assuming arguendo that the complaint does seek invalidation of the ordinance or that invalidation would be the inevitable result of finding that it has not substantially advanced its purpose, there would be no basis for the majority’s concern that judicial recognition that the rent control ordinance takes property without just compensation would be an impermissible or unprecendented judicial repeal of the ordinance.

The majority position reflects an erroneous view of the proper role of the judiciary. Reviewing legislation to ensure that the law does not offend the Constitution has been recognized as a proper exercise of the judicial role for almost 200 years, since Marbury v. Madison, supra, 5 U.S. (1 Cranch) 137. As the Supreme Court recognized there, determining the constitutional validity of legislation “is of the very essence of judicial duty.” (Id. at p. 176.)

This duty is not confined to assessing the constitutional validity of legislation or its application at the time of its enactment. The United States Supreme Court has rejected the majority’s restrictive view of the judicial role, one which fails to acknowledge the power and duty of the court to reconsider the validity of a law in light of actual experience with its operation. The high court did so in Chastleton Corp. v. Sinclair, supra, 264 U.S. 543 (Chastleton), when asked to consider if the emergency conditions created by World War I still existed in the District of Columbia and thus continued to justify rent control. In so doing it stated: “A law depending upon the existence of an emergency or other certain state of facts to uphold it may cease to operate if the emergency ceases or the facts change even though valid when passed. Perrin v. United States [(1914)] 232 U.S. 478, 486, 487 [34 S.Ct. 387, 58 L.Ed. 691]. Missouri v. Chicago, Burlington & Quincy R.R. Co. [(1916)] 241 U.S. 533, 539, 540 [36 S.Ct. 715, 60 L.Ed. 1148].” (264 U.S. at pp. 547-548 [44 S.Ct. at p. 406].) The court’s remand to the District of Columbia courts for an evidentiary proceeding where the facts could more conveniently be “accurately ascertained and carefully weighed” and “preserved so that if necessary it can be considered by this Court” (id. at p. 549 [44 S.Ct. at p. 406]) confirms that the judiciary has both the power and the obligation to consider evidence of changed conditions and, where necessary, to declare a law invalid.

The majority dismiss Chastleton, supra, 264 U.S. 543, as a questionable precedent, apparently finding it relevant only to whether rent control is permissible absent emergency conditions. The decision stands for a more important principle, however—the duty of the court to consider changed conditions in assessing the continued validity of a law that restricts property rights or, as here, to whether a regulation of property has over time failed to substantially further its purpose. Unwilling to assume that duty, the majority claim it would be too difficult to decide when such a claim should be entertained and assert that the court’s power to invalidate a statute on the basis of changed conditions is narrowly circumscribed. Of course, the difficulty of decisionmaking cannot justify abdication of judicial duty. The majority give no reason other than avoiding judicial “activism” for concluding that this plaintiff’s claim does not fall within the narrowly circumscribed judicial power to declare invalid a statute which impermissibly impinges on constitutional rights.

The Chastleton rule is neither suspect or circumscribed in the manner suggested by the majority. Abie State Bank v. Bryan (1931) 282 U.S. 765 [51 S.Ct. 252, 75 L.Ed. 690] is to the same effect. There the validity of a statute authorizing special assessments made under a state statute had been upheld against a takings clause challenge before the plaintiffs brought the action then before the court to enjoin collection of the assessment. The high court rejected a challenge based on the prior adjudication of validity stating: “As to the first objection, it is sufficient to say that the Bank Guaranty Law was sustained by this Court as a police regulation [citations] and that a police regulation, although valid when made, may become, by reason of later events, arbitrary and confiscatory in operation. [Citations.] In the Shallenberger case [Shallenberger v. First State Bank of Holstein (1911) 219 U.S. 114 [31 S.Ct. 189, 55 L.Ed. 117]], the suit was brought immediately upon the enactment of the law, and that decision sustaining the law cannot be regarded as precluding a subsequent suit for the purpose of testing the validity of assessments in the light of the later actual experience.” (282 U.S. at p. 772 [51 S.Ct. at p. 255], italics added; see also Nashville, C. & St. L. Ry. v. Walters (1935) 294 U.S. 405, 415 [55 S.Ct. 486, 79 L.Ed. 949] [“A statute valid as to one set of facts may be invalid as to another. A statute valid when enacted may become invalid by [a] change in the conditions to which it is applied.” (Fns. omitted.)].)

This court, too, has recognized that the initial validity of a statute does not preclude a subsequent challenge to its continued validity. “[/]« the absence of a constitutional objection . . . the courts have no right to declare a statute obsolete by reason of a supervening change in the conditions under which it was enacted.” (Palermo v. Stockton Theatres, Inc. (1948) 32 Cal.2d 53, 63 [195 P.2d 1], italics added.) “ ‘A change of conditions may invalidate a statute which was reasonable and valid when enacted.’ (Perez v. Sharp (concurring opinion) [(1948)] 32 Cal.2d 711, 737 [198 P.2d 17].) Also, due weight must be given to new and changed conditions. (Skalko v. City of Sunnyvale [(1939)] 14 Cal.2d 213, 216 [93 P.2d 93]; Bernstein v. Smutz [(1947)] 83 Cal.App.2d 108 [188 P.2d 48]; Endara v. City of Culver City, 140 Cal.App.2d 33 [294 P.2d 1003].)” (Gaylon v. Municipal Court (1964) 229 Cal.App.2d 667, 671-672 [40 Cal.Rptr. 446].)

Skalko v. City of Sunnyvale (1939) 14 Cal.2d 213 [93 P.2d 93] (Skalko), which the majority concede is relevant, applies this rule to a zoning ordinance which, because of changed conditions over a period of time, no longer carried out the legislative intent and, in the view of this court, had become confiscatory. We held there that “the police power must be applied to existing conditions. [Citation.] ‘The principle that a police regulation, valid when adopted, may become invalid because in its operation it has proved to be confiscatory, carries with it the recognition of the fact that earlier compliance with the regulation does not forfeit the right of protest when the regulation becomes intolerable’. (Abie State Bank v. Bryan, 282 U.S. 765.) When conditions have changed since the legislative action was taken, ‘statutes and ordinances, which, after giving due weight to the new conditions are found clearly not to conform to the Constitution, of course, must fall’. [Citation.] The question, therefore, is whether under the facts shown by the appellant his rights are now being invaded by the existence and maintenance of the ordinance.” (14 Cal.2d at p. 216.)

Contrary to the majority, I conclude that the same rule must apply when a statute that was a valid exercise of the police power when enacted, because it was reasonably designed to achieve a proper governmental purpose, but would otherwise impermissibly infringe on private property rights, is shown after a reasonable period of implementation to fail to achieve that purpose. Although Skalko was an “as applied” challenge to the continued validity of the zoning ordinance, there is no reason that the rule should not be equally applicable to a challenge like this to the continued application, without just compensation, of a rent control ordinance that does not achieve the legislative purpose that justified it.

Plaintiff has brought such a challenge. It has alleged facts to support its claim that the Santa Monica rent control ordinance has not achieved the legislative purpose that justified it. If so, just compensation must be paid if the law is to continue to be applied. I find it remarkable that the majority justify their refusal to follow Chastleton and Skalko to enforce the takings clause on the ground that carrying out the court’s constitutional duty would force the court into an activist role. Two centuries of jurisprudence since Marbury v. Madison, supra, 5 U.S. (1 Crunch) 137, have escaped notice. Apparently questions of first impression will no longer be entertained lest their resolution propel the court into an activist role.

V

The Complaint Also States Facts to Show That the Santa Monica Rent Control Ordinance Goes “Too Far”

Rent control is not simply a species of price control subject to a due process-type analysis like that undertaken by the majority. The analytical focus in assessing whether rent control constitutes a taking for which the takings clause of the Fifth Amendment mandates just compensation must be directed to the means by which rent control accomplishes its purpose. The Santa Monica rent control ordinance takes from the property owner the right to charge market rent for the owner’s property and by so doing compels the owner to subsidize the tenant. It depresses the value of the rent-controlled property. Under a scheme like that before the court the tenant is given the right to occupy the owner’s property for an indefinite period. Finally, except to the extent it has been superseded by state law (see Gov. Code, § 7060 et seq.), the Santa Monica ordinance restricts the ability of the owner to turn the property to other uses.

Even when the public purpose of rent control, that of ensuring a supply of affordable housing, is achieved, the property owner does not receive a reciprocal benefit corresponding to or justifying the restriction on the owner’s property rights. Thus, the property owner is forced to bear the burden of providing affordable rental housing to those tenants unable to pay market rents, a burden that in justice should be borne by the community as a whole. This burden is not imposed on the property owner because rent control is the only or even the best means of ensuring affordable housing. Governmental rent subsidies and/or government assistance in creating affordable housing through new construction or rehabilitation of existing, underutilized structures can achieve the same end while better ensuring that the low-cost housing thereby created is occupied by persons who most need assistance with rent. When a city resorts to those alternatives, the public bears the burden as the cost is shared by all through taxes. A city which opts instead for rent control to achieve its purpose puts what should be recognized and assumed as a public burden on the owner of rental property.

None of this is true of other forms of price control. While they, too, restrict an investor’s right to maximize the return on the investment, they do not control the use or disposition of the property in which the investment is made. No individual is given the right to use property owned by another. Under price control the owner may destroy and/or turn the property that generates the controlled item to other uses. No individual is directly subsidized by the price restriction and the public as a whole, not solely the individuals who use the investor’s product, benefits. Therefore, while there may be some burden on use of the income-generating property, and the takings clause may not require that just compensation be paid when other forms of price control are instituted, those types of price control are not analogous to rent control.

The majority not only abdicate the judicial role by refusing to assess whether the Santa Monica ordinance has substantially advanced its declared purpose, they also fail to recognize the court’s duty to assess whether the various restrictions the Santa Monica ordinance has imposed on the owners of rental property in using that property go too far by imposing on owners of rental property the burden of subsidizing tenants.

The complaint in this action states facts to establish a taking without payment of just compensation to owners of rental property in violation of the takings clause on this ground. The Santa Monica rent control ordinance causes a taking for which compensation must be paid because it imposes on owners of rental property a burden that in fairness and justice should be borne by the public as a whole. The ordinance compels the owners of rental property to subsidize the housing costs of their tenants, denies owners the option of turning the property to other uses, and invests the tenants with lifetime occupancy rights—all for the purpose of providing a supply of “affordable” rental housing for tenants.

For those reasons the Santa Monica ordinance does not withstand scrutiny under the standards by which a court determines whether a land use regulation goes too far. Regardless of how the factors the Supreme Court has indicated are relevant to that determination are weighed, the law cannot satisfy the ultimate test—does it impose on owners of rental property a burden that in justice and fairness should be borne by the public as a whole. Santa Monica may not compel the owners of grocery stores to subsidize their needy customers. Subsidizing rent or other necessities of life for persons in need of financial assistance is a public responsibility to be financed through general tax revenues. It is not an obligation of owners of rental property. The city has no right to shift the burden of subsidizing housing to the owners of rental property.

Application of the Penn Central and “reciprocity of advantage” factors leads to the same conclusion—the Santa Monica rent control ordinance goes too far. The ordinance has a significant economic impact on a property owner, not only through devaluation of the controlled property, but also in compelling the owner to forego market rate rental income. In addition to taking from the owner the right to have rents determined by market forces, the Santa Monica law takes the right to terminate tenancies and select new tenants, and even the right to go out of the rental business short of simply leaving the property unoccupied. The ordinance totally frustrates the investment-backed expectations of any owner who invests in rental property, and particularly those who owned property before the law was enacted.

The character of the governmental action—controlling rent in order to forestall excessive and exorbitant rent increases—may have a proper governmental purpose insofar as it assists persons unable to afford safe and decent housing, but to achieve that purpose the law requires private property owners to subsidize their tenants. That is a burden that in fairness and justice should be borne by the community as a whole. “[Rjent control obviates the need to put public money behind public measures.” (Jones, Confiscation: A Rationale of the Law of Takings (1995) 24 Hofstra L.Rev. 1, 84.) And, as noted above, the Santa Monica ordinance compels owners of rental property to subsidize even the wealthy.

Finally, there is no “reciprocity of advantage” whatsoever in being subject to the Santa Monica rent control ordinance. The community benefits because Santa Monica is able to provide “affordable” housing without using general tax revenues to do so. This is not comparable to the community benefit generated by zoning laws and similar land use restrictions which enhance the value of many, if not most, properties and protect the quality of life for all residents, however. Under the Santa Monica ordinance the benefits all flow one way, to the tenant who is subsidized and the taxpayers who are relieved of the burden of providing affordable housing through general tax revenues. The owner of rental property, on the other hand, receives no benefit from the rent control ordinance and the value of the rent-controlled property declines.

“The traditional manner in which American government has met the problem of those who cannot pay reasonable prices for privately sold necessities—a problem caused by the society at large—has been the distribution to such persons of funds raised from the public at large through taxes, either in cash (welfare payments) or in goods (public housing, publicly subsidized housing, and food stamps). Unless we are to abandon the guiding principle of the Takings Clause that ‘public burdens . . . should be borne by the public as a whole,’ Armstrong, 364 U.S., at 49, this is the only manner that our Constitution permits. The fact that government acts through the landlord-tenant relationship does not magically transform general public welfare, which must be supported by all the public, into mere ‘economic regulation,’ which can disproportionately burden particular individuals.” (Pennell v. San Jose, supra, 485 U.S. 1, 21-22 [108 S.Ct. 849, 863] (dis. opn. of Scalia, J.).)

Although Justice Scalia was addressing a provision of the San Jose rent control ordinance which permitted the administrators to consider tenant hardship in fixing rents, and he assumed the validity of rent control to prevent excessive rent, his reasoning is equally applicable to rent control in general. The Santa Monica rent control ordinance forces owners of rental property to bear what should be a public burden. It thus creates a taking of property from any owner of rental property to which it is applied, a taking for which the takings clause mandates just compensation.

I would affirm the judgment of the Court of Appeal.

1 Rent control in Santa Monica is imposed under article XVIII, an amendment to the Santa Monica City Charter. Because article XVIII has the effect of a city ordinance, that term is used here for convenience.

2 As relevant here, the Fifth Amendment provides that no person shall “be deprived of. . . property, without due process of law; nor shall private property be taken for public use without just compensation.” The latter provision is commonly referred to as the “takings clause.”

3 The complaint states a cause of action on a third ground—the Santa Monica rent control ordinance is not a valid exercise of the police power. There is no legitimate governmental interest in granting rent subsidies, through rent control, to tenants able to afford market rate rentals.

Although this is not a theory of relief identified by plaintiff in its complaint, the law is well settled that a complaint must be upheld against a demurrer if it states a cause of action on any theory. (American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118 [51 Cal.Rptr.2d 251, 912 P.2d 1198]; Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1232 [44 Cal.Rptr.2d 352, 900 P.2d 601].) This is true whether or not the plaintiff has correctly identified the legal theory on which relief is available. (5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 905, p. 366.)

Nonetheless, since plaintiff has limited its challenge to one under the takings clause, I shall not pursue this theory further than to comment that the demographics of Santa Monica suggest that the benefits of rent control flow directly to persons who are able to afford market rate rents. Presently the median family income in Santa Monica is $51,085, and the per capita income of its residents is $29,134. More than 19 percent of households have income of $75,000 or more and over 15 percent of households have income between $50,000 to $74,999. Forty-three percent of residents over 25 years of age have bachelor’s degrees or higher. In 1989 only 5.7 percent of families and 9.1 percent of persons over 65 years of age had incomes below the poverty level. Only 4.8 percent of households received public assistance. (U.S. Bureau of the Census, County and City Data Book: 1994, pp. 690-691.)

4 Plaintiff has challenged that action in a petition for writ of (administrative) mandamus joined with the instant complaint for inverse condemnation that is still pending in the superior court.

5 California Constitution, article I, section 19, provides in pertinent part: “Private property may be taken or damaged for public use only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner.”

The Fifth Amendment is applicable to the states through incorporation into the Fourteenth Amendment. (Webb’s Fabulous Pharmacies, Inc. v. Beckwith (1980) 449 U.S. 155, 160 [101 S.Ct. 446, 450, 66 L.Ed.2d 358]; Chicago, Burlington &c. R’d Co. v. Chicago (1897) 166 U.S. 226, 239 [17 S.Ct. 581, 585-586, 41 L.Ed. 979].) While article I, section 19, of the California Constitution protects a broader range of property rights than does the Fifth Amendment (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 9, fn. 4 [32 Cal.Rptr.2d 244, 876 P.2d 1043]; Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 298 [142 Cal.Rptr. 429, 572 P.2d 43]), it does not do so with respect to rent control legislation. For ease of reference, therefore, I refer only to the takings clause or Fifth Amendment.

6 Wilson v. Brown (Emer.Ct.App. 1943) 137 F.2d 348 rejected a challenge to rent ceilings imposed in Chicago pursuant to the Emergency Price Control Act. The property owner complained that the rent adjustments permitted did not produce a fair return on investment. The court questioned any analogy between the due process requirement of fair return on value in rate regulation for public utilities to the requirement of just compensation for taking of property by eminent domain, but relied on the war powers doctrine to sustain application of the law to rental property. “[W]e are satisfied that principles derived from the law of eminent domain are not the proper constitutional criterion for determining the validity of a nation-wide program of price and rent control enacted by Congress under its war powers. In the case of public utilities there is an extensive and permanent regulation of the use of the properties in the public interest, of which the regulation of rates is only a part. The situation more nearly approaches a ‘taking’ of the properties, or the use thereof, than in the case of war-time rent regulation. . . . [T]he Emergency Price Control Act is concerned with the regulation of prices and rents which are normally determined by the operation of economic forces in a free competitive market; it is not designed ‘as a permanent substitute for the normal operation of competitive forces, but as a bridge over a period of emergency when the normal influences of the market place are temporarily distorted by war conditions.’ The useful life of housing accommodations extends far beyond the contemplated period of rent control. There is, in fact, no appropriation of the housing accommodations at all, and so far as there is a narrow restriction on their use, it is for a very limited period. ‘A limit in time, to tide over a passing trouble, well may justify á law that could not be upheld as a permanent change.’ Block v. Hirsh, 1921, 256 U.S. 135, 157, 41 S.Ct. 458, 460, 65 L.Ed. 865, 16 A.L.R. 165. ... The landlord is . . . free to occupy the property himself, or devote it to some commercial enterprise, or utilize it in any other way. This serves to emphasize that there has been no ‘taking’ of his property in the constitutional sense.” (Id. at pp. 351-352.)

7 I am not alone in this conclusion. (See Radford, Why Rent Control Is a Regulatory Taking (1995) 6 Fordham Envtl. L.J. 755. (Radford); Stout, Making Room at the Inn: Rent Control as a Regulatory Taking (1990) 38 Wash. U. J. Urb. & Contemp. L. 305.)

The petitioners in Yee v. Escondido (1992) 503 U.S. 519, 526 [112 S.Ct. 1522, 1527-1528, 118 L.Ed.2d 153] did not make a claim that rent control statutes violate the takings clause.

8 In Lucas v. South Carolina Coastal Council, supra, 505 U.S. 1003, the court noted only two categories of interference which inevitably go too far and for which just compensation is mandated by the Fifth Amendment—physical occupation of any part of the property (see Loretto v. Teleprompter Manhattan CATV Corp. (1982) 458 U.S. 419 [102 S.Ct. 3164, 73 L.Ed.2d 868]) and a regulation which denies the owner all economically beneficial or productive use of land (see Agins, supra, 447 U.S. 255).

9 To the extent that this holding is based on a perceived inadequacy of the census data to support the claim, the majority again err. The plaintiff need only allege facts. (Code Civ. Proc., § 425.10, subd. (a).) All that is necessary is that the pleading as a whole apprise the defendant of the factual basis of the claim, (Jackson v. Superior Court (1994) 30 Cal.App.4th 936, 942 [36 Cal.Rptr.2d 207]; Semole v. Sansoucie (1972) 28 Cal.App.3d 714, 718 [104 Cal.Rptr. 897]; see 4 Witkin, Cal. Procedure, supra, Pleading, § 339, p. 437.) Santa Monica Beach, Ltd., has done that. There is no requirement that all evidence that might support the claim be recited in the complaint. A plaintiff may obtain additional evidence after the filing of the complaint.

10 The majority’s willingness to defer to legislative judgment in this case is curious. In Professional Engineers v. Department of Transportation (1997) 15 Cal.4th 543 [63 Cal.Rptr.2d 467, 936 P.2d 473], a majority of this court refused to defer to legislative judgment, but here the majority see no inconsistency in refusing to permit this plaintiff to offer evidence that the Santa Monica ordinance does not substantially advance the legislative purpose. They attempt to distinguish this case as one involving neither a “fundamental” right nor a constitutional provision that has been “construed to prohibit a certain type of government action absent specific factual findings.”

The popular view that property rights receive a lesser degree of constitutional protection because they are not “fundamental” is itself suspect. Protection against taking without due process or just compensation has been accorded to property rights under the United States Constitution since 1791 when the Fifth Amendment was ratified as part of the Bill of Rights. The same protections have existed in California since this state joined the Union in 1850, set out in the Declaration of Rights (art. I) of both the 1849 and the 1879 California Constitutions. Nothing in either the federal or the state Constitution suggests an understanding that property rights are inferior to other rights accorded constitutional protection or that the drafters did not consider property rights as “fundamental” as the other rights sought to be protected. Indeed, the tenor of the time suggests otherwise. (See Calder v. Bull (1798) 3 U.S. (3 Dall.) 386, 388 (opn. of Chase, J.) [“An act of the legislature (for I cannot call it a law), contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority. ... [¶] ... a law that takes property from A. and gives it to B: it is against all reason and justice, for a people to entrust a legislature with such powers; and, therefore, it cannot be presumed that they have done it.”].)

Nonetheless, a judicially created hierarchy has relegated property rights to a second class status which, it is claimed, justifies a distinction between property rights and “fundamental” rights when the validity of legislation impinging on constitutional rights is called into question. Although constitutionally unsupportable, this distinction persists in decisions of this court and the United States Supreme Court and underlies much of the reasoning and analysis of the majority.

In my view the right to just compensation for property taken by the government is very fundamental. Be that as it may, however, a claim for jqst compensation made under the takings clause as construed in Agins, and applied in Nollan and Dolan, does require specific factual findings. Indeed, as the majority recognize elsewhere (maj. opn., ante, at p. 964), determining whether a taking occurs under a land use regulation requires “ ‘essentially ad hoc, factual inquiries.’ ” (Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1015 [112 S.Ct. at p. 2893].) By characterizing the question presented here as the extent to which the government may regulate rent increases, the majority avoid this inescapable conclusion. The issue here is not the extent to which rents may be regulated. It is whether the regulation imposed by the Santa Monica ordinance constitutes a taking because it does not substantially advance the legislative purpose. That is a factual question.

11 It might not be inappropriate to take judicial notice that tenants well able to afford market rents continue to occupy rent-controlled apartments in Manhattan for their lifetimes, paying only a few hundred dollars for apartments that would rent for thousands in a free market. In some cities, including Santa Monica, would-be tenants pay thousands of dollars in “key money” to landlords for the right to rent desirable units, agreeing also to make all repairs, knowing that once they become tenants they will not have to pay market rent and cannot be evicted. With regard to the impact of rent control in Santa Monica in particular, see Wilkinson, Death Threats and Long Waiting Lists, Santa Monica: A House Divided by Rent Control, Los Angeles Times (Apr. 29, 1989) page 1-1, column 1.

When rent control becomes this perverted, it can hardly be said that it has substantially advanced its purpose.

Moreover, empirical studies of rent control in several United States cities, including Santa Monica, have shown that far from mitigating the shortage of affordable housing, in rent-controlled cities the supply of affordable housing has been reduced, harsh costs have been imposed on the groups the Santa Monica ordinance particularly seeks to protect, and both the quantity and quality of rental housing in those cities has decreased. (See Radford, supra, 6 Fordham Envtl. LJ. at pp. 669-770, and authorities cited.) The author observes: “A sizable body of research suggests that rent control not only reduces the available stock of affordable housing, but also redistributes this dwindling supply regressively within the population of renters, [¶]In California, rent control has tended to be adopted in cities with relatively wealthy electorates. The demographic evidence has never supported the claim that rent control was adopted in these cities to ease the burdens of the poor. Instead . . . ‘the major beneficiary of regulatory controls in each case was (and still is) a population that is firmly entrenched in the middle class.’ ” (Id. at pp. 770-771, fns. omitted.)

The assumption of the majority that the political process is adequate to correct any injustice to owners of rental property subject to rent control reflects a startling naivete for a court that sits in a rent-controlled city in which a substantial majority of voters are renters. It is axiomatic, of course, that the protections embodied in the Bill of Rights exist to ensure that majoritarian preference will not suffice to deny citizens those rights. “The sovereignty of the people is itself subject to those constitutional limitations which have been duly adopted and remain unrepealed.” (Hunter v. Erickson (1969) 393 U.S. 385, 392 [89 S.Ct. 557, 561, 21 L.Ed.2d 616]; see also Eastlake v. Forest City Enterprises, Inc., supra, 426 U.S. at p. 676 [96 S.Ct. at p. 2363]; Lucas v. Colorado Gen. Assembly, supra, 377 U.S. 713,136-Til [84 S.Ct. 1459, 1474]; West Virginia State Board of Education v. Barnette (1943) 319 U.S. 624, 638 [63 S.Ct. 1178, 1185, 87 L.Ed. 1628, 147 A.L.R. 674].)