Brief Fact Summary. The Town of Telluride enacted an ordinance which was intended to provide affordable housing to employees of developments by requiring developers to create affordable housing for forty percent of employees generated by the development. This ordinance was challenged on the basis that it was a rent control, in violation of a statutory prohibition against rent control.
Synopsis of Rule of Law. Where an ordinance of a town constitutes an attempt to control rent, in contravention of state law, the ordinance will not be enforceable.
Issue. Do the provisions of the ordinance and guidelines constitute an attempt at rent control in violation of the statute prohibiting rent control by municipalities?
Held. Yes. Judgment of the intermediate appellate court affirmed.
When construing the statute proscribing rent control, in the absence of legislative definitions, the Court will be guided by the language of the statute and give the words therein their plain and ordinary meaning.
Rent control mean that allowable rent is capped at a fixed rate with only limited increases. Because the ordinance clearly fixes the maximum rent for the affordable housing units and also limits the increase per year to 2.5%, the ordinance clearly contemplates rent control.
Because the statute’s meaning is clear, legislative history need not be considered. Also, because the meaning of the town’s ordinance is clear, the conditions which gave rise to the enactment of the statute need not be considered.
The Court finds that the most important fact is that the ordinance forces developers to offer space to rent at a level below that which the market can bear. The statute proscribing rent control does not distinguish between pre-existing property and developed property, so it is unimportant that the developer could plan to include a certain amount of affordable housing in the development.
Discussion. This case is an example of the difficulties rapidly developing communities face. Rent control statutes, although not considered by this Court, are possibly not aimed at prohibiting the type of conduct in which the town engaged. However, when, as here, the meanings of the competing laws are clear, the state statute will take precedence over the local ordinance.