Pennell v. San Jose - Impact

San Jose's rent control ordinance was carefully crafted to protect both landlords and tenants. The U.S. Supreme Court found no evidence that any landlord in San Jose was or would ever be aggrieved by the application of the tenant hardship provision of the ordinance. The majority judged that a city's ordinance which sought to ensure fair and equitable rent control did not violate clauses of either the Fifth or Fourteenth Amendments if its provisions were not arbitrary, discriminatory, or irrelevant to state policy. Further, the Court found that when the provisions of an ordinance such as those of San Jose served a legitimate state interest (in this case, rent control that specifically protected low-income tenants), it was not inconceivable that some landlords would be subject to different treatment depending on whether or not they had "hardship tenants." The Court reasoned that tenants' hardship was as equally relevant as landlords' interests when a city ordinance served a legitimate purpose. Thus, in rendering their decision, the Court emphasized that cities (and states) had a legitimate interest in protecting consumer welfare.