The City's rent control program, initiated in 1988, issues to apartment owners annually a certificate that states what the maximum rent owners can charge for each of their units based on a set formula that applies a CPI increase to the previous year's rent ceiling. Beyond the year it was implemented, however, the program does not take into consideration the actual market rent being charged at the property, and because the owners who sold their properties to Page Mill hadn't maxed out the rents – either because the properties' condition didn't warrant it or prospective tenants could not afford it – the difference between the rent ceiling and market rents had grown to about 37%.

The City Council, apparently concerned that Page Mill might try to max-out rents, passed an "urgency ordinance" that restricted rent increased to 3.2% above the actual rent being charged at the properties. This week, Judge Beth Larson Freeman ruled the temporary ordinance unenforceable for several reasons, not the least of which is that the voter-approved rent control program, known as the Rent Stabilization Ordinance, cannot be modified but by the voters.

According to the court decision, the City argued that its temporary ordinance merely clarified an ambiguity in the ordinance; the judge was not convinced. "This court accords great weight to the consistent application of the RSO by the Rent Board for 20 years and is not persuaded by the City's change in view," she states in her decision. City officials did not respond to a request for comment.