By Jonathan Volzke, The Capistrano Dispatch
Feb  1, 2008

In some ways, it’s as much a tradition in San Juan Capistrano as the Swallows Day Parade, Summer Nites Concerts or the Historical Society’s Old-Timer’s Picnic: If you live in one of the city’s seven mobile-home parks, you’re protected by a rent-control ordinance.

The ordinance was put into place in 1978, generally limiting any rent increase to an annual amount based on the consumer price index. In 1978, the issue was before residents again, seeking to strengthen the ordinance and keep rents low even when a new owner buys into the park. That was the fiercely fought Measure A. Park owners banded together against a group of residents who called themselves Help Our People Exist.

Even then, it was a battle watched throughout the state. And residents won by a landslide, securing 74 percent support. The 1978 an amendment prohibited park owners from increasing the rent to market rates when a new owner moved in.

It’s been a battle fought again and again in City Hall since then, still pitting park owners against residents. Whenever it comes up, residents from the seven mobile home parks throughout town watch closely. So far, the ordinance has survived without a dent.

That might change in June, though. A statewide ballot initiative touting itself as a property-owner protection from eminent domain would also phase out rent control statewide. San Juan Capistrano is among 110 California cities and counties that have rent-control laws, covering 230,400 people in about 153,145 mobile homes. The initiative, which has received substantial backing from mobile home and apartment-owners committees, is called The California Property Owners and Farmland Protection Act. (Now Proposition 98)

San Juan Capistrano has about 1,214 mobile homes in town, housing an estimated 3,000 people. While most are not officially counted as affordable housing, the parks offer a variety of entry level options and often house the working class or seniors.

Manufactured housing representatives say cities prefer rent control to building affordable housing to create balanced communities.

“Local governments have essentially decided to have socialized housing here,” said Sheila Day, executive director of the Sacramento-based Western Manufactured Housing Communities Association. “They’re just holding mobile home park owners hostage to satisfy their need to provide affordable housing.”

Residents argue the local ordinance is vital, especially in South County, where housing costs have for years shot upward.

“Rent control has helped us avoid all of the crisis this housing bubble would have created,” said Jim Vance, a resident in the 152-unit Capistrano Terrace Mobile Home Park on Valle Road. “Without rent control, the housing bubble would have destroyed the middle and lower classes. This harms most of the people who can afford it least.”
So far, the proposal has been largely flying under the local radar. City officials said they were unaware of the measure, as did even some local park owners and residents. The measure would specifically allow park owners to raise the ground lease for a unit to market rates after the unit becomes vacant.

Park owners have long complained that allowing rent-control rates to pass from one owner to the next creates an artificial premium on the value of the mobile home. Park owners say while they have to pay for infrastructure and park operating costs, it’s the owner of the unit selling their coach who cashes in on the value of the rent control.

“We are writing to you to notify the city that tremendous premiums are being paid on the resale of older mobile homes in our park,” an attorney representing the Rancho Alipaz Mobile Estates wrote the city more than a decade ago. “San Juan Capistrano’s rent control ordinance, which has depressed home sites’ rent far below market values, has created an environment where the incumbent sellers of mobile homes can sell their homes for prices which exceed the home’s intrinsic market value by many tens of thousands of dollars.”

The city’s ordinance allows park owners to raise rents higher than the formula with residents’ approval or special City Council action. Attorneys for San Juan Mobile Estates, also on Alipaz, made the argument about the artificial premium when they asked for a rent increase in 2003.

Their request was denied, and the park owners ultimately sold the park to the nonprofit Millennium Housing Corp., which owns 16 other parks in California. Millennium agreed to abide by the rent ordinance even if it’s ultimately tossed out, Millennium President George Turk said.

Capistrano Terrace’s new owners, Advanced Real Estate, also applied for an extra rent increase after buying that park. They contended the age and condition of the park—it opened in the ’50s as a trailer campground on a hillside above town and evolved into a year-round mobile home park—demanded higher rents to pay for the necessary improvements. They were denied, too.

“We’re on the horns of a dilemma,” said Ray Poulter of Advanced. “The residents think the basic infrastructure needs to be upgraded, and to do that, you’re looking at $1 million or $2 million—and there’s not a mechanism for recouping that. If you want to do major upgrades, you have to get residents to approve the increase, and that ain’t going to happen.”

After the rent increase for Capo Terrace was rejected, park owners moved to shut it down. A report on how residents could be relocated, and what it might cost, has just been completed. The park ownership and residents are unhappy with the report, which will next go before the Planning Commission.

Despite the increasing pressures on the ordinance, an ambiguous name and even a late start, rent-control advocates predicted groups will again organize to beat back this attempt, too.

Jack Heath, a resident in the 230-space Capistrano Valley Mobile Home Estates on Avenida Aeropuerto, said he recently saw a newspaper article on the measure. He clipped it out. He said residents will rally against it.

“You can depend on it,” Heath said. “Now that we’re aware of it, we’ll certainly fight for it. We’ll be after the city or the state or whoever with our colored shirts or signs or whatever we can.”