Dear Jennifer Svec:

I am a past member of the C.A.R. and Board of Realtors here in Santa Barbara.

I have been watching the actions of the C.A.R. group and do not approve of their efforts to remove rent control. Likewise, I disapprove of your efforts to make it easier for park owners to force the residents to convert their property to condo status.

Your organization needs to be aware that there is a huge amount of equity at risk regarding these matters. For example, 3 years ago we purchased our 1964 mobile home for $225,000. We have invested another $25,000 fixing it up. Our mobile home park is under rent control and has been for the past 18 years. If rent control was weakened or destroyed by the Jarvis Initiative or by AB 1309, our equity would be severely reduced. Without bills such as SB 900, we could also lose our rent control by means of forced conversions. When vacancy control or rent control was lost in Santa Cruz and in Santa Barbara, the mobile home equities fell to near $0.   Seniors were especially devastated.

There are 324 homes in our park with an average value of $250,000, or approx. $80 million for all the homes. The land under these homes with the accompanying amenities has been appraised at $40 million.  The average home turns over approx. every 7-10 years, as the owners die or move to assisted living in most cases. The resulting value to Realtors assisting in the sale of these homes is immense; whereas the revenue from the owners of the land is $0 over the last 43 years.  It baffles me that C.A.R. would take a position that basically “shoots themselves in the foot” where  they would help destroy our rent control thereby destroying our equity which could lead to the result of the residents blaming C.A.R. for endorsing the actions that led to this. Even if it didn’t result in a negative “fall guy blaming” of C.A.R. it would mean much less revenue for agents trying to sell a “don’t want it” market in mobile homes.  Assuming history repeats itself and the values go from $200,000 to $20,000 that equates into 1/10 of the income realtors would have from the sale of these homes. You are supporting the wrong group when you think about the results of your actions.

Articles in major newspapers will carry the stories if rent control is lost. GSMOL and COMO-CAL, which represent  mobile home residents statewide, will likewise circulate the news. The relatives and friends of these residents will also be informed of C.A.R.’s actions. Many people will lay blame on C.A.R. for its role in the displacement of tens of thousands of seniors and disabled mobile home residents throughout Calif.

When I was a landlord, I did not like the idea of rent control, but this is not the same situation. Mobile home parks have been under rent control for a very long time. The park owners have invested in this scenario regardless, because it has a safe and sure return that increases every year. Rent-controlled mobile homes are also the largest  sector of “affordable housing”  in the state and that should not be jeopardized.  Houses have their protection with Prop. 13 and fixed interest rate loans. Why can’t mobile homes have a similar level of protection with rent control,  especially for senior, disabled, and low income residents?

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Another consideration is the fact that mobile homes fall under a Oligopoly category, which will likely be litigated upon in the future. The owners that run these parks have a trapped renter that has no choice but to pay what is dictated to him under a “free market” environment. The home cannot be moved to other parks because they are usually too old, it is too expensive to move, and the residents sometimes are too old to be engaged in such in activity.  That is why rent controls need to remain in place.               .

There will definitely be class action lawsuits. The defendants will be the pre-informed or forewarned parties who knew that their actions would bring losses in the billions of dollars to mobile home owners.   The defendants will include the Realtors and their brokers who have been involved in mobile home transactions. They in almost all cases failed to properly “disclose” the facts to buyers and sellers of these mobile homes.  Frequently, there was pending and proposed legislation to get rid of rent control, even while the parties were negotiating.              .
Sincerely,.

Roger Svensson

Retired Realtor, engineer, and financial analyst

Rancho Santa Barbara, Santa Barbara, Ca.       rogersvensson2005@yahoo.com