RENT CONTROL

Rent control is the hot button issue today, hands down.  Whether the “California Property Owners Protection Act,” condo conversion, economic eviction, affordable housing, or whatever, it is all about rent control.  And this issue DOES AFFECT you, whether or not you live in an area with rent control.

HISTORY

Today, approximately 25% of Californians live in rent control areas, in slightly over 100 cities and 9 counties.  Many mobile home resident groups, in areas without rent control, are working hard to secure rent control for their area (Modesto, Clear Lake, Banning, Loma Linda and others).  Remember, if you do not have rent control, your park owner may raise your rents as often as every 90 days and by any amount!  This impacts all renters, but mobile home owners are the most vulnerable because we have the most to lose—the homes that we own!

CALIFORNIA PROPERTY OWNERS PROTECTION ACT

Do you remember Proposition 90, the “Protect Our Homes Initiative?”  Although a coalition of hundreds of organizations (the NO ON 90 folks)  raised over $11 million, it was barely defeated.  Today, land owners continue their efforts to rid the state of rent control.  Now in the form of the California Property Owners Protection Act, it was submitted a third time to the California State Attorney General for a title and summary, which should be done by April 5, 2007.  Unlike Proposition 90, this new initiative comes right out and says it will eliminate ALL rent control.  We understand the new version would phase out rent control three years after it passes.

If passed by the voters, the affects would be devastating across the state.  Here in Los Angeles, rents could increase 100% or more.  (Remember our tip—for every $10 increase, we estimate the value of your home decreases $1000.  For example, if you received a $500 monthly rent increase, the value of your home would decrease $50,000, OVERNIGHT).  Just think of all the mobile home owners that would LOSE their homes and be forced to walk away.  You could easily be one of them, especially if you are low income or a senior on a fixed income!  Does this sound scary?  Well just ask the hundreds of thousands of mobile home owners that would be affected.  Once the CPOPA gets a title and summary, supporters must obtain 695,000 signatures before it gets on the ballot—perhaps November, 2008.  Please refer to previous issues of THE VOICE for more information on this initiative.

CONDO CONVERSIONS

On February 28, 2007, the Senate Select Committee on Mobile/Manufactured Homes held a hearing on condo conversions.  If you remember, “condo conversions” is the latest tactic being used by park owners to break rent control in mobile home parks.

Park owners argue this is a property rights issue and that “park condo conversion” – as it is known in the vernacular – is one of the few methods by which they can recapture (continued on Page 3, Rent Control)(Continued from Page 1, Rent Control) the market value of their parks in rent control jurisdictions, as well as bring rents for non-buying non-low income residents, who they say are usually able to pay a greater share of their rental housing costs, up to “market.”

Residents claim the state law in question was not originally intended to be used by park owners to convert parks to resident ownership and is now being adapted to allow parks to circumvent local rent control, gentrify affordable housing and economically evict low-moderate income homeowners, many of whom cannot afford the asking prices for their spaces or “condo” interests.  Although this is a complicated issue, here are some facts:

El Dorado Case:  El Dorado Mobile Country Club is a 377-space mobilehome park located in Palm Springs. This was the first known case of a park converted to resident ownership by a park owner. The City of Palm Springs, concerned about allegations that the conversion was a “sham” driven by a park owner whose motive, according to some park residents at the time, was to sell a few lots in the park to circumvent the city’s rent control and other local regulations, imposed several conditions on the subdivision map.  These included, among others, that the map would not be effective (meaning the park would not be exempt from city rent control) until 50%-plus-1 of the lots were sold to residents.  The El Dorado park owner sued the city, claiming the effective date of conversion was when one lot was sold and that the city had          exceeded its authority under the state’s Subdivision Map Act to impose more stringent requirements for a park conversion, as it might do for other kinds of conversions, such as conversion of an apartment to a condominium.  Although the city won the first round, the park appealed, and the 4th District Court of Appeal reversed (El Dorado Palm Springs, Ltd., v. City of Palm Springs, 2001).  The appellate court ruled that the city was limited by the state’s Subdivision Map Act and opined that the question of whether there should be more protections in the statute to prevent “sham” resident conversions by park owners was a legislative, not legal, issue.  In other words, condo conversions can break rent control because of this decision in 2001.

The Keeley Bill:  As a result, AB 930 (Keeley, 2002) was introduced to permit local governments to impose additional requirements on the conversion of a mobilehome park to a ROP subdivision or condominium.  The bill was heavily lobbied and debated, with mobilehome owners, housing advocates and local governments supporting the bill and park owners opposing it.  As finally passed and signed by the        Governor, the Keeley bill allowed local governments to require park owners as part of the map act process to provide the city with “a survey of support” indicating resident support for a proposed ROP conversion and included un-codified language stating the bill was intended to assure such conversions were “bona fide” in accordance with the El Dorado case.  Because the language was not clear, there are differing views on whether a city can deny a “park condo conversion” if the survey showed little or no resident support for the conversion.

To date, park-owner initiated conversions appear to be taking place in Buellton, Carson, Ojai, Vallejo,   Sonoma County, Santa Rosa, Healdsburg, Rohnert Park, and San Luis Obispo County.  The Select Committee has been able to document 12 such parks to date statewide.  Some local governments have placed temporary moratoriums on these conversions, although at least one jurisdiction is reportedly being sued by a park owner over the moratorium.

(The source of much of this article was taken from the Senate Select Committee fact sheet entitled:       Conversion of Mobilehome Parks to Subdivisions or Condominiums)

February 28, 2007 Hearing