SACRAMENTO The heated legislative skirmish between those who own mobile home parks and those who live in them escalated this week when an Assembly committee approved a proposed state law that would nullify local rent-contro ordinances and allow unlimited rent increases for new tenants whenever coaches are sold.
The vote of the Assembly Housing and Community Development Committee on Wednesday was a victory for park owners in a two-front battle that has reignited the debate over mobile home rent controls, a debate that residents largely won in the 1980s.
More than 100 California cities and counties restrict the rents that park owners can charge residents for the spaces on which their homes sit. As a result, park owners were left behind as real estate values skyrocketed over the last several years, with the value of their properties remaining stagnant even as the values of other real estate holdings soared.
That phenomenon has spurred renewed efforts among park owners to find ways to get out from under rent controls. One method spreading across the state is for owners to convert their parks to condominium ownership, an arrangement that legally allows them to skirt local rent controls on the remaining spaces as soon as single spaces are sold.
Earlier this year, owners of two Ventura County mobile home parks took initial steps toward conversion, and last week the owners of Ventura’s Star Dust Mobile Estates informed residents of their intent to do the same.
Mobile home park residents are backing two bills that have advanced in the Legislature this spring that would restore the ability of local governments to impose rent controls in condominium parks.
The root of the issue is the owners’ intense desire to get out from under “oppressive rent-control ordinances,” said Sheila Dey, executive director of the Western Manufactured Housing Communities Association.
Dey said if AB1309, which would eliminate rent control on spaces once a coach has been sold to a new owner, were to become law it would eliminate the economic pressure on owners to convert parks to condominiums. “They wouldn’t feel the need to do that, because they would be capturing some of their investment,” she said. “The desire to subdivide is motivated by these oppressive ordinances.”
Rent controls were enacted across the state, including in most Ventura County cities, in the ’70s and ’80s as a means to protect mobile home owners from runaway costs. Local officials were persuaded to act because of the unique economic situation of mobile home owners, who are part homeowners and part tenants.
Many are paying mortgages on their homes in addition to rent on the land on which the homes sit. Their mobile homes, despite their names, cannot practically be moved, so they do not have the option of an apartment dweller to simply move if the rent becomes too expensive.
The same economic conditions still apply, argued Maurice Priest, lobbyist for the Golden State Manufactured-Home Owners League. In the case of apartment rents, he said, “There’s a market check that applies, but as long as a mobile home sits on a lot, the homeowner’s going to have to pay rent.”
Ventura County Supervisor Steve Bennett of Ventura, who has become a leading advocate for changing the laws governing condominium conversions, said it is not a solution to eliminate rent controls on new residents in exchange for slowing the movement to convert parks.
“I wouldn’t see that as an appropriate compromise” he said.
Bennett noted that rent controls provide certainty in the market and allow a buyer to predictably calculate what his living expenses would be: the mortgage payment plus rent.
“When you’re buying your coach, you’re buying the certainty of rent control,” he said.
If new buyers did not have that certainty, they would not be willing to pay as much for their coaches and would have to pay far more in rents to the park owner. “It would be a huge transfer of equity from park residents to park owners,” Bennett said.
Meanwhile, the condo-conversion movement is spreading in Ventura County. Attorneys for the Star Dust park met with residents on May 3 and notified residents by letter that the park “plans to file” documents to convert the park.
Ventura City Attorney Robert Boehm said he believes a city ordinance that prevents condominium conversions unless there is a citywide vacancy rate of at least 5 percent would prevent Star Dust or other parks from proceeding.
“That’s an issue of some import to us,” he said.By Timm Herdt (Contact) May 10, 2007