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Santa Rosa, CA – Proposed Mobile Home Park Condo Conversion

By BRETT WILKISON
THE PRESS DEMOCRAT

Sonoma County government’s latest stance on disputed condo-style conversions of mobile home parks is expected to come today in a Planning Commission vote.

For the second time, commissioners will take up a plan to subdivide the 191-unit Sequoia Gardens Mobile Home Park off Fulton Road, a county-controlled area within the city of Santa Rosa.

Under the change, tenants would have the option of buying the land beneath their homes or continuing to rent.

But park residents, who packed a Feb. 17 Planning Commission hearing, are opposed to the conversion, saying high purchase prices and rent increases will push them out of their homes.

“If I am forced to move out of the park by these rent increases then I will lose everything,” 17-year Sequoia resident Mary Lynne Nicholas, 72, told commissioners.

The park owners, an out-of-the-area investment group, claim the conversion would not adversely impact residents. Low-income tenants would be covered by state rent control until they move while market-rate rents for all other tenants would be phased in over five years, according to a report submitted by the group, Sequoia Park Associates.

But because that report did not use actual rent figures or disclose possible purchase prices, the owners’ assurances aren’t credible, critics said.

“They’re just playing a game,” said William Constantine, the residents’ attorney.

Don Jurow, an owners’ representative, declined to provide rental and purchase figures in an interview, saying the report “spelled out all the facts.”

Similar disputes between mobile home residents and park owners have cropped up around the county and the state.

Critics say the conversions are an end run around local rent control rules that govern parks, which make up one of the state’s largest blocks of affordable housing, especially for seniors.

Separate county and Santa Rosa city ordinances that sought to limit owner-driven conversions were struck down in 2009 in a court challenge by Sequoia Park Associates.

Commissioners are set to deliberate and vote today. Public comments were taken until Feb. 17.

County planners have recommended denial on two grounds:

– A required survey showed residents overwhelmingly oppose the conversion, with 164 against it and two for it.

– The park’s well water has been off-limits to drinking since 2009 because of higher-than-allowed levels of arsenic. Owners have provided bottled-water vouchers. A bid to join the city’s water system remains in funding limbo.

Any decision will likely be appealed to the Board of Supervisors.

Monning bill lets cities recover costs of mobile home suits

By JASON HOPPIN – Santa Cruz Sentinel

Assemblyman Bill Monning, D-Carmel, introduced a bill Wednesday that he hopes shifts the balance in frequent and often long-running disputes between mobile home park owners and communities seeking to protect residents from eviction and rent hikes.

The bill, AB 579, allows governments that prevail in court to recover attorney’s fees in mobile home cases, something they aren’t currently allowed to do. Monning said the bill should particularly help small cities that can’t afford to pursue pricey litigation.

“Our current legal system is tilted against a local government’s ability and willingness to defend their mobile home rent control ordinances and AB 579 will level the playing field,” Monning said.

Monning said the bill provides parity for local governments, which can be ordered to pay the costs associated with litigation should they lose a case. Many of the suits focus on government efforts to control rents on the land beneath owner-occupied mobile homes. Shelia Day, of the Sacramento-based Western Manufactured Housing Communities Association, said mobile home park owners have a First Amendment right to argue their cases in court and that one industry should not be singled out by lawmakers.

But advocates for mobile home residents praised the bill.

“One of the strategies the park owners use is to bludgeon smaller communities with the threat of litigation expenses,” said Terry Hancock of Santa Cruz Senior Citizens Legal Services. “To defend these lawsuits takes a lot of money.”

Santa Cruz County has seen its share of mobile home park battles over the years. In December, the city of Capitola estimated that it’s spent nearly $1 million defending its mobile home rent law.

And the city of Santa Cruz waged – and ultimately gave up on – long-running battles over its mobile home laws following a protracted battles with the owners of De Anza Mobile Estates, situated on a picturesque bluff on the city’s Westside.

There are 89 mobile home and recreation vehicle parks in Santa Cruz County, many of them located in unincorporated areas, according to the California Department of Housing and Community Development.

Goleta California – Mobile Home Park Owner Hires Ted Olson

Ted Olson, former solicitor general under President George W. Bush and certified legal heavyweight, has been hired by landlord Daniel Guggenheim, owner of Rancho Mobile Home Park, to take his anti–rent-control case against the City of Goleta to the U.S. Supreme Court. Guggenheim, who contends Goleta’s mobile-home-park rent-control ordinance constitutes an illegal confiscation of private property, was recently shot down by a panel of 11 judges serving on the Ninth Circuit Court of Appeals. They argued that Guggenheim knowingly bought the property in 1997 when rent control was already in effect and that the purchase price he paid reflected the reduced rents the law enabled him to collect. If the law were struck down, they opined, it would constitute an unfair windfall for Guggenheim and shortchange mobile-home-park residents who purchased after the law went into effect to the tune of $100,000 per coach. (That’s the difference in sales price between a coach on a rent-controlled space as opposed to one not covered by rent control.)

Typically, the Supreme Court agrees to hear only a tiny fraction of the petitions submitted. By bringing in a high-profile appellate specialist, Guggenheim might be able to increase his odds of being heard. Olson argued the landmark voter recount case that gave the 2000 presidential election to George W. Bush over Democrat Al Gore. Most recently, he argued that California’s Proposition 8, which excludes gays and lesbians from marriage, was unconstitutional. Goleta City Attorney Tim Giles expressed skepticism that the Supreme Court would hear the case even with Olson involved. The facts of the Guggenheim case, he said, are so unique and narrow that they have minimal application to other mobile-home-park rent-control disputes. As for Olson, Giles said, “It’s like he’s coming in after the 10th inning and the game is already over.”

*This article is from The Santa Barbara Independent and written by Nick Welsh.

Judge backs mobile home park conversion – Chino CA

Chino, CA – The city is considering its next step after a judge granted a petition for the Lamplighter Mobilehome Park to convert its rental units into ownership lots. Read the full story here.

Guggenheim: The Regulatory Takings Case That Won’t Die

FEBRUARY 4, 2011 BY Rick Rayl…

We thought it was over in 2009 when the Ninth Circuit held that the City of Goleta’s rent control ordinance constituted a taking.

We thought it was over in late 2010 when an en banc Ninth Circuit panel ruled the other way, holding that the property owner failed to establish the “investment-backed expectations” necessary to establish a takings claim underPenn Central.

Now, we’re not sure if it’s ever going to be over.  Apparently, Dan Guggenheim has decided to seek review by the U.S. Supreme Court, so there may yet be more drama for the long-playing battle between the Guggenheims and the city over a mobile home rent control ordinance that the parties seem to agree has the effect of transferring the vast majority of the mobile home park’s value to the tenants.

So what happens now? First, the Guggenheims must actually file their Petition for Writ of Certiorari, asking the Supreme Court to review the case.  Then, the Court decides whether it wants to review the case, and it’s a serious uphill battle.  The Court receives thousands of petitions each year and it typically selects only about 100 of them for review.  In other words, based on the math alone, the Guggenheims aren’t likely to see the inside of those hallowed halls.

But some cases are more likely than others to pique the Justices’ interest (four must agree that review is warranted), and controversial land use cases that have garnered media and practitioners’ interests – and that have generated multiple, conflicting decisions by separate panels of a federal Circuit Court - probably have a greater likelihood of being chosen then most cases.

Add to this that the decision comes out of the Ninth Circuit – which has a well-documented reputation for receiving far more than its share of decisions selected for review – and the Guggenheims probably have a decent shot (of course, even if these factors make the case five times more likely to be selected than a typical case, that still probably means only about a 10% chance of being reviewed).

And if the Supreme Court grants review? Obviously each case is reviewed on its own merits, but according to an analysis of ten years’ worth of Supreme Court review, the Ninth Circuit was reversed (or had its decision vacated) 80% of the time and affirmed 20% of time.  In other words, the Guggenheims’ odds once they get there are a whole lot better than the odds of getting there in the first place.

We’ll let you know what happens.

Goleta California – Appeal “Probable” in Mobile Home Park Rent Control Case

The December 22 decision to uphold the legality of rent control for mobile home parks across California may not be the last battle in the war over Rancho Mobile Home Estates in Goleta. (See the December 22 report here.) According to an attorney for park owner Daniel Guggenheim, an appeal to the nation’s highest court is being considered and seems “probable.”

On Monday, Guggenheim’s attorney Robert Coldren pledged, “We and the taxpayers of Goleta and those who support true affordable housing lost the battle but will win the war. A misguided city council is perpetuating a price-fixing scheme at a cost of many hundreds of thousands of dollars and millions in exposure to the city’s strapped treasury. And for what? Vacancy control [in which rents are not allowed to be raised even when ownership changes hands] does absolutely nothing to reduce or maintain low rents for existing mobile home tenants, and does not lower the housing cost to incoming tenants either.”

Noting that he is “glad” about a particular part of the ruling, Coldren believes that the way in which the Ninth Circuit Court decided in the case leaves open a window for appeal. “My colleagues and I, as well as lawyers specializing in U.S. Supreme Court cases, believe the manner in which the panel decided the case paves the way for a U.S.Supreme Court review,” claimed Coldren.

Guggenheim vs. City of Goleta

Closely watched case goes to the heart of government’s ability to regulate land use on behalf of the public interest Court finds for public agency in Guggenheim vs. City of Goleta, securing mobile home rent control ordinances throughout California and protecting property values for low- and moderate-income mobile home owners.

Today the U.S. Ninth Circuit Court of Appeals reaffirmed decades of land use precedent in finding for the defendants in Guggenheim vs. City of Goleta. Daniel Guggenheim, the owner of a mobile home park in Goleta, California, sued the City, claiming that its rent control ordinance illegally restricted his profits by limiting rental fees within the park.

The case has been closely watched by legal scholars since the majority of a three-judge Ninth Circuit Appellate panel found in favor of Guggenheim in April 2010. The Ninth Circuit Court vacated that decision and granted an en banc rehearing of the case. A victory for the plaintiffs could have opened the door to significant challenges to other types of land use and environmental regulations, upending long-standing Supreme Court case law that protects such regulatory activity.

“This case is about far more than rent control on mobile homes: it goes to the heart of a government’s ability to make land use decisions on behalf of the public good,” said defense attorney Andrew Schwartz of Shute, Mihaly & Weinberger. “The Court did the right thing in protecting the rights of cities to make land use decisions, including enacting rent control ordinances that protect vulnerable populations.”

In 1997, when Guggenheim purchased the mobile home park in question, it was situated within an unincorporated portion of Santa Barbara County and was subject to the County’s mobile home rent control ordinance. When it incorporated in 2002, the City of Goleta adopted a mobile home rent control ordinance identical to the one that was in place when Guggenheim purchased the property. Because Guggenheim bought the property with full knowledge of the ordinance, the Court agreed with the City that Guggenheim had no reasonable expectation that he could increase rents beyond the levels allowed in the ordinance.

As noted in the opinion, which was authored by Judge Andrew J. Kleinfeld, “The Guggenheims bought a trailer park burdened by rent control, and had no concrete reason to believe they would get something much more valuable, because of hoped for legal changes, than what they had.”

As the Court pointed out, Guggenheim bought the property for a price that took into account the ordinance’s limits on the rent increases that the park owner can impose on the mobile home owners who lease space in his park. Had Guggenheim succeeded in the case, he could have dramatically increased rents and gained a windfall profit at the expense of a particularly vulnerable population.

“The people who really do have investment backed expectations that might be upset by changes in the rent control system are tenants who bought their mobile homes after rent control went into effect,” continued Judge Kleinfeld in the opinion. “Ending rent control would be a windfall to the Guggenheims, and a disaster for tenants who bought their mobile homes after rent control was imposed in the 70′s and 80′s.”

Mobile home owners have a unique relationship with park owners; while the mobile home owner can invest in improvements to her property and surrounding landscaping, she does not own the land itself. The higher the cost of the rent for the pad on which a mobile home sits, the lower the value of the mobile home itself. Without limits on rent increases, mobile home owners cannot recoup their investment in the property if they need to sell their mobile home. This case therefore has significant implications for mobile home owners and mobile home park owners throughout California.

“Mobile home owners tend to be low- or moderate-income individuals and families, elderly, and disabled who have struggled to become homeowners,” noted Tim Giles, City Attorney with the City of Goleta. “Rent control protects their investment. The Court’s decision affirms the important role rent control regulations play in providing stability for this vulnerable population, particularly in California’s expensive real estate market.”

In winning the case, the City of Goleta can now keep its mobile home rent control ordinance in place without compensating mobile home park owners for their alleged loss of profits under the ordinance. Municipal governments throughout California can also maintain land use regulations that limit private profit without fear of being forced to compensate land owners for every such regulation.

“Government regulation of land is clearly permitted under the Constitution. A property owner is not entitled to compensation simply because regulation prevents the greatest possible profit,” said Doug Kendall of the Constitutional Accountability Center in Washington, DC, who filed an amicus brief in the case on behalf of the American Planning Association and others. “The Supreme Court has time and again affirmed that regulation of property to protect important community interests is the cost of living in a civilized society and does not require compensation. The Ninth Circuit’s decision here followed that well established precedent.”

Lakewood WA…Sale may save trailer park

A Lakewood mobile home park that the city has threatened to close because of health and safety violations may receive a new lease on life this week.

Pierce County Superior Court Judge Katherine Stolz on Friday will consider a request by a court-appointed receiver to sell the property to Christopher Opie for $800,000, court records show.

The receiver, Renee Rouleau, hired a broker and received eight offers on the property, which were later narrowed to three.

Rouleau stated in a court declaration that Opie’s is the most favorable because of a large cash payment and his “significant experience operating commercial properties.” Opie would pay $250,000 in cash and pledge payment of the remainder in a promissory note secured by the property.

“Mr. Opie has the financial ability to bring the deteriorating condition of the property up to standard that will improve the living conditions of the residents, and ensures the secured creditors receive a return on their investment,” she stated.

Opie did not return phone messages seeking comment.

The future has been uncertain since at least last spring for the mobile home park on the 12600 block of Bridgeport Way, near the main gate of McChord Field.

The city threatened to close the park of about 60 households unless someone stepped forward with a plan and money to address the problems.

Residents said they would have nowhere to go if the park were closed. Several of them showed up at a City Council meeting in early August, asking for help and holding signs such as “Don’t Take Our Homes Please” and “Save Our Homes.”

Fir Acres tenants and the city say the fault lies with the property owner, SLI Associates LLC, for allowing the property to fall into disrepair before abandoning it. Almost all of the tenants own their homes and rent their spaces.

The city removed 10 decrepit mobile homes this year and completed some cleanup in April. It placed a $85,000 lien on the property to recover costs for the work.

Lakewood officials said the abatement was the most significant the city has handled since it incorporated in 1996.

They had initiated a second abatement but canceled it when Rouleau made repairs so the property’s electrical system met minimum standards. A representative of SLI Associates has said the owners abandoned the property because it refused further investment in a “big money hole.”

Before resigning, the investment manager for a group of investors and another individual who hold the two mortgage loans on the property then petitioned the court to appoint a receiver to manage the property.

Since then, Rouleau has been working with the city and seeking potential buyers in an effort to keep the park open. The new buyer must work with the city to resolve the remaining issues.

David Bugher, the city’s assistant city manager for development, said a third abatement notice has been proposed to remove carports and lean-tos on the property. He said that process wouldn’t be initiated until after Christmas.

“They’re dilapidated and in a state of falling down,” he said.

Down the road, the city would shift its attention to individual mobile homes. Bugher said landings connected to the mobile homes weren’t built to code and some dwellings have been altered without permits.

“Some of those units may not survive this process,” Bugher said. “But, again, one step at a time. We’re taking baby steps here.”

The Perfect Storm is Building in Mobile Home Parks

I just came across an article which I assume is written by the owner / operators of the web site, mobilehomeparkstore.com and it should be noted that these same people are active investors in mobile home parks. The article is quite negative about current mobile home park values and states that it is a Buyers market out there…

“There have never, in the 12 year history of www.mobilehomeparkstore.com, been so many mobile home parks for sale at one time. This enormous supply/demand disaster has rendered many terrified sellers into a panic mode. Sellers are stating on their parks “make offer”, “must sell”, and “seller will carry”. This is the quintessential “buyer’s market”.”

While I do agree with some of the points made in article / blog, in scanning all the available mobile home parks in the western United States that I deal in, I find that the article must be referencing mobile home parks in less desirable locations across the nation. In other words, don’t panic. Read more here.

Judge OKs county bid to protect Soquel mobile home park rent control

“SANTA CRUZ – A county-led fight waged in the name of rent control has scored a crucial legal victory.

Superior Court Judge Timothy Volkmann is expected to hand down an official decision that the county Board of Supervisors acted appropriately when it denied a request by the owner of a Soquel mobile home park to subdivide his property and sell off the individual, rent-controlled lots. Volkmann preliminarily OK’d the move last month.” Read full article here.

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