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Santee (San Diego County, CA) Approves Mobile Home Park Rent Increase and Partial Vacancy Decontrol

Courtesy of HKC law firm, Orange County California:

Last week, the City of Santee approved a settlement that grants a Santee park owner a $200.00 per month rent increase, implemented over four years. The agreement also allows for a 15 percent vacancy adjustment and 100 percent of CPI for the next 25 years. This is a positive result for the park owner. But it didn’t come without filing suit and creating “downside” risk for the City and park tenants in the form of an even larger rent increase.

The park initially requested a significantly larger rent increase which had a substantial factual and legal basis. The City’s rent commission denied the park owner any rent increase and this decision was upheld by the City Council.  The park owner filed suit.  With the case set to go to trial, the City indicated its willingness to agree to a substantial rent increase.

This case illustrates the point that for local governments, denying an administrative rent increase application is often the politically expedient decision regardless of whether it is right or equitable. Local government politicians get to look like heroes by saving the tenants from a rent increase and the City has no immediate exposure to damages from the administrative decision. Politicians realize a park owner whose rent increase application was denied may simply abandon the application rather than incur the cost of filing suit. The question for the political official is something like this: “Do I make a large group of tenants who vote happy or one (often out of town) park owner happy”? We all understand how politicians usually answer such questions. Thus, while we would like to believe park owners would be treated fairly with a rent increase application before the local government, all too often that is not the case.

My law firm is frequently asked whether we should seek a more modest rent increase in order to avoid upsetting the local politicians and the tenants. In our experience, the political dynamic does not change for the politicians or residents unless the requested increase is so small that it barely justifies the application.