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Los Angeles, CA— Today, the Board of Supervisors voted to approve a motion authored by Supervisor Janice Hahn and coauthored by Supervisor Sheila Kuehl instructing the County to draft a rent control ordinance for mobile home parks in unincorporated LA County.
“Mobile home residents are in a difficult and unique situation,” said Supervisor Janice Hahn. “While they own their homes, they do not own the land underneath them. Because so-called ‘mobile’ homes are often not mobile at all, residents are particularly vulnerable to rent hikes. It is time the County step in and ensure mobile home residents do not join the ranks of the homeless families living here in LA County.”
The term “mobile home” is misleading. Mobile homes are often placed permanently in a park and moving them is difficult and expensive. This gives mobile home park owners a virtual monopoly and gives residents few options if they cannot afford rent hikes or fees. Mobile home owners are often forced to sell their homes to their landlords for substantially less than their value because moving the home would be cost-prohibitive.
“We have a critical shortage of affordable rental housing in Los Angeles,” said Supervisor Kuehl. “This proposed rent stabilization program would help protect residents of mobile home parks from unreasonable rent increases while providing park owners with a fair and reasonable return on their investment. Today’s action is one of many steps the County is taking to preserve existing affordable housing and reduce the number of people driven into homelessness by rising rents.”
In unincorporated Los Angeles County, there are 86 mobile home parks and a total of 8,503 mobile home units. 1,381 of these units are in the Fourth District.
The motion which passed today instructs the Community Development Commission to report back to the Board in six months with a proposed mobile home rent regulation ordinance which would: place an annual cap on space rent increases; provide protections for residents against impacts to services and maintenance with reduced space rents; provide a rent increase process for park owners who believe they are not receiving a fair rate of return on their property; and require park owners to complete an annual report on occupancy, rental rates and services and amenities provided by the park.
In drafting the ordinance, the Community Development Commission has been instructed to conduct thorough stakeholder outreach with both mobile home tenants and park owners.
The motion passed by a 4-1 vote, with Supervisor Kathryn Barger voting no.
After several mobile home residents testified at the meeting that they experience intimidation and feared retaliation from mobile home park owners, Supervisor Hahn said she believes these residents. Supervisor Hahn also asked County Counsel to explore the idea of placing a temporary rent freeze to prevent mobile home park owners from increasing rents ahead of implementation of this ordinance. County Counsel will report back to the Board on the feasibility of a rent freeze in 30 days.
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From San Mateo Co.: The San Mateo County Board of Supervisors acted today to require relocation assistance to help any displaced tenants of the seven mobile home parks in the unincorporated area resettle if, and when, those parks are closed or converted.
The Board unanimously approved an ordinance implementing and expanding state law governing mobile home park changes of use. Specifically, under the proposed ordinance a park owner must obtain a change of use permit from the Planning Commission prior to converting or closing a park.
Other key features of the ordinance include:
- Use of a relocation counselor to help residents find alternative housing;
- Payment of moving costs for personal belongs and first and last month’s rent plus security deposit at the alternative housing for all eligible residents;
- Payment of costs to move the mobile home unit to a new park if feasible or payment of in-place value if the unit cannot be moved;
- Payment for temporary lodging up to 30 days if necessary;
- Nine-month notice required prior to applying for Change of Use Permit; additional six-month notice required post-permit before residents are required to vacate;
- Right of first refusal for displaced residents to purchase or rent new homes to be constructed on the park site, if applicable.
The ordinance also allows park owners to request an exemption from the relocation requirements where payments would exceed the reasonable costs of relocation, would eliminate substantially all reasonable economic value of the property or in cases of bankruptcy.
The ordinance requires a second reading at the Sept. 26 Board meeting and becomes effective 30 days later.
The seven existing mobile home communities in the unincorporated county provide more than 750 spaces for units, providing affordable housing for low-income families and seniors. Amid the ongoing housing crisis in the Bay Area, the Board of Supervisors is concerned that the market conditions that led a number of other park closures or conversion near San Mateo County might also cause similar efforts locally.
When parks are converted to another land use or closed, displaced residents are often not able to move their unit to another park due to its condition or if a park only accepts new mobile homes Facilities that accept other types of mobile shelter also have long waiting lists for long-term residents.
At the Sept. 12, 2017 meeting, the Board also approved an ordinance amending its 2003 mobile home rent control ordinance to widen the definition of “mobile home” to include all structures used for habitation located on a space within such a park, such as motor homes and travel trailers. That ordinance also requires a second reading.
The Board did consider concerns that RVs are shorter term modes of shelter but ultimately decided their inclusion was warranted.
“If rent control in mobile home parks only applies to manufactured units and not to RVs, owners may be encouraged to convert spaces to specifically house RVs so that they can charge market rates,” Board President Don Horsley said. “As a result, I would anticipate that low-income individuals using RVs as their living space would end up instead parking on city and county streets.”
Under the 2003 ordinance, rent increases are allowed no more than once a year in an amount not exceeding 75 percent of the annual increase in the Consumer Price Index (CPI) for the San Francisco-Oakland-San Jose area or 5 percent of the existing rent, whichever is less.
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From The San francisco Chronicle…
A federal judge says 400 residents of Palo Alto’s only trailer park are entitled to relocation payments of about $20,000 each if the owners go ahead with their plans to close the park down.
Tim and Eva Jisser, who have owned the Buena Vista Mobile Home Park since 1986, filed suit in federal court in November, arguing that the $8 million in payments ordered by the city to cover the residents’ costs of moving elsewhere amounted to an unconstitutional confiscation of their property. But in a ruling made public Monday, U.S. District Judge Edward Davila in San Jose said that the Jissers were required to first file their arguments in state court — and that the deadline for such a filing has long since expired.
Under established federal court doctrine, Davila said, property owners who contend a state or local government has violated their rights must turn first to the state court system, unless they can show it would be futile. Only after the state courts fail to remove the alleged burden on property rights or provide adequate compensation can the owners take their constitutional claims to federal court, Davila said.
The owners filed an appeal late Monday.
“The federal courts are the right place to go if you’re seeking to have your constitutional rights vindicated,” said attorney Lawrence Salzman of the Pacific Legal Foundation, a property-rights organization. He said the Jissers weren’t seeking damages from the courts, just a ruling barring Palo Alto from enforcing its relocation-payment ordinance against them.
Palo Alto City Attorney Molly Stump declined to comment.
The Jissers applied to close Buena Vista in November 2012 so they could sell the property, possibly to a developer. As they were looking for a buyer, Palo Alto and Santa Clara County jointly proposed keeping the trailer park open by acquiring the property, through condemnation if necessary, and have each pledged $14.5 million for the purchase.
Buena Vista, on Los Robles Avenue near one of Palo Alto’s main thoroughfares, El Camino Real, has 117 trailer units on about 4½ acres and has been open since the 1950s.
As of last fall, the average rent, including utilities, was $1,000 to $1,200 a month. Most of the residents have limited incomes and couldn’t afford to live elsewhere in a city where one-bedroom apartments rent for $2,500 a month.
California law allows local governments to require mobile home park owners to protect residents from the impact of a shutdown.
After the Jissers announced their plans to sell, city officials held a hearing and then gave their approval in September 2014 on the condition that the owners compensate residents for the value of their home, the moving costs, and the difference between their trailer rent and the average apartment rent in Palo Alto and surrounding communities.
The city wound up ordering payments of about $20,000 per resident, which would allow them to move their mobile home to another site, if possible, or pay for rent elsewhere.
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LOS ANGELES, April 25, 2016 /PRNewswire/ — Hundreds of mobile home parks across Southern California are eligible to participate in a voluntary statewide pilot program which upgrades natural gas systems from master meters to direct utility service for each park resident. But while SoCalGas covers to-the-meter costs and reimburses mobile home park owners for some beyond-the-meter costs, park owners may need help to cover other costs of the program. Now, Small Business Development Corporation of Orange County, together with Pacific Premier Bank (Irvine, California), is providing funding to mobile home park owners to support the program’s beyond-the-meter costs.
The mobile home park utility upgrade program is intended to enhance safety and reliability for residents, and allows them to sign up for programs that can help them save energy and money as direct utility customers. Park owners also benefit because they can turn system maintenance and billing over to SoCalGas.
The Mobile Home Park Upgrade Loan Program provides the necessary financing needed to convert master-metered service to direct service for each mobile home resident of the park. “These upgrades will save time and effort for mobile home park owners because the service will be provided directly to the resident plus an added public safety benefit to residents in terms of the upgraded infrastructure,” said Michael A. Ocasio, President/CEO of Small Business Development Corporation of Orange County(SBDCOC). “We are proud to offer this financing conduit that ensures little risk to the owner for making these upgrades.”
“SoCalGas is very pleased to work with SBDCOC,” said Eugene “Mitch” Mitchell, vice president of legislative and external affairs for SoCalGas and San Diego Gas & Electric. “The additional options available to mobile home park owners will help move this program forward and work to meet the goals set by the California Public Utilities Commission.”
The Mobilehome Park Utility Upgrade Program is a voluntary, three-year statewide pilot program approved by the California Public Utilities Commission (CPUC) and monitored by the commission’s Safety Enforcement Division. The CPUC approved the pilot program in March 2014.
For more information about the Mobilehome Park Utility Upgrade Program, please visit socalgas.com/stay-safe/safety-and-prevention/mobilehome-park-utility-upgrade-program.
About Small Business Development Corporation of Orange County
Small Business Development Corporation of Orange County is a quasi-public private non-profit organization that has been serving Orange County and Southern California region for over 15 years. The organization works with small businesses, commercial banks, Community Development Financial Institutions (CDFI’s) and various resource partners to assist small businesses with access to capital. It accesses capital through programs like the California Small Business Loan Guarantee Program, and the State Small Business Credit Initiative (SBCCI) to help small businesses and communities of greater need to succeed. Small Business Development Corporation of Orange County is one of nine Financial Development Corporations in California that are a part of the Governor’s Office of Business & Economic Development (GoBIZ), under the California Infrastructure and Economic Development Bank (IBank).
About SoCalGas
Southern California Gas Co. has been delivering clean, safe and reliable natural gas to its customers for more than 145 years. It is the nation’s largest natural gas distribution utility, providing service to 21.6 million consumers connected through 5.9 million meters in more than 500 communities. The company’s service territory encompasses approximately 20,000 square miles throughout central and Southern California, from Visalia to the Mexican border. Southern California Gas Co. is a regulated subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego.
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From Pacifica Tribune, Nov. 18, 2015
A high-level California Coastal Commission official wrote to the Pacifica planning director questioning the planning department’s determination in 2013 that the renovation project at Pacific Skies Estates is exempt from the city’s coastal development permit requirements for repair and maintenance.
Coastal Commission’s Nancy Cave, North Central Coast District Manager, wrote to Tina Wehrmeister, Pacifica’s planning director on Nov. 4 raising a number of issues that may change the mobile home park owner’s renovation plans.
Cave wrote, “It is our opinion that Pacific Skies Estates’ renovation project constitutes a complete redevelopment and cannot be considered a repair and maintenance. The project does not propose to repair or maintain development in its current legally established form; rather it proposes to change it completely including installing all new units and infrastructure.”
The letter goes on to state Coastal Commission’s regulations state that replacing more than 50 percent of a structure is not repair and maintenance, but instead something that requires a coastal development permit.
“This is a complete redevelopment of PSE and the exemptions afforded certain minor improvements under the Coastal Act and the Commission’s regulations do not apply,”Cave wrote.
In addition, the regulations do not allow such exemptions for bluff top development, the letter states.
“This project proposes replacement of 93 units and a complete redevelopment of the park. And there is an existing armoring structure seaward of the PSE mobile home park that raises a series of issues,” Cave wrote.
Cave asked Weirmeister to reconsider whether the exemption from a coastal development permit was accurately applied in this case, or to seek a formal ruling from the Coastal Commission.
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From Silicon Valley Business Journal, Sept. 22, 2015
The Carlyle Group, the massive private equity firm based in Washington, D.C., has invested in everything from Dunkin’ Donuts to Hertz. Now it’s targeting a surprising spot for its next real estate deal: A 60-year-old Bay Area mobile home park.
Carlyle earlier this month entered into a joint venture with the longtime owners of Pacific Skies Estates, a 93-lot community in Pacifica that overlooks the ocean and is walking distance to Sharp Park Beach.
Under the deal, valued at $42 million, Carlyle and its partner will bring in new luxury manufactured homes, upgrade the aging streets and utilities and construct a new 1,000-foot-long boardwalk on the property’s ocean bluff edge. The deal value includes the cost of the improvements as well as Carlyle’s acquisition of a majority stake in the venture. A representative of the longtime ownership provided details exclusively to the Business Journal in response to questions over the past two weeks.
The transaction is the latest example of Wall Street money’s growing interest in mobile home communities, and it’s not Carlyle’s first rodeo. In 2013, Carlyle acquired two Florida communities for $30.8 million, as reported at that time in the Wall Street Journal. Carlyle didn’t return a phone call last week requesting an interview.
Investor attraction to mobile home parks includes steady, recession-proof income and high barriers to entry. Publicly traded Equity Lifestyle Properties Inc., the largest mobile home park owner in the nation, has seen its stock price jump by 38 percent in the last year; over the same time period, the New York Stock Exchange composite index is down by about 7 percent.
But the Pacific Skies deal differs from the usual business model in an important respect. While mobile home park residents typically own their manufactured homes and pay rent on the land, Pacific Skies will own the land and the vast majority of the new residential units — which are more like traditional single family homes than the trailers of yore.
The model allows the property owner to command much higher rents while maintaining its designation as a mobile home community — thus avoiding the political and regulatory headaches that come along with closing and redeveloping the communities. In San Jose, Pulte Group has run into a buzzsaw of controversy over its plan to redevelop the Winchester Ranch mobile home park near Santana Row; in Palo Alto, the closure of Buena Vista Mobile Home Park, home to hundreds of low-income families, has received national coverage.
Pacific Skies has been steadily transitioning the park out of the traditional homeownership model for some time, buying up units from owners and today just 12 homeowners remain. Under a deal reached with the landlord, about half a dozen residents will remain homeowners at Pacific Skies in newer units.
The rest of the park’s residents, who have been renting homes month-to-month, will receive a relocation assistance package of between $10,000 and $15,000. Sixty-day notices to vacate the units started going out this month to the first phase of 13 tenants.
This is not a density play. Carol McDermott, founder and principal of Entitlement Advisors LLC, which is working with the ownership, told me that the park would remain at 93 lots. “We’ll have a new, quality community that people will want to live in,” she said.
It’s unclear what kind of rents the park will see when all is said and done, but they likely won’t be cheap. The oceanfront property is a half hour from downtown Redwood City and San Francisco’s Financial District, but a world away from the hustle and bustle of Silicon Valley. In an email, McDermott said that the park would still offer “a wide range of pricing options.”
Pacific Skies’ owners, who have owned the roughly 10-acre site for more than 25 years, retain a stake in the property and the business, but McDermott declined to provide specifics. Greystar, which has served as the property manager at Pacific Skies, is staying on in the property’s next iteration.
Carlyle is no stranger to Silicon Valley, of course. In Los Gatos, it is the capital partner on Netflix’s new corporate headquarters in a joint venture with Sand Hill Property Co. In a deal that closed last week, Carlyle sold two of the office campus’s four planned buildings to Wealthcap for about $192 million.
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A judge has overturned an $111 million jury verdict against Equity LifeStyle Properties in a dispute with residents of a mobile-home park the company owns in San Jose, Calif. The California Superior Court for Santa Clara County “cited excessive damages and insufficiency of the evidence to support the verdict” on the question of damages, according to a statement from Equity LifeStyle, the Chicago-based mobile-home park owner whose founder and chairman is billionaire Sam Zell. The ruling stems from a lawsuit that residents of the property, called the California Hawaiian, filed against Equity LifeStyle, alleging that it failed to maintain the property and blaming it for utility outages. A jury awarded the residents $15.3 million in compensatory damages and $95.8 million in punitive damages in April. The court has granted the real estate investment trust a new trial on the issue of damages. “We intend to continue to vigorously defend ourselves in the litigation,” Equity LifeStyle said in the statement. Lawyers for the residents were not immediately available.
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The City of Palo Alto has appointed an administrator to settle a longtime dispute on whether the city’s last mobile home park should be sold to make way for luxury apartments. Read more here.
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SAN JOSE CA, courtesy of San Jose Mercury News– With a fancy name like “California Hawaiian Mobile Estates,” the trailer park on Snell Avenue should have been top-notch.
But residents say that for years it was anything but — marred by sewage backups, potholes, electrical blackouts and a swimming pool filled with geese feces. Fed up with having their complaints ignored, a small group sued five years ago, risking the possibility that if they lost, they’d be on the hook for the park owner’s substantial legal fees.
Last week, a San Jose civil jury awarded the residents $111 million, the largest such award for a failure-to-maintain lawsuit against a mobile home park in California. Previous awards in other California cases topped out around $12 million. If the verdict stands, 61 tenants out of 1,500 people who live in the park could reap an average of $100,000 each in compensatory damages, plus punitive damages of $1.57 million apiece.
California Hawaiian Mobile Estates residents, Gela DePutter and Carol Johnson, right, walk through their neighborhood in San Jose, Calif. on Thursday, April 17, 2014. For years, residents of the mobile home park put up with electrical blackouts, overgrown trees that damaged homes, and a failure by the owner to maintain the park. This week, 61 residents of the park, including Johnson and DePutter, were awarded $111 million in a class action lawsuit brought against the owner of the mobile home park. (Gary Reyes/Bay Area News Group) ( Gary Reyes )
The money would be quite a windfall for the tenants, many of whom live on limited incomes and say they cannot sell their mobile homes because the park has such a bad reputation.
“We always knew it was a David and Goliath thing, going up against a multibillion-dollar corporation,” said resident Joan Malone, 66, who helped spearhead the effort. “Now, people are coming up to me with their faces shining. We finally have justice.”
The unprecedented verdict has sent shock waves through the industry, even as the park’s owner vows to try to get it overturned. Equity Lifestyle Properties, a publicly traded company chaired by billionaire Sam Zell, is the largest mobile home park owner in the nation, with 140,333 home sites in 379 properties in 32 states and Canada. The award represents about 10 percent of its assets.
“We could not disagree more strongly with the jury’s verdicts,” said Equity Lifestyle CEO Marguerite Nader, referring to the damage awards, which were handed down in two separate phases of trial. “This property is a well-located, 100 percent-occupied, institutional quality asset that received the Manufactured Housing Institute’s Community of the Year award in 2012.”
California Hawaiian was once a pristine seniors-only park. But conditions began to go downhill in 1997, some longtime tenants said, after ELS took over. It had already been converted to a family park by then.
Joan Malone and Gary Stutzman chat in front of Malone’s mobile home at California Hawaiian Mobile Estates in San Jose, Calif. on Thursday, April 17, 2014. For years, residents of the mobile home park put up with electrical blackouts, overgrown trees that damaged homes, and a failure by the owner to maintain the park. This week, 61 residents of the park were awarded $111 million in a class action lawsuit brought against the owner of the mobile home park. Malone and Stutzman helped lead the efforts to file the lawsuit. (Gary Reyes/Bay Area News Group) ( Gary Reyes )
The tenants’ suit described a litany of troubles: The once-scenic artificial lakes became slick with slime. Sewers backed up into people’s homes. Brownouts and blackouts were common. Street lighting was inadequate, making it dangerous to go out at night. Homeless people camped out under the clubhouse stage and roamed the streets. Once, in 2012, Malone said, the large black iron gate at the front entrance even fell over — and lay there for about two weeks.
One of the worst problems was that the water for the entire park of 420 households would frequently be turned off — without notice — for up to 20 hours at a time, they said.
Russ Montalbo shows the vandalism his fishing boat sustained while in the unsecured storage area at California Hawaiian Mobile Estates in San Jose, Calif. on Thursday, April 17, 2014. Montalbo pays $40 per month to keep it there since he is not allowed to store it on his driveway. For years, residents of the mobile home park put up with electrical blackouts, overgrown trees that damaged homes, and a failure by the owner to maintain the park. This week, 61 residents of the park were awarded $111 million in a class action lawsuit brought against the owner of the mobile home park. (Gary Reyes/Bay Area News Group) ( Gary Reyes )
The residents, who own their own trailers but pay space rents of at least $800 a month plus utilities, property taxes and mortgage payments, complained — to a series of short-term managers — but said it was to no avail.
Residents formed a homeowners association in 2007 and sued in 2009. Gela DePutter, 59, a semiretired former Hitachi analyst, remembers getting “threatening” letters from management after the suit was filed. About half the tenants who originally joined the suit bailed out, leaving a core group of determined people.
“I had to follow through with this,” DePutter said. “I knew we were going to win but I’m floored at how much.”
Gary Stutzman said when the owners did make repairs, the work was shoddy. After he complained for years about the lakewater lapping right up against his house, one corner of the house crumpled and the driveway wound up being laced with cracks. A crew came and chopped up the driveway, he said in an interview, but instead of hauling the pieces away, they dumped them at the edge of the lake, leaving a still-unsightly mess. Lawyers for the tenants said the jury was aghast at the “deplorable conditions,” finding after a nearly three-month-long trial that even though ELS had made some significant improvements after the lawsuit was filed, the company was negligent, in breach of contract and had created a public nuisance by failing to maintain the park and provide sufficient security. Some serious problems remain to be fixed, including the substandard electrical system.
The case highlights what the tenants’ lawyers contend is a common problem statewide — the failure by some owners to maintain their mobile home parks, which can be cash cows.
For instance, ELS was spending between $101,000 and $273,000 on upkeep annually at California Hawaiian and taking in more than $4.5 million, according to the San Diego lawyers who represented the residents, James C. Allen and David Semelsberger. The lawyers will reap 40 percent of the award.
Others said the case could set a dangerous precedent. “If verdicts like these are held up,” said Phil Woog, an Orange County lawyer who defends park owners, “there won’t be a mobile home park industry.”
Allen said the jury was won over in part because of the testimony of the residents, including Heather and Dion Berry, a clean-cut young couple in their early 30s with three young children. Among other problems, they described how difficult it was for the family to safely shower, go to the bathroom or use the tap water because of the sewer backups. Now, they’re excited about the possibility of netting more than $2 million, after attorneys’ fees. They have their first move already planned.
Said Heather Berry, “To get out of here, into a safe home.”
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LAKE COUNTY, Calif. – A local resident and a group of mobile home park owners are seeking to have a judge decide whether senior mobile home park rent control initiatives set to go on the ballot in the county and city of Lakeport this year are legal. Read more here.
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