End of Rent Control Called End to Way of Life : Dreams Fade at Many Mobile Home Parks
The Point Dume Club in Malibu is not the aggressively social place it used to be. No longer is it possible to breeze into the game room and round up willing partners for poker or gin. Bingo nights have ended for lack of volunteers. The swimming pool and the tennis court are often empty now.
The country club facilities were the original attraction for nearly 280 retired couples who moved behind Point Dume’s security walls and guardhouse during the 1970s.
In those days, they congratulated each other for discovering one of the most luxurious mobile home parks in the nation.
They thought they had bought into a way of life that enabled former garment manufacturers and one-time liquor salesmen to share the coast with rock singers and movie stars. The formula, to them, was simple: buy mobile homes for half the price of conventional houses; save even more by renting land in the posh park instead of buying lots of their own.
But since Los Angeles County rent controls expired in January, the talk at the Point Dume Club has been of moving away or facing financial ruin.
Land rents at Point Dume are rising by as much as 15% this year. In many cases, the rents will go up by 60% or 70% over five years.
The residents on pensions say they simply cannot afford what is coming.
For nine months, they worried out loud, every conversation leading to the same depressing topic. Now they avoid the park’s common areas, and each other. “Everyone’s kind of given up and withdrawn,” said Adeline Burton, who has lived there seven years.
Members of a county mobile home task force monitoring the decontrol say they have received hundreds of similar reports from Topanga to Canoga Park to Rowland Heights.
Without the protection of the county law that kept rent increases at or below 9% from 1979 through 1984, the residents--an overwhelming majority of them in their 60s or older--are learning quickly that mobile home living has changed.
Sixty-five local ordinances in California govern mobile home rents; among the cities with controls are Los Angeles, Palmdale, Ventura and Ojai. Elsewhere--in the state, around the nation and now, in the unincorporated areas of the county--legions of senior citizens are afraid they will lose the affordable, comfortable retirements they once enjoyed.
Whether they are poor or middle-class--and county mobile home parks span the spectrum--their incomes are fixed and the future rents are uncertain. “You’re dealing with their security,” said Rudy Lackner, a county planner and the task force coordinator. “That’s a real serious issue, when you deal with someone’s security.”
The loss of their security is exactly what the Point Dume Club residents are mourning now.
Five years from now, when Adeline Burton’s husband Bernard is 73, “they’ll be taking 40% of my income for the lousy rent on a piece of rock,” he said.
“What the hell’s the future here?”
‘This Is Utopia’
The Burtons’ first rent increase after decontrol was 13.6%--from $454 to $516 a month. At the end of their five-year lease, the rent will be $725--nearly 60% over what they pay now.
A block away, Len Rector tells a similar tale. He came to the park in 1978. After living in a Pacific Palisades house for 27 years and then retiring to a condominium for three years, he put $9,000 down on a $56,500 mobile home. “I thought to myself, ‘This is Utopia,’ ” he said.
At the time, his monthly rent was $303. By 1990, his rent will be $825. When combined with his $545 mortgage payment, his housing costs will take up more than 50% of the family’s income: Social Security checks for himself and his wife, a Navy pension and retirement pay from his job selling spirits and wine.
“My wife screams that we won’t be able to make it,” said Rector, who is 72. “But after I go, there’ll be the insurance. She’ll get about 40 grand when I pass on. I think she can live here for a few years on that.”
The partnership that owns the park says the changes are necessary. “For many, many years we have held the rents down and the rent controls came in and continued to keep it down,” said Alfred Edgerton, legal services director for the Adamson Cos.
The rents that will take effect in five years, Edgerton said, are the rents that the park should be charging today, according to a fair market report by a consultant who Adamson hired.
“We’ve been fair as can be with these people,” Edgerton said. “This is a desirable place to live. (The park) is profitable but it isn’t all that profitable by any means.”
This is the second time in two years that the county has let rent limits end. In 1984, so many mobile home park owners issued immediate 50% and 60% increases that 4th District Supervisor Deane Dana called for the reinstatement of all rent controls for another year. Dana, a conservative who opposes apartment rent controls, has warned that he will seek new rent caps just for mobile homes if park owners abuse their second chance.
This time, however, county government representatives on the task force note that most of the complaints are coming from only 10 of the 100 mobile home parks in unincorporated county areas. “Overall, it’s been a less painful process than it could have been,” said Dana deputy Michael Pohndorff.
Still, county officials are concerned enough that the task force is refining a set of voluntary guidelines for park owners. “It’s a complicated, convoluted situation,” Pohndorff said. “The owners are entitled to a return on their business, but at the same time we’re dealing here with human beings.”
The guidelines--which the Point Dume Club has followed--call for five-year leases, so homeowners will know exactly where they stand. Where park owners believe they need hefty increases to make up for rising operating costs during the years of regulation, they could raise rents up to 15% a year. By the end of the lease, park owners reason, payments would reach what they consider to be a fair level for 1985.
Said Cathy Ann Connelly, executive director of a county park owners association: “If some resident said, ‘Gee, the rent’s going to be too high for me,’ they’d have five years to sell their coach. People would have time to look around and make other arrangements.”
At the Point Dume Club, about 50 mobile homes are for sale--approximately twice the number listed during the rent control years.
But there’s a catch. The buyer of a mobile home there would have to pay the higher “fair market” rent immediately--not five years from now.
And so there are few takers.
Other would-be sellers in the decontrol area are experiencing the problems.
“Everything is going to hell,” said Bill Wall, 74, a retired printing plant owner who is trying to sell his mobile home at Top-O-Topanga in Topanga Canyon. “Coaches that are normally $40,000, you’re lucky to sell for $25,000. The only ones that are selling are the ones they’re giving away.”
At Granada Villa Mobile Home Park in Soledad Canyon, about 40 of 179 coaches are for sale, said park owner Ernest Goldenfeld. In past years, about 18 coaches were on the market at any given time, Goldenfeld said.
“There is a buyer for any coach--at a price,” Goldenfeld said. “They may find that they can’t sell at a profit because I’ve raised the rent. But if they keep it for five years, the park will be improved and the value would be up.”
Besides, he added, a buyer chooses a coach for its location. Under rent control, he said, the value of individual mobile homes went up because of the park owner’s investment. “Why shouldn’t we share?” he said.
The park’s influence on a coach’s value, and the park owner’s power over rents, became important in the 1970s. That was when mobile homes became, for all practical purposes, immobile.
Bigger coaches came onto the market then, extra-wide versions that had to be assembled in the park. The new roomy homes were popular. But moving a “double-wide” or “triple-wide” means taking it apart again so that the pieces can fit on a truck. Costs for such a massive job run from $5,000 to $10,000.
Once the coaches were in place, the residents cemented an air of permanence to their new homes by building patios and decks, hot tubs and Jacuzzis. If the coach is ever transported, such improvements would have to be left behind.
Soon enough, there were no places to move a coach anyway. The vacancy rate for Los Angeles County mobile home parks is 1.7%, according to a statewide survey conducted in March by the Federal Home Loan Bank in San Francisco.
The only park openings are in outlying areas, such as the Antelope Valey. And those lots are reserved for new mobile homes; a study by the city of Los Angeles this spring found that the closest park that would accept a used coach was in Riverside.
As a result, “it’s almost unheard of to move a mobile home these days,” said Bristol Brodrick, an alternate director of the Golden State Mobilehome Owners League, which represents the 1 million coach-dwellers in California.
“What you have here is a captive audience,” said Thomas D. Curtis, a University of South Florida economist who has been studying mobile home parks since 1979. “Once you get your park full, you can just about place any rent you want on these people because they cannot get out.”
Around the United States, especially in the Sun Belt where mobile home parks are concentrated, the inability of many residents to afford rising rents is becoming more apparent. Leo Baldwin, a housing expert with the Washington-based American Assn. of Retired Persons, said he has received complaints from park residents in Texas, Oregon, Arizona “and then to a lesser degree from places like Indiana, Illinois, Missouri, Arkansas . . . “
The changes have not reached yet crisis proportions, he said, but he is concerned.
“I don’t want to just paint the park owners as scalawags,” he said. “They’re business people who have increased taxes or road maintenance problems or whatever it might be. But in the process there have been some rather exploitative situations developing . . . and I believe this will continue to be a pattern.”
Bankers are also noticing that hefty rent increases have caused financial trouble for residents on pensions. “There are five or six parks in our area that we know are going to do more than the standard 6% to 7% a year,” said Dick Thilken, a Bank of America vice president who oversees mobile home loans along the south Los Angeles County coast and in Orange County. “We won’t finance in those parks.”
Residents without rent control are beginning to look for protection from the courts, state legislatures and a fledgling co-op movement.
Locally, tenants of a Bell Gardens park bought it from the owner in 1983. They formed the Casa Mobile Home Park Cooperative. Each co-op member owns his own mobile home and his own plot of ground.
Shortly after county rent controls ended, about 80 homeowners from the 300-space Greenbriar Mobile Home Park, in the Canyon Country area, spent $900,000 for 70 acres in Hasley Canyon, near Castaic.
Last month, the Regional Planning Commission approved the group’s plans to start a mobile home park cooperative on the property. Its members plan to leave Greenbriar because “they were sick and tired of rent increases,” said the group’s attorney, Gregory Gershuni. “They knew more were coming and they wanted to be masters of their own destiny.”
Still, such solutions are the exception, not the rule. Legal experts, lobbyists and park purchases all take more money than most mobile homeowners have.
“We recognize that rent control is a patch, a Band-Aid,” said Brodrick of the homeowners’ league. “But it’s the only thing that seems to be available for the people without the money. It’s the only thing that’s fair.”
Park owners disagree. They say rent controls punish the good landlords for the actions of a few greedy ones. Though they do not have to pay for maintenance of the mobile homes themselves--the residents do that--county park owners say they have been hit by soaring insurance, property tax and road expenses.
Nobody denies that Los Angeles County mobile home parks were profitable even during the rent control years. “I’m making a 10% to 12% return on my money,” Goldenfeld said.
But, he added, “Today you can go and buy second trust deeds at 12%, 13%, 14%, without any management, without any resident worries, without any hassle. We feel a fair return (on mobile home parks) should be 12% to 14%.”
Increasingly, he said, park owners believe the only way to make a fair profit is to change their orientation and cater to younger customers.
“Family parks, that’s the coming thing,” he said. “They are the only ones that can afford to rent. Mama and Papa are working, they get raises; I get a raise in my rent.”
He is converting his Soledad Canyon park from all-adult to families.
The population at oceanfront parks like the Point Dume Club is changing, too, but in a different direction. Those parks are becoming resorts.
When coaches do sell at Point Dume these days, the buyers are generally looking for a second residence for weekends or vacations by the sea.
Frank Linden, a 55-year-old builder, and his wife Cynthia bought a mobile home at the park in December. They live during the week in an Encino condominium.
Herb Schwartz, 68, and his wife, Miriam, are also Encino residents during the week. They bought their mobile home 18 months ago. Said Schwartz: “I always wanted a home at the beach.”
The mortgage is $500 a month; the rent is $500 a month. “No big deal,” Schwartz said.
The neighbors tell him the rent will double within five years. “I have no problem with that,” Schwartz said. “They want to get rid of the poor schnooks. Soon you can only be here if you’re rich.”