Recent Leases May Control Trailer Rents in Escondido

The Escondido City Council is considering controlling mobile home park rents by prohibiting a park owner from charging current residents more than the amount that his five most recent tenants paid after negotiating their own leases.

Such a rent control ordinance, said Mayor Jim Rady, “is simple, easily documented, not discretionary and I think it will work.”

With his encouragement, the council voted, 4-1, to have a committee of six--two representatives of Escondido park owners, two representatives of mobile home owners, City Atty. David Chapman and City Councilwoman Doris Thurston--discuss the details of such an ordinance and return to the council by April 1 with its recommendations--or with a different proposal all its own.

Rady argued that the benefit of his proposal is that it does not involve any number of possible equations, some of them open to ambiguity, which the city could have employed in determining fair rents, based on such criteria as the park owner’s investment, his net operating income or an arbitrary determination of a fair level of profit.

He maintained that this plan would allow the free marketplace to determine rents, versus technical equations that could work for or against the parties involved.

Escondido currently does not have a rent control ordinance, and residents of the city’s 33 mobile home parks have been pleading for years for city intervention in controlling escalating rents.

Rady said the key to controlling rents is establishing an amount, perhaps unique for each mobile home park in the city, that could not be exceeded at that park.

That amount, he said, would be determined by the average monthly rent of the last five spaces leased to park newcomers--”an amount beyond which nobody’s rent could be raised.”

Rady noted that, if there is no turnover at a particular park, rents could not be increased because there would be no new leases to indicate what the current market rate would be. Rady and park owners observed, however, that most parks experience a 10% annual turnover of residents.

Councilman Jerry Harmon opposed Rady’s suggestion, arguing that there would be such a demand for existing spaces in Escondido that persons moving to the area would be willing to pay rents significantly higher than those charged current park residents. Current residents, he said, would still face excessive rent increases.

To that point, other members of the council pledged that, through city financial subsidies, no current park residents would be economically evicted in the event that rents increased beyond their means.

Rady dismissed rent control based on a “fair rate of return” for the park owner because it typically involves expensive appraisals of parks and usually is determined ultimately by the courts. He also said park owners could too easily manipulate figures to reflect excessive operating costs if a net operating income formula was used.

“What could be simpler than a system that lets the (prospective park resident) say, ‘I’ll pay no more than X number of dollars a month.’ That’s what a space is worth in that park. If the park owner charges too much, the person walks away and goes somewhere else. The simplicity is the beauty of this system,” Rady said.

Harmon retorted: “It’s easy to say, but it won’t work.”

Rady answered: “Then they (park residents) will be right back here and I’ll have to reconsider my position. But let’s start with this. Let’s try it.”

Don Olmsted, spokesman for mobile home owners, said he opposes Rady’s plan because park owners might pressure residents to leave their parks in order to generate greater turnover, so that rents could steadily be increased.

“But I’m encouraged the council asked the homeowners and park owners to sit down and try to negotiate this,” he said.

Park owners in the council audience said that, if there is to be any form of rent control, they could embrace Rady’s proposal.

“Rent control is as American as borscht, “ said Buz DuPont, who owns the 100-space Vista Verde mobile home park in Escondido. “But as long as they’re going to do something, I’d just as soon have some input in it.”

Chuck Jacobson, who owns Escondido Mobile Park West and Eastwood Meadows, said he has “no problem” with Rady’s proposal.