Carson Sued Over Mobile Home Rent Law
Carson’s largest mobile home park filed a federal lawsuit against the city this week, asking $25 million in damages and seeking to overturn portions of the city’s strict mobile home rent control ordinance.
Citing a federal appeals court decision, the suit seeks to eliminate a provision, known as vacancy control, that prevents park owners from increasing the rent for a space when a resident sells a mobile home to a new tenant. The suit, filed Monday by the 409-space Carson Harbor Village, says this provision is unconstitutional.
In a second line of attack, the suit also seeks to relax Carson’s formula for rent increases, which in general permits them only to pay for higher operating costs and capital improvements. Referring to a recent state Supreme Court decision, the attorney for the park said rent control should not prevent park owners from earning a reasonable profit on their investment.
The filing of the federal lawsuit follows a series of similar lawsuits filed in state Superior Court by the Colony Cove, Carson Gardens, Avalon Carson and Shangri Lodge, all Carson mobile home parks. The cases, which date from last October, are still pending.
In challenging Carson’s vacancy control, the Carson Harbor Village lawsuit cites a 1986 federal appellate decision in a case involving a Santa Barbara mobile home park. The ruling said preventing rent increases when a tenant moves out can result in an unconstitutional seizure of private property by the government because rent control may enable mobile home residents to sell their units at artificially inflated prices. Park owners, whose rents remain low, may lose out, the court held.
The appellate decision was cited May 30 by Senior U.S. District Judge Laughlin E. Waters when he struck down vacancy control for about 7,000 mobile homes in the city of Los Angeles. Waters awarded $1 million in damages to the owners of the Tahitian Terrace mobile home park in Pacific Palisades.
In arriving at the amount of damages, Waters analyzed comparable sales of mobile homes and ruled that 48 mobile home owners who had sold their units during the preceding year had reaped profits averaging $20,000 because the new tenants’ rents remained controlled.
In the suit filed against Carson, attorney Richard Close said a study of sales in Carson Harbor Village estimates that the value of a mobile home there is about $50,000 higher than the value of a comparable mobile home in areas without vacancy control. The suit seeks damages for each unit, whether or not it has been sold.
But Coni Hathaway, chairwoman of Homeowners Against Rent Decontrol, the city’s most active mobile home owners organization, said mobile homes in Carson do not sell for more than those in comparable parks outside the city where there is no rent control.
Hathaway said her organization is collecting data on mobile home sales prices. “Our preliminary analysis shows that, comparable-to-comparable, they are the same,” she said.
Hathaway said the city should fight to keep its mobile home ordinance to maintain the stock of affordable housing.
“Because real estate values have gone up so high, mobile homes now provide an ideal way for a family or an older couple to be able to afford a home,” she said.
Close countered that the city is ignoring the federal appellate decision at considerable legal risk and urged that Carson eliminate vacancy control, as several other cities have done, before a judge forces the issue.
“Carson will lose like the city of Los Angeles lost,” he said. “Can the taxpayers of Carson afford the bill? What services is the City Council going to cut to pay various mobile home park owners?”
In attacking the often-upheld concept of rent control, Close said he hopes that the reasoning of a more conservative state Supreme Court will be persuasive in the federal lawsuit.
He pointed out that in a case involving Proposition 103, the auto insurance initiative, the state Supreme Court recently held that insurance companies are entitled to fair rate of return.
“Likewise, we say that landlords are entitled to a fair rate of return,” Close said.
