SAN JUAN CAPISTRANO : Mobile-Home Rent Increase Is Rejected

The City Council this week rejected a 26% monthly rent increase proposed by the owners of one of the area’s largest mobile-home parks, saying the request far exceeded standards outlined in a citywide mobile-home rent-control law.

Instead, the council voted 3 to 0 to allow the owners of San Juan Mobile Estates to increase by 5.1% the monthly rents, which average $330 per space. The smaller increase reflects cost-of-living adjustments under a formula in the city’s 1978 rent-control law.

The owners’ partnership, San Juan Investors Ltd., had asked for the 5.1% raise allowed by law and an added $70 per month per space to offset increased expenses incurred by the firm’s recent $3.8-million purchase of a 31-acre mobile-home park on Alipaz Street. For 20 years, San Juan Investors had leased the land for the 310-unit park.

Jeff Thomas, an attorney representing San Juan Investors, said the partnership decided to buy the land after learning that the annual lease cost was going to quadruple, from $57,000 to $266,000.

But mobile-home residents protested the proposed rent increase.

“Nowhere (in the law) does it say that we should take all those extraordinary expenses and put them in a rent raise,” said Al Simmons, a spokesman for many San Juan Mobile Estates residents.

Council members agreed, saying increased debts from the land-purchase deal should not be passed along to park residents, as was recommended last month by the city’s advisory Mobile Home Park Review Committee.

“It is possible to over-finance these debts and (then) overburden the residents,” Mayor Gary L. Hausdorfer said. “I think that’s wrong.”

In its vote, the council also said San Juan Investors did not adequately prove that increased expenses are preventing the owners from receiving fair profits. An impartial hearing officer assigned to the case earlier this year reached the same conclusion.

“These gentlemen who purchased the property knew what they were doing,” Councilman Lawrence F. Buchheim said. “We have had an ordinance in place and had hearings on it and been to court on it.”

The city’s mobile-home rent-control law has withstood several court challenges, including one last year in the 4th District Court of Appeal. In that case, the owner of the Capistrano Terrace mobile-home park sued the city for damages based on his inability to meet mortgage payments because he was denied a rent increase.

The judge ruled that because the owner’s financial setback was apparently temporary, the city was not responsible for ensuring him an immediate profit through rent increases.

San Juan Capistrano’s seven mobile-home parks house most of the city’s senior-citizen population.