Voters to Decide Fate of Rent Control in Mobile Home Parks
Voters will be asked March 26 to settle an ugly fight between landlords and mobile home park tenants over repealing local rent controls and outlawing any rent restrictions in the future.
At issue is Proposition 199, a relatively obscure initiative written and financed by park operators. They claim that a marketplace free of government controls would stimulate development of needed affordable housing and result in benefits for tenants due to increased competition.
But mobile home park tenants, mostly senior citizens and young families, claim that Proposition 199 would trigger waves of unprecedented rent-gouging that ultimately could drive them from their homes.
“People are extremely concerned about Proposition 199,” said retiree Ron Laramie of Huntington Beach, a mobile home owner and activist in the campaign against the initiative.
Although rent controls traditionally provoke localized fights between park owners and tenants, this will be the first time such a proposal has faced voters statewide. Owners went to the initiative after years of losing battles in the Legislature.
Unlike apartment tenants, mobile home residents typically own their coaches and rent space from park operators. They say they cannot merely pack up and move when rents get too high because mobile homes--despite their names--are not very mobile.
Under the proposal, rent controls would be phased out gradually on a space-by-space basis when the mobile home was sold, vacated or its ownership transferred, a process that likely would take years.
The initiative also would require landlords to provide a 10% “rental assistance” discount to the poorest tenants who occupy 10% of the spaces after a park was removed from rent controls. Opponents charge that such a reduction would be meaningless for a tenant whose rent had already been substantially increased.
But the core economic issue, both sides agree, is the initiative’s proposed ban on rent restrictions in the future by local or state governments.
“There is considerable interest in housing as an investment,” said Dennis Wolcott, a spokesman for the Proposition 199 campaign organization Californians for Mobilehome Fairness. “The threat of rent control is keeping the lid on that money.”
But the prospect of outlawing future rent controls has energized thousands of mobile home owners as never before, said Dave Hennessy, president of the 60,000-member Golden State Mobilehome Owners League, chief opponent of the proposition. He said mobile home owners outside rent control parks are especially opposed to it.
“Those people who haven’t got rent control want it. They don’t want this thing to pass because they know that if it does, they will never get it as long as they live,” Hennessy said.
Officials estimate there are about 1 million people who live in mobile homes or manufactured housing statewide, including anywhere from 140,000 to 250,000 in rent-controlled parks.
Traditionally, mobile homes have been favored by seniors who want stable housing costs in safe and peaceful environments. Increasingly, young families who cannot afford fixed-site homes have found mobile homes an attractive alternative.
Mobile home park operators, whose campaign has outspent tenants about 3 to 1, maintain that the enactment or mere threat of local rent controls has hobbled marketplace forces and inhibited their ability to make a reasonable profit.
They also argue that rent controls artificially inflate the value of a mobile home far beyond its normal market price because below-market rental rates are more attractive to buyers. As a result, the seller can reap an unearned windfall in equity.
“If the rent is $200 below market, it adds $20,000 to the value of the coach,” said Charles Dupont, operator of a rent-controlled park in Escondido. “That is equity that belongs to the landowner. The premium did not belong to the tenant in the first place.”
But Jack Heath, 76, who lives in a 228-space rent-controlled park in San Juan Capistrano, maintains that coach owners are as entitled to increased equity as any other seller.
Like other elements of the real estate market, Heath noted, sales of mobile homes have suffered during the economic downturn. For many people, he said, the investment in their coaches is their biggest asset.
“If rents go up, our places are less attractive to sell,” Heath said. “If we lose this [election], we automatically begin losing equity in our asset.”
Supporters, led by park investors Jeffrey A. Kaplan and Thomas T. Tatum of Los Angeles, have raised more than $1.6 million for the campaign. In contrast, the Golden State Mobilehome Owners League has reported raising $489,000, most of it in $25 and $50 contributions from tenants.
Opponents have sought to make Kaplan the poster boy of their campaign against repeal of rent controls. They cite pending lawsuits filed against two Kaplan-Tatum companies, alleging that they duped tenants into signing long-term, high-rent leases in violation of San Jose rent control ordinances. The lawsuits filed by the Santa Clara County district attorney’s office claim that park residents were forced to walk away from their homes or sell them at bargain-basement prices. Kaplan has vigorously denied the allegations.
“Our opponents try to use Mr. Kaplan as an example of all park owners in the state. Nothing could be further from the truth,” said Wolcott, the Proposition 199 campaign spokesman. “He helped qualify the initiative. He has no active role in the campaign.”
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Proposition 199 at a Glance
Proposition 199, an initiative on the March 26 ballot, would bar communities from adopting rent control ordinances for mobile home parks. It also would phase out mobile home rent controls in about 100 communities. In addition, the measure would provide 10% rent reductions for extremely low-income residents in parks where rent control has been phased out.
ARGUMENTS IN FAVOR
* Developers would be encouraged to build new mobile home parks, increasing the state’s supply of affordable housing and lowering home purchase prices. Although state law already prohibits rent control on newly developed parks, the proposition would provide a strong extra layer of protection against new rent controls if political winds shift.
* Residents covered by rent control would face rent increases that would be, at most, only slightly more than currently allowed in their communities.
* Local governments would save money because they would be able to phase out their administration of rent control.
* Supporters: California Republican Party, California Chamber of Commerce, National Tax Limitation Committee, Alliance of California Taxpayers and Involved Voters
ARGUMENTS AGAINST
* The proposition would put many elderly and low-income park residents increasingly at the mercy of park owners, some of whom were imposing excessive rent increases in the years before rent controls were adopted. Many residents could be forced to abandon their property.
* In communities where rent control would be phased out, landlords would have an incentive to pressure existing residents to move, so they could start charging uncontrolled rents.
* Developers already have a state law prohibiting rent controls on newly built parks. High land prices and zoning restrictions, not the threat of rent control, is inhibiting development.
* Opponents: California Democratic Party, California Labor Federation (AFL-CIO), California Council of Churches, American Assn. of Retired Persons
