A hitch in the plan
COLONY COVE Mobile Estates resembles a quaint village with its narrow lanes and pastel homes, including some with porches and attached garages. There are ficus, twisted juniper, Italian cypress, eucalyptus, palm, pine, jacaranda, lemon, orange, gardenia and bird of paradise.
The seniors-only park in Carson has more than 400 spaces, and residents pay about $400 monthly for renting the land on which their manufactured homes sit, plus access to a clubhouse, pool, hot tub, gym and picnic area. Most own their two- and three-bedroom homes, but all lease the land beneath them.
Now, the mobile home development could “go condo.” No, owner James F. Goldstein isn’t evicting elderly residents to put up new condominium buildings. Everyone is welcome to stay in the mobile homes already on the property. They will have the choice of buying the piece of land beneath them or continuing to rent. But the plan is not without controversy. The moment that even one owner buys the pad on which his or her home sits, the complex will no longer be governed by local rent control.
Goldstein’s lawyers, however, point to state protections that would keep the rent from ballooning for low-income residents. They also explain that some buyers who qualify for various homeowner programs would pay less for a mortgage than they are paying to rent.
As park residents contemplate their future, they want real numbers. None are available.
Under state law, the sales price can’t be set until the process is much further along. But L. Sue Loftin, a Goldstein attorney, provided one example when she recently addressed a packed meeting of residents. At a Palm Springs mobile home park that Goldstein converted from rental to resident ownership three years ago, she said, spaces sell today for $129,000 to $169,000, based on size and location of the lot.
Conversions of mobile home parks are taking place across the country. The process changes the form of ownership and the legal description of the property, which is subdivided into individual parcels, but it doesn’t change the use.
Although no organization tracks how widespread the trend is, Richard Close, another lawyer representing Goldstein, is working on 18 conversions for owners across Southern California.
Tenant groups and nonprofits also initiate these conversions.
“It’s one thing if the residents of the park favor converting ... so they can buy their lots and preserve affordable housing. But when park ownership initiates such a conversion, it’s usually done to maximize their profit,” said Maurice Priest, president of the nonprofit housing corporation Resident-Owned Parks Inc., based in Sacramento. “It’s one way to break out from local rent control.”
Park owners, of course, see things differently.
Goldstein declines interviews about his business dealings, according to Close, so the attorney explained the benefits.
“When park owners convert,” he said, “they can sell some units and retain for future appreciation units that residents do not want to buy.” The lawyer said residents benefit because they own the land rather than rent, they control and manage the park through a homeowners association after a majority of the units have been sold and they, instead of the park’s proprietor, gain the future appreciation of the land.
A kind of a condo
If Goldstein’s application to convert the park is approved by the state Department of Real Estate, he can sell what will be known as single-family manufactured-housing condominium units -- basically the individual parcel on which the home sits and a proportional share of the common areas and amenities. If tenants do not buy, he will continue to own the lots and their fractional shares of the common areas.
Because the land is included in the purchase, mobile home condominium units qualify for mainstream mortgage financing and are assessed county real estate property taxes. Without the land, lenders generally finance mobile homes with personal property loans that carry higher interest rates. Owners of manufactured homes who rent space typically pay personal property taxes or, if they purchased before July 1, 1980, state vehicle license fees.
A pioneer of owner conversions, Goldstein applied in 1993 to change the 377-unit Palm Springs mobile home park El Dorado Country Club Estates despite significant resident opposition. The city of Palm Springs attached conditions to the conversion, which would have required him to continue local rent control until escrow closed on at least 120 units, to hire a specific appraiser to determine the sales price and to provide financial assistance to all residents to help them purchase the lots, according to 2002 court documents.
Goldstein’s lawyers, including Close, successfully argued that the city lacked the authority to impose the conditions. The first lot was sold at El Dorado in 2003.
Since then, Goldstein also has applied to convert Carson Harbor Village, a family mobile home park with more than 400 spaces. His application there is much further along in the process than at Colony Cove, which is across the street.
Jackie Apodaca has lived at Colony Cove for 21 years.
“I’m 70. I don’t want a mortgage. I’ve already paid for this house,” she said. “My neighbor is 91, and they want him to have a mortgage.”
Not according to Close. “The key in conversions is that the tenant, under state law, has the ability to either buy or rent, their choice,” he said. “No one gets evicted. No one has to buy.”
For residents who continue to rent, he explained, state rent control would apply to those low-income tenants who earn less than $44,000 for a two-person household. Their annual hikes could go no higher than the consumer price index, the federal government’s key measure of inflation. It was 3.8% at the end of August, the most recent cost-of-living data available.
The rents for other tenants would rise, he said, over a four-year period to market rates. Some residents fear that could be at least $1,000 a month.
In the absence of facts, rumors abound. Confusion and distrust also flourish.
“Every time there’s a big announcement or rules come down, or Sue Loftin comes here, or Goldstein sends out one of his memos,” said resident Ann Lasky, 62, there are “paramedics and ambulances in the park the next day.”
Loftin, an attorney for Goldstein and an expert on mobile park conversions, meets regularly with Colony Cove tenants to explain what is going on, although she is not obligated to do so. She did not respond to requests for an interview.
Looking for answers
Many residents who oppose the conversion seek answers from Bill Smalley. The retired veteran, 66, has lived in the park for 14 years and heads one of the committees against conversion. They are fighting, Smalley said, to preserve local rent control. And, he said, at their ages they don’t want to take on significant new debt plus monthly homeowners association fees.
“Most of us live on fixed incomes,” he said. “Some people ... $800 or $900 a month.”
Smalley and his group have appealed to federal, state and local elected officials, seeking additional protections for senior citizens and protesting the loss of affordable housing.
Carson Mayor Jim Dear has met with residents of both Colony Cove and Carson Harbor Village. Most oppose the change, he said, but there is not much the city can do beyond requiring that Goldstein’s application be filled out properly.
Once Carson officials deem the application complete, Goldstein will obtain an appraisal of the individual lots. Based on that, an estimated price for the condominium interests will be submitted to the California Department of Real Estate, the agency that issues the sales permit.
Because the mobile home condominium unit includes land, Carson officials may make prospective buyers eligible for a first-time homeowners program financed by redevelopment funds, according to Ken Freschauf, Carson’s housing program manager. Under the current guidelines, the loan would require no payments during the first decade of a 30-year-loan.
Not everyone would qualify. Lasky, for example, fears that she and her husband will not be able to afford to buy. Both of them work full time. She is a document specialist for an aerospace firm. Her husband, Barry, 51, handles shipping and receiving for a medical firm. “We don’t qualify for any of the special programs,” she said.
She also worries that they will not be able to sell or move their home, which was manufactured before 1976, because many parks reject older homes in an attempt to improve the park’s appearance, and few of California’s mobile home parks have vacancies.
“We moved here from Lawndale,” Lasky said. “The house we were renting was sold out from under us, and now we’re facing it again.”
gayle.pollard-terry@latimes.com
