June ballot item would phase out rent control
Having toiled in machine shops during World War II and worked for decades in other manual jobs, 84-year-old Mary Kubancik felt entitled to live out her years in a pleasant mobile home park in Sylmar.
Instead, the frail Kubancik is preparing to move out after 19 years. Her $919 monthly Social Security check won’t cover her essentials and the $702 that her mobile home space will cost when the latest double-digit increase takes effect in April.
“I worked since I was 14 years old, and this is all I have,” she said, tears vying with anger in her eyes. “I had to sell. And this was supposed to be my golden years.”
Six rows away, Elisena Thompson, 86, doesn’t worry about making ends meet, thanks to rent control rules that have kept her space at $385 a month. In a quirk of geography, the 186-unit Blue Star Mobile Home Park, where both women live, is partly in the city of Los Angeles, which has a rent control law, and partly in an unincorporated area, which has none.
Across town is Robert Kubota, 66, a pharmacist and chief executive of a family firm that operated a mobile home park in Chula Vista for 44 years. He blames rent control laws for six years of financial losses on the park. A Bankruptcy Court judge agreed that the business was not sustainable and approved a plan that led to the closure of Jade Bay Mobile Lodge last year.
“With rent control, you couldn’t make any money,” Kubota said. “The social problem of helping the poor should not be thrown on one industry.”
In the spring, voters will decide whose interests prevail. More than 100 owners and operators of apartment buildings and mobile home parks spent nearly $2 million to put an initiative on the June 3 ballot to phase out California’s rent control laws. About 1.2 million people statewide are covered by such laws.
Los Angeles, which has 626,600 rent-controlled residential units, could be affected more than any other city if the measure passes.
Big financial backers of the California Property Owners and Farmland Protection Act include the Howard Jarvis Taxpayers Assn., which gave $100,000 to the effort and lent the campaign $200,000; the Western Manufactured Housing Communities Issues political action committee, which contributed $150,000; and the Apartment Owners Assn. PAC, which put in $100,000.
Among the donations is $50,000 from Equity Lifestyle Properties Inc., which owns 27 mobile home parks in California and many more in other states. Equity Lifestyle’s chairman is Sam Zell, chairman and chief executive of Tribune Co., which owns the Los Angeles Times.
Proponents tout the measure as one that would limit government’s use of eminent domain, preventing the taking of private property for private development. Although that is the first provision of the measure, it goes on to phase out rent control. Opponents have dubbed the measure the “Hidden Agenda Scheme,” in part because rent control is not mentioned in the ballot title.
“Homeowners want true eminent domain protections but will not be duped into enacting harmful and deceptive provisions that have nothing to do with eminent domain,” said Ken Willis, president of the League of California Homeowners.
His group and others last week qualified a separate initiative for the same June 3 ballot that would simply restrict eminent domain.
Meanwhile, another backer of the rent control measure is Sierra Corporate Management, which gave $35,000 to the campaign. It operates the Blue Star park, where the ballot measure is being watched with special interest. Passage of the measure would dash the hope of tenants there who want the city of Los Angeles to annex the part of the mobile home park that is outside the city boundary, extending rent control to all residents.
Thompson, sitting in her roomy, lime-green coach, said her elderly friends on the wrong side of the city-county boundary can no longer afford to live there. “It breaks your heart,” she said.
The measure says rent control laws enacted before Jan. 1, 2007, would remain in effect for tenants who were living in the controlled units as their principal residence. When the tenant leaves, rent control would be removed from that unit.
Los Angeles has rent control on all apartments built before Oct. 1, 1978, and on mobile home parks whose operating permits were issued before Feb. 10, 1986.
Some 110 California cities and counties have adopted laws controlling rent for mobile home parks. Those cover about 230,400 people in about 153,145 mobile homes, according to industry officials. An additional 1 million people live in rent-controlled apartments in the state.
Generally, the laws allow landlords to raise rents by a limited amount -- in many jurisdictions by the amount of the consumer price index. Whenever a unit is vacated, the landlord can reset the rent at market level. But while the unit is occupied, rent increases are subject to controls.
“That sets a perverse incentive for landlords to charge the highest rent when an apartment is vacated,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn.
Coupal said the long-term effect of rent control laws is to reduce the amount of affordable housing because developers won’t invest in it.
Kubota, for his part, says rent control helped ruin Jade Bay Mobile Lodge. He says financial problems developed at the 75-unit park after Chula Vista adopted a rent control law in 1986, and there’s been an operating loss in each of the last five years.
The site is now fenced, and the mobile homes have been removed.
“The income never matched the expenses,” Kubota said, adding that he couldn’t afford to make improvements and “the whole park deteriorated.”
Some tenant activists say that Chula Vista’s rent control law allows landlords to petition for increases so that they can make a “fair return” on their properties. To do so, they must open their financial books to the city.
Tim Sheahan, president of the Golden State Manufactured-Home Owners League, said Kubota’s firm did not take advantage of the appeal because it wanted to shut the park down so it could be redeveloped with condos.
Kubota declined to discuss the current status of the park, but city officials said an application had been submitted for a zone change that would allow apartments or condominiums on the site.
Tenant-rights advocates say that if rent control is phased out, many poor and elderly people will have no place to live.
“It would literally take the roofs off most tenants’ heads who live in rent control jurisdictions,” said Larry Gross, executive director of the Coalition for Economic Survival, a tenants’ rights group in Los Angeles.
“Los Angeles would be hit the worst,” Gross said. “Landlords would resort to any action, legal or illegal, to get those tenants out.”
The removal of rent control also would make selling mobile homes more difficult because buyers could face years of unregulated rent increases for the land their mobile homes occupy, according to Glenn Bell, a tenant activist.
“It would be devastating,” Sheahan said.
Kubancik said that with the increase scheduled for April on her Blue Star lot, her rent will have risen about 65% in two years. Thompson, whose lot is rent-controlled, said her rent had gone up no more than 4% a year.
Representatives of Blue Star’s operators did not return calls for comment.
Sheila Day of the Western Manufactured Housing Community Assn., which represents many mobile home park owners, voiced sympathy for Kubancik but said her situation did not justify taking money from the owner of the park to subsidize her housing.
“Why doesn’t the city or county of Los Angeles help her by providing rent subsidies?” Day asked. “It’s incumbent on government to help these people without putting it on the back of private investors.”