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Close the loophole that lets some Malibu homeowners skip out on their property taxes

Close the loophole that lets some Malibu homeowners skip out on their property taxes
Signs welcome visitors to Malibu's Paradise Cove in 2014. (Los Angeles Times)

If you were around in the 1970s, you might remember Jim Rockford, the TV sleuth who lived in a trailer on the parking lot in Paradise Cove, with arguably the best view in Malibu. No next-door neighbors, just Rockford (played by the late James Garner), the rundown trailer and the beach. Rockford investigated a lot of cases, but the biggest of them all went unsolved: How could a guy who did five years in San Quentin and who now scratched out a living as a private investigator afford to live on that valuable patch of land? And is there a similar spot nearby for us?

In real life there is no Rockford-like stand-alone trailer on a deserted parking lot in Paradise Cove, but there is indeed a mobile-home park. And as reported in The Times on May 19, one home there recently sold for $5.3 million. It's got stunning views of the cove and of the Malibu coastline and beyond, past Santa Monica and south to the Palos Verdes Peninsula. There are four bedrooms, four bathrooms, Carrara marble, wood shingles, huge windows, a lovely flagstone patio, a perfectly positioned wood deck, a two-car garage – and it's in Malibu. There is little hint of the "mobile" part, manufactured and first sold in 1976, buried underneath the spacious built-out cottage on top. Rockford wouldn't recognize the place.

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Imagine the taxes on this home!

No, seriously, go ahead and imagine. How about $29? Rockford could easily afford that, even in 1976. How come the owners of a $5.3-million Malibu home are paying so little in property taxes?

The answer is that this piece of paradise is technically still a mobile home, even though there is nothing mobile about it. The owner of the mobile home park pays the tax on the land, and that's fine; but the owner of the home itself isn't paying the any property tax on the home except the $29 in-lieu license fee – the mobile-home equivalent of a vehicle license fee or "car tax."

That would be okay if this were Rockford's trailer, but there is a point at which a manufactured home ceases to be a mobile home. Build enough conventional house on top of the chassis, and it's a conventional house, even if it happens to have a chassis in the basement. It stops being a rare opportunity for a handful of non-wealthy but lucky Rockfords of the world to live on the beach, and instead becomes an opportunity for the very wealthy to nestle into Malibu without having to pay their property taxes.

This abuse can occur up and down the coast, but it is especially acute in Los Angeles and adjacent counties.

Current law allows owners of such homes to convert to conventional property taxation if they want to, but county assessors – the elected officials who determine taxable values – can't make that conversion on their own. Los Angeles County Assessor Jeffrey Prang is backing a bill that would allow them to do so. After moving through the state Senate a year ago, though, SB 434 got stuck in the state Assembly. It's time for it to get moving again. The Assembly should pass the bill and send it to the governor.

It's tempting to root for the developers and property owners who were clever enough to find a loophole in tax laws so they could build and sell virtually tax-free Malibu cottages. But the property taxes those homeowners are avoiding are what pay for police and fire protection as well as the other services that help sustain the high value of their homes. Special tax treatment for mobile-home owners was meant to provide housing choices to homeowners and residents, many of whom could not afford, or chose not to buy, more expensive conventional houses. It was not meant to give developers an incentive to convert homes like Rockford's trailer into Malibu estates.

By the way, Garner returned as Rockford in several 1990s TV movies, and he was still living in his trailer. Now, though, it was built out and remodeled. He had clearly put some work and money into it. Good for him – as long as he was paying his taxes.

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