Archive

Archive for the ‘Rent Control’ Category

City of Sunnyvale, CA Manufactured Home Community Rent Control Plan – A Closer Look

December 5th, 2016 No comments

The San Jose Mercury News reports that the City of Sunnyvale, California, is paying “special attention” to “rent stabilization” for mobilehome parks as a top priority in 2017.

Several points are important to keep in mind. First, rent stabilization is merely a euphemism for price-fixing/rent control.

The entire objective of rent control is to distort the market and have a government agency decide what rent is appropriate. Such governmental controls never lead to more housing or better housing.

Second, rent control has documented impacts.

For example, the City of Carson, California, lost a federal court jury trial earlier this year arising out of its enforcement of its draconian rent control ordinance. The jury concluded, properly, that the city had taken the park owner’s property in violation of the property owner’s Fifth Amendment rights.

This type of impact is all too common.

Any unbiased research will disclose that cities across California, and elsewhere in the nation, have engaged in time consuming and expensive litigation because of price-fixing for rents in mobilehome parks. The cities of Escondido, Hollister, San Marcos, Palm Springs, and multiple others have spent literally millions of dollars arising out of enactment of rent control ordinances.

All of those funds come from the taxpayers in the city. Only a small minority of city residents reap the “benefits”.

This writer has yet to see a rent control ordinance adopted by any municipality [or county] that utilizes any variation of an “income qualifier” for a resident to receive the “benefits” of rent control.

The alleged underpinning for rent control is that low income residents are being “priced out” by allegedly unscrupulous landlords. Setting aside from the issue of whether such claims are true, the reality is that when a government agency [whether state or federal] provides housing assistance, it makes all applicants be income qualified.

rentcontrolcwilliamdahlinjdhartkinglawindustryvoicesmanufacturedhomeindustrycommentarymhpronews

Headline, images and graphics on this page are provided by the publisher, not the opinion writer. As with all Op-Ed or letters to the editor, the views are those of the writer – other viewpionts are welcome.  Image credit, MHProNews.

Government housing assistance programs, such as Section 8, should be mirrored in any rent control ordinance. Why aren’t they? Should persons with substantial assets and/or annual income have their rent subsidized?

One striking example should suffice.

The City of Malibu has mobilehome park rent control. Mobilehomes in that coastal community are now selling at prices in and around $1 million. Why?

The answer is simple. An existing resident can sell a home for many times its actual value because the space rent is far below market.

The tenant who is leaving is really selling, for all practical purposes, the land where the home is sited even though the resident does not own the land. And the new home owner is clearly not low income, since the price points are indeed in the million-dollar range. Published statistics report that many of the sales result in purchases that are “all cash.”

The exact situation in Malibu will almost certainly be duplicated in Sunnyvale.

Sunnyvale, in the heart of Silicon Valley, has housing shortage issues.

However, the housing shortage issues were created and exacerbated by the city, and all of the surrounding communities, who have consistently and purposefully denied developers the opportunity to build new homes in the area.

The high-tech jobs in the area, combined with the lack of housing has, of course, created a demand for housing that cannot be filled by the existing supply.

That supply shortage causes prices to go up. What is the price of a median home in Sunnyvale? Zillow reports the median price is approximately $1.4 million. Are there any “low income” people buying single family homes in Sunnyvale? Of course not.

Having a rent stabilization ordinance that is income-based and requires income qualification would achieve the alleged objective of protecting people with limited resources.

pointdumeclubofmalibu-manufacturedhomecommunity-multi-milliondollarmanufacturedhomes-googlemaps-postedindustryvoicesmanufacturedhomeindustrycommentarymhpronews

Google Earth view of Manufactured Home Community in Malibu, CA off famous Zuma Beach. As Dahlin notes, this community boasts numerous manufactured homes valued at over a million dollars. To see a photo spread of one of these multi-million dollar manufactured homes, then owned by a movie star, click here.

Having price constraints on the re-sale of homes would also prevent those very tenants from then selling a home for much more than its actual value to a new tenant who pays more to take advantage of artificially low rent.

Finally, research studies on this subject have demonstrated that price controls eventually cause property upkeep to suffer and decay. The current tenant, understandably, could not care less about that future problem. It is the future tenant that pays the price for delays in infrastructure repairs.

Rent control is a political “solution” that has no economic basis. A city council that adopts price controls on mobilehome park space rent is seeking to incur favor with resident groups (voters) who want their housing costs to be subsidized. And the city wants to do that without spending taxpayer money.

Thus, the vote is to compel the park owner to “subsidize” the residents’ housing costs.

The vote of such a city council is averse to the small number of property owners who own and operate mobilehome parks. That is precisely the type of legislation that the Fifth Amendment was designed to protect against.

c-william-bill-dahlin-hartkinglaw-postedmanufacturedhousingindustryvoicesmhpronews

C. William Dahlin, JD
Hart | King Law

 

(Editor’s Note: news the article that Dahlin is commenting on is linked here.)

California Housing Crisis: Manufactured Homes Could Be Part of the Solution

October 14th, 2016 No comments

Costly government regulations have stifled the development of attainable housing

October 14, 2016 (Sacramento, CA) – In an effort to educate public policymakers on how mobilehome parks operate and how the misapplication of rent control has contributed to California’s housing crisis, the Western Manufactured Housing Communities Association (WMA) has launched a statewide public education campaign.

There is no question that California is one of the most expensive places to live in the country,” said Sheila Dey, Executive Director of WMA. “So when the purchase price of a mobilehome can be up to 30% less than a traditional home, state and local government should be creating incentives to build more mobilehome parks and not less.”

manufacturedhomeskitcaliforniamanufacturedhousingindustryvoices-mhpronews

Fish-eye lens camera view of California manufactured home by Kit, – this photo was not part of WMA’s original column. Photo credit, ManufacturedHomes.com

Rent control is a reaction to local government’s failure to plan for their community’s future housing needs. When attainable housing is no longer accessible, politicians force parkowners to subsidize a tenant’s housing costs regardless of income, which often leads to a reduction in park amenities and in some cases, lawsuits when rents do not cover a park’s operational costs.

California has created a regulatory environment where existing parks are threatened by rent control ordinances that undermine a park’s economic sustainability, and cost prohibitive building regulations and fees that have stifled the construction of new parks. As a consequence, it’s been decades since a new mobilehome park has been built in California.

rentcontrollocalgovtfailureplantakelandlordsrights-sheiladeywesternmanufacturedhomecommunitiesassociationwma-postedindustryvoices-mhpronews

Graphic credit – MHProNews.

Building more manufactured home communities could ease California’s housing crisis,” said Dey. “But first, politicians are going to have to address rent control’s failure and reduce building fees, and at the very least, require means-testing so that rent control truly benefits the needy.”

In an effort to educate policymakers, WMA has released a video which explains how parks operate and how they have become a source of quality housing for scores of people from all socio-economic backgrounds. To demonstrate its misapplication, the video showcases a rent control park in Malibu, California, where millionaires live in beachfront properties, and for some, the properties serve as a second home.

 

 

Fast Facts

  • Mobilehomes offer all the quality and comfort of traditional homes, for up to 30% less.
  • Unlike a traditional rental property such as apartments, mobilehome parks operate like small villages or cities. Rents often cover property taxes and fund essential neighborhood services, such as, park management, utilities, cable, roads, landscaping, security, recreation and more. When rent control ordinances reduce or freeze rents at below market rates, services can be reduced like a city facing budget deficits.
  • Rent control ordinances do notrequire means-testing. As a consequence, park owners are required to subsidize the housing costs of tenants, regardless of their need.
  • In an extraordinary case, a father and son want to close their mobilehome park, but the  City of Palo Alto is standing in the way by threatening to forcibly seize it by eminent domain.
manufacturedhomecommunitiescalifornia-postedmanufacturedhomeindustryvoices-mhpronews

Image collage inserted by MHProNews.com, and was not part of WMA’s original column.

  • Very much like homebuilders, costly regulations and fees do not provide financial incentives to expand or build new mobilehome parks in California, limiting the potential for new stocks of attainable housing. Even though mobilehomes are a source of affordable housing, not one park has been built in California in decades.
  • Rent control regulations can cost local governments millions of dollars to administer and to legally defend; all at the expense of other government servicesand programs.
  • Rent control can lead to lawsuits when parkowners are denied their right to a fair and reasonable return on their investment. This year, afederal jury unanimously found that the City of Carson’s mobilehome park rent control ordinance violated the constitutional rights of a parkowner in Southern California. The parkowner was awarded $7.5 million in damages.
  • Many parkownerssupport long-term lease agreements and direct rental assistance programs, which provide bonafide rental protection and help to those mobilehome park residents truly in need.

To follow WMA’s campaign to reform the failed practice of rent control, visit

www.wma.org/real-housing-solutions,

www.facebook.com/realhousingsolutions and

twitter.com/CAHousingFix ##

sheiladey-wma-westernmanufacturedhomecommunitiescalifornia-postedindustryvoicesmhpronewsSheila Dey & Marko Mlikotin

WMA

 

(Editor’s Note: Rent Control and Measure V (see our latest story, linked here and in the image below) have both local and national importance. So MHProNews offered to provide this forum for this column to be republished.  Other industry perspectives are welcome – indeed, there are other professional views on rent control in recent Industry Voices guest blog posts. Scroll down below or see the listing below the banner ads on the right.

As a matter of public policy, editorially MHProNews opposes rent control as contrary to the long-term interests of all involved.)

battleovermeasurevyes-no-manufacturedhousingindustrydailybusinessnewsmhpronews-575x214

 

ireportmhnewstipsmhmsm-com-mhpronews

To submit your own thoughtfully written guest blog post, please use the email address shown above, and put Industry Voices Guest Blog in the subject line. Attach a photo you want to use with your column. Thank you – the editor.

Measure V is Bad Public Policy, should be Rejected

October 4th, 2016 No comments

Park owners in Humboldt County have been addressing the issue of alleged “excessive” rent for well over a year.

Most Park owners offer long-term leases that address and stabilize any legitimate concern about rent increases.

A rent increase that reflects an increase in property taxes simply reflects the costs of doing business. Not one penny of such increases go to the park owner. Rather, such funds go the county for roads as well as police and fire services.

Rent control, by its nature, does not include any logical safeguards, such as income qualification. Rather, such ordinances are premised on the idea that park owners are “taking advantage” of homeowners because a mobile home cannot be easily moved.

rentcontrolmanufacturedhomecommunitiesakamobilehomeparks-billdahlinmhpronews

For our recent story on Measure V, please click the image above. An updated Measure V report will be coming soon to the Daily Business News, on MHProNews.

However, the reality is that rents in Humboldt County are not excessive. Indeed, rents in Humboldt County mobilehome parks are exceptionally low. Do the research.

Measure V is bad for Humboldt County, bad for Tenants, and bad for Park owners.

This type of legislation creates and fosters adversarial relationships and leads to expensive and time-consuming litigation. Again, do the research.

Ask what the city of Carson has paid for its rent control. Or the city of Escondido.

The taxpayers of Humboldt County will pay for this legislation [not the park residents] advanced by a small minority of persons who reside in mobilehome parks.

Measure V is bad policy.

Measure V should be rejected. # #
c-william-bill-dahlin-hartkinglaw-postedmanufacturedhousingindustryvoicesmhpronewsC. William Dahlin
Hart | King
4 Hutton Centre Drive, Suite 900
Santa Ana, CA 92707

(Editor’s Note: this comment came in response to MHProNews coverage related to Measure V, please see the link here.  Other industry commentary on this or other manufactured, modular and prefab housing related topics issue are welcome. Submit all letters to the editor/Op-Ed columns to: iReportMHNewsTips@mhmsm.com with the words Industry Voices Commentary in the subject line.)