HomeMy WebLinkAbout01/25/1982City Council Minutes
January 25, 1982 - 12:10 p.m.
Page 2
decision would probably be made. She then declared the public hearing
open.
Mark Woolpert, representing SLO -MOTA, the San Luis Obispo Mobile Home
Owners and Tenants Association and mobile home owner, explained that at
this point: he felt the situation was a matter of lack of supply and,
therefore, a monopoly existed. He felt that the tenants carrot move ..
anywhere else. when the rents go up except out of town:_ as there are
simply no other mobile home parks that they could move into. He then
explained other advantages that the park owner had over the mobile home
tenant and asked that the Council look closely at the interest, appreci-
ation and leverage that the park owner has. Further, look at the
difference between income (capital gain) and sale of park property. He
also explained the differences of investors, how some are looking for a
negative cash flow regardless of the rents. On the matter of inflation,
they are not just trying to keep up with it but they are far in excess
of the inflation factor.
Clint Lefler, representing the owners of Chumash Mobile Home Park,
explained that on today's market a rental space should cost between $325
and $376. He then went on to explain the replacement cost values and
stated he could refute any point brought by the tenants on a one -to -one
basis and would be happy to do so. The Mobile Home Park was now offer-
ing leases anywhere from one month to five years and 98 individuals had
already signed up but others who were going to sign leases are not, at
this time, as they feel that the rents will go down later on if this
ordinance is enacted. He-felt-the-owners were just trying to keep up
with the rate of inflation and explained that the benefit of owning real
estate in parks are threefold: 1) The tax shelter, 2) hedge against
inflation, and 3) cash flow. He stated that few individuals are
investing in cash flow because it is so low. They are also not invest-
ing for the purposes-of tax shelter so much as the hedge against infla-
tion. If the return on the investment does not keep pace with
inflation, it is going to lose. He explained that the days of the
wind -fall profits simply do not exist any longer. This is primarily
because the fixed rate financing will not be seen again. It is now on a
variable rate, which is true of Chumash. The owners of the Chumash
Mobile Home Park are everyday people trying to make this hedge against
inflation, not for today, but for the future. They are not getting
anything out of it now. He felt the residents were receiving a great
deal in return and to add up all the amenities that they have received
at the park would be almost unobtainable on the open market for what
little they now pay.
Charles Long, owner of Village Mobile Home Park, stated that he was
opposed to any type of rent control. With regard to the HRC survey on
rules and regulations that tenants must live by, he felt this was no
different than the rules and regulations that are imposed by City and
County Governments on low -cost housing. On the matter of utilities,
mobile home parks are given the very same rates as outlined by the
Public Utilities Commission. By metering each individual user, there
appears to be more energy conservation, which he felt was important.
Regarding the matter of park maintenance, he felt that the average
tenant wanted a clean -mobile.home•park. He-again urged against rent
control; he felt that if the Government were to take control of the
mobile homes, it would also probably cost between $50,000 and $100,000
to provide this rent control by city forces.
Morris Levin, representing the Legislative Committee for SLO -MOTA and a
resident of Pismo Beach, explained that the City of Pismo Beach had
recently adopted condominium conversion and rate stabilization ordin-
ances. He supported both of them and briefly outlines them for the City
Council. He explained that Pismo's ordinance uses the C.P.I Indexing,
which amounts to approximately 75 percent of the C.P.I for a 5 -year
lease. He would ask that a similar ordinance be drafted for adoption
for the City of San Luis Obispo.
Lois Rinehart, mobile home tenant, asked the Council to look again at
the HRC survey as she felt that it was not totally accurate.
City Council Minutes
January 25, 1982 - 12:10 p.m.
Page 3
Additionally, with rules and regulations imposed on them, she would
support removal of the requirement that over -night guests not be allowed
to use the pool on weekends. She explained that this is the only time
that she has visitors and when she moved into the mobile home park, this
rule did not exist but four years later they changed it. She also
addressed the matter that 31 percentlof tenants in mobile home parks are
widows, as such, she used herself as an example that when you become a
widow, you lose a lot of benefits and cannot afford these types of
increases.
Gary Byrne, representing owners of the Creekside Mobile Home Park,
explained to the Council that normally a rent stabilization ordinance
would be imposed only if the matter was very much out of hand. He did
not feel that this was the case here. He explained the proportional
percentage of family income for standard housing is approximately 33
percent. The average person in a mobile home park pays between 15 and
20 percent for housing. He, therefore, did not feel that the proposed
increases were exorbitant.
Doris Pauley, resident of Creekside Mobile Home Park, 3860 South Higuera
Street, urged the Council to adopt a rent stabilization ordinance as she
could no longer afford the rent being raised because she lived on a
fixed income. The next raise is intended for March, and she did not
understand why the mobile home park owner is raising it at this time
when the Federal Government will be giving them a huge tax relief.
Craig Amspoker, representing SLO -MOTA, explained that he had invested in
a mobile home so that he would not have to pay the 30 percent.of his
income in his old age for housing knowing that he would have a restricted
income. He would urge the Council step in and protect people such as
himself.
Ward Spencer, Creekside Mobile Home Park, did not feel that the mobile
home park owner invested any more than the mobile home tenant in that
the mobile home tenant has a limited income, unlike the park owner. He
feels the tenants should have some say in the rules and regulations
governing them, especially due to the fact that they are unable to move
out when an increase occurs.
John Moody, representing the Chumash Mobile Home Park, explained that:
1) The residents of the park keep emphasizing that they have as much
invested as the owner of the park; he felt this was not correct and as
an example, he stated that the average mobile home owner bought their
home for $20,000 a few years ago and at this time, could probably sell
for 200 to 300 percent increase. 2) Rules and regulations; these rules
were made by the residents inasmuch as they were established because
some individuals abused them, and he felt that all tenants have a say in
the rules that are adopted.
Paul Dunmire, member of SLO -MOTA, felt that 75 percent of the C.P.I.
seemed to be a reasonable figure. He felt this was a fair amount and
would like to see the City enact an ordinance using this stipulation.
With regard to investment figures, he explained that Chumash was built
for a total of $947,000 and recently sold for over $4 million. The
investor gets the higher return. In the case of the tenant, if you
cannot afford the rent, you must sell both your home as well as the
space.
Mark Woolpert -again urged Council's adoption of the proposed ordinance
and explained that if it proves not to work, it could always be amended.
He also cautioned the Council on the unreliability of using the C.P.I.
Index.
Gary Byrne again cautioned the Council in having the Government act as a
third party liaison. He would rather the tenants and the mobile home
park owners be given more time to work out their differences.
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City Council Minutes
January 25, 1982 - 12:10 p.m.
Page 4
Paul Dunmire, felt that the ordinance was imperative and using Pismo
Beach as an example, explained that now both sides can get together and
work better using the ordinance as a guide and format.
David Brymer, President of Chumash Village Association, explained why 98
people had signed the one to five -year leases. He felt that a statement
included in the lease was a matter.of-�.intimidation as it read "in other
words, if you remain on a month -to -month tenancy, your rent may be
increased at any time after given the notice as given by State law" (60
days). He would consider this statement an intimidation message.
Further, the lease was so complicated their lawyers couldn't even
understand it. Most of those people in the park were widows or in their
late 60's.
Mayor Billig declared the public hearing closed.
Mayor Billig stated she appreciated all the comments received from both
sides although she was disappointed that so few owners spoke at today's
meeting.
Councilman Griffin felt that there had been a substantial disparity of
the bargaining power between the owners and the tenants. There seems to
be an on -going pattern of not keeping communications open between the
tenant and landlord. This, therefore, requires the Government to act as
an intervenor, which he does not like. He would like additional time to
look at the materials submitted by both sides today.
Councilman Dunin agreed that there seemed to be a lot of problems that
needed to be worked out between the tenants and the landlords. He would
not be supportive of the Government getting involved as the negotiator
but this problem has been with the City for a long time and although not
as acute a problem -as it was, there still.needs to be better understand-
ing established. This should not be the function of the Government and
making anyone feel totally. secure,- would.be wrong. After hearing both
presentations, he was unsure if he could make a. recommendation today,
especially with regard to what.the fair investment return and cash flow
numbers should be. He would be supportive of another study session to
address those issues and look to other communities with similar problems
as well.
Councilwoman Dovey agreed with comments made by both Councilmembers
Griffin and Dunin. She was also disappointed, after hearing presen-
tations from both sides and considering there were 13 mobile home parks,
that very few park owners had anything to say. She would also prefer to
see the differences worked out between the tenant and landlord so that
the Government did not have to get involved as this would also cost the
City a great deal of money to implement. She would encourage both sides
to continue to work together and although time is critical, she would
not want to take action too hastily until all information was in.
Mayor Billig added that for almost three years there has been an in-
creased number of complaints from people living in mobile home parks,
and it is unfortunate that a resolution could not be made without going
to the City, forcing the City to act as a final arbitrator; this would
Councilman Settle felt that this was a common problem with most commun-
ities. A mobile home community is in a unique position because they do
have to live with the rules and regulations and cannot move out as
easily as an apartment dweller who is unhappy with the rules. He felt
that maybe the land use could be changed in the future to allow a tenant
to buy his own coach space. He cautioned the Councilmembers not to jump
into something as important as rent stabilization without all facts
looked at. He would like to see a better communication link with the
idea of a lease with 75 percent of the C.P.I. as there seems to be a
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common denominator here. There is a definite need for research to be
done in the near future focusing on the finer points on what type.of
rent control or lease is to be established. He felt that now that some
of the information had become available, he would like time to look at
it closer.
Mayor Billig added that for almost three years there has been an in-
creased number of complaints from people living in mobile home parks,
and it is unfortunate that a resolution could not be made without going
to the City, forcing the City to act as a final arbitrator; this would
City Council Minutes
January 25, 1982 - 12:10 p.m.
Page 5
be unfortunate. Cooperation and working together is what she would
prefer to see between the tenant and landlord. Rents are part of the
problem as much as the rules and regulations, etc. The tenant feels a
captive and is in a unique position. The land use issue she did not
feel was the crux of the problem i.e. more mobile home parks don't
necessarily reduce or lessen the problems, i.e. City of Carlesbad. She
agreed that the Council should not make a final decision today but come
back at a future study session, possibly directing the City Attorney to
prepare a possible draft rent stabilization ordinance to be used as a
discussion guide only.
Councilman Dunin stated he would not be opposed to this approach, but he
would like to see a better repport established between the two groups.
After the proposed draft is submitted by the City Attorney, he would
like to see it referred first to the mobile home park owners and associa-
tions for discussion and resolution of those items that they can come to
agreement with and then let the City only discuss those items that are
still at issue. Before coming back to the City, he would like to see
their comments submitted to the HRC for further discussion and comment
and then forwarded to the City Council. He would prefer to avoid a rent
control concept.
Councilman Griffin stated he would be interested in seeing a rent
stabilization ordinance be drafted and conceptual observations made. He
felt there was an urgency to finalize this. He would also agree to
referring this item to a work study session and having the City Attorney
prepare a draft rent stabilization ordinance with as many options as
staff could come up with.
Councilman Settle would also support this.
Mayor Billig then suggested that the City Attorney be directed to
prepare a draft rent stabilization ordinance by the end of February to
include optional approaches and then send a copy of this to both the 1
park owners and tenant representatives, as well as the HRC (possibly an
HRC subcommittee). She would also encourage both sides to try toy
resolve as many of these issues as possible before coming back to the
City Council and then this draft could be returned to Council for a
future study session.
There was general consensus to concur with Mayor Billig's remarks.
There being no further business to come before the City Council, Mayor
Billig adjourned the meeting at 2:00 p.m. to Tuesday, January 26, 1982,
at 7:00 p.m.
/, /Z',1:;
amela o es, ty Clerk
APPROVED BY COUNCIL: 2/16/82
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