HomeMy WebLinkAbout09/27/1988, 4 - STATUS REPORT ON MEASURE ""D"" IMPLEMENTATION (MOBILEHOME RENT CONTROL)"Original Staff Report from 9/1' meeting with new attachment *leas e, -,D
MEETING DATE:
�������►►�illll��p► ���l`I city of San LUIS OBI Spo _
COUNCIL AGENDA REPORT ITEM r
FROM: ROGER PICQUET, CITY ATTORNEY
SUBJECT: STATUS REPORT ON MEASURE "D" IMPLEMENTATION
(MOBILEHOME RENT CONTROL)
CAO RECOMMENDATION: Receive and file.
BACKGROUND:
In June, 1988, the electorate adopted Measure "D" regarding mobi.lehome rent
control. This measure was proposed by an Ad Hoc Committee comprised of park
owners and tenants and revised the existing regulations (SLOMC Chapter 5.44)
quite significantly. Specifically, the new Chapter 5.44 provides for "safe
harbor." limited vacancy de- control, MNOI formula, a binding hearing officer
appeals provision, and other amendments to the original regulations which had
been adopted in 1982 and essentially unchanged since then.
Staff has initiated implementation of Measure "D" as follows:
?. Preparation of informational "Flow Chart" showing how rent - related
requests would be addressed (attached). This chart is available on
request to all concerned.
2. Collection of "base -line" data from all parks showing number of spaces.
types of spaces (e.g., single or double), schedule of rents as of June 1,
1988, and dates for annual rent increases (CPI- based).
3. Meeting with interested individuals and groups to answer questions and
provide interpretations of the new regulations as appropriate.
Staff has not experienced any significant problems with the above
implementation steps, nor does staff anticipate any problems arising in the
immediate future. Staff is aware that long -term lease negotiations have been
or. -going in several of the larger parks (e.g.. Creekside) and will advise
Council of any developments. At this time, staff does not recommend any
additional imDlementation measures.
Attachment - Flow Chart
Ordinance on Measure D
SEP 13 1988
CRV CLERK
SAN LUISORISPO CA
. 06 7b 4mm
1
FLOW CHART
Mobile Home Rent Stabilization tiheasure D) (Chapter 5.44 SLOMC.)
+-------------- - - - - -+
BASE RENT
;(as of 3/15/82 and
allowed increases);
+-------------- - - - - -+
+--------- - - - - --
*-------------- +-------------- - - - - -+
;INCREASES w/o A HEARING: ;
& -----------------------------------
+ - - - -- -- - - - - + - -- - - - - -- - - - -+
;NO OBJECTION W/I 30 DAYS:;
;End of Process. Base
;rent is changed to ;
;reflect adjustment.
+-------------------- - - - - -+
+--------------- +----- ----- - - - --f
;ADJUSTMENTS BY APPLICATION
;(procedure):
;1. By park owner:
a. file application and
b. file statement of proof;
that notice was sent to;
all affected park.
tenants.
.
c
,'^ By park tenants:
a. file application
b. file statement of proof;
that notice was sent to;
park owner.
c. select not more than
three (3) tenants as
reps. for all affected
tenants.
d. 51% of all affected
tenants must sign.
;(5.44.070 A)
-------------------------------- +
+
+ - - -- - -------- +--------- - - - -y'
;OBJECTION W/I 30 DAYS after;
;notice of application has ;
;been received:
1. Park
owner may ;
object by: ;
;1.
CPI - If Consumer Price
;
City Clerk and:
Index increases:
notifying all ;
'
a. less than 5%, rent
;
tenants. ;
increase can be 100%
;
object by: ;
of the CFI increase.
;
b. more than 57, rent
b.
an objection ;
increase cannot exceed
which is ;
75% of the CPI increase.
;
of the tenants:
# Cap at 9%
affected. ;
(5.44.060 B)
;2.
Change of Mobilehome Ownership:;
a. maximum of 10% of
;
current rent.
b. Can occur once in any
36 month (3 year) period.
;
( 5.44 . i X60 C)
For increased expenses for
;
common area utilities.
;
(5.44.060 E)
;
& -----------------------------------
+ - - - -- -- - - - - + - -- - - - - -- - - - -+
;NO OBJECTION W/I 30 DAYS:;
;End of Process. Base
;rent is changed to ;
;reflect adjustment.
+-------------------- - - - - -+
+--------------- +----- ----- - - - --f
;ADJUSTMENTS BY APPLICATION
;(procedure):
;1. By park owner:
a. file application and
b. file statement of proof;
that notice was sent to;
all affected park.
tenants.
.
c
,'^ By park tenants:
a. file application
b. file statement of proof;
that notice was sent to;
park owner.
c. select not more than
three (3) tenants as
reps. for all affected
tenants.
d. 51% of all affected
tenants must sign.
;(5.44.070 A)
-------------------------------- +
+
+ - - -- - -------- +--------- - - - -y'
;OBJECTION W/I 30 DAYS after;
;notice of application has ;
;been received:
1. Park
owner may ;
object by: ;
a.
filing w/ the ;
City Clerk and:
b.
notifying all ;
of the rep. ;
tenants. ;
2. Park
tenant may ;
object by: ;
a.
filing w/ the ;
City Clerk ;
b.
an objection ;
which is ;
signed by 51% ;
of the tenants:
affected. ;
:(5.44.070 B)
+-------------- - - - - -+ L/ I
+--------- + - - - - -- +
PARTIES NEGOTIATE
(5.44.1)7() D)
+--------- +----- - - - - -+
+------------------- +-------------- - - - - -+
----------- +------- - - - - -+ +----------- +------- - - - - -+
;AGREEMENT W/I 60 DAYS ;NO AGREEMENT W/I 60 DAYS;
;1. Tenant reps. ; +----------- +------- - - - - -+
notify others of ;
agreement. Majority;
have 10 days to ;
disapprove of the ;
agreement.
-------- +-- - - - - -+ +------ +- - - - - -+ ;
;TENANTS APPROVE; ;TENANTS DON'T; ;
;End of process.; ;APPROVE ;
;Base rent +------ +- - - - - -+
;changed to ;
;reflect ;
;adjustment. ; --------------------------------
----------------- ;
+----------------- +----------- - - - - -+
HEARING ;
;1. Hearing officer (H.O.)
appointed by CAO no more than
21 days after notice of ;
negotiation termination. ;
;2. H.O. must be held not less ;
than 10 and not more than
30 days after H.O. is selected.;
;3. Hearing cannot continue 30 days;
beyond first hearing date w/o ;
persmission of the applicant. ;
4. H.O. makes decision using ;
specified factors (5.44.090) ;
and applying MNOI. ;
;5. H.O. must make decision w/i
20 days after the hearing.
;(5,44.070 E - 5.44.100) ;
+---------------- +------------ - - - - -+
+------------------- +-------------- - - - - -+
a
4------ - - - - -+
;H.O. DECISION ACCEPTED;
;End of process. Base
;rent changed to ;
;reflect decision. ;
+----------------- - - - - -+
------------- +--------- - - - - -+
H.O. DECISION NOT ACCEPTED ;
;(5.44.110)
;
+------ +-- - - - - -+
DECISION ;
ACCEPTED ;
End of ;
process. Base;
rent changed ;
to reflect '
Panel
Decision. ;
+-=------- - - - - -+
+------ +-- - - - - -+
;DECISION NOT ;
;ACCEPTED ;
;1. No further ;
appeal w/i
City frame -;
work. ;
;2. Review of ;
Panel ;
decision ;
may be
obtained ;
f rom' ;
Superior ;
Court. ;
+--------- - - - - -+
zl- - 41
Appeal Decision ;
;1.
File w/ the City Clerk ;
w/i 15 days. ;
;2.
Notify the other side. ;
;3.
If tenants are filing. ;
appeal must be signed by ;
51% of the affected ;
tenants. ;
;4.
CAO appoints a '17• person ;
panel w/i 21 days after ;
appeal filed. ;
'S.
Panel reviews H.0 '
'
decision and mays
'
a. call for a new ;
'
hearing or ;
b. accept the prior ;
hearing decision. ;
;6.
If Panel calls for a new ;
hearing, it has 30 days ;
to change the prior ;
decision.
;(5.44.110)
;
+------ +-- - - - - -+
DECISION ;
ACCEPTED ;
End of ;
process. Base;
rent changed ;
to reflect '
Panel
Decision. ;
+-=------- - - - - -+
+------ +-- - - - - -+
;DECISION NOT ;
;ACCEPTED ;
;1. No further ;
appeal w/i
City frame -;
work. ;
;2. Review of ;
Panel ;
decision ;
may be
obtained ;
f rom' ;
Superior ;
Court. ;
+--------- - - - - -+
zl- - 41
I)
FULL TEXT OF MEASURE 0
"BE IT ORDAINED by the People of the City of San Luis Obispo as follows:
Chapter 5.44
MOBILE HOME PARK RENT STABILIZATION
Sections:
5.44.010
Purpose and intent.
5.44.020
Definitions.
5.44.030
Exemptions.
5.44.040
(Repealed.)
5.44.050
City Council -- Powers and duties.
5.44.060
Base space rent -- Determination -- Allowable increases without
hearing
5.44.070
Application for rent adjustment -- Fee — Contents -- Notice of re-
quest— Hearing.
5.44.080
Application for rent adjustment — Conduct of hearing.
5.44.090
Application for rent adjustment — Evaluation -- Relevant
factors.
5.44.100
Application for rent adjustment -- Hearing -- Determination.
5.44.110
Application for rent increase— Hearing -- Appeal.
5.44.120
Rent increases not made in conformity with provisions- -
Tenant's right to refuse to pay.
5.44.130
Actions brought to recover possession of mobile home
space -- Retaliatory eviction grounds for denial.
5.44.140
Owner to provide tenants with copy of this chapter.
5.44.141
Amendment.
5.44.142
Severability.
5.44.010
Purpose and intent.
A. There is presently within the city and the surrounding areas a shortage
of spaces for the location of mobile homes. Because of this shortage. there
is a very low vacancy rate, and rents have been for several years. and are
presently, rising rapidly and causing concern among a substantial number
of San Luis Obispo residents.
B. Mobile home tenants, forced by the lack of suitable alternative housing,
have had to pay the rent increases and thereby suffer a further reduction in
their standard of Irving.
C. Because of the high cost and impracticability of moving mobile homes,
the potential for damage resulting therefrom, the requirements relating to
the installation of mobile homes. including permits. landscaping and site
preparation, the lack of alternative homesites for mobile home residents.
and the substantial investment of mobile home owners in such homes, this
council finds and declares it necessary to protect the owners and occupiers
of mobile homes from unreasonable rent increases. while at the same time
recognizing the need of park owners to receive a suitable profit on their
property with rental income sufficient to cover increases in costs of repair,
maintenance, insurance. utilities. employee services, additional amenities.
and other costs of operation. and to receive a fair return on their property.
D. This council finds that the present low vacancy rate and frequent rent
increases are particularly hard upon and unfair to residents of mobile home
parks within the city. Large numbers of these residents are senior citizens
and others on fixed incomes who installed their mobile homes in the city
when the present inflationary rent increases could not reasonably have
been foreseen.
E. However, this council recognizes that a rent stabilization ordinance
must be fair and equitable for all parties and must provide appropriate
incentives for mobile home park operators to continue their parks profita-
bly, as well as to attract additional investors for new parks. (Ord. 923 §1
(part), 1982: prior code §4800)
5.44.020 Definitions
For the purpose of this chapter. certain words and phrases used herein
are defined as follows:
A. "Capital improvements" means those improvements. not previously
located in the mobile home park, that materially add to the value of the
property and appreciably prolong its useful life or adapt it to new uses, and
which may be amortized over the useful life of the improvement in
accordance with the Internal Revenue Code and regulations issued pur-
suant thereto; provided, that this definition shall be limited to capital
improvements approved by more than fifty percent of the tenants in the
affected park.
B. "Mobile home park" means an area of land which rents spaces for
mobile home dwelling units.
C. "Mobile home park owner" or "owner" means the owner, lessor,
operator or manager of a mobile home park.
D. (Repealed)
D. Mobile home tenant" or "tenant" means any person entitled G
occupy a mobile home within a mobile home park pursuant to ownership
of the mobile home or under a rental or lease agreement with the owner of
the mobile home.
E. "Rehabilitation work' means any renovation or repair work completed
on or in a mobile home park performed in order to comply with the
direction or order of a public agency or public utility. or to maintain
existing improvements in a safe and usable condition, or to repair damage
resulting from fire. earthquake or other casualty.
F. "Space rent- means the consideration. including any security depos-
its, bonuses. benefits or gratuities. demanded or received in connection
with the use and occupancy of a mobile home space in a mobile home
park, or for housing services provided, but exclusive of any amount paid
for the use of a mobile home dwelling unit. (Ord. 923 §1 (part), 1982: prior
code §18011
G. Chanae of ownership" means the sale. rental transfer, or exchange of
a mobile home subject to the provisions of this chapter excepting the
transfer to tenants spouse by gift. bequest or devise.
H. 'Hearing Officer" means the duly appointed hearing officer selected
from a panel of qualified hearing officers. A hearing officer shall have no
financial interest in either a mobile home park or a mobile home nor have
been a resident of nor reside in a mobile home park.
I. "Appellate Panel'' means a panel of three qualified hearing officers. A
panelist shall have no financial interest in either a mobile home park or a
mobile home nor have been a resident of nor reside in a mobile home park.
J. CPI shall be the Consumer Price Index (1967 =100) All Items, All
Urban Consumers. for the Los Angeles Long Beach'Riverside standard
metropolitan statistical area published by the Bureau of Labor Statistics.
United States Department of Labor. If the CPI is not hereafter published.
then any substitute index, or. if none, then the index most closely resem-
bling the CPI shall become the new CPI.
K. "Qualified Hearing Officer ". The City Administrative Officer shall main-
tain a list of available qualified hearing officers. Qualified hearing officers
shall be persons experienced in financial and accounting methods with
knowledge of mediation process and rules of evidence.
5.44.030 Exemptions.
The provisions of this chapter shall not apply to the following tenancies
in mobile home parks:
A. Mobile home park spaces rented for nonresidential uses:
B. Mobile home parks managed or operated by the United States Govern-
ment. the state of California. or the county of San Luis Obispo;
C. Tenancies which do not exceed an occupancy of twenty days and which
do not contemplate an occupancy of more than twenty days.
D. Tenancies for which any federal or state law or regulation specifically
prohibits rent regulation;
E. Tenancies covered by leases or contracts which provide for a tenancy
of more than a year, but only for the duration of such lease or contract.
Upon the expiration of or other termination of any such lease or contract,
this chapter shall immediately be applicable to the tenancy. No rent
increases other than that allowed under the provisions of the lease, shall
be allowed during the duration of such a lease or contract.
F. Spaces in a mobile home park in which at least 66.67% of said spaces
are governed by a lease with an initial term of more than one year.
G. Mobile home parks which sell lots for factory-built or manufactured
housing. or which provide condominium ownership of such lots, even if
one or more homes in the development are rented or leased out. (Ord. 923
§t (part). 1982: prior code §4802)
5.44.040 (Repealed)
5.44.050 City Council -- Powers and duties.
Within the limitations provided by law and in addition to any oth.
powers and duties the Council has. the City Council shall have the
following powers and duties:
A. To meet from time to time as required to receive, investigate, hold
hearings on. and pass upon the issues relating to mobile home park rent
stabilization as set forth in this chapter.
(Continued Next Page) ��
FULL TEXT OF MEASURE 0, Continued
B. To direct staff to make or conduct such independent hearings or
investigations as may be appropriate to obtain such information as is
necessary for Council to carry out its duties:
C. To adopt, promulgate. amend and rescind administrative rules, as it
deems appropriate to effectuate the purposes and policies of this chapter.
(Ord. 923 §t (part 1952: prior code §4804)
5.44.060 Base space rent — Allowable increases without hearing.
A. The "base space rent" for purposes of this chapter shall be the
monthly space rem charged as of March 15, 1982 plus any increases
otherwise allowed, pursuant to this Chapter. The maximum monthly space
rent for any space under a lease, upon expiration of the lease shall be no
more than the rent charged in the last month of said lease. In parks where
there is an exemption because 66.67% of the spaces are governed by a
lease with an initial term of no less than one year, then the maximum
monthly space rent shall be the space rent designated in leases for
comparable spaces. A schedule of current rents in the park shall be posted
in a conspicuous place in the park.
B. Except as otherwise provided in this chapter, the maximum monthly
space rent may be increased no more than once a year based on the
percentage change in the CPI, or 9 %, whichever is less, calculated as
follows:
1. The maximum monthly space rent may be increased at a rate equal
to 100 percent (100 %) of the CPI up to 5 percent (5 %) and 75 percent
(75 %) of the CPI in excess of 5 percent (5 %) calculated as follows:
.a. The change in space rent shall be calculated by dividing the
ending CPI index by the beginning CPl index.
.b. If the resulting quotient is less than 1.05, then it shall be multi -
plied by the space rent. The resulting product shall be the new space
rent.
.c. If the resulting quotient is greater than 1.05. then the difference
between the resulting product and 1.05 shall be multiplied by 75
percent. The resulting product shall be multiplied by the space rent
and that product shall be added to the sum derived from 5.44.060
B.2 above. The sum shall be the new space rent.
.d. The beginning CPI index shall be the index for the month used as
the ending index for the last CPI adjustment.
.e. The ending CPI index shall be the index for the month twelve
months after the beginning index.
2. Each month the City Administrative Officer shall publish the percent-
age change of the CPI allowed under this Section B for the 12 -month
period immediately preceding the month for which CPI information has
been most recently published.
3. It is the intention of this paragraph 5.44.060 B to allow for automatic
increases in space rent based on changes in the cost of living as
measured by the CPI. The limitations on such increases are intended to
minimize the immediate impact drastic changes in the CPI might have
on residents. The limitations are not intended to prevent ultimate adjust-
ments to allow owners to receive a fair return on their property.
C. The maximum monthly space rent of a tenant may be increased by the
owner when there is a change of ownership affecting a mobile home.
However, such increase shall not exceed 10% of the then existing space
rent and may not be relied upon any more often than once in arry 36 -month
period as the basis to increase rent. In the event of change of ownership
resulting from subletting of the mobilehome space as may be allowed by
State law, should such become State law, then upon any such subletting
then the space rent may be increased up to 10% of the then - existing space
rent. In the event of change of ownership resulting from vacation of the
space, then the space rent may be adjusted to fair market rent in the
community.
D. No owner shall either (1) demand, accept or retain a rent of or from a
tenant in excess of the maximum rent permitted by this chapter, or (2)
effect a prohibited rent increase by a reduction of general park facilities and
services. However, an owner may modify the nature of park services 0
reasonable allowance is provided to the tenant. For example, if the owner
elects to submeter water so that tenants pay for water consumed by them.
then tenants shall receive a reasonable reduction from their base space
rent. (Ord. 1079 §1, 1986: Ord. 1020 §7, 1984: Ord. 923 §t (part). 1982:
prior code §4805)
40.55
E. Space rent may be automatically adjusted based on increases in ex-
penses for common area utilities; new government mandated services;
garbage service and cable television, where applicable. The space rent may
be adjusted by dividing the total increase in any such expenses incurred
during a twelve -month period by twelve, less the percentage in the CPI
index for the twelve -month period. The quotient shall be allocated to the
space rent for each space in the park based on the amount the space rent
relates to total space rent for the park. Notice of the increase shall be in
writing and shall be given as required by law no less than 60 days prior to
any such increase being effective. The notice shall state the amount of the
rent increase, the new space rent, the amount of the total increase in
expenses and the nature of the expense. A copy of the notice shall be given
to the City Administrative Officer. The City Administrative Officer shall have
the authority to resolve questions regarding computation of the space rent
increase based on this section. There shall only be one such increase in
any twelve -month period.
5.44.070 Application for rent adjustment - -Fee -- Contents -- Notice of re-
quest-- Hearing.
A. Except for automatic increases in base rent allowed under Section
5.44.060, an owner or tenant may file with the City Clerk an application for
a rent adjustment ( "application "). The application shall state the amount
of the adjustment for each space affected and the reasons for the
adjustment.
1. An application shall be accompanied by the payment of a fee as may
be established from time to time by the council.
2. An application filed by an owner shall be accompanied by a state-
ment stating that the tenant for each space affected has been served
either personally or by mail with a notice describing the application and
the change in rent or services.
3. An application filed by a tenant shall be accompanied with a state-
ment stating that the owner has been either personally or by mail served
with the application and with a statement designating not more than
three persons to act as representatives for the spaces affected and
containing the names and addresses of tenants representing no less
than 51% of the spaces affected by the application and supporting the
application and established by a secret election.
4. A statement shall accompany the application and shall notify the
receiving party that he/she has 30 days to file an objection and if one is
not filed within the time allowed, then the application will be automat-
ically granted.
B. An objection to the application may be filed with the City Clerk within 30
days after the notice of application has been served. The objection shall
identify the portions of the application objected to and shall state the
grounds of the objection.
1. A copy of an objection filed by an owner shall be mailed to each of
the designated tenant representatives.
2. A copy of an objection filed by a tenant shall be mailed to the owner.
The tenant's objection shall designate not more than three persons to
act as representatives for the objecting tenants. The objection must be
accompanied by a statement containing the names and addresses of
tenants representing no less than 51% of the spaces affected by the
owners application and verifying that they object to the application,
established by secret ballot election.
C. If no objection is filed to an application within the time allowed, or if
less than 51 % of the tenants support an objection to an application, then
the application will be automatically granted.
D. If an objection is filed within the time provided, then the owner and the
tenant representatives shall meet and confer to negotiate in good faith an
agreement regarding the application. Either party may request a mediator
of their choice to assist in the negotiations, but this is not required. If an
agreement is reached within 60 ddaU then the tenant representatives shall
notify all tenants affected by teagreement. The tenants shall have 10 days
to approve or disapprove of the agreement. If tenants represen ig a
majority of the spaces affected fail to disapprove of the agreement then the
agreement shall be binding on the owner and all tenants affected. The City
Clerk shall be notified that an agreement has been reached. The statements
made in negotiations and any agreements reached but not approved shall
not be admissible in any subsequent hearings regarding the application.
(Continued Next Page) / —/_
FULL TEXT OF MEASURE D, Continued
E. If the owner and the tenant representatives fail to reach an agreement
within the time provided or if a majority of the tenants disapprove of an
agreement reached, then the applicant shall within 10 days notify the City
Administrative Officer that an agreement has not been reached. The City
Administrative Officer shall obtain a list of no less than five (5) qualified
hearing officers. Owners and tenants may each delete one person from the
list of qualified hearing officers within seven (7) days and one of the
remaining persons shall be selected by the City Administrative Officer as the
hearing officer. Appointment of the hearing officer shall be completed no later
than twenty-one days after filing of the notice that an agreement has not been
reach—eT-
F. The hearing officer shall set a hearing on the application complying with
the requirements of this section no less than ten days and no more than
chi fter his appointment. The hearing officer shall notify the owner
and tenants. in writing, of the time. place and date set for the hearing. No
hearing or any part hereof may be continued beyond thirty days after the
initial hearing date. without the applicant's consent. If the hearing officer
approves an application as requested or as modified, the same shall take
effect as noticed by the owner or as the hearing officer may otherwise
direct. (Ord. 1077 §2. 1986: Ord. 923 §t (part). 1982: prior code §4806)
5.44.080 Application for rent adjustment -- Conduct of hearing.
A. All review hearings conducted by the hearing officer shall be conducted
in accordance with the Ralph M. Brown Act. at Section 54950 et seq. of
the California Government Code and according to the rules of the American
Arbitration Association.
B. All interested parties to a hearing may have assistance from an attorney
or such other person as may be designated by the parties in presenting
evidence or in setting forth by argument their position. All witnesses shall
be sworn in and all testimony shall be under penalty of perjury.
C. In the event that either the owner or the tenant(s) should fail to appear
at the hearing at the specified time and place, the hearing officer may hear
and review such evidence as may be presented and make such decisions
as if all parties had been present.
D. Owner and affected tenants may offer any testimony. documents,
written declarations or other relevant evidence.
E. Formal rules of evidence shall not apply.
F. Minutes shall be taken at all hearings. (Ord. 923 §1 (part), 1982: prior
code §4807)
5.44.090 Application for rent adjustment— Evatuation -- Relevant factors.
In evaluating the application the hearing officer may consider, along with
all other factors it considers relevant, changes in costs to the owner
attributable to increases or decreases in master land andror facilities lease
rent, utility rates, property taxes. insurance, advertising, variable mort-
gage interest rates, employee costs, normal repair and maintenance, and
other considerations. including, but not limited to. rehabilitation work,
capital improvements, upgrading and addition of amenities or services, net
operating income. and the level of rent necessary to permit a just and
reasonable return on the owner's property. (Ord. 923 §1 (part). 1982:
prior code §4808)
A. In applying the foregoing factors. the hearing officer shall utilize the
maintenance of net operating income (MN01) formula. Under the MN01
allowable gross rents are calculated as follows: All operating expenses for
the twelve -month period ending December 31. 1981 are subtracted from
all operating expenses for the twelve -month period immediately preceding
the date of the application for which expense data is available. In the event
operating expenses are not available for the period ending December 31,
1981. then expenses for a twelve -month period reasonably close to De-
cemoer 31. 1981 may be substituted. The difference shall be added to
gross annual rent based on rental rates in effect on March 15, 1982. The
sum shall be the allowable gross annual space rent. The allowable gross
space rent shall be fairly apportioned between all spaces in the park. The
space rent determined under the MN01 formula shall be adjusted as
follows:
1. There shall be an adjustment to allow for inflation calculated as
follows. The net operating income (N01) for the base period shall be
calculated by subtracting the park's operating expenses for the twelve-
month period ending December 31. 1982. from the park's annual gross
space rent based on the space rent in effect on March 15. 1982. The CPI
index for the month most recently available prior to filing the application
shall be divided by the CPI index for March. 1982. The resulting quotient
shall be multiplied by the base period N01. This shall be the adjusted
N01. The operating expenses for the twelve-month period immediately
preceding the date of the application for which information is available
shall be added to the adjusted N01. The sum shall be the inflation
adjusted gross space rent. The allowable space rent shall be the greate
of the space rent calculated using the MN01 formula and the space ren
adjusted for inflation.
2. In calculating MN01 there shall be an adjustment to the gross space
rent in effect on March 15. 1982. if the hearing officer determines that
the gross space rent in effect on that date did not allow the owner to
receive a just and reasonable return on his property.
3. If the hearing officer concludes that the MN01 formula, and the
adjustments thereto, does not provide a just and reasonable return to
the owner, then the hearing officer may apply any reasonable formula,
including a return on investment, a return on fair market value. or return
on equity. to determine a space rent which will allow the owner to
receive a fair and reasonable return on his property.
B. The hearing officer shall not consider income arising from spaces
leased in the park pursuant to 5.44.030(E) of this chapter. Likewise, the
hearing officer shall not consider a pro rata portion of the expenses of park
operation attributable to the leased spaces.
5.44. 100 Application for rent adjustment -- Hearing -- Determination.
A. The hearing officer shall make a final decision no later than twenty days
after the conclusion of its hearing. The hearing officer's decision s a e
based on the preponderance of the evidence submitted at the hearing. The
decision shali be based on findings. All parties to the hearing shall be
advised by mail of the hearing officer's decision and findings.
B. Pursuant to its findings, the hearing officer may
Permit the requested adjustment to become effective. in whole or in
part: or
2. Deny the requested adjustment. or
3. Permit or deny, in whole or in part, requested reductions of, or
charges for, facilities or services.
C. Any decision of the hearing officer shall be final unless. within fifteer
days after mailing of the decision and findings the owner or any affecte
tenant appeals the decision. (Ord. 923 §1 (part). 1982: prior code §4809)
D. The hearing officer's charges shall be paid by the City.
5.44. 110 Application for rent adjustment — Appeal— Hearing.
A. Any appeal from a decision of the hearing officer shall be filed with the
City Clerk. The appellant shall also mail a copy of the appeal to the
responding party. The appeal shall state the grounds on which it is based.
An appeal filed by a tenant shall be accompanied by a statement containing
the names and addresses of the tenants supporting the appeal. The appeal
must be supported by at least 51 percent of the tenants affected by the
appeal.
B. Upon filing of a valid appeal, the City Administrative Officer shall obtain
a list of no less than seven (7) qualified hearing officers. The hearing
officer who previously acted shall not qualify. Owners and tenant represen-
tatives may each delete one person from the list of qualified hearing
officers within seven days, and three of the remaining persons shall be
selected by the City Administrative Officer as the Appellate Panel. Appoint-
ment of the Appellate Panel shall be completed no later than twenty-one
(211 days after fling the appea'.
C. At the time set for consideration of the appeal the Appellate Panel shall
review and consider the record of the hearing officer's hearing as well as
the decision and finding of the hearing officer. After review and considera-
tion the Appellate Panel may either (1) determine that a further hearing
shall be held. r (2) ratity and adopt the decision and findings of the
hearing officerLif a further hearing is conducted, the Appellate Panel may
upon conclusion of that hearing and in no event more than thi da -
thereaa modify or reverse the decision of the hearing officer, on y if the
ppellate Panel finds that there has been an abuse of discretion or that
there is no substantial evidence to support the hearing officer's decision.
(Ord. 923 §1 (part). 1982: prior code §4810) The Appellate Panels
decision shall be final and no appeal may be taken to Council.
D. If the party filing the appeal is unsuccessful, then that parry shall pa,
the Appellate Panel's charges. If the responding party is unsuccessful.
then both parties and the City shall share equally in payment of the
Appellate Panel's charges.
5.44.120 Rent increases not made in conformity with provisions -- Tenant's
right to refuse to pay.
(Continued Nest Page) Isi/-7
FULL TEXT OF MEASURE 0, Continued
A tenant may refuse to pay any increase in rent not made in conformity
with this chapter. Such refusal to pay shall be a defense in any action
brought to recover possession of a mobile home space or to collect the
rent increase. (Ord. 923 §t (part), 1982: prior code §4811)
5.44.130 Actions brought to recover possession of mobile home space —
Retaliatory eviction grounds for denial.
Notwithstanding Section 5.44.120, in any action brought to recover
possession of a mobile home space, the court may consider as
grounds for denial any violation of any provision of this chapter.
Further, the determination that the action was brought; n retaliation for
the exercise of any rights conferred by this chapter shall be grounds for
denial. (Ord. 923 §1 (part), 1982: prior code §4812)
5.44.140 Owner to provide tenants with copy of this chapter.
Any tenant offered a lease or contract which if accepted and fully
executed would be exempt from the provisions of this chapter (Section
5.44.030E) shall at the time of the offer also be provided with a copy of
this chapter. (Ord. 923 §1 (part), 1982: prior code §4813)
5.44.141 Amendment
The provisions of this Chapter 5.44 may be amended by a majority vote
of the City Council.
5.44.142 Severability
If any portion of this Chapter is found to be invalid, then that shall in no
way affect the validity of the remaining portions of this Chapter.
IMPARTIAL ANALYSIS MEASURE 0
The City of San Luis Obispo currently regulates the rents of mobilehome
spaces for parks within the City (San Luis Obispo Municipal Code, Chapter
5.44). This measure, if adopted, would replace the existing laws with a new
set of regulations. Significant components of the new regulations would be:
1. Rent increases could occur through two basic means; an annual in-
crease equal to a given percentage of a specified Consumer Price Index (CPI)
(which could vary depending on the level of the CPI) and an increase upon an
application by the owner setting forth the reasons justifying such an
adjustment.
2. A rent increase proposed by the application method would become
effective unless tenants representing 51% of the affected spaces object. If an
objection is filed, the tenants and owner must attempt to negotiate a settle-
ment. If the matter is not settled, the issues in dispute are heard by a neutral
and experienced Hearing Officer selected by the City.
3. The Hearing Officer would take testimony and accept evidence from
both parties. He would consider a number of specific factors and would use a
method known as the Maintenance of Net Operating Income (MN01) in
determining what level of rent would permit a just and reasonable return on
the owner's property.
4. The Hearing Officer's decision could be appealed to a 3- person Appel-
late Panel comprised of qualified persons selected by the City. Under certain
circumstances the Appellate Panel could modify or reverse the Hearing
Officer's decision. The Appellate Panel's decision would be final and not
appealable to the City Council.
S. Arty park which had more than 2/3 of its spaces on long term leases
would be exempt from these regulations. "Long term" is defined as a period
greater than one year. Rent for spaces within such a park and not under long
term leases would be the rent for comparable spaces under leases.
6. Upon a change in ownership in a mobilehome, rent may be increased
no more than 10 %; provided, however, this particular increase can occur no
more than once every 3 years. If there is a change in ownership resulting
from vacation of the mobilehome space, the space rent may be set in
accordance with the market level.
7. Amendments to these regulations could be enacted directly by the City
Council and would not require a vote of the electorate.
There are other provisions of the proposed regulations which merit atten-
tion and which should be reviewed in order to understand how the ordinance
would work in detail. This Measure, if adopted, would result in some
expenditure of public funds in order to administer the regulations in an
efficient and timely manner. The exact fiscal impact is not known at this time.
This Measure and Measure "E" both address the subject of mobilehome
rent control. In order for either Measure to be adopted, it must receive at
least 50% of the total votes cast. If both Measures receive greater than 50%.
the one which gets the most votes will become the law. If neither Measure
gets 50% of the vote, the existing mobilehome rent control regulations will
remain in effect.
An-47
s/ Roger Picquet
San Luis Obispo City Attorney