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HomeMy WebLinkAbout07/07/1994, 3 - PROPOSED AMENDMENT TO THE MOBILE HOME PARK RENT STABILIZATION ORDINANCE CONCERNING AUTOMATIC ADJUSTMENTS TO RENT. 1����Il��ll�lyllllflllll II� "1 f M G DATE: Iiq�U cio san lugs o��spo 94 Mums COUNCIL AGENDA REPORT ITEM NUMBER: FROM: JEFFREY G. JORGENSEN, CITY ATTORNEY' SUBJECT: PROPOSED AMENDMENT TO THE MOBILE HOME PARR RENT STABILIZATION ORDINANCE CONCERNING AUTOMATIC ADJUSTMENTS TO RENT. CAO Introduce an Ordinance to Print Amending RECOMMENDATION: Section 5.44.060 (E) of the Mobile Home Park Rent Stabilization Ordinance to clarify that automatic adjustments to rent shall not be included in base space rent for the purpose of determining CPI increases. DISCUSSION: At the June 7 , 1994 City Council meeting, the City Council considered a communication item from Leola Rubottom requesting deletion of Section 544 . 060 (E) of the Mobile Home Park Rent Stabilization Ordinance, which allows for automatic adjustments of rent based on " . . . increases in expenses for common area utilities, new government mandated services, garbage service and cable television . . . . " Previous analysis from the City Attorney's Office dated May 18, 1994, and December 22, 1993 , is attached for your information. As an alternative to the complete deletion of all automatic adjustments under Section 5.44 . 060 (E) , the Council directed staff to return with an ordinance amending Section 5. 44. 060 (E) to clarify that automatic adjustments to rent shall not be included in base space rent for the purpose of determining CPI increases, but shall be considered as additional rent. The effect of such an amendment would be to still allow automatic adjustments, while avoiding compound rent increases, which may be perceived by mobile home tenants as unfair. The proposed ordinance will carry out the Council's intent. OPTIONS: Option 1: If the Council wishes to amend the automatic adjustment provisions as discussed above, pass to print the attached ordinance (Exhibit "A") . This is the staff recommended alternative. Option 2: If the Council wishes to delete automatic adjustments entirely, pass to print the attached ordinance (Exhibit "B") . In light of the previously submitted analysis of May 18 , 1994 and December 22, 1993 , this is not recommended. Option 3: Take no action and leave the automatic adjustments as currently written. This would maintain the ordinance as originally adopted by the voters in 1988 . Option 4: If the Council has additional concerns or proposed revisions not .considered in the report, continue this item with additional direction to staff. FISCAL IMPACT: If the Council adopts the ordinance as recommended, it should have no fiscal impact on the City. It may result in a slightly lower overall rate of rent increases to tenants in the future depending upon the unique circumstances of each case. JGJ/sw Attachments: Letter from City Attorney (5/18/94) Legislative Draft, SLOMC § 5.44 . 060 (E) Exhibit A Exhibit B �-2 MEMORANDUM FROM THE OFFICE OF THE CITY ATTORNEY May 18, 1994 TO: City Council FROM: Jeff Jorgensen, City Attorney SUBJECT: Mobile Home Park Rent Stabilization Automatic Adjustments Pursuant to 5. 44. 060 (E) At the April 19, 1994 City Council meeting, the attached communication item from Leola Rubottom was referred 'to staff for an analysis and response. Leola has requested the deletion of Section 5. 44. 060 (E) of the Mobile Home Park Rent Stabilization Ordinance, which allows for automatic adjustments of rent based on. "increases in expenses for common area utilities, new government- mandated services, garbage service and cable television. . . . " The apparent reason given for this request is that the owner of Creekside Mobile Home Park has offered long term leases which do not include automatic adjustments as set forth in 5. 44. 060 (E) . The inference is this constitutes a "discriminatory practice. " A previous inquiry, which asserted that the automatic rent adjustments allowed by 5.44 .060 (E) are in conflict with the Mobile Home Residency Law (Civil Code § 798 . 31) was submitted in December, 1993 . (Attached for your information is the analysis of that previous correspondence. ) CONCLUSION The City Council has the authority to delete Municipal Code § 5. 44. 060 (E) provided an adequate mechanism remains in the Rent Stabilization Ordinance to ensure a "fair return on investment. " The fact that a park owner offers long-term leases with provisions different from the provisions of the Rent Stabilization Ordinance is not a "discriminatory practice. " Therefore, should the Council wish to consider deletion of § 5.44 .060 (E) , it should do so on some basis other than an alleged discrimination. ANALYSIS 1. Does the City Council have authority to delete the automatic adjustment provisions of § 5.44.060 (E) ? The Mobile Home Park Rent Stabilization Ordinance was adopted by " voter approval as an initiative measure in 1988. However, the City Council specifically retained the authority to amend the ordinance JJ by majority vote (§ 5.44 . 141) . Therefore, the City Council clearly has the authority to delete § 5.44 .060(E) should it choose to do so. However, it should also be noted that the validity of a rent control ordinance will rest upon whether the ordinance permits the landlord to earn a "just and reasonable return. " A long line of court decisions support this fundamental requirement. Birkenfeld v. City of Berkeley, 17 Cal. 3d 129 (1976) ; Carson Mobile Home Park Owners Assoc. v. City of Carson, 35 Cal. 3d 184 (1983) ; Palos Verde Shores Mobile Estates, Ltd. v. City of Los Angeles, 142 Cal.App. 3d 362 (1983) ; Fisher v. City of Berkeley, 37 Cal. 3d 644 (1984) ; West Hollywood Concerned Citizens v. City of West Hollywood, 232 Cal.App. 3d 486 (1991) . While no case has concretely defined the term "just and reasonable return, " one court has described it as one which ". . . is high enough to encourage good management, reward efficiency and discourage the flight of capital and is commensurate with returns on comparable investments, but not so high as to defeat the purpose of preventing excessive rents. " San Marcos Mobile Home Park Assoc. v. City of San Marcos, 192 Cal.App. 3d 1492 (1987) . Conversely, a denial of a just and reasonable return constitutes an unconstitutional taking of property which requires compensation. Birkenfeld v. City of Berkeley, 17 Cal .3d 129 (1976) . The City's rent stabilization ordinance recognizes the' need for balance by including in the Purpose and Intent section, the following provision: "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 home sites 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 investment.,, (§ 5. 44 . 010 (C) . Emphasis added. ) Most rent control ordinances allow an annual increase based on the percentage change on the consumer price index or a portion thereof (in the case of San Luis Obispo, 100% of the CPI up to 5% and 75% of the CPI in excess of 5$) . However, even with an annual increase provision, a procedure must be provided by which an owner can seek an increase on the grounds the annual increase is not sufficient to 2 JAI provide a just and reasonable return. Thus, the San Luis Obispo ordinance also provides for an application for rent adjustment over and above the CPI increase, and any automatic adjustments, when appropriate to assure a fair and reasonable return on investment. (§ 5A4 . 070. ) Some cities provide for automatic adjustments in their rent control ordinances. others do not. The potential advantage of automatic adjustments is the ease of administration which may result. The disadvantage is that the adjustments may result in slightly higher rents than a more complex and staff intensive hearing procedure. The difficulty with simply eliminating the automatic adjustment provisions of Section 5.44 . 060 (E) is that while it may provide for a modest reduction in rent increases in the short term, it may also simply result in shifting requests for rent increases to the formal application process set forth in Section 5. 44. 070. I am unaware of any formal rent adjustment hearings having been held by the City since the rent stabilization ordinance was adopted in 1988 . Given the extremely contentious, time consuming, and litigious hearings held in many other cities, this may be an enviable record. In light of this, the Council may wish to determine whether there are' significant reasons for changing the current balance in the ordinance prior to taking any action on this matter. 2 . Does the fact that a park owner offers long-term leases with provisions different from the provisions of the Rent Stabilization Ordinance constitute a ('discriminatory practice"? Whether a park owner decides to offer a long term lease, and whether a tenant decides to accept such a lease, is a purely Private, voluntary decision between the parties which has nothing to do with discrimination and is largely beyond the ability of the City to regulate. A park owner is not obligated to offer a long term lease, but has a right to, and if such a lease otherwise complies with the provisions of Civil Code § 798. 17 (G) the owner " . . . shall be exempt from any ordinance, rule, regulation, or initiative measure adopted by any local government entity . . " (Civil Code § 798 . 17 (A) . ) The owner's decision may be motivated by a number of reasons (such as stability and predictability) , but generally will be based upon the perceived economic- benrefit of a lease as opposed to the Rent Stabilization ordinance. On the other hand, a tenant is not required to enter into a long term lease, and may opt for the protection of the Rent Stabilization Ordinance if the tenant perceives a greater economic benefit in doing so. It depends upon the relative value of benefits offered in the lease. In both instances, it is a matter of choice based upon the terms and conditions of the entire agreement. To call such a process of negotiation a "discriminatory practice" does not seem to be a supportable premise. Further, to single out one provision of a long term lease as a reason for amending the Rent Stabilization QYdinance to delete automatic adjustments would essentially 3 penalize owners for offering long term leases that do not exactly mirror the ordinance, and may take away incentives to offer such leases at all. RECOMMENDATION ' Based upon the above analysis, it is respectfully recommended that § 544. 060 (E) not be deleted based upon an unsupported notion of "discriminatory practice. " Issues which might properly support such a deletion would include whether the automatic adjustments have resulted in excessive rent increases or have been abused. I am unaware of any such instances having been brought to the attention of the City. JGJ/sw cc: John Dunn Deb Aossli Attachments: 1. Leola Rubottom Letter, dated April 18, 1994 2 . Jeff Jorgensen Memo, dated December 22 , 1993 3 . California Civil Code § 798. 15, et sea. 4 San Lui,o 06.i<6pv, LA dp&a 18, 1994 Honorable II)ayon %)innand and Cibj Counci.t Aemberc4 v� San Lui...e 06ia1-)o, &I Re: ThenthnouVA4 betray adde�f to the bane nerd in edwide Mobite/wme %ante ticcoto a "Sixty-Day Notice oA a Rent Jncneaee'dated Oct. 23, 1993, Creehe %entero that have not airgned lea6e4 wilt have the. 1993 pa44 thnvugh4 Li.4ted 6epanately on the neat Qtatement and mitt be included in .the bane vent. The patio thnaugho that coerce li.oted and eecti ve Yanuwuuy 1, 199_4 were booed on .the cont 4 ca=on area utLli.ti", new government mandated Qenvi.ceo, ganba,ge 4ezvi ce, etc. to the pante mnen. %/ce new 1994 6aoe nett con oio.ted o4 the current hent .in 1993 pi6 .the C.P..Y. inctea4e oA Z7 and the cuzment 1993 pQ44 tA4ouyh4. Me 1995 C.P.9., PA thane not on ton^ee, mi,U be booed on the new vent Apse plu4 any new pa44 thnouyh4. We neepecqully ne$ue4t the deletion o4 (6.) Qection o4 5.44.050 o4 the d)ob4tehome Rent Stabi li jation i)rd vmru:e ?Con San Ludo Obcopo that a Lowe PA thio di4aoiminatoiuy practice. Sinew-ly, Leola Ruhottom 3960 South Nirgueena, Space 21 San Luio Obiopo, CA 93401 intoned: Stxtry Day Nvtire o� )dent 9nucea4e An tho4e not on tea-6". Stxty Day Notice oA Rent 9ncaeaee P,% thuoe on tea4e4. ATTACHMENT 1 7 Space: CREEKSIDE MOBILEHOME COMMUNIiy 'ec-rd 3960 S. HIGUERA STREET SAN LUIS OBISPO, CA 93401 October 31, 1593 SIXTY DAY NOTICE OF RENT INCREASE Dear Resident : The Lease provides for rents to be adjusted annually on January 1st. This latter is notice of s;�ch adjustment. From A•.igust, 199E to August, 1993 the Consumer Price Index applicable to the Lease moved from 434. 1 to 442. 8 which is a 2. 0% increase. Therefore, your r'_rit :+ill be increased by 15. 47 to $278. 79. The _ease fu_:-ther provides for pass thrus of costs related directly to the park costs as further adjusted for inflation. These casts include utilities, government services and fees, which this year affects electricity, gas, water, trash and government fees. All increases and decreases listed have been adjusted for the CPI. Park use of electricity has risen slightly and the commodity cost has again risen, resulting in an overall increase. Therefore, last year' s pass thru of $1. 26• will increase by 3. 35 to $2.21. While the cost of gas has increased this year, the park' s consumption of gas to he.at the recreation building, swimming pool and spa has again decrease•J. Your prorata share of this decrease is a $ 1.24 per, month reduction for a new pass thru of $2. 27. This year- both .rater consumption and the commodity cost have increased dramatically. Your prorata share of this increase is $4. 35 per month for a total water, pass thru of $5).66. The cost for dump fres will increase an additional $1. 113 for a total pass thru of $e.06. Thi permit to cper•ate fee this year remained the same. Adjusting last year' s cost for CPI results in a prorata decrease of $ . 01 for a total Government fees pass thr�A of $. 32. The property tare assessments will remain at $1. 0-2. DrS� Your pass thresgh, e:fective Jarouar•y 1, 1994 will be 1132. 54 and will be listed saoar•ately on ••o+•r• re••` statesent and mil nut 'be subject to CRI increases. All of e.. the above pass thrus reflect actual cost increases and do NOT include utilities and other charges billed directly to you. Documentation for- the pass tnr•ds is available at the park office. This notice applies to all residents uncle:• the J provisions of the San Luis Obispo Rent Contr•ui Ordinance. The Basa Rant becomes effective for January 1, 1994 and will remain so trough December 311 1:94. Sincerely, Pat Flemings Manager h Space: ! r ' =RcE�S:OE M33ILE OrE C0"1L;r; rY A D L . :lir LL._ Cb_' -L1, ter'. •7� .d?1 VL.v er SIXTY DAY NOTICE OF RENT INv—RE",SE Dear Nezident . City of San Luis Obispo Mobile dome Park Rent Stabilization Ordinance, Chapter 5. 44 allows for- rents to be adju.tEd annually. This letter is notice of such �N adjustment. From August, i99c to August, 1993 the Consumer Price Index moved from D " :;4. 1 to 4;F. 8 wi?iC i 15 a c.l•�• increase. Therefore, your CurrEnt rent will be J increased by 34. 9E which is the increase in the CPI. S1 -he 1993 Nass thru of sE. 93 currently listed separately on your rent Statement will be included in your new base rent. In addition, Section 5. 44. 260, Paragraph E. allows "Space rent may be automatically adjusted based on increases in expensas for• common area utilities, new gc.veinmcnt m,:�ndated services, garbayE service. . . ". In addition, SeCtiUn 5. 44. 160, ;aragr•aph E. further states, "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 CGI index for the twelve—month period. The quotient shall be allocated to tj.e space rent for' each space in thepark based on the amount the space rent relates to total space rent for the park. " The additional park costs under this section are as Folic;;:: r'ar'e( COst f 6r r12Ctric:ty iper'easEd by iWZ. 950. r'C.. ., ._.jjy . ,.. .V .t CI 11.Lrc JOB{J .JJ 4 • •, l:v. /4. ..:2 �­o: rr x CGSt �. v!:mp tees ln•=i'eaSaG by ' r . : ...1a. e`�i:'r•c vl vlL.Li incl"2a5e, 21"fcLt.VE .id(I'_:dr'y :, : 'r:, ..: ii rJc 7. .1e a:• ve 1T,crea3= r"'2f:ects act-a! Par" Cost incr'eases an.' GJ2s N..T _..0_'.I.e UY: :ltles ..i.•`J__ . _ �..'l'•_ ! _... ULA:WI� :i. a'_.. _ . 1i i•� a:..t = .. : . ._ 14;t 1Cc ��� .:S .0 iva .'I:DI.._:1'.;5 SU.�.•j _Ct to L.1@ 'er _:'ns. . . _ ti'! r , ..• _ ... . i! tl'.E :ikLi 1L". V. •+4.�•ql, ...1. u•. •_C'l•. vi. II'i:] L'Ira1l , : y. uci:'JLc': 2i 2L:tilYe .,a..!:ar"y :, 1y94 and will r=_main so t'.rough- December 31, 1994. �ince)-Ely, 'a. FleihinLam, r. 3-9 MEMORANDUM FROM THE OFFICE OF THE CITY ATTORNEY December 22, 1993 TO: City Council FROM: Jeff Jorgensen SUBJECT: Mobile Home Ren Stabilization I have reviewed the attached letter dated December 7 , 1993 from Leola Rubottom, which asserts that the automatic rent adjustments allowed by Municipal Code Section 5 .44 . 60 (E) [5.44 : 0.60 (E) ] are in conflict with the Mobile Home Residency Law, and therefore invalid. CONCLUSION Municipal Code Section 5. 44 . 060 (E) is not. in conflict with the Mobile Home Residency Law and is a valid subject of municipal regulation. ANALYSIS It is correct that the Mobile Home Residency Law, Civil Code Section 798 . 31, requires that, "a homeowner shall not be charged a fee for other than rent, utilities and incidental reasonable charges for services actually rendered. " However, what constitutes rent, particularly under a rent control ordinance, is not preempted by state legislation and is left to the broad discretion of the local agency. Gregory v City of San Juan Capistrano, 142 CA3d 72 , 191 Cal.Rptr. 47 (1983) . In addition, in the absence of a rent control ordinance, rent can be established at whatever level the park owner determines, subject only to market forces. The only case addressing the issue raised by Leola's letter is Karrin v. Ocean-Aire Mobile Home Estates, 1 Cal.App.4th 1066, 2 Cal.Rptr. 2d 581 (1991) . The Karrin case invalidated a rent control ordinance of the City of Oxnard which permitted a mobile home park owner to add a monthly capital improvement assessment to the monthly bill in addition to regular rent. The rent control ordinance specifically provides that such assessments should not be considered rent. The Court invalidated this provision because it directly conflicted with Civil Code Section 798 . 31. However, the Court was careful to point out that had the increase been added to rent rather than billed separately as an assessment, it would have been valid. ATTACHMENT 2 3-0 City Council December 22, 1993 Page Two The San Luis Obispo Mobile Home Rent Stabilization Ordinance is significantly different from the Oxnard ordinance which was invalidated in Karrin. The adjustments permitted under the San Luis Obispo ordinance are specifically included in space rent and are not a separate fee, charge, or assessment. Under this situation, it appears clear that the San Luis Obispo Mobile Home Rent Stabilization Ordinance is valid under the Karrin decision. (In addition, the 60 day notice of rent increase provided to the tenants of Creekside Mobile Home Community appears to meet the requirements of our ordinance as to form and effect. ) Finally, the reference to Civil Code Section 798 ..43 (b) does not appear to be relevant or related to the question raised. If you have further questions or comments, please feel free to contact me at your convenience. JGJ/sw attach. cc: Leola Rubottom Pat Fleming John Dunn San. Lti.e Obia1oo, CA Uecembetc 7, 1993 HononabLe !'layo,% Pinnaird and City Counci..L Aembuce v� San Lcie Obi,epo, CA Re: T he i_Uegat L4Aoushe being added to the bane nent in Cneee Abi&C ome %anh 9t had been bzought to my attention that Section 5.44.60, panagmph 4 the San L.Z4 Obicdpo'e Mobi,Cehame i2eduercy Lam .eo in direct conq�Lict oath the CaZZ4".ia irlobitehome 2eeidenay Law. Panagnaph "C4 Section 5.44.60 0A the Sate Lcie i'lobiteh.ome i?eaidency Lam etatee „, Space )cent maa be autawt.� adyudted based on ,encneaded in expense PA cammon area „};. }ieo, new govetvvnent manned eeavi.cee, gazbage eexvice and cabte vie) m dw-Ae appzicabte." Lhe Ca,Le4v)vua State Ao6itehvme R"idency Lau rrv. 798.43 Section (b) otated "aheneve4 a hvmevxne4 ed neopon:5ibte Pz pd, ort etectnic utilefif eenvLce, management dhaU diectoee to the Aaneounen bepAe tenanaf, a4eneve)c the homeOL�'d mete,% a.LOo mea0une0 gad on eL.'U.citcy on. Cvmmore atc.Pn Acil i,ti_ee, oR , uectudeng Li Ung. Th1d can be h ed yr7�oagcrug ee ome- va-2 t^.at pan:ron v4 the 6 Lvi.ce to t�.a ccxvron areae v� d4zconti-we ue- in$ the meter) on toe Aorevunend eite Pxa� o e cannon aAea aciL- itie6 and equipment." 9n addVi.on to a .e ttega.L patio thnvughd our parch oanen ed now going to add theee paeo thno to the base nen). chid uxLL allow the inciceaoed .cent 4.eaw-e to be the new bade 4on t•n/r�nd or neat begntwcg next yeah 7y8.31 or `,ne State I7obitehome Redidenc�t Liu, atate6, "A homeonea 6halt not be chaAged a jee P,% o;hez than neat, utLb:tiee and uuui4Lr&4, J neaoonabte cnaluit gee PA oeavicee ucbwj.� ae.4.ur., The pade thaougfu have beene einthein .inception acco)rdinj to our gvvenning State MobiLeAvrae 2e4i Lam. Ar, nding to 'Weet'o Annotated C¢Lip&rz a Co,e Cwwtitution, rintirte 6, Section 5, %tate Lam eupezcedeo manitipat on cL;�C lam." We ane aching the Non. Map,% and the. 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O ."a A S� IV "19 A A w t=o o 3 ~ O d O' N 130 .c 7 10 Tam ?n A SlAp n n a d y s S3 < -.A p x n �� A A 30 " _ A ° 3 n.A m n d-^� ° c y m x m 3 =T Ato A p Ado H ° n.S m A a A 3 3 ° `" = n c 3 a T-c 3 A A A A A d n•A m y ° �� w �+ '� �m ° mom.'=" ..cro,X nA Mco .0 m T °. o .� °c 0 7 a0 01 0 M omn £ mcd °. m � 3 o�a3Om cam 001 a.= "- g W ; � �.po..co ° E .Ay..fO T ^y 3 m o S C1-.d o a A A c `-°, m s � y d,0 NO; m > 0o� � OyA y �o_ °lac �•o m3 °: ° 3n -Ta = c `° 33 ° 31no SOA•O A .� .'O S A b CI A p A '� A •� d Q �I T O d '� y 0 03 A ...,o d o E0;. A - A . o ..A � o y d y .n. O7 7 ..� .° wA3O 3 TT dw-, x 3m -o . m ° ma ° d E yd �0 ° 2 ,� ��, ^. 0 DoT T3TAosod QTc Ta o oqo > ? AnT_ A O 6.99 ., AyA A ...,- A .. A A (O -� -aMu yAy.vi A. � ATTACHMENT 3 3-/3 Legislative Draft SLOMC § 5.44.060 (E) E. Space rent may be automatically adjusted based on increases in expenses 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. itomat3 cdustnents to : rent aut2ora2d by kris 3ragraph shah not be riciude:d in "baste ::space; rent"' faMmxr the purpose of determining CPI zncreasespursuant to Section 5 44 06O(,B) f but ` shaT1 be considered as; :. .. gdd t .ona text. Notice of the increase shall be in writing and"`shall be given as required by law no less than sixty 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 ont his section. There shall only be one such increase in any twelve-month period. ORDINANCE NO. (1994 Series) An Ordinance of the Council of the City of San Luis Obispo Amending Chapter 5. 44.060 (E) of the San Luis Obispo Municipal Code Relating to . Automatic Adjustments to Rent in Mobile Home Parks BE IT ORDAINED by the Council of the City of San Luis Obispo: SECTION 1. Section 5.44 . 060 (E) of the San Luis Obispo Municipal Code is amended to read as follows: E. Space rent may be automatically adjusted based on increases in expenses 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. Automatic adjustments to rent authorized by this paragraph E shall not be included in "base space rent" for the purpose of determining CPI increases pursuant to Section 5. 44 . 060 (B) , but shall be considered as additional rent. Notice of the increase shall be in writing and shall be given as required by law no less than sixty 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.. SECTION 2 . This ordinance, together with the names of council members voting for and against, shall be published once in full, at least three days prior to its final passage, in the Telegram Tribune, a newspaper published and circulated in this City. The ordinance shall go into effect at the expiration of 30 days after its final passage. Exhibit A Ordinance No. (1994 Series) Page Two INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at its meeting held on the day of , 1994 , on motion of , seconded by and on the following roll call vote: Ayes: Noes: Absent: Mayor Peg Pinard ATTEST: City Clerk, Diane Gladwell APPROVED AS GTO FORM: *iA!t: me 3-/,6 ORDINANCE NO. (1994 Series) An Ordinance of the Council of the City of San Luis Obispo Deleting Chapter 5.44. 060 (E) of the San Luis Obispo Municipal Code Relating to Automatic Adjustments to Rent in Mobile Home Parks BE IT ORDAINED by the Council of the City of San Luis Obispo: SECTION 1. Section 5.44 . 060 (E) of the San Luis Obispo Municipal Code is hereby deleted in its entirety and repealed. SECTION 2 . This ordinance, together with the names of council members voting for and against, shall be published once in full, at least three days prior to its final passage, in the Telegram Tribune, a newspaper published and circulated in this City. The ordinance shall go into effect at the expiration of 30 days after its final passage. INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at its meeting held on the day of , 1994, on motion of , seconded by and on the following roll call vote: Ayes: Noes: Absent: Mayor Peg Pinard ATTEST: City Clerk, Diane Gladwell APPROVED AS TO FORM: 1 At me Exhibit B MEETIN : AGENDA DATE. ITEM # Legislative Draft SLOMC § 5.44.060 (E) E. Space renin Fea� be automatically adjusted based on increases in BXpL�IIS�S for common area utilities, new government-mandated services, garbage service and cable television, where applicable. The space rent may be nn /n� � adjusted by dividing the total increase in any dC_- g?; s 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 ::. .::.....:...:.. ..: .......:::::::..:. :.w•:.::: v::. .k:.»...v:.,^., raaGau:..:tm,.: ....::.ta..,. .: ::en:t au: :ho: :a> paragraph 13 shllFnot, bexihc3uded n "base s ace rent" for the purpose:;flf detearm rlrig,vCr°incxeas pusuata; ectiori ' 54 X60($) , butt > shall be r�onsidered' as dditsEinal x nt Notice of the inczease sna2l be in x writing 'and`""'shall be given as required by law no less than sixty 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 ont his section. There shall only be one such increase in any twelve-month period. F ❑ CDD DIR ❑ FIN DIR `� �1❑ FIRE CHIEFRECEIiFEV❑ PW DIR ❑ POUCE CHF + 1994 O REC DIR ❑ UTIL DIR CITY CLERK i C� 0 PERS DIR .";©BISPO,C.'. MEETING AGENDA DATEITEM #._. ., July 7, 1994 MEMORANDUM TO: City Council FROM: John Dunn��V SUBJECT: Request-t6coontinue Agenda Item #3 - Mobile Home Park Rent Stabilization Leola Rubottom called in the early afternoon to say that she had spoken with the Mayor and that she was requesting this matter be continued until a full Council was available to hear the item. I told Leola I would be happy to pass her request on to you given that she didn't have the time to write a letter. JD:ss COUNCIL ❑]DIR . dCAO ❑ OAO OIEF TTORNEY O CLERIGDFUG ❑ HF a ! _; ❑ MGMT TEAM ❑ 0,C GREAVILE O ,lUl - 7 1994 ❑ CITY CLERK :': OBISPO C. . ME AODA - DA 1055-B Ortega Way Placentia, California 92670 Phone: (714) 632-1646 Fax: (714) 632-5305 RECEIVED F(rgATTORNEY ]ERD R JUL 7 1994 June 17, 1994 IEF CITY COUNCIL Y SAN LUIS OBISPO, CA RIG CHFAM Mayor and City Council ILE RCity of San Luis Obispo ; , IR 990 Palm Street P.O. Box 8100 San Luis Obispo, California 93403-8100 RE: Proposed changes to the rent control ordinance. We believe the proposed changes to the rent control ordinance are not justified and contrary to the cooperative spirit from which the ordinance evolved. Furthermore, it is a direct contradiction to council actions taken in 1992. We should be reminded that the ordinance is the product of extensive committee negotiations between residents and park owners. It was voted in by the people of San Luis Obispo and should not be easily changed. The Ordinance has provided stability to both sides and kept the City out of harms'way for 6 years since its enactment in June of 1988. It should be of no surprise to the City Council that the cost of city services paid for by mobile home park owners have escalated far in excess of the CPI. These services comprise most of the pass-thru's in question. Mrs. Ruebottom's position seems to be that Mobilehome owners be the only residents in the city to not share this burden. The current effort to liken the ordinance to the Creekside lease provides a unique irony. In 1992 the same proponents were successful in convincing the Council to eliminate the safe harbor provisions in order to be "protected" by the ordinance. Creekside strongly objected to the change, but complied with the law. The city attorney has stated, 'Creekside... appears to meet the requirements of our ordinance as to form and effect.' Now, it seems these few residents don't care for the provisions of the ordinance but do like the provisions the Creekside lease they sought protection from in 1992. The Creekside lease and the rent control ordinance are two separate documents negotiated in their entirety with differing provisions that were a direct result of arms length negotiations. The terms and conditions of each must be left intact to provide the balance originally intended. Therefore, this action before the City Council places an unfair burden, again on the park owners, as well as, treating unfairly the residents who did work for and sign the lease. If discrimination exists, it is against the residents Who worked for and signed the lease. This piece-meal approach to law making does not benefit all mobilehome residents. . . is We believe any City Council action to be unwarranted and a further signal to park owners of the city's intentions to continue to erode return on investment. Creekside relied upon the provisions of the ordinance as it was enacted in 1988. Its lease was the product of a long, hard effort with our resident committee. Subsequent changes to the ordinance have placed this reliance in jeopardy. We sincerely urge the City Council to let the ordinance stand. Sincerely, Edwin J. ans Creekside Mobilehome Community