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HomeMy WebLinkAbout8/18/2026 Item 7b, Pardo (2) Nick Pardo < To:Stewart, Erica A; Marx, Jan; CityClerk; City_Attorney; Francis, Emily; Boswell, Mike; Shoresman, Michelle Subject:Re: URGENT PUBLIC COMMENT for Aug 18 Hearing (Item 7b) - Reject Proposed MHPRSO Amendment Attachments:Memo_Item7b_Response_Aug2026.pdf Dear Mayor Stewart, Vice Mayor Francis, and City Council Members, I am writing to follow up on this thread ahead of the council meeting tomorrow, August 18th, regarding Item 7b. During the May 5th meeting, multiple council members actively questioned whether Ordinance 1757 would protect residents on existing leases. Vice Mayor Francis specifically asked if it was possible to update the ordinance to ensure protections for those existing leases. The intent of this Council was clear: to protect the vulnerable residents of San Luis Obispo. However, the current legislative draft for Item 7b largely abandons that intent. By introducing Section 5.44.030(F) to explicitly exempt long-term leases signed before July 2, 2026, the city is choosing to cave to corporate pressure. I urge the Council to recognize that this fear of litigation does not justify leaving residents unprotected. The legal precedent establishing the city’s authority to apply rent stabilization to existing contracts is already here, and the City Council has the power to protect its residents today. If corporate park owners do attempt to sue the city over this ordinance, a Motion to Stay has a high likelihood of being granted. Because the exact constitutional question regarding these leases is currently pending in state appellate courts (WMA v. Newsom), the City Attorney can request a local judge to grant a stay on litigation until the higher court defines the statewide precedent. This would preserve the city’s legal resources while ensuring residents receive immediate protection from predatory rent increases in the interim. Alternatively, the current proposal guarantees that corporate park owners will continue to extract exorbitant rent increases from residents while the city waits on the sidelines. Please do not bow to corporate pressure at the expense of some of your most vulnerable residents. I urge the Council to reject the proposed amendment in Item 7b and instead vote for the alternative outlined in the staff report: direct staff to apply the Mobile Home Park Rent Stabilization Ordinance to all existing long-term leases. Thank you for your time and your commitment to doing what is right for our community. Sincerely, Nick Pardo 1 On August 11, 2026, at 20:59, Nick Pardo <nickpardo1992@gmail.com> wrote: Dear Mayor Stewart, Vice Mayor Francis, City Council Members, and City Attorney Dietrick, Please find attached my formal memorandum regarding Item 7b on the agenda for the August 18 Public Hearing. The staff report presented to you fundamentally mischaracterizes the economic reality of mobilehome leases. The proposed ordinance is not a "compromise"—it is a complete surrender to corporate park owners. Grandfathering existing, often 10 to 20 year, leases abandons up to 90% of current corporate park residents to compounding, unregulated rent hikes that will inevitably result in economic eviction and the total loss of their home equity. Furthermore, the proposed "protection" of applying a 10% transfer cap to older leases is a performative half-measure. Capping a transfer increase at 10% is meaningless when the baseline space rent has already been artificially inflated through years of compounding annual increases. Additionally, the City is already well aware that corporate owners like Harmony Communities actively dodge the City's existing transfer caps by dubiously classifying certain homes as "RVs." The legal path for the City to intervene and protect the public welfare is clear, and the time to act is now. I urge you to read the attached memo, reject the draft ordinance in Attachment A, and adopt the full alternative option to apply the Rent Stabilization Ordinance prospectively to all leases, regardless of execution date. Thank you for your time and your service to our community. Sincerely, Nick Pardo San Luis Obispo Resident 2 MEMORANDUM TO: Mayor Erica A. Stewart, Vice Mayor Emily Francis, City Council Members, and City Attorney Christine Dietrick FROM: Nick Pardo, San Luis Obispo Resident DATE: August 12th, 2026 SUBJECT: URGENT RESPONSE TO ITEM 7b (AUGUST 18 PUBLIC HEARING): Factual Correction of Staff Report and Rejection of Proposed Ordinance Amendment Ahead of the August 18th Public Hearing on Chapter 5.44 (Item 7b), I am submitting this formal memorandum to correct explicit mischaracterizations of my position in the Council Agenda Report. I also want to clarify the reality of how these mobilehome leases are actually executed and explain why the City’s proposed “compromise” is nothing more than a complete surrender to corporate park owners. First, the Staff Agenda Report claims that tenant advocates indicated failure to extend MHPRSO protections to existing long-term leases would violate state law (AB 2782). I want to make it clear that I have never made this assertion. What I have repeatedly stated is that AB 2782 completely repealed California Civil Code § 798.17, removing the state mandate that forced municipalities to exempt long-term leases. The State returned full authority to local governments to regulate all mobilehome leases. Removing the exemption from Chapter 5.44 and explicitly applying it to existing leases will put the City in 100% alignment with the state’s legislative intent. The staff report justifies leaving existing long-term leases unregulated out of a desire to “respect... the privately negotiated terms of existing private contracts.” This ignores the economic reality of mobilehome ownership. There is no fair negotiation between corporate park owners and prospective buyers. The Mobilehome Residency Law (MRL) does not set a maximum lease term, nor does it force park owners to offer short-term leases to incoming buyers. Corporate owners like Harmony Communities exploit this gap to subvert local rent control by offering a single ultimatum: sign a 10 or 20-year lease, or you cannot live here. Buyers are routinely kept in the dark about these terms until they are already under contract and have put down earnest money. Calling an adhesion contract forced upon a buyer under duress a “privately negotiated agreement” is entirely disingenuous. Harmony Communities also attempts to justify these forced agreements by claiming they offered residents steep "discounts" on their homes in exchange for signing long-term leases. This is an illusory marketing tactic. A corporate park owner can arbitrarily claim a home is worth whatever they want. Advertising a $300,000 home as being worth $400,000, only to offer a $100,000 "discount" if the buyer signs a 20-year lease, still results in a $300,000 home. Property value is dictated by the market, not by a manufactured, inflated sticker price designed solely to coerce buyers into signing away their rent control protections. By carving out an exemption for these existing leases, the City is abandoning the vast majority of its residents that currently live in corporately owned parks. In prior correspondence, Harmony Communities representative Nick Ubaldi stated that ninety percent of his residents hold long-term leases. What wasn’t included is the crucial context that these mandatory leases carry minimum terms of 10 to 20 years. Carving out annual rent increases on existing long- term leases allows park owners to continue enforcing mandatory annual rent increases of CPI + 2% with hard floors of 4–5%, compounding annually over two decades. Over a 20-year lease, space rent easily doubles, extracting tens to hundreds of thousands of dollars per unit in unearned profit. By the time a 20-year lease finally expires and a resident gains any protection from the MHPRSO, the damage is already permanently done. The ending rent will be pushed well above market rate, devaluing the property and making it borderline unsellable. Because future buyers inherit that inflated baseline space rent (plus a 10% transfer increase), the park owner gets to continue extracting that wealth in perpetuity. Rent control at that point is useless. Ultimately, resident home values are of absolutely no concern to corporate park owners. If you are squeezed until you can no longer pay, they will simply evict you. Because the home may be too difficult to sell due to the exorbitant space rent and is far too expensive to move, the park can use this opportunity to seize your property and resell it to the next victim. Leaving 90% of corporate park residents exposed to this cycle of unregulated rent hikes and inevitable equity theft renders the City’s ordinance effectively useless for these owners. To distract from this massive loophole, the staff proposal claims to offer protection by applying a 10% transfer cap upon sale to these older leases. This is a performative half-measure that accomplishes virtually nothing. Capping a transfer increase at 10% is completely meaningless if the baseline space rent has already been artificially inflated to above market-rate levels ($1,500+) through years of unchecked, compounding annual increases. Furthermore, the City already knows that Harmony Communities flagrantly ignores the existing transfer caps. They subvert the policy by classifying smaller trailers as “RVs” instead of mobilehomes if they do not meet HUD standards. They install these units, market and sell them like mobilehomes, then use this bad-faith technicality to claim the units are completely exempt from the ordinance, allowing them to double space rents upon transfer—in one recent case, jumping from $767 to $1,595. This has been well documented with the city and has appeared in the local news. Expanding a 10% transfer clause that corporate owners already routinely bypass (and will continue to bypass) via this definitional loophole does absolutely nothing to help current residents. It is simply a smokescreen designed to deflect from the complete surrender the City would be making by grandfathering existing compounding rent increases. Harmony Communities has also claimed that without the long-term lease exemption, sustainable operation becomes “extremely difficult and park closures are likely.” This is a baseless scare tactic. Applying the full MHPRSO to existing leases does not force park owners to operate at a loss. All this ordinance does is mandate basic oversight. If a park owner is genuinely incurring substantial operational costs that warrant an increase above the standard allowable limits, the existing rent stabilization framework provides a legal mechanism for them to petition the City. Under the MHPRSO, park owners must actually prove their financial hardship. They are fighting to keep the exemption not to keep their parks open, but to avoid opening their books. The City has a well-established right to intervene in private contracts to protect the public welfare, especially for vulnerable populations facing the total loss of their affordable housing. The City Attorney’s fear of litigation is based on a hollow legal threat. When a mobilehome park owners’ association sued the State claiming that subjecting existing long-term leases to local rent control violated the Contracts Clause, the Sacramento Superior Court firmly rejected their claims (Western Manufactured Housing Communities Association v. State of California, Case No. 34- 2022-00332244). The legal path for the City is clear and the time to act is now. The proposed ordinance amendment presented in Item 7b is a policy failure that caves to corporate threats at the expense of San Luis Obispo residents. I urge the City Council to reject the recommended draft ordinance in Attachment A and adopt the full alternative option outlined in Item 7b: direct staff to amend Chapter 5.44 to apply all provisions of the Mobile Home Park Rent Stabilization Ordinance prospectively to all mobilehome leases, regardless of execution date.