HomeMy WebLinkAboutItem 6c - O-1759 Clarifying pplicability of MHPRSO to Long-Term Leases and Requireing Notices By Owners Item 6c
Department: Attorney
Cost Center: 1501
For Agenda of: 9/1/2026
Placement: Consent
Estimated Time: N/A
FROM: Christine Dietrick, City Attorney
Prepared By: Sadie Symens, Deputy City Attorney
SUBJECT: FINAL ADOPTION OF ORDINANCE CLARIFYING APPLICABILITY OF
MHPRSO TO LONG-TERM LEASES AND REQUIRING NOTICES BY
OWNERS
RECOMMENDATION
Adopt Ordinance No. 1759 (2026 Series) entitled, “An Ordinance of the City Council of
the City of San Luis Obispo, California, Amending Chapter 5.44, Mobile Home Park Rent
Stabilization Ordinance, to Apply Restrictions on Space Rent Increase Upon Transfer
(5.44.060(C)) to Certain Existing Long-Term Leases and to Require Park
Owners/Operators to Provide Notice to Tenants (5.44.143).”
POLICY CONTEXT
Chapter 5.44 of the City’s Municipal Code regulates maximum space rent increases in
mobile home parks. Until January 1, 2025, state law required local ordinances to exempt
long-term leases from their mobile home rent control ordinances. As permitted by
Assembly Bill 2782, the City removed the long-term lease exemption from its Mobile
Home Park Rent Stabilization Ordinance (MHPRSO) on June 2, 2026, with the ordinance
becoming effective July 2, 2026. (Ordinance No. 1757 [2026 Series].)
On August 18, 2026, the City Council unanimously voted to introduce Ordinance No. 1759
which clarifies the applicability of the MHPRSO to long-term leases that existed before
July 2, 2026. The Ordinance also requires mobile home park owners to provide notice to
tenants of the terms of, and any changes to, the MHPRSO. The recommended action is
a second reading and final adoption of that Ordinance.
DISCUSSION
Background
The City's Mobile Home Park Rent Stabilization Ordinance (MHPRSO), originally adopted
in 1981, regulates allowable space rent increases in mobile home parks and has been
amended several times, most recently in June 2026. Until recently, state law required
local rent stabilization ordinances to exempt long-term mobile home space leases.
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Item 6c
However, Assembly Bill 2782 repealed that requirement effective January 1, 2025,
allowing local jurisdictions to extend rent stabilization protections to long-term leases.
In response, the City adopted Ordinance No. 1757 on June 2, 2026, effective July 2,
2026, eliminating the long-term lease exemption from the MHPRSO.
Following its adoption, the City received conflicting assertions from representatives of
mobile home parks and residents regarding whether the ordinance applied to long-term
leases already in effect. Staff determined that a clarifying amendment was appropriate
and met with the Council in closed session for direction .
The proposed Ordinance (introduced on August 18th and presented for final adoption
today) clarifies that the MHPRSO's limitation on space rent increases upon transfer of
ownership of a mobile home (Section 5.44.060(C)) applies to all pre -July 2, 2026 long-
term leases that either do not address transfer-related rent increases or permit increases
exceeding the MHPRSO’s ten percent limit. This amendment responds to concerns
raised by residents who experienced substantial space rent increases upon sale or
transfer of their homes, negatively affecting their ability to sell and reducing home values.
The amendment is narrowly tailored to extend these transfer protections while preserving
the remaining negotiated terms of existing long-term leases for the remainder of their
current terms.
Annual rent increases established under pre-July 2, 2026 long-term leases would remain
governed by those agreements. Long-term leases executed on or after July 2, 2026, are
subject to all provisions of the MHPRSO under Ordinance No. 1757.
The Ordinance also modifies language in Section 5.44.060(C) regarding increases in
space rent upon “vacation” of the space by clarifying that space rent may only be
increased to market if the existing mobile home is removed from the space and a new
one (with a new owner) moves into that space. Park owners will not be permitted to
increase space rent to market rate if an existing mobile home is merely replaced by its
current owner.
Finally, the Ordinance requires mobile home park owners to notify all residents of this and
all future amendments to the MHPRSO, as well as any other changes in law or policy that
affect mobile home park residents.
Further discussion of the above changes can be found in the 8/18/2026 Council agenda
report here.
Previous Council or Advisory Body Action
On May 5, 2026, the Council introduced an ordinance amending Chapter 5.44 to remove
the long-term lease exemption from the MHPRSO prospectively. On June 2, 2026, the
Council adopted Ordinance No. 1757 removing that exemption.
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Item 6c
On June 16, 2026, and on July 21, 2026, the Council met in closed session with the City
Attorney regarding anticipated litigation arising from communications from both park
owners and resident advocates.
On August 18, 2026, the City Council unanimously voted to introduce Ordinance No.
1759.
Public Engagement
The public had an opportunity to comment at the public hearing introducing Ordinance
No. 1759 on August 18, 2026. Notice of that public hearing was published as required by
law. The public may also provide comments on the recommended action both before and
during this meeting.
Notices were sent on July 8, 2026, to all owners and operators (as registered with the CA
Department of Housing & Community Development) of mobile home parks within the City
regarding the passage of Ordinance No. 1757. The Notice advised that any further
changes to the MHPRSO will be duly noticed for introduction and final adoption by the
City Council.
CONCURRENCE
The Community Development Department concurs with the recommendation.
ENVIRONMENTAL REVIEW
The recommended action is not a “project” under the California Environmental Quality
Act, as it does not have any foreseeable impact on the environment, and it is therefore
exempt from environmental review.
FISCAL IMPACT
Budgeted: No Budget Year: 2026-2027
Funding Identified: No
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:
Total $ 0 $ 0 $ 0 $ 0
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Item 6c
There is no immediate fiscal impact anticipated, but subsequent investigation of alleged
violations and/or enforcement action will require significant staff resource in the City
Attorney and/or Community Development Department. Litigation challenging Council
action would result in significant legal defense costs and reallocation of City Attorney’s
Office staff resources potentially totalling tens of thousands of dollars, even if the City
were to prevail, as would be expected.
Partial expansion of the MHPRSO to existing long-term leases may affect the workload
of Code Enforcement officers and Administrative Hearing Officers if enforcement action
is taken against park owners, but such potential impact is difficult to estimate.
ALTERNATIVES
1. Continue the second reading and adoption of the Ordinance. A vote by the
Council to continue consideration of the introduced Ordinance should include direction
for staff on pertinent issues that should be further analyzed for Council consideration.
2. Do not adopt the introduced Ordinance. This would leave the MHPRSO in effect
as modified by Ordinance No. 1757, meaning removal of the long-term lease
exemption affects only leases executed on or after July 2, 2026. Not adopting the
introduced Ordinance will likely result in continued ambiguity as to the applicability of
the MHPRSO to long-term leases that existed before July 2, 2026, and may also
negatively impact existing mobile home park residents wishing to sell their mobile
homes. It would also leave rent increases upon “vacation” of a space open to
unintended interpretations by park owners.
3. Modify the introduced Ordinance. Should Council wish to make substantive, non-
clerical modifications to the Ordinance, it would need to be re -introduced at a
subsequent, duly-noticed public hearing. This delay in implementation may lead to
further confusion over the applicability of the MHPRSO to existing long -term leases
and negatively impact existing mobile home park residents wishing to sell their mobile
homes.
ATTACHMENTS
A - Ordinance No. 1759 (2026 Series)
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O ______
ORDINANCE NO. 1759 (2026 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING CHAPTER 5.44, MOBILE HOME
PARK RENT STABILIZATION ORDINANCE, TO APPLY RESTRICTIONS
ON SPACE RENT INCREASE UPON TRANSFER (5.44.060(C)) TO
CERTAIN EXISTING LONG-TERM LEASES AND TO REQUIRE PARK
OWNERS/OPERATORS TO PROVIDE NOTICE TO TENANTS (5.44.143)
WHEREAS, the City’s municipal code, Chapter 5.44 (known as the Mobile Home Rent
Stabilization Ordinance [MHPRSO]), limits the maximum amount a mobile home park
operator may increase space rent within a mobile home park annually and upon transfer
of ownership of a mobile home; and
WHEREAS, prior to July 2, 2026, long-term leases were excluded from the protections of
the MHPRSO pursuant to the City’s ordinance and as previously required by state law
(former Civil Code § 798.17); and
WHEREAS, a change in law in 2021 (Assembly Bill 2782) allowed local agencies to
remove the long-term lease exemption from their mobile home rent stabilization
ordinances; and
WHEREAS, on June 2, 2026, the City Council voted to adopt Ordinance No. 1757 (2026
Series), removing the long-term lease exemption from the MHPRSO, a change which
went into effect on July 2, 2026; and
WHEREAS, as adopted, Ordinance No. 1757 only applies to leases executed on or after
July 2, 2026;
WHEREAS, residency in mobile home parks provides one of few affordable housing
options within the City;
WHEREAS, unlimited space rent increases upon change in ownership of a mobile home
make it more difficult for tenants in mobile home parks wishing to sell their mobile home
to find buyers and/or may diminish or deprive homeowners of the investment in their
mobile homes by suppressing the sales value of mobilehome units sold in place, while
effectively transferring value to park owners; and
WHEREAS, unlimited space rent increases upon change in ownership of a mobile home
erode the supply of affordable housing options for prospective buyers by significantly
increasing the overall costs to purchase and occupy a mobile home if the space rent
increase upon sale or transfer is unpredictable and/or unlimited; and
WHEREAS, the City has a substantial interest in preventing the rapid erosion of
affordable housing provided by mobile home parks that results from unlimited increases
of space rent upon sale or transfer of a mobilehome in place, and in protecting mobile
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Ordinance No. 1759 (2026 Series) Page 2
O 1759
homeowners wishing to sell their mobile homes from unlimited space rent increases upon
sale that diminish or transfer the value of their investments in their units to mobilehome
park owners and discourage investments in the maintenance of safe mobilehome units in
the City .
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. The Council hereby finds and declares the following:
1. The above recitals are true and correct and are incorporated herein by
reference as the findings of the City Council.
2. The City reiterates and herein incorporates by reference its findings codified in
Section 5.44.010 (Purpose and Intent) of the San Luis Obispo Municipal Code.
3. The City has received complaints from mobile home residents within the City
wishing to sell their mobile homes that the park owner/operator intends to
increase their space rent by two hundred percent or more and City staff have
verified these claims through review of notifications of space rent increase upon
sale.
4. Absent regulation by the City, tenancies exempted from the MHPRSO under
Section 5.44.030 are not afforded the protection against unlimited space rent
upon transfer of ownership under Section 5.44.060(C), which limits such
increases to no more than ten percent (10%) of the prior space rent.
5. The City has a substantial interest in protecting and preserving the long-term
availability and affordability of tenancies in mobilehome parks, and in protecting
mobilehome park tenants who must sell their homes in place against the loss
or significant diminution of their investments in their mobilehomes resulting
from exorbitant increases in space rent upon sale or transfer of their homes.
6. The allowable increases in space rent upon transfer permitted herein are
intended to and do provide landlords with reasonable returns on investments
in local mobilehome parks.
7. The Council has considered various options to advance its interests set forth
herein and has determined that the Ordinance herein is narrowly tailored to
advance the City’s substantial interests.
SECTION 2. Chapter 5.44, Mobile Home Park Rent Stabilization, of the Municipal Code
is amended by adding Subsection (F) to Section 5.44.030 as follows:
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 Government, the
state of California, or the county of San Luis Obispo;
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Ordinance No. 1759 (2026 Series) Page 3
O 1759
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. Spaces in a mobile home park which sells lots for factory-built or manufactured
housing, or which provides condominium ownership of such lots, but only when
the dwelling unit and the underlying interest in the space it is located upon are in
the same ownership.
F. Tenancies entered into before July 2, 2026, covered by leases or contracts that
provide for a tenancy of more than one year (“long-term tenancy”), except as
provided in Section 5.44.060(C).
SECTION 3: Chapter 5.44, Mobile Home Park Rent Stabilization, of the Municipal
Code is amended by modifying Subsection (C) of Section 5.44.060 as follows:
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 ten percent of the then existing space rent and may not be relied upon
any more often than once in any thirty-six-month period as the basis to increase rent. In
the event of change of ownership resulting from subletting of the mobile home space as
may be allowed by state law, should such become state law, then upon any such
subletting the space rent may be increased up to ten percent of the then existing space
rent. In the event of removal of the mobilehome from the space and
termination/abandonment of the space lease, the space rent may be adjusted to fair
market rent in the community. For clarity, replacement of a unit by an existing tenant who
is continuing their residency within the park does not constitute removal of a mobile home
for the purpose of a rent adjustment contemplated by this paragraph. Nothing in this
paragraph shall preclude an adjustment as may otherwise be provided for in this chapter.
Notwithstanding the exemption for long-term tenancies that existed prior to July 2,
2026, as set forth in Section 5.44.030(F), such tenancies that are subject to leases or
contracts that either: 1) do not expressly address or limit the allowable increase in space
rent upon sale, transfer, or any other change of ownership of the mobile home, or 2) that
expressly allow increases in space rent upon sale, transfer, or any other change of
ownership of the mobile home, at a rate above ten percent (10%), are subject to this
Subsection (C.)
SECTION 4: Chapter 5.44, Mobile Home Park Rent Stabilization, of the Municipal
Code is amended by adding a new section 5.44.143 as follows:
5.44.143 Required notices by park owners
A. Initial Notice. Prior to execution of any agreement for a tenancy within a mobile
home park, the owner or operator of a mobile home park shall provide each
homeowner and tenant with a copy of this Chapter.
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Ordinance No. 1759 (2026 Series) Page 4
O 1759
B. Notice of Amendments. Following notice by the City to a mobile home park
owner or operator and within thirty (30) days of adoption of Ordinance No.
1759, or any subsequently noticed amendment to this Chapter, the owner or
operator shall provide written notice of the amendment to each homeowner and
tenant. Such notice shall be provided within thirty (30) days after any
amendment becomes effective.
C. Other Notices. Whenever directed in writing by the City, the owner or operator
shall provide written notice of any matter affecting mobile home park tenants,
including but not limited to a change in law or a new or amended rule, policy,
regulation or land use. Such notice shall be provided within thirty (35) days of
mailing of such direction by the City.
D. Method of Notice. Notice as required by subsection (B) or subsection (C) shall
be deemed sufficient if it is:
1. Delivered personally to the homeowner or tenant, with a proof of service;
2. Mailed by first-class mail to the address of the mobile home space, with
a proof of service;
3. Electronically transmitted, if the homeowner or tenant has consented to
receive notices electronically; and
4. Posted in a conspicuous location accessible to all homeowners and
tenants within the mobile home park; posting shall supplement, and not
replace, individual notice.
E. Violation. Failure to provide any notices required in this Section within the time
periods and by the methods set forth herein shall be a violation of this Chapter
subject to the provisions set forth in Chapter 1.12 and Chapter 1.24.
SECTION 5. Publication. Within fifteen (15) days after its passage, the city clerk
shall cause a summary of this ordinance to be published at least once, with the names of
those city council members voting for and against the ordinance, in a newspaper of
general circulation published and circulated in the city.
SECTION 6. Severability. If any provision of this Ordinance is held invalid by a
court of competent jurisdiction, such provision shall be considered a separate, distinct,
and independent provision and such holding shall not affect the validity and enforceability
of the other provisions of this Ordinance.
///
///
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Ordinance No. 1759 (2026 Series) Page 5
O 1759
INTRODUCED on the 18th day of August, 2026, and finally ADOPTED on the 1st
day of September, 2026, by the Council of the City of San Luis, on the following vote:
AYES:
NOES:
ABSENT:
_______________________________
Mayor Erica A. Stewart
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, this ______ day of ______________, 2026.
______________________________
Teresa Purrington
City Clerk
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