HomeMy WebLinkAbout05/15/1990, 2 - THE CONTROL OF RENTS UPON THE SALE OF MOBILE HOMES LOCATED IN PARKS SUBJECT TO MOBILE HOME RENT STA y�ORIGINAL AGENDA REPORT AOM 5/1/90 REGULAR MEETING. MEETING DATE:
�� %1W,11l city of San Luis OBlapo 5-1-90
WMIr" COUNCIL AGENDA REPORT ITEM NUMBER:
From: Jeffrey G. Jorgens Prepared By: Robert S. Illman
City Attorney Senior Legal Assistant
Subject: The control of rents upon the sale of mobile homes
located in parks subject to Mobile Home Rent
Stabilization.
CAO Recommendation:
Introduce to print an ordinance amending Section
5.44.060C of the San Luis Obispo Municipal Code to
provide for decontrol of rents upon the sale of mobile
homes located in parks subject to Mobile Home Rent
Stabilization.
Discussion:
Background
The present version of San Luis Obispo Municipal Code Section
5.44.060C provides for a control upon the level of rent which a
mobile home park owner can charge if a mobile home located on a
space subject to rent stabilization is sold. (Because legislation
such as this controls the rent upon vacancy of the Mobile Home, it
"is frequently referred to as a "vacancy control". ) This section
of the municipal code limits rental increases upon sale to a
maximum of ten percent (.10$) , and then only once every three
years.
In the fall of 1989, the Federal District Court rendered a
final decision in the Hall v. Santa Barbara case. The court
reasoned that if rents were controlled at the time of sale, this
made the mobile homes affected more valuable. This value is,
according to the court, created by the rent control, and is only
available to the mobile home owner. The owner of the park is
prevented by vacancy control from sharing in this valuable right,
and therefore an unconstitutional "taking" of the park owner's
property occurs. Because of the holding in this case, most
California cities and counties which have controls on rental levels
at the time of- sale have amended their regulations to remove such
controls. (This is often referred to as "vacancy de-control". )
Because the Hall case has now been finally settled and is
binding law, staff recommends amending our ordinance to make it
consistent with Hall. This requires deleting the language from
5.44. 060C which controls rental increases at the time of sale. At
the same time, staff recommends the addition of language which
makes it unlawful for a park owner to utilize vacancy de-control
unfairly, as would occur if a park owner raised the rent so high
that no one would buy the mobile home. Such action would become
a-�
CAO Report on Vacancy Decontrol
Mobile Home Ordinance
Page 2
a violation of
the code as redrafted.
The new 5.44.060C would provide 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 '!Pr*CjV1d 4*"
hawevex, it shal'I b ..t2#l�tWtl ain,
vials ion aP t� .s Gtiap�er fax`
owned 'trs �x� `.entatana3 ly ands ifull
ncreass tk3e mcrithly ;space �ren�. ci
a. tenant above the fair mazIset rend
the Cox=,n g; ar a ptsxpass aE
farang t taecan
mobilehame:" to the C1 @fir h15
.
or xe ressntat�v ��ev-gin
ifteFeage si=' -met e.eeed test
rent and may net be relied upen any
mere often than F thirty -
six menth peeled Rg *:I32—acs3st-_9
inerease rents Fit—tee event of
as may be allewed by state law,
sheuld sii h beeeme state law, then
upon any sueh sttbletting then the
spaee rent may be inereased up to
spaee the event a
of ownership restAtinel
ef spaee, he the speee rent
may be adjusted to fair market rent-,
in the eemmunity-r.
Concurrences
For information purposes, staff involved in implementing
Chapter 5.44 have been informed of this report, and concur in the
adoption of the recommendation.
4a7—a;k
CAb Report on Vacancy Decontrol
Mobile Home Ordinance
Page 3
Fiscal Impact
There are no anticipated impacts on city funding, either in
terms of expenses or savings. The potential fiscal impact of
doing nothing is discussed below.
Alternatives
Staff believes that viable alternative actions are limited in
scope. To do nothing would invite certain litigation. In light
of the Hall decision, we could expect to lose, and the impact on
city finances from the litigation alone, not counting any provable
damages would make doing nothing inadvisable.
Attachments
Proposed Ordinance
a 3
` 1
1
ORDINANCE NO. (1990 Series)
AN ORDINANCE AMENDING SECTION 5.44.060 (C) OF THE
SAN LUIS OBISPO MYNICIPAL CODE, ELIMINATING CERTAIN
RESTRICTIONS ON MOBILE HOME RENTAL AWUSTMENTS
BE IT ORDAINED by the Council of the City of San Luis Obispo:
SECTION 1: Section 5.44.060 (C) of the San Luis Obispo
Municipal Code is amended to read 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.
Provided, however, it shall be unlawful and a
violation of this Chapter for an owner to
intentionally and wilfully increase the
monthly space rent of a tenant above the fair
market rent in the community for the purpose
of forcing the tenant to. sell his mobilehome
to the owner, his agent or representative.
SECTION 2. This ordinance, together with the names of
councilmembers voting for and against, shall be published once in
full, at least (3) days prior to its final passage, in the
Telegram-Tribune, a newspaper published and circulated in this
city. This ordinance shall go into effect at the expiration of
thirty (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 ,
Ordinance No. (1990 Series)
Page Two
1990, on motion of seconded by
and on the following roll call
vote:
AYES:
NOES:
ABSENT:
Mayor Ron Dunin
ATTEST:
City Clerk Pam Voges
1'3
APPROVED:
City
_Adm nistrative Officer
1 At or y
G -a
� C3
Community D IM1.opment, Director
a-�