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Home My WebLink About11/10/1992, C-3 - THE CONTROL OF RENTS UPON THE SALE OF MOBILE HOME LOCATED IN PARKS SUBJECT TO MOBILE HOME RENT STABILIZATION. MEETING DATE d jID city of san Gsoialspo 11-10-92 Wo COUNCIL AGENDA REPORT ITEM NUMBFA: FROM: Jeffrey G. Jorgensen, City Attorney SUBJECT: The Control of Rents Upon the Sale 11 Mobile Homes Located in Parks Subject to Mobile Home Rent Stabilization CAO RECOMMENDATION: Give Final Passage to Ordinance No. 1226 (1992 Series) Amending Chapter 5.44 of the San Luis Obispo Municipal Code and Section 5.44. 060(C) Establishing Control of Rents Upon the Sale of Mobile Homes Located in Parks Subject to Mobile Rent Stabilization. SUMMARY DISCUSSION: On October 20, 1992, the City Council passed to print an amendment of the San Luis Obispo Municipal Code, Section 5.44 .060(C) , to provide for the control of rents upon the sale of mobile homes (otherwise known as "Vacancy Control") , limiting the increase in monthly space rent when there is a change of ownership, to no more than 10% within any 36 month period. FISCAL IMPACT: There is no anticipated impact on City funding, either in terms of expense or savings, with the exception of potential litigation. Costs of any such litigation are too speculative to project at this time. Attachments: Ordinance No. 1226 Legislative Draft I ORDINANCE NO. 1226 (1992 Series) An Ordinance of the Council of the City of San Luis Obispo Amending Chapter 5.44 of the San Luis Obispo Municipal Code and Section 5.44.060C Relating to Space Rent Increases in Mobile Home Parks Upon Change of Ownership BE IT ORDAINED by the Council of the City of San Luis Obispo: SECTION 1. Section 5.44.010 of the San Luis Obispo Municipal Code is amended to read as follows: 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 living. 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 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 Ordinance No. 1226 (1992 Series) Page Two present inflationary rent increases could not reasonably have been foreseen. E. Tenants in mobile home parks desiring to sell their mobile homes may have difficulty finding buyers because, upon a change of ownership, the park owner is able to. raise the rent without regard- to the city's mobile home rent stabilization ordinance. F. This council finds that it is in the best interests of the citizens of the City of San Luis Obispo to assist those who are seeking to sell their mobilehomes and those who are seeking to buy such homes to have the same fair rental protection as is afforded to those who remain in their mobilehomes without sale. This Council finds that the vacancy control provisions originally included in the Mobile Home Rent Stabilization Ordinance when it was approved by the voters was an effective and beneficial provision for the people of San Luis Obispo living in mobile home parks, and should be reinstated. This council further finds that provisions allowing annual rent increases together with provisions allowing rent increases upon a showing of necessity protect the park owner's right to a fair return on investment, thus eliminating the need for rent increases above 10$ upon change of ownership. G. 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 profitably, as well as to attract additional investors for new parks. SECTION 2 . Section 5.44.060C 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. 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 mobilehome space as may be allowed by x,3_,3 Ordinance No. 1226 (1992 Series) Page Three 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 change of ownership resulting from vacation of the space, then the space rent may be adjusted to fair market rent in the community. Nothing in this paragraph shall preclude an adjustment as may otherwise be provided for in this Chapter. SECTION 3 . 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 , 1992, on motion of , seconded by and on the following roll call vote: AYES: NOES: ABSENT: Mayor Ron Dunin ATTEST: City Clerk, Diane Gladwell APPROVED: jCi2ty A inistrative Officer nt��e 67 Community Dev opment Director Legislative Draft of Ban Luis Obispo Municipal Code Section 5.44.010 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 living. 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 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. :}}:.►.��....oir%,don.j..:.4.:tS.>.:.....;;:..i:::�>.::.;.'y\°:::•1:4�RU.`k!�vry...y:kl�!'.`:t:::v.$1: :jtv�}f'.(;;;t::d.n\n'v....$.'F..}:�$:;5<.:+::'}..S ...}..}..,nt:v.?:y:n.i.$.:y ' : .�.t on OU :..;.}}.fOthn .r< IN :.. : is tF';::",. :t.'f.:;:..i}'S.�:ti�::=(:',:i. h iJ::n.Y.i$}':t::n'• $}:{::: .2.::f r•'h'JiU... .}: .:�"Y,s...�+.. 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