A special city council meeting was held on Feb. 26, at 3 p.m., to review the mobilehome rent stabilization ordinance and resolution, which requires that the city carry out a biennial review of the ordinance during odd-numeric years. The last review was completed in 2017.
On Aug. 30, 2019, the city held a meeting with representatives of Yucaipa Mobilehome Residents Association (YMRA), Manufactured Housing Educational Trust (MHET), Western Manufactured Housing Communities Association (WMA), Mobile Home Rent Review Commission (MRRC), attorney Amy Greyson, city staff attorney Don Lincoln (via conference call) and city rent administrator Jennifer Crawford to discuss and gather input on various issues that were presented as part of the 2019 review.
On Sept. 10, 2019, staff notified park owners, park owner organizations, YMRA and the MRRC of the upcoming biennial review and requested that they submit comments regarding the ordinance and/or administrative rules by Sept. 30. Staff received comments from YMRA, MHET, WMA, and MRRC member Caecilia Johns (MRCC Johns). In addition, Kenneth Baar submitted a memo in response to comments made by YMRA and provided an analysis of the CPI (consumer price index) requested by city staff.
Tony Slaick, YMRA chairman, said, “I want to say this was an outstanding review.
“The stakeholders, residents, park owners and their representatives had opportunities well in advance to review and digest information. They could even meet with staff on all the issues. The rent review commission was open and inviting. They took the time to consider and weigh the pros and cons to all the proposals and they made good solid decisions in their recommendations.
“Since the inception of the ordinance, that is over 30 years now, there has not been any form of vacancy decontrol. This is a big move that favors park owners. We feel that the rent review commission did an excellent job in looking for reasonable changes to the ordinance that keep a good, fair balance. Yet in this case, they actually found a way to benefit park owners without a big impact to the park residents.”
Crawford addressed the council and said since the last biennial review, there have been three applications that involved a form of special rent adjustment. Two were MNOI’s (maintenance of net operating income) and then a capital improvement.
The first of several items was the annual adjustment. Once a year rents can be adjusted by 80% of CPI or cap by 4%.
Based on the analysis conducted by Kenneth Baar dated Nov. 5, 2019, in response to YMRA Sept. 26, 2019 comments and requested by city staff pertaining to annual allowable rent increase analysis, the impact of increasing the annual allowable increase from 80% to 100% of the percentage increase in the CPI would be approximately 25% higher. In addition, the ordinance contains a 4% cap on allowable annual increases, thus even if 100% CPI is granted, and the CPI exceeds 4%, the annual increase will be restricted to 4%.
In addition, Baar used Yucaipa Village as his example and analyzed the impact that a 100% of CPI annual increase standard from 1996 to 2009 (as opposed to the actual 80% of CPI standard) would have had on the allowable increase in the Yucaipa Village fair return case that went before the MRRC in 2011.
“If 100% CPI would be factored back to 1996 when it changed from 66-2/3% to 100%, instead of receiving a $61.16 increase it would have been a $20.13 increase. So just because you move it to 100% CPI, it doesn’t resolve because there is some catchup-component, but we wanted to show you what it means on an annual basis and potentially what it could mean where there is a special rent adjustment application,” said Crawford.
After more discussion, Councilmember Dick Riddell said, “I’d like to move that we follow the commissions vote and maintain 80%.”
Councilmember Bobby Duncan seconded.
Council passed it unanimously 4-0, with one councilmember absent.
The second item was rent adjustments upon vacancy. The city ordinance defines a vacancy to mean any of the following: the existence of any space on which no mobilehome is located; any transfer of ownership of a mobile home which remains in a park; or any change in occupancy of any mobile home space.
“Currently the ordinance prohibits the increase in a space rent upon a vacancy resulting in a transfer of ownership of a mobile home that remains in the park or any change in occupancy in a mobile home space,” said Crawford.
Three options the staff wanted the council to consider were option 1 - upon a vacancy (a vacant pad) defined as a space that was never occupied or mobile home is completely removed, or a resident abandons his/her coach and the park owner gains title and sells the coach to a new resident.
“The option one we are presenting before you would also not include any in-place transfers, for instance, selling to a family member,” said Crawford. “So it strictly means zero coach on the space, or the resident passes away or leaves and the park owner gains title of that coach. Knowing the definition of that vacancy as we are proposing to you, there are two sub options within that also which is 1A. This is recommended by YMRA, which is you take the average of three highest rent control spaces and then that space rent adjustment is factored by that.
“Or option 1B, which is upon the vacancy we would combine the average of rent controlled spaces in the park plus 10% or $35, whichever is less. That is the option recommended by staff.”
Julie Paule of WMA, addressed this item by saying, “If you never want another mobile home park attorney to darken the city hall’s doorsteps, you should adopt full vacancy decontrol option No. 2 in the staff report. YMRA likes to sound the alarm that evictions will run rampant because park owners will evict good-standing tenants in hopes of getting the higher rents and this is actually impossible because mobile park owners don’t evict tenants from mobile home parks, judges do. Mobilehome park tenants have just cause eviction protection in the state of California.”
Subject 2: Rent Adjustments Upon Vacancy - Commission decision - approved Option No. 1 and No. 1B - upon vacancy resulting in vacant pad or abandonment and excluding in-place transfers or evictions, the park owner may increase the last rent based on the combined average of rent controlled spaces in the park plus 10% or $35, whichever is less. This option would not impact existing residents only new residents moving into the park as defined in Option No. 1. Not all commissioners were in favor, 4-1.
Councilmember Dick Riddell said, “I’d like to make a motion that we keep the complete vacancy control as it now exists.”
Councilmember Bobby Duncan seconded.
Allen said, “I think again that the commission did a lot of work on this and a lot of deliberation.”
Allen went on to say, “Even the representative from YMRA is here with us today and just spoke on the fact that he stated agreement with what the commission did in terms of this particular item so I think that to not seriously consider what our appointed commissioners did and the work that they did, without any discussion, is really something that this council should not do. I think that it takes away from the work that we have asked them to do, and then why have a commission.”
“I would like to add that this is the question I asked, I think after the first time I was on council and we made this decision on the biennial review,” said Mayor Avila.
Crawford clarified the point of discussion by saying, “This was to ensure that the current residents living in Yucaipa are not impacted whatsoever. I want to include this would be people moving into town or into the mobile home park for the first time. This was just a way to figure out a way not to impact the current residents.”
Allen added, “We are trying to figure out ways to minimize the impact of an MNOI adjustment on our current residents of the parks and if we can approve a creative way of helping the park owners to gain a little bit more income, then in turn reduce the differential then hopefully we won’t have these $90 one-time rent increases that have been devastating to park residents that we have witnessed several times since I have been on this council. If we don’t do something, it is going to continue to occur. We have one coming forward now … this is a way we can move a little bit on the scale and see if it helps without having an impact on current residents in the mobile home parks.”
Riddell called for a vote on this subject. The vote was 2-2 so it did not carry.
Allen made a motion that the recommendation be accepted from the rent review commission as stated in the agenda. Avila seconded it.
More discussion was invited and Slaick stated, “Vacancy control can be devastating for park residents if it is not done right. The push-back that I think you have heard in the past is that once you make a change here, this could hold open the door for all kinds of different changes.”
Riddell said, “It does impact the residents because it raises the average rent within the park so any annual adjustments or anything like that is going to effect all the residents. I would like to point out that I’m sure you have all read that last year there was rent control put on apartments and stick and brick houses and they didn’t include mobile homes. But they recognized this injustice so there is a proposal now in the assembly to have that also effect the mobile homes.”
Allen wanted to clarified by saying, “It is actually a 5% a year plus cost of living up to a maximum of 10% of the current rent. It is much bigger than what we currently have.”
Duncan added, “I understand the concept of trying to help out and try to move it incrementally instead of all at once but I’m not convinced that by doing that it won’t jump also with the MNOI. I don’t think the park owners care at all about the people that live there. I think the ordinance is great the way it is and I don’t want to change it.”
Vote was taken again and it didn’t carry. 2-2. Nothing changes.