A brewing battle between property rights and rent control intensified last week when Huntington Beach’s Mobile Home Advisory Committee voted 5-4 to recommend the city council place a “carve out” for mobile home rent control on the ballot.
The 9-member Mobile Home Advisory Board is composed of three mobile home residents, three mobile home park owner representatives, and three “at-large” members who are supposed to be independent of either interest.
Last year, a group of residents of the Skandia Mobile Country Club in Huntington Beach began demanding the city impose rent control after an ownership change led to small rent increases for existing residents and larger increases for new residents. Opposing the carve out push are mobile home park owners, who contend it is an erosion of their property rights that places no limit on rising operating costs and makes it difficult to maintain their properties to the high level to which their tenants are accustomed.
When Skandia was sold, most residents paid a monthly space rent of $1,128 – about a thousand dollars below market rate.
Those who signed a new leases could cap the rent increase at $75 a month for three years.
Conflicting Views On Rent Control
Nearly fifty people from both sides of the issue attended the MHAB meeting.
Skandia resident Carol Rohr, who bought a manufactured home in the park in 2019, has been leading the charge for a carve out, and turning out like-minded residents at council meetings. She and a number of her supporters were at the MHAB to press their case.
Rohr disputed allegations that she has advised other residents against signing leases with Skandia owner IPG and against participating in the Manufactured Housing Education Trust’s rental assistance program.
Rent control opponents noted that the $75 monthly space rent increase at Skandia is less than the inflation rate, and residents there enjoy top-notch amenities. They cautioned against legislating broadly based on a particular circumstance. They pointed out there are no controls on escalating costs for park owners – such as taxes, insurance, energy and general price increases for goods and services – and rent control will ultimately result in deteriorating maintenance and services.
Richard Hughes, the owner of the Rancho DEl Rey mobile home community,
Richard Hughes (Zoom caller), the Ranch Del Rey owner, told the MHAB his property is one of 13 family-owned parks in Huntington Beach, and likened them to small cities within the city.
Hughes said sufficient revenues are necessary to maintain these communities to the standard their resident expect – but rent control handcuffs the ability of park owners to deal with rising costs will maintaining their properties. Rent control, he pointed out, will force park owners to spend less on things such as landscaping, road repairs, and onsite security – and that negatively impacts park owner and resident alike.
Supporters of the carve out defended it by saying apartments, condos and rental homes would retain their immunity against city-imposed rent control. Skandia resident and carve out supporter said the rent increases eroded the equity in their manufactured homes.
Divided MHAB Boards Makes Mixed Recommendation For Placing Carve Out On Ballot
The recommendation to place a carve out on the ballot was supported by all three mobile home resident members (Allison Plum, Carey Jo Chase, Mary Jo Baretich) and two at-large members (Tim Geddes and Scott Miller).
It was opposed by all three owner representatives (Vickie Talley, Valeria Avila and Chris Houser) and at-large member Eric Silkerson.
It was Miller’s first meeting as an MHAB member. According to sources who were in attendance, Miller opined on the desirability of obtaining more testimony from experts on the efficacy and impacts of a rent control regime vis-a-vis mobile home parks.
At-large member Tim Geddes expressed support for a continuance and holding a special MHAB meeting on the issue.
According to sources in attendance, Miller provided the necessary fifth vote almost out of pique, saying he would vote to send it to the council even though he believed it would be rejected out of hand for the reasons he had noted.
OC Independent reached out Mr. Miller to ask for amplification of his remarks. Speaking through the city’s public information office, Miller declined to comment.
Skandia Rent Increases Caused By Enormous Property Tax Increase
Proposition 13 fixes the property tax rate at 1%, and limits annual increases to no more than 2%. Property can only be re-assessed when it is sold.
At the time of Skandia’s sale last year, it’s annual property tax was based on the property’s 1975 valuation. The ownership change triggered a reassessment based on 2021 property values, and the annual property tax increased dramatically. On a per space basis, the property tax surged from $50 to $290.
IPG also invested an additional $100,000 into community improvements such as asphalt and new pool furniture.
The change in ownership prompted a reassessment of the park’s value, which resulted in massive property tax increase. While some Skandia residents are pushing for rent control, other residents believe the new owners are doing their best to manage a difficult transition, such as offering rental assistance.
City Charter’s Property Rights Provision Is Roadblock For Rent Control
Section 803 of the Huntington Beach City Charter prohibits rent control of any kind. It was added to the charter in 2002, when 68.7% of city voters approved Measure EE, a property rights protection measure.
In order for mobile home park rent control to even be considered, voters would first have to approve a ballot measure “carving out” mobile home parks from Section 803.
Rent control advocates could try to qualify a carve-out measure themselves by gathering enough signatures, but instead have been lobbying the city council to do it for them.
Since the costs of operating the park had gone up significantly, a rent increase was unavoidable. At the time of the acquisition, most Skandia residents paid a monthly space rent of $1,128. To put that in context, residents of city-owned Ocean View mobile home park pay the same space rent, but without any amenities.
In November of 2021, IPG announced that effective March 1 of 2022, monthly rent for existing residents would increase by $75, or about 6.6%. The monthly space rent for new residents was raised to $2,195, which is approximately the market rate for the area.
The initial long-term lease – 15, 20 or 25 years – offered to residents contained a $75 per month increase for the next three years, after which annual increases go to 5% or the equivalent of the Consumer Price Index, whichever is greater. In response to resident feedback, IPG is also now offering a 5-year lease with an annual increase limited to the CPI. Or residents can switch to month-to-month.
“Our goal was to keep the increase low in an effort to keep Skandia residents in the park,” said Julie Rodriguez, president of property management for IPG. “The $75 increase for existing residents is below the inflation rate.”
The Huntington Beach City Council could take up the MHAB’s recommendation as soon as its May 17, 2022 meeting.
