Factors Which Support a Rent Ordinance

MOBILEHOME COMMUNITY BENEFITS

Homeowners must educate the City Council, Board of Supervisors or voters about the benefits of a rent ordinance for the mobilehome community. The following points/arguments in support of an rent stabilization ordinance (RSO) should be emphasized:

A VIRTUAL MONOPOLY

Mobilehome rent control promotes health, welfare, and safety for a deserving segment of the community by setting up a regulatory framework within which park owners conduct business with their residents. The majority of mobilehome rent control ordinances have been enacted because park owners have unreasonably raised rents to a point where they become unaffordable, and the cost of moving the home, coupled with the unavailability of other spaces, gives the park owner virtual "monopoly" powers.

RENT INCREASES WITHIN REASONABLE BOUNDS

Because of the practice of many park owners to unjustifiably raise rents, the practical effect of the regulatory process in rent control is to keep rent increases within reasonable bounds.

In general, a history of rent control in California jurisdictions demonstrates that rent increases "within reasonable bounds" means those in line with inflation and consumer price indices, while ensuring the park owner a fair return on investment.

HOMEOWNERS FORCED TO FORFEIT THEIR EQUITY

Without rent controls, park owners will invariably raise rents to the extent that those mobilehome park residents with fixed incomes will be forced out, thus forfeiting their equity interests.

As rents go up, the resale value of mobilehomes declines.

As rents are unreasonably raised, the ability of the homeowner to sell his or her mobilehome diminishes, because a prospective buyer's ability to receive financing is also dependent upon his or her ability to pay the rent for the space where the mobilehome is located.

Mobilehome owners have substantial investments in their homes, and have the right to protection of their investments from abuses in the form of unreasonable rent increases.

Source: The GSMOL Mobilehome Rent Stabilization Ordinance Handbook, Second Edition: Guidelines for Drafting and Enacting a Mobilehome Rent Stabilization Ordinance.

Prepared by: Bruce Stanton, Esq., Corporate Counsel

Image courtesy of David Castillo Dominici at freedigitalphotos.net