Reasonable Ordinances

VACANCY CONTROL

Rent control is necessary for vacancy control to be in place; i.e. rent regulations that apply when a mobilehome is sold. When vacancy decontrol exists, rents skyrocket at the time of sale.  Consequently, the price of mobilehomes plummets.  For many fixed income individuals, such as seniors, the mobilehome is their only asset, in which they have a substantial investment. Consequently, a drastic increase in rents diminishes their investment and they are forced to move out or forfeit their investment. Due to a shortage of spaces and the high cost of moving a mobilehome, movement of the home from the park is not a viable option.

A FAIR RETURN

A properly drafted rent control ordinance restricts park owners to limited annual increases; however, it also should allow a procedure for the park owner to make a plea to an appropriate hearing body of the local agency for larger increases than what the ordinance automatically allows in order to ensure a fair and reasonable return on the property. This provision ensures that excessive rents will not be imposed on the tenants, yet guarantees a reasonable rate of return on the park owner’s investment and keeps the mobilehome park operating for the benefit of both residents and owners.

PROPER EXERCISE OF THE POLICE POWER

Despite allegations that mobilehome rent control ordinances invite litigation, California and federal case law has expressly held that rent control legislation is constitutionally valid as a proper exercise of the police power so long as it is reasonably calculated to eliminate excessive rents, and, at the same time, provide park owners with a just and reasonable return on their property.

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