Since last fall, the city of Santa Maria has worked to facilitate talks between mobile home park residents and park owners in an effort to preserve affordable living for residents, many of whom are seniors living on fixed incomes.
Talks have not yet produced lease conditions agreeable to both parties, and residents fear time is running out, as leases for two of the city’s largest parks are set to expire, according to Gary Hall of North Santa Barbara County Manufactured Homeowners Team.
The organization represents residents from five of Santa Maria's parks that are home to around 1,600 people.
The unique condition of park residents — who usually own their homes but not the land — leaves them in a vulnerable state, Hall said. Although the homes are called “mobile,” the cost to move them makes it virtually impossible.
As space rents rise at rates that exceed the annual Social Security cost-of-living adjustment, it places enormous strain on those with fixed incomes, Hall said.
Over time, the increases become unsustainable, leading some park residents to have to sell their homes.
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“If your budget is pretty small and you’re being asked to spend more and more on your rent — something’s got to give,” Hall said, noting that those priced out of mobile homes are unlikely to find comparable housing elsewhere.
“It’s a real tragedy when someone has to leave their home and friends,” he said.
The terms of current leases at northwest Santa Maria parks like Casa Grande and Rancho Buena Vista call for annual rate increases on the base rent to rise with the Los Angeles-area Consumer Price Index, with a minimum rise of 3% and a maximum rise of 7%.
In years when the CPI is less than 3% — like most years during the past decade — the rent rises 3%.
The consecutive rate increases that depart from the CPI are the problem, said Jackie Narachi, a resident of Casa Grande and a North Santa Barbara County Manufactured Homeowners Team member.
The rent increases also harm the value of the mobile home itself, because any potential buyers must then incorporate the cost of increased rent into the purchase price, she said.
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According to the Mobile Home Park Homeowners Allegiance, the “general industry rule of thumb” is that a $10 increase in monthly space rent results in a $1,000 loss in equity for the homeowner.
“So the rent keeps going up and it lowers the value of what you could sell for,” Narachi said.
Hall said one of the primary goals is having rent protections in place if a park is sold to an owner who intends to institute steep rate increases, which has happened elsewhere in the state.
In Fullerton and Anaheim, mobile home park residents were notified earlier this year that they would face rent increases of over $200 a month shortly after the park was sold, according to the Orange County Register.
Before that, the residents experienced incremental rate increases amounting to $5 to $15 each year.
According to a Feb. 14 Washington Post report, many large investment and private equity firms — including the Carlyle Group and Apollo Global Management — have been purchasing mobile home parks, viewing them as an asset that provides steady returns, even during recessions, with fewer operating costs than other real estate investments.
Unlike apartment tenants, park residents generally own their homes and are responsible for maintenance and upkeep.
What’s been done so far
The longing for city action that would establish a rent stabilization ordinance or an enforceable “model lease” goes back 20 years.
The Santa Maria City Council considered a rent stabilization ordinance in 1999, but it was voted down in a 2-3 vote.
Instead, the city adopted a “model lease” program it encouraged residents and park owners to use.
The program, which remains voluntary and unenforceable, is not in use by any of the city’s parks.
In November, Mayor Alice Patino directed city staff to bring something to the council agenda after North Santa Barbara County Manufactured Homeowners Team members called for the City Council to establish a space rent stabilization ordinance or develop a model lease that could be enforced.
Earlier that fall, Councilwoman Etta Waterfield had called for a rent stabilization ordinance during a candidates’ forum held in advance of the 2018 election.
Since then, the city has held four stakeholder meetings, hoping to facilitate a solution that would protect residents from unexpected cost increases while providing park owners a fair return on their investment, said City Manager Jason Stilwell.
Patino and Waterfield, who have each attended two of the stakeholder meetings, did not respond to interview requests.
While the stakeholders have come to a preliminary agreement on which terms would be included in the model lease, Stilwell said, there is still wrangling over how to define those terms and what the conditions regulating rate increases would ultimately be.
Councilwoman Gloria Soto said she is hopeful city staff would bring something forward that could benefit homeowners and the parks.
Soto, who was unable to attend the stakeholder meetings due to Brown Act provisions that prohibit a majority of the council members discussing city business in private, said she was looking forward to seeing what comes out of the meetings.
“With mobile homes, it’s people on fixed incomes, seniors, veterans and low-income families living in these parks,” she said. “At the end of the day, our job is to look at the best interests of our residents, especially the most vulnerable.”
The option currently eyed by city officials is a revamp of the model lease program with added provisions that provide for enforcement, Stilwell said.
Although Patino had asked for something to be brought to the City Council, it’s not clear that it will be able to vote on anything.
The model lease that both park owners and residents agree to would serve as “a middle ground between an ordinance and not doing anything,” Stilwell said.
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While an ordinance may come before the council, Stilwell said, the goal is a model lease that could serve as the “default” option, but allow tenants and park owners to negotiate alternative terms, if desired.
“Some residents told us that they’re happy with the terms and they don’t want the city getting involved in their lease negotiations,” Stilwell said. “If people do want to have a model and want to know what the negotiated terms have been, we want to make that is available to them.
“Ultimately, our goal is to maintain affordable housing for our residents,” he said.
North Santa Barbara County Manufactured Homeowners Team members are in favor of a model lease but are opposed to anything that would be voluntary on behalf of park owners, Hall said.
“If it’s voluntary, that leaves us at the mercy of the park owner, who could pull the rug anytime,” he said.