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HomeMy WebLinkAbout01-19-1994 City Council/RDA Work SessionMINIITES CITY COIINCIL/REDEVELOPMENT AGENCY WORR SESSION CITY OF LARE ELSZNORE 310 A. GRAA.AM LARE ELSINORE~ CALIFORNIA TIIESDAY~ JANUARY 19~ 1993 ~r*~rr,-r*rrr,t,r,~r~a**+t,t~~*rrr~it,t***+t+t*~tt,t,t~-t*,tat~*t+t~~tr,-rr*~,t*r,~t CALL TO ORDER The City Council/Redevelopment Agency Work Session was called to order by Mayor Washburn at 3:05 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: ALONGI, CHERVENY, DOMINGUEZ, WINKLER, WASHBURN ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Molendyk, City Attorney Harper, Administrative Services Director Boone, Community Services Director Sapp, City Treasurer Pape and City Clerk Kasad. DISCUSSION ITEM 1. Mobilehome Rent Control. City Attorney Harper commented on the staff inemo provided for this meeting and explained that most cities can adopt Mobile Home Rent Control Ordinances, if they are to be in effect for in excess of one year and do not relate to new spaces after 1990. He detailed factors to be considered in relationship to this type of ordinance being: 1. The relationship between mobile home park rents and the value of park amenities including non-economic benefits of individual parks.•:` 2. The analysis of the appropriateness of capital and maintenance expenditures. 3. The relative rates among parks with a community; i.e. the park which has been operating at no profit versus the park that operates at a profit and the causes therefore. 4. The interface and potential rent differentials of term rental agreements versus month to month tenancies and newly constructed spaces versus pre-1990 construction. 5. Changing ownership of parks. City Attorney Harper further explained that there are currently 90 ordinances of this type throughout the State, most utilizing a neutral third party. He detailed the criteria by which this neutral third party would consider situations including: 1. Increased or decreased cost to the park owner attributable to utility rates, taxes, insurance,, advertising, maintenance and repair of facilities and' operational expenses. PAGE TW~ - WORR SESSION MINIITE3 - JANIIARY 19~ 1993 2. Capital improvement costs for rehabilitation work related to the mobilehome space or spaces and the cost thereof, including cost of materials, labor, construction interest, permit fees and potentially excluding replacement or reconstruction necessitated by the park owner's failure to maintain the mobilehome park. 3. The addition or deletion of amenities or services. 4. Fair rate of return on property. 5. Rental rates paid in comparable mobilehome parks in the area. 6. The physical condition of the mobilehome~s space or park. 7. The rental history of the mobile home~s spaces. 8. The park owners rental assistance program, if any. City Attorney Harper indicated that the Council might look at additional financial investigation prior to adopting a controlling ordinance of this type. Councilman Winkler questioned a document provided by the Manufactured Housing Educational Trust and the study which might be necessary. City Attorney Harper explained that in order to adopt such an ordinance, a factual basis of existing problems must be determined. He suggested that the next step should probably be a more detailed analysis of the existing problems. Mayor Pro Tem Dominguez questioned the study which was done by the Manufactured Housing Educational Trust and the existing situation. Mayor Washburn clarified that this was only a cursory study, and detailed the information provided regarding Briarwood, Butterfield and Huntsman Mobile Home Parks. Councilman Winkler noted that this information was only one side of the issue. Councilman Alongi suggested the need for comparison between the parks with reqard to services and amenities provided. Mayor Washburn commented that there does not appear to be an adequate comparison of amenities. He noted that 3/4 of the people in attendance at this meeting were residents of Briarwood Mobile Home Park, 2 people represented Butterfield, and the owners of Huntsman were present. He commented on • previous discussions and questioned the status of legislation which had been pending on this issue. A member of the audience indicated that this legislation known as AB 935 lost by only one vote. City Attorney Harper questioned the intent of Assemblyman Lundberg~~tp have the bill reintroduced for consideration and offer.ed to contact his office to find out. Mayor Washburn noted that this bill as previously presented, would have forced all cities to enact a rent control ordinance. ' Walt Wilson, representing the Golden State Mobile Home Park PAGE THREE - STUDY SESSZON MINUTES - JANUARY 19~ 1993 Owners group, commented on his contacts with other owners~ associations and clarified that there are control ordinances and review ordinances. He used the City of Hemet as an example, noting that their review process had only been used about ten times. He further explained that their review board consists of three non-mobile home people, one park owner and one tenant; and was formed with the intent of stabilizing rents. He noted that the other basic issue has been to allow the owners to make a profit, but not to the point of excess. Councilman Winkler questioned the issue of control' versus review. Mr. Wilson indicated that reviewing of rents is done by a commission on the basis of the total situation to determine what is appropriate; versus control which limits the ability to raise rates, subject to appeal. He also explained that some parks have an assistance program to assist hardshi cases. P Maybr Pro Tem Dominguez questioned the assistance program and whether the parks in the City have such a program. Mr. Wilson indicated he was not sure whether this program was in place in Lake Elsinore, however he was aware of proqrams in Riverside. Ellen Friedmann, representing the Manufactured Housing Educational Trust, indicated that she was familiar with the rental assistance program and explained its coordination through her association. She further indicated that this program had only been in the Inland Empire since June, 1992, however, this type of assistance has been available in Orange County for approximately four years. She also indicated that this is a temporary program through HUD with a guideline of 40% of income for rent. Councilwoman Cherveny questioned the long term lease limit for exemption from rent control. Ms. Friedmann clarified that rent control would only impact those people without a long term lease. City Attorney Harper further clarified that this exemption applies to only those leases of one year or longer, for spaces developed before November of 1990. Councilwoman Cherveny inquired whether there had been court cases to determine a fair rate of return for a mobile home park. City Attorney Harper indicated that this is a matter of market factors for each park and needs to be addressed on a case by case basis. Councilman Alongi questioned grant programs. Ms. Friedmann explained that each case is different based on the situation, however they are generally given in the form of a subsidy out of the park owner's pocket. Another alternative in some cases is that the program writes a check to the recipient every month. Councilman Alongi inquired where these funds come from. Ms. Friedmann indicated they come from the association fees paid by park owners. Councilman Alongi further inquired how many are currently subsidized directly by the program. Ms. Friedmann advised that there are currently four people compensated directly out of 100 receiving subsidies. councilman Alongi inquired how lonq the application and PAGE FOIIR - WORR SESSION MINUTES - JANIIARY 19~ 1993 approval process takes. Ms. Friedmann indicated that it takes two months at most. Councilman Alongi inquired whether her organization would oppose a rent review ordinance. Ms. Friedmann advised that their position is in, opposition to any governmental intervention. Councilwoman Cherveny questioned the amount of assistance available in the Inland Empire. Ms. Friedmann indicated that she was uncertain, however the Orange County and Inland Empire groups are tied and draw from the same pool. ~ Councilwoman Cherveny inquired whether all parks participate in the Manufactured Housinq Educational Trust. Ms. Friedmann indicated that not all parks participate, however, the tenants can still qualify for assistance. City Attorney Aarper clarified that rent control and rent review are really the same thing under the law, and the difference is only a matter of semantics. Councilwoman Cherveny inquired whether rent control could be tied to the Consumer Price Index. Mr. Harper indicated that it probably could not specifically be tied to CPi, however that is a term which could be considered. Councilman Alongi indicated that he thinks that rent review would better address the different situations, while rent control would be based on one set of standards. City Attorney Harper further clarified that the two terms are realistically the same thing. Pat DesJardin, 34350 Olive Grove, Wildomar, addressed the semantics of rent control and rent review. She suggested that the word "tenant" should not be used, because of the uniqueness of mobile home park living. She detailed her background and knowledge of mobile home park requlation, and offered assistance to the City Council in developing a final solution. Councilman Winkler inquired whether the voluntary program in the City of Riverside was successful. Mr. Wilson indicated that the City of Riverside did have a voluntary program until recently, however in the last 4 to 5 months it was converted to rent control. City Attorney Harper advised that he is not aware of a successful voluntary program. Albert Bishop, resident of Briarwood, c'ommented on the "mandatory" lease presented by his park owner and the "intimidation" that accompanied it. He further commented that his rent was raised $35 after he chose not to sign it. He stressed that approximately 80~ of the residents in Briarwood are sick, elderly or disabled and on fixed incomes. He further stressed that additional increases will literally put the residents out on the streets. He also commented on the fairness of the previous owner over the new owners. Mayor Pro Tem Dominguez inquired whether Mr. Bishop had signed the lease. Mr. Bishop indicated he had not. Mayor Pro Tem" Dominguez inquired how much those without a lease were paying. PAGE FIVE - WORR SESSION MINUTES - JANUARY 19~ 1993 Mr. Bishop indicated the new residents were paying up to $240 per month; and the owner appears to adjust the rents as he pleases, detailing his rent increases to date. Mayor Washburn inquired how old the Briarwood park is. Mr. Dominquez indicated it was developed in the 1960~s. Earline Dufault, owner of Huntsman Mobile Home Park, adv.ised that they recently held a tenants meeting to receive input on the issue of rent control. She indicated that the input received from tenants is that they just want to be left alone, because all is going well between the owners and tenants. Their concern was that forced rent control would hurt these tenants. Councilman Winkler questioned the amenities at Auntsman. Ms. Dufault indicated that they have a pool, Spa, pool room, clubhouse and a number of activities. Councilman Alongi inquired how many of the lots at Huntsman are rented. Ms. Dufault indicated that all of the lots are rented. Councilman Alongi further inquired whether they used lease agreements. Ms. Dufault advised that the tenants have a choice of a one year lease or a 30 day rental agreement. She further advised that there is a once per year rent increase. Councilman Alongi questioned the age of the Huntsman park. Ms. Dufault advised that it was developed in 1972 and she has owned it since 1980. Councilman Alongi further questioned rent increases. Ms. Dufault advised that they are one time each year based on the increased cost to the owner. Councilman Alonqi questioned the notification to the tenants of these rent increases. Ms. Dufault indicated that notification is provided 60 days in advance. Mr. Alonqi inquired who pays water and sewer charges. Ms. Dufault indicated that they are paid by the owner. Councilman Alongi commented on the difference in management between parks, and the impact of responsible ownership; and stressed the importance of cooperation between the owners and tenants. Councilman Winkler concurred with Mr. Alongi and went on to note that with the change of owners, the same concerns could arise in other parks. Bill Peyton, owner of Butterfield Mobile Home Park, commented that the brunt of the problem is the interaction between landlords and tenants. He further commented on the uniqueness of mobile home park living. He questioned the need for a rent control program when only one park appears to have conaerns. He stressed that only 37~ of the Briarwood tenants have concerns with a long term lease. Lela Cardoza, resident of Briarwood, stressed the smaii size of the lots in her park. She noted that the owner even attempted to charge extra for parking more than one vehicle. Mayor Washburn questioned the actual lot size. Ms. Cardoza was uncertain, but noted she could not open her car door without hitting another coach. PAGE SIX - CITY COUNCIL MINUTES - JANUARY 19~ 1993 Flora Williams, resident of Briarwood, questioned the effect of rent control on park owners with no problems. City Attorney Harper clarified that the impact would be uniform and any limitations would be across the board. Ms. Williams indicated that she believes if the program is effective it will not impact other owners. She suggested that Briarwood will suffer in the meantime until a solution is found. Mayor Washburn further clarified that such an ordinance would force owners to charge the maximum amount allowed to keep up, and stressed that most citizens don't want more government. Jim Erickson, resident of Briarwood, commented on the residents without leases who are paying higher rents. He noted that currently the highest rate of monthly rent is $246. He stressed that there is no comparison of the amenities between parks. He suggested consideration of a program to assist the residents in purchasing the park themselves through assistance of the Redevelopment Agency, noting that several residents would be interested. Marge Rieder, resident of Briarwood, commented on the issue of leases and the threats of exorbitant rent increases. She suggested that it might be better to sign the lease and terminate it 60 days later. Mr. Harper clarified that termination of the lease could incur damages and that termination of the lease would require that the residents move. Mr. Bishop aqain stressed the intimidation used by the current owners to force siqnature of the leases. Councilman Winkler addressed the issue of assisting residents to purchase the park. He inquired whether it had been done elsewhere and whether the residents would be interested. The residents indicated interest. City Attorney Harper advised that it has been done previously and is specifically addressed by Redevelopment law. Mr. Erickson noted that this proposition was presented to the previous owner before the park was sold. THE WORK SESSION WAS ADJOURNED AT 5:00 P.M. AT EST: VICKI ICF~gAD, CITY CLE RK CITY OF LAKE F.LSINORE ~' Vv''~/ /'"~ \ GARY~ WASHBURN, Mp,YOR CITY ~p~' I,AKE ELSINORE