Chapter 5.44
MOBILE HOME PARK RENT STABILIZATION*

Sections:

5.44.010    Purpose and intent.

5.44.020    Definitions.

5.44.030    Exemptions.

5.44.040    Mobile home park owner exemptions under Section 5.44.030(F).

5.44.050    City council—Powers and duties.

5.44.060    Base space rent—Determination—Allowable increases without hearing.

5.44.070    Application for rent adjustment—Fee—Contents—Notice of request—Hearing.

5.44.080    Application for rent adjustment—Conduct of hearing.

5.44.090    Application for rent adjustment—Evaluation—Relevant factors.

5.44.100    Application for rent adjustment—Hearing—Determination.

5.44.110    Application for rent adjustment—Hearing—Appeal.

5.44.120    Rent increases not made in conformity with provisions—Tenant’s right to refuse to pay.

5.44.130    Actions brought to recover possession of mobile home space—Retaliatory eviction grounds for denial.

5.44.140    Owner to provide tenants with copy of this chapter.

5.44.141    Amendment.

5.44.142    Severability.

*    Prior history: Ords. 923, 1020, 1077, 1079 and 1091; prior code §§ 4800 through 4802, 4804 through 4809 and 4811 through 4813.

5.44.010 Purpose and intent.

A. There is presently within the city and the surrounding areas a shortage of spaces for the location of mobile homes. Because of this shortage, there is a very low vacancy rate, and rents have been for several years, and are presently, rising rapidly and causing concern among a substantial number of San Luis Obispo residents.

B. Mobile home tenants, forced by the lack of suitable alternative housing, have had to pay the rent increases and thereby suffer a further reduction in their standard of living.

C. Because of the high cost and impracticability of moving mobile homes, the potential for damage resulting therefrom, the requirements relating to the installation of mobile homes, including permits, landscaping and site preparation, the lack of alternative homesites for mobile home residents, and the substantial investment of mobile home owners in such homes, this council finds and declares it necessary to protect the owners and occupiers of mobile homes from unreasonable rent increases, while at the same time recognizing the need of park owners to receive a suitable profit on their property with rental income sufficient to cover increases in costs of repair, maintenance, insurance, utilities, employee services, additional amenities, and other costs of operation, and to receive a fair return on their property.

D. This council finds that the present low vacancy rate and frequent increases are particularly hard upon and unfair to residents of mobile home parks within the city. Large numbers of these residents are senior citizens and others on fixed incomes who installed their mobile homes in the city when the present inflationary rent increases could not reasonably have been foreseen.

E. Tenants in mobile home parks desiring to sell their mobile homes may have difficulty finding buyers because, upon a change of ownership, the park owner is able to raise the rent without regard to the city’s mobile home rent stabilization ordinance.

F. This council finds that it is in the best interests of the citizens of the City of San Luis Obispo to assist those who are seeking to sell their mobile homes and those who are seeking to buy such homes to have the same fair rental protection as is afforded to those who remain in their mobile homes without sale. This council finds that the vacancy control provisions originally included in the mobile home rent stabilization ordinance when it was approved by the voters was an effective and beneficial provision for the people of San Luis Obispo living in mobile home parks, and should be reinstated. This council further finds that provisions allowing annual rent increases together with provisions allowing rent increases upon a showing of necessity protect the park owner’s right to a fair return on investment, thus eliminating the need for rent increases above ten percent upon change of ownership.

G. However, this council recognizes that a rent stabilization ordinance must be fair and equitable for all parties and must provide appropriate incentives for mobile home park operators to continue their parks profitably, as well as to attract additional investors for new parks. (Ord. 1226 § 1, 1992: Ord. 1117 (part), 1988)

5.44.020 Definitions.

For the purpose of this chapter, certain words and phrases used herein are defined as follows:

A. “Capital improvements” means those improvements, not previously located in the mobile home park, that materially add to the value of the property and appreciably prolong its useful life or adapt it to new uses, and which may be amortized over the useful life of the improvement in accordance with the Internal Revenue Code and regulations issued pursuant thereto; provided, that this definition shall be limited to capital improvements approved by more than fifty percent of the tenants in the affected park.

B. “Mobile home park” means an area of land which rents spaces for mobile home dwelling units.

C. “Mobile home park owner” or “owner” means the owner, lessor, operator or manager of a mobile home park.

D. “Mobile home tenant” or “tenant” means any person entitled to occupy a mobile home within a mobile home park pursuant to ownership of the mobile home or under a rental or lease agreement with the owner of the mobile home.

E. “Rehabilitation work” means any renovation or repair work completed on or in a mobile home park performed in order to comply with the direction or order of a public agency or public utility, or to maintain existing improvements in a safe and usable condition, or to repair damage resulting from fire, earthquake or other casualty.

F. “Space rent” means the consideration, including any security deposits, bonuses, benefits or gratuities, demanded or received in connection with the use and occupancy of a mobile home space in a mobile home park, or for housing services provided, but exclusive of any amount paid for the use of a mobile home dwelling unit.

G. “Change of ownership” means the sale, rental transfer, or exchange of a mobile home subject to the provisions of this chapter, excepting the transfer to tenant’s spouse by gift, bequest or devise.

H. “Hearing officer” means the duly appointed hearing officer selected from a panel of qualified hearing officers. A hearing officer shall have no financial interest in either a mobile home park or a mobile home nor have been a resident of nor reside in a mobile home park.

I. “Appellate panel” means a panel of three qualified hearing officers. A panelist shall have no financial interest in either a mobile home park or a mobile home nor have been a resident of nor reside in a mobile home park.

J. “CPI” means the Consumer Price Index (1967 = 100) All Items, All Urban Consumers, for the Los Angeles/Long Beach/Riverside standard metropolitan statistical area published by the Bureau of Labor Statistics, United States Department of Labor. If the CPI is not hereafter published, then any substitute index, or, if none, then the index most closely resembling the CPI shall become the new CPI.

K. “Qualified Hearing Officer.” The city administrative officer shall maintain a list of available qualified hearing officers. Qualified hearing officers shall be persons experienced in financial and accounting methods with knowledge of mediation process and rules of evidence. (Ord. 1117 (part), 1988)

5.44.030 Exemptions.

The provisions of this chapter shall not apply to the following tenancies in mobile home parks:

A. Mobile home park spaces rented for nonresidential uses;

B. Mobile home parks managed or operated by the United States Government, the state of California, or the county of San Luis Obispo;

C. Tenancies which do not exceed an occupancy of twenty days and which do not contemplate an occupancy of more than twenty days;

D. Tenancies for which any federal or state law or regulation specifically prohibits rent regulation;

E. Tenancies covered by leases or contracts which provide for a tenancy of more than a year, but only for the duration of such lease or contract. Upon the expiration of or other termination of any such lease or contract, this chapter shall immediately be applicable to the tenancy. No rent increases other than that allowed under the provisions of the lease shall be allowed during the duration of such a lease or contract.

F. Spaces in a mobile home park which sells lots for factory-built or manufactured housing, or which provides condominium ownership of such lots, but only when the dwelling unit and the underlying interest in the space it is located upon are in the same ownership. (Ord. 1228 § 1, 1992: Ord. 1117 (part), 1988)

5.44.040 Mobile home park owner exemptions under Section 5.44.030(F).

A. Any mobile home park owner claiming an exemption under Section 5.44.030(F) shall comply with the following requirements and procedures:

1. Such mobile home park owner shall file with the city clerk a statement setting forth the basic facts upon which the claim for exemption rests, such as total number of spaces, number on long-term leases, identity of spaces on long term leases, expiration date for each long-term lease and any other information determined necessary by the city administrative officer to evaluate the claim.

2. The statement shall include a listing, by space number and name, of each tenant not on a long-term lease and who would be affected by the claim of exemption. In addition, the owner shall provide proof of service that all tenants have been notified of the claim of exemption and of the fact that a tenant may file an objection within thirty days.

3. The statements required to be filed above shall be confidential and not public records unless and until a hearing officer determines otherwise as necessary to conduct a hearing as set forth in subsections (D) or (F) of this section.

B. An objection to the claim of exemption may be filed with the city clerk within thirty days after the notice of claim has been served. The objection shall state the grounds of the objection. The only acceptable grounds for objection is that the owner in fact does not have two-thirds of the spaces in the park on long-term leases.

C. If an acceptable and timely objection is received the owner and the tenant(s) filing the objection shall meet and confer to negotiate in good faith and attempt to reach an agreement. If no agreement is reached within thirty days of the date of filing of the objection, the owner shall within ten days notify the city administrative officer that an agreement or resolution to the objection has not been reached. The city administrative officer shall proceed to select a hearing officer as set forth in Section 5.44.070(E).

D. The hearing officer shall set and conduct a hearing as set forth in subsections (E) and (G) of Section 5.44.070. The hearing officer shall determine whether the claim of exemption is valid, taking into account all relevant evidence, facts and circumstances necessary to come to a decision.

E. The hearing officer’s charges shall be paid by the city.

F. An appeal may be taken from a decision of the hearing officer as set forth in Section 5.44.110, including the obligation for the costs of the appellate panel as set forth in subsection (D) thereof. (Ord. 1146 § 1, 1989)

5.44.050 City council—Powers and duties.

Within the limitations provided by law and in addition to any other powers and duties the council has, the city council shall have the following powers and duties:

A. To meet from time to time as required to receive, investigate, hold hearings on, and pass upon the issues relating to mobile home park rent stabilization as set forth in this chapter;

B. To direct staff to make or conduct such independent hearings or investigations as may be appropriate to obtain such information as is necessary for the council to carry out its duties;

C. To adopt, promulgate, amend and rescind administrative rules, as it deems appropriate to effectuate the purposes and policies of this chapter. (Ord. 1117 (part), 1988)

5.44.060 Base space rent—Determination—Allowable increases without hearing.

A. The “base space rent” for purposes of this chapter shall be the monthly space rent charged as of March 15, 1982 plus any increases otherwise allowed, pursuant to this chapter. The maximum monthly space rent for any space under a lease, upon expiration of the lease, shall be no more than the rent charged in the last month of said lease. In parks where there is an exemption because 66.67 percent of the spaces are governed by a lease with an initial term of no less than one year, then the maximum monthly space rent shall be the space rent designated in leases for comparable spaces. A schedule of current rents in the park shall be posted in a conspicuous place in the park.

B. Except as otherwise provided in this chapter, the maximum monthly space rent may be increased no more than once a year based on the percentage change in the CPI, or nine percent, whichever is less, calculated as follows:

1. The maximum monthly space rent may be increased at a rate equal to one hundred percent of the CPI up to five percent and seventy-five percent of the CPI in excess of five percent calculated as follows:

a. The change in space rent shall be calculated by dividing the ending CPI index by the beginning CPI index.

b. If the resulting quotient is less than 1.05, then it shall be multiplied by the space rent. The resulting product shall be the new space rent.

c. If the resulting quotient is greater than 1.05, then the difference between the resulting product and 1.05 shall be multiplied by seventy-five percent. The resulting product shall be multiplied by the space rent and that product shall be added to the sum derived from Section 5.44.060(B)(1)(b) above. The sum shall be the new space rent.

d. The beginning CPI index shall be the index for the month used as the ending index for the last CPI adjustment.

e. The ending CPI index shall be the index for the month twelve months after the beginning index.

2. At least every two months the city administrative officer shall publish, by means of an advertisement or similar notice in the newspaper, the percentage change of the CPI allowed under this subsection B for the twelve-month period immediately preceding the month for which CPI information has been most recently published by the appropriate federal agency.

3. It is the intention of this subsection B to allow for automatic increases in space rent based on changes in the cost of living as measured by the CPI. The limitations on such increases are intended to minimize the immediate impact drastic changes in the CPI might have on residents. The limitations are not intended to prevent ultimate adjustments to allow owners to receive a fair return on their property.

C. The maximum monthly space rent of a tenant may be increased by the owner when there is a change of ownership affecting a mobile home. However, such increase shall not exceed ten percent of the then existing space rent and may not be relied upon any more often than once in any thirty-six-month period as the basis to increase rent. In the event of change of ownership resulting from subletting of the mobile home space as may be allowed by state law, should such become state law, then upon any such subletting the space rent may be increased up to ten percent of the then existing space rent. In the event of change of ownership resulting from vacation of the space, then the space rent may be adjusted to fair market rent in the community. Nothing in this paragraph shall preclude an adjustment as may otherwise be provided for in this chapter.

D. No owner shall either (1) demand, accept or retain a rent of or from a tenant in excess of the maximum rent permitted by this chapter, or (2) effect a prohibited rent increase by a reduction of general park facilities and services. However, an owner may modify the nature of park services if reasonable allowance is provided to the tenant. For example, if the owner elects to submeter water so that tenants pay for water consumed by them, then tenants shall receive a reasonable reduction from their base space rent.

E. Space rent may be automatically adjusted based on increases or decreases in expenses for common area utilities, new government-mandated services, garbage service and cable television, where applicable, excluding capital improvements or ongoing maintenance costs. The space rent may be adjusted by dividing the total increase or decrease in any such expenses incurred during a twelve-month period by twelve, less the percentage in the CPI index for the twelve-month period. The quotient shall be allocated to the space rent for each space in the park based on the amount the space rent relates to total space rent for the park. Automatic adjustments to rent authorized by this paragraph E shall not be included in “base space rent” for the purpose of determining CPI increases pursuant to Section 5.44.060.B, but shall be considered as additional rent. Notice of the increase, or decrease, shall be in writing and shall be given as required by law no less than ninety days prior to any such increase or decrease being effective. The notice shall state the amount of the rent increase or decrease, the new space rent, the amount of the total increase or decrease in expenses and the nature of the expense. A copy of the notice shall be given to the city administrative officer. The city administrative officer shall have the authority to resolve questions regarding computation of the space rent increase or decrease based on this section. There shall only be one such increase or decrease in any twelve-month period. (Ord. 1279 § 1, 1995; Ord. 1268 § 1, 1994; Ord. 1226 § 2, 1992; Ord. 1173 § 1, 1990; Ord. 1167 § 1, 1990; Ord. 1146 § 2, 1989: Ord. 1117 (part), 1988)

5.44.070 Application for rent adjustment—Fee—Contents—Notice of request—Hearing.

A. Except for automatic increases in base rent allowed under Section 5.44.060, an owner or tenant may file with the city clerk an application for a rent adjustment (“application”). The application shall state the amount of the adjustment for each space affected and the reasons for the adjustment.

1. An application shall be accompanied by the payment of a fee as may be established from time to time by the council.

2. An application filed by an owner shall be accompanied by a statement that the tenant for each space affected has been served either personally or by mail with a notice describing the application and the change in rent or services.

3. An application filed by a tenant shall be accompanied with a statement stating that the owner has been either personally or by mail served with the application and with a statement designating not more than three persons to act as representatives for the spaces affected and containing the names and addresses of tenants representing no less than fifty-one percent of the spaces affected by the application and supporting the application and established by a secret election.

4. A statement shall accompany the application and shall notify the receiving party that he/she has thirty days to file an objection and if one is not filed within the time allowed, then the application will be automatically granted.

B. An objection to the application may be filed with the city clerk within thirty days after the notice of application has been served.

The objection shall identify the portions of the application objected to and shall state the grounds of the objection.

1. A copy of an objection filed by an owner shall be mailed to each of the designated tenant representatives.

2. A copy of an objection filed by a tenant shall be mailed to the owner. The tenant’s objection shall designate not more than three persons to act as representatives for the objecting tenants. The objection must be accompanied by a statement containing the names and addresses of tenants representing no less than fifty-one percent of the spaces affected by the owner’s application and verifying that they object to the application, established by secret ballot election.

C. If no objection is filed to an application within the time allowed, or if less than fifty-one percent of the tenants support an objection to an application, then the application will be automatically granted.

D. If an objection is filed within the time provided, then the owner and the tenant representatives shall meet and confer to negotiate in good faith an agreement regarding the application. Either party may request a mediator of their choice to assist in the negotiations, but this is not required. If an agreement is reached within sixty days, then the tenant representatives shall notify all tenants affected by the agreement. The tenants shall have ten days to approve or disapprove of the agreement. If tenants representing a majority of the spaces affected fail to disapprove of the agreement then the agreement shall be binding on the owner and all tenants affected. The city clerk shall be notified that an agreement has been reached. The statements made in negotiations and any agreements reached but not approved shall not be admissible in any subsequent hearings regarding the application.

E. If the owner and the tenant representatives fail to reach an agreement within the time provided or if a majority of the tenants disapprove of an agreement reached, then the applicant shall within ten days notify the city administrative officer that an agreement has not been reached. The city administrative officer shall obtain a list of no less than five qualified hearing officers. Owners and tenants may each delete one person from the list of qualified hearing officers seven days and one of the remaining persons shall be selected by the city administrative officer as the hearing officer. Appointment of the hearing officer shall be completed no later than twenty-one days after filing of the notice that an agreement has not been reached.

F. The hearing officer shall set a hearing on the application complying with the requirements of this section no less than ten days and no more than thirty days after his or her appointment. The hearing officer shall notify the owner and tenants, in writing, of the time, place and date set for the hearing. No hearing or any part thereof may be continued beyond thirty days after the initial hearing date, without the applicant’s consent. If the hearing officer approves an application as requested or as modified, the same shall take effect as noticed by the owner or as the hearing officer may otherwise direct. (Ord. 1117 (part), 1988)

5.44.080 Application for rent adjustment—Conduct of hearing.

A. All review hearings conducted by the hearing officer shall be conducted in accordance with the Ralph M. Brown Act, at Section 54950 et seq. of the California Government Code and according to the rules of the American Arbitration Association.

B. All interested parties to a hearing may have assistance from an attorney or such other person as may be designated by the parties in presenting evidence or in setting forth by argument their position. All witnesses shall be sworn in and all testimony shall be under penalty of perjury.

C. In the event that either the owner or the tenant(s) should fail to appear at the hearing at the specified time and place, the hearing officer may hear and review such evidence as may be presented and make such decisions as if all parties had been present.

D. Owner and affected tenants may offer any testimony, documents, written declarations or other relevant evidence.

E. Formal rules of evidence shall not apply.

F. Minutes shall be taken at all review hearings. (Ord. 1117 (part), 1988)

5.44.090 Application for rent adjustment—valuation—Relevant factors.

In evaluating the application the council may consider, along with all other factors it considers relevant, changes in costs to the owner attributable to increases or decreases in master land and/ or facilities lease rent, utility rates, property taxes, insurance, advertising, variable mortgage interest rates, employee costs, normal repair and maintenance, and other considerations, including but not limited to, rehabilitation work, capital improvements, upgrading and addition of amenities or services, net operating income, and the level of rent necessary to permit a just and reasonable return on the owner’s property.

A. In applying the foregoing factors, the hearing officer shall utilize the maintenance of net operating income (MNOI) formula. Under the MNOI allowable gross rents are calculated as follows: all operating expenses for the twelve-month period ending December 31, 1981 are subtracted from all operating expenses for the twelve-month period immediately preceding the date of the application for which expense data is available. In the event operating expenses are not available for the period ending December 31, 1981, then expenses for a twelve-month period reasonably close to December 31, 1981 may be substituted. The difference shall be added to gross annual rent based on rental rates in effect on March 15, 1982. The sum shall be the allowable gross annual space rent. The allowable gross space rent shall be fairly apportioned between all spaces in the park. The space rent determined under the MNOI formula shall be adjusted as follows:

1. There shall be an adjustment to allow for inflation calculated as follows: the net operating income (NOI) for the base period shall be calculated by subtracting the park’s operating expenses for the twelve-month period ending December 31, 1982, from the park’s annual gross space rent based on the space rent in effect on March 15, 1982. The CPI index for the month most recently available prior to filing the application shall be divided by the CPI index for March, 1982. The resulting quotient shall be multiplied by the base period NOI. This shall be the adjusted NOI. The operating expenses for the twelve-month period immediately preceding the date of the application for which information is available shall be added to the adjusted NOI. The sum shall be the inflation-adjusted gross space rent. The allowable space rent shall be the greater of the space rent calculated using the MNOI formula and the space rent adjusted for inflation.

2. In calculating MNOI there shall be an adjustment to the gross space rent in effect on March 15, 1982, if the hearing officer determines that the gross space rent in effect on that date did not allow the owner to receive a just and reasonable return on his or her property.

3. If the hearing officer concludes that the MNOI formula, and the adjustments thereto, does not provide a just and reasonable return to the owner, then the hearing officer may apply any reasonable formula, including a return on investment, a return on fair market value, or return on equity, to determine a space rent which will allow the owner to receive a fair and reasonable return on his or her property.

B. The hearing officer shall not consider income arising from spaces leased in the park pursuant to Section 5.44.030E of this chapter. Likewise, the hearing officer shall not consider a pro rata portion of the expenses of park operation attributable to the leased spaces. (Ord. 1117 (part), 1988)

5.44.100 Application for rent adjustment—Hearing—Determination.

A. The hearing officer shall make a final decision no later than twenty days after the conclusion of the hearing. The hearing officer’s decision shall be based on the preponderance of the evidence submitted at the hearing. The decision shall be based on findings. All parties to the hearing shall be advised by mail of the hearing officer’s decision and findings.

B. Pursuant to his or her findings, the hearing officer may:

1. Permit the requested adjustment to become effective, in whole or in part; or

2. Deny the requested adjustment; or

3. Permit or deny, in whole or in part, requested reductions of, or charges for, facilities or services.

C. Any decision of the hearing officer shall be final unless, within fifteen days after mailing of the decision and findings, the owner or any affected tenant appeals the decision.

D. The hearing officer’s charges shall be paid by the city. (Ord. 1117(part), 1988)

5.44.110 Application for rent adjustment—Hearing—Appeal.

A. Any appeal from a decision of the hearing officer shall be filed with the city clerk. The appellant shall also mail a copy of the appeal to the responding party. The appeal shall state the grounds on which it is based. An appeal filed by a tenant shall be accompanied by a statement continuing the names and addresses of the tenants supporting the appeal. The appeal must be supported by at least fifty-one percent of the tenants affected by the appeal.

B. Upon filing of a valid appeal, the city administrative officer shall obtain a list of no less than seven qualified hearing officers. The hearing officer who previously acted shall not qualify. Owners and tenant representatives may each delete one person from the list of qualified hearing officers within seven days, and three of the remaining persons shall be selected by the city administrative officer as the appellate panel. Appointment of the appellate panel shall be completed no later than twenty-one days after filing the appeal.

C. At the time set for consideration of the appeal, the appellate panel shall review and consider the record of the hearing officer’s hearing as well as the decision and finding of the hearing Officer. After review and consideration, the appellate panel may either (1) determine that a further hearing shall be held, or (2) ratify and adopt the decision and findings of the hearing officer. If a further hearing is conducted, the appellate panel may, upon conclusion of that hearing and in no event more than thirty days thereafter, modify or reverse the decision of the hearing officer, only if the appellate panel finds that there has been an abuse of discretion or that there is no substantial evidence to support the hearing officer’s decision. The appellate panel’s decision shall be final and no appeal may be taken to the council.

D. If the party filing the appeal is unsuccessful, then that party shall pay the appellate panel’s charges. If the responding party is unsuccessful, then both parties and the city shall share equally in payment of the appellate panel’s charges. (Ord. 1117 (part), 1988)

5.44.120 Rent increases not made in conformity with provisions—Tenant’s right to refuse to pay.

A tenant may refuse to pay any increase in rent not made in conformity with this chapter. Such refusal to pay shall be a defense in any action brought to recover possession of a mobile home space or to collect the rent increase. (Ord. 1117 (part), 1988)

5.44.130 Actions brought to recover possession of mobile home space—Retaliatory eviction grounds for denial.

Notwithstanding Section 5.44.120, in any action brought to recover possession of a mobile home space, the court may consider as grounds for denial any violation of any provision of this chapter. Further, the determination that the action was brought in retaliation for the exercise of any rights conferred by this chapter shall be grounds for denial. (Ord. 1117 (part), 1988)

5.44.140 Owner to provide tenants with copy of this chapter.

Any tenant offered a lease or contract which if accepted and fully executed would be exempt from the provisions of this chapter (Section 5.44.030(E)) shall at the time of the offer also be provided with a copy of this chapter. (Ord. 1117 (part), 1988)

5.44.141 Amendment.

The provisions of this chapter may be amended by a majority vote of the city council. (Ord. 1117 (part), 1988)

5.44.142 Severability.

If any portion of this chapter is found to be invalid, then that shall in no way affect the validity of the remaining portions of this chapter. (Ord. 1117 (part), 1988)