Mobile home park residents challenge rent control changes

CAPITOLA -- The city has received a petition calling for the repeal of recent changes to its rent-control ordinance, and if the signatures are confirmed, the City Council will have to approve the repeal or allow Capitola voters to decide.A decade-long battle between the city and mobile home park owners over rent control seemed to reach a crescendo March 18, when the council voted to amend its ordinance, allowing for incremental rent increases and total decontrol when a current resident leaves the park. The decision was driven by a desire to reach a settlement agreement with Ron Reed, the owner of Surf and Sand Mobile Home Park, who had filed two lawsuits.But the park's residents had one last recourse, filing a petition challenging the amended ordinance. They went door-to-door gathering signatures, and five minutes before the 5 p.m. Mondaydeadline they delivered the petition to repeal the changes to the city clerk. The residents gathered 875 signatures, well over the 400 required. "There wasn't much else we could do," said Surf and Sand resident Shirley Hill, 80. "Either we get the petition signed and let the people vote on whether they want this mobile home park to stay here or not, or we file a lawsuit. We are mostly low-income people. We can't afford a lawsuit."Mayor Dennis Norton said there was "no chance" the council would repeal the changes, and if the petition is verified, the issue will be left up to Capitola's voters.doesn't have any support except for some people in the mobile home parks," Norton said. "The community doesn't support it, and if the ordinance is repealed, we would be facing millions of dollars in litigation costs again. Then we will have to start by cutting major services that affect all our residents to find the money." Councilman Sam Storey was not as quick to rule out a repeal, saying the council would have to review the issue again once the petition is verified.
Both the city clerk and city attorney will review the petition to ensure signatures were gathered appropriately. Also, the county elections department will check the signatures to make sure they come from registered Capitola voters.
Reed, like many mobile home park owners, has argued that rent control prevents him from getting a fair return on the property his family has owned for more than five decades. The changes to the ordinance were implemented to reach a settlement with Reed, whose two lawsuits challenge the city's decision to deny an application to close the park and the city's denial of an application to subdivide the mobile home park.
Capitola has spent more than $1.22 million to defend its rent-stabilization ordinance against various lawsuits, City Manager Jamie Goldstein said. About a third of the money for that defense has come from a mobile home administrative service fee paid by Capitola's mobile home park residents.
Reed was seeking $27 million in damages, a staggering figure for a city that has an operating budget of $12.3 million for 2010-2011.
The Surf and Sand residents' attorney, William Constantine, said the city is likely to win the two lawsuits based on previous court decisions, and that the cost of going to trial is not as steep as the $1 million the city projects.
The majority of Surf and Sand residents pay between $260 and $400 in monthly rent. Under the agreement, all rents would jump to at least $475 while low-income residents would be offered a minimum of a 34-year lease and rents will go up based on the consumer price index each year.
Moderate income tenants would have their rents raised to market level over an eight-year period.If a resident terminates the lease and leaves the park, rent for that space could be raised to fair market value. Because the owner could raise rents to market level once a coach is sold, residents say all equity in their homes is lost because potential buyers would balk at both a high rent and a mortgage.
"There are a lot of people's lives involved here," said Surf and Sand resident Jack Alsman. "A lot of people don't have other places to go. I'm 65 and my plan when I bought this place in 1982 was to retire here. I'd probably be forced out of here if the ordinance stands."
Source  http://www.santacruzsentinel.com/