On my recent “road trip” to Northern California, I visited CoMO-CAL members who live in Santa Cruz area MH parks. “Rent control” was one of the topics we discussed at length. If you recall, ELS (Equity Life Styles), Mr. Sam Zell’s group, was asking residents in De Anza Mobile Estates to pay a $5,000 rent increase. As a consequence, many of you have heard that mobilehome rent control was “defeated in Santa Cruz” in 2003. But the parks I visited in the Santa Cruz area last week still have rent control. So, what’s going on here?
To understand what’s going on, you need to know this: The City of Santa Cruz and the County of Santa Cruz are different government entities. Each has a different rent control law. There are 3 mobilehome parks in the City of Santa Cruz – 2 small ones, and a large (198 space) park called De Anza Mobile Estates. De Anza’s homeowners had their rent control protection gutted in 2003, after the Santa Cruz City Council decided to stop defending City rent control law against a continuing lawsuit by the park’s owner. By the way, the owner of De Anza is Equity LifeStyle, Inc. (formerly Manufactured Housing Communities), the infamous nationwide park investment company founded by the equally infamous Sam Zell.
In the County of Santa Cruz, there are more than 70 mobilehome parks. Santa Cruz County government is very interested in preserving affordable housing. The County of Santa Cruz has its own rent control law. It has existed for 25 years. While park owners have challenged it on rare occasion, it has never been “broken.” The County’s rent control ordinance continues to offer excellent protection to mobilehome owners in Santa Cruz County. But the County’s law never applied to folks in the City of Santa Cruz, and unfortunately, it can’t help them today.
For homeowners in De Anza, the failure of Santa Cruz City rent control was a disaster. The park owner and the City forced a settlement upon the homeowners. It basically says that as long as you live in De Anza, your space rents are regulated. But, when you sell your home, the person who buys it must pay “market” space rent to the park owner. This is called “vacancy decontrol,” and it offers no protection to the home seller. (By the way, remember AB1309 which was introduced this year by the WMA? It takes vacancy decontrol another step—across the whole state.) Drastically raised rents for homebuyers mean drastically reduced home values for home sellers. In the case of De Anza, space rents for homebuyers went up to $1,500 per month or more. For premium spaces in the park, rents were even higher. As a result, homeowners in De Anza were stripped of their home equity. Homes that formerly sold for $200,000 are now on the market for $20,000 or less. Yes, you are counting the correct number of zeros! Potential mobilehome buyers now avoid parks in the City of Santa Cruz. Instead, they buy mobilehomes outside the City limits, in the unincorporated County of Santa Cruz, where mobilehome park rent control is still in force.
So why did rent control in the City of Santa Cruz disappear? Park owners around the state call rent control in the City of Santa Cruz a “failed experiment.” They cite all the usual “park owner” arguments against rent control – it’s a taking of park owners’ property, etc. They would like city and county governments around the state, as well as mobilehome owners, to think “they will be next” to see rent control disappear.
However, those who understand the facts know better. Santa Cruz area “locals” know that the City Council forced De Anza’s homeowners into a settlement with the park owner. The well-publicized reason? The City Council said it could not afford to keep spending large sums of public money defending homeowners in De Anza. The City estimated that the settlement saved it at least $1 million in future legal costs.
But why was the City’s rent control law vulnerable to continuing attack? My friends in Santa Cruz told me the “story behind the story.” Simply put, the City’s rent control law limited the resale prices of mobilehomes in the City’s MH parks. This was an attempt to preserve affordable housing in the City. However, the City never properly enforced that law. Instead, home sellers in De Anza sold their homes for whatever the market would bear. The City’s failure to properly enforce its rent control ordinance opened the law to attack. The City could not adequately defend a law it had not enforced. This is what killed rent control in the City of Santa Cruz.
What is the lesson here? I think it’s this: There are challenges to rent control at the State level, such as AB 1309. Mobilehome owners must fight such challenges as they arise. However, rent control is not in “general jeopardy” around the state at the local government level.
More than 100 California cities and counties have MH park rent control ordinances. Most of these are well-written laws that provide reasonable fairness for mobilehome owners as well as park owners. Typically, these laws are properly enforced. This includes the ordinance in the County of Santa Cruz, where rent control continues to protect affordable housing today.
AROUND CALIFORNIA - NEWS FOR OWNERS OF MOBILE/MANUFACTURED HOMES 
On the surface, this article is accurate. But underlying this interpretation is the fact that Sam Zell will spend any amount he deems necessary to divest homeowners and leaseholders of their rights, in support of his personal profit motive. The nation is littered with victims. Sadly, the City of Santa Cruz accurately perceived a losing battle.