By JONDI GUMZ

Posted: 06/12/2010 01:30:58 AM PDT

CAPITOLA — A federal judge has ruled in favor of the Surf and Sand Mobile Home Park challenging the city’s refusal to let the owner to close the park, which is one of the most affordable places to live in Capitola.

U. S. District Judge Robert Seeborg, in a ruling Wednesday, said most of the property owner’s claims for relief can go forward.

On one point, the judge ruled against property owner Ron Reed, dismissing the claim that the city’s action constituted “public taking” of the property but giving Reed the option to file that claim in the future.

Reed is seeking damages or relief that would allow him to close the park on terms he finds acceptable.

The 73-space ocean-view mobile home park, opened by Reed’s parents, has been at 750 47th Ave. for more than 50 years. Many of the residents are retirees on fixed incomes paying $250 to $400 a month for their spaces.

Reed contends that affordability comes at his expense with some mobile homes selling for as much as $500,000 because of the city’s rent control ordinance.

His lawsuit challenges the constitutionality of the rent control and park closure ordinances, alleges that he is being treated differently and argues that the city’s process to handle a closure application was a sham.

The City Council vote against the closure application was unanimous.

Mayor Sam Storey, who is an attorney, said he was “disappointed that the court did not dismiss the entire Surf and Sand case,” noting a closure would displace many low-income residents and senior citizens.

“It is hard to get a court to dismiss a case before it is heard on the merits, therefore, it is some satisfaction that the court did dismiss the public takings claim,” he added.

Storey contends the Capitola City Council “correctly applied the state rules” to the closure application.

“I am confident that the courts will affirm that when they get to the merits of the case,” he said.

Reed’s attorney, Mark Alpert of Hart, King & Coldren in Santa Ana, said the takings claim may be refiled later

via Capitola’s arguments against Surf and Sand lawsuit fall short – Santa Cruz Sentinel.

Jun. 4–Issue tabled until budget workshops are completed

The Ukiah City Council voted unanimously Wednesday night to postpone discussions and further action on a proposed rent-stabilization ordinance for mobilehome parks.

“We need a clear understanding of the potential outcomes before we pick a path,” said Council member Doug Crane. “This step should follow (the budget strategic planning) discussion later this month. I hope that we simply continue this until we’ve had a chance to digest the budget and do some prioritization.”

Prior to the vote, City Attorney David Rapport presented the council with three examples of similar ordinances in California: one in Santa Rosa, one in Lake County and one in Merced.

According to Rapport’s report, the Santa Rosa ordinance establishes a base rent for mobilehome parks and limits any increases to 100 percent of the consumer price index (CPI), as long as it is 6 percent or less.

The ordinance also allows park owners to pass on expenses such as capital improvements and government-mandated fees and taxes to tenants, but sets procedures for how the fees can be imposed and how tenants are notified.

If owners feel the CPI does not provide a “fair return” on their investment, they can seek an increase through a formal arbitration procedure.

The city’s costs to administer the ordinance include paying a clerk to assess and collect fees, proce

via Council delays rent control discussion.

By Nick Taborekwrite the author  June 14, 2010

CITY HALL — A plan that would strengthen rules that protect against evictions and extend protections to tenants who live in non rent-controlled units got the City Council’s initial approval last week, a step that could pave the way for the proposals to appear on a citywide ballot in November.

The proposals would extend basic eviction protections that tenants in rent-controlled buildings receive to all tenants in Santa Monica and would afford added eviction protections to senior citizens and those who are disabled or terminally ill.

Each of those proposals would require an amendment to the Rent Control Agency’s charter, said Deputy City Attorney Adam Radinsky, which means they’ll have to receive support from a majority of voters to take effect. The City Council this summer will consider precise language for the amendments and is expected to approve placing them before voters in November’s election.

If adopted, the protections that would be extended to all Santa Monica tenants would affect the eviction process in cases where a landlord alleges a tenant has breached a contract, created a nuisance, refused to execute a written lease extension, damaged the premises or denied the landlord access to the rented unit.

The council also tentatively supported two other proposed changes to the rent control law last Tuesday that would not require charter amendments.

Those changes, which Radinsky said the council could enact by adopting new ordinances, would increase the amount tenants receive in relocation payments after an eviction and increase the amount of time tenants receive to correct lease violations before an eviction notice could be issued.

Though the landlord group Action Apartment Association has said it opposes the changes and may sue to block them, the proposals were considered non-controversial by the seven member City Council.

Councilman Kevin McKeown said while Santa Monica has a strong rent control law, it has fallen behind other cities in some areas of tenant protection.

“We have the best rent control law and will continue to have [the best law] of any city, but in many ways we’re just catching up to other cities on some of these other protections,” he said.

nickt@smdp.com

via City Council moves ahead with expanded protections for SM renters.

June 11   Merrie Turner Lightner

via Is it time to improve San Francisco rent control?.

Is it time to question rent control? Rent Control Economics 101

It is not a surprise that the benefits and costs of rent control are hotly contested in San Francisco. Most tenants, especially those who are long term residents, will espouse the benefits of rent control concluding with the very real and very personal benefit: “I couldn’t live here without it.”

But when you ask a rental property owner, you hear a very different story. More often than not, a property owner will have a rent control horror story which often ends with the owner selling the building in frustration, taking their housing units off the market in protest, or in fear paying a hostile unappreciative residential tenant thousands of dollars to vacate the unit.

Rent Control Benefits

Still, there is no doubt that rent control in San Francisco has benefits to identifiable San Francisco renters. No doubt some of these renters need financial assistance. No doubt, some actually deserve it.  No doubt there are societal benefits that stem from rent control that should not be dismissed or overlooked.

The question is not can we find some good in rent control; of course we can find some good. The question to be asked of all of our social safety-net systems spawned before the turn of this Century is: could there be another, better way to get to the same, or even a better result?  

Narrow Cast Rent Control Benefits

A look at the available evidence leads down a road which suggests the current rent control system is outdated, inefficient and overkill in the new economy we face in 2010.  Like so many of the programs of the past, rent control as a “public policy” is ready for a major overhaul and improvement.  It is time for rent control to become surgical and to narrow cast the benefits, rather than broadcast the benefits.

The San Francisco rent control public safety net, which is entirely privately funded, is too wide, too deep and too inefficient. Like so many of the entitlement programs of the 1970s, it mis-allocates and overspends limited resources.

The current rent control system transfers resources to the entire general populace of renters, when only a few are in need.  Instead of providing $50 of assistance to a single needy resident, the current system takes that $50 and distributes it among 10 residents, irrespective of need. The deserving few are forced to share assistance benefits with renters who can and should take care of themselves.  Imagine food stamps for everyone, just because a few people deservedly need them?  It makes no sense and we can’t afford it.

Marketplace distortions

In addition to the public transfer of private resources for a public good, rent control distorts the behavior of the market place.

Go to any free market city, even a desirable one with a tight housing supply like San Francisco, and you will find rent specials and promotions, as building owners attempt to entice customers into moving to their complex or building. 

Missing concessions

Now look at San Francisco. No promotions. No market incentives.  No negotiations.  No DEALS. The dynamic market is dead.  Why?   Because concessions- inducements- incentives- and negotiations can be and have been used against property owners to reduce the base rent of tenants. The result?

New San Francisco residents receive none of the typical market concessions we see in dynamic free markets. Concession dollars are reallocated in budgets by San Francisco owners to allow longer periods of vacancy.  Money that could be in the pockets of residents, remains locked inside the building.

Price reductions slow to occur

A related distortion is that rental rates are not lowered as quickly as they are in other cities. Go anywhere else and you will see a market that reacts in real time.  Rents are reduced –and discounted and adjusted sometimes daily and even hourly.  These market adjustments happen quickly, in prompt response to a changing market.  As a market slows, rental rates go down.  It if slows further, the rates go down further.  You will not find these consumer benefits in San Francisco.

In San Francisco you can see pricing stagnate week after week as owners refuse to drop pricing because it is permanently lost.  In todays environment of annual increases that are typically only $1 per thousand in rent, a $50 per month price decrease equates to a lifetime of rental increases. 

Do price controls work? The anecdotal evidence is lush with stories of inequities and problems. The academic literature indicates “no”.  A Goggle search comes up with paper after paper and research article warning of unintended consequences and market distortions resulting from price controls.  Economic models teach us price controls provide a short term solution at a significant long term cost. 

But for a real answer look at the San Francisco rental market. At times of increasing vacancy the San Francesco rental housing market does not react as a typical healthy free market.   But it could; it should; and it can.

Do you have an opinion about San Francisco rent control?  How would you improve the system?  Share you ideas through Comments.  

via Is it time to improve San Francisco rent control?.

The 9th Circuit considers the constitutionality of rent control

Damon W. Root | June 11, 2010

According to the Takings Clause of the Fifth Amendment, “private property [shall not] be taken for public use without just compensation.” The classic example of this is eminent domain, where the government seizes property, compensates the owner with taxpayer dollars, and puts the property to an alleged public use. But what happens when government regulations violate property rights? Do regulatory takings require just compensation as well?

It depends. In Pennsylvania Coal Company v. Mahon (1922), the Supreme Court held that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” But how far is too far?

That’s the question the federal 9th Circuit Court of Appeals will confront on June 22 when it rehears the controversial case of Guggenheim v. City of Goleta. At issue is a Goleta, California, rent control ordinance enacted “to protect the owners and occupiers of mobile homes from unreasonable rents.” According to a 2009 decision written by Judge Jay Bybee for a three-judge panel of the 9th Circuit, the Goleta ordinance amounts to little more than a government “wealth transfer” from the owners of mobile home parks to their rental tenants, and thus “looks much more like a classic taking than a mere regulatory burden.” Under Bybee’s ruling—which the full 9th Circuit will reconsider—the city must either pay just compensation to the owners or scrap the law entirely.

For property rights activists, Guggenheim came as a welcome and somewhat surprising victory in the long war against California’s noxious regulatory regime. Yet there’s good reason to believe this victory will prove short-lived. No less an authority than University of Chicago law professor Richard Epstein, author of the influential 1985 book Takings: Private Property and the Power of Eminent Domain, argues that Bybee’s decision is riddled with “multiple technical deficiencies” and that Bybee tried to “bite off more than he could chew.”

The trouble lies in the Supreme Court’s treatment of the Takings Clause, particularly the Court’s disastrous 1978 precedent in Penn Central Transportation Co. v. New York. In that regrettable decision the Court permitted New York’s Landmarks Preservation Commission to strip Penn Central of its lucrative air rights over Grand Central Station without providing any compensation—just or otherwise—for the loss. In essence, the commission forbid the company from erecting an office tower on top of Grand Central in order to preserve the train depot’s famous physical appearance. 

That certainly sounds like a public use. After all, if the public gets to enjoy the aesthetic benefits of this untouched architectural marvel, why shouldn’t the public foot the bill via just compensation? As Justice William Rehnquist correctly observed in his dissent—where he was joined by Chief Justice Warren E. Burger and Justice John Paul Stevens—New York had clearly “destroyed—in a literal sense, ‘taken’—substantial property rights of Penn Central.”

Furthermore, if the public thought its tax dollars were being ill-spent on that particular use, voters could take political action against the officials responsible for the offending regulation. That’s how it works when the government seizes land via eminent domain. (Which is not to say that eminent domain takings are free from corruption or abuse.) At the very least the property owners shouldn’t be the only ones bearing the cost of New York’s commitment to historical preservation.

Yet in his majority opinion in Penn Central, Justice William Brennan showed little concern for either property rights or public accountability. “A ‘taking’ may more readily be found when the interference with property can be characterized as a physical invasion by the government,” Brennan wrote. It was a convenient trick that denied Penn Central its air rights so long as the government didn’t build anything on top of Grand Central either—which was the whole point of the regulation in the first place. Furthermore, Brennan’s decision placed the burden of proof entirely on the victimized property owners, establishing a pro-government standard that gave the green light to uncompensated regulatory takings across the country. 

That’s the ill-conceived precedent hovering over the Goleta rent control case. Until the Supreme Court reconsiders Penn Central and its dangerously flawed approach to the Takings Clause, property owners will remain at the mercy of unaccountable politicians, overzealous regulators, and precedent-bound courts. There’s nothing just about that.

Damon W. Root is an associate editor at Reason magazine.

via Taken By Regulation – Reason Magazine.

Lookout Staff

June 8, 2010 — Santa Monica residents could have an opportunity to vote on enhanced tenant protection laws in the November election. The City Council on Tuesday will consider placing modifications to the City’s rent control law on the ballot.

The modifications were endorsed by a majority of the Rent Control Board and are opposed by Santa Monica’s longtime opponent on rent control issues as well as the Rent Control Board’s lone landlord.

The proposed changes include a warning period for tenants to correct violations before being evicted, protection for seniors and terminally ill tenants from being evicted for owner occupancy, extension of what is known as just cause protection (which prevents tenants from being thrown out for certain violations without a warning) to tenants without rent control and for increased relocation benefits for tenants who are forced to move due to owner occupancy as well as extending the right to these benefits to tenants from apartments with three units or fewer.

This proposal was initially introduced by Rent Control Board Commissioner Jennifer Kennedy at a meeting last month as a method “to improve community stability and add an additional layer of protections for rent-controlled tenants and all tenants, which would incrementally, but significantly enhance the already excellent existing fabric of tenant protections.”

At the time, she said she did not know what it would take to put the items into effect, but asked that the recommendations be presented to the City Council. She received the support of three of her colleagues.

Commissioner Robert Kronovet, a landlord who has been a thorn in the side of many rent control advocates since 2008 when he became the first person to win a seat on the board without the endorsement of Santa Monicans for Renters’ Rights, opposed the modifications.

“Strengthening private property rights will also lead to community stability,” he said. “So I’m not sure that this social agenda of weakening private property rights creates stronger community stability as Commissioner Kennedy believes.”

The modifications are also opposed by the Action Apartment Association, a landlord group that has had several battles with the City over rent control laws. Rosario Perry, the group’s attorney, said the they are flawed from the start because the process to put them before the council was flawed.

The Rent Control Roard’s proposal has been presented as a staff report and not a formal measure. He said this is not legal, because the City Charter specifically makes the Rent Control Board a separate entity outside the City Council’s authority. Therefore, Rent Control Board com

via Council to Consider Changes to Rent Control Rules.

Daily News Staff Writers

Posted: 06/09/2010 12:01:35 AM PDT

East Palo Alto voters on Tuesday overwhelmingly approved a new rent control law that will strengthen and modernize an existing 22-year-old ordinance.

As of 11:30 p.m. Tuesday, with seven of eight precincts reporting, 77.7 percent of voters had cast their ballots for Measure H, according to the San Mateo County elections office.

“We’re elated that the community would come out so strongly in support of rent conrol,” said East Palo Alto Vice Mayor Carlos Romero, who campaigned for the ordinance.

Community leaders have blamed the city’s previous 1988 rent stabilization ordinance for a string of legal disputes over the past couple of years between East Palo Alto and Page Mill Properties, citing the law’s vagueness and inconsistency with state law. Page Mill was the city’s largest landlord until it defaulted on a loan to Wells Fargo Bank and lost its 101 East Palo Alto buildings to foreclosure earlier this year.

Page Mill began buying properties in East Palo Alto in 2006 and owned about 1,800 rental units in the city of 33,000 when its properties reverted to Wells Fargo.

East Palo Alto voters approve new rent law – San Jose Mercury News.

By: Cristina Rodda, Eyewitness News 4

It was not a good day to be without an air conditioner, but that’s what some Albuquerque mobile home park residents had to deal with all day Tuesday.

The residents blame the park owner Del Rey Investments and claim it’s just more salt in their wounds after they were recently told to find a new place to live.

Residents say the power went out at about 5 a.m. Tuesday morning. The owners of the park say the problem was with a transformer and they were waiting for a specialized electrician to come fix the problem.

Development Director of Del Rey Investments, Drew Dolan said of the problem “It’s actually critical that we get that corrected as soon as possible, and we’re doing everything we can to do it. We’ve got every resource we have working on getting that fixed.”

The mobile home residents weren’t so sure that was happening.

“I feel betrayed … They promised that they would upkeep the park so long as we need to stay here until our lots in the redevelopment were ready for us to move on to,” said Del Rey Neighborhood Association Vice President Heather Whitling.

A few weeks ago, people at the mobile home park learned they’d have to find a new place to live. If they leave by August 31st, they’ll get a stipend.

The park is closing November 30th because the owners say they’re not making enough money.

via KOB.com – Mobile home residents without electricity.

Twenty-two coach owners, who must move their dwellings off rented spaces on property at 1200 Newbury Road, were seeking more relocation money. The residents claimed they would lose money they’d invested in their mobile homes due to Thousand Oaks’ violation of a city law requiring higher relocation fees.

The city had earlier agreed that the property owner had to pay less than the law required due to court case rulings overturning similar laws in other cities.

Although the lawsuit was filed within a required 90-day time frame, it was dismissed because it wasn’t served to the city before that same deadline.

—Nancy Needham

via Mobile home residents lose in courtroom | www.toacorn.com | Thousand Oaks Acorn.

Ronald W. Rose of Glendora (Your View, May 20) makes a valid point concerning mobile home space rents. I own and reside in a manufactured home situated in a park in Glendora and am well aware that mobile home parks are being bought up by large corporations that are making large increases in space rents. And I agree that something needs to be done to control the situation.

I don’t know where Rose gets the figures he quotes for the cost of maintaining a single mobile home site, but I’m sure it is not as much as that for a one-bedroom apartment. Yet owners want to charge as much as one would pay for a one-bedroom apartment! And unfortunately, in Los Angeles County, HUD Sect. 8 housing assistance is unavailable to those who own a mobile or manufactured home and rent a space in a mobile home park. Even if it were, the waiting list for Section 8 housing assistance is years long. Nor is there, to my knowledge, any other source of assistance for mobile home space rents. This, too, is a situation that needs to be remedied.

In short, mobile home owners must unite or remain at the mercy of mobile home park owners who may not be very merciful and may be quite willing to use disingenuous tactics to get their way. Anyone who would like more information should contact the

Coalition of Mobile Home Owners-California, P.O. Box 4821, Chatsworth, CA 91313; 1-800-929-6061.

Judith A. Cook

Glendora