The Council finds and determines that:
(a) There
is presently, within the City and the surrounding areas, a shortage
of spaces for the location of mobile homes, resulting in a low vacancy
rate and rising space rents.
(b) Mobile
home owners have invested substantial sums in their mobile homes and
appurtenances.
(c) Alternative
sites for the relocation of mobile homes are difficult to find, and
the moving and installation of mobile homes are expensive, with possibilities
of damage to the units.
The Council, accordingly, does find and declare that it is necessary
to protect the residents of mobile homes from unreasonable space rent
increases, recognizing the need of mobile home park owners to receive
a fair, just, and reasonable return.
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(Ord. No. 795, § 1)
For the purposes of this article, unless otherwise apparent
from the context, certain words and phrases used in this article are
defined as follows:
"Assessment"
shall mean the entire allocation of the cost of installing,
improving, repairing, or maintaining any capital improvement benefiting
the resident.
"Consumer Price Index"
shall mean the Consumer Price Index for all urban consumers
(CPI-U) published for the Los Angeles-Long Beach-Anaheim area.
"Maximum allowable increase"
shall mean the maximum allowable increase in mobile home
space rent an owner may charge, unless a higher increase is approved
by the City after a petition and hearing as provided in this article.
The maximum allowable increase shall be provided in this subsection
(d) and shall be determined by either of the following formulae an
owner may choose to apply:
(1)
Take the operating expenses of the park for the 12 month period
immediately preceding the date upon which notification of any rent
increase is to be made; multiply that sum by the percentage of increase
in the CPI-U appearing in the latest published Consumer Price Index
to arrive at the maximum allowable annual increase in rent for the
entire park; and divide the number of units in the park to compute
the maximum allowable annual rent increase (in dollars) for each space;
or
(2)
Secure the percentage of annual increase in the CPI-U for the
calendar year immediately preceding the one in which the rental adjustment
is being made; multiply that figure by the rent to be adjusted to
arrive at the maximum allowable rent increase percentage per year;
and apply that product to each space rent.
(3)
Effective April 1, 1988, the maximum allowable increase for
rental adjustments occurring under this subsection shall be based
upon the percentage of annual rise in the CPI-U for the previous calendar
year. Any rental increase occurring between October 1, 1987 and March
31, 1988 shall be subject to the maximum allowable increase computed
with the annual rise of the CPI-U for the 1986 calendar year.
(4)
The percentage increase computed by either of the methods set
forth in this subsection shall be applied to each space and shall
not be applied to the park’s mean rent. Moreover, there shall
be no more than one increase in space rents within a park during any
12 month period without the prior approval of the City.
(5)
The occurrence of a vacancy in either a space within a park or a mobile home unit on a space within a park shall not result in a space rental increase in excess of the percentage increase allowed once during any 12 month period by this subsection, unless it results from a petition duly heard and approved pursuant to Section
2-2.903.
"Owner"
shall mean the owner, lessor, or designated agent of a park.
"Park"
shall mean a mobile home park which rents spaces for mobile
home dwelling units.
"Rent"
shall mean the consideration charged solely for the use and
occupancy of a mobile home space in a park and shall not include any
amount paid for the use of the mobile home dwelling unit or for facilities
or amenities in a park, other than a mobile home space, or any other
fees or charges regulated by a governmental agency and charged to
residents on an actual usage and/or cost basis.
"Resident"
shall mean any person entitled to occupy a mobile home dwelling
unit pursuant to the ownership thereof or a rental or lease arrangement
with the owner of the subject dwelling unit.
(Ord. No. 795, § 1; Ord. No. 1084, § 3, 2021)
(a) Petition
and hearing procedure. Upon the filing with the secretary of a written
petition concerning a proposed or actual increase in rent filed by
an owner or by residents who reside in and represent more than 50%
of the inhabited spaces within a park, excluding management, a hearing
thereon shall be conducted by a Hearing Officer within 60 calendar
days, or as soon thereafter as is reasonably practicable, after the
filing of the petition.
In the event that the park owner has proposed a rent increase
for one or more residents (e.g., based upon one year anniversary dates)
but less than the total number of residents in the park, then only
one hearing process shall be conducted by the same hearing officer
where the rent increases proposed for all residents in the park for
that year are based upon the same factual justification. Any such
rent increase shall be subject to a protest petition when filed by
a majority of total park residents. The filing of one petition protest
shall be sufficient to place all similar rent increases for that year
at issue under the hearing review process.
The hearing shall be conducted only in the event the petition
is filed with the secretary 30 calendar days following the effective
date of the rent increase which is the subject of the petition.
The Hearing Officer shall be chosen and a hearing conducted
in accordance with the Hearing Officer procedure established by the
Council.
(b) Purpose of hearings. At the hearing on such petition, the Hearing Officer shall conduct an investigation to determine if the rent increase in question exceeds the maximum allowable increase as defined in subsection
(d) of Section
2-2.902 of this article. If the Hearing Officer concludes that the rent increase exceeds the maximum allowable increase, the Hearing Officer shall then continue the hearing by receiving all relevant evidence for the purpose of rendering findings and conclusions as to the propriety of the rent increase in accordance with the criteria set forth in subsection
(g) of this section.
The Hearing Officer may require either party to a hearing on
the petition to provide any books, records, and papers deemed pertinent,
in addition to that information previously set forth by the parties.
(c) Hearing
Officer recommendations. Within 30 days after concluding the hearing,
the Hearing Officer shall render written findings and conclusions
as to the propriety of the rent increase to the Planning Commission.
The Hearing Officer recommendations shall not be binding. The Planning
Commission shall give 10 days prior written notice of its meeting
to the parties.
(d) Planning
Commission reviews of Hearing Officer findings. The Planning Commission
shall review the findings and conclusions of the Hearing Officer at
its next available meeting. Its scope of review shall be limited to
the written record consisting of the evidence received by the Hearing
Officer, written arguments of the parties, findings of the Hearing
Officer, other relevant matters as compiled by the secretary of the
Planning Commission, and additional oral or written arguments the
parties may wish to make. However, the Planning Commission shall not
receive or consider any additional evidence.
(e) Council
reviews. The Council shall review the findings of the Hearing Officer
and the recommendations of the Planning Commission as soon as reasonably
practicable. The Council shall not reopen the hearing held by the
Hearing Officer for the purpose of receiving new evidence unless,
in the discretion of the Council, it is necessary to do so. The Council
may affirm, modify, or reverse the rent increase in question, but
in no case require a reduction lower than the maximum allowable increase.
The Council shall render written findings in support of its conclusions
within 30 days after its meeting, and the decision of the Council
shall be final.
(f) Return
of excess rents collected. Any rent increases which are collected
by an owner pursuant to an increase which is the subject of a petition
for hearing, and which later is determined by the Council to exceed
the maximum allowable increase, or such greater increase as the Council
approves, shall be either returned to the residents or credited to
future space rents; provided, however, no increase collected prior
to December 5, 1980, shall be returned.
(g) Criteria
to be utilized in rent increase reviews.
(1) Purpose of reviews. The Hearing Officer, the Planning Commission,
and the Council shall review the rent increase to determine whether
the increase is, or is not, fair and reasonable. Such review shall
be conducted by applying the nonexclusive criteria set forth in subsection
(g)(2) of this section to the facts submitted to the Hearing Officer.
(2) Nonexclusive criteria. The Hearing Officer, the Planning Commission,
and the Council shall consider all relevant factors, including, but
not limited to, increased or decreased costs to the mobile home park
owner attributable to utility rates, property taxes, insurance, advertising,
governmental assessments, cost-of-living increases attributable to
incidental services, normal repairs and maintenance, capital improvements,
except those defined in subsection (h) of this section, the upgrading
and addition of amenities for services, except as defined in subsection
(h) of this section, and a fair rate of return on the property.
(3) Fair rate of return on property criteria. The Council finds and declares
that the following principles shall be applied in utilizing the fair
rate of return on property standard as a criterion in the review process:
(A) All the provisions of this article shall be applied with the overall
purpose of eliminating the imposition of excessive rents while at
the same time providing park owners with a just and reasonable return
on property.
(B) The reasonableness of rent increases is not to be determined solely
by the application of a fixed or mechanical accounting formula, such
as “return on investment” or “return on market value”
of the property; in particular, recent court decisions have discouraged
the use of a “return on market value” test.
(C) The fair rate of return on property is but one of a number of nonexclusive
factors to be taken into account in reviewing the fairness of rent
increases; it is to be given weight, but not to dominate other relevant
criteria in arriving at a final determination.
(D) The Hearing Officer, the Commission, and the Council shall impartially
consider all relevant evidence in relation to the application of the
nonexclusive criteria. The extent to which the criteria are considered
in the review process, that is, the amount of weight given to any
one of the several criteria, ultimately falls within the wisdom and
best judgment of said three bodies.
(E) In conducting the entire process, guidance should be taken from leading
California case law decisions dealing with rent control issues and
in particular, rent control in mobile home parks. Such cases include:
Birkenfeld v. City of Berkeley (1976), 17 C.3d 165; Gregory v. City
of San Juan Capistrano (1983), 142 C.A.3d 8; Cotati Alliance for Better
Housing v. Cotati (1983), 143 C.A.3d 296; Palisades Shores v. City
of Los Angeles (1983), 143 C.A.3d 369; Oceanside Mobile Home Park
Owners Association v. City of Oceanside (1984), 157 C.A.3d 887; and
Carson Mobile Home Park Owners Association v. City of Carson (1983),
35 C.3d 184.
(h) Rent
increases and capital improvement upgrade costs.
(1) Capital improvement upgrade costs. Only those capital improvement
costs incurred to upgrade through additions, alterations or replacements,
park facilities, assets, or amenities, shall not be recouped from
residents through rent increases, or any other special assessment,
unless the following procedure is first followed:
(A) The park owner shall first inform by first-class mail all park residents
of the exact nature, approximate cost, billing method, and billing
duration of the proposed capital improvement upgrade by written notice.
(B) After allowing the residents a reasonable period of time (of not
less than 30 days) to consider whether the capital improvement cost
is one the residents believe is necessary and desirable, the park
owner shall then obtain formal written consent on a form approved
by the City from a simple majority of the total number of residents
in the park. The simple majority shall be calculated on the basis
of one vote per coach space.
(C) The costs of the capital improvement upgrade shall be prorated and
billed in a method mutually acceptable to the park owner and the residents.
For the purposes of this subsection, “to upgrade”
shall mean to raise to a substantially higher quality, or to substantially
improve, the existing level of service. Examples of capital improvement
upgrades include, but are not limited to, swimming pools, spas, tennis
courts, clubhouses, clubhouse additions, fencing, children’s
play equipment, and other similar improvements.
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(2) Exceptions for governmentally mandated costs. Capital improvement
upgrade costs incurred because of the application of current day Building
Codes, such as, but not limited to, City Building Codes, Health and
Safety Codes, and State, Federal, and Fire Codes, shall be exempted
from the resident consent provision set forth in subsection (h)(1)
of this section. The park owner shall obtain a written statement from
the Building Official verifying that the subject capital improvement
upgrade arose from the more stringent current day Building Code requirements
before the exception set forth in this subsection may be utilized
by the park owner.
(A) Leasehold agreement exemptions. Notwithstanding any provision of
this article to the contrary, leasehold agreements (that is, leases
other than tenancies at will or month-to-month) entered into between
mobile home park owners and their residents shall be exempted from
the operation of the petition and hearing review process.
(B) Forms. The City Manager is authorized and directed to develop and
require the completion of forms by interested parties at the time
a petition is received by the secretary. Until such forms are completed
to the satisfaction of the City Manager, or designated representative,
the petition and hearing process shall proceed no further.
(Ord. No. 795, § 1; Ord. No. 902, § 1; Ord. No. 1084, §§ 4—7, 2021)
(a) Administrative fee. There is hereby instituted a one thousand dollar ($1,000.00) fee to be paid to the City for costs incurred in invoking the Hearing Officer procedure set forth in Section
2-2.903.
(b) Five
hundred dollar ($500.00) deposit. At the time the park residents file
a petition in protest of a proposed increase, the petitioners shall
simultaneously post a five hundred dollar ($500.00) deposit with the
Secretary to the Planning Commission. The Secretary shall find that
the petition is incomplete if the five hundred dollar ($500.00) deposit
is not posted. Further, the statute of limitation period of 30 days
from the effective date of a rent increase shall continue to run in
the event that the petition has been found to be incomplete.
If the petition is in order and the deposit has been posted,
the City shall promptly notify the park owner that the hearing procedure
will be invoked and that the park owner shall, within 10 days of receipt
of notice, post a five hundred dollar ($500.00) deposit equal to the
petitioners’ deposit. Should the park owner not post the five
hundred dollar ($500.00) deposit within the 10 day time limit, the
residents shall be under no legal obligation to pay the proposed rent
increase.
(c) Responsibility
for payment of administrative fee. At the conclusion of the administrative
hearing, the Hearing Officer, as a part of his or her responsibility
to make findings, shall make a recommendation as to the percentage
that each party is to pay in satisfying the one thousand dollar ($1,000.00)
administrative fee. The City Council shall make a final decision regarding
the Hearing Officer’s determination based upon the final rent
award.
(d) Remedies
for nonpayment of administrative fee. Should any party refuse to pay
his or her portion of the required administrative fee, the City may
pursue any civil remedy available, or in the alternative, refuse to
process a future petition by the same petitioners. In the case of
park owner nonpayment, park tenants shall not be obligated to pay
proposed rent increases until the administrative fee debt has been
satisfied.
(Ord. No. 795, § 1; Ord. No. 1084, § 8, 2021)