Item 12 Staff Report Consider Amending Town Code Section 29.20.820 Regarding Mobile Home Park Conversion, "Findings Upon Consideration of Application," to Implement Housing Element Section 3.5.10 of the General Plan., Zoning Code Amendment A-98-03. ApplicCOUNCIL AGENDA REPORT
DATE: December 15, 1998
TO: MAYOR AND TOWN COUNCIL
FROM: TOWN MANAGER
SUBJECT:
MEETING DATE: 12/21/98
ITEM NO. /
CONSIDER AMENDING TOWN CODE SECTION 29.20.820 REGARDING MOBILE HOME
PARK CONVERSION, "FINDINGS UPON CONSIDERATION OF APPLICATION," TO
IMPLEMENT HOUSING ELEMENT SECTION 3.5.10 OF THE GENERAL PLAN., ZONING
CODE AMENDMENT A-98-03. APPLICANT: TOWN OF LOS GATOS
RECOMMENDATION:
1. Hold public hearing;
2. Close public hearing;
3. Find that the amendment is consistent with the General Plan;
5. Direct Clerk to read title;
6. Waive reading; and
7. Introduce the Ordinance amending Zoning Code Sections 29.20.820 and 29.20.805 (Attachment 7)
BACKGROUND:
On October 5, 1998, the Town Council referred a proposed amendment to the Town Code regarding the Conversion
of Mobile Home Parks to the Rent Advisory Committee for additional comments after receiving testimony from the
mobile home park residents and the property owners. On November 2, 1998, the Rent Advisory Committee revisited
the issue of the proposed ordinance amendment. The recommendations of the Rent Advisory Committee are reflected
in the minutes from the meeting and are provided as Attachment #1. In addition to these recommendations, the Town
received additional correspondences from Clovis and Gerry Mirassou, and William Kraus. Copies of their letters are
provided as Attachment #2, #3, and #4. To assist Council in reviewing the proposed ordinance, staff has provided
excerpts from the Housing Element and Closure Report that were used for the Mobile Home Park Closure Study Session
held on December 8, 1998 (Attachment #5 and #6, respectively).
DISCUSSION:
The Rent Advisory Committee made three recommendations. Recommendations 1 and 3 deal with the Council's referral
and are consistent with the ordinance as recommended by the Planning Commission. Recommendation 2 deals with
subjects outside the scope of the recommended ordinance changes reviewed by the Planning Commission. If the
Council feels that these recommendations have merit, the Council must refer the proposed changes to the Planning
Commission before they can be adopted as part of the mobile home park ordinance. Based on comments made by the
Council at the December 7, 1998 study session, it would appear that the council would prefer to act on the amendment
rather than delay it further. If the Council wants to refer the amendments about renters to the Planning Commission,
the matter could be bifurcated by adopting the original amendment and delaying the other amendment to a later date.
(Continued on Page 2)
��
PREPARED BY: LEE E. BOWMAN �,
PLANNING DIRE TOR
Reviewed by: 04- Attorney V Finance
Revised: 12/15/98 2:44 pm
Reformatted: 10/23/95
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ZONING CODE AMENDMENT A-98-03
December 17, 1998
ENVIRONMENTAL ASSESSMENTS:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT: None
Attachments: 1. Los Gatos Rent Advisory Committee minutes from November 2, 1998.
2. Letter from Clovis and Gerry Mirassou, received November 30, 1998.
3. Letter from Clovis and Gerry Mirassou, received December 7, 1998.
4. Letter from William R Krause, dated December 15, 1998.
5. Housing Element excerpts from Mobile Home Park Closure Study Session
6. Closure Report excerpts
7. Ordinance amending Zoning Ordinance Sections 29.20.820
Distribution: Regina Falkner, Community Services Director
Thomas P. Kerr, 3807 Pasadena Avenue Suite 100, Sacramento, CA 95821
Gerald Mirassou, 607 Galen Dr., San Jose, CA 95123
Clovis Mirassou, 5496 Amby Dr., San Jose, CA 95124
Ann Mirassou, 147 Old Orchard Drive, Los Gatos, CA 95032
Douglas McNelly, 5476 San Felipe Rd, San Jose, CA 95135
Mark Hansen, 701 N. First St, San Jose, CA 95112
Jack Cole, 14685-53 Oka Road, Los Gatos, CA 95032
Malcom McNelly, 1020 Lakeshore Boulevard, Incline Village, NV 89451
Jim and Betty Jean Rogers, 201 Howes Drive, Los Gatos, CA 95032
Elizabeth Stewart, 124 Edelen Avenue, Los Gatos, CA 95030
Geoff Lamb, P.O. Box 949, Los Gatos, CA 95031
Sandra Foster, 49 Chester St., Los Gatos, CA 95030
Mary -Alice Blice, 484 Woodland Ave. #43, Los Gatos, CA 95030
Vikki & Betsy Recktenwald, 484 Woodland Ave., #25, Los Gatos, CA 95032
Marilyn Boruley, 484 Woodland Ave., #52, Los Gatos, CA 95032
Joyce Byers, 484 Woodland Ave., #32, Los Gatos, CA 95032
Stephen Carlson, 484 Woodland Ave., #66, Los Gatos, CA 95032
Dan Connelly, 484 Woodland Ave., #7, Los Gatos, CA 95032
Kristin Nutting, 484 Woodland Ave., #9, Los Gatos, CA 95032
Susan Kintscher, 484 Woodland Ave., #15, Los Gatos, CA 95032
Jean Morgad, 484 Woodland Ave., #20, Los Gatos, CA 95032
M.G. Bechler, 484 Woodland Ave., #34, Los Gatos, CA 95032
G. Bhulla, 484 Woodland Ave., #48, Los Gatos, CA 95032
K. Bhulla, 484 Woodland Ave., #29, Los Gatos, CA 95032
Anna Marie Ferla, 484 Woodland Ave., #61, Los Gatos, CA 95032
Bruce Thompson, 484 Woodland Ave., #53, Los Gatos, CA 95032
Larry Andreasson, 484 Woodland Ave., #60, Los Gatos, CA 95032
Jack E. Jones, 484 Woodland Ave., #45, Los Gatos, CA 95032
Jewell King, 484 Woodland Ave., #46, Los Gatos, CA 95032
Paula Alves, 484 Woodland Ave., #47, Los Gatos, CA 95032
Leisa & Rick Florendo, 484 Woodland Ave., #16, Los Gatos, CA 95032
LEB:EO
N:\DEVICNCLRPTSIA-98-3.TC3
TOWN OF Los GATOS
LOS GATOS RENT ADVISORY COMMITTEE
MONDAY, NOVEMBER 2, 1998
LOS GATOS NEIGHBORHOOD CENTER
ROOM 214 - 5:30 P.M.
ROLL CALL
Members Present:
Members Absent:
Also Present:
MINUTES
CIVIC CENTER
110 E. MAIN STREET
P.O. Box 949
Los GATOS, CA 95031
Bill Errico, Susan Fish, William Kraus, and Clovis Mirassou.
Lisa Meddows.
Regina Falkner, Community Services Director; Christine Burdick,
Executive Director Santa Clara County Bar Association; Larry
Andreasson; Joyce Byers; Stephen Carlson; Kelly Caramella; Jack
Cole, GSMOL; Rick & Leisa Florendo; Martha Hoffman; Kristine
Kasten; Jewell King; Gerry Mirassou; Judy Ray; Vikki
Recktenwald; and BruceThompson.
II. APPROVAL OF MINUTES OF NOVEMBER 2. 1998
It was M/S/C (Kraus/Errico) that the minutes of November 2, 1998 be approved as written.
III. COMMUNICATIONS
A. Verbal
None
B. Written
Christine Burdick, Santa Clara County Bar Association Executive Director, reported
on the agency's Rental Dispute Resolution Program from July through October. She
noted that a number of cases handled in July and August were those assumed from
Information and Referral Services.
ATTACHMENT 1
INCORPORATED AUGUST 10, 1887
Rent Advisory Committee Minutes
November 2, 1998
Page Two
IV. BUSINESS
A. Consider Draft Amendment to the Town Code Regarding Mobile Home Park
Conversion.
After considerable discussion the Committee agreed to the following:
1. Units on Site
• The Rent Advisory Committee recommends providing park owners the
option of siting the units elsewhere --even though it may be difficult.
• Mobile Home Park residents want to remain in the Los Gatos community.
Staying in school system is critical for households with children.
• The Committee wants to be assured that low income units are built and
recommends that Council consider requiring that low income occupancy
permits be issued prior to issuing market rate units' occupancy permits.
2. Renters Issues Regarding Notification Procedures
• Amend Ordinance to require six months notice for renters. Encourage park
owners to have all units vacated within the same month to avoid safety issues
resulting from having a few tenants left in the park.
29.20.825, paragraph 1 should be amended to include renters in the
notification process.
3. Replacement
• Keep with the General Plan by requiring one to one replacement and make
units affordable with subsidy and/or density.
• It was M/S/C Kraus/Errico (3 yes, 1 abstention) that the following be
provided as an alternative to the one to one replacement (or the current
General Plan requirements as they may be applied): Developer makes
proposal to Town for development of Mobile Home Park which would price
units at their proportionate current land value plus cost of unit. Low income
units are replaced, and could be increased, by allowing increased density
and/or subsidy to meet Below Market Price affordability prices. To
participate the developers general construction and acquisition fees shall not
exceed 22%.
Example:
$90 per square foot hard and soft costs for single family dwelling.
House $90.00 x 1,300 square feet = $117,000 building costs
One Million per acre = 12 units $83,000 per unit land costs
$200,000 cost per unit
Rent Advisory Committee Minutes
November 2, 1998
Page 3
B. Mobile Home Rental and Other Tenant/Landlord Disputes: Status Report
1. Revisions to Ordinance Section 14.85.010 - 14.85.415.
2. Draft Regulations.
Staff distributed drafts of these items to Committee members Kraus, Mirassou, and
Chair Fish for review. A copy will be forwarded to Christine Burdick for comment.
V. STAFF REPORTS
None
VI. ADJOURNMENT
The meeting was adjourned at 7:45 p.m. to January 4, at 5:30 p.m. in Room 214 of the Los
Gatos Downtown Neighborhood Center.
Regina A. Falkner,
Community Services Director
Recording Secretary
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November 2, 1998
To: Rental Advisory Committee
From: Gerry Mirassou
At its October 5 meeting the Town Council considered the 1-to-1 replacement
amendment to the Mobile Home Conversion Ordinance and voted to refer the matter
back to the RAC for consideration. After considerable testimony from the public and
discussion amongst Council members, the Council still did not feel comfortable that the
proposed amendment was adequate as to fairness or implementation. The main reason
the amendment was sent back to the RAC was due to presentations by Bill Krause and
Bill Erico indicating RAC's willingness to deal with the ordinance in a more specific
manner.
I have attended all the meetings with the GP Committee, the Planning
Commission and the Town Council regarding this amendment (since the July 6 RAC
meeting), and I feel the major concerns voiced are as follows:
1. Fairness of 1-to-1 requirement placing burden on two property owners for
providing low and moderate income housing.
2. Keeping affordable housing within the parks rather than dispersing.
3. Providing public monies to update infrastructure in the park and maintain the
sites as mobile home parks.
4. Resident concerns of losing their sense of community upon park closure and
not being able to find affordable replacement housing in LG.
5. Owner concerns of realizing fair market value for their property.
6. Council concerns of reaching a solution/compromise that keeps affordable
housing in the town while accomplishing all of the above.
It is my contention that implementation measures for this proposed ordinance
amendment must be addressed. In its discussion the Council recogni7ed the necessity of
some type of partnership amongst the Town, the owners and the residents so the 1-to-1
issue can be dealt with fairly. In essence, this is a business deal, and much investigation
and negotiation must take place before 1-to-1 can be effectuated. To insure that the
owner's position is secured I recommend that another finding should be added to Section
29.20.820 as follows:
(13) If the proposed conversion is to another residential use, whether the mobile
home park owner receives a fair and equitable return on his investment
based on the current fair market value of owner's land and a reasonable rate
of return on that land value.
With this finding in place the concerns of all parties are addressed and it is now
incumbent uponall parties (Town, residents, owners) to negotiate their side as it
would be in any business deal.
November 25, 1998
Planning Department
Town of Los Gatos
Los Gatos, CA
RECEIVED
NOV 3 01996
TOWN OF LOS GATOS
gPLANNING DEPARTMENT
Re: responses to the Administrative Draft of the Los Gatos Mobile Home Park Conversion
Impact Report
Planning Dept. Staff:
The following are the comments to the above mentioned document from the owners of
the Bonnie View Mobile Home Park. We appreciate the opportunity to submit our comments
and trust they will be dealt with fairly by Mr. Kerr.
Comment #1 Although this section seems unnecessary since none of the mobile home owners
has indicated a desire to relocate, Mitigation #'s 2 and 3 (page 20 under the Relocation Plan
section) should include the Town of Los Gatos as financial contributors to any Relocation Plan.
Since the town has created the inflated value of the owner -occupied coaches through the
implementation of the Rent Ordinance, the Town should now take part in the buyout of the
coaches "in place" should the coach owner not wish to relocate. Thus, sentence #3 under
Mitigation #4: Relocation Plan should read "The plan requires the full financial and moral
commitment of the park owner, the Town of Los Gatos and the coach owner to be successful."
Comment #2 In the second paragraph of page 28 it states that from the outset of the Impact
Study coach owners have expressed concern "that the market values of their mobilehomes have
been depressed by the `cloud' [of closure] that has existed since the park owners publicly
expressed intention of closing the park." However, it should be noted that park owners have been
complaining that since the inception of the Rental Ordinance for Mobile Home Parks, the
passage of the Conversion Ordinance and the zoning of the mobile home parks for mobile home
park use only, the value of owner -owned coaches in the park have been inflated as land value has
been transferred to the coach. This needs to be taken into account when determining the "in -
place" value of the coaches.
Comment #3 The discussion on pages 30 and 31 very correctly points out the dramatic effect in
mobile home values due to the rental increase restrictions placed on the mobile home park
owner. All the restrictions have been placed on the mobile home park owner and none have been
placed on the coach owner. Due to this the 17 owner -owned coaches have been the beneficiaries
of $590,000 of land value (the difference between the depreciated value and the "in place"
value.) This is nothing more than a transfer of land value from the land owner to the coach
owner. This phenomenon was explained to the Town Councils during the public hearings on the
various mobile home park measures (conversion ordinance, rental ordinance and zoning
ordinance), but the ordinances were passed anyway. Furthermore, an extensive study on the
impact of rent control ordinances by the UCLA School of Law was forwarded to the Town
ATTACHMENT 2
Council during the public hearing process on these ordinances. That study explained this same
phenomenon —over time land value would be transferred to the coaches.
In light of Mr. Kerr's discussion on pages 31 & 32 and the three levels of values in
the Tables on page 29, which illustrate and explain value transfer, we would like to know
what court decisions have been rendered regarding this land value transfer phenomenon,
where they took place and how they might relate to the present conversion situation in Los
Gatos.
Comment #4 As an additional point to the narration on pages 30 and 31, it is imperative to note
that no price restrictions have been place on coach owners who sell their coaches nor have
income restrictions been placed on buyers purchasing coaches in the parks. Thus, if the purpose
of the ordinances is to maintain low -and- moderate income housing within the parks, only one
half of the rent structure has been controlled for this purpose, rent raises and vacancy control.
The other part of the rent structure, the price of the coach upon sale, has not been controlled. It
can go to the highest bidder, regardless of whether or not it prices out a low-income person.
Furthermore, the income of the proposed buyer is not controlled so that a higher income person
can purchase a coach if he/she so pleases just in order to pay a lower rent.
If the Council chooses to award "in place" values to the owners of coaches within the Los Gatos
Mobile Home Park, it sets a precedent that has the potential to send coach prices spiraling in the
Bonnie View Mobile Home Park. No ordinance is in place to prevent a potential mobile home
owner from inflating the price of his/her coach for sale, taking a small down payment from the
potential buyer of the coach and amortizing the remaining price of the coach over a very long
term to keep the monthly payment down. Then, as part of the sales agreement the seller can
insert a covenant that allows him/her to receive a portion of a buyout upon conversion. As an
example, a coach owner who originally paid $10,000 for his 1963 500 square foot home agrees
with a buyer to sell his coach for $100,000 and accept $20,000 down. Knowing full well that the
park infrastructure is old and the park will most likely be converted within the next 5 years,
he/she places terms on the remaining $80,000 of the loan at 1% over 50 years for a payment by
the buyer of $170/month. He/she then records a caveat that upon closure of the park and an "in
place" value is awarded, the owner and the buyer will split the remaining principle of the "in
place" value paid by the park owner. Both the seller and the buyer come out winners. The new
buyer is still effectively paying $800/month rent (1% of down payment equals $200+ $170 coach
payment + $425 space rent, the seller makes an initial profit plus an added profit upon the initial
sale and they both make a profit once the park is converted.
Although this is extreme, in effect, that is what is happening and the coach owners in
Bonnie View Mobile Home Park know it. Paragraph 4 on page 33 of the report is a direct quote
from a resident who knows he or she is receiving a direct monetary benefit from the value of our
land.
Comment #5 The first sentence of paragraph 4 on page 36 indicates that no relocation
requirements are imposed by the Town on apartments due to a closure nor when a low -density
residential use is removed from the rental pool. However, the next five pages are devoted to the
demographics of the renters in Los Gatos Park as well as a discussion on the spectifics of
relocating them. Will relocation benefits be provided only to tenants renting mobile homes, or
also to renters who reside in "stick built" units within the park as well? A policy explanation by
the Council should accompany this position. Why should renters in a mobile home park be
granted relocation benefits upon closure of a mobile home park and renters in apartments or low -
density residential units not be granted relocation benefits upon closure? The rent control
ordinance treats both apartment dwellers and the renters of park -owned coaches the same. Why
should relocation benefits be different?
Furthermore, we do not construe the State of California Mobile Home Park Conversion
legislation to include renters of park -owned coaches. The legislation refers to residents
receiving relocation benefits. Renters of park -owned coaches are not specifically mentioned. At
the time the legislation was written park owners were not buying mobilehomes in their parks.
Thus, renters of park -owned coaches were not an issue. Therefore, the legislation was not
intended to include renters of mobilehome owned by the park, only residents who own their
mo bilehomes.
Comment #6 Paragraph 3 on Page 39 states that there are 8 park -owned mobilehomes at Bonnie
View Park. The correct number is 10 park -owned mobilehomes plus two apartment units and a
manager's quarters that has been used as a rental in the past. Nine of the rented mobile homes
are one bedroom/one bath units and one is two bedroom/ two bath. The range of rents charged is
correct.
Comment #7 A key element not mentioned in this Conversion Impact Report is the financial
impact that the proposed 1-to-1 replacement ordinance will have on the mobile home park
owners. This also will remove millions of dollars of value from the price of the land and place a
requirement on mobile home park owners that other land owners do not have. An analysis of
the financial impact of the 1-to-1 replacement ordinance needs to be included in this
Conversion Impact Report.
In summary, the comments from the owners of Bonnie View Park are forwarded in the
spirit of fair play, equal treatment and integrity. Due to twelve years of rental restrictions that
have proven to transfer land value to mobilehome owners rather than accomplish the originals
goals of preserving low -and -moderate income housing, it seems appropriate that the Los Gatos
Town Council utilize this "closure process" to return land values back to the mobile home park
owners and establish policies that more equally spread the the monetary burden of providing and
conserving low -and moderate income housing in Los Gatos. Mobile home parks should not be
singled out as the only residential uses that must provide relocation benefits to renters nor should
they be forced to provide 1-to-1 replacement of low -and -moderate income housing upon closing
and converting to another residential use.
Los Gatos is a wealthy Town and voters have demonstrated their willingness to absorb
low-income housing by their 60% approval of Measure K in the Novemeber 3 elections. The
Council should combine these two factors and create a more equitable plan for the provision of
low-cost housing. Upon conversion, the park owners must already provide at least 10% of any
new housing to lower income residents. It only seems fair that the remaining 90% be provided
by the Town and its residents, especially since the Town, through its Draconian ordinances, has
rendered mobilehome parks repositories for low income housing for the past twelve years while
not requiring the same of other residential uses.
Sincerely,
Clovis M. and Gerald E. Mirassou
December 4, 1998
Honorable Town Council
Town of Los Gatos
Los Gatos, CA 95030
Dear Council Members,
t�t11c;C vl Ene
DEC 7 1998 •
TOWN MANAGER
1CC
PECE VE[
DE ,071998
SJ = ;�
TOWN OF SOS GATG=
>LANN1NG DEPARTMEN'
5
— 7
Attached for your consideration is my submittal to the Rental Advisory
Committee (RAC) regarding the 1-to-1 replacement clause proposed to be
added to the Mobilehome Park Conversion Ordinance. Although the content
and goal of my proposal is very similar to the RAC's proposal to you, I feel
my proposal is more comprehensive in that it speaks to both for -sale and
rental residential uses as replacement housing. I feel the wording of the
RAC's proposal would only cover for -sale housing. Furthermore, my
proposal actually codifies the owner's position so that all affected parties,
mobilehome owners, the Town of Los Gatos and the mobilehome park
owners, have a strong bargaining position.
I realize that this entire process will be a complex one in that all parties
involved have something at stake. The Town desires to conserve and create
low -and -moderate income housing, mobilehome owners are seeking equity
in replacement housing and/or relocation costs, and the mobilehome park
owner wants a fair -market price for his land. If the Conversion Ordinance is
approved by the Council as proposed, only the Town and mobilehome
owner have a position actually spelled out in the Ordinance. With the
addition of my proposal the mobilehome park owner also has a "legal"
position codified in the Conversion Ordinance. Thus, during the conversion
process all parties approach the bargaining table on a more even keel. I
believe this will facilitate negotiations in that all parties will begin with an
established, codified goal.
Sincerely,
Clovis and Gerry Mirassou
ATTACHMENT 3
November 2, 1998
To: Rental Advisory Committee
From: Gerry Mirassou
At its October 5 meeting the Town Council considered the 1-to-1
replacement amendment to the Mobile Home Conversion Ordinance and voted to
refer the matter back to the RAC for consideration. After considerable testimony
from the public and discussion amongst Council members, the Council still did not
feel comfortable that the proposed amendment was adequate as to fairness or
implementation. The main reason the amendment was sent back to the RAC was
due to presentations by Bill Krause and Bill Erico indicating RAC's willingness to
deal with the ordinance in a more specific manner.
I have attended all the meetings with the GP Committee, the Planning
Commission and the Town Council regarding this amendment (since the July 6
RAC meeting), and I feel the major concerns voiced are as follows:
1. Fairness of 1-to-1 requirement placing burden on two property owners
for providing low and moderate income housing.
2. Keeping affordable housing within the parks rather than dispersing.
3. Providing public monies to update infrastructure in the park and maintain
the sites as mobile home parks.
4. Resident concerns of losing their sense of community upon park closure
and not being able to find affordable replacement housing in LG.
5. Owner concerns of realizing fair market value for their property.
6. Council concerns of reaching a solution/compromise that keeps
affordable housing in the town while accomplishing all of the above.
It is my contention that implementation measures for this proposed
ordinance amendment must be addressed. In its discussion the Council
recognized the necessity of some type of partnership amongst the Town, the
owners and the residents so the 1-to-1 issue can be dealt with fairly. In
essence, this is a business deal, and much investigation and negotiation must
take place before 1-to-1 can be effectuated. To insure that the owner's
position is secured I recommend that another finding should be added to
Section 29.20.820 as follows:
(13) If the proposed conversion is to another residential use, whether the
mobile home park owner receives a fair and equitable return on
his investment based on the current fair market value of owner's land
and a reasonable rate of return on that land value.
With this finding in place the concerns of all parties are addressed and it is
now incumbent upon all parties (Town, residents, owners) to negotiate their
side as it would be in any business deal.
From, Bill Kraus To: Regina Fagvier
Date: 12J1&90 Time: 12:52:10 Page 2 of 9
WILLIAM R. KRAUS
484 Woodland Ave., No. 1 7, Los Gatos, CA 95032
Tel.: (408)354-2656 Fax: (408)395-5022
DATE: December 15, 1998 Page 1 of 2
TO Town Council
Town of Los Gatos
C: Lee Bowman, Planning Director, via fax to
408.354.7593
C: Regina Falkner, Community Development
Director, via fax 408.396.8640
SUBJECT: MH Park Conversion affordable housing units replacement concept
Dear Council:
This letter expands on RAC's recommendation to provide an alternative to the required one to one"
replacement of existing mobile home spaces with new affordable units. First an updated and expanded
example of that discussed by RAC is presented. This is followed by an outline of what the interested parties
give and get with the proposed alternative.
The following example helps clarify the opportunity the recommended concept (below named the "Alternative")
provides. NOTE: the specific numbers can be modified as the council deems appropriate.
EXAMPLE: A Mobile Home Park of one acre with 10 MH considered to be 10 units of very low to
moderate income ("affordable") housing is proposed to be converted. The current zoning density allows a
maximum of one unit per acre and the general plan indicates eight to nine units per acre. Fair market land
value is one million dollars per acre for eight units per acre. Town home construction costs are $95 per heated
sf for all costs (including site work and a garage) excluding developer and general construction fees. Note there
is a developer and a general construction project manager on RAC; so, these figures are based in reality. The
Alternative program includes fast -track Town review.
Scenario One: developer proposes a project at a density of eight units per acre without participation in the
Altemative program. Pricing is based on a calculated 22% developer and GC fee. Typically, the price of market
units would by higher than indicated. This extra revenue would be utilized by the developer to pay for the
developer proposal of one affordable housing unit and the balance would increase the developer's profitability.
The eight units in the project make replacement of the 10 affordable housing units impossible due to the
reduction in units. Even eight affordable units would require a substantial subsidy. This project may not be
approved by Council since it does not meet affordable housing guidelines and may have no other compelling
benefit for the Town.
Scenario Two: developer proposes a project at 15 units per acre with participation in the Alternative program.
The increased project density makes replacement of the affordable housing possible. Scenario Two utilizes
the sale of 5 units at a higher price to subsidize the sale of ten units as affordable housing.
Scenario Three: developer proposes a project at 15 units per acre with participation in the Alternative program
and the Town subsidizes the project. The affordable housing stock is increased as a result of the increased
density and subsidy.
General note: The units are illustrated as affordable housing purchase units. However, they could be sale or
rental units and the specifics of size, etc., could be modified to address the Town's needs.
LITACHMENT
�t-
From: Bin Kraus To: Regina Fallow
Date: 12r16f96 Time: 12:53:30
Page 3of3
Bill Kraus to Los Gatos Town Council, December 15, 1998
Page 2
Scenario
One
Two
Three
Land Value
$1,000,000
$1,000,000
$1,000,000
Project units/acre
8
15
15
Land value per unit portion of average sale price
(including developer's 11% fee)
$138,750
$74,000
$74,000
Construction cost per sf (developer & GC fees @+22%)
$116
$116
$116
Town home heated SF
1,350
1,350
1,350
Unit construction portion of sale price
$156,465
$156,465
$156,465
Unit average sale puce before subsidy
$295,215 +
$230,465
$230,465
Town subsidy per unit to create affordable housing
-
$0
$32,375
Average Sale Price After Subsidy
$295,215 +
$230,465
$198,090
Price of 5 units at Scenario One pricing
NA
$295,215 +
NA
Price of 10 units at Affordable Pricing
NA
$198,090
NA
Approximate price for affordable 3 BR, 2BA home
$200,000
Affordable housing units
1
10
15
AFFORDABLE HOUSING UNIT GAIN (LOSS)
(9)
0
5
What the interested parties give and get:
TOWN GETS
A. Affordable housing units are replaced or increased from numbers currently in the mobilehome
park. These units can be for sale or for rent units. To create rental units would require some
fine tuning
B. Updated housing stock.
II TOWN GIVES
A. Increased density to make desired number of affordable units an economic possibility
1. The negative of increased density must be weighed against the retention or increase
of a relatively large number of affordable housing units.
B. Fast track review of projects participating in program.
III. DEVELOPER GETS
A. Faster and more certain path to project completion (therefore less profit is required to justify
the project).
IV. DEVELOPER GIVES
A. Potential project windfall profits.
V. PARK OWNER GETS
A. Reasonable land value or rental cash flow.
B. Faster and more certain path to project completion.
VI. PARK OWNER GIVES
A. No increase in profit due to higher project density.
In conclusion, the Alternative program could be used to maintain or increase a significant portion of the Town's
affordable housing stock at the cost of a small density increase. Projects like this could help provide housing
for others as the mobilehome park did for me. Namely, allow a recent college grad to transition from his
parents' Los Gatos home to affordable housing in the Town. I'm sure we all agree that affordable housing for
our children and seniors is a priority
Sincerely,
Bill Kraus
The 1985 Housing Element provided the following:
3.3 Issues: 7. Mobile Home Parks:
Mobile home parks provide needed affordable housing for seniors and others in the
community. Multi -family residential zoning on the property encourages the owner to
redevelop the property to expensive condominiums and townhouses.
How can the Town preserve its existing mobile home parks?
3.5 Policies: 19. The Town shall develop special zoning tools to preserve the status quo at the
mobile home parks.
3.6 Implementation: 9. Mobile Home Zone:
The Town shall develop a mobile home zone for the existing mobile home
parks to protect the existing affordable high density housing at these sites,
to recognize the status quo, and to prevent change of use.
Responsible Agency: Planning Commission: Planning
Department: Town Attorney
Schedule: 1985-1986
The RMH or Mobile Home Residential Zone was added by Ordinance 1667, 12/2/85
10. Relocation Assistance:
The Town shall develop an ordinance requiring relocation assistance for
any mobile home tenant displaced by actions of the mobile home park
owner.
Responsible Agency: Planning Commission: Planning
Department: Town Attorney
Schedule: 1985-1986
The Town's Mobile Home Conversion Ordinance was added by Ord. 1758, 8/1/88
11. Safety Standards:
The Town shall develop and enforce safety standards (fire, earthquake and
flood) for mobile home parks.
Responsible Agency: Town Council: Building Department: Town
Attorney
Schedule: 1985-1986
1
ATTACHMENT 5
The 1991 Housing Element provided the following:
3.3 Issues: 8. Mobile Home Parks:
Mobile home parks provide needed affordable housing for seniors and others in
the community.
How can the Town preserve the affordable housing provided by the existing
mobile home parks?
3.5 Policies: 19. The Town shall discourage the conversion of mobile home parks into other
uses that would reduce the availability of comparably priced housing units.
3.6 Implementation: 8. Mobile Home Zone:
a. The Town shall maintain a mobile home zone for the existing mobile
home parks to protect the existing affordable high density housing at these
sites, to recognize the status quo, and to prevent change of use.
b. The Town shall require that any proposal to convert a mobile home
park to a residential development shall provide at least as many low cost
housing units as could be accomodated within the existing parks' capacity.
c. The Town shall maintain an ordinance requiring relocation assistance
for any mobile home tenant displaced by actions of the mobile home park
owner.
d. The Town shall develop and enforce safety standards (fire, earthquake
and flood) for mobile home parks.
Responsible Agency: Planning Commission; Planning Department
Schedule: Ongoing
2
The 1997 Housing Element provides the following:
3.2 Issues: 4. Conservation of Existing Housing Stock:
The existing housing stock needs to continue to be protected, especially those
units that may provide affordable housing at market rates; for example, mobile
home parks. Further, rental units and units of modest size should also be
protected as much as feasible. Therefore, the Town should review the revisions
recommended in the 1996 Housing Element Technical Appendix in regard to the
following ordinances: Condominium Conversion Ordinance, Mobile Home Park
Ordinance Revisions and the development of a Residential Demolition Ordinance.
3.4 Policies: 10. The Town shall discourage the conversion of mobile home parks into
other uses that would reduce the availability of comparably priced housing units.
3.5 Implementation: 10. Mobile Home Park Ordinance:
The Town will continue to administer the Mobile Home Park
Ordinance and will revise the Ordinance to specify that any
proposal to convert a mobile home park to a residential
development shall provide at least as many low cost housing units
as could be accommodated within the existing park's capacity.
Time Frame: 1997-1998 (Evaluate and Revise Ordinance)
Responsible Party: Town Planning Department
3
(L) The availability and cost of alternate housing of comparable size
and quality in the Town.
Fifteen mobilehomes are occupied by mobilehome owners. Eight of these
households own the mobilehomes free and clear; seven are making payments to
institutional lenders or to prior owners.
Twelve of the fifteen households are comprised of just one or two persons.
One household has two school age children; two others have one school age child.
One household is a multi -generation family: grandparents, parents, and school age
child.
Five households are retired or without current employment income. Seven current
residents, living in six households, are over the age of 62. Several older residents
are in poor health.
Most of the other residents are in their late 30s, or 40s and 50s. They work as nurse
or technician at a hospital, or are self-employed in their own businesses, engineer or
system analyst, sales representative, restaurant maintenance employee, bartender,
computer graphics illustrator, court clerk. Only one person is employed full-time in
Los Gatos; two or three others work part-time jobs in Los Gatos.
Several homeowners are Tong time residents of Los Gatos. All prefer to remain in
Los Gatos, Campbell, or the immediate area because of the lifestyle, jobs, family, or
medical care.
Of the fifteen households that own and reside in their own mobilehomes, nine (9)
report their household income to be in the very low income category; four (4) are
lower income; and one (1) has a moderate income.6
Table 11: Current Income Guidelines
Determined by U.S. Dept. of Housing and Urban Development
For Santa Clara County
Effective January 7, 1998
Very Low Lower Median Moderate
Income Income Income
Income
$27,000 $32,200 $54,050 $64,850
30,900
36,800 61,750 74,100
34,750 41,400 69,500 83,400
38,600 46,000 77,200 92,650
41,700 49,700 83,400 100,050
44,800 53,350 89,550 107,450
47,850 57,050 95,750 114,450
50, 950 60,700 101,900 122,300
6 Incomes as approximated by homeowners were not verified.
Los Gatos Mobile Home Park Closure Impact Report - Page 36 - FINAL DRAFT
ATTACHMENT 6
Town Council Minutes December 21, 1998
Redevelopment Agency Los Gatos, California
TOWN'S DEFERRED COMPENSATION PLAN/RESOLUTION 1998-203 (08B.14)
TERMINATION OF SERVICES PROVIDED BY WASHINGTON MUTUAL BANK
Motion by Mr. Blanton, seconded by Mrs. Lubeck, that Council adopt Resolution 1998-203
entitled, RESOLUTION OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN
MANAGER TO TERMINATE. AS SOON AS PRACTICAL IN 1999. THE DEFERRED
COMPENSATION ADMINISTRATION AGREEMENT WITH WASHINGTON MUTUAL BANK.
Carried unanimously.
SPECIAL EVENTS LIABILITY INSURANCE/RESOLUTION 1998-204 (09.14)
Motion by Mr. Blanton, seconded by Mrs. Lubeck, that Council adopt Resolution 1998-204
entitled, RESOLUTION OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN
MANAGER TO EXECUTE AN APPLICATION WITH ROBERT F. DRIVER CO.. INC. TO
PROVIDE SPECIAL EVENTS LIABILITY INSURANCE. Carried unanimously.
JOINT TOWN COUNCIL/REDEVELOPMENT AGENCY ACTION
LOS GATOS REDEVELOPMENT AGENCY ANNUAL REPORT/RESOLUTION 1998-205 (10.49)
Motion by Mr. Blanton, seconded by Mrs. Lubeck, that Council adopt Resolution 1998-205
entitled, RESOLUTION OF THE TOWN OF LOS GATOS APPROVING THE 1997-98 ANNUAL
REPORT FOR THE LOS GATOS REDEVELOPMENT AGENCY. Carried unanimously.
MINUTES OF JOINT STUDY MEETING/MOBILE HOME PARK/DECEMBER 7, 1998 (11.V)
Motion by Mr. Blanton, seconded by Mrs. Lubeck, that Council approve the Minutes as
submitted of Special Called Meeting to discuss Mobile Home Park Conversions held on
December 7, 1998. Carried unanimously.
HEARINGS
MOBILE HOME PARK CONVERSION/APPLICATION FINDINGS/PUBLIC HEARING (12.46)
Consider amending Town Code Section 29.20.820 regarding Mobile Home Park Conversion,
"Findings Upon Consideration of Application," to implement Housing Element Section 3.5.10 of
the General Plan, Zoning Code Amendment A-98-03. Applicant: Town of Los Gatos.
Council comments:
To fairly treat the residents .of mobile home parks, and to also recognize the property rights of
land owners. Ordinance should be fair to all parties involved. Council's roll is to do what is best
for the Town. Tonight's hearing is not on the closure, and its not on the economics. The
hearing is on whether or not to add a paragraph and two sentences having to do with findings.
The following people from the audience spoke to this issue:
Jack Jones, 484 Woodland Ave. #45, asked for a list of considerations to be added to the
closure report and submitted them to the Planning Director.
Jerry Mirassou, Bonnie View Mobile Home Park owner, asked for a fair ordinance, and spoke
of alternative addendums that would allow some mobility to the issue. He discussed conversion
options that might be allowed.
TC:D10:MM122198
Town Council Minutes December 21, 1998
Redevelopment Agency Los Gatos, California
HEARINGS CONTINUED
MOBILE HOME PARK CONVERSION/CONT.
Council comments:
The General Plan requires a one to one replacement requirement at this time. That would have
to be changed before anything else could be considered. Within the context of the current
ordinance and the amendments suggested, the Council is given as much discretion as possible
to take into account all the parties involved when a mobile home park conversion is proposed.
Speakers continued:
Vikki Ricktenwald, 484 Woodland Ave, #25, approved the proposed amendments, and noted that
there were insufficient units to move the present mobile home park dwellers to if there is
closure.
Rosemary Bittmann, 108 Villa Ave, asked Council to protect existing low income housing in
Town.
Bill Kraus, 484 Woodland Ave #17, member of the Rent Advisory Committee, spoke of the
work of the committee involving the conclusions found in the Rental Ordinance. Spoke of 10
to 15 units per acre that would allow some development, and some consideration for moderate
income housing. Supported a one to one replacement ratio.
Geoff Lamb, 58 Chester, asked for one to one ratio both on site and off site for maximum
flexibility.
No one else from the audience addressed this issue.
Motion by Mr. Pirzynski, seconded by Mr. Attaway, to close the public hearing. Carried
unanimously.
Motion by Mr. Attaway, seconded by Mr. Pirzynski, that Council find that the amendment is
consistent with the General Plan. Carried unanimously.
The Town Clerk read the Title of the Proposed Ordinance.
Motion by Mrs. Lubeck, seconded by Mr. Attaway, to waive the reading of the Proposed
Ordinance. Carried unanimously.
Motion by Mrs. Lubeck, seconded by Mr. Attaway, that Council introduce Draft Ordinance
entitled, ORDINANCE OF THE TOWN OF LOS GATOS AMENDING TOWN CODE
SECTIONS 29.20.805. 29.20.807. AND 29.20.820 REGARDING MOBILE HOME PARK
CONVERSION. "FINDINGS UPON CONSIDERATION OF APPLICATION." TO IMPLEMENT
HOUSING ELEMENT SECTION 3.5.10 OF THE GENERAL PLAN. Carried unanimously.
Mr. Attaway, spoke for the record stating that he is not in support of an increase in density but
believes in protecting the quality of life.
Mr. Pirzynski noted that the ordinance is as clear as it can be with flexibility built in and he
invited interested parties to return and continue discussion when this issue is scheduled again.
TC:D10:MM122198
4