Item 31 Staff Report Consider Introducing Ordinance Amending the Los Gatos Town Code Section 14.85.025, Mobile Home Rental and Other Tenant/Landlord DisputesDATE:
TO:
FROM:
MEETING DATE: 11-06-00
ITEM NO.
COUNCIL AGENDA REPORT
November 1, 2000
MAYOR AND TO
TOWN MAN
SUBJECT: CONSIDER I'N-T`RODUCING ORDINANCE AMENDING THE LOS GATOS TOWN CODE
SECTION 14.85.025, MOBILE HOME RENTAL AND OTHER TENANT/ LANDLORD
DISPUTES
RECOMMENDATION:
That Council:
1. Direct the Town Clerk to read the title.
2. Waive the reading.
3. Introduce the Ordinance amending the Los Gatos Town Code Section 14.85.025, Mobile Home Rental
and Other Tenant/Landlord Disputes); and, instruct the Town Clerk to publish a summary no more
than five (5) days prior to adoption.
BACKGROUND:
The Rent Advisory Committee (RAC) recommends changes to the vacancy control formula described in the Town Code.
The formula limits the space rent increases that can be charged to mobile home buyers.
When considering a mobile home purchase, buyers evaluate total housing costs including home purchase price
(mortgage) and monthly space rent. If the rent is low, buyers are generally willing to pay more for the home. The RAC
has held several meetings over the past year to achieve consensus on a new vacancy control formula. At its October 24
meeting, the Committee approved a revised formula.
DISCUSSION:
Mobile Home Parks throughout the County have seen a sharp increase in sales prices. The mobile home space rent
increase limits allow more of the land value to be transferred to the seller at resale. The RAC proposes Town Code
changes to more equitably compensate the park owners and home seller when homes are sold or when new homes are
installed.
Section 14.85.025(c)
The Code places no restrictions on initial rents when homes are purchased by dealers or under other certain conditions.
The RAC recommends that rents not be restricted when real estate brokers/agents purchase and replace the home since
these purchases are done for profit at resale. After a buyer's starting rent is established, it is subject to the Town's rent
increase restrictions.
Section 14.85.025(d)
The proposed formula would require that rents for mobile home buyers be calculated annually for sales in the following
PREPARED BY: Regina A. Falkne
Community Serviirector N:\csd\tcrpts\1485025.rpt
Reviewed by: Attorney
Reformatted: 7/14/99
Revised: 11/1/00 3:17 PM
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: CONSIDER INTRODUCING ORDINANCE AMENDING THE LOS GATOS TOWN CODE,
SECTION 14.85.025 MOBILE HOME RENTAL AND OTHER TENANT/ LANDLORD
DISPUTES
November 1, 2000
year. Although exact market value is difficult to determine, there is general agreement among RAC members that rents
under this formula will be less than market in every case.
Section 14.85.025(e)
In cases where mobile homes are replaced by park residents, the RAC recommends allowing rents to be raised $100 over
the cap calculated in Section (d) when the home is sold. Thereafter, rents would be subject to annual increase limits.
ENVIRONMENTAL ASSESSMENT:
The recommended action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The recommended action has no fiscal impact.
Attachments:
1. Draft Ordinance amending the Los Gatos Town Code, Section 14.85.025.
2. September 27, 2000, Memo from Bonnie View Mobile Home Park Owner Gerry Mirassou
Distribution:
Rent Advisory Committee
Ann Marquart, Executive Director, Project Sentinel, 430 Sherman Avenue #308, Palo Alto, CA 94306
Doug Johnson, WMA Regional Rep, WMA N. Calif. & Bay Area Reg. Off., 1622 14th St., Sacramento, CA 95814
Jack Cole, 14685 Oka Road #53, Los Gatos, CA 95030
Clovis M. Mirassou, 5496 Amby Drive, San Jose, CA 95124
Catherine Sprague, 14685 Oka Road #55, Los Gatos, CA 95030
Franklin and Wilma Jones, 14685 Oka Road #57, Los Gatos, CA 95030
Clovis T. and Ann Mirassou, 147 Old Orchard Drive, Los Gatos, CA 95032
Jim Grant, 14685 Oka Road #2, Los Gatos, CA 95030
Michele Martin, 14685 Oka Road #34, Los Gatos, CA 95030
Attachment 1
ORDINANCE
ORDINANCE AMENDING THE LOS GATOS TOWN CODE CHAPTER 14, ARTICLE
VIII.V., MOBILE HOME RENTAL AND OTHER TENANT/LANDLORD DISPUTES
(SECTION 14.85.025)
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY ORDAIN:
SECTION I
Section 14.85.025 of the Town Code is hereby amended to read as follows:
Sec. 14.85.025. Exceptions to article provisions; partial vacancy decontrol.
The provisions of this article shall not apply to the following:
(a) Space rent or space rent increases during a thirty -day period commencing upon
the completion of a new mobile home space or mobile home space first rented
after December 1, 1992.
(b) Nothing in this article shall operate to restrict the rights of tenants and owners
who have entered into agreements providing for a fixed term and/or a fixed rent
for mobile home tenancies, beyond a twelve-month duration.
(c) Nothing in this article shall operate to restrict the rents charged by owner in the
case of voluntary termination, abandonment of a mobile home in place, removal
as a result of dealer or real estate broker/agent pull out, eviction, or sale of a
mobile home owned by the mobile home park owner.
(d) In the case of an in -place sale of a mobile home, the initial space rent to be
CSDO8A:1ordsics 110600.000
charged the new mobile home tenant may be increased as follows. to an
as thc last space iei .
a mobile heinc owncd by tilt.,, park-uv ner orac,ant-spac s, thc space rust-mlhcrll-ln,
deemed -to
homes.
Year
Rents raised to the greater of the two alternatives,
2000
$488 or seller's rent + $25
2001
$488 + CPI rent increase or seller's rent + $25
2002
$488 + 2001 CPI rent increase + 2002 CPI rent increase or
seller's rent + $25
CPI rent increase is calculated by applying the annual CPI rent increase to the
$488. The CPI rate is per the data most recently available when calculated. The
CPI increase applied in this table will be for each year from 2001 to the current
year.
Increases for subsequent years are calculated in the same manner. Increases are
calculated in October of each year.
(e) In all cases when a mobile home is replaced, except as stated in (c), above, the
rent upon the first resale following replacement will increase $100.00 over the
rent calculated in (d) in the year the sale occurs.
CSD08A:\ords\cs 110600.000
SECTION II
This ordinance was introduced at a regular meeting of the Town Council of the Town of
Los Gatos on November 6, 2000, and adopted by the following vote as an ordinance of the Town
of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on
This ordinance takes effect thirty (30) days after it is adopted.
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
CSDO8A:1ords\cs 110600.000
SEP 2 8 100D
Attachment 2
To: RAC Committee Members
Jack Cole
Date: September 27, 2000
From: Gerry Mirassou
Re: Proposed modifications to "vacancy control" provisions in Mobile Home
Ordinance.
Based on the following Clovis and I feel the "Vacancy Control" amendment
approved by RAC at its September meeting needs to be restructured:
1. There have been significant changes in the structure and dollar amounts of
sales within Bonnie View Park. The demand for housing in Los Gatos has escalated the
prices of mobile homes in our park at a much more rapid pace than we had anticipated.
Since we last met, a new buyer purchased a mobile home ($110,000), removed it from
the space and brought in a new mobile home that cost $110,000 with improvements —a
total cost of $220,000. The space rent could only be raised $25. As another example, a
mobile home purchased five months ago for $76,000 just resold for $95,000. Once again,
the space rent could only be raised $25. Dealers are making offers to mobile home
owners for $70,000 for our smallest mobile homes, so they can take them off the space,
bring in a new mobile home and sell the new home for a substantial profit since we can
only raise rents $25. Mobile home owners have admitted selling their mobile homes for
the profit, because they know the mobile home park owner can only raise rents $25 to the
new buyer.
The extreme price increases appear to be benefiting existing mobile home owners and
dealers to a far greater degree than park owners. Low rents upon the "in place" sale of a
mobile home are pushing up prices and creating an environment for profiteering. As you
can see from Table 1, the RAC approved "vacancy control" measure will do little to alter
this trend. At best, the new ordinance provides only a $19 increase over the existing
ordinance whereas in 40% of the cases rent raises would be less than the existing
ordinance allows.
2. Upon analyzing Bill Krause's proposal, we find it does not provide park owners the
gains we were seeking when compared to the previous analyses presented to the RAC
over the last year. My previous presentations started the new "vacancy control" at $50
over median, or $488, in the year 2000 not 2001. This makes a substantial difference as
you can see when comparing Tables 1 and 2. Furthermore, we protected the seller of a
mobile home by using a hard number ($488) rather than a formula (such as median) as a
benchmark for figuring the rent to a new buyer, but this does not protect the mobile home
park owner. For instance, should we sell one of our park -owned mobile homes and place
Page 1 of 3
the new rent at $650, the new buyer can turn around and resell the mobile home at a new
rent of $488.
To remedy this situation we propose changes to the "Vacancy Control" clause of the
Mobile Home Ordinance that provide for the following: (1) It does not impact those
residents who remain in the Park. (2) It protects the mobile home seller from inordinate
rents increases to the new buyer and the mobile home park owner from decreases in the
new rent to a buyer upon resale. (3) Fair "vacancy control" increases that would not
drastically impact sales prices (the greatest difference in rent increase from the existing
ordinance to what I propose would be $42). (4) Discourages profiteering by dealers/real
estate agents and new buyers who merely buy and sell for a profit rather than to live in
the Park.
We have prepared two tables comparing the impact on new rents. Table 1 is what was
approved at the September RAC meeting and Table 2 is what I now propose. The second
column in both Tables represents in actuality what rents will be at Bonnie View Park for
the year 2001.
The following are the changes in the ordinance we propose.
Sec. 14.85.025. Exceptions to article provisions: vacancy decontrol
(c) Nothing in this article shall operate to restrict the rents charged by owner in the case
of voluntary termination, abandonment of a mobile home in place, removal as a result of
dealer or real estate broker/agent pull out, eviction, or sale of a mobile home owned by
the park owner.
(d) In the case of an in -place sale of a mobile home, the initial space rent to be charged
the new mobile home tenant may be increased to $488 in the year 2000 or $25 over the
existing rent, whichever results in the higher rent For each succeeding year after the
year 2000 the initial space rent to be charged the new mobile home tenant may be
increased to the previous years allowable rent increase plus the existing year's annual
rent increase, or $25 over the existing rent, whichever result in the higher rent 1n the
case of a new or previously owned mobile home placed on a space by a new or existing
tenant and subsequently sold, upon resale the new rent will be $125 over the existing
rent
Page 2 of 3
TABLE 1
RAC APPR( )
(cpi of 4.7%)
bvp 2001
rents
399.91
4 399.91
32 407.08
62 407.65
4 469.06
29 411.91
44 415.82
57 19.75
45 :1.62
5 41.92
67 43 .71
41 437 :2
37 440.
38 440.1
30 444.6
24 450.41
14 451.01
9 456.86
13 456.86
53 456.97
39 457.78
48 457.78
26 459.45
40 459.56
50 459.57
11 459.72
15 459.72
35 459.72
61 459.72
64 460.28
59 463.22
66 467.18
49 469.53
8 469.53
20 469.91
42 478.89
55 479.85
58 483.16
75 485.17
73 486.46
22 489.18
17 490.47
3 493.64
7 494.21
54 495.92
68 497.27
60 497.32
51 498.37
74 502.3
56 507.
34 513. 8
43 52 50
52 52'.98
2 5 .49
total bvp
total Igmhp
total both parks
mean both parks
page 3of3
25, 13.08
8 73.81
3 ,286.89
468.83
rent raise
existing
rent raise
RAC 9/4
differenc
468.83 488.00 19.1
468.83 488.00 19
468.83 488.00 19 7
468.83 488.00 1 • .17
468.83 488.00 1:.17
468.83 488.00 9.17
468.83 488.00 9.17
468.83 488.00 19.17
468.83 488.00 19.17
468.83 488.00 19.17
468.83 488.00 19.17
468.83 488.00 19.17
468.83 488.00 19.17
468.83 488.00 19.17
469.66 488.00 18.34
475.41 488.00 12.59
476.01 488.0 f 11.99
481.86 488. i * 6.14
481.86 488. J 0 6.14
81.97 488 .0 6.03
82.78 48 r .00 5.22
4'2.78 4::.00 5.22
4: + .45 4.8.00 3.55
4: 56 :8.00 3.44
484. • 7 88.00 3.43
484. • 488.00 3.28
484.7. 488.00 3.28
484.72 488.00 3.28
484.72 488.00 3.28
485.28 488.00 2.72
488.22 488.00 (0.22)
492.18 488.00 (4.18)
494.5 88.00 (6.53)
494. 88.00 (6.53)
494.'-1 4.8.00 (6.91)
503:9 4::.00 (15.89)
50 .85 48: 00 (16.85)
5. :.16 488.10 (20.16)
5 0.17 488.1 i (22.17)
1.46 488.0 k (23.46)
14.18 488.00 (26.18)
515.47 488.00 (27.47)
518.64 488.00 (30.64)
519.21 488.00 (31.21)
520.92 488.00 (32.92)
522.27 488.00 (34.27)
522.32 488.00 34.32)
523.37 488.00 t 5.37)
527.31 488.00 (• . 31)
532.74 488.00 ( .74)
538.18 488.00 (50 18)
548.50 488.00 (60. 0)
550.98 488.00 (62.9
552.49 488.00 (64.4
TABLE 2
JEW PROPOSAL
(cpi yr 4.7%)
6.
bvp 2001
rents
rent raise
existing
rent raise
proposed
0.
difference
1 399.91 468.83 511.00 42.17
47 399.91 468.83 511.00 42.17
32 407.08 468.83 511.00 42.17
62 407.65 468.83 511.00 42.17
4 469.06 468.83 511.00 42.17
29 411.91 468.83 511.00 42.17
44 415.82 468.83 511.00 42.17
57 419.75 468.83 511.00 42.17
45 481.62 468.83 511.00 42.17
5 430.92 468.83 511.00 42.17
67 431.71 468.83 511.00 42.17
41 437.82 468.83 511.00 42.17
37 440.19 468.83 511.00 42.17
38 440.19 468.83 511.00 42.17
30 444.66 469.66 511.00 41.34
24 450.41 475.41 511.00 35.59
14 451.01 476.01 511.00 34.99
9 456.86 481.86 511.00 29.14
13 456.86 481.86 511.00 29.14
53 456.97 481.97 511.00 29.03
39 457.78 482.78 511.00 28.22
48 457.78 482.78 511.00 28.22
26 459.45 484.45 511.00 26.55
40 459.56 484.56 511.00 26.44
50 459.57 484.57 511.00 26.43
11 459.72 484.72 511.00 26.28
15 459.72 484.72 511.00 26.28
35 459.72 484.72 511.00 26.28
61 459.72 484.72 511.00 26.28
64 460.28 485.28 511.00 25.72
59 463.22 488.22 511.00 22.78
66 467.18 492.18 511.00 18.82
49 469.53 494.53 511.00 16.47
8 469.53 494.53 511.00 16.47
20 469.91 494.91 511.00 16.09
42 478.89 503.89 511.00 7.11
55 479.85 504.85 511.00 6.15
58 483.16 508.16 511.00 2.84
75 485.17 510.17 511.00 0.83
73 486.46 511.46 511.46
22 489.18 514.18 514.18
17 490.47 515.47 515.47
3 493.64 518.64 518.64
7 494.21 519.21 519.21
54 495.92 520.92 520.92
68 497.27 522.27 522.27
60 497.32 522.32 522.32
51 498.37 523.37 523.37
74 502.31 527.31 527.31
56 507.74 532.74 532.74
34 513.18 538.18 538.18
43 523.50 548.50 548.50
52 525.98 550.98 550.98
2 527.49 552.49 552.49
25,113.08
8,173.81
33,286.89
468.83
Town Council Minutes November 6, 2000
Redevelopment Agency Los Gatos, California
TOWN CLERK/AGREEMENT OF COMPENSATION WITH THE TOWN (30.29)
This item has been pulled from this agenda and will be considered at the November 20, 2000 Council
meeting.
MOBILE HOME RENTAL/TENANT LANDLORD DISPUTES/ORDINANCE INTRO (31.39)
The following person spoke on this issue:
Gerry Mirassou, 14685 Oka Road, co-owner of Bonnie View Mobile Home Park, spoke of the
work done by the Rental Advisory Committee this last year. He spoke of compromise and
amendments, including those of the owners of the parks, the owners of the mobile homes and the
tenant residents.
The Town Clerk read the Title of the Proposed Ordinance.
Motion by Mr. Attaway, seconded by Mr. Pirzynski, to waive the reading of the Proposed
Ordinance. Carried unanimously.
Motion by Mr. Attaway, seconded by Mr. Pirzynski, that Council introduce the Proposed Ordinance
entitled, ORDINANCE OF THE TOWN OF LOS GATOS AMENDING THE LOS GATOS
TOWN CODE, CHAPTER 14,ARTICLE VIILV.i MOBILE HOME RENTAL AND OTHER
TENANT/LANDLORD DISPUTES (SECTION 14.85.025). Carried by a vote of 4 ayes. Mr.
Blanton abstained.
CAPITAL IMPROVEMENT FINANCING STRATEGIES/JOINT REPORT (32.09.V)
Council Comments:
Council requested a study session be set to discuss the proposed CIP goals. The study session to be
set at 6 p.m. on a night that there is no closed session agendized. That funding of these projects be
discussed, including long term debt financing. That staff offer timing sequences for carrying out
these projects to completion , and also show the feasibility of funding the proposals within a
reasonable period of time.
Council consensus to accept and file report on Redevelopment Agency and Town capital
improvement financing strategies.
COUNCIL REPORTS
Jan Hutchins noted the Museum Historic Home Tour, and that 8Pennsylvania Ave. was on the tour.
He felt that the Planning Commission and the Council had done well in holding to the commitment
of retaining the historic elements and charm of this home and that the result was an absolute gem.
Mayor's Meeting
Mayor Blanton noted items to discuss at the Council Workshop which had to do with Item 28 on
tonight's agenda concerning Planning Commission meetings and procedures.
ADJOURNMENT
Motion by Mr. Attaway, seconded by Mr. Hutchins, to adjourn this evening's meeting at 11:23
p.m. Carried unanimously.
ATTEST: Marian V. Cosgrove
TC: D11: MM 110600
11