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Minutes 1986-03-12 SP ~ CITY COUNCIL MARCH 12, 1986 ARROYO GRANDE, CALIFORNIA 1:00 P.M. The City Council met in a study session which was continued from the re- 9ular meetin9 of March 11, 1986. Mayor B'Ann Smith presided. Also present were Council Members Matthew Gallagher, Dorace Johnson and Gene Moots. Mayor Smith said that the meeting would be a study session on Mobile Home Rent Stabilization, and that the Council would be listening to information, but making no decisions. The Council received documents, including letters and sample leases from park owners and tenants. Seated at the staff table were Morris Levin of Hacienda Del Pismo, Bernie Burke of Sunrise Terrace, M. J. Waggoner of the Arroyo Trailer Mobile Home Park, Craig Amspoker of Los Osos, and Albert St. Peter of Sunrise Terrace, all of whom had been invited by the Council to participate in the meeting. Mayor Smith invited members of the public to speak. MELVIN JOHNSON of Los Osos, owner of Vagabond Mobile Home Park in Arroyo Grande, said mobile home parks have a right to appreciate and that it is a "no win" situation if the value of parks does not stay in relationship to other real estate. He said rent control is totally inconsistant with what is going on with everything else. COUNCIL MEMBER D.G. PORTER ENTERED THE MEETING AT 1:20 P.M. BERNIE BURKE of Sunrise Terrace referred to letters submitted by the committee representing the mobile home owners in Sunrise park, a letter from Harry Fischer, president of Golden State Mobile Owners League, and letters from Mr. Flack and Mr. St. Peter. Mr. Burke said that on February 26, 1986, the United States Supreme Court handed down an 8 to 1 decision saying that Rent Control was found to be legal. He said if there were no need for Rent Control, why have 67 communities in the state adopted it? MAURY LEVIN of Hacienda Del Pismo said that in the case of Rent Control the Supreme Court had found that the welfare of the citizen takes presidence over free enterprise. He gave a history of Rent Control in Pismo Beach, listed the items in a typical mobile home lease and presented a model lease agreement to be entered into the record. He said a Rent Control ordinance is necessary to force the owners to sit down and negotiate with the tenants. MR. ST. PETER referred to his letter titled "Brief Background Information on the Bases for Rent Stabilization" to be entered into the record. He said an Ordinance is needed to equalize the negotiating positions. MR. PACKARD, who lives in Duna Vista Mobile Home Park in Oceano, listed the materials he brought to the Council. He said he had letters from some tenants of mobile home parks who were, he believed, threatened and intimidated by park owners. MR. FLACK said the sale price of Sunrise Terrace park is $8 million with a profit of $551,484.00. He said that is a much too high a selling price. He said that basing rent increases on market values have not been upheld in California. MR. AMSPOKER said it is obvious that an ordinance is needed in Arroyo Grande. He said he hoped the Pismo Beach ordinance would be used as a basis, and that Mr. Levin would be consulted. MR. PACKARD said Rent Stabilization should come first and then the leases. CHUCK HUGHES of the Western Mobilehome Association, said most of the testimony given applies to rumor and speculation, and that although 67 communities have Rent Control only one has passed it lately. He read from a City of Antioch ordinance, and said this shows it is not necessary to pass Rent Control to negiotiate leases. He gave other examples where leases were negiotated. He said the resale of parks should be like the resale of homes, based on comparable rents and replacement value. He said Rent Control becomes costly and time-comsuming for government agencies, citing as examples the City and County of San Luis Obispo. JOHN CUMMINGS of Newport Beach, new owner of Sunrise Terrace Mobile Home Park, said he would be accessible to park tenants and gave his telephone ~- C!TY COUNC I L MAR CH 12, 1986 ARROYO GRANDE, CALIFORNIA PAGE TWO number in Newport Beach - 1-714-752-5181. He said he would not be a passive owner, and that every resident in the park will have a 10n9-term lease of five years or more. JANE PERINI asked Mr. Cummin9s if it were true that rents would increase $75.00. Mr. Cummings said he would sit down and talk about it. He said he likes the elements in the lease presented by Mr. Levin. MR. FISHER said he was told that the tenants in Sunrise park would be offered non-negotiable leases. MR. LEVIN asked the Council to act before January, 1987, when the long-term leases at Sunrise Terrace are due to expire. ADELLE RAYMOND of Chumash Park in San Luis Obispo said there are 100 mobile home parks in San Luis Obispo County and only two of those owners actually live in the County. She said the Rent Control ordinance has worked in San Luis Obispo. MR. HUGHES said in the mediation process what has to be done is to isolate the issues between the two parties concerned. MR. ST. PETER said Measure "A" is arranged badly, and that owners are using "harship relief" as an excuse for raising rents. He said some tenants cannot sign long-term leases so the Rent Control is still needed. Mayor Smith asked in general how many people are on a Rent Control Review Board, and Mr. Levin said that in Pismo Beach there are two owners and two tenants. He said the boards should be small. MADELINE BURKE of Sunrise Terrace said that all the facts and figures presented by the Committee representing tenants at the park were researched and are true. Council Member Porter asked why all tenants would not want long-term leases. Mr. Levin said some tenants might not want to be tied up for a long period of time. Mr. St. Peter said it is the law of the state that a tenant must be offered a month to month or yearly lease. Mr. Burke said the Sunrise Terrace lease is up to five yea~ but could be month to month, one or two years, or five years. Council Member Gallagher asked if leases were assumable and Mr. Burke answered yes. Council Member Johnson asked if the rent rate was the same, and Mr. Burke answered yes. Mr. Levin said that in all leases certain state laws must be followed. He presented the Council with a copy of the state "Mobile Home Residency Law." CHARLENE HALL of Oceano said that in our County a Rent Stabilization Fund was set aside to cover the expenses of the Review Board. DON DURANT of Rancho Del Arroyo, whose realty company is handling the Sunrise Terrace sale, suggested that the council allow park owners and tenants to work out an equitable lease agreement before considering rent control. Mayor Smith asked City Manager Robert Mack to research the costs of Rent Stabilization Review Boards and Committees. She also asked that the subject of Rent Stabilization be put on the agenda of April 8, 1986. The meeting was adjourned at 2:50 P.M. MAYOR ATTEST: