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HomeMy WebLinkAboutCORRESPONDENCE - 65ACity Council Meeting Correspondence 5/21/2019 RECEIVE AND FILE RESPONSE TO REQUEST FOR INFORMATION ON MOBILE HOME PARKS G5A Date of Name Representative of In Favor In Opposition Comment Correspondence of RA'. of RA.* 1 5/20/2019 Ray Chances Yes 2 5/20/2019 Pedro Correa Santa Ana Resident Yes 3 5/21/2019 Danh Pham Kona Kai M.H.O.A. Yes 4 5/21/2019 Qui Vuong Bali Hi Resident on behalf of Yes fellow neighbors 5 5/21/2019 Cynthia Guerra on behalf The Kennedy Commission Yes of Cesar Covarrubias G 5/21/2019 Dao Tran Bali Hi Resident on behalf Yes various residents 7 5/21/2019 Bali Hi Home Owners Bali Hi Home Owners Yes Association Association 8 5/21/20'19 Julie Paula West Manufactured Housing Yes Communities Association 9 5/21/2019 San Diego Tax Payers San Diego Tax Payers Yes Advocate Advocate . 9 TOTAL: 9 *RA- Recommended Action Wednesday, June 19, 2.019 Page 1 of 1 Orozco, Norma From: Ray Chandos < Sent: Monday, May 20, 2019 11:40 AM To: eComment Subject: Bali Hai Mobile Home Space Rent Increase Categories: Correspondence Dear City Councilmember, The residents of Bali Hai whom you represent are mostly retired people on fixed incomes, but the exorbitant rent increases they are facing --far exceeding the consumer price index --will force them out of Bali Hai, and even into homelessness. Please use the legal discretion that you have, as outlined by the City Attorney and exercised by other cities, to help these Santa Ana citizens who simply want— --- -- to stay in their homes. Thank you. Ray Chandos I Orozco, Norma From: Pedro Correa < Sent: Monday, May 20, 2019 9:53 PM To: eComment Subject: Speaker addressing the Council. My name is Pedro Correa and I am 60 years old. I have been living in Bali Hi Mobil home park for almost 5 years. I am writing this on my own and nobody is coaching me or telling me what to say. I beg the Council members for help . The J @ H administration or the owner are increasing the rent. For some of my brothers and sisters in the park is going to be really hard or impossible to pay. Some may be force to leave the park Please help the older people to stay In their houses and stop the high Increase on rent. My wife and I moved at this park because we could afford the rent. In the future we do not know. I was laid off last February and I am looking for another job. I do not plan to retire anytime soon. I beg the Council members to please help and stop the abuse and harassment on the grandparents of Bali Hi. Thank you for your help. Sent from Yahoo Mail on Android N Orozco, Norma From: huynh trinh < Sent: Tuesday, May 21, 2019 7:30 AM To: eComment Subject: City Council May 21, 2019 - Item 65A - Help Us Stop Rent Abuse on the Elderly Attachments: City Council Letter 0521.pdf Dear Mayor and Council members; Enclosed is a letter asking for your help in stopping the excessive rent increase in Kona Kai mobile home park. Sincerely; Kona Kai Mobile Home Owner Association May 20 2019 To: The Mayor and City Council members of Santa Ana Re: item 65A - Help Us Stop Rent Exploitation of the Elderly Dear Mayor and Council members; The Kona Kai Mobile Home Owner Association (or Kona Kai M.H.OA) represents the majority of the 55 year or older resident owners who currently live in the mobile home park at 4117 W McFadden Ave, Santa Ana CA 92704. In May 2019, the rent increase for our residents is a whopping 6%, three time the US CPI On behalf of your elderly and frail senior residents, we are asking for: - a 6 months moratorium on the rent increase in our mobile home park or at least until the construction work in the park is completed - and that future increase on land rent be limited to 3% (or CPI) as in past 20 years. The owner / park manager justified the 6% increase in rent with upgrades to the park infrastructures, which was granted at minimal cost to park owner. The rent increase and the ongoing street digging, installation of gas and electric meters has brought an unfair deal, many inconveniences and stresses to the Kona Kai elderly residents, namely: 1) Stress - The excessive rent increase cause extreme stress to elderly and sick residents, some of them live alone and rely on meager social security monthly check. It is so stressful that one resident had to call 911 and check into the hospital when she received the notice of the latest rent increase. 2) Gas leak - A few new gas installations have leak. The onsite manager refused to handle. Their excuse is that it is now the resident problem which he now has to pay for the repair, no longer a park problem. Again only a call to 911 resolves the potentially dangerous situation 3) Lower Expense to park owner - The gas and electric upgrade will eventually save the park owner the expense of reading, invoicing and maintaining utilities in the long term. Yet the park management makes the resident pay with an excessive rent increase. Furthermore, any cost involving the gas and electrical works can be written off or amortizes as business expenses, therefore there will be no additional costs to the park owner. 4) Violation - The park manager / owner may be violating the law when passing the improvement cost to the resident prior to completion. 5) Lower property value - The streets in the park now look like a shoddy, ugly patch work that lower the value of the all properties and that is not what many of us sign up for when we choose to settle in the park. All the above cross the line of elderly abuse and rent exploitation of our elderly. We are responsible residents, have always paid our rent on time and in full. We try to live in Kona Kai peacefully for the remaining years of our life. Since the last recession in 2008, our limited income (wages and Social Security check) has stagnated. The City Council's help with a moratorium on the rent increase would go a long way. At the current rate of rent increase, the rent will double in 12 years, and will render most of us homeless We urgently ask for your intervention in this matter. Many of our long time elderly residents are suffering greatly awaiting for justice and help from their elected officials. Your assistance will be truly appreciated. Please do not hesitate to contact us if you need any additional information. Sincerely yours, Danh Pham as President Kona Kai M.H.O.A. Orozco, Norma From: Qui Vuong < Sent: Tuesday, May 21, 2019 12:35 PM To: eComment Subject: 20190521 City Council Meeting and Agenda Item #65A Attachments: 20190511 Space Rent Increase at Bali Hi (20-year history).pdf; 20190401 Bali Hi Resident Petition.pdf; 1Y9A8946.JPG; 1Y9A9221.JPG; 1Y9A8985.JPG; 1Y9A9060.JPG; 1Y9A9122.JPG; IY9A9016.JPG; 1Y9A9181.JPG RE: EMERGENCY RESCUE of Bali Hi, and other senior mobile home parks in Santa Ana; from "Predatory Rent Gouging." Dear Mayor and City Council Members, The senior citizens living on fixed income whom you represent at Bali Hi Senior Mobile Homes Lodge, and so many more all over the city of Santa Ana, are suffering deeply from devastating financial hardship, as well as psychological trauma, from uncertain futures of exhaustion and tragedy, Vulnerable seniors living on fixed income streams with food, medicine, and mortgages to pay,for, among other things besides "Parking Space" rent, should not be preyed upon, and targeted for manufactured homelessness, this way. Please find attached our nearly unanimous signed petition, along with our collective cry for help. The unconscionable parking space rental rate hikes imposed by J&H Asset Property Management, Inc. of Yorba Linda, CA, on these vulnerable tenants this upcoming June I st, and over the past 3 years, speak for thernselves. This property management company, who claims to have power of attorney to represent park owner Clarence C. Humphries Holdings, Inc. of Laguna Niguel, CA (a family -owned corporation with a sterling 3-generation track record of helping the poor, and harboring the elderly living on fixed income) is doing so many things that are incongruous, unjustified, and simply don't make sense. As you can observe from the attached charts compiled from fellow residents, the decades of successful "Space Rent" STABILIZATION at Bali Hi are being wiped out by UNJUSTIFIABLE "Space Rent" ESCALATION, as a result of J&H's inherent conflict of interest, defined as "Percentage of REVENUES COLLECTED." The sizable 288-page investigative report prepared by your own staff would be incomplete, without this unique close-up, and rather telling perspective of the latest 20-year history of rent raises at Bali Hi. Please dig deeper into the facts and figures, and put a stop to this "affordable housing" INJUSTICE. Your action and message will help us get the attention, caring and harmony of the park owner back, once again. "Space Rent Stabilization" have always worked and made sense with park owners and tenants, but not so for exploiters or predators. Bali Hi is prime case and point. Rest assured that what you will be voting on today has nothing to do with RENT CONTROL, but everything to do with ethically responsible RENT PATROL of PREDATORY GOUGING, Please exemplify your respective personal commitment as elected officials to serve your community and to do the right thing. Santa Ana is counting on you to lead by example. Thank you for your consideration. Respectfully submitted, I Qui Vuong Bali Hi Resident on behalf of my fellow neighbors m N^ h 0 � m 7 O V1 CO 0 00 01 01 01 01 Ol ti N m m V V N N VT N N N tp Qt Ol Ql Ol Ol N N N M V V N N vT ih 1A +R 0 0 0 0 0 N eMi ��-1 N ti ti N N N in 1/T LA 0 N N VT V? 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N aseanul;uay lenuuy I ap �° 0 3° 2� `04• e a e o c a e a• o 0 t¢y 4 9 w w w w w w w w w w 2 (3 =as a s a° ae w w w w w w w w w w w.w w- w w w w w w w w tzz s f I.V e '^% Izz ,e C&I f* M 3 w w w w w w w w w w w w w w w w w w w w w w z (. of Y Is > r� N WA N „ m e Ti dN p, N N M W tR p tl} eR bt t# 6li Vi » k9 bi 49 4! w 49 /R 1A (A H UN by �•+ N M Iy yy N! aA 19 N 69 Y# W M y !A l9 W b9 N} aR 1g . 6 Oddy m A i a a �y e� 0 m Q Q w w w�w w w w w w ww w «n w w w win w w w w w w W w w wnw w w w olyLL 8� i d e '�' a ii itn e o e a e a o M C)`7 .C� CM NFU U Cr o g w N w N N N w w N N -w W fN N w w N N N wN w N 07TO- � d - a K i .y� 0 E m E 0 m a rn 0 #ts- k Orozco, Norma From: Cynthia Guerra < Sent: Tuesday, May 21, 2019 1:20 PM To: eComment Subject: Letter of Support for Agenda Item 65A for Santa Ana City Council Meeting on 5.21.19 Attachments: Ltr_Santa Ana Space Rent Stabilization_21.5.15.pdf Hi, Please find attached the Kennedy Commission's comments regarding the upcoming City Council meeting: 1) Agenda Item #65A: RECEIVE AND FILE RESPONSE TO REQUEST FOR INFORMATION ON MOBILE HOME PARKS Please confirm receipt of this email and let me know if you have any questions. Thank you, Cynthia Guerra The Kennedy Commission Community Organizer ■ May 21, 2019 Mayor Pulido and City Council Members City of Santa Ana 22 Civic Center Plaza Santa Ana, CA 92701 RE: Agenda Item #65A: Receive and File Response to Request for Information on Mobile Home Parks Dear Mayor Pulido and City Council Members: The Kennedy Commission (the Commission) is a broad based coalition of residents and community organizations that advocates for the production of homes affordable for families earning less than $20,000 annually in Orange County. Formed in 2001, the Commission has been successful in partnering and working with Orange County jurisdictions to create effective housing and land -use policies that has led to the new construction of homes affordable to lower income working families. The Commission would like to commend the City for its leadership and commitment in encouraging and facilitating the development of homes affordable to lower income families. Currently under construction, First Street Apartments is comprised of 68 units of which there are 7 units are set -aside for extremely low income families, 28 units for very low-income families and 33 units set aside for low-income families.1 Recently, the City Council approved the construction of the Legacy Square Apartments, a completely affordable project that will provide 33 units of permanent supportive housing, 11 units to extremely low-income families, 31 units to very low- income families, and 17 units to low-income families.2 While these developments will provide much needed housing for the City's lower income households, it is unfortunately not enough to fully address the affordable housing crisis the City is facing. As the Council reviews the City staffs report on space rental rates in mobile home parks in the City and rent stabilization tools that are utilized in other jurisdictions, the Commission urges the City to take action by moving forward in supporting space rent regulations and creating new affordable housing developments in the City. The Commission commends the City's leadership in proactively starting this dialogue and believes that supporting space rent regulation is a move in the right direction to helping alleviate the precarious housing conditions many mobile home park residents are facing in Santa Ana. Many lower income households and seniors in the City have relied on mobile homes as an affordable alternative option to achieving safe and stable housing conditions. Recently, however, mobile home park residents in the City have been the target of exorbitant rent increases. An example of this are the Bali Hi Mobile Home Park residents have been greatly impacted by the prospect of an excessive rent increase that has put them in jeopardy of losing their homes. Bali Hi is City Council Agenda Report, Item 65A, p. 5, April 19, 2016. 2 City Council Agenda Report, Item 65A, p. 5, February 5, 2019. Mayor Pulido and City Council Members May 21, 2019 Page 2 of 3 age restricted, meaning the tenants are 55 years and older and, thus, many are on a fixed income.3 This greatly limits their ability to absorb a rent increase, especially the exorbitant rent increases scheduled to go into effect on June 1 st which range from $39 to $205 per month.4 Moreover, rental prices for new incoming residents are starting at $1,100 which is too high for seniors on a fixed income,5 thus prompting Bali Hi residents' fears that the mobile home park with be converted to a family park, which presents disastrous financial implications for the senior residents. The higher space rental prices depreciate the value of the mobile homes hindering residents' abilities to sell their homes, a strategy suggested by the Bali Hi management company, J & H.6 Given that the Bali Hi rent increases are scheduled to go into effect June 1st, the Commission urges the City to act immediately and approve the proposed emergency ordinance. The City should also reach out to mobile home park residents and conduct a thorough analysis of who is living in Bali Hi and other mobile home parks that are currently or will potentially be experiencing rent increases, in order to fully assess the adverse impacts these increases will have on these residents' lives. Implementing the proposed emergency ordinance and conducting a definite study will allow the City to implement a more permanent solution. It is important to note there are 29 mobile park homes in Santa Ana, amounting to a total of 3,913 rental spaces.7 None of the residents in these parks are protected from the rent gouging practices experienced by the Bali Hi residents. Six of these mobile home parks, including Bali Hi, are age restricted constituting a total of 1,020 rental space units.8 It is imperative to approve the proposed ordinance in order to extend protections to these mobile home residents, a substantial amount of which are seniors who are financially limited and health vulnerable. The case of the Bali Hi residents is situated within the greater context of the affordable housing and homelessness crisis Orange County is currently facing. It is ranked among the top ten least affordable metropolitan areas in the country.' A resident must earn at least $36.08 per hour to afford a two -bedroom apartment at a fair market rent of $1,876 a month.10 Over the past seven years, Orange County renters have paid an average of $355 more a month and rents are projected to continually rise.11 During 2000 to 2015, Orange County's inflation -adjusted median rent increased by 28 percent while the median renter income decreased by 9 percent. 12 The impact of this crisis is dire. Many Orange County renters are rent burdened where they spend more than 30% of their income towards housing costs. Struggling to make ends meet, many take on more jobs, including seniors, or live in overcrowded substandard households. With high rents, low vacancy rates and an increasing number of residents needing affordable homes, the supply of affordable homes being built for lower income households has also not kept up with the demand. 3 City Council Agenda Report, Item 65A, p. 8, May 21, 2019. 4 City Council Agenda Report, Item 65A, p. 12, May 21, 2019. 5 City Council Agenda Report, Item 65A, p. 12, May 21, 2019. 6 City Council Agenda Report, Item 65A, p. 15, May 21, 2019. 9 City Council Agenda Report, Item 65A, p. 7, May 21, 2019. 8 City Council Agenda Report, Item 65A, p, 7, May 21, 2019. 9 Out of Reach 2018. The High Cost of Housing, National Low Income Housing Coalition, p.14, 2018. 10 Out oIReach 2018- The High Cost of Housing, National Low Income Housing Coalition, p.38, 2018, u Southern Californians Scrimp to Get By As Average Rents Hit $1,900, Orange County Register, February 15, 2018. 12 California Rents Have Risen to Some of the Nation's Highest. Here's How that Impacts Residents, Orange County Register, February 15, 2018, Mayor Pulido and City Council Members May 21, 2019 Page 3 of 3 An additional 92,738 affordable rental homes are needed to address Orange County's housing needs for lower income renters.13 Furthermore, according to the 2019 Orange County Point in Time count, 6,860 people experienced homelessness in Orange County on a single night in January 2019. This is a drastic increase from the 2017 Orange County Point in Time count which documented 4,792 homeless people,14 indicating that the crisis is worsening. According to the Cost Study of Homelessness, close to $300 million was spent to address homelessness in Orange County during 2014 to 2015. Studies have shown that housing coupled with supportive services is a cost-efficient intervention that will safely house individuals experiencing chronic homelessness. With high housing costs and the severe lack of affordable homes, mobile homes have provided an alternative option to living in a stable affordable home. However, there are serious concerns regarding the excessive rent increases and the potential negative impacts it will have on residents. A majority of the mobile home park residents are comprised of lower income seniors on fixed incomes and lower income working family households who will face great challenges in paying the new rent increases. They may not be able to afford the rent increases and might have no choice but to move elsewhere, and, unlike popular belief, mobile homes are not really mobile. It is extremely hard for mobile homes to be transported and accepted at other parks. Thus, mobile home park residents will not only be displaced, but they will lose the money invested in their homes. These rent increases will displace residents in the best of cases or force them into homelessness in the worst. The City of Santa Ana should follow the lead of other jurisdictions in the state that have taken the necessary steps to address the housing and homelessness crisis faced by their residents. Jurisdictions in Los Angeles County have recently taken action to combat the steep rent increases afflicting their residents. On April 9th, the Los Angeles Board of Supervisors approved the extension of a temporary cap on rent increases of 3% annually and "just cause" eviction protections in unincorporated areas through 2019.15 Additionally, on March 5th, the City of Inglewood approved an emergency ordinance that would prevent rent increases for a period of 45 days with the possibility of a year -long extension. 16 The Commission looks forward to partnering with the City to increase and preserve affordable homes for lower income households in the City. Please keep us informed of any updates and meetings regarding the City's action to effectively address rent increases in mobile home parks. If you have any questions, please free to contact me at (949) 250-0909 or cesarc@,kemedycommission.org. Sincerely, Cesar Covarrubias Executive Director "Orange County's Housing Emergency and Proposed Solutions, California Housing Partnership Corporation, p. 1, May 20t8. 14 Orange County Homeless Population Jumps to Nearly 7,000, Survey Shows, Las Angeles Times, April 25, 2019. U L.A. County supervisors vote to extend rent increase cap through 2019," The Los Angeles Times. April 19, 2019, 16 Inglewood votes to limit rent hikes and halt evictions spurred by development," The Los Angeles Times. March 6, 2019 Orozco, Norma From: Dao tran < Sent: Tuesday, May 21, 2019 3:18 PM To: eComment Subject: Item 65A Attachments: Bali Hi Rent - Dao Tran.xlsx; BALI HI RENT - Vy Nguyen.xlsx; BALI HI RENT - Nancy Caldwell.xlsx; BALI HI RENT - Hung Phung.xlsx; Bali Hi Rent - Nam Pham.xlsx; Bali Hi Rent -Joann Jones.xlsx; Bali Hi Rent -Sandra Allen.xlsx; BALI HI RENT - Annie Montejano.xlsx; BALI HI RENT - Christina Fry.xlsx; BALI HI RENT - Peter Do.xlsx; BALI HI RENT - Jasper Newkink.xlsx; BALI HI RENT - Phong Nguyen.xlsx; BALI HI RENT - Dinh Pham.xlsx Regarding: EMERGENCY RESCUE of Bali Hi Mobille Homes Lodge - Rent Gouging I am writing this message on behalf of myself, Dao Tran; Tuat Mai, my husband; and the residents of Bali Hi Mobile Park listed below. I am writing to you today because we find ourselves in a critical situation, and we really need your help. All of us are long-term residents of Bali Hi Mobile Park (henceforth referred to as "Bali Hi Mobile Park"). Some of us have been here for over 50 years. When we arrived, the company managing Bali Hi was Francis Property Management. Those at Francis Property Management verbally promised us that every year, the rent would only increase by approximately $15.00, that is, by less than 3%. Francis Property Management kept this promise until they left Bali Hi in In 2016, J&H Asset Property MGT (henceforth referred to us "J&H") took over the management of Bali Hi, and this is where all our problems began. Since J&H commenced its management of Bali Hi, we have seen our rent prices increase by staggering and incomprehensible amounts. Some of us have experienced rental increases of up to 35% in the last three years. These price increases have pushed us into a state of emergency. There is something you must understand about the residents of Bali Hi. We are retired senior American citizens who financially support ourselves through our social security funds. Almost all of us are between the ages of 65 and 102. Given the precarity of our financial situations, J&H°s practices have had devastating consequences for us. We simply cannot afford the increasing rent prices that are being ruthlessly imposed on us, with little regard for our modest livelihoods and for our physical and mental health. At this point, many of us find ourselves gripped with unending, overwhelming anxiety, and genuinely fear becoming homeless due to the action of J&H. z Given the urgency of this situation, we ask that you put an end to J&H's irresponsible, inhumane practices. We ask that you do what you are supposed to do: serve the citizens of Santa Ana. Very simply, by asking you to stop the immoral and callous practices of J&H, we ask that you prioritize human well-being and survival over profit. Below you will find the contact information of myself, Dao Tran; Tuat Mai, my husband; and other long-term residents of Bali Hi on whose behalf I am writing you. These other Bali Hi residents are elderly American citizens, whose primary languages are English, Vietnamese and Spanish. These residents do not have email addresses. Nonetheless, I have listed their names and phone numbers below, so that you may contact them if necessary. We thank you in advance for your consideration, and sincerely hope you will take action soon to help us out of this situation. Sincerely, Dao Tran 91 Bali Hi Rent of Been here 11 years Manager Names Managers: Francis & John !t: $570.00 2010 $585.00 1 1`/ 1 611 11 $15.00 2012 $615.00 $15.00 ,, H Asset Propert1 1 11 $15.11 MGT. Inc -from 2016 2014/1 $15.00 Thomas Parcelli RPM 2015.1 11 $15.00 AlbertManagers: Claudia & f f ,Mana•ers: Kymberly & John1 . 2017 $718.00 $29.00 2018 $747.00 $29.00 1 .. 1 1 $52.00 . • ' ,, Bali Hi Rent of - Been here 14 years Vy Nguyen, 102, & Anh Nguyen 97 years old Phone ( Manager Narnel Year Rent $ Increased Percent Managers: Francis & John 2006 $525.00 $0.00 2007 $540.00 $15.00 2.86% 2008 $555.00 $15.00 2.78% 2009 $570.00 $15.00 2.70% 2010 $585.00 $15.00 2.63% 2011 $600.00 $15.00 2.56% 2012 $615.00 $15.00 2.50% J & H Asset Pro a 2013 2014 2015 $630.00 $645.00 $660.00 $15.00 $15.00 $15.00 2.44% 2.38% 2.33% MGT. Inc -from 2 Thomas Parcelli R Managers: Claudia & Albert 10/20/15 $29.00 4.39% 120161 $689.00 Managers: Kymberly & John 7/18/2016 $29.00 4.21% 2017 $718.00 2018 $747.00 $29.00 4.04% 2019 $799.00 1 $52.00 1 6.96% Bali Hi Rent of - Been here 18 years Nancy Caldwell 69 years old - Manager Names Year Rent increased Percent 2010 2011 2012 ZU13 2014 'MGT. Inc -from r $390.00 $405.00 $420.00 $435.00 $450.00 $465.00 $480.00 $495.00 $510.00 $525.00 $540.00 $555.00 :�57U.UU $585.00 $585.00 Thomas Parcelli RPM Claudia•-10/20/15 120161$624.01 Kvmberlv & John1 $0.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 �15.UU $15.00 $0.00 i r� Bali Hi Rent of - Been here 16 years Hung Phung, 72, & Hien Nguyen 68 years old - ( Manager Names Year Rent $ Increased Percent Managers: Francis & John 2004 $420.00 $0.00 0.00% 2005 $435.00 $15.00 3.57% 2006 $450.00 $15.00 3.45% 2007 $465.00 $15.00 3.33% 2008 $485.00 $20.00 4.30% 2009 $500.00 $15.00 3.09% 2010 $515.00 $15.00 3.00% 2011 $530.00 $15.00 2.91% 2012 $545.00 $15.00 2.83% J & H Asset Property 2013 2014 12015 $560.00 $575.00 $590.00 $15.00 $15.00 $15.00 2.75% 2.68% 2.61% MGT. Inc -from 2016 Thomas Parcelli RPM Managers: Claudia & Albert 10/20/15 $29.00 4.92% 120161 $619.00 Managers: Kymberly & John 7/18/2016 $29.00 4.68% 2017 $648.00 2018 $712.00 $64.00 9.88% 2019 $799.00 $87.00 12.22% Bali Hi Rent of Been here 20 years Nam Pham, 84, & Van Pham 80 years old - ( Manager Names Year Rent $ Increased Percent Managers: Francis & John 1999 $270.00 $0.00 0.0% 2000 $340.00 $70.00 25.93% Z001 $355.00 515.00 4.41% Z002 5370.00 515.00 4.23% Z003 5385.00 515.00 4.05% 2004 $400.00 $15.00 3.90% 2005 5415.00 515.00 3.75% 2006 $430.00 $15.00 3.61% 2007 $445.00 $15.00 3.49% 2008 $460.00 $15.00 3.37% 2009 $475.00 $15.00 3.26% 2010 $490.00 $15.00 3.16% 2011 $505.00 $15.00 3.06% 2012 $520.00 $15.00 2.97% J & H Asset Property 2013 $535.00 $15.00 2.88% MGT. Inc -from 2016 2014 $550.00 $15.00 2.80% Thomas Parcelli RPM 2015 $565.00 $15.00 2.73% Managers: Claudia & Albert 10/20/15 120161 $594.00 $29.00 5.13% Managers: Kymberly & John 7/18/2016 2017 $643.00 $49.00 8.25% 2018 $715.00 $29.00 4.51% 2019 $808.001 $93.00 13.01% Bali Hi Rent of - Been here 17 years Joann Jones 76 years old - phone ( Manager Names Year Rent $ Increased Percent Managers: Francis & John 2002 $395.00 $0.00 #REF! 2003 $410.00 $15.00 3.80% 2004 $425.00 $15.00 3.66% 2005 $440.00 $15.00 3.53% 2007 $455.00 $15.00 2.97% 2008 $470.00 $15.00 3.30% 2009 $485.00 $15.00 3.19% 2010 $485.00 $0.00 0.00% 2011 $470.00 $15.00 3.09% 2012 $485.00 $15.00 3.19% J & H Asset Property 2013 2014 2015 $500.00 $515.00 $515.00 $15.00 $15.00 $0.00 3.09% 3.00% 0.00% MGT. Inc -from Z016 Thomas Parcelli RPM Managers: Claudia & Albert 10/20/15 $49.00 9.51% 2016 I $564.00 Managers: Kymberly & John 7/18/2016 $49.00 8.69% 2017 $613.00 2018 $712.00 $29.00 4.73% 2019 $799.00 1 $87.00 12.22% Bali Hi Rent of - Been here 25 years Sandra A Allen, 84 years old - phone ( Manager names I Year I Rent $ 1 Increased I Percent anagers: Francis J & H Asset Property MGT. Inc -from 2016 Thomas Parcelli RgPM /� Managers: K 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 1 2016 rlv & John 7, $285.00 $285.00 $285.00 $285.00 $285.00 $285.00 $290.00 $305.00 $320.00 $335.00 $350.00 $365.00 $380.00 $395.00 $410.00 $425.00 $440.00 $455.00 $470.00 $470.00 $485.00 $500.00 $500.00 $500.00 $515.00 $515.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $5.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $0.00 $15.00 $0.00 $0.00 $0.00 $15.00 $0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.75% 5.17 4.92 4.69% 4.48 4.29% 4.11 3.95 3.80% 3.66% 3.53% 2.97 3.30% 0.00% 3.19% 0.00% 0.00% 0.00% 3.00% 0.00% 9.51% 2017 $613.00 2018 $662.00 2019 $799.00 $49.00 8.69% $29.00 4.73% $137.00 20.69% Bali Hi Rent of - Been here 20 years Annie Montejano 84 years old - Manager names Year Rent increased Percent Managers: Francis & John 2000 5340.00 50.00 0.00% ZUU1 �o34U.UU �iU.UU U.MKO 2002 5350.00 510.00 2.86% 2003 5365.00 515.00 4.11% 2004 5380.00 515.00 3.95% 2005 5395.00 515.00 3.80% 2006 5410.00 515.00 3.66% 2007 5425.00 515.00 3.53% 2008 5440.00 515.00 3.53 % 2009 5455.00 515.00 3.41% Z010 5470.00 515.00 3.30% Z011 5485.00 515.00 3.19% 2012 5500.00 515.00 3.09% J & H Asset Property 2013 2014 120151 $515.00 $530.00 $545.00 $15.00 $15.00 $15.00 3.00% 2.91% 2.83% MGT. Inc -from 2016 Thomas Parcelli RPM Managers: Claudia & Albert 10/20/15 $49.00 8.99% 120161 $594.00 Managers: Kymberly & John 7/18/2016 $49.00 8.25 2017 $643.00 2018 $692.00 $29.00 4.51 2019 $799.00 1 $107.00 115.46%1 Bali Hi Rent of SPC # -Been here 23 years Christina Fry 67 years old - phone ( Manager Names Year Rent increased Percent Managers: Francis & John 1996 5320.00 50.00 0.00% 1997 $320.00 $0.00 0.00% 1998 $335.00 $15.00 4.48% 1999 5350.00 515.00 4.29% 2000 $365.00 $15.00 4.11% 2001 $380.00 $15.00 3.95% ZOOZ $395.00 515.00 3.80% 2003 $410.00 $15.00 3.66% 2004 $425.00 $15.00 3.53% 2005 $440.00 $15.00 3.41% 2006 5455.00 515.00 3.30% 2007 $470.00 $15.00 3.19% 2008 $485.00 $15.00 3.19% 2009 $485.00 $0.00 0.00% 2010 5500.00 515.00 3.09% Z011 5500.00 50.00 0.00% 2012 $500.00 $0.00 0.00% J & H Asset Property 2013 $500.00 2014 $500.00 12015 $505.00 $0.00 $0.00 $5.00 0.00% 0.00% 1.00% MGT. Inc -from 2016 Thomas Parcelli RPM Managers: Claudia & Albert 10 20 15 $554.00 $49.00 9.70% 120161 Managers: Kymberly & John 7/18/2016 $49.00 8.84% 2017 $603.00 2018 $652.00 $29.00 4.81% 2019 $799.00 1 $147.00 1 22.55% Bali Hi Rent of Been here 18 years Perter Do., 78 years old - phone ( Manager Names Year Rent increased Percent Managers: Francis & John 2002 $400.00 $0.00 0.00% 2003 $415.00 $15.00 3.6% 2004 $430.00 $15.00 3.49% 2005 $445.00 $15.00 3.37% 2006 $460.00 $15.00 3.26% 2007 $475.00 $15.00 3.16% 2008 $475.00 $0.00 0.00% 2009 $490.00 $15.00 3.16% 2010 $505.00 $15.00 3.06% 2011 $520.00 $15.00 2.97% 2012 $535.00 $15.00 2.88% J & H Asset Property 2013 $550.00 $15.00 2.80% MGT. Inc -from 2016 2014 $565.00 $15.00 2.73% Thomas Parcelli RPM 2015 $580.00 $15.00 2.65% Managers: Claudia & Albert 10/20/15 2016 1 $619.00 $39.00 6.72% Managers: Kymberly & John 7/18/2016 2017 $658.00 $39.00 6.30% 2018 $712.00 $29.00 4.41% 2019 $799.00 $87.00 112.22%1 Bali Hi Rent of - Been here 50 years Jasper Newkink 90 years old - phone ( Manager Names Year Rent increased Percent Managers: Francis & John From 19691st payment $350 J & H Asset Property 2013 $426.00 $0.00 0.00% MGT. Inc -from 2016 2014 $441.00 $15.00 3.52% Thomas Parcelli RPM 2015 $456.00 $15.00 3.40% Managers: Claudia & Albert 10/20/15 120161 $505.00 $49.00 10.75% Managers: Kymberly & John 7/18/2016 2017 $554.00 $49.00 9.70% 2018 $652.00 $29.00 5.23% 2019 $799.00 1$147.00 122.55%1 Bali Hi Rent of - Been here 22 years Phong Nguyen 73 years old - ( Manager Names I Year Rent increased Percent Managers: Francis & John 1997 $345.00 50.00 50.00 1998 $345.00 50.00 0.00% 1999 $345.00 50.00 0.00% Z000 $345.00 50.00 0.00% Z001 $345.00 50.00 0.00% 20OZ $350.00 55.00 1.45% 2003 $365.00 515.00 4.29% 2004 $380.00 $15.00 4.11% Z005 $395.00 515.00 3.95% 2006 $410.00 $15.00 3.80% 2007 $425.00 515.00 3.53% Z008 $440.00 515.00 3.53% 2009 $455.00 $15.00 3.41% 2010 $470.00 $15.00 3.30 % Z011 $485.00 515.00 3.19% 2012 $500.00 $15.00 3.09% J & H Asset Property 2013 2014 2015 $515.00 $530.00 $545.00 $15.00 $15.00 $15.00 3.00% 2.91% 2.83% MGT. Inc -from 2016 Thomas Parcelli RPM Managers: Claudia & Albert 10/20/15 a •4 00 $49.00 18.99% Managers:.- $49.00 8.25% 2017 .400 2018 .• 00 $49.00 7.62% Bali Hi Rent of - been here 20 years Dinh Pham , 80, & Ngan Nguyen 63 years old - ( Manager Names I Year Rent increased Percent Managers: Francis & John 1999 $300.00 $0.00 0.00% 2000 $300.00 $0.00 0.00% 2001 $300.00 $0.00 0.00% 2002 $315.00 $15.00 4.76% 2003 $335.00 $20.00 5.97% 2004 $350.00 $15.00 4.29% 2005 $365.00 $15.00 4.11% 2007 $380.00 $15.00 3.95% 2008 $395.00 $15.00 3.95% 2009 $410.00 $15.00 3.80 2010 $410.00 $0.00 0.00/ 2011 $425.00 $15.00 3.66% 2012 $440.00 $15.00 3.53% J & H Asset Property 2013 $455.00 $15.00 3.41% MGT. Inc -from 201E 2014 $470.00 $15.00 3.30% Thomas Parcelli RPN 2015 $485.00 $15.00 3.19% Managers: Claudia & Albert 10/20/15 120161 $555.00 $70.00 14.43% Managers: Kymberly & John 7/18/2016 2017 $663.00 $108.00 19.46 2018 $692.00 $29.00 4.37% 2019 $799.00 1$107.00 115.46% Orozco, Norma From: Bali Hi HOA < Sent: Tuesday, May 21, 2019 3:26 PM To: eComment Subject: URGENT: Item 65A on today's CitiyCouncil Meeting Agenda Attachments: 20190520 Bali Hi Park Management Newsletter.pdf This is to inform you that all residents of Bali Hi Senior Park have received this first ever newsletter from Park Management company J&H Asset Property Management, Inc. We have never received any newsletter, or any meeting invitation from them for over 4 years, ever since they took over management of the park. The company began to clean up the park this past weekend, and of course, immediately start touting as if they have done so, all along.. We want to draw your attention to one FAQ item in the back page, which states that The Santa Ana City Council cannot stop any noticed rent increases at any mobile home park in Santa Ana. IS THIS TRUE? Please ask the representative(s) of the management company, or respectively„ their WMA and MHET lobbyists this important question. Like you, we are highly suspicious of this kind of propaganda, and perhaps misstatement of truth, virtually guaranteeing that "no one will lose thier home," that "no one will become homeless." etc. while insisting that the devastating rent raise goes into effect, regardless of any circumstances. Thank you very much for your consideration, and prompt attention to sort out this important matter. On behalf of our resident members, crying for your help, The Bali Hi Home Owners Association( 0 Bali Hi Mobile Home Lodge News A Communication from the Community Owners and Management • Office Hours 9:00 am 4:00pm May 20. 2019 Dear Community Residents, Bali Hi has had the same ownership for a very long time. Over those many years we have expressed our appreciation to the residents of the Park through a variety of events such as Holiday dinners and celebrations and by paying close attention to the maintenance and upgrading of the Park and services we provide to each of our residents. We also realize that good communication with our residents is very important, In this brief newsletter we will address some of the issues that have been raised concerning our Park while at the same time taking this opportunity to thank each of you for choosing to be a part of the Bali Hi community and for living with us! Sincerely, From the Park Owners and Management Be Cautions About What You Hear We are troubled by some of the rumors we are hearing and, frankly, it is very concerning and hurtful to be called "predators" in communications distributed in the Park and on some Facebook sites. There seems to be a group of people who are set on attacking Park ownership and management and who are also focused on scaring the residents of our community. This is very sad. No one is going to lose their home. No one is going to become homeless. We want to assure you that we care about our each and every one of our residents. We Hope You Like the Park Improvements We are very pleased to have been able to install a front gate to upgrade Bali Hi to a gated community. We hope this addition, along with other ongoing improvements around the park, are being enjoyed by everyone. A Note About The 2019 Rent Increases Everyone in the park received a 90 notice of a rent increase that will go into effect on June 1, 2019. The increases were different depending on the current rent you are paying. Current rents in the park range from a low of $594 to a high of $925. This wide range of rents for the same exact size sites and services did not seem fair and it was time to begin to address the issue of this inconsistent rent range. Therefore, those residents with lower rents received higher rent increases than the residents with the higher rents who received lower increases. In addition, the rents in the park are below market. As an example, new residents moving into the community are paying $1,100. Rent Subsidies Help if Rent Increase is a Hardship Along with the rent increase notice information was provided about a program the Park has participated in for the past three years, the Manufactured Housing Educational Trust Rental Assistance Program (MHET RAP). This program provides monthly rent subsidies for residents who are paying more than 40% of their monthly income on housing costs (rent, mortgage and utilities). The program is administered by a third party and is completely confidential. Some residents in the park are receiving a monthly subsidy. For more information on this program, please call (949) 380-3311. Long Term Leases Address Future Rent Increases We realize everyone is concerned about future rent increases. It is for this reason that we are working on long term lease agreements that provide every resident with the amount of future rent increases. We look forward to sharing this option with you in the near future. Frequently Asked Questions (FAA's) Q Are you going to withdraw the noticed rent increase? A No, we are not withdrawing the rent increase. It is a fair and reasonable approach for all residents. Q Can the City Council stop the noticed rent increase? A No. The notice is a legal notice that is binding and will go into effect on June 1, 2019. Q There is a rumor that you want to buy my home. Is that true? A There could be nothing further from the truth. We do not want to purchase or own any homes in the Park. Our business is providing you with a nice site for your home with services and amenities. Q What if 1 have a suggestion regarding park operations? A We want to hear your suggestions! The office has a Suggestion Form for you to complete and submit. Q I am aware that the rents at Bali Hi are lower than almost every other park in the region. I am worried about future rent increases. How should I plan? A You are correct, the rent at Bali Hi is lower than most parks. Moving forward there will be annual rent increases. The goal of offering long term leases will provide you with a guideline for future increases. Q I hear that people are being forced out of the park, but there are no homes up for sale. If I want to sell my home, what will the rent be to the new buyer? A Indeed, it is not true that homes are for sale in the park. However, when it is time for someone to move the rent to the new resident will be provided. Currently the rent to a new purchaser is $1,100 a month. The way we communicate with others and ourselves ultimately determines the quality of our lives" Anthony Robbins Western w Manufactured Housing Communities Association May 20, 2019 Mayor Miguel Pulido City of Santa Ana PO Box 1988, M31 Santa Ana, CA 92701 RE: 65A. RECEIVE AND FILE RESPONSE TO REQUEST FOR INFORMATION ON MOBILE HOME PARKS Dear Mayor Pulido The Western Manufactured Housing Community Association (WMA) is a statewide trade association, which represents mobile home park owners throughout California. WMA is always against government fixed price housing and rent control policies. The presented Staff Report to fulfill council's request for more information on Santa Ana's 29 mobile home parks was exhaustively comprehensive. After reading all 288 pages, it is clear, Santa Ana has affordable, well -maintained and professionally managed mobile home parks. This would never have be the case under a rent control scheme. POSSIBLE OPTIONS FOR CITY COUNCIL AND TENANTS The staff report provides a road map of policies the city can adopt to address concerns or potential problems. They are outlined as 1) Regulations of rents as affordable housing 2) Ensuring residents have a say in how the park they live in is improved, and an avenue for making complaints if it is not being take care of properly and 3) a path towards resident owners. However, for all the remedies provided in the Staff Report, no citywide problems in Santa Ana have been identified. There is no evidence of citywide excessive rent increases or spiking, park closures or subdividing. One glaring omission from the Staff Report is any data to explain the costs associated with a mobile home rent control ordinance. Perhaps that is because the council didn't specifically ask for it? However it is an important aspect to the regulation you must consider. Our association has dealt with jurisdictions that have enacted rent control and it is extraordinary expensive to administer. In a 2012 study by the San Diego Taxpayer Advocate, Oceanside Rent Control — Costly to Oceanside Taxpayers, An Analysis of the Fiscal Impacts of Rent Western Manufactured Housing Communities Association &W Control in the City of Oceanside concluded that between 1999-2011 Oceanside Taxpayers have spent and lost $7.5 million as a result of their ordinance and were trending to spend or lose $8 million in the next ten years. I've enclosed the study for your review. Quoting form Page 16 of the staff report: "Mobile Homes represent the largest sector of non -subsidized and non -covenanted affordable housing in the Untied States, yet often with few protections" This statement is factually false. In California, mobile home park tenants enjoy more protections than apartment tenants. The Mobile Home Residency Law (MRL), essentially, provides resident protections for just cause evictions, mobilehome tenancy, utility service and billing, rental agreements, change of use, HOAs, park rules, fees, caregivers, pets, streets, trees, driveways, security deposits, common areas, homeowner communications and meetings, subleasing, termination of tenancy, home sales and age restrictions to name only a few. CONCERNS FROM BALI HI RESIDENTS WMA, MHET and the management of Bali Hi met with City Staff on April 30". It was a good discussion and we were able to convey the following facts about Bali Hi ownership: • The ownership has been the same families for many years. • For many years, the rent increases were non-existent, or minimal up to approximately $15. • This rent schedule has produced a large rent differential. Some residents were paying $315 per space, per month more than their neighbor. • The recent increase was structured to reduce this large differential. The breakdown is as follows: ➢ 66% of the park (102 spaces) received increases 4% - 6.96°% ➢ 11 % of the park (17 residents) received increases of 9.15% - 12.22% ➢ 22% of the park (34 residents) received increases of 13% - 26% ➢ 4 residents are on Section 8 ➢ 10 residents receive the MHET Resident Assistance Program (RAP) funded by the park owner. Even with below market rents, the ownership continued to invest in the property. They have installed limited access gates and an 8-ft security wall to address the increase in criminal activity by non-residents. They have also remodeled the clubhouse. • Due to resident's concerns of future rent increases, the owner has begun the process to offer long-term leases to Bali Hi residents. Long-term leases are voluntary and fully enforceable in court. They provide a low, predictable increase for the resident while at the same time allow the park owner to keep pace with inflation, market rents on turn over and maintain the community. WMA conducted a rent survey of a sample of mobile home parks in Santa Ana. While it was a different sample of parks than the Staff Report's sample we had a similar result. Bali Hi and Kona Kai's highest space rent is still $200 below the average Santa Ana mobile home park space rent. Rent control is inherently unfair, erodes affordable housing, it is divisive to your community and costly to administer. Most importantly, the two communities in question have solid, long-term ownership who are more than willing to accommodate those residents that can show need and be transparent with the city. The prudent course of action is to let these parties negotiate long-term leases and allow this relationship to remain private. Thank you for consideration of our concerns and recommendations. Please feel free to contact me with any questions or concerns. Sincerely, Julie Paule Regional Representative cc: Council Member Miguel Pulido Council Member David Penaloza Council Member Jose Solorio Council Member Juan Vargas Council Member Cecilia Iglesias Q&A: California's Housing Crisis, Failed Policies and Obtainable Solutions Has housing become unattainable for many Californians? According to analysts, government imposed regulations and fees are leading contributors to why California is the most expensive place to live in the U.S. An average California home ($440,000) costs two -and -half times the average national home price ($180,000), and the average monthly rent is $1,240, 50% higher than the rest of the country. This is not news for those who see a big portion of their paycheck going to housing each month. Are political leaders addressing the real problem? Instead of addressing the root cause of the housing crisis, needless and costly regulations and fees, some policymakers are championing rent control, despite the fact that it has never effectively preserved or expanded affordable housing stocks. One of their favorite targets is manufactured housing communities or mobilehome parks, as if private property owners are responsible for the housing crisis. When manufactured homes offer all the quality and comfort of a stick -built house, at prices 30% less, a compelling case can be made that they are part of the solution and not the problem. Does rent control work? The view of nearly every economist and housing expert is that rent control has never led to more affordable housing stock. In reality, it discourages builders from building more apartments and mobilehome parks, and in fact, it has incentivized property owners to leave the rental market. If rent control was effective, California would not be facing a housing crisis and rent control communities would have the lowest rents, when in fact, they have the highest - and sometimes, the highest in the state or nation. Does rent control improve a mobilehome park's services and quality of life? The application of rent control poses many challenges (i.e. unintended consequences) when applied to manufactured home communities, creating a tradeoff between lower rents and the capital investments parkowners must make to protect a park's viability, quality of life and the value of the privately -owned homes located in the community. Why is rent control particularly problematic for mobilehome parks? To understand how it has truly failed, one must also understand how parks operate. Unlike traditional rental property such as apartments, mobilehome parks operate like small villages or cities. They provide all the benefits of a traditional neighborhood (i.e. security, social interaction, open space, and close proximity to needed goods and services) and they appeal to all income Ievels.The only real difference is the park's residents own the manufactured home, and the parkowner generally owns the land beneath it. Rather than collect taxes like cities, parkowners collect rent to cover property taxes and fund essential neighborhood services, such as park management, roads, lighting and landscaping. In some cases, rents also cover all utilities, including cable. Some parks include clubhouses, fitness rooms, pools and golf courses. Consequently, when the government imposes a rent control ordinance that reduces or freezes rents at below market rates, it threatens a community's quality of life. Just like cities, when revenue does not exceed expenses, essential services are reduced or eliminated altogether, and as the maintenance of neighborhoods decline, so do property values as blight takes root. Do rent control policies specifically target those in need? Government subsidies for traditional housing and apartments require means -testing; however, mobilehome parks are the exception. As a consequence, parkowners who are under rent control are required to personally subsidize the housing of residents regardless of income or need, forcing these small business owners to close parks when rents no longer support the balance between affordability and sustainability. What's more, the notion that all mobilehome community residents are poor and in need of financial assistance is wholly inaccurate. Many mobilehome community residents are quite capable of paying fair, market -rate rents. Housing subsidies should be reserved for those residents truly in need. Do taxpayers subsidize rent control? Yes, in most cities and counties with rent control, taxpayers do fund rent control through the general fund of the city or county in order to pay for the administration of rent control. Rent control can be a very expensive proposition for cities and counties because it is a very costly program to enforce and to legally defend. Extra city and county employees are needed to administer the program. Rent control takes away badly needed funds for police and fire and other vital government services. A means -tested rental assistance program would be much more effective for local governments. Are there alternatives to rent control that can make housing more affordable? State and local government regulators should abandon the current course of driving up the cost of housing with costly, unneeded regulations, only to hastily impose price controls that don't work once homeownership becomes unattainable. It is time for real and meaningful solutions. Making housing construction less expensive and more plentiful so that the savings can be passed on to all prospective homeowners is a good place to start. WMA and our members look forward to fully participating in this important public policy discussion. Learn more: /realhousingsolutions © /CAHousingFix fwww.wma.org/rgalhousingsolutions wW KA A A Julie Paule, Regional Representative for Orange, Riverside and San Diego Counties TaxpayersAdvocate.org 7770 Regents Road, Suite 113-286 • San Diego CA 92122-1967 • 619-857-1857 • Fax 619-615-2025 info@taxpaversadvocate.ore • www.taxoaversadvocate.ore Oceanside Rent Control —Costly to Oceanside Taxpayers An Analysis of the Fiscal Impacts of Rent Control in the City of Oceanside March 27, 2012 Forthe North San Diego County Association of Realtors San Diego Taxpayers Advocate Key Findings on the Impact of Rent Control in Oceanside • Oceanside taxpayers have spent and lost $7.5 million from 1999 through 2011 • Oceanside will spend and lose $8 million over next decade • Unreported additional staff costs are unknown • Outside legal cost related to rent control is unknown Executive Summary The City of Oceanside enacted rent control in 1983. There are 17 mobile home parks with over 2500 units. As the voters are asked to consider modifying the current rent control restrictions in June, it is relevant to analyze the past and ongoing costs and fiscal impacts of rent control on Oceanside's taxpayers. It is also worth noting that as part of this study, it was clearly determined that the City of Oceanside has NOT adequately tracked all of its rent control -related staff and legal costs. Lost Taxes Since rent control was enacted, no additional mobile home parks have been built in the city. This non -growth in mobile home parks is in extraordinary contrast to the explosive population growth and the construction of thousands of new housing and apartments units. This stagnation led to depressed property values on these 17 properties, resulting in a potential property tax loss of over $3.2 million. It is estimated that this under -valuation will mean that Oceanside will not realize $4 million in additional property tax revenues over the next decade. Increased Costs The costs associated with rent control are only partly tracked by the City of Oceanside in its "Mobile Home Rent Control Fund." Whether as a simple oversight, or as an intentional way to hide the full costs, this lack of detailed accounting has made it impossible to determine the complete and accurate impact to the taxpayers. In addition, the financial data which IS available only goes back to the 1999 fiscal year. 15 previous years of rent control related expenditures are a mystery. According to city Rent Control Fund, since 1999 the Oceanside has collected $1.7 million in rent control fees, while spending $2.4 million in staff and other costs. However, it is estimated that an additional $1.9 million in unreported personnel costs were expended as well, bringing full staff rent control costs to $4.3 million. Additional rent -control related staff and legal expenditures are unknown. Introduction At the request of the North San Diego County Association of Realtors, San Diego Taxpayers Advocate was asked to analyze the fiscal impact of rent control on the City of Oceanside. Rent control was enacted almost 30 years ago. Areas Reviewed Four basic areas were considered in analyzing the fiscal impact on Oceanside's taxpayers Mobile Home Rent Control Fund —City records detailing rent control related revenues and expenditures from fiscal years 1999 through 2011 were examined. Records for the previous 15 years of rent control revenues and costs were NOT available for this study. Lost Property Tax Revenue —Rent control prevents mobile park owners from charging fair market rent, so the values of the underlying properties are artificially depressed. Income properties are valued primarily on how much net income it can generate to the property owner. Property taxes are based on the assessed value of a property and its improvements. A conservative estimate of "lost property taxes" as a result of two decades of rent control is included in this study. Other Staff expenditures —Other city records and documents were reviewed to attempt to determine additional costs related to rent control, which are NOT delineated in the "Mobile Rent Control Fund." Since a detailed tracking of all staff hours spent on rent control issues is not available, the full and complete personnel cost of rent control is unknown and cannot be accurately estimated in this report. Outside Legal costs --While it is evident that outside legal firms have been utilized to deal with the contentious issue of rent control, it seems likely from the data available that all rent control -related legal costs have not been quantified. This leaves a great "unknown" in compiling full costs of rent control and cannot be accurately estimated in this report. Detailed Findings As a result of rent control, Oceanside Taxpayers have spent and lost approximately $7.5 million since 1999*. The city has collected approximately $1.7 million over that period in mobile home park registration fees. So the estimated NET cost and lost tax revenue to the taxpayers since 1999 is $5.8 million. However, this is not a full accounting of outside legal and litigation costs, nor does it include all staff costs which have not been allocated to rent control programs, $7.5 million cost and loses to taxpayers 1999-2011*. • $2.4 million in expenditures from the rent control fund. • $1.9 million in estimated additional management staff costs • $3.2 million in lost property taxes *15 years of data from 1983-1998 not available and does not include additional unreported staff and outside legal costs. Costs of Rent Control The City of Oceanside's financial documents shows the "total" costs of rent control from 1999 through 2011 as $2.4 Million. During this same period, $120,000 in rent control -related fees were received each year. In 2011 the annual amount increased to $235,875. A total of $1.7 million in these fees were collected from 1999 through 2011. City of Oceanside "Reported" Rent Control Administration and Staff Cost 1999-2011 • Total Labor costs $1.1 million, including $840,700 for Permanent Employees • City reports staff -related rent control expenditures of only about $110,000 a year. Additional Costs related to rent control 1999-2011: • Consultant fees $279,000* • Maintenance and Operations $504,600 • General administration allocation $110,900 • Inspections $184,000 • Redevelopment and housing admin costs $122,000 • Rent to city $257,800 • Management info services to city $120,000 • Between 2006 and 2011 the City transferred over $556,000 from general fund to cover rent control expenses *City characterizes what are predominantly outside legal fees as "consultant costs" in financial documents. Total outside legal costs of rent control is unknown. Actual Staff Costs of Rent Control Much Higher While the city appears to obscure the full internal staff costs of rent control, these are the two primary departments which are involved in rent control activities: • Housing & Neighborhood Services • Legal (city attorney) The Neighborhood Services Director, the Housing Program Manager and the Assistant City Attorney spend significant amount of their time on mobile home related activities. In addition these activities would require administrative support and additional overhead costs. The current annual costs of these three significant management positions who work on rent control issues is $550,000. See Chart below: Total Salary Total Modifiers Sala + Modifiers Margery Pierce Neighborhood Services. Director $ 155,731 $ 53,589 $ 209,320 Angie Hanifin Housing Program Mana er $ 95,444 $ 33,510 $ 128,954 Barbara Hamilton _ Assistant City Attorney $ 162,201 $ 51,731 $ 213,932 Note: "modifiers" include health benefits, retirement, etc. Source: City of Oceanside $1.9 million estimated additional costs 1999-2011. For the purpose of this study, we are assuming that these positions spend only 45% of their time on rent control related activities, or $250,000. It is very likely these actual costs plus other unreported staffing costs are significantly higher. In order to estimate the costs to date (1999- 2011) of just these three positions, we calculated an estimated annual cost of $150,000 a year over 13 years. So the additional cost to the city since 1999 is estimated at $1.9 million. Ongoing annual staff costs are estimated at over $360,000 per year (2012 dollars). This includes an "unreported" amount of approximately $250,000 and a "reported" amount of $110,000 per year. Details of annual rent control expenditures -- 2011 According to city documents, approximately $170,000 was shown as expended on total 2011 rent control related activities. Of that ONLY $77,796 was on "permanent employees" and another $23,700 on employee related costs, for a total of approximately $100,000 in 2011. Of the remaining $70,000 only $10,000 was spent on "General Administration Allocations."* This would be the amount determined for the General Funds' activities on behalf of rent control and brings the total recorded amount of staff related expenditures to $110,000 in 2011. *This "allocation" should include everything from the City Manager and treasures time, to the Housing Director, City Attorney, code enforcement inspectors, etc. Clearly, $10;000 does not cover all these staffing costs. The remaining funds were allocated as follows: • Management info services (IT) $9,564 • Building rent $7,008 (rent was reduced from $20,900 in 1999, as high as $38,000 in 2002, and gradually dropping to $17,160 in 2010. There does NOT appear to be any consistent formula for rent charged over the years. (Meaning the city either significantly reduced its rental fees or significantly reduced its rent control related space occupancy.) • Building debt service $10,428 (2011 is the first year this expenditure was shown as a separate line item.) • PERS (retirement costs) $1,225 • Risk Management expenditure of $24,984 was charged in 2011. $90,741 in 2010, and $81,181 in 2009. The rent control fund was NEVER charged by risk management in previous years. Absent in 2011 charges to the rent control fund is: • Community Service mobile home park Inspection costs. In 2009 $18,000 was charged to the rent control fund, which was consistent with the previous ten years of annual inspection costs. Why hasn't that been billed since then and are the costs now being covered by the General Fund? • Redevelopment billed rent control fund approximately $15,000 a year through 2006 and then stopped. How were these costs covered the Following five years? • Consultants* was last billed at $84,333 in 2009. *This is where city paid much of its outside legal bills from rent control since 1999. Oceanside will spend and lose $8 million over next decade. It is estimated that over the next decade, rent control will have an $8 million negative impact on the City of Oceanside. This includes an approximate $4 million in new expenditures and an estimated property tax loss of $4 million. Both of these estimates are "conservative," therefore it is likely these losses will be higher. $4 Million in new costs Based on the available data, it is estimated that the city spent over $400,000 in 2011 on rent control related activities. $170,000 as outlined in the "Rent Control "fund" and an estimated $250,000 additional management cost. Measured in 2012 dollars, the City will spend over $4 million on rent control related activities in the next Ten years. $4 million in Lost Property Taxes Property Taxes are the City's largest revenue source representing 39.9 percent of the total General Fund revenue. They are derived from a portion of the one -percent property tax collected by the County of San Diego and allocated to the various governmental entities within the county. Oceanside's General Fund receives approximately $19,64 for every $100 collected. In accordance with State law, property is assessed at actual full cash value and the maximum tax is one percent of the assessed valuation. Proposition 13, passed by California voters in 1978, specified that an assessed value may increase at the rate of the Consumer Price Index, not to exceed two percent per year based on the 1975 value, unless the property is improved or sold to establish a new market value. (Source: City of Oceanside 2012 Budget) Rent Control Depresses Property Values and Resale Values Oceanside has 17 mobile home parks, with a little over 2500 units. Because rent control depresses property and resale values, the average estimated annual TOTAL property tax paid by EACH mobile home parks is only $13,500. The City of Oceanside receives back approximately $2,646 annually from EACH park, or about $45,000 a year. An actual calculation of the reduced value resulting from rent control cannot be determined. For the purpose of this study, an increased assessed valuation of 10 x current value is used. In other words, if rent control were NOT in place this past two decades, it is assumed for this study that the existing properties would be paying 10 times their current property taxes. The increased valuation of non -rent control revenue producing properties over the last two decades in San Diego County and in Oceanside, this is considered a "conservative" estimate. Therefore, it is assumed that in the absence of rent control these past 20 years, the 17 mobile home parks 7 1 would currently be paying a total of $450,000 in property taxes to the city, a net increase of over $400,000 a year. Calculation of estimated property tax receipts without rent control: • Current net taxes: _ $45,000 x 10 = $450,000. Subtract current estimated tax receipts of $45,000. Resulting in a $405,000 net loss annually to City treasury • Looking Back 20 years: if rent control were not in place, it is assumed the increased annual assessed values would have resulted in a net increase of $5 million in property taxes since 1983. This is an average estimated loss to the city of $250,000 a year (in 2012 dollars). • Looking Forward: the continued existence of rent control will result in Oceanside losing $4 million in property taxes (2012 dollars) over the next decade. Conclusions From 1999 through 2011, Oceanside taxpayers have spent and lost $7.5 million as a result of rent control. If rent control is maintained in its current form, Oceanside will spend and lose another $8 million over next decade. In addition, it is clear that hundreds of thousands of dollars in additional staff and outside legal costs have been incurred, but the city has not kept track of these detailed expenditures. While citizens debate the merits and demerits of rent control, one thing is clear: rent control is a costly proposition to Oceanside's taxpayers. F] Report Author Scott Barnett: Scott Barnett has almost three decades of political and public policy experience, including a term on the Del Mar City Council from 1984-1988, where he was the city's representative on the SANDAG and North County Transit Boards. Mr. Barnett was executive director of the San Diego County Taxpayers Association from 1995 through 2001 and in 2003 formed Taxpayers Advocate a private company which conducts studies on local government spending policy. In November, 2010 he was elected to the Board of Trustees of the San Diego Unified School District. (SDUSD) SDUSD, the second largest school district in California, which has over 100,000 students, 14,000 employees, over 200 educational facilities and an annual budget of $1 billion. 9