Santa Rosa votes to limit rent control in mobile home parks

Santa Rosa mobile home park residents will get more peace of mind when it comes to rent increases under a new plan tentatively approved by the City Council late Tuesday.

The move to tighten rent controls and make them the strongest in Sonoma County is the culmination of years of grassroots efforts by Santa Rosa mobile home residents that intensified in recent months.

“It was a victory … It feels great,” said Tom LaPenna, president of Santa Rosa Manufactured-Homeowners Association and a resident at Sequoia Gardens Mobile Home Park who played a key role in developing the new policy. “We’re leading the way now for the county.”

At the council meeting, which stretched late into the evening, mostly older mobile homeowners filled the chamber, holding bright homemade paper signs with phrases like “save our housing” and “new faces of homelessness (without) rent control.”

Mobile homes are one of the few unsubsidized affordable housing options, especially for older adults, who account for the fastest growing share of the unhoused population in California, a trend also reflected in Sonoma County.

After more than two hours of discussion Tuesday, the City Council tentatively voted 5-2 to amend its mobile home rent ordinance, which was last updated in 2004. Natalie Rogers, who sponsored the amendment, Mayor Chris Rogers, Vice Mayor Eddie Alvarez, Dianna MacDonald and Victoria Fleming voted in favor while Tom Schwedhelm and John Sawyer voted against. The change will go to a second reading of the ordinance and a final vote next week.

It’s up to local governments to set limits on the rent mobile homeowners pay for the land below their residences, different laws than govern other types of housing.

About 100 California cities and counties have some form of rent control. Yearly increases are mostly tied to a percentage of the Consumer Price Index (CPI), the measure of prices for goods and services paid by consumers in an area.

Currently, 16 of Santa Rosa’s 19 mobile home parks with rent control set yearly increases based on 100% of the CPI with a 6% cap, like most other Sonoma County jurisdictions.

If the new amendment holds, rent increases will be tied to 70% of the CPI with a 4% cap. It would also allow park owners to increase rent by 10% for in-place transfers, which occur when a mobile home is sold to a new buyer.

The closest comparison is Rohnert Park which uses a slightly different CPI calculation with a 4% limit. The City of Sonoma ties rent increases to 80% of CPI.

Average mobile home space rents across Santa Rosa are $721 per month, though this varies considerably park to park and lot to lot, according to city calculations. Without the new ordinance, the average would increase to $762 in 2023.

Mobile homeowners from Petaluma to Windsor have been pushing for similar changes, part of a grassroots trend throughout California and more broadly. Most recently, the Windsor City Council took up the issue at a meeting earlier this month.

Proponents of tighter rent control argue that current limits risk pricing out many of the predominantly older people living in mobile homes who rely on Social Security, payments that have failed to keep pace with CPI over time.

Twelve of Santa Rosa’s 16 rent-controlled parks are for residents who are 55 and older.

“Some of my neighbors are already walking a tightrope between paying rent and buying food and necessary medicine with little or no space before falling into homelessness. Personally I’m not yet at that homeless abyss, but my calculator says that I will be there if rent increases keep on going with the trajectory they’ve been going on,” said Dianne Monroe, a Santa Rosa mobile homeowner who testified at the Tuesday hearing. “You’re in a position to help keep senior citizens in their homes.”

Another speaker described how her rent has gone from $650 per month to $800, and with soaring utilities, she’s facing a recent bill of more than $1,100. “I wanted you to look at what a 77-year-old woman who has saved all her life for security when she retired and a place to live,” Macy McFarland of Sequoia Gardens said. “I wasn’t equipped for that when I retired.”

Social Security adjustments have only exceeded CPI increases in two of the last 10 years, leading CPI to outpace the benefit payments by roughly 10% over the last decade.

Most recently, an 8.7% cost of living bump to Social Security payouts was announced for 2023, the highest in 40 years to account for record inflation. That eased the impact of an upcoming 5.7% rent increase based on current law a bit, but not enough for many already struggling to cover other rising costs.

In a letter sent to the City Council ahead of its hearing, Legal Aid of Sonoma County advocated for tying rent increases to Social Security cost of living adjustments instead, like Ventura and Tuolumne counties.

Generally, mobile home parks are seen as a good investment, leading in recent years to a buying spree by real estate and private equity firms.

However, local mobile home park owners and managers argued that under Santa Rosa’s current law, over the last 20 years, the average maximum CPI increase allowed was 2.7% or the equivalent of an average annual bump of $16.11 per month. Further limits would threaten owners’ ability to maintain and reinvest in park facilities and operation, the costs of which have increased for expenses like insurance and payroll, they said.

Ken Kravenas, chief operations officer of Hometown America Communities, who represents the Orchard, a Santa Rosa mobile home park for 55-and-older residents, noted that after one-third of the park was destroyed by the 2017 Tubbs Fire, the owners offered to rebuild residents’ homes at cost, incurring over $4 million in expenses and lost income without additional costs to residents or the city.

“We’re more or less like little towns — a mobile home community — and it’s the responsibility of the owner for the affairs and the maintenance of the roads and many other structures and common area amenities,” said Mark Winters representing Rancho Cabeza Mobile Estates ownership. “It’s getting more and more costly to run a park and maintain it and do any kind of infrastructure improvements along the way.”

“Our residents are attracted to our communities because they provide attractive affordable path to homeownership in an extremely high cost housing market,” said Steve Hathaway representing Roseland Mobile Home Park, adding that while he wants to support those who are financially insecure, park residents come from diverse social and economic backgrounds.

Resident and park owner representatives met several times in October and early November in city-facilitated negotiations to try to reach an agreement. Residents’ final proposal came in at 65% of CPI with a 3.5% cap along with a 3.5% limit on rent bumps on in-place transfers. Owners came down to an offer of 75% of CPI with a 6% cap and a 15% allowable increase for in-place transfers. They also offered a $100,000 annual subsidy program to help residents most in need.

Ultimately, city staff recommended rent increases be tied to 75% of CPI with a 5% cap and a 10% increase on in-place transfers, a less restrictive version of what was ultimately voted on by the City Council.

Schwedhelm and Sawyer, who voted against the amendment, favored city staff’s proposal.

Per the city ordinance, park owners are entitled to a “fair rate of return” and can request a hearing if that metric is not met. Park owners and residents pay into a fund monthly to cover expenses for such proceedings, which can be lengthy and costly, and could become a more regular occurrence, park owners warned, if rent control is too restricted.

The fund has ballooned to more than $800,000 largely because of no hearings have been held since 1999.

Without park owners voluntarily providing data on their profit margins, several City Council members said they were unable to determine whether the new ordinance would ultimately endanger a fair return.

In the end, Natalie Rogers and a majority of the council members erred toward residents’ concerns.

“We’re not dealing with pocketbooks here, we’re dealing with peoples lives, we’re dealing with their ability to feed themselves to stay housed. It’s a bit different from a profit margin,” Rogers said. “We can come back and look at an ordinance, but what we can’t do is come back and rehouse people that may lose their housing or that don’t have heat or that we find in a mobile home because they don’t have food … A lot of things are irreversible.”

The ordinance amendment, after a final vote next week, would go into effect 30 days later. The City Council discussed how to ensure any change would apply to mobile home residents who are facing a rent increase Jan. 1.

“In Your Corner” is a new column that puts watchdog reporting to work for the community. If you have a concern, a tip, or a hunch, you can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On Twitter @InYourCornerTPD and Facebook @InYourCornerTPD.