La Verne Orders Review of Mobile Home Rent Control

LA VERNE — A month after a federal judge ruled that a Santa Barbara law controlling mobile home park rents is unfair to park owners, city officials are taking another look at a 6-year-old ordinance that limits rent increases when a park space is vacated.

City council members will not say whether La Verne is leaning towards lifting restrictions on rent increases for new tenants. But the City Council has hired an attorney to study the legal implications of a recent Santa Barbara case. A judge there awarded $315,000 to a park owner who claimed owners collected sizable profits from selling their mobile homes, but park owners gained nothing.

La Verne Councilman Thomas Harvey said he is against changing the city’s ordinance. But Harvey would support relaxing some restrictions, he said, “if it’s clear to me that we would lose in court.”

However, he warned that under “vacancy decontrol,” or the process of putting rent-controlled property back on the free market, park owners could take advantage of the situation by driving out older residents in order to raise rents as often as possible.

A sprinkling of cities in Southern California--including Carson, Los Angeles, Rialto and Santa Monica--have rent control ordinances that regulate the amount a park owner may raise rents for a new tenant.

In the San Gabriel Valley, La Verne is the only city that regulates rents for new tenants of mobile home parks. Under the city’s policy, when a space is vacated, the park owner can increase the new mobile homeowner’s rent by no more than $25. In addition, annual rent increases may not exceed 7% and are set according to the consumer price index. Larger raises have to be approved by a committee of landlords and tenants.

Park owners throughout the state are citing the Santa Barbara case as a legal precedent to city officials, warning them that ignoring it may bring a barrage of lawsuits. The pressure has worked in one case: The Santa Paula City Council recently relaxed the city’s rent-control ordinance and now allows park owners to raise rents up to 25% whenever a tenant moves in.

Michelle Brooks, spokeswoman for the Western Mobilehome Assn., which represents 59 park owners statewide--and six of the eight in La Verne--said La Verne could be liable for up to $2.6 million in damages, if landlords challenged the rent control ordinance and won. Brooks said that, although her association accepts the concept of limits on annual increases for existing tenants, it is fighting against any kind of ceiling on rates of vacated spaces.

Mobile homes in La Verne typically sell for $30,000 more than comparable coaches in non-rent-controlled cities, Brooks said. The spaces are more valuable because rents are guaranteed to rise at a slow rate.

Harvey acknowledged that residents will pay substantially more to live in a park in La Verne, but said the difference in price is closer to $10,000.

La Verne is already facing one legal challenge to its rent control ordinance. One of the park owners, Marvin Schwartz, is suing the city over alleged damages he suffered because he could not raise rents to match market values. Schwartz now charges $240 to $350 per month at his park, Kings Way Gardens on Arrow Highway.

Schwartz’s attorney, Robert Coldren, said the lack of a vacancy decontrol provision is the city’s “most glaring violation of constitutional rights” of mobile home park owners.

“By restricting the landlord from increasing rent, what the city has done is created a situation where residents have a perpetual hold on below-market rents,” he said.

But in spite of the restrictions, the rents in La Verne mobile home parks--which average $250 a month--aren’t far below other areas. Random calls to parks in surrounding cities found that rents in Pomona, San Dimas, and Walnut are equivalent to, or only slightly higher than those in La Verne. In West Covina, however, one park--Friendly Village of West Covina--charges $425 to $436 for a space.

Jeff Allred, La Verne’s assistant city manager, said that despite the pending lawsuit, the ordinance has been “very successful, with very few problems” between park owners and residents.