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Home My WebLink About1995-06-13 - AGENDA REPORTS - MH PARK SPACE VACANCY SURVEY (2)A4 Manag Approval Itepm� to be/prresented by: 1( Richard Henderson UNFINISHED BUSINESS DATE: June 13, 1995 SUBJECT: Mobilehome Park Space Vacancy Survey Results. DEPARTMENT: Community Development - _ .&G J►I In 1991, the City Council adopted Chapter 6.02 of the City's Municipal Code, which describes the manufactured home park rent adjustment procedures. Section 6.02.010 of the Municipal Code states the purpose of rent stabilization in mobilehome parks: "..Because of the high cost of moving manufactured homes, the potential for damage resulting therefrom, the requirements relating to the installation of manufactured homes, including permits, landscaping, and site preparation, the lack of alternative homesites for manufactured home residents, and the substantial investment of manufactured home owners in such homes, a virtual monopoly exists in the rental of manufactured home park spaces, creating a situation where park owners have potentially unbridled discretion and ability to exploit manufactured home park residents." Also included in Chapter 6.02 of the Municipal Code is a provision which provides for the suspension of rent stabilization when the City Council determines that the space vacancy rate of manufactured home parks exceeds 5%. These suspension measures do not apply if the City's mobilehome park space vacancy rate exceeding 5% is caused by a major disaster or emergency. In November, 1994, the City Council received a letter from Dowdall Law Offices, representing a group of Santa Clarita mobilehome park owners. The letter questions the validity of continuing mobilehome park rent control and contends that the citywide mobilehome space vacancy rate exceeds 5%. The Dowdall letter estimates a current vacancy rate of 8% and requests that the City Council suspend rent stabilization, as prescribed in the Ordinance. At the January 24, 1995 City Council meeting, staff was given 120 days to document the mobilehome space vacancies in the City. Since the City incurred substantial damage from the Northridge Earthquake on January 17, 1994, staff was directed to break down the space into earthquake -related and non -earthquake -related vacancies. Furthermore, the lA /I -P enda Item:_ Council directed staff to divide the space vacancies into physical vacancies, abandoned mobilehome vacancies, park -owned mobilehomes, and economic vacancies. For a complete description of these categories please see the attached methodology statement. Results Staff completed on-site appointments at each of the City's mobilehome parks in early April. The data gathered at these appointments is summarized in the attached spreadsheet. Of the 2120 mobilehome park spaces subject to rent stabilization, 212 are vacant, resulting in a citywide space vacancy rate of 10%. This rate excludes the parks' 84 earthquake -related space vacancies and the 23 park -owned vacant mobilehomes. The vacancy rates of individual parks range from 2.9% to 32.5%. All but three of the 16 mobilehome parks governed by the Rent Stabilization Ordinance currently have vacancy rates exceeding 5%. As prescribed in the Ordinance, the mobilehome park space vacancy rate is calculated on a citywide basis. Thus, it is not necessary for every park to be at least 5% vacant in order to have a citywide vacancy rate exceeding 5%. Instead, the cumulative vacancies are divided by the total number of spaces in the City under rent stabilization, yielding an average space vacancy rate, which is currently 10%. For comparison purposes, alternate space vacancy rates were calculated, which included different vacancy categories. For example, a space vacancy rate which did not exclude the earthquake -related vacancies was calculated at 14%. When economic vacancies are not counted as vacancies, the citywide space vacancy rate is 6.3%. In all scenarios, the citywide vacancy rate exceeds 5%. RECOMMENDATION Staff recommends that the following action be taken by the Council: Direct staff to return with a resolution acknowledging the 10% space vacancy rate in City mobilehome parks, and, in accordance with the Manufactured Home Rent Stabilization Ordinance, suspend rent stabilization. Attachments: Mobilehome Park Vacancy Survey Results spreadsheet Space Vacancy Survey Form Survey Methodology GAC:NLH:Iep current\mhagrzp.nlh 2 City of Santa Clarita Mobilehome Park Space Vacancy Survey: Methodology Vacancy Categories During the regular City Council meeting of January 24, 1995, the Council directed staff to break down the existing mobilehome park space vacancies into the following categories: Space Vacancies Economic Vacancies Earthquake -Related Vacancies Staff formulated the following definitions for the vacancy categories specified above: SPACE VACANCIES, which include: PHYSICAL VACANCIES: there are no tenants and no mobilehome on the space; ABANDONED MOBILEHOME VACANCIES:. there are no tenants on the space, but there is a mobilehome on the space which is not owned by the park owner (and no rent is being paid to the park by a creditor or other such party)'; PARK -OWNED MOBILEHOME VACANCIES: the park has purchased a mobilehome which was previously owned by a tenant, creditor, or other party, ECONOMIC SPACE "VACANCY': a tenant has not paid the full amount of his or her space rent for a period of 37 days or more (this time period allows for a 7 -day grace period, plus 30 additional days before eviction proceedings can legally begin); EARTHQUAKE -RELATED SPACE VACANCY: a space is not occupied by tenants (even though it may be occupied by an abandoned mobilehome) because of physical damage to the home caused by the January 17, 1994 earthquake. Any space that was occupied by tenants on the date of the disaster but was not occupied as of April 1, 1994 will be considered an earthquake - related vacancy. Any space which was occupied on April 1, 1994 cannot be considered an earthquake -related vacancy. The April,1 date was chosen because it allows sufficient time for tenants, who may have temporarily vacated their homes immediately following the earthquake, to have returned to the mobilehome park. In order to verify which spaces were occupied as of April 1, 1994, utility records, rent receipts, and other park records were collected. Space Vacancy Rate The above categories have been used in the calculation of the space vacancy rate, using the Chapter 6.02 does not define an `abandoned manufactured home". It is therefore unclear whether a mobilehome is "abandoned" when it is park -owned. Whether or not a mobilehome is considered abandoned is significant bfcause abandoned mobil chomes comprise part of the space vacancy rate.. Therefore, a determination had to be madeas to: whether a park -owned mobilehome on a space for which rent is not being paid would be counted as an "abandoned" home.: Rased on a recommendation from the City Attorneys office, staff did not include park -owned, empty mobilehome spaces in the space vacancy rate... The rationale for their exclusion from the "abandoned" category is that there is a mobilehome on the space which can be rented. following formula: (PHYSICAL VACANCIES + ABANDONED MOBILEHOME VACANCIES - PARK -OWNED MOBILEHOMES + ECONOMIC VACANCIES) - EARTHQUAKE -RELATED VACANCIES divided by the TOTAL NUMBER OF SPACES. The formula above considers all types of vacancies, for which the park does not receive payment, as vacancies, with the exception of earthquake -related vacancies and park -owned mobilehomes. The earthquake -related vacancies are subtracted from the subtotal of space vacancies, as mandated by the 1992 amendment to the Mobilehome Rent Stabilization Ordinance. Economic and abandoned mobilehome vacancies are included in the vacancy rate calculation because the effect of either type of vacancy on park revenue is the same, if not more damaging, than that of a true physical vacancy. With a physically vacant space,. the potential of attracting a new tenant exists. With economic and abandoned mobilehome vacancies, not only are parks foregoing rent for the affected spaces, the potential of attracting new tenants does not exist. Parks cannot rent out economically vacant spaces to new tenants until formal eviction proceedings are completed and the rent -delinquent tenant is physically removed. The survey revealed that many parks are owed thousands of dollars of back -rent by individual tenants due to economic vacancies. Abandoned mobilehome vacancies present a similar problem for park owners. Although the home is vacant, in many cases it cannot be rented out because it still belongs to another party (the original owner or a creditor). The space is in transition, in that the original owner no longer occupies it and the creditor may not be paying space rent to the park, yet the park cannot rent the space to new tenants because it may be owned by the previous owners or by the bank. For this reason, when a space was unoccupied and no space rent was being paid to the park, the space was counted as a vacancy. If a vacant mobilehome was unoccupied, but rent was being paid to the park (by the bank or any other party), the space was not counted as a vacancy. If a lien sale had taken place and the park had purchased the home, the space was not counted as a vacancy, even if the home was unoccupied (see footnote 1 above). Data Collection In order to determine the current mobilehome park space vacancy rate, a survey was conducted by Planning Division staff during the month of March, 1995. There are 18 mobilehome parks in the City of Santa Clarita, 16 of which are governed by the Mobilehome Rent Stabilization Ordinance! All park owners were invited to attend the March 10, 1995 meeting of the Santa Clarita Mobilehome Owners' Association,at which Planning staff introduced the mobilehome park vacancy survey. The purpose of this meeting was to explain the vacancy category definitions above and outline the survey methodology to the park representatives who would later provide staff with data on the park's vacancies. Individual surveys were distributed to all park owners and managers who attended (approximately 2/3 of those invited). Park representatives were asked to tabulate the number of mobilehome spaces in the park, the space vacancies (physical vacancies and abandoned mobilehome vacancies), the economic space Placenta Canyon Mobilehome Park and the Canyon View Estates are exempt from the Rent Stabilization Ordinance because tenants in these parks are on long-term leases. For the purpose of comparison, data was collected from Placerita Canyon Mobilehome Park. Data was not collected from Canyon View Estates, since the development, which contains approximately 400 home sites, is not yet fully operational. vacancies, and the earthquake -related vacancies on the survey worksheet At the March 10, 1995 meeting; staff members also scheduled on-site appointments with the park representatives. The purpose of these appointments was to visually verify the tabulations prepared by the park owners/managers and collect supporting documentation, such as utility and rental records. The park owners who did not attend the meeting of the Mobilehome Owners' Association were contacted by telephone, at which time staff both explained the vacancy survey and scheduled on-site appointments. Copies of the survey worksheet were also mailed to those individuals unable to attend the March 10, 1995 meeting. On-site appointments were completed in early April. The data gathered at these appointments is summarized in the Mobilehome Park Vacancy Survey Results spreadsheet, current\ mhmethd2.nlh Mobilehome Park Vacancy Survey Results June 13, 1995 N SPACE VACANCIES •,�; ..{a ' k Abandoned Park- Earthquake- M Rental Space'1sSVA% Physical Mobilehome owned Economic Related Spaces Vacancy ele Park Name Vacancies plus Vacancies minus Homes plus Vacanciesminua Vacancies divided b p p yin Park equals Rate U Canyon Breeze. 6 5 0 13 0 136 .17.6% 2) Canyon Palms 5 1 1 0 3 45 4.4% 3) Caravilla 1 4. 0 1 3 84 3.6% •y e, '' M - 41 Cordova 6. 9 0 7 4 314 5.7% 5) Greenbrier 22 26 4 4 28 318 6.3% 6) Granada Villa 20 7 0. 16 10 179 18.4% sib �q 7) Hacienda 2 5 0 6 0 40 32.5% 8) Mulberry 8 4 0 7 12 109 6.4% 9) .Parklane 39 18 17 3 12 406 7.6% 10)Polynesian 15 9 0 0 5 144 132% 1A9 111 Ramona Shaw 1 5 0 5 4 28 25.0% ' 121. Royal Oaks 3: 0 0 10 1. 87 13.8% 13) Sand Canyon 2 0 0. 0 0 70 2.9%�� Axa 14) Shady 2 1 0 1 0 56 7.1% 15):Sierra Park 11 1 0 2 1 74 17.6% i- 16):Soledad Trailer Lodge 0 3 2 3 0 30 13.3% Citvwide Totals 143 98 24 78 83 2120 10.0%.x"6'.'3%x.•�.99's Placenta Canyon jnot included' in,�urvey) uv. -I ArziLeJu..I1. 0. 0 0 '3 0 31 9.7'k *b CITY OF SANTA CLARITA MOBILEHOME PARK SPACE VACANCY SURVEY Mobilehome Park -- Name of Park Owner: Name of Park Manager: (Please place an "X" next to the name of the person above completing this worksheet) TOTAL # OF SPACES IN PARK: Please fill in the information under each vacancy category below. PHYSICAL VACANCIES: There are no tenants and no mobilehome on the space. Number of List the space #s Vacancies_ of the vacancies: ABANDONED MOBILEHOME VACANCIES: There are no tenants on the space, but there is an abandoned mobilehome on the space. Number of List the space #: Vacancies: of the vacancies: ECONOMIC SPACE VACANCIES:: A tenant has not paid the full amount of his or her space rent for a period of 37 days or more (this time period allows for a 7 -day grace period, plus 30 additional days before eviction proceedings could legally begin). Number of List the space #s Vacancies: of the vacancies: EARTHQUAKE -RELATED VACANCIES: A space is not occupied by tenants (even though it may be occupied by an abandoned mobilehome) because of physical damage to the mobilehome caused by the January 17, 1994 earthquake, Any space that was occupied by tenants on the date of the disaster but was not occupied as of April 1, 1994 will be considered an earthquake - related vacancy. Any space which was occupied on April 1, 1994 cannot be considered an earthquake -related vacancy. The April 1 date was chosen because it allows sufficient time for tenants, who may have temporarily vacated their homes immediately following the earthquake, to have returned to the mobilehome park. In order to determine which spaces were occupied as of April 1, 1994, copies of utility records and/or rental receipts will be collected at the on-site appointments. Number of List the space #s Vacancies; of the vacancies: 'To the best of my knowledge, the information provided above is true and accurate." Signature: Dater