COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

DATE:

March 6, 2003

BOARD MEETING DATE:

March 11, 2003

TO:

Honorable Board of Supervisors

FROM:

Thomas F. Casey III, County Counsel

SUBJECT:

Mobilehomes: Affordable Housing and Related Issues at the El Granada Manufactured Home Community and Bayshore Villa

Recommendation

1. Direct staff to continue to provide assistance to park residents in regards to the possible conversion of the two mobilehome communities to non-profit or tenant ownership; encourage residents to continue to work with consultants in furtherance of this goal.

2. With regard to the use permit for El Granada Manufactured Home Community (EGMHC), provide direction to staff about whether to: a) pursue requiring the owners to make an application for a new use permit to continue operation of the park; b) pursue revocation and administrative review of the existing permit; c) draft a new county-wide mobilehome ordinance which would require a use permit and specify conditions and other requirements.

3. Direct staff to continue consideration and evaluation of ordinances addressing rent control and/or rent stabilization, and to report back to the Board of Supervisors.

Background

The Board of Supervisors first considered this issue on December 18, 2001, reviewing a proposed rent control ordinance, and referring the matter to the Planning Commission for public hearings and review. This matter was considered at three Planning Commission meetings, on May 8, 2002, July 10, 2002, and August 28, 2002.

The Board of Supervisors most recently considered these issues concerning mobilehome communities at its November 5, 2002 meeting. At that time, the Board directed staff to pursue two matters: 1) to assemble a team of County staff, including the County Manager's Office, Housing, and County Counsel, to explore the possibility of conversion to non-profit or tenant ownership for both mobilehome communities; and 2) to obtain an application for a new use permit from the owners of the El Granada Manufactured Home Community; and later for Bayshore Villa.

Discussion

1. Conversion of Communities to Non-Profit or Tenant Ownership

Regarding the possible conversion of the two communities to non-profit or tenant ownership, staff assembled a team consisting of representatives from the County Manager's Office, County Counsel, Housing, and Real Property, which met several times to explore these issues.

Members of the team spoke with staff from Daly City who had worked on the purchase of the Franciscan mobilehome community. Because of the desire to utilize tax-free financing, any tenant or non-profit purchase would require the County's participation with bond financing. As such, the team also met with Daly City's bond counsel, Tom Downey of Jones Hall. Mr. Downey discussed the bond financing process, and explained that while a deal would be structured so that the County would not have to contribute funds, it would be complex and would probably involve significant contributions of staff time.

In the meantime, the residents of both EGMHC and Bayshore Villa retained mobilehome purchase consultants. The EGMHC residents are working with George Turk of Millennium Housing, and the Bayshore Villa residents are working with Maurice Priest of Resident Owned Parks. The County team held meetings with each of the consultants, along with the tenants' attorney, Peter Reid of Legal Aid. Tenant representative Lisa Ketcham attended the meeting concerning EGMHC, and tenant representative Roberta McNair attended the meeting concerning Bayshore Villa.

Both consultants would structure a purchase so that a non-profit would take ownership after a sale. The approach of George Turk of Millennium Housing is for the non-profit to maintain ownership indefinitely. Maurice Priest of Resident Owned Parks uses a model which transfers ownership to the residents after the debt service is complete (usually after 30 years), but assumes that the residents would have formed their own non-profit by then.

Mr. Turk has been in contact with the owners of EGMHC, and begun to discuss a possible sale price. Mr. Priest has not spoken with the owners of Bayshore Villa, and seeks to have SAMCAR (Realtors' Association) or the County fund an appraisal before he will make an offer to the owners.

Both consultants would like to see the County continue to pursue other options for maintaining affordability of the mobilehomes while they pursue the possibility of transferring ownership.

2. Use Permit

The original Use Permit was issued for the construction and operation of EGMHC on May 29, 1963. Subsequent Use Permits were issued for various changes: addition of a retaining wall, conversion of a storage area, addition of a water system. But there was never any "renewal" or new use permit for the park's operation.

As directed by the Board, Planning staff sent a letter to the EGMHC owners in December 2002, asking that they submit an application for a new use permit by January 31, 2003. In February, the owners' attorney, Ed McDonald, sent letters to Planning indicating first that his clients intended to submit an application by February 10, and then asking for clarification of the process. On February 25, Mr. McDonald sent a letter stating that it would not be appropriate to require the owners to renew or obtain a new permit, as the use had not changed since the original permit was obtained in 1963. A copy of the February 25, 2003 letter is attached (see Attachment "A").

One approach would be to require that the owners at EGMHC obtain a new use permit, with conditions negotiated specifically for that park. If the owners refused to apply for a permit, the County could revoke the existing permit and start the process of administrative review of the park's use permit.

An alternative would be to draft a new countywide mobilehome ordinance, which would require a use permit, and specify conditions and other requirements specific to mobilehomes. Such ordinances have been adopted in Mendocino County and the City of Santa Clara.

3. Other Issues

Though not the subject of the Board's direction to staff, lot lines and rent issues continue to be of concern.

a. Lot Lines at EGMHC

As reported previously, there have been problems with the lot lines at EGMHC. State Mobilehome Regulations (Title 25) require that lot lines be marked, and that they be changed only with the written consent of affected residents. In order to find a solution which would allow the County to lift the permit hold which was obstructing pending sales, the County asked the owners to submit a proposed lot line map to the Building Division. Residents were given an opportunity to object, and some did. The owners were able to come to agreement with those residents. The final configurations did result in many encroachments of units over lot lines, but the approach will be to correct these on a rolling basis when new units come in. This is an ongoing issue, and staff will continue to work with the residents and owners to come to some resolution. At the moment, the owners are working to resolve lot line issues with a new group of residents who raised objections subsequent to the lot line map being accepted by the County.

b. Rent Control or Rent Stabilization

At EGMHC, a rent increase of $37.70 (almost 5%) is scheduled for next month (April 2003). At the last Board meeting, EGMHC's attorney presented copies of new long term leases which were to be offered to the tenants. Tenant representative Lisa Ketcham indicates that she is in contact with a majority of the tenants, and is not aware of anyone having signed the long term lease.

In addition to rent control, the alternative of some kind of "rent stabilization" process has been raised, based on a model which exists in Daly City. This method does not involve specified limits on rent increases, but provides a mechanism for review by a Rent Stabilization Board when tenants complain that rent increases are excessive.

Vision Alignment

The County's efforts towards preserving affordability of mobilehome communities furthers the County's commitments to offer a full range of housing choices for people at all income levels and for all generations of families; and to ensure basic health and safety for all by helping vulnerable people--the aged, disabled, mentally ill, at-risk youth and others--achieve a better quality of life.

Fiscal Impact

If adopted, the recommendations would involve staff time, but no direct expenditures by the County.