To the editor:
You recently ran an article discussing rent control for a mobile home park located in Orange County (July 26, 2019). It is not my intention to defend the new owner of the mobile home park listed in the article; I don’t know anything about him or his park other than what I read in the article. The question is what can be done? A possible course of action could be for someone to gather a few investors to provide seed money to begin the process of building a mobile home park of their own.
This raises an important question. If mobile home parks are so profitable, why aren’t any new parks being built? Some of the blame needs to be laid at the feet of the very government officials who are being asked to solve the problem. Last time I checked there was about $70,000 in fees to put a new home on a lot. School tax fee, police and fire fee, water meter fee, sewer connection fee, electric meter fee, traffic and urban and on. Then you have all of the development costs. (Tract housing developers are now rolling some of these costs into the homebuyer’s property tax, which artificially lowers the cost of the home, but usually more than doubles the property taxes.) Perhaps, a mobile home park builder could develop a lot for $170,000 with land cost, development cost and fees. That same money could be put in the stock market and generate a 7% return on investment. To get a 7$ return on the $170,000 investment, a charge of $1,000 a month in rent would be required, and this does not account for any overhead, operating, or management expenses. Then there is always the threat of governmental imposed rent control.
Seniors can buy a home on land they own and be somewhat insulated from rising costs. However, in California, their property taxes will go up at the rate of 2% per year, rain or shine. Utility costs continue to rise as well. Costs of maintaining a home also rise. I have seen the cost of a new roof more than double in a relatively short time. A new HVAC system has certainly outpaced the rate of inflation. A park owner has private streets to maintain, common facilities like pools, clubhouses, and landscaping to maintain and improve along the way. The park owner is less insulated from rising housing costs. The city of Yucaipa has rent control. The last time rents were surveyed locally the cities with rent control weren’t significantly lower than the cities without rent control. Attorneys profit from rent control. Park owners hire attorneys to protect their interests and cities with rent control have attorney expense to draft rent control ordinances with ongoing legal expense to and and defend such ordinances. Who pays for the cities’ costs of rent control? The city imposes a fee on all mobile home park residents to offset the cost of administering rent control.
It becomes a very complicated and expensive undertaking to take away free market forces and try to artificially control rent through governmental agencies and the inevitable courtroom battles and yet we continue in our search of the ever elusive utopia.
Operator, Mountain Air Mobile Home Estates