Rent control jeopardizes mobile home park

April 21, 2009 7:33:08 PM PDT
In mobile home parks around California, people are worried about the implications of a ruling in Federal District Court. It's a decision that could put them in a financial vice-grip.

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At the Contempo Marin Mobile Home Park in San Rafael, it felt to residents as if a big black cloud had settled above on this otherwise perfect spring day.

"You're stuck, just really, really stuck," said a mobile home resident.

"As a lay person, I have to assume that any court decision is appealable," said Dick Heine from the Homeowners Association.

This decision from the United States District Court for Northern California, which found in favor of Equity Lifestyle Properties, is chaired by billionaire Sam Zell.

The company bought Contempo Marin in the 1990s and sued the city of San Rafael, claiming their mobile home rent control was unconstitutional. When the company won the first time, it tried to triple the rents.

"It could be that he's thinking that if we can get the place empty, we can do something else with the property," said Heine.

The court's decision cuts two ways, but ultimately homeowners lose in either one of them. It does protect rent control, but only for 10 years. And if a resident should sell before then, rent control is no longer in effect.

"It makes it impossible for me to sell my house at this point," said homeowner Steve Vincent.

This news has the worst kind of timing for Vincent and his wife. They want to sell and move out and they had a place in mind. But this court decision effectively dissolves their equity.

And there are larger implications. Zell's company owns some 300 mobile parks, including 30 in California. Residents worry that this court decision might set a precedent.

If this one stands, the defeat of the rent control ordinance, then others are going to topple," said Heine.

The management of Contempo Marin did not go on camera, but issued a statement saying: "We are very happy with this ruling. In terms of broader implications, the decision addressed only the San Rafael ordinance, but raises serious issues about rent control in California."

An attorney representing San Rafael says the city has yet to decide whether it will or will not appeal.

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