San Rafael rent control case could impact thousands

June 3, 2013 10:08:18 PM PDT
Residents of a San Rafael mobile home park won a major victory Monday in a case that could affect hundreds of thousands of California mobile home residents. The multi-million dollar legal battle pits a company controlled by one of the richest men in America against the city of San Rafael and the Contempo Marin mobile home park.

At first glance, you might think life at Contempo Marin looks idyllic. But former resident Jacqui Garcia says that's an illusion. "I get very angry about what's happened to so many people that have had to walk away," she said.

Garcia lived at Contempo Marin for 30 years, in a home protected by rent control.

Former San Rafael City Councilman Greg Brockbank says mobile home parks are "one of our best examples of affordable housing." "It gives us the diversity we need to have a healthy community," he said. "It provides us with people that work in the community, that retire in the community."

But things at Contempo Marin changed 13 years ago when the park owner Equity LifeStyle Properties (ELS) sued to end rent control. Contempo Marin is like most mobile home communities; residents own their houses but rent the land under them. Despite their name, the homes are actually not very mobile.

About 100 California cities and counties have rent control laws to protect to the homeowners. The San Rafael case could affect them all.

Attorney Michael Von Loewenfeldt is representing the city of San Rafael. "Because (mobile home owners) don't own the land under their homes, they are really subject to abuses or potential abuses by the landowner," he said.

In 2008, ELS tried to raise rents from $700-$800 a month to almost $2,000 a month. A judge stopped that, but the legal battle is still going and it's taken an emotional toll on many residents.

ELS is the biggest mobile home park owner in the country. The chairman of the board is Sam Zell, estimated by Forbes to be worth $4 billion. Last month residents of ELS communities in seven states showed up outside a shareholder meeting in Chicago to accuse the company of excessive rent increases.

"Seniors are actually walking into the manager's office and turning in the key to their house and walking away, losing everything," Carla Burr, a mobile home resident from Virginia, said.

Residents at Contempo Marin say that's happening at their park too. They are caught in legal limbo. Five years ago, a federal judge ruled San Rafael's rent control law was unconstitutional. Then, last April the appeals court reversed that decision.

But the president of the homeowners association, Keith Meloney, says it's too soon to celebrate. He told residents, "While there is a time for our victory dance, it is not yet today."

ELS is fighting the court ruling. For now, if any one moves out of their home, rent control on that space goes away and ELS can raise the rent as high as it wants. That's already happened on more than 60 of about 400 spaces at the park.

In court papers filed last week, residents claim ELS is trying to drive them out.

Gordon Atkinson is the attorney for Contempo Marin residents. He feels so strongly about the case he is doing it for free. Atkinson says the court documents include statements from residents who say they are being harassed. "They say that the park owner is not taking care of the park, that conditions are deteriorating, that they are selectively enforcing rules against some homeowners, but not other homeowners," he said.

Residents who want to sell are struggling. Their houses have lost almost all their value because of the uncertainty over future rent. Andrew Perrins has family and health issues and needs to move. Perrins says he bought his house for $160,000. "Just a few years later, due to the legal actions of the owners of the landowner, my house is now worth less than $5,000," he said.

Jacqui Garcia was so desperate to get out, she's selling her home for just $300. "There was no peace of mind anymore," she said. "You lived in constant fear, what are you going to get hit with next?"

In court documents, ELS calls the residents claims of harassment "erroneous assertions."

No one from Equity LifeStyle Properties would not talk on camera. Instead, they sent the following statement:

We filed a petition for rehearing with the full 9th Circuit U.S. Court of Appeals because we believe that the 3-judge panel's opinion was in conflict with U.S. Supreme Court rulings. As discussed in our petition, the trial court found after a full trial that the City's rent control ordinance does not make housing more affordable, a conclusion the 3-judge panel did not dispute. Instead, the ordinance forces new residents to pay more upfront to get into the community than they would have to pay without the ordinance. Our customers are overwhelmingly satisfied with the quality and pricing of the communities and lifestyle we provide. We invest large amounts of money in maintaining and upgrading our communities every year. Last year alone, we invested tens of millions of dollars in property upgrades.

Monday, the federal appeals court refused to re-hear the case -- a major victory for the mobile home owners. However, Equity Lifestyle Properties has 90 days to appeal to the U.S. Supreme Court.

There are an estimated 350,000 mobile homes in communities throughout California.

Written and produced by Jennifer Olney


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