After two years of maneuvering, including a successful lawsuit, owners of the Stardust Mobile Estates mobile home park in Ventura have won approval to sell its spaces to residents instead of renting them out.
The impending switch from rental spaces to resident-owned lots at the 125-space park could generate millions, providing the longtime owners a hefty nest egg. Some residents, however, are less confident about their futures.
Under California law, once the first sale is completed — the spaces should hit the market in late 2010 or early 2011 — the 40-year-old park will no longer fall under the city’s mobile home rent-control ordinance.
The owners will be allowed over four years to raise rents to market rates, likely resulting in higher monthly payments than the $390 to roughly $550 being charged now.
Ventura’s Planning Commission unanimously approved the conversion earlier this month, and an attorney for the owners said not a single resident would be displaced. Each can purchase the space where the mobile home sits, or elect to stay and pay increased rents.
People who earn less than $49,000 or live on fixed incomes will get a better deal. While city rent-control will be gone, they will remain covered by state mobile home protections and can apply for special financing to buy their spaces, said Sue Loftin of The Loftin Firm, a Carlsbad-based law group frequently hired by park owners that has overseen dozens of conversions statewide.
“Those who live on Social Security alone will be able to buy and possibly reduce their housing costs,” Loftin told the commission. “The process is all about choice.”
Stardust Mobile Estates is located on 12.6 acres at 11100 W. Telegraph Road, near North Wells Road.
Dotti Bash, 88, has lived at the park for more than two decades. She plans to stay.
“I’m too old to even think about buying my dirt,” she said.
Bash was assured by the owners that she qualified as low-income and her rent would rise only modestly. “I quit worrying about it,” said Bash.
But resident Claudette Marie Lemay, 73, a retired Ventura Unified School District librarian, is troubled by the uncertainty. She was disappointed in the conversion approval, because city rent control has long provided retirees like her a sense of reassurance.
She might be able to afford to buy her space, she said, but the combination of a mortgage, homeowner association fees, utilities and property taxes are guaranteed to be far more than the $541 a month she pays now.
“I’m from Massachusetts. I am not going back there,” she said.
As for state assistance for low-income buyers, she said, “I have no confidence in that. The state is absolutely broke.”
The money in that program — the Mobilehome Park Resident Ownership Program — is safe from state raids, said Chris Westlake, deputy director of financial assistance with the California Department of Housing and Community Development, which runs the program.
There is, however, a cap of $2 million in assistance per mobile home park. The going rate for a space in Southern California is $115,000 to $200,000, Westlake estimated, so the $2 million could be chewed up quickly. “We would not be able to satisfy all residents,” he said.
Plus, there is only about $8 million available for the entire state, Westlake said, and it’s distributed on a first-come, first-served basis.
“There is never enough money,” said Frank Wodley, a Chatsworth mobile home resident and president of the Coalition of Mobilehome Owners California.
The coalition and affordable housing advocates prefer to see park residents band together and buy the entire park themselves. The state has established a different program to help such efforts, he said, but park owners have to be willing to sell, and selling spaces individually on the open market often is far more lucrative.
Selling 125 spaces at $200,000 would generate $25 million. A park-wide sale likely would net a third of that, officials estimated.
About 365,000 mobile home spaces currently exist in 4,700 parks statewide. Out of those, 165,000 are under some type of rent control, Wodley said.
“The park owners claim, ‘This is the American Way, own a piece of the rock.’ But at what price?” he asked.
Built in 1968, Stardust has been a family-owned business for 41 years, said co-owner Jim MacKay, who lives at the park and prides himself on the maintenance. The park also has a clubhouse, lounge, laundry facilities and swimming pool.
He said he could have sold to a big corporation or out-of-town management firm “in about 48 hours” but wanted residents to have the chance to buy their spaces.
The next step for the owners is to complete a comprehensive appraisal and apply with the state Department of Real Estate, which will help set a sale price for each space. MacKay also pledged that his team of attorneys would sit down with each resident to go over the options.
“I firmly believe in all my heart that this is a good thing for a resident who elects to buy (the space) and those who remain a renter,” said MacKay, 69. “People don’t realize this is a business. We are not out to force people from their house. That doesn’t make any sense.”
Ventura city officials disliked the proposal because it would eliminate some of the city’s already limited low-cost rental housing, remove rent control, and put a greater strain on the roughly 2,500 rental mobile home spaces that remain in the city — all of which are virtually full, officials said.
Last year, the Planning Commission rejected the application, saying it was incomplete. The City Council upheld the determination on appeal, prompting a lawsuit.
In August, a judge ruled the owners complied with state law in the conversion process and that Ventura overstepped its authority by rejecting the plan. Superior Court Judge Glen Reiser ordered the city to approve — without condition — Stardust’s tentative map for its conversion and ruled the city must pay its attorney fees and other legal costs.
FAIR USE NOTICE. This document may contain copyrighted material the use of which may not have been specifically authorized by the copyright owner. Tenants Together is making this article available on our website in an effort to advance the understanding of tenant rights issues in California. We believe that this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.