Local Government

Rent Gouging Moratorium: Anaheim Moves Discussion to April 16 while Fullerton Postpones Until July

 

At their April 2 meeting, Fullerton City Council decided to postpone discussion of rent stabilization (or measures to prevent rent gouging) at mobile home parks until July.

This decision came in the context of the new owner of Rancho La Paz mobile home park in Anaheim/Fullerton (John Saunders of Newport Beach) drastically raising rents between 44 and 60 percent.

Residents organized at council meetings and elected officials put pressure on Saunders to reduce these drastic increases, which would cause real hardship to the hundreds of the park’s residents, all of whom are seniors.

This situation caused some local elected officials, such as Jose Moreno of the Anaheim city council, to propose emergency “rent stabilization” to protect residents of mobile home parks from this kind of price gouging.

Fullerton Mayor Jesus Silva, Anaheim Councilmember Jose Moreno and Fullerton District 5 Councilmember Ahmad Zahra met with Rancho La Paz residents.

After Councilmember Jose Moreno requested an emergency item be placed on the Anaheim agenda to stop the rent gouging effort by Saunders,  Anaheim Mayor Harry Sidhu (along with councilmembers Trevor O’Neil and Stephen Faessel) met with park owner Saunders and reached an agreement that no rent would be increased until September 1st and that, in the meantime, talks would take place between the park owner and homeowners in efforts to negotiate a less drastic increase.

Because of that agreement, Councilmember Moreno changed the emergency measure item for action at the April 2nd meeting to one that would put an official moratorium on rent increases until November. He said he did that to ensure that the promise made by the park owner had an official basis. Though the measure received majority audience approval, the council majority failed the item with Mayor Sidhu, and councilmembers O’Neil, Faessel and Lucille Kring voting to table it without discussion.

Councilmembers Jose Moreno, Jordan Brandman, and Denise Barnes successfully placed the item on the Tuesday, April 16 agenda where it will be open for discussion.

Meanwhile, Fullerton city council decided to postpone discussion until July, at the request of Mayor Protem Fitzgerald.

Mayor Silva, alternatively, proposed creating an “ad hoc” committee to study rent stabilization proposals and how they have worked in other cities.

“I would like to study this a little more—to allow our city attorney and city manager to determine what does it take to do some sort of rent stabilization—what’s the process, the administrative costs, will it help,” Silva said.

Councilmember Zahra supported this; however, Mayor Protem Fitzgerald, and Councilmembers Whitaker and Flory did not.

Mayor Protem Fitzgerald opposed the idea of creating a committee to study rent stabilization, and made the motion to postpone the item until July.

“This has never been a problem with any of our mobile home parks before. We have every indication at this point that this owner is committed to working with these residents. So what problem are you looking for to solve?” Fitzgerald asked.

“I’m looking to make sure that this type of increase doesn’t happen to other mobile home park residents. So if someone comes in and again raises rents by 20-30 percent that we’re not back here again going through all this. So I want to look at to see what a rent stabilization would entail,” Silva said.

Fitzgerald responded, “I just think we need to calm down a little bit, give this specific situation time to see if it can work itself out. I always think that letting the people and the private sector work out these problems leads to much better solutions than government coming in and dictating what solutions will be for the entire industry based on one bad apple.”

Council Member Flory agreed with Fitzgerald’s “wait and see” proposal, but urged city staff “to investigate what has happened in other cities” such as Huntington Beach, where mobile home park residents have faced similar issues with Saunders.

“If a mobile home park owner causes people to lose their homes, I have no compunction about supporting an ordinance that makes that landowner have to make that tenant whole,” Flory said.

Council Member Whitaker said, “I think it’s more a private transaction issue more than it is a government policy issue, so that’s where I like the notion of trying to work this out on your own.”

Silva repeated the he wanted an ad hoc committee to gather as much information to see what is happening with other parks.

“It may not involve rent control. I don’t know what it may be,” said Silva.

However, lacking majority support for his ad hoc committee proposal, Silva withdrew it, and council voted 5-0 to adopt Fitzgerald’s “wait and see until July” policy.

During public comment, residents expressed concern over John Saunders, the new park owner’s track record, and expressed skepticism that he could be trusted to keep the residents best interests in mind.

“The reason we’re all here comes down to the track record of the new owner,” said Rancho La Paz resident Todd Harrison, “We’re not the first park he’s bought, in multiple states. And we’re not the first park he’s bought to get radical, sudden, disabling rent increases. He talks about how he didn’t understand the issue until all of you and Anaheim and our state legislature started showing up at his door and telling him what he needed to do. It’s not his first time. He knew all of this beforehand—it just did not matter to him.”

“The moment public attention wanes or turns away from him, we can expect nothing from him over the years and decades to come except the same track record, the same plan of moving out seniors and moving in families that can have two wage earners and are too busy earning those wages to be a political pressure movement of any kind. He will, at the first opportunity, change the nature of the park. His track record alone says so. So I think you’re going to become very used to seeing me and many of my fellow residents at meetings for a very long time to come…He bit off more than he could chew with these seniors…I’m asking all of you to not turn your attention away,” said Harrison.

For more on Saunders’ other mobile home parks, visit his company’s page on the Mobile Home Park Owners Allegiance HERE.

Speaking of the increasingly common practice of buying mobile home parks and drastically increasing rents, Rancho La Paz resident Rosemary Mccloud said, “I would like to see Fullerton be number one leading this state in legislation to stop this. I know rent control failed by small margin last year [prop 10]. But I would like to propose rent control for mobile home parks.”

Rosemary McCloud speaks to Fullerton City Council.

“We really need you to take a very strong action,” Mccloud said, “These people aren’t just being run out of this park. They’re being run out of the state of California. People I’ve spoken to—one is going to Utah, one to Colorado, one to Arizona, one as far as Tennessee—some place where they can live on the money that they have. I don’t know if there’s a place in Orange County for the elderly, for the handicapped, for the people who’ve served their country—my husband served in the military for 21 years.”

Resident Jim Warner said, “We’ve heard the term “rent control.” What we need is  rent stabilization. Rent stabilization prevents excessive and unreasonable rent increases, but does not stop the owner from having a reasonable rent increase. They’re typically based on the consumer price index. The consumer price index for this year is 4.5%…He [the owner] has the right for a fair return on his investment, but this rent increase was just crazy.”

Housing industry and lobbyist folks showed up at the Fullerton City Council meeting and gave standard arguments against rent stabilization: that the solution to the affordable housing crisis is to build more housing, not rent stabilization, and that rent stabilization creates unnecessary and costly bureaucracy.

What was in short supply at both meetings was actual data, and council majorities on both Anaheim and Fullerton city councils seemed determined not to study how rent stabilization programs have actually worked in other cities.

Notice went out to some park residents about a meeting with the new owner, John Saunders, on Friday, April 5th at 10am in the Rancho La Paz clubhouse. However, the time of the meeting was changed at the last minute to 6:30pm, which caused confusion among residents and didn’t go very far to establish the much-needed trust between Saunders and the residents of Rancho La Paz.

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