|
In This Issue...
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitola Council Encourages Surf & Sand Sides to Work Things Out
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitola Council Encourages Surf & Sand Sides to Work Things Out
By Linda Fridy
After another long night of testimony illustrating the divide between the park and coach owners at the Surf and Sand Mobile Home Park, the Capitola City Council on Feb. 18 postponed a decision on a proposed subdivision.
Capitola council member instead asked both sides to talk to each other, a plea Capitola has been making for some time.
The Reed Family that owns the Surf and Sand wants to subdivide the park's 73 spaces into lots that would be sold separately for an undisclosed market rate.
The residents who rent the spots and own the trailers that sit on them worry that if they can't afford the purchase price, they will lose all equity in their trailers with the loss of rent control.
Many of the current tenants have large mortgages on their trailers. These loans were made when most assumed the mobile home park would continue to be governed by rent control.
Only one resident supported the subdivision in a survey required by state law. Many have said that they cannot consider any subdivision proposal without knowing prices or how a homeowners' association would handle common property and fees.
Mayor Sam Storey said the question of price resonated with the council and played a role in its decision to continue the hearing for 30 days in hopes that both sides can talk things over.
Jamie Goldstein, current community director and incoming city manager, is working with both parties and has already begun discussions. He is armed with a just-completed valuation of the park funded by the city.
The assessment valued the park at $14.29 million, with lots ranging from $150,000 to a high of one at $340,000. The majority fall in the $160,000 to $220,000 range, Goldstein said.
He is encouraging the residents to come up with their best offer to buy the park while asking the Reeds to clarify the costs and processes for subdivision.
"Given the emotional environment, it may be more productive to take ideas back and forth and share them among the parties," said Goldstein.
A History of Disagreements
Residents say they offered to buy the park for $7 million a few years ago, but the Reeds stopped negotiations and instead considered subdivision.
When the city passed a law governing such conversions, the Reeds then tried to close the park, but were denied a permit last year to do so.
The Reeds and their attorneys say rent control robs them of the right to profit from the increased property value.
Rents at the park increased an average of only $28.94 between 2003 and 2010, or 10.14 percent total. Goldstein said. Rent hikes are tied to a percent of the consumer price index and must be submitted to the city for review.
The Reeds and their attorney also note that a subdivision by law protects low-income current residents from increased rents.
Similar arguments play out in council chambers and courts around California as municipalities try to defend rent control and prevent park owners from "sham" conversions intended only to circumvent protections.
The county of Santa Cruz recently denied a subdivision request by the owner of the Alimur park in Soquel, in part because its residents also did not support the change in a survey.
Preserving Affordable Housing
The Surf and Sand application has an extra layer of complexity because it falls within the coastal zone and, at least to the city and its attorney, under the rules of the Mello Act to preserve affordable housing in California's coastal areas.
The Reeds' attorney, Mark Alpert, has continued to maintain that the Mello Act does not apply, but the owners did add provisions addressing affordable housing to the application to subdivide after the Planning Commission recommended denial, using the Mello Act as part of the reason for denying the request.
"I was pleased to see it. It's a show of good faith on the owners' part to show a plan," said Mayor Sam Storey.
The plan would identify certain lots as affordable housing and place caps on the price.
But that doesn't address the concerns of the present tenants in most cases.
Both the city and Alpert noted that effort is complicated by the fact that, again, the actions of the land owner could impact the value of the coach, another person's personal property.
How Much Profit Is a Landowner Entitled To?
One of the arguments of park owners against rent control is that rent controlled coaches command higher prices when resold, and in essence the coach seller is profiting from the increase in land value while the land owner is not.
On the other hand, local experience based on the De Anza park in Santa Cruz shows that when rents rise significantly, the values of the coaches plummet. Coach owners with mortgages of $100,000, $200,000 or more cannot sell for what they owe, and local jurisdictions lose a large stock of affordable housing if rents jump sharply.
|
