BILL ANALYSIS Ó
AB 2351
Page 1
Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
David Chiu, Chair
AB 2351
(Roger Hernández) - As Amended April 18, 2016
SUBJECT: Mobilehome parks: rent control
SUMMARY: Deletes the provision of Mobilehome Residency Law
which exempts from local rent control ordinances rental
agreements that are in excess of 12-months' duration.
Specifically, this bill:
1)Makes the following findings and declarations:
a) California is experiencing a housing crisis throughout
the state;
b) The preservation of affordable housing options and the
need to create more housing opportunities requires
increased funding and policy changes;
AB 2351
Page 2
c) Mobilehome parks are community-based, affordable housing
options important to many residents in our state;
d) Local governments need tools to ensure mobilehome parks
remain available as affordable housing options;
e) Current policy barriers inhibit local control on
mobilehome parks; and
f) It is necessary to provide local governments with tools
to preserve affordable mobilehome parks in their
communities.
2)Deletes the provision of the Mobilehome Residency Law which
exempts from local rent control ordinances rental agreements
that are in excess of 12-months' duration.
EXISTING LAW:
1)Exempts from any rent control ordinance adopted by a local
governmental rental agreements which meet all of the following
criteria:
a) The rental agreement is in excess of 12 months'
duration.
AB 2351
Page 3
b) The rental agreement is entered into between the
management and a homeowner for the personal and actual
residence of the homeowner.
c) The homeowner has at least 30 days from the date the
rental agreement is first offered to the homeowner to
accept or reject the rental agreement.
d) The homeowner may void the rental agreement by notifying
management in writing within 72 hours of returning the
signed rental agreement to management, in the case where
management provides the homeowner a copy of the signed
rental agreement at the time the homeowner returns the
signed rental agreement.
e) The homeowner may void the rental agreement within 72
hours of receiving an executed copy of the rental
agreement, in the case where management does not provide
the homeowner with a copy of the signed rental agreement at
the time the homeowner returns the signed rental agreement.
2)Requires that the terms of a rental agreement meeting the
above criteria prevail over conflicting provisions of an
ordinance, rule, regulation, or initiative measure limiting or
restricting rents in mobilehome parks, only during the term of
the rental agreement or one or more uninterrupted, continuous
extensions thereof.
3)Requires, if the rental agreement is not extended and no new
rental agreement in excess of 12 months' duration is entered
into, that the last rental rate charged for the space under
AB 2351
Page 4
the previous rental agreement be the base rent for purposes of
applicable provisions of law concerning rent regulation, if
any.
4)Requires, if the homeowner rejects the offered rental
agreement or rescinds a signed rental agreement, that the
homeowner is entitled to instead accept a rental agreement for
a term of 12 months or less from the date the offered rental
agreement was to have begun.
a) In the event the homeowner elects to have a rental
agreement for a term of 12 months or less, including a
month-to-month rental agreement, the rental agreement shall
contain the same rental charges, terms, and conditions as
the rental agreement offered pursuant to subdivision (b),
during the first 12 months, except for options, if any,
contained in the offered rental agreement to extend or
renew the rental agreement.
b) Nothing in subdivision (c) shall be construed to
prohibit the management from offering gifts of value, other
than rental rate reductions, to homeowners who execute a
rental agreement pursuant to this section.
5)Prohibits the assessment of any fees or other exaction imposed
pursuant to any ordinance, rule, regulation or other
initiative measure for a mobilehome park space that is exempt
from local price controls as specified above.
6)Prohibits, for a park space exempt from price controls, the
imposition of any other fee or other exaction for the purpose
of defraying the cost of administration thereof.
AB 2351
Page 5
7)Requires the management, at the time the rental agreement is
first offered to the homeowner, to provide written notice of
the homeowner's right to:
a) Have at least 30 days to inspect the rental agreement;
and
b) Void the rental agreement by notifying management in
writing within 72 hours of receipt of an executed copy of
the rental agreement.
8)Provides that the failure of the management to provide the
written notice shall make the rental agreement voidable at the
homeowner's option upon the homeowner's discovery of the
failure.
9)Requires that no rental agreement that is exempt from price
controls that is first entered into on or after January 1,
1993, shall have a provision which authorizes automatic
extension or renewal of, or automatically extends or renews,
the rental agreement for a period beyond the initial stated
term at the sole option of either the management or the
homeowner.
FISCAL EFFECT: None.
COMMENTS:
There are approximately 4,822 mobilehome parks and manufactured
housing communities in California, with an estimated 700,000
residents living in these parks. In the majority of parks,
mobilehome residents own their homes but rent the spaces on
AB 2351
Page 6
which their homes are installed. "Mobilehome" is something of a
misnomer in that once installed in a park, it is very rare for a
mobilehome to be moved. This is due to both the difficulty and
cost involved, and also because the supply of mobilehome spaces
is very limited, vacancies are rare, and most park owners do not
allow the installation of older mobilehomes in their parks.
Over 100 jurisdictions in California have some form of local
rent control ordinance limiting the amount of rent or
establishing a maximum amount of rent that the management of a
mobilehome park may charge a tenant. However, under existing
law, long-term rental agreements, those with a term longer than
twelve months, are exempt from local rent control. AB 2351
would delete the exemption from local rent control for rental
agreements longer than 12 months.
Purpose of the bill: According to the author, "Various studies
have documented the lack of safe and affordable housing
opportunities in California. Studies have shown that the state
faces a challenge in creating new affordable housing
opportunities and preserving affordable housing options for low
income populations. Given the significant need for affordable
housing and the lack of fiscal resources, it is important to
make policy changes to allow local governments the opportunity
to preserve affordable housing options, such as mobile home
parks."
Arguments in opposition: Opponents to the measure have asserted
that rent control reduces the incentive to build and own rental
property; leads to a deterioration of existing housing; results
in substantial administrative costs; and represents an unfair
tax on property providers.
AB 2351
Page 7
Staff comments: In some cases mobilehome parks residents form
an organization to purchase their park in order to avoid it
being sold to a new owner with unpredictable effects on the
residents' rents. According to Resident Owned Parks, INC.,
residents often enter into multi-year leases and agree to pay
above market rents in order to obtain purchase financing.
Making these multi-year leases subject to rent control may
therefore inadvertently prevent resident organizations from
securing the mortgage necessary to purchase their park. In
light of these concerns, the committee may wish to consider the
following amendment:
1)Exempt resident organizations formed by more than 50% of
homeowners in a mobilehome park from local price controls on
long term leases.
2)Page 2 line 11: delete "hosing" and replace with "housing"
REGISTERED SUPPORT / OPPOSITION:
Support
None on File
Opposition
Apartment Association, California Southern Cities
AB 2351
Page 8
Apartment Association of Orange County
California Association of Realtors
California Manufactured Housing Institute
California Mobilehome Park Alliance
East Bay Rental Housing Association
Gilchrist & Rutter Law offices
North Valley Property owners Association
Resident Owned Parks, INC.
The Loftin Firm, P.C.
Western Manufactured Housing Communities
Mobilehome Owners/Managers (100)
Analysis Prepared by:Ken Spence / H. & C.D. / (916) 319-2085,
Ken Spence / H. & C.D. / (961) 319-2085
AB 2351
Page 9