Last week, the Anaheim City Council effectively squashed an attempt by Councilman Jose F. Moreno to impose a 6-month rent freeze on every Anaheim mobile home park. The council had already voted on April 4 to table Moreno’s rent freeze, but the District 3 councilman re-agendized it for consideration on April 16.
The pretext for Moreno’s proposal came from the Rancho La Paz mobile home park, which straddles the Anaheim-Fullerton border in District 3. This February, following a change of ownership, Rancho La Paz tenants received notice of a large rent hike – in some cases more than 50%. Understandably, this sparked a public uproar.
Moreno responded to the situation in a single mobile home park by demanding a 6-month rent freeze on all 27 mobile home parks in Anaheim while a “solution” was worked out.
At the same time, Mayor Harry Sidhu and Councilmembers Steve Faessel and Trevor O’Neil convened a meeting of the residents and the owner, John Saunders – who subsequently rescinded the rent increase and pledged no increases for six months while negotiating with the residents to arrive at a mutually agreeable solution. This would include a gradual phase-in of increases to cover park expenses and an expanded, simplified rent subsidy program for tenants experiencing difficulty.
Rancho La Paz residents have since formed a homeowners association to represent them in the negotiations.
As it turns out, rents in Rancho La Paz were the lowest of any mobile home park in Anaheim. Following the change of ownership, the property was reassessed per state law, and the annual property tax paid by the owner rose from $100,000 to $800,000.
Moreno: Lots of Rhetoric, Little Evidence
Moreno asserted thousands of Anaheim mobile home park tenants are at risk of “extreme rent hikes” but presented no evidence residents at any of the other 26 mobile home parks face extreme rent hikes. Moreno also admitted he was unable to define what makes a rent increase “extreme.”
Moreno arrived at that number by taking the total number of mobile home spaces – 3,483 – and logically assuming two to three people per space.
In a PowerPoint presentation, Moreno displayed a bar chart showing the number of mobile home spaces citywide and per council district – hoping to dramatize for each of his colleagues the danger to their constituents.
“District 4, Councilwoman Kring, you have the largest number of spaces, which means the largest number of people impacted by an extreme rent hike if one were to happen,” Moreno intoned, while presenting no evidence of an impending “extreme” rent increase in any of the seven mobile home parks in District 4 – let alone in all of them simultaneously.
Moreno likewise laid some scaremongering on Councilman O’Neil:
“And Mr. O’Neil you likewise have 347 spaces in your district that right now are begging for help.”
Moreno’s evidence that hundreds of District 6 mobile residents are “begging for help”? A couple from the Friendly Village mobile home park with an apparent political connection to Moreno who spoke during public comments.
O’Neil Debunks Moreno
Following Moreno’s PowerPoint presentation, District 6 Councilman Trevor O’Niel gave one of his own. While Moreno’s presentation was light on data about rent, tenancy laws and similar pertinent information, O’Neil’s was replete with it.
According to an industry survey of Anaheim mobile home parks conducted earlier this month, the average monthly space rent is $1,154. Rents range from a high of $1,600 to a low of $765 – the latter being the rent at Rancho La Paz.
Rent at Del Este mobile home park – less than half a mile from Rancho La Paz – is $1,160. What emerges is the previous owner of Rancho La Paz was charging rents that were significantly below market. The upshot is any change in ownership – assuming the new owner intended to keep the park operating – would almost certainly lead to a rent shock.
That reality doesn’t make it any easier on Rancho La Paz residents, nor does it excuse the severity or the initially proposed hike or the hardship it would have imposed. But it does provide context that was absent from both media coverage and Moreno’s posturing.]
“Rancho La Paz was in fact the lowest space rent in all of Anaheim, and well below the market rate,” said O’Neil.
“I’m certainly not defending an extreme rent hike,” said O’Neil. “But even if owner did impose the extreme rent hike, it would still be below the average in the community.”
“That was [the new owner’s] thinking and it would still be OK because it was below market value, but we know that that’s still very problematic” O’Neil said.
“In my district, specifically at Friendly Village, the average space rent is $1,219 a month,” O’Neil continued.
O’Neil took a deeper dive into the list of Anaheim mobile home parks used by Moreno in his presentation. He found that approximately 1,500 spaces in nearly half the city’s parks would not be subject to Moreno’s proposed rent freeze, for a variety of reasons.
He also pointed out the reality that rent control is an attempt to give people something for nothing. It
What Did Moreno Hope To Accomplish?
“This is a temporary rent stabilization effort to allow us to think of ways we can try to improve and build on tenant and owner relationships,” Moreno said from the dais.
How? What new idea does the councilman think will emerge in the next 6 months? The tenant-owner relationship in Rancho La Paz is already improving: the rent hike has been rescinded and a constructive, substantive, good faith dialog is taking place.
Moreno said one reason he wants a 6-month rent freeze was his belief the prospect of impending rent controls would “freak out” mobile home park owners, who would respond by increasing rents while they had the opportunity. “Freak out” is hardly a fair characterization of a rational economic response to the prospect of government-imposed price controls, but it at least reveals Councilman Moreno has some understanding that markets respond to both positive and negative incentives – an understanding that heretofore has not been on display.
When government imposes price controls on a product, the market produces less of that product. If the goal is increasing the supply of affordable housing, then rent control is counter-productive. Indeed, the prospect of it will cause property owners to increase rents before the government takes away their ability to set their own rents.
Moreno’s assurances notwithstanding, his “temporary” rent freeze would likely have become permanent. Hundreds of Anaheim mobile home park residents would suddenly have an enormous incentive to lobby and organize politically – supported by progressive activists and politicians – to make it permanent. Councilman O’Neil pointed out, rent control is tantamount to giving people something for nothing. And in this case the something is very valuable: certainty regarding one’s rent – especially if it is locked in at below market rate.
California’s Mobile Home Residency Law already provides considerable protections for mobile home tenants and there are genuine alternatives to rent control. And it is better to let landlords and tenants work out their own solutions than to politicize rent disputes by interposing local government.