Anaheim Mobile Home Park Owner Rescinds Rent Increases, Will Work With Residents on Solution

The owner of the Rancho La Paz Mobile Home Park in north Anaheim will rescind a recently announced rent increase that would have significantly raised the below-market rents paid by the 400 or so residents of the venerable mobile home park.

Owner John Saunders made his decision following a meeting yesterday evening with park residents organized by Anaheim Mayor Harry Sidhu and Councilmembers Steve Faessel and Trevor O’Neil.

“As a result of our meeting, I’m pleased to announce Rancho La Paz’s ownership has committed to rescind the proposed increases and to spend the coming months working with residents to find common ground,” Sidhu said in a statement issued by the city.

“We will work with residents on a more gradual transition,” said Saunders. “I look forward to meeting with residents to talk about a way forward that allows time to adjust and also brings improvement to the community.”

In addition to rescinding the rent increase, the owner also announced a moratorium on any rent increase until at least September 1, 2019.

Saunders acquired Rancho La Paz in February 2019. The change in ownership triggered a re-assessment of the property’s value by the County of Orange – leading to a nearly $1 million increase in the annual property tax bill.

Although the rent increases would have brought Rancho La Paz rents to par with rents in neighboring mobile home parks, they would have hit residents – primarily seniors – with significant increases in the 50% range. The increases were scheduled to take effect June 1, 2019. Although the park owner also offered monthly rent assistance of up to $200, the sudden, steep increase caused consternation among the residents.

Rancho La Paz is a 390-space mobile home park located on Orangethorpe Avenue, and is bisected by the Anaheim-Fullerton boundary.  Rents at the mobile home park or half or less than rents at other mobile home parks in the vicinity.

Park ownership will meet with residents in the days ahead to craft a fair solution that that addresses residents concerns about rent affordability as well as the owner’s need to offset the significantly increased costs of operating the park.

UPDATE: Here’s the helpful Q&A included with the city’s press release (thank you to David Michael Klawe for the reminder):

Q&A

What is Rancho La Paz?

Rancho La Paz is a mobile home park in north Anaheim and neighboring Fullerton along Orangethorpe Avenue near Lemon Street. There are 390 lots for mobile homes, with 240 in Anaheim and 150 in Fullerton.

Who lives there?

Rancho La Paz is an age-restricted community in which people have to be 55 or older to live there. It is home to some 400 retirees and working seniors.

How do mobile home parks work?

Residents buy and own their mobile homes. They pay rent for a lot at a mobile home park, such as Rancho La Paz.

What were the proposed rent increases?

In late February, residents were given 90-day notice of proposed monthly rent increases of $200 or more.

Why were rents being raised?

The park’s new owner faces higher costs that aren’t offset by current rents, which are half or lower than rents at comparable mobile home parks in the area, according to data provided at the meeting.

What are the higher costs for the owner?

The park saw an increase in its annual property tax bill to $800,000 a year. The new tax bill is significantly higher than before and was triggered by the change in ownership.

What does it mean to rescind rent increases?

The owner is withdrawing the 90-day notice of new rents that was issued in February. That means they will not take effect on June 1, as had been proposed.

What happens next?

The owner has put off any changes in rents through at least Sept. 1, as he meets with residents to find common ground.

Is the city planning to regulate rents at the park?

Housing affordability is a regular point of discussion in Anaheim. Our Council will evaluate whether any additional action is needed.

What does Anaheim do to ensure affordable housing?

A lot. Through the Anaheim Housing Authority, we have nearly 4,000 affordable apartments in our city. They are home to families, seniors and those with special needs.

They include 13 city-supported affordable communities, with two more on the way, where 100 percent of apartments are affordable.

We also provide more than $70 million in housing support vouchers to residents each year, covering more than 6,600 households.

In cases like we saw with Rancho La Paz, we encourage landlords and tenants to come together to see if there is room for compromise that allows landlords to recoup reasonable costs while also maintaining longtime tenants who are part of the community.

One comment

  1. David Michael Klawe

    From the Anaheim Press Release in the Q&A…

    >>s the city planning to regulate rents at the park?

    Housing affordability is a regular point of discussion in Anaheim.

    Intervening in people’s property and agreements between landlords and tenants is a big step for any government to take.

    Where we can, we opt to bring people together to see if they can find a workable resolution short of government intervention, which can end up impacting many property owners and bring unintended consequences.<<

    Interesting to note that the Anaheim portion of the park is in District 3.

    So the Council Majority feels the proper way to approach this is to sit down and see if something can be worked out without government interference, while the Councilmember whose district the mobile park resides feels the need to use government control to just not allow the rent increase.

    At the meeting, the owner disclosed that the main reason for the rent increase was the major hike in property taxes, to the tune of around $700,000 a year, which calculates to about $150 per month for each of the 400 spaces. If the rent moratorium took place, the owner, who purchased a property from an owner who basically took the approach of not running the property as a business, but as something the family had and opted to have the property not to make a profit, for unknown reasons.

    When the previous owner decided to get rid off the property, the Proposition 13 rules kicked in. The Prop 13 rules that helped keep the rents low due to the fact that the tax increases were kept at 2% a year.

    And if Split Roll property taxes are approved in 2020, and businesses have to pay market rates in 2021, how will other Mobile Home Parks be affected. Or the small business that pays rent. The owner of that building will have to increase rents to cover the additional government costs.

    I am very pleased that the Mayor, along with Councilmembers O'Neil and Faessel helped facilitate a meeting where things got discussed from both sides, and that a workable solution can be found without mandates or other government interference.

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