Rent advisory committee advises vacancy changes

By Nathan R. Huff

The town's vacancy control ordinance may be altered to let mobile home park owners raise space rents closer to market value by allowing a $50 increase when certain units change owners.

The proposal, crafted by Bonnie View Mobile Home Park owner Gerry Mirassou, was adopted by the rent advisory committee (RAC) at its Aug. 23 meeting, but won't be forwarded to town council until October. Mirassou said certain aspects could use more tinkering.

Currently the vacancy control ordinance governing mobile homes restricts the raising of space rents in Los Gatos' two mobile home parks when a mobile home is sold to a new owner. Space rent can be increased to an amount equal to the average rent of all mobile home spaces in Los Gatos or $25, whichever is more.

Other than the Consumer Price Index (CPI) rent adjustments of up to 5 percent a year, rents for existing tenants can only be raised if park owners can prove operating costs have substantially increased, or capital improvements have been made to the park.

According to Mirassou, who sits on RAC, the value of mobile homes in Los Gatos has increased substantially in the past few years, related to the larger rise in land value in the valley. Mobile home owners who bought in the mid- to late '80s have seen their home values double, while rent has only increased 50 percent, according to Mirassou's proposal. He cited a mobile home bought in 1993 for $47,000 that recently sold for $120,000.

Mirassou found consensus on RAC that there needed to be a way to bring rents at vacancy closer to market, but determining what constitutes market value has been more difficult. The issue was discussed at several RAC meetings this summer.

"It's very difficult to make comparisons [with other mobile home parks]," Community Services Director Regina Falkner said. "You have to compare all the amenities and then you have to compare location."

The final proposal adopted by RAC uses the median rents of the Los Gatos Mobile Home Park and Bonnie View Park--$439 a month--as the starting point for vacancy-related increases. Park owners would be allowed to increase rents by $50 over the median when a home is sold to a new owner. Any rents already over the median could only be increased to the $489 level upon transfer of ownership, and rents above $489 could not be increased. All mobile home park residents pay space rents; those who do not own their mobile homes pay an additional rent for their dwelling.

According to Mirassou, the change would have no real effect on long-term residents while allowing the park owners to slowly raise rents to market rate. Another proposal by Mirassou to allow rent increases to $5 over the highest rent in the Bonnie View park upon changes in ownership was rejected by the committee.

Bill Kraus, a Los Gatos Mobile Home Park resident and a member of the RAC subcommittee on mobile home parks, said there was a genuine consensus on the change. While Kraus said some tenants who have low rents, including himself, would be negatively impacted when they sold their mobile homes, it would benefit those who were already paying higher-end rents. Low space rent is a big selling point for mobile homes.

"Personally, I don't like it," Kraus said. "But I voted for it because it's the fair thing to do."

The Mirassou family filed a petition--as is required by town code--for a non-CPI rent increase of 5 percent in 1999. Residents objected, and the Santa Clara County Bar Association was called in to mediate.

The arbitrator sided with the park's residents, stating that the owner did not present the required burden of proof when applying for a supplemental rent increase. A CPI increase of 3 percent was awarded for 1999.

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