The owner of Windmill Mobile Estates will have to wait until
next month to find out if can double the rent of tenants without a
lease.
MORGAN HILL
The owner of Windmill Mobile Estates will have to wait until next month to find out if can double the rent of tenants without a lease.
Peter Wang, who bought Windmill, 575 San Pedro Ave., for about $4.3 million in 2005, considers it an investment property and believes the rent income he receives falls short of what he can collect in the current mobile housing market. To make a case for an increase, he asked economist Richard Fabrikant to do a market rent study and hired attorney William Dahlin.
“I understand people are against the increase, but I just don’t know what else I can do from the business perspective,” Wang said.
Windmill is one of six mobile home parks in Morgan Hill, said Margarita Balagso, the senior coordinator at the Business Assistance and Housing Services Department and liason to the Mobile Home Rent Commission.
Wang, Fabrikant and Dahlin took turns arguing for the increase to the commission on Dec. 4. The increase would raise average rents of unleased tenants at Windmill by about $190 per space, or 51 percent over the current average of $373 per month. Tenants pay from $320 to $775 in monthly rent at Windmill, Wang said. Out of 90 residents, 61 are under lease, 27 are unleased, and two are in the midst of moving, Wang said. Under the five-year leases, rent is locked in to increase according to a percentage calculated using the Consumer Price Index. For leased spaces it’s a $30 increase and for the unleased, $10, Wang said.
The proposed increase would affect about one third of the Windmill tenants population, and a cluster of them came to the meeting to register their concerns.
“When my lease is up, is he (Wang) going to increase rent?” asked tenant Ginger Sotelo, to which Wang responded by saying he tried to extend lease by up to five years.
Larry Charles Aden, who takes care of an 86-year-old Windmill resident, said many tenants are seniors on fixed incomes and a steep increase would “price some of (them) out of their homes,” he said.
Although Dahlin urged the commission to approve the increase, the commissioners decided to postpone the vote until Jan. 15. They sought advice from City Attorney Janet Kern, who said that the commissioners shouldn’t have to give in to pressure from the owner and forced to vote. The panel meets quarterly and is the first step that a mobile home park owners must take if they want to increase rent. The commission makes recommendations to the full city council, which has the final say.
Balagso said the staff won’t be making a recommendation, only “an analysis and present that to the commission,” she said Monday.
“I disagree with the owner’s representative (Dahlin),” said Kern. “Anybody can continue a hearing. This commission hasn’t had staff analysis.”
Commission chair Swanee Edwards agreed, saying the issue needed to have more facts on which to make a decision. Wang and his representatives couldn’t answer commissioners’ questions about average rents at other mobile home parks in the area. The commissioners voted 4-0 to ask the city staff to look into the facts and report back. Commissioner Elena Ann Miles, recused herself from the meeting because she works for Wang as a property manager at Windmill. The commission also took into account the city’s rent control ordinance, which allows rental property owners to increase rents only once per year; Wang raised rent earlier this year, according to his petition.
There is a bigger issue at work as well as far as Wang’s attorney sees it. The city’s rent control ordinance prevents Wang from receiving a fair return on his investment and therefore it violates state and federal laws, Dahlin said.
The validity of his arguments couldn’t be independently verified by press time, but such allegations have a precedent in Morgan Hill and skirmishes over rent increases have happened before, said former mayor Dennis Kennedy. He recalled that in the late 80s or early 1990s the owner of Hacienda Valley Mobile Home Estates sued the city and the case was appealed all the way to the land’s highest court.
The outcome was that the city’s rent control ordinance was held “enforceable and stood up to the U.S. Supreme Court challenge,” Kennedy said.
Hacienda was later sold to a nonprofit after the city’s Redevelopment Agency acquired it, Kennedy. Another park, the Woodlands Estates, is resident-owned and is not subject to rent increases.
