By: Sandy Mazza
June 20, 2010
Residents of Carson's mobile home parks may now have a small glimmer of hope in their long, mostly unsuccessful battle to maintain low rents.
The state Supreme Court last week upheld a March decision by the state 2nd District Court of Appeal that gives the Carson City Council a second chance to deny park owner James Goldstein's application to subdivide Carson Harbor Village.
As a result, the city has latitude to review whether Goldstein's intent is to actually subdivide the park and sell the 400 individual lots or just to remove strict municipal rent controls -- something city officials have argued since he first applied to convert Carson Harbor Village and Colony Cove Mobile Estates four years ago.
Carson City Attorney Bill Wynder said the Supreme Court's decision will likely spur negotiations rather than an ongoing stalemate.
"The most important thing the city is looking for is a collaborative effort between the park owner, residents and the city," Wynder said. "Landlords can't just ignore residents and blow off staff anymore. They've got to work something out that works for all parties. We don't want these spaces to sell at such high rates that low-income residents can't buy."
Until the appellate court decision, Goldstein appeared to be on the way to mopping up the city of Carson, with a reluctant council approving his application to subdivide Colony Cove in late 2009. And Goldstein filed a lawsuit seeking more than $150 million in damages from the city for taking so long to approve his applications.
The future of Carson Harbor Village is uncertain.
"Legally, we're winning," said Paul Randall, president of the Carson Harbor Village Homeowners Association. "But the city's going to say, 'We converted Colony Cove, we'll get concessions and convert you too."'
Randall said residents are adamant against conversion, and will be livid if the city allows it.
Terri Forsythe, president of Homeowners Against Rent Control, a Carson homeowners group that oversees the city's 22 mobile home parks, said she is worried the city has grown weary of fighting for their financial well-being.
"We're being held hostage because we can't move our homes and we can't sell," Forsythe said.
The rush to sell homes created by the threat of conversion has made them nearly worthless, she said.
And with the difficult economy, many elderly park residents on fixed incomes could find it difficult to get a loan to buy the land where their units sit.
If conversion is allowed to proceed and residents can't afford to buy their homes, their rents will go from a current average of $600 to about $900.
Two other Carson parks -- Imperial Avalon Mobile Estates and Park Granada -- have recently filed conversion applications, but they are on hold until the situation at Carson Harbor Village is resolved.
The owner of Park Granada also is seeking to convert to resident ownership his 147-unit Alimur Park in Soquel. One of the residents of that mobile home park, Clay Butler, has been so shaken by the threat to his home that he now operates a website on his struggle called Sham Conversions.
"Parks are cash cows for the owners," Butler said. "But conversion will wipe out all our equity and a large portion of us will lose rent control. They tell you it will be easy (to buy the land) but they lie, lie, lie. The biggest lie they tell you is you'll be able to get financing. I still owe $40,000 on my home so who is going to give me $150,000 now?"
But Sheila Dey, executive director of Western Manufactured Housing Communities Association, said cities like Carson are unfairly denying the rights of mobile home park owners.
"Carson's rent control law is one of the worst in the state. Carson's ordinance has no vacancy decontrol and it's been in existence since 1979. If they go in and apply for rent control increases, they're turned down," Dey said. "The owners are concerned about a return on their investment. Rent control denies them a fair return. They're landlords, it's not a government affordable-housing program."
Goldstein's attorney, Richard Close, said that despite the Supreme Court's decision, he believes the council will approve the conversion application at the next hearing, which should be within two months.
"The case now goes back to the lower court, which will require the city to have a new hearing on its decision to deny the subdivision or conversion," Close said.
"The city's going to owe a lot of money to Mr. Goldstein and taxpayers are going to have to pay it," he said. "It will take awhile. The longer the city fights, the more it's going to cost them. This may precipitate renewed settlement talks."