– This bill requires management to stop park-owned rentals, even in economically depressed areas struggling to economically survive, unless tenants are allowed to sublease. So, owners cannot exercise a right (to lease property) unless they waive the right to exclude others from sub-leasing their spaces to strangers? To exercise one constitutional right, one must waive the right to another constitutional right? Yes. and to force mobilehome tenants in less desirable areas to live next to subtenants. To prove a point, the tenant political activists are again eating their own.
– This bill prohibits management from renting a mobilehome owned by management (except the direct rental of up to 2 mobilehomes for onsite employees, and one additional mobilehome for every 200 mobilehomes for on-site employees).
– Rentals before January 1, 2022 are grandfathered and will continue as long as a tenant listed in the agreement continues to occupy the mobilehome.
– AB 861 MEANS HIGHER RENTS. In a rent control area, park-owned rents are reported as gross income on every MNOI application. AB 861 forces a reduction in gross income. It thus reduces net operating income. Maintaining net operating income therefore requires rent adjustments to replace the loss gross revenue. Additional revenue will be supplied in adjustments by the homeowners themselves. By getting rid of park-owned rentals, tenants will be faced supplementary rent adjustments to cover the lost revenue.
Discussion: Due to the economic necessity of park-owned rentals , subleasing will have to be required in sensitive a difficult market areas. This means that it will be very difficult to police “party rentals” and other air B&B issues, subleasing, boarding, and vacation rental situations. Subleasing is unlikely to have any demonstrable impact in “older persons” (55+) parks where the subleasing regulation must be enforced as a continuing rule and regulation for which the homeowner will remain responsible.
Subleasing also gives Park owners the opportunity to require tenants to owner occupy in accordance with their mortgage and financing obligations, and to require the same level of high quality insurance that the park owner requires for its own homes.
I have helped keep parks operating and out of chapter proceedings (bankruptcy court) by developing strategies for park-owned rentals– parks that would have closed or filed for insolvency proceedings because demand was so low that park-owned rentals was the only way to keep them open.
Finally, park occupants can no longer complain about subleasing. This bill invites it. Many tenants have proclaimed their dislike of the concept of subleasing, for several decades, because sublessees do not share the same community interest as homeowners. So one must ask why, if tenants dislike subleasing, they would invite the park owners to engage in systemic and widespread subleasing throughout the state? Conversely, why is the state legislature actively squelching available and affordable housing opportunities. This bill prohibits rental of available mobilehomes in mobilehome parks. Perhaps mobilehomes are not deemed to be affordable housing after all?
In essence, the proponents of this hot mess are stuck in a turbulent sea of rage affecting their thinking. They fail to rationally evaluate all the good that park-owned rentals do. You see, additional revenue through park-owned rentals means better maintenance, lower space rents, and continuing solvency of the enterprise. Park-owned rentals raise net operating income. Park-owned rentals can be construed as gross income which attenuates increases to cover increasing expenses. And applications for a rent increase can take into account such additional revenue in order to level out increasing expenses. Park owned rentals save money. The loss of park-owned rentals will mean more applications for net operating income maintenance rent increases.
I wrote a letter requesting a veto of this bill, concluding in substance: AB 861 is driven by seething animosity of [resident groups and their lobbyists] who find another avenue to rail against mobilehome park owners. Some do not want park owners to “sublease” because tenants cannot sublease. A petty jealousy. They think park owners will stop park rentals because they will not allow subleasing. They fatuously proclaim that “the park owner is subleasing, so we should be able to sublease as well.”
The governor signed the bill, and they have their way. Well, someone said that people should get the representation they choose, good and hard. Welcome to subleasing.
“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” C. S. Lewis