Agenda Item Wording:
title
Mobile Home Park Standardized Lease Program Review and Approval - Review annual report on rental information received from participating mobile home park owners under the 2020 Standardized Lease Program Agreement and consider approval of the 2025 Standardized Lease Program Agreement with participating mobile home park owners along with the 2025 Model Lease Agreement.
body
Deadline for Action: 4/7/2025
Submitting Department: Finance and Technology Services
Contact Name and Phone Number: Jim Koontz, Assistant City Attorney, (559) 372-2400; Margie Perez, Housing Specialist, (559) 713-4460
Department Recommendation:
Review annual report on rental information received from participating mobile home park owners under the 2020 Standardized Lease Program Agreement and approve the proposed 2025 Standardized Lease with all mobile home park owners that will agree to participate in the program; and offer the 2025 Model Lease to residents that live within those mobile home parks.
Background Discussion:
The City of Visalia has entered into memorandums with participating mobile home park owners as an alternative to a rent control ordinance since the 1990’s. The current agreement expires in June 2025. Under these agreements the participating parks have agreed to offer a Standardized Lease Agreement with specific rental increase maximums and in exchange if the City were to pass a rent control ordinance these participating parks would be exempt.
The model agreement requires the participating Park Owners to offer a Model Lease with limitations on how much space rental rates can increase per year. Rental increases are to be the same rate as the social security cost of living increases, with a minimum allowable percentage increase of three percent (3%) and a maximum increase of seven percent (7%). If the social security increase is less than the minimum rate the rent can be increased by three percent and, if the social security increase is over the maximum amount, the rental rate cannot exceed seven percent.
The City of Visalia has ten total parks with approximately 1,400 mobile home spaces. There are 5 parks participating, which contain 757 mobile home spaces eligible to participate in the current Standardized Lease Program Agreement. Under the current agreement participating mobile home park owners annually provide information to the City concerning rental conditions and the number of park residents utilizing the Model Lease. A summary of the information provided by the park owners has been prepared by City staff and is attached to this report for review as Attachment “C.” The report shows that rental rate increases remain steady although participation in the Model Lease Program varies in the participating parks. There are a total of 757 total spaces in the participating parks and of those total spaces there were 643 spaces being rented. Of the spaces being rented, 401 of those spaces were using the Model Lease during the reporting period of January 1, 2024, through December 31, 2024, as shown below in Table 1: Participating Park Space Information. The number of rented spaces participating in the City Model Lease Agreement is dependent on the residents deciding to participate in the program. Several parks offer other lease agreement options that may be more appealing to residents, depending upon their individual income and situation.
A revised agreement between participating park owners and the City for the Model Lease to continue for another five-year period is included as Attachment “A” Draft Memorandum of Understanding, with the Master Lease form, included as Attachment “B” for Council’s approval. As discussed in more detail below, the 2025 Model Lease is similar to the 2020 Model Lease with a few revisions.
These documents have been discussed with the Park Owners. City staff have also forwarded draft documents to mobile home residents that have sought to be involved in negotiating the Model Lease.
Relationships between mobile home park owners and park residents can be contentious. Generally, each resident owns their individual mobile home and rents the land where their mobile home is located. Each resident is responsible for their individual mobile home space and the park owner is responsible for the common areas. Mobile homes are often “mobile” in name only and it is expensive to relocate leaving many park residents feeling trapped when space rents increase. Disputes often occur between these groups over the fairness and necessity of rent increases.
Park residents in Visalia have often argued that a rent control ordinance by the City is necessary. Park owners have responded that rent control is not necessary and that even if implemented, rent control is no guarantee that rents will not increase. Park owners have also argued that rent control ordinances can be expensive for cities to implement and manage. As an alternative to rent control, several park owners agreed to offer and be bound by a Standardized Model Lease and, in exchange, if the City implemented rent control, the participating parks would be exempt. The Standardized Lease Program has continued to encourage long term rental agreements with stable rent increases throughout the City, although, as noted in this report, not all parks in Visalia participate in the program. Under the Model Lease program, park owners can offer other lease forms with different terms as long the Model Lease is among the rental agreements offered. Residents choose which lease they feel best meets their needs.
In past versions of the Standardized Lease Program the City was more heavily involved and would be actively involved in attempting to resolve disputes between the park owners and park residents at significant expense to the City. Since the 2010 version of the Program, dispute resolution services by the City have been modified to be available at the option of the City and then only if the issue involves a Model Lease provision. This change has reduced the amount of funds spent by the City on managing the program.
The goal of the Lease Program has been to encourage stability in the rental rates and to avoid sharp rate increases. A copy of the 2024 data provided by the participating mobile home park owners is attached (Attachment “C”) for review. The data shows that usage of the Model Lease varies but it is commonly used in the parks that participate in the program. As with prior reports the data indicates that rental rate increases have remained steady without the large spikes that the Standardized Lease Program was intended to avoid.
Currently five of the ten mobile home parks in Visalia participate in the program. With the changes in the current version, if approved, then City staff would send the revised version to the remaining parks in the City to determine if they would be interested in participating. It is unlikely these parks will want to participate, but since residents in the non-participating parks have not sought to have rent control imposed, pursuing a rent control ordinance would not be recommended if participation in the Standardized Lease Program can continue to cover a large portion of mobile homes in the City.
State Rent Control Law and Mobile Homes
It should be pointed out that mobile homes remain largely exempt from statewide rent control laws. In 2019, AB 1482 passed in California. This law mandated a form of statewide rent control largely limiting annual rent increases to five percent plus the applicable cost of living, or ten percent, whichever is less. Mobile homes are not subject to AB 1482. A measure to include mobile homes under this law was proposed in 2020 but was not passed.
A modification to include certain mobile homes, (AB 978) was passed in 2021 that limited rent increases to no more than three percent, plus the applicable cost of living or five percent, whichever is less, but it only applies to mobile home parks that are located and governed by the jurisdictions of two or more incorporated cities. AB 978 does not apply to any mobile home parks in Visalia.
Changes to the 2025 Model Lease
The 2020 Model Lease included a significant change allowing Park Owners to “pass through” qualifying costs for improvements or significant repairs in the parks. Park Owners requested this change in part because of the age of mobile home parks in Visalia and concerns over the remaining operational lifespan of park improvements. No modifications to the pass-through requirements that were approved in 2020 have been proposed. One Park Owner has indicated that they think the amount eligible for pass-through should be raised from the current limits, but they have not requested any changes as of this report. Park Residents are opposed to increases.
For the 2025 version of the Model Lease, the Park Residents requested several modifications: (1) Residents sought to cap or install a flat rate for increases upon the sale or transfer of a mobile home. (2) Residents requested Park Owners provide the amount of the new monthly rent to Park Residents, or their heirs, that are selling the mobile home. (3) Park Residents requested that their heirs be able to assume their interest in the Model Lease, after a change in ownership of the mobile home to the heirs.
Park Owners had concerns with the requests to cap increases on the sale or transfer of a mobile home and having a blanket rule allowing heirs to assume the Model Lease. Park Owners have noted that rates and expenses can change over time, and they would not agree to a flat rate for increases on mobile home sales. Park Owners rejected this request by the Park Residents.
The Model Lease also already allows certain heirs, if they already reside in the mobile home to assume the Model Lease without a rental increase upon the death of a Park Resident. (See Model Lease Section 3.4, although this provision has been modified to allow a surviving spouse already residing in the mobile home to assume the current Model Lease this new exception should only apply in limited instances where the surviving spouse was not already listed as a tenant in the Lease.) In addition, some parks have specific requirements for residency and a blanket rule allowing heirs that are not residents to assume leases could violate residency terms. Park Owners also rejected the request to allow heirs to automatically assume the terms of an existing Model Lease.
Park Owners did agree to include terms in the Model Lease that allow for residents (or heirs/estate administrators) that are selling the mobile home to request the new rental rate that would apply after the sale from the Park Owner. (See Model Lease Section 17.2.) This change was requested since Park Owners typically adjust rental rates upon the sale or transfer of a mobile home and questions about the potential new rate are raised when mobile homes are put on the market. Concerns over the lack of a specific process to request the new rate have been raised by Park Residents that need to consider different living arrangements or are concerned about their heirs being able to quickly resolve their estate. The proposed language is intended to address those concerns.
Preliminary comments from Park Owners and Park Residents indicate an agreement with the proposed 2025 Model Lease and MOU. It is possible that some additional comments will be received but based on current feedback received the draft agreement seems acceptable to both sides, if the Park Owners agree to respond, within a reasonable time, to requests for updated space rental amounts from Park Residents that must sell their mobile homes.
Fiscal Impact:
Unknown, although fiscal impacts to the City under the 2010 and 2015 Agreements were minor.
Prior Council Action:
● May 6, 2019 - Authorized City staff to renegotiate Agreement on terms similar to 2015 Agreement. ● May 17, 2021 - Council reviewed the draft 2020-2024 Standard Lease Agreement and provided directions for modifications to provide limitations on the proposed pass-through capital repairs. ●June 21, 2021 - Council approved the proposed 2020-2024 Standard Lease Agreement.
Other: N/A
Alternatives: 1. Direct staff to continue negotiations, although the current program ends in June 2025. 2. Terminate program.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to approve the 2025 Standardized Lease Agreement and authorize the City Manager to execute a final version with all mobile home park owners that will agree to participate in the program and offer the 2025 Model Lease to residents.
end
Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments:
Attachment A - 2025 Standardized Lease Program Agreement
Attachment B - 2025 Model Lease Agreement
Attachment C - 2024 Visalia Mobile Home Park Rental Rate Report