Ordinance 1987-17ORDINANCE NO. 87-17
AN ORDINANCE OF THE CITY OF GILROY ENACTING CHAPTER 14A
OF THE GILROY CITY CODE PERTAINING TO MOBILE HOME RENT
STAB IL IZAT ION
WHEREAS, after public hearings the City Council has determined that
stabilization of mobile home rents would improve the public welfare in the
City of Gilroy, and good cause appearing therefore,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GILROY DOES ORDAIN
AS FOLLOWS:
SBCTION I. Chapter 14A, of the Gilroy City Code, MOSQUITO ABATEMENT,
is renumbered 14B.
SECTIO~ II. New Chapter 14A is enacted to read as follows:
CHAPTER 14A
MOBILE HOME RENT STABILIZATION
Sec. 14A.1. FINDINGS AND DECLARATION OF INTENT
There is presently within the City of Gilroy an extreme shortage of
developed spaces for the placement of mobilehomes, and because of this
shortage the vacancy rate for such spaces is nearly zero, if not
nonexistent among most parks. With the widespread shortage of available
spaces, rental increases within the last several years have been rapidly
rising within a select number of parks.
After studying the City's mobilehome rental situation thoroughly, and
then considering whether and what type of mobilehome rent stabilization
ordinance is needed in the City of Gilroy, this City Council finds and
declares it necessary, in the public interest, to facilitate and encourage
fair bargaining between mobilehome tenants and park owners in order to
achieve a mutually satisfactory agreement regarding space rental rates in
mobilehome parks.
The intent of the City Council in enacting this Rent Stabilization
Ordinance is to curb excessive and unreasonable rent increases on
mobilehome park tenants, to prevent an exploitation of the current
widespread shortage of available mobilehome spaces within the City of
Gilroy, to permit mobilehome park owners to receive a fair and reasonable
return, and to establish a process for rental increase disputes between
park owners and tenants.
ORDINANCE NO. 87-17 - 1 -
Sec. 14A.2. DEFINITIONS
AFFECTED TENANTS; means all tenants in a mobilehome park who have been
notified that a space rent increase is to become effective within the
following twelve (12) months.
ARBITRATOR; means a person who is neither a tenant (as defined within
this Ordinance) nor who has an interest in a mobilehome park of a nature
that would require disqualification under the provisions of the Political
Reform Act if the person were an elected state official; and a person whom
the Rent Review Officer determines meets one of the following criteria:
(1)
Completion of a Juris Doctor or equivalent degree from a school of
law and completion of a formal course of training in arbitration
which, in the sole judgement of the Rent Review Officer, provides
that person with the knowledge and skills to conduct a space rent
dispute arbitration in a professional and successful manner; or
(2)
Completion of at least three rent increase arbitration proceedings,
or other public related arbitration that involved issues the Rent
Review Officer considers similar to those raised in rent dispute
arbitrations.
BASE R~T; means the rent charged for a mobilehome space on the effective
date of this Ordinance; or rent charged for a space immediately following
the transfer of ownership, vacancy due to eviction, vacancy due to a move-
off, or subsequent transfers of ownership; or the initial rent charged for
a newly created space within an existing mobilehome park.
CAPITAL IMPRO¥~T$; mean those improvements which materially add to the
value of the property, appreciably prolong its useful life, or adapt it to
new uses and which are required to be amortized over the useful life of
the improvements of the building pursuant to the straightline depreciation
provisions of the Internal Revenue Code, and the regulations issued
pursuant thereto.
CONSUMER PRICE INDEX; means the Consumer Price Index for all urban
consumers for the San Francisco-Oakland Area, as published by the U.S.
Department of Labor, Bureau of Labor Statistics.
LANDLOP,~; means the mobilehome park owner.
LF~SE; means a written agreement between a landlord and a mobilehome
tenant for the use and occupancy of a rental space to the exclusion of
others, and consistent with the provisions under Section 14A.3 part (C).
MOBI~.EMOME; means a structure transportable in one or more sections,
designed and equipped to contain not more than one dwelling unit, and to
be used with or without a foundation system.
MOBILEMOME PAR~; means any parcel (or two or more contiguous parcels)
within the City of Gilroy where ten (10) or more mobilehome spaces are
rented or leased for the purpose to accommodate mobilehomes used for human
habitation.
MOBI~EHO~ SPACE and/or LOT; means a portion of a mobilehome park
designed or used for the occupancy of one mobilehome.
OPERATING EXPOSES; means those operating expenses paid by the owner as
described in Section 14A.8 part (A)-(1).
PARK O~;ER and/or Owner; means the mobilehome park owner(s).
R~TAL AGP. BEM~T; means a lease, which is consistent with the provisions
as stated under Section 14A.3 part (C).
RENT INCRFASE; means any additional amount demanded of or paid by a
tenant in excess of the rent paid for the mobilehome space immediately
prior to such demand or payment.
P.~T REVIEW OFFICER; means the person or persons designated by the City
Administrator to administer and enforce the provisions of this Ordinance.
SPACE P~T; means any consideration required for the use and occupancy of
a mobilehome space in a park including all amenities, services, and
benefits.
SUBSTANTIAL REHABIlITATIOn; means that work done by an owner to a
mobilehome space or to the common area of the mobilehome park, exclusive
of a capital improvement (as defined within this Ordinance) the value of
which exceeds two hundred dollars ($200) and which is performed either to
secure compliance with any state or local law or to repair damage
resulting from fire, earthquake, or other casualty or natural disaster, to
the extent such work is not reimbursed by insurance or security deposit
proceeds.
T~ANT; means a tenant, subtenant, lessee, sublessee, or any other person
entitled to the use or occupancy of any mobilehome space under a rental
agreement, lease, or other expression of tenancy.
Sec. 14A.3. EXEMPTIONS
The provisions of this Ordinance shall not apply to rent or rent
increases for new mobilehome parks created after the effective date
of this Ordinance or new individual lots created (above the current
number of total spaces within an existing park as of the effective
date of this Ordinance) for a period of twelve (12) months.
(~)
The provisions of this Ordinance shall not apply to rent or rent
increases for new and/or relocated mobilehomes placed on vacated lots
for a period of twelve (12) months following the first day the lot is
re-occupied.
(c)
The provisions of this Ordinance shall not apply to any mobilehome
lot which is under a lease, voluntarily entered into between a
landlord and a mobilehome tenant where the lease meets all of the
following criteria:
(D)
(1) The lease was entered into on or after the effective date of
this Ordinance;
(2) The term of the lease is in excess of a thirty-six (36) month
duration;
(3) The mobilehome lot which is under the lease is used for the
personal and actual resident of the mobilehome tenant; and
(4) The first paragraph of the lease contains a provision notifying
the mobilehome tenant that the mobilehome lot will be exempt
from the provisions of this Ordinance; and
(5) This exclusion shall apply only for the duration of the term of
the lease and any uninterrupted, continuous extensions thereof.
If the term of the lease is not extended and no new rental
agreement meeting the above stated criteria is entered into,
this Ordinance shall immediately become applicable to the
mobilehome lot and the last rental rate charged for the lot
under the immediately preceding rental agreement shall be the
rent for the purposes of determining the base rent under this
Ordinance.
The provisions of this Ordinance shall not apply to mobilehome lots,
for a period of twelve (12) months, immediately following:
(2)
The transfer of ownership after the effective date of this
Ordinance;
For any subsequent transfers occurring after the effective date
of this Ordinance; and
A vacancy occurring because the prior mobilehome tenant was
evicted for nonpayment of rent, issuance by the tenant of checks
drawn against insufficient funds or closed accounts, chronically
late payment of rent, the tenant's commission of waste upon the
mobilehome and/or lot, the tenant's total disregard for
maintenance, the tenant's commission or permitting of a nuisance
on the premises, the tenant's use of the premises for an
unlawful purpose, or other material violation of a reasonable
provision of a written rental agreement.
Sec. 14Ao4. MOBILEHOME SPACE RENT INCREASE LIMITATIONS
(A)
Any rent increase (within any twelve (12) month period) which does
not exceed five percent (5%) of the base rent or eighty percent (80%)
of the change in the Consumer Price Index, whichever is less, shall
not be subject to arbitration.
Any rent increase (within any twelve (12) month period) which exceeds
the maximum permitted under Section 14A.4 part (A) may be subject to
a formal arbitration hearing under the provisions of this Ordinance.
(c)
No rent increase increment which is in excess of the amounts
specified in Section 14A.4 part (A) and subject to a formal review
hearing, may become effective or be collected by the landlord until
such time that the increase increment is approved under a formal
review hearing by an Arbitrator appointed by the City's Rmnt Review
Officer.
SECTION 14A.5. RENT INCREASE REQUIREMENTS
(A)
Except as otherwise provided within this Ordinance, the rent of any
mobilehome space shall not be increased more than once in any twelve
(12) month period.
(3)
All rent increase notices shall be given to the tenants on the same
day each calendar year and subsequent years, although proposed
increases may take effect on different dates. The purpose of this
requirement is to avoid the possibility of multiple disputes over
rent increases for the same park within a given year.
(c)
A list of all mobilehome tenants, with their respective space number
denoted, receiving notice of rent increase shall be available to any
tenant upon request.
(D)
Whenever a landlord serves notice to a mobilehome tenant of a
proposed rent increase which exceeds the amounts specified in Section
14A.4 part (A), said notice shall include the following information:
(1) The name of the mobilehome tenant occupying the rental space
which is subject to the proposed increase;
(2) The mobilehome space number and/or letter;
(3) A statement that the tenant has the right and may file a
petition request for a formal rent review hearing with the
City's Rent Rmview Officer. It shall also be stated that the
petition must consist of signatures from not less than fifty-one
percent (51%) of the total mobilehome park space registry (from
those spaces where tenants are not under a rental agreement
and/or lease as governed under Section 14A.3 part (C));
(4) A copy of Section 14A.4, entitled "Mobilehome Space Rent
Increase Limitations", shall be attached for reference;
(5) The Gilroy City Hall street address and telephone number of the
City's Rent Review Officer; and
(6) A statement of the proposed rent increase expressed both as an
actual dollar amount and as a percentage of the then current
base rent.
(~.)
Whenever a landlord serves notice to a mobilehome tenant of a
proposed rent increase which exceeds the amounts specified in Section
14A.4 part (A), a copy of said notice shall also be sent to the
City's Rent Rmview Officer.
Sec. 14A.6. PETITION BY TENANTS
(A) A petition requesting an arbitration hearing shall include the
signatures from not less than fifty-one percent (51%) of the total
mobilehome park space registry (from those spaces where tenants are
not under a rental agreement and/or lease as governed under Section
14A.3 part (C)); and shall be submitted to the City within thirty
(30) days from the date the notice of rental increase was received by
the Rent Review Officer (as required under the provisions of Section
14A.5 part (E)). Said petition shall include all the following
information:
(1) The printed names of all affected mobilehome tenants with their
respective space number denoted;
(2) The original petition signatures, with date of signature, from
all affected tenants involved;
(3) The total number of mobilehome rental spaces within the park;
and
(4) The name, address & space number, and telephone number for the
tenants' representative and/or contact person. Tenants may
designate an outside representative.
(B) Receipt of the petition
(c)
(1) Upon receipt of a completed written petition by tenants, as
specified under Section 14A.6 part (A), the Rent Review Officer
shall within ten (10) working days assign an arbitrator. The
Rmnt Review Officer shall set a date for the arbitration hearing
no sooner than ten (10) days nor later than thirty (30) days
after the arbitrator has been assigned.
(2) The park owner and all affected tenants shall be notified
immediately in writing by the Rent Review Officer of the date,
time, and place of the hearing.
(3) The notice of hearing shall be sent to all parties via first
class mail.
In the event a petition fails to meet all the submittal requirements
listed in Section 14A.6 part (A), the Rent Review Officer shall
respond in writing with a statement of the listed deficiencies. The
party filing the petition shall have fifteen (15) days to correct and
refile the appeal. If the applicant(s) fail to meet the time
limitation the petition shall be deemed to have been abandoned.
Sec. 14A.7. ARBITRATION HEARING
(A)
The purpose of the hearing shall be to allow the two parties the
opportunity to present their differences concerning~ the proposed rent
increase and settle them in a final manner.
Both the park owner and the affected tenants may appear at the
arbitration hearing and offer oral and/or documentary evidence.
the park owner and the affected tenants may designate a
representative to appear for them at the hearing.
Both
(c)
The Arbitrator, as designated by the City's Rent Review Officer,
shall use the standards of review outlined under Section 14A.8 for
the hearing proceedings.
(D)
The burden of proving the reasonableness of the proposed rent
increase shall be on the landlord. The burden of proving service
reductions shall be on the mobilehome tenants alleging that service
reductions have occurred.
(r.)
(~)
(~)
(~)
(~)
The Arbitrator shall within fourteen (14) days of the hearing, submit
a written statement of decision and reasons for the decision to the
City's Rent Review Officer. Copies of the Arbitrator's decision
shall be distributed by mail to the owner and all tenants.
If the Arbitrator's determination is that the proposed space rent
increase is not reasonable under the circumstances, then that portion
of the proposed space rent increase which exceeds the amount allowed
under Section 14A.4 part (A) shall be suspended. The determination
shall be final and that portion of the increase greater than the
amount stated under Section 14A.4 part (A) shall not be collected
from the tenants by the park owner or his representative.
If the Arbitrator's determination is that all or a portion of the
proposed rent increase is reasonable under the circumstances, then
the Arbitrator shall grant all or such portion of the rent increase
to be effective as of the time such increase would have been
otherwise effective without the intervention of this Ordinance.
The decision of the Arbitrator is final and binding upon the owner
and all affected tenants.
Any party disputing the final decision and findings of the Arbitrator
may seek review of the Arbitrator's actions pursuant to Sections
1094.5 and 1094.6 of the California Code of Civil Procedures.
Sec. 14A.8. STANDARDS OF REVIEW
(A)
In evaluating any proposed space rent increase, which exceeds the
maximum permitted under Section 14A.4 part (A), the following factors
should be considered by the arbitrator:
(1) Unavoidable increases in maintenance and/or operating expenses,
including but not limited to the reasonable value of:
(a) the owner's and/or landlord's labor;
(b) any caretaker's labor;
(c) increased costs for services provided by a public agency or
public utility; and
(d) quasi-public agency and/or utility;
(2)
The physical condition of the mobilehome park and the amenities
provided for each individual space, including the quantity and
quality of maintenance and repairs performed during the
preceding twelve (12) months;
(3) Substantial rehabilitation work that has been completed;
(4)
(5)
(6)
Capital improvements that have been completed, as long as such
work is:
(a) distinguished from ordinary repair and maintenance;
(b) for the primary benefit, use, and enjoyment of the tenants;
(c) permanently fixed in place or relatively immobile and
appropriate to the use of the property;
(d) cost factored and amortized over the good faith estimate of
the remaining useful life of the improvement; and
(e) not coin-operated nor one for which a "use fee" or other
charge is imposed on the tenants for its use;
Increases or decreases in property taxes; and
A fair and reasonable rate of return on the owner's investment
in the park, and other financial information which the park
owner is willing to provide.
Sec. 14A.9. ARBITRATION FEE
(A) An initial cash deposit, set by resolution of the City Council, shall
be paid by the petition representatives. In addition, upon notice to
the mobilehome park owner of an impending hearing, the owner shall
deposit like amount. The balance of hearing costs shall be paid
equally between the petition tenants and the park owner within thirty
(30) days from the final hearing. Any balance remaining will be
refunded equally between the petition tenants and the park owner.
(n)
Fees are due and payable on the date of petition submittal. Any park
owner who receives a notice and payment statement from the City's
Rmnt Review Officer (as required under Section 14A.6 part (B)-(2))
shall pay the required fee within thirty (30) days or prior to the
first arbitration hearing date, whichever comes first. A park owner
who fails or refuses to pay the required arbitration fee under these
time constraints shall be considered to have withdrawn the rental
increase demand (only by the incremental amount which is in excess of
the amount specified in Section 14A.4 part (A)).
Sec. 14A.IO. INCREASES SUBJECT TO REVIEW
(A)
Except as hereinbefore provided, any space rent or combination of
increases occurring after January 1, 1987, and prior to the effective
date of this Ordinance, and any increase after the effective date of
this Ordinance which taken together with any increase which took
effect in the twelve (12) month period immediately preceding such
increase, exceeds the limitations as specifically stated within
Section 14A.4 , shall be subject to the provisions of this Ordinance.
SECTION III. Ail ordinances and parts of ordinances in conflict
herewith are hereby repealed.
SECTION IV. This ordinance shall take effect and be in full force
thirty (30) days from and after its adoption and approval.
PASSED AND ADOPTED this 2nd day of November 1987 by the following
vote:
AYES:
NOES:
ABS~T:
COUNC ILMEMBERS:
COUNC~.M~BERS:
COUNCILMEMBERS:
ALBEI{r, GAGE, ~SSALLEM, PALMEI~EE,
VALDEZ AND HUGHAN
KL OF_IIKER
NONE
APPROVED:
City Clerk ~
ORDINANCE NO. 87 - 17
I, SUSANNE E. STEINMETZ, City Clerk of the City of Gilroy, do
hereby certify that the attached Ordinance No. 87-17 is an original
ordinance, duly adopted by the Council of the City of Gilroy at a regular
meeting of said Council held on the 2nd day of November , 19 87 ,
at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
Official Seal of the City of Gilroy this 5th day of November
19 87.
(Seal)