Wheels Turning at Mobile Home Parks in O.c.
Among the residents of Sierra Mobile Homes Estates, Gerie Kirkpatrick is known as the Rose Lady.In front of the blue-and-white home that Kirkpatrick and her husband bought in 1982, she cultivates 18 rose bushes that bloom in yellow, pink and white. Scissors hang from a small wooden sign hand-painted with the words, "Help yourself to a rose." Her neighbors at the 230-home park often do--and no one steals the scissors.Kirkpatrick, now a widow and retired, owns her Huntington Beach mobile home, but she doesn't own the rose garden. And because of escalating rental rates for spaces in the park, she says, keeping the home itself is becoming difficult."We thought we did such a smart thing when we moved in here, thinking it was a good, affordable place to retire," Kirkpatrick said. "Then we were hit with rent increases. People are walking away from their trailers, and they are going back to the banks." Advertisement The rent on Kirkpatrick's space in Sierra Mobile Homes Estates has climbed to $488 a month from $220 six years ago, she said. That is in addition to her monthly payment of $429 on her home. Squeezed by such increases, a growing number of California's mobile home dwellers, estimated to total more than 1 million, say they are being forced out.Facing that prospect, many are taking advantage of state laws that encourage them to band together and buy the property on which their homes sit. Besides gaining control of rental rates, residents who own their parks can set policies and regulations, pool their money to improve common areas and build equity that they can cash in if they decide to sell their mobile homes.Local governments are getting involved, too, especially in urban areas like Orange and Los Angeles counties, to preserve mobile home parks as affordable housing for elderly people such as Kirkpatrick who live on fixed incomes and for young, lower-income families.California's mobile home population has changed dramatically in the past 30 years. During the 1960s, most park residents were elderly people who bought homes for as little as $15,000, often paying cash for them after retiring and selling conventional houses. Advertisement During the real estate boom of the 1980s, working families priced out of the housing market began moving into the parks. Driven by consumer demand, mobile home prices soared.In the economic downturn and housing industry slump that followed, however, many of those working people lost their jobs. At the same time, the value of their mobile homes sank because of depreciation and the real estate decline. Homes for which families had paid between $50,000 and $80,000 were bringing only $20,000 to $30,000 as resales, according to the Manufactured Housing Educational Trust, a trade group based in Orange County.At the same time, rent on spaces in parks began increasing. Sites that rented for $250 a month in the mid-1980s now range as high as $1,000 in coastal areas and average about $500, according to the trade group.As early as 1986, the state launched a program that made low-interest loans available to park residents. Of the estimated 4,000 mobile home parks in California, only about 120 so far have converted to resident-owned parks--knows as ROPs. But interest is increasing sharply, said John Tennyson, chief consultant with the state Senate Select Committee on Mobile Homes."Rents are going to continue to go up," said Tennyson, whose committee has published a pamphlet titled Guide to Mobilehome Park Purchases by Residents. "That's the biggest issue driving the trend toward park ownership."This month, an intergovernmental agency created by the California State Assn. of Counties and the League of California Cities will mail out brochures for a new program called "MuniHome." Under the program, the agency, which has sold various types of bonds since the 1980s, will offer tax-exempt revenue bonds for cities, counties or nonprofit groups such as mobile home residents who can then use the proceeds to buy the parks. New York investment bank Lazard Freres & Co. has been chosen to sell the bonds, which will be paid off with park operating revenue."We want to help cities and counties who are interested in preserving existing low-income housing stock," said Dan Harrison, assistant director with the cities league in Sacramento. "It's a tough decision for a city or county to acquire a mobile home park. We're not saying they should. But if they make that decision, we want to help them do it well."Beyond seeking to ensure affordable housing, local governments are sometimes getting into the mobile home park market after being drawn into disputes between park owners and tenants. Advertisement In the Ventura County, which has 23,136 mobile home residents, the Santa Paula City Council was besieged two years ago by angry tenants who alleged rent gouging by park owners. City voters subsequently passed a measure that tightened rent-control laws already in effect. But the owner of one mobile home park then sued the city, alleging that the new regulations interfered with his ability to make a profit.James Taylor, owner of the Santa Paula West Mobilehome Park, withdrew his lawsuit after agreeing to sell the property to the residents for $9.2 million. The city has agreed to supply housing redevelopment bond money, but the purchase has not been finalized because park residents say the price is too high.Interest by either a city or a residents' group in buying a park does not guarantee a done deal. In some cases, park owners are simply not interested in selling.Gene Pica, an owner of Sierra Mobile Home Estates where Kirkpatrick lives, said the Huntington Beach property is profitable, and "our rents are right where they should be. We're just a mile and a half from the ocean.""If we do sell, we'll give them first choice," Pica said of the park's residents, who have formed a nonprofit group, the Sierra Residents Corp. State law, in fact, requires park owners to notify residents first before putting the property up for sale.But for now, Pica said, "we're just not selling."Other park owners complain that tenant groups who want to buy them out are either poorly organized or cannot obtain financing."The ideal buyer is the tenant," said Richard Hall, a Costa Mesa businessman who is a part-owner of Orange County's largest mobile home park: the 29-acre Treasure Island Mobile Home Park on the oceanfront at Laguna Beach. "But they don't have their act together." Advertisement Other park owners say they feel pressured to sell once residents announce their interest in buying."I think if an owner wants to sell to the residents, that's fine, but they shouldn't be forced to," said Norman McAdoo, a partner with Busch, Carr, McAdoo in Garden Grove, which owns five mobile home parks in Orange County. "Everyone wants to live in Orange County--it's California's paradise. (Park) residents are complaining about rents, but nowhere else in Orange County could you get a decent place to live for those prices."Such different viewpoints can be an obstacle when residents sit down to negotiate a purchase, said Gerald Gibbs, a lawyer with Gibbs, Dunham & Gibbs. The firm, based in San Clemente, specializes in resident-owned parks."In many parks, the residents are pitted against the owners over issues like rent and rent control," he said. The owners "resent the fact that these homeowners have banded together and screamed and yelled and got the city to go along with them in terms of financing."Despite the obstacles, at least two Orange County cities, Garden Grove and La Habra, have already bought mobile home parks with money raised by issuing a total of $35 million in tax-exempt bonds.In Los Angeles County, which has nearly 105,000 mobile home dwellers, the city of Lancaster has used redevelopment funds to purchase two parks and is negotiating to buy several more of the 33 parks within the city limits.Several deals have been completed in recent months, too, by nonprofit residents' groups. In December, for example, the 268 dwellers in the Bayside Village Mobile Home Park in Newport Beach purchased a 279-slip marina and the 56 acres under their homes from the Irvine Co. for $12 million.Other park purchases are being negotiated. In January, mobile home owners in Lake Forest asked that city to co-sign a $6-million loan so they can buy the lease on Kimberly Gardens Mobile Home Park, where 1,300 people live.Industry consultants and even park owners foresee an increasing number of the state's mobile home communities being run as nonprofit entities."The whole status of mobile home parks in California is going to change in the next decade, with most of them becoming owned by tenants and cities," said Laguna Beach park owner Hall. "Thirty years ago it was a good idea to buy your mobile home and set it up on someone else's land. That's not true today."Indeed, though the name "mobile home" suggests otherwise, owners cannot simply move to a new park where rents are lower, lawyer Gibbs said."The industry has changed since 1955--it's not Lucille Ball and Desi Arnaz hooking up their trailer to their car," he said. "These things don't move today. Some have stucco walls and tile roofs."That is all the more incentive for park dwellers to become landowners. Homeowner Kirkpatrick, who paid $42,000 for her home, says she has spent at least $15,000 on improvements. She estimates that she could sell her home, though, for no more than $25,000, partly because the value of mobile homes has depreciated rapidly in the Southern California real estate downturn.David Hennessy, president of the Golden State Mobile Homeowners League in Garden Grove, said Orange County, which has more than 53,000 mobile home residents, is especially ripe for purchase by park dwellers. The reasons are high housing costs in general and a lack of any form of rent control, said Hennessy, whose nonprofit group represents 100,000 mobile home owners in California.Still, park owners' groups question the fairness of state and local backing for purchase of parks by residents."Should a city make a gift of public funds to help a couple of hundred people buy property?" asked Vickie M. Talley, executive director of the Orange County Manufactured Housing Educational Trust, a mobile home park owners association. "Just like any other homeowner, they should have to come up with the down payment and make the payments."Consultant Tennyson of the state Senate Select Committee on Mobile Homes argues that park residents, though, are in a special situation. Mobile homes are the only affordable housing available to many lower-income people, he said, and thus should be protected."Mobile homes are something the state should be involved in," he said. "Many of these people are seniors on fixed income. If they are economically forced out of their homes, they will end up on the streets, and the taxpayers will eventually be supporting them."Among mobile home residents who have succeeded in buying their parks, the consensus is that they made a wise decision.Ben Hetherington, 64, a former Pasadena police officer who owns a mobile home in the Shorecliffs park in San Clemente, said he and his neighbors are delighted with their $12.8-million purchase, completed in September, 1992.Each resident obtained a separate bank loan to buy his or her individual parcel of land, and now the 192-home park operates much like a condominium association. It is governed by a seven-member board of directors, of which Hetherington is one."You don't pay rent, you control your own park, and you have a say in what work is to be done," Hetherington said. "You don't have to go to someone else and ask for something. We have the security to know we can stay here and control our future."Profile of Mobile Home Parks* Number of parks in Orange County: 214* History: The majority were built during the 1960s and '70s. The county's newest park was built 10 years ago. Most are on leased land.* Typical space rental fee: $375 to $500 a month* Average price for a new mobile home: $50,000* Average resale price: Varies widely according to condition and location. Recent sales ranged from $8,500 to $89,900, with an average of $37,700.* Glossary: Trailer parks offer little more than a space to park a travel trailer. Mobile-home parks are larger communities with more space between homes and feature recreation facilities such as pools, open spaces and sites for organized activities.HOW MANY PEOPLE LIVE IN MOBILE HOMES?According to the 1990 census, 3.6% of Orange County's population lived in mobile homes. In inland counties, the rate is much higher. Riverside had the most in Southern California, with 15.4%.Mobile-home Percent of County population total population Orange 53,019 3.6% Los Angeles 104,985 1.8 Riverside 131,338 15.4 San Bernardino 76,829 7.9 Ventura 23,136 5.3 San Diego 83,132 4.9ANAHEIM, SANTA ANA HAVE MORE MOBILE HOMESMobile home units in Orange County by city: City: Number Anaheim: 4,304 Brea: 894 Buena Park: 317 Costa Mesa: 1,303 Cypress: 373 Dana Point: 260 Fountain Valley: 395 Fullerton: 790 Garden Grove: 1,944 Huntington Beach: 3,200 Irvine: 968 Laguna Beach: 451 Laguna Hills: 2 Laguna Niguel: 4 La Habra: 765 Lake Forest: 1,228 La Palma: 3 Los Alamitos: 115 Mission Viejo: 7 Newport Beach: 947 Orange: 1,214 Placentia: 537 San Clemente: 423 San Juan Capistrano: 1,212 Santa Ana: 3,830 Seal Beach: 128 Stanton: 1,394 Tustin: 702 Villa Park: 1 Westminster: 2,917 Yorba Linda: 302 Unincorporated areas: 1,024 County total: 31,954Sources: Manufactured Housing Educational Trust; California Multiple Listings Service; California Department of FinanceResearched by JANICE L. JONES / Los Angeles Times