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HomeMy WebLinkAboutR23- Redevelopment Department OFFICE OF THE MAYOR Sign-In Sheet Name Represent Address Phone # 0 Ll cl X7- 1- z l�Csrn no y- 56 Mo bit I How P" D, ec �. -7,Z8 cad. L(/ C,�yk�rnitd J a Warr3',nJ t5R*e.+r- P,& 30 7 0117 236 rt(M Ww DEVELOPMENT DEPARTMZNT OF THE CITY OF SAN BERNARDINO MEMORANDUM ----------------------------------------------------------------------------------------- TO: MAYOR MINOR AND COMMON COUNCIL FROM: Kenneth J. Henderson Executive Director SUBJECT: MOBILE HOME PARK CONVERSION WORKSHOP DATE: December 1, 1993 COPIES: Administrator - EDA; Housing Division Manager; Mobile Home Rent Board Coordinator; File ----------------------------------------------------------------------- On March 1, 1993, De Anza, Inc., in association with the London Group were engaged to investigate/analyze each of the existing forty-four (44) mobile home parks located within the City of San Bernardino. The expressed purpose of this analysis was to determine the potential feasibility of Mobile Home Park Conversion to some form of resident ownership. De Anza/London Group has now completed the City of San Bernardino Mobile Home Park Feasibility Study and Executive Summary. These documents include a number of mobile home park policy recommendations based on the significant findings and conclusions gathered over the part nine (9) months. At the December 6, 1993 Community Development Commission meeting (luncheon workshop), De Anza/London Group will be providing a video presentation based on the Mobile Home Park Conversion Feasibility Study and Executive Summary. Following that presentation, each of the various elements of the study along with the individual policy recommendations will be discussed in detail. In preparation for the December 6, 1993 Mobile Home Park Conversion Workshop, copies of the Mobile Home Park Conversion Feasibility Study and Executive Summary are now being disseminated to the Community Development Commission. Should you required additional information or clarification regarding the contents of this memo, please contact David R. Edgar, Housing Division Manager, at 5081. KENNE J. HENDERSON, Executive Director ADMIN TRATOR Development Department --------------------------------------------------- mblehm.mmo e DeANZA • LONDON A California Joint Venture Moblollehome Park Con"Yer,910lon F Executive Summary Updated November 30, 1993 0 EXECUTIVE SUMMARY De Anza Group, Inc., in association with The London Group (hereinafter "De Anza•London") was engaged by the City of San Bernardino to analyze each of the existing forty-four (44) mobilehome parks situated within the City with respect to the following issues which may be applicable to each of the mobilehome parks: • decline of the park's physical plant and the mobilehomes situated thereon; • stabilization of monthly housing costs; • increase the opportunities for home ownership; reduce the transiency associated with rental housing; and, • reduce the conflicts of two-tier ownership and resultant City need to arbitrate such conflicts. De Anza•London has completed its initial analysis and, as detailed in the accompanying MOBILEHOME PARK CONVERSION FEASIBILITY STUDY, and based on the criteria set forth therein, has determined that the existing mobilehome parks fall within the following three (3) distinct categories, all of which if implemented will address the above noted issues: • CATEGORY I. Category I parks are those which are most likely feasible for resident ownership or control and, if converted, will most likely result in, among other things, stabilized housing costs within the range of current rents, preservation of affordable housing, elimination of potential deterioration and long-term overall park infrastructure improvement, as well as eliminate the City's need to further regulate this section of the housing element. CATEGORY II. Category II parks are comprised of those mobilehome parks which operate within reasonable parameters as rental mobilehome park facilities. While these mobilehome park facilities do not have the traditional attributes supporting conversion to resident ownership, they, nonetheless, should be supported as continued rental operations. However, during the course of our analysis and investigation, it would appear that a number of these facilities require both short and long-term strategies with regard to their maintenance and operation so that this readily available rental housing pool remains viable both in terms of its economics and quality of operation. By developing a program which actively involves both residents and owners in the process of rehabilitation, the City will have the opportunity to unify on common ground these otherwise competing interests. • CATEGORY III. Category III parks are those which may have reached, or are in the process of reaching, the end of their useful life as quality facilities providing reasonable housing standards. These facilities have been in operation for significant periods of time and, due to the passage of time, deterioration of infrastructure and other attendant issues, simply would be more appropriately utilized in some other fashion. Accordingly, this category of mobilehome park facilities may be viewed as those requiring some degree of re-use analysis to assure fairness to the owners of the parks, as well as a more favorable living environment for the residents. Category I, II and III parks are comprised of the parks noted on the following tables_ CATEGORY I P, ,RKS-APPROPRIATE JR CONVERSION FNumber of spaces Vacant Lots Vacant Homes Homes For Sale 82 3 3 8 Arrowlane 68 1 2 0 Bonanza Trailer Park 52 8 0 1 Country Club 58 1 0 0 Fiesta Hills 141 0 0 14 Friendly Village 85 9 11 7 Y Glen Aire 131 1 0 6 Herkelrath 67 0 0 4 Lytle Creek 55 4 3 6 Manor MHP 2 69 4 4 4 Mediterranean 81 1 1 3 Meridian Terrace 266 41 15 53 Mountain Shadows 403 NA NA NA Ninth Street 108 7 1 3 Oasis Palms 139 20 11 12 Orangewood 155 15 2 14 Pacific Palms Trailer Park 142 0 0 8 Pepper Villa 51 1 0 4 Petite Chateaux 69 3 1 6 Rancho Meridian 143 6 7 31 Royal Coach 45 2 0 8 Royal York Estates 93 2 3 8 Second Meridian 96 0 0 2 Sequoia Plaza 242 3 3 27 Spa 181 9 9 19 Terra Alta 62 1 0 6 Thunderbird 161 2 0 11 Tropicana 146 5 4 5 Valencia Lea 281 0 0 24 TOTAL 3672 149 80 294 CATEL JRY II PARKS-REMAiiJ RENTAL Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Crestview 38 4 0 0 Cypress Inn 72 14 0 3 Hi-U Trailer Park 71 4 2 0 Highland 62 11 0 0 Manor MHP 1 60 7 0 1 Rancho Trailer Park 27 0 0 0 Sunset 13 0 0 0 Valley Vista RV Park 15 0 0 0 TOTAL 358 40 2 4 CATEC,JRY III PARKS-REUSE ROGRAM k E Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Brown's Trailer Park 17 1 1 0 Meadowbrook Trailer Park 21 12 0 0 Shady Nook 27 19 0 0 Trails End 20 0 0 0 Turnbull's Trailer Park 11 0 0 0 Vogue 63 7 2 12 Welcome Inn 42 7 0 0 TOTAL 201 46 3 12 NEW PARK CONSTRUCTION The development and construction of a new mobilehome park facility has been raised as one of the alternative approaches the City may undertake as part of its overall comprehensive housing program. The following are critical elements for consideration and evaluation: I. PURPOSE Whenever any new facility is being considered for development, the members of the community for whose benefit the park is being built, must be clearly identified. There exists a wide range of socio-economic factors prevalent in the current mobilehome park base, as well as a significant divergence in the various physical attributes of the existing forty-four (44) mobilehome parks. In light of the data referred to in Section II hereof, the only clearly identified need is with respect to those residents currently occupying Category III parks. II. NEED Any new facility must be integrated with the communities ability, or lack thereof, to serve that need with existing housing stock. In this regard, we have identified in Category III parks, approximately 201 spaces, which should be the subject of a re-use and housing integration program. Category III represents, based on the available empirical data, the group potentially most needing alternative housing. Further, our data reflects 189 available vacant lots in Category I and II facilities and an additional combined readily available alternative housing stock of 380 homes. The existing and readily available in-community mobilehome park sites and homes could readily absorb, at minimum attendant costs, the Category III facilities, as well as interim growth and demand for mobilehome park housing. Thus, development of a new mobilehome park does not serve either the purpose or need identified during our Phase I analysis. III. IMPACT STUDY Any new facility must take into formal consideration the overall impact that may result from implementation of such development, both beneficial and potentially detrimental, which was not within the scope of our feasibility study. IV. CONCLUSION Based on the results of our Phase I analysis, the development of a new mobilehome park is not indicated at this time. BENEFITS OF CONVERSION Mobilehome parks within San Bernardino are a major component of the City's affordable housing element. A primary goal of the housing element of the City's general plan is "preservation and improvement of existing housing and neighborhoods". Another goal is to "remove any obstacle to the provision of affordable housing". In furtherance of those stated goals, the City has passed a rent stabilization ordinance. Although the ordinance has the short-term affect of controlling increasing rents, it does not appear to be a long-term solution to meeting the City's stated goals. The ordinance placed the City as the arbiter between mobilehome park owners and residents. This leads to an increased role by the City in the day-to-day operation of the parks and leads to a greater likelihood of the City being a party to litigation, as has been seen in other similarly situated cities. It appears that the ordinance, coupled with the general economic downturn in the area, has led to mobilehome park owners not undertaking all necessary improvements to their parks. As can be seen in the accompanying photographs and video this has led to a downward spiral in the appearance and quality of many of the parks and the homes. This result is inconsistent with the aforementioned City goals. De Anza•London believe that by converting the parks to resident ownership there is a much greater likelihood of the City's goals being met. Conversion to resident ownership leads the City's resources away from being used for arbitration between two property owners, and instead, uses the resources as facilitator of home ownership for thousands of it's citizens. Once the two-tiered ownership structure has ended, pride of ownership increases which leads to a higher quality of life within this important affordable housing element. If residents own the park, public sources of money for rehabilitation and financing such as the Federal HOME Program and the State MPROP Program may be available. This can also lead to an increase in quality of the housing element. In addition, there is the likelihood of increased harmony within these communities due in part to the City's role as facilitator. THE RESIDENT'S PERSPECTIVE As discussed in greater detail in the study the benefits of resident ownership vary depending on the form of ownership selected. Residents are empowered by having greater control of the communities they live in through their Homeowner's Association and Board of Directors. Control of the rules and regulations, by-laws, and covenants, conditions and restrictions generally lead to a better sense of pride and harmony within the community. Economically, ownership has a much greater chance of leading to control of individual housing costs. The only annual increases in such costs are those related specifically to running and improving the park. Also, where ownership is in a condominium form, all interest on a mortgage obtained for acquisition is tax- deductible. In all forms of ownership all future appreciation in value of the property belongs solely to the resident and is not split, as is currently the case, between park owner and resident. Finally, the cost of debt is generally much less once the resident's mobilehome is combined with the land. Currently the cost of debt on rental mobilehomes is much- greater than a real estate loan. Thus the benefits of ownership by the residents are both social and economic. The by-product of which enhances the quality of the affordable housing and the neighborhoods in which they are situated. Until negotiations for the purchase of the park are concluded, it is impossible to say how much it will cost the residents to acquire the park. However, for ownership to be feasible, the monthly cost of ownership must be close to the current monthly cost of renting their space. It is with that directive that negotiations over price are undertaken. PARK OWNERS For park owners, conversion can mean getting a reasonable and fair price for the sale of the park in a difficult market in which many of the traditional buyers no longer exist. As an added inducement to owners, the City may be able to help provide benefits found within Section 1033 of the Federal Tax Code. RECOMMENDATIONS In order to implement the City's stated goals of increased home ownership, maintenance of existing affordable mobilehome park housing and the preservation and improvement thereof, we respectfully request the San Bernardino City Council adopt the following policies: CATEGORY I PARKS - Parks Appropriate For Conversion In order to pursue conversion of the mobilehome parks identified in the body of this report as Category I parks, authorize De Anza•London in concert with and under the direction and supervision of the Economic Development Agency to undertake all necessary and appropriate measures for the formal development of a mobilehome park resident ownership conversion program. CATEGORY II PARKS - Remain Rental Parks In order to maintain and upgrade the quality of the mobilehome parks which have been recommended to remain as rental parks, authorize De Anza•London in concert with and under the direction and supervision of the Economic Development Agency to undertake all necessary and appropriate measures for the formal development of an infrastructure and on-site home rehabilitation program. CATEGORY III - Re-use Program To address housing which does not meet existing industry and community standards as well as to improve the overall quality of the immediate neighborhoods, authorize De Anza•London in concert with and under the supervision of the Economic Development Agency to undertake all necessary and appropriate measures for the formal development of a site re-use and resident relocation program. Based on our analysis, we are of the opinion that these policies, if developed into programs and implemented, will result in direct tangible benefits for the City, it's mobilehome park residents, mobilehome park owners and the community at large.