[Metroactive News&Issues]

[ Santa Cruz | Metroactive Home | Archives ]

[whitespace] Seniors
Photograph by Jana Marcus

Not Beat Yet: Bill Minkowski (left), wife Lillian and neighbor Hut Hutton vow to fight to the finish against efforts to repeal the city's mobile-home park rent control.

Location, Location, Location

Seniors at Santa Cruz's De Anza Mobile Estates have rent control and a gorgeous locale. So why do they feel trapped?

By Sarah Phelan

HUT AND SHIRL HUTTON are doing just what one would expect a pair of house-proud seniors to do after heavy rains. They're cleaning up the garden, which, under the fallen branches and wet leaves, is bursting with garlic, Mexican sage and bright yellow Daddy's daisies. Married 57 years, Hut and Shirl's love for one another is also still blooming, at least judging by Shirl's risqué garden talk.

"I just love it when he has tools in his hands," says Shirl, 79, eyeing the bearlike Hut, 81, who's wielding a rake. "Now get that gorgeous body over here!" Hut grins--and attacks her with a kiss-laden embrace.

The Hutton's flower-filled garden borders Terrace Point, a much contended UCSC development that includes plans for a research center, dining facilities, townhouses and dormitories. A retired journalist and speech therapist, Shirl says she used to be the kingpin fighting Terrace Point. "But now, I say, 'Que sera sera,' because they're thinking in 20-year terms, and we're not," says Shirl. "Besides, we've got enough problems to fight right here in the mobile-home park."

The mobile-home park in question is De Anza Santa Cruz Mobile Estates, a rent-controlled senior community where the Huttons retired almost two decades ago.

"We moved in on Hut's birthday 19 years ago and thought we were set for life," explains Shirl, as she leads me into their airy double coach.

"It's the closest thing we could find to Hawaii," she adds, nodding toward the Pacific Ocean, which lies five minutes away--or two, if you travel by electric golf cart, which is how Hut, a retired contractor, likes to get around the park.

And what a park it is.

Perched on 29.5 acres at the northernmost tip of Santa Cruz, De Anza Mobile Estates commands some of the city's most awesome ocean views. Arguably the most attractive mobile-home park in the nation, it hosts 198 homes and houses 317 residents--of which 99 are single, with women outnumbering single men by 8:1.

Though some of the homes are renovated and have stellar waterfront locations, 80 percent of the structures are older and tightly packed together. Either way, as one of only two mobile-home parks in Santa Cruz protected by rent control (the other is Clear View Court near Bay Street), De Anza provides a stable and relatively affordable (land rent runs from $400 to $750) housing haven for seniors struggling on fixed incomes.

[line]

Do the Math--If You Can: The city's mobile-home rent-control ordinance caps rents and resale prices using a complicated formula.

[line]

Grave Dancers

All that could change if Manufactured Home Communities Inc., which purchased the park in 1994, has its way. The largest owner-operator of manufactured homes in the United States, with parks in 23 states, MHC is the deep-pocketed 600-pound gorilla of mobile home parks--and, it seems, it's determined to take out rent control, not just in Santa Cruz but across California, where a majority of its parks are located.

So far MHC has launched challenges to rent control here and in San Rafael, while other mobile-home park owners are fighting rent-control ordinances in Ventura, Carpenteria, Clovis and Cotati.

But with nearly two-thirds of its communities marketed exclusively to seniors, why would MHC want to attack its own bread and butter?

MHC is one of 25 real estate corporations owned by Chicago-based multibillionaire Sam Zell, who has a finger in just about every slice of the real estate pie. One of the richest individuals in the United States, Zell has been known to call himself the "grave dancer" because of his propensity for buying troubled properties. But this time it seems that MHC is trying to create the trouble itself, by casting the first stone at rent-controlled parks.

Long the butt of trashy jokes, mobile-home parks, especially the rent-controlled ones, must seem like virgin gold mines to MHC, which keeps pressing its point in court.

Larry Barton, MHC's public affairs consultant, had not returned phone calls from Metro Santa Cruz by presstime, but the company has gone on record as saying it intends to make De Anza, which it considers the jewel in its mobile-home-park crown, a test case. If MHC does succeed, residents fear they'll lose their homes, their gardens and their equity, many having sunk every last penny into buying their homes, while renting MHC's land.

Senior Squeeze

Are residents' fears unfounded? The Huttons think not. Two months ago, all De Anza residents received their annual rental increase notice--a manageable 3 percent--along with a reminder that MHC was challenging rent control and, if successful, would be able to charge market rent.

In the Huttons' case, as MHC kindly informed them, that would mean raising the rent a staggering sevenfold, "which is enough to give anyone a heart attack!" says Shirl, who received what she called the "horribly frightening letter" at the end of September.

Shirl accuses MHC of "bullying residents to accept terms that weaken rent stabilization and undermine the value of our homes."

The Huttons weren't the only ones who almost had a stroke.

"I held a woman who cried when she read the letter," says Shirl, "and I saw anger in people who are very gentle. But mostly I witnessed a fear of the 'What am I going to do?' variety. There's no way seniors here can pay $2,500, $4,000, $5,000 in rent." (Increases varied from three to sevenfold, according to location.)

Hut, who's a little doddery on his feet these days, accepts that physical changes are a natural part of aging.

"What's not natural is to be threatened with losing all that we have already paid for, just as we're settling into our last phase of retirement," says Hut, who estimates that, in addition to paying for their mobile home, he and Shirl have paid $75,000 in rent for the MHC-owned land on which their home sits.

"MHC assumes most seniors won't have the legal expertise to understand their challenge, or the wherewithal to get an attorney. In our case, they assumed wrong."

Legal Eagles

Enter Herb Rossman, a retired law professor who bought his mobile home at De Anza in 1992, never thinking he'd ever set foot in another courtroom.

"But then the lawsuits started, and the residents drafted me, and here I am, almost eight years later, up to my neck in lawsuits and personally involved," says Rossman, who took early retirement after Anita, his wife of 51 years, had a stroke.

Ushering me into his waterfront mobile home (so close to the ocean a passing pelican could make an unintentional detour into the living room, if it put one wing wrong), Rossman says MHC is trying to change the ground rules as it goes along.

"MHC bought this park under rent control, but now claims the city's ordinance is unconstitutional," says Rossman, who first realized MHC was bad news in 1994, when it overcharged residents for water service.

Residents sued and were awarded $6 million in damages, but haven't yet seen a penny, the matter being bogged down in a quagmire of appeals. After another round of illegal water and sewer overcharges, MHC again refunded the difference, then targeted 30 individuals with hefty rent increases, including Rossman, who was threatened with a $5,000 monthly rent--a sevenfold increase.

A superior court judge granted an injunction against these increases, but MHC remained undaunted and filed federal suit against the city.

Rossman believes that by making federal claims, MHC is playing on the average senior's lack of understanding of constitutional law in the hopes of intimidating residents into abandoning rent control.

"They're informing current residents and prospective buyers that rent control is being attacked and that if the attack is successful residents will be subject to higher levels of rent," says Rossman, who believes MHC wants to induce current and future residents to enter long-term lease agreements instead.

Seniors
Lip Service: Hut and Shirl Hutton, married 57 years, remain upbeat despite MHC's attempts to increase their rent sevenfold.

By the Book

To date, MHC has tried to launch its federal challenge in two ways: by asserting that the city of Santa Cruz's mobile-home rent-control ordinance is unconstitutional; and by claiming the city is not properly enforcing its own ordinance (which requires mobile-home residents to sign up for rent control within 180 days of purchase and agree to resale price limitations).

MHC's gripe is that homeowners are getting a premium on the value of their homes, a premium MHC says is enhanced because the home is protected by rent control. Which, MHC argues, is why MHC, and not the homeowner, should get that premium.

Rossman disagrees. "It's not a premium. That's a fiction MHC invented to argue a legal point. What they call a premium is really the equity in our homes." As he explains, MHC claims that De Anza residents can sell their homes for between $200,000 and $300,000 precisely because the park is rent controlled, whereas the home's Blue Book value is really only $30,000. Says Rossman, "MHC argues that it should be able to get rental based upon the value of that premium but has been prevented from raising rents. What they never mention is that our mobile home is all most of us folks own, it's our equity and should belong to us."

MHC also argues that landlords raise rents all the time, so why can't MHC? "But there's a major difference between mobile-home parks and apartment rentals," says Rossman. "MHC does not provide us with housing, but a piece of ground to put a house on. And we permit them to be the exclusive provider of services--water, sewer, gas and electricity--on which they make a nice profit."

MHC has offered to pay "reasonable moving costs" to those who want to move out. (Moving a double standard coach costs between $10,000 and $20,000).

"But that's assuming we have a place to move to, which we don't," says Rossman, adding that since some mobile homes have sold for between $300,000 and $400,000 (one house at De Anza topped $500,000 but the majority sell for $150,000), MHC argues they no longer are affordable and thus violate the city's rent control ordinance.

"But if you were to look at a comparable home in Santa Cruz, it would cost over $1 million," says Rossman. "We're not pleading poverty. We're looking to protect our property."

Home Ground

Maurice Priest is legislative advocate for Golden Gate Manufactured Home Owners League Inc. (GMSOL), a statewide association that has represented mobile-home owners in California for the past 37 years.

Priest got into the field 20 years ago to protect his elderly parents, who retired to a mobile-home park just as he finished law school.

"I decided to check into some of the laws that might affect them--and I never got out," he says with a dry laugh.

With more than 1,000 GMSOL members residing in its parks, Priest says that Santa Cruz County as well as the cities of Capitola, Scotts Valley, Watsonville and Santa Cruz have been "very supportive of mobile-home rent control, as well as the need to preserve affordable housing for people who've invested capital, and are trying to look after themselves, yet depend on park owners to set a fair rent."

Clearly, the issue is a top priority in Santa Cruz, where affordable housing stock is almost nonexistent, and two state bills drawn up to try and protect mobile-home owners were authored by local legislators Senator Bruce McPherson (R-Santa Cruz) and Assemblyman Fred Keeley (D-Boulder Creek). McPherson's bill, which was defeated earlier this year, would have allowed a city to recover $7,500 in attorney fees if it successfully defended mobile-home rent-control laws against a mobile-home park owner.

Says Priest, "Even if a city proves it's constitutional to protect people on fixed income, it has no way of claiming attorney fees, but if the park owner wins, he can recover costs. So even if a city wins the battle, it'll eventually lose the war, because litigation leaves it out of pocket and less willing to fight in future." (The city of Hollister eventually repealed its mobile-home-park rent-control ordinance after repeated legal attacks.)

Priest says McPherson's bill failed by two votes on the Assembly floor, because of park owner opposition. "They hired five opposing lobbyists to argue that this is free enterprise, so why should cities be able to collect fees from private individuals. Even so, we got 99 percent of the way, but it hurt to lose by only two votes."

For now, Priest is pursuing "the right of first refusal." Under California law, he explains, cities have a legal obligation to preserve affordable housing supplies, "which means that a park owner who jacks up the rent or forces unreasonable rent increases onto tenants would have to replace that housing."

Building more parks is a long and expensive process, whereas the purchase of parks by the residents is an immediate and legal solution, says Priest, adding that if De Anza residents had an interest in buying the park, they'd have the right of first refusal.

But Rossman says the De Anza Homeowners Association, of which he's a member, has tried to buy the park for years with no success. "MHC wasn't interested," he says.

Not Beat

For now, residents like Win Frederickson, who moved to Santa Cruz five years ago, worry what to do next. "I came on a visit from Michigan one February, and when I saw the sun out and the flowers blooming, I decided I never wanted to leave," says Frederickson, who lives in one of De Anza's older and more modest homes.

Widowed and living off Social Security, Frederickson has been threatened with a fourfold rent increase.

"It was such a shock to get that letter and to have to think about moving, especially in Santa Cruz where there's nowhere to move--and even if there was, my place is probably too old to drag somewhere else," says Frederickson, who has put her name on a senior residence list, just in case.

Meanwhile, Lillian and Bill Minkowski, who live on the waterfront side of the park, have no intention of moving from their home of 15 years, whose walls are decorated with art collected on their travels. Married for 58 years, this adventurous pair keep an African mask by the door, "to scare away enemies," warns Lil, 83, who once taught school on the Ivory Coast, when Bill, now 85, worked there as a doctor.

From their deck, they can see tide pools and surfers, but don't think they should pay a threatened sevenfold increase in land rent.

"Since we bought in 1986, our house has doubled in value," says Bill, bundled up in an Argyle sweater. "But the selling price is still a steal, being limited by virtue of our having accepted rent control."

He watches a pelican glide by, then shakes his head. "MHC has so much money already, whereas most of us are on fixed incomes. For them, it's a case of pure greed. For us, it's our home that's at stake. Our main concern isn't so much our legal position, but that the city stay firmly behind us."

Senior Strategies

Deputy City Attorney Barbara Choi says the city isn't about to give up or cave in. But neither, apparently, is MHC, which, she says, wants to argue its case at the federal level. (The federal court took MHC's issues under submission Dec. 10 and Choi expects to hear a decision in January 2002.)

As to charges that the city has failed to enforce resale price limitations, Choi admits that some at the park have sold at higher-than-agreed-to rates.

"The city filed a suit against an owner who oversold by about $85,000, and some other oversales involved $27,000, $19,000 and $2,600," says Choi, adding that if someone violates the resale agreement, the city sends letters and talks to tenants before launching lawsuits.

"But these people are in violation of an agreement with the city, not MHC," says Choi, adding that the "$2,600 oversale and some others were corrected voluntarily by the tenants" after the city notified them they were in violation.

Choi says MHC is claiming a multitude of instances in which homeowners were able to oversell. "They say the city is involved in a conspiracy by not enforcing our own ordinance. But in the city's view, there have been very few instances of which we've been aware."

Though De Anza mobile-home purchasers are required to sign a contract agreeing to resale price limitations, honoring that contract seems to be a trust-based process. As Danielle Uharriet, a city housing program specialist, explains, there's no easy way to track a mobile home's previous sale price, since the coach is not attached to a land title. "If a person oversells, we have no way of knowing that until the new buyer applies for rent control," she says, adding that since seniors may be unwell or even have died when their home sells, this loophole could use tightening for everyone's sake.

Meanwhile, the rent-control battle promises to be long and expensive, a proposition that doesn't seem to daunt MHC.

"They've hired three different law firms to represent them, using Chicago-based lawyers who charge three to four times our rates, and have five times as many people," says Choi, noting that the city has already spent in excess of $200,000 to defend rent control at De Anza. Says Choi, "At some point, the public begins to ask how much are we willing to pay for this battle vs. other social services?"

Meanwhile, De Anza tenants intend to fight to the end. Says Rossman, "Sometimes my wife and I wonder what the hell we've got into. But what MHC is doing just isn't right." The Huttons and Minkowski agree, as the three couples meet to strategize. Says Bill, raising a fist in youthlike defiance, "We may be old, but we're not beat."

[ Santa Cruz | Metroactive Home | Archives ]


From the December 12-19, 2001 issue of Metro Santa Cruz.

Copyright © Metro Publishing Inc. Maintained by Boulevards New Media.




Foreclosures - Real Estate Investing
San Jose.com Real Estate