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[whitespace] Do the Math--If You Can

The city's mobile-home rent-control ordinance caps rents and resale prices using a complicated formula

By Sarah Phelan

MOBILE-HOME rent control in Santa Cruz is a somewhat unique system, says City Attorney John Barisone. "If people want to participate, they have to sign a contract with the city, whereby they agree to cap the resale price of their house." That resale value is calculated using the same equation that's employed to determine annual rent rates in the park.

Says Barisone, "The base price of the coach goes up by the same percentage as the rental for the coach space." Percentages are set using the following formula: 75 percent of the consumer price index over the prior 12 months or 8 percent of the rent, whichever is less.

"Say your rent was $100. And the CPI was 10 percent--75 percent of the CPI is 7.5 percent, which is less than 8 percent, so that year, your increase would be 7.5 percent. Which on $100 rent , would be $7.50. But say the CPI was 12 percent--75 percent of the CPI is over 8 percent, so your rent increase would be 8 percent, and in that case would be $8."

According to Barisone, buyers who want rent control in the park sign an "involuntary participation agreement, which requires the owner to tell the city when they're going to sell their coach. And when they do this, the city will calculate what the maximum resale price is that they can ask. As for those who haven't complied with the contract, Barisone warns that the city is in the middle of a lawsuit against one owner who oversold by $85,000. "We're trying to regain that money," says Barisone, adding that another case was settled when the city threatened a suit. "We're getting ready to file a third," he warns.

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

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