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In This Issue...
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Surf and Sand Park Owner Asks to Divide, Sell Lots
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Driving Impaired: The Costs & Consequences
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Surf and Sand Park Owner Asks to Divide, Sell Lots
County Wins One Round in Court over Alimur Plan
By Linda Fridy
The owners of the Surf and Sand Mobile Home Park were back in front of Capitola's planning commission, but the result was the same. After having been denied a permit to close the park by both the commission and the city council, the Reed family is now applying to subdivide the park and sell off the land under the homes individually, a process known as conversion.
Capitola's council has a long-standing reputation of protecting the area's mobile home parks from conversion. The city also has rent control laws specifically for mobile home parks that have kept park living affordable for area seniors and lower income families.
The city's commission recommended against the subdivision and permit at the Dec. 3 public hearing.
Capitola falls within the coastal zone, and the conversion would also need a coastal development permit.
The Reeds and the city have been battling for several years over what can be done with the land that has housed a mobile home park for nearly half a century. The city recently enacted a "sham" conversion law aimed at making it difficult to convert parks.
When that recent ordinance went into effect at the same time the family was beginning a conversion, the Reeds tried to close the park.
That permit was denied Aug. 27 based on local and state laws requiring park owners to help displaced residents and to replace any lost housing occupied by low and moderate income families.
The city found the Reeds had not adequately addressed these requirements.
City staff believes that some of those requirements also apply in the conversion, said Jamie Goldstein, community development director.
The Mello Act was passed in 1981 to preserve housing within the coastal area for low and moderate income households. Its language includes conversions of mobile home parks.
The planning commission agreed, noting that the Mello Act requirements have not been met.
"The Mello Act treats affordable housing as a resource to be protected, kind of like a wetland," explained Goldstein. If a wetland is disturbed, a developer must recreate it elsewhere so there is no net loss. The Mello Act says any housing occupied by low or moderate income families must be preserved or replaced.
The Reeds and their attorney disagree that the act applies, saying in the application that no net number of homes will be lost.
The final decision rests with the city council, and the matter could come before it early in the New Year if the Reed family makes no changes to its application.
Residents Don't Support Conversion
State law requires that any park owner who wishes to subdivide and convert the land must first survey the residents for support.
The residents own their coaches and rent the spaces, so they have a financial stake in the decision to close a park. In some cases, residents wouldn't be able to move their mobile homes because the trailer is too old or in poor condition. In that case, without a place to live or option of moving a trailer, the resident could lose all the value in the property.
Of the 67 spaces rented at Surf and Sand, only one resident indicated support for the conversion, one did not indicate a preference and 64 opposed.
An ongoing question statewide is how much weight the survey results should carry. The language of the state law simply calls for the survey to be taken and "considered."
Cities and counties that have tried to clarify how the survey is used have been challenged in court by park owners for superseding state law.
County Repeals Ordinance in Wake of Court Case
Santa Cruz County recently repealed its ordinance after another county lost in court. It is facing a similar conversion controversy with the Alimur Park in Soquel. That park is also home to older trailers and the residents stand to lose equity if a conversion is approved and rent control lost.
However, on Dec. 1, Superior Court Judge Paul Burdick sided with the county against Alimur's owner. The park owner had hoped to have the survey disregarded, arguing that under state law he believed a survey wasn't necessary to be considered in the decision-making process.
Burdick found that since the state asks for a survey, the county can use it in the decision-making process.
"It is a great victory for Alimur residents in a long battle against conversion and to protect rent control in Santa Cruz County," said First District Supervisor John Leopold. "We have thousands of people living in rent controlled parks and the loss of rent control would have a disastrous effect in Santa Cruz County."
With that judgment, the Alimur conversion previously denied under local law will return to the county planning commission Dec. 9 for review under state law.
Surf & Sand Future Uncertain
As part of the letter asking residents to participate in the survey, Surf and Sand owner Ron Reed wrote that the family has not decided whether to continue to try to close the park or to convert it. Prices for the lots have not been determined yet, either.
The residents have previously offered to buy the whole park from the Reeds, but the family did not respond.
Although both plans involve alternatives that would allow coach owners to purchase the space occupied by their trailers, Surf and Sand residents want to buy the park in total.
A conversion creates many lots and potentially many owners.
Residents who do not buy the lot on which their coach sits will still have to pay rent.
Unless the tenant is very low income or low income, that rent will no longer be held at reduced, rent-control rates.
Because federal poverty standards are set by the average of states throughout the nation, it is more difficult for low-income residents to meet the standards.
Also, any rent protections end with the sale of the coach, which drives prices down.
A park owner could price the lots so that no residents purchased them, and then retain ownership without rent control restrictions.
That type of conversion is called a sham conversion and is why the state and many municipalities have enacted laws to prevent such actions.
A cooperative purchase by the residents of the entire park would have set costs and remove the former owner from any voice in park operations.
Many former rental parks in the county have been purchased by the residents successfully, like Brookdale and Turner Lane in Capitola.
The legal question regarding the Mello Act may come down to whether a court considers the loss of rent-controlled property a loss of housing covered by the law.
Given the litigious nature of the battle over Surf and Sand, a court may well be asked to make that distinction.
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