CITY HALL — City Hall has made it clear over the past several years that it never intended to be in the mobile home park business.
Now, it’s clear that it wants to get out.
City officials are exploring options to divest Santa Monica of its stake in the Mountain View Mobile Home Park, a 4.8-acre park with 105-rent controlled and deed-restricted mobile home pads.
The City Council purchased the park in 2000 from the Ring Trading Corp. for roughly $7 million to settle a lawsuit with the company and the tenants related to an old landfill adjacent to the property.
City Hall then invested another $6 million to fix the failing infrastructure. It also installed 20 environmentally-friendly manufactured homes to replace travel trailers and old mobile homes that had populated the park, and created a financing program to allow low-income residents the option to buy the units and retain their positions as homeowners.
Relations between existing residents and their new landlords, and property manager REC & S, Inc., have soured over the years, with residents alleging poor upkeep and abusive practices that have led some to abandon their homes for greener pastures.
That turned into a $121 million claim filed against Santa Monica for failing to maintain the trailer park, civil rights abuse and emotional distress.
“When the previous owner wanted to shut the park down, the city protected us. When I had problems, the city protected me. I didn’t realize in 2004 I would have to protect myself from the city,” said Michelle Cole, a resident at Mountain View since 1984.
At the most recent City Council meeting, staff asked for permission to seek out a nonprofit corporation that would be willing to own and operate the property, although a for-profit entity would also be welcomed, said James Kemper, a project manager with the Department of Housing and Economic Development.
“We never really set out with the intent to become a property manager, it’s not our bailiwick,” Kemper said. “Mountain View was purchased by the city to preserve it as affordable housing. At the time, the only feasible path to do that was to have the city buy it. That’s how it started.”
Now that the new homes are in place and the infrastructure has been improved, City Hall is looking for another entity that might be better suited to run the park.
So far, the focus seems to be on the nonprofit world, where organizations have a mission to maintain affordable housing and no need to bring in a massive return on investment.
For-profit owners might have difficulty with the space. Not only are the spaces rent controlled, they’re also locked in, meaning that the rents cannot be brought up to market rate after a long-term tenant moves out.
The park also has an added layer of protection called deed restriction, which City Hall applied to the property when it purchased it, keeping the spaces open only to those who meet certain income levels.
“With rent control and affordability restrictions, its market value is lower than an identical park right next door,” Kemper said, noting that rents run on average between $300 and $320 compared to the $600 to $800 an owner might otherwise get.
Only the spaces at Mountain View, not the homes themselves, are governed by rent control laws, but the space rent and the home rent cannot exceed the affordability requirements put down by City Hall, Kemper said.
Still, officials are willing to put additional curbs on the property to preserve it as affordable housing.
“In my mind, it’s iron clad, but we have to look at it,” Kemper said. “At the expiration of this, we should look at a way that basically guarantees that the tenants would be safe.”
City Hall isn’t entirely done with Mountain View.
Nine more of the new manufactured homes will come online in coming months, according to a staff report, and residents of the Village Trailer Park will have the option to move into Mountain View as part of their relocation plan if they qualify under the park’s income restrictions.