Mobile Home Wars

Even with Prop. 98 shot down, some mobile-home owners may still have to buy their lots. What can low-income residents do?

From: The 8/14/08 Bohemian: By P. Joseph Potocki

Sonoma resident Sam DiGiacomo is worried about losing his home. "We are currently under a total frontal attack—senior citizens and low-income families alike," he says.

DiGiacomo retired in 1996, after 30 years serving as a maintenance instructor with the Department of Defense; these days he's passionate about protecting mobile-home park (MHP) rental spaces for persons of limited means. DiGiacomo, a chapter president for the statewide organization Golden State Manufactured-Home Owners League, also sits on the Tri-Park Committee, representing the city of Sonoma's mobile-home owners.

"If it [MHP condo conversion] should happen here," DiGiacomo says, "I am sure that 80 percent of our residents would almost immediately be classified as poverty level."

Last September, California AB 1542, a bill sponsored by Santa Rosa assemblywomen Noreen Evans, was passed, only to be vetoed by the governor. Had the legislation been signed into law, it would have allowed manufactured-home owner-occupants statewide to retain their rent-controlled status, even if neighboring homeowners choose to purchase their lots.

Then came Proposition 98, which was designed to wipe out rent control altogether and pave the way for massive condo conversions of apartments and mobile-home parks across the state. Heavy hitters like Chicago developer Sam Zell, cited in the May 21 issue of the Bohemian as a major financial backer of the Prop. 98 initiative, tried to convince voters to pass the proposition in order to presumably protect basic property-ownership rights. But it got cold-cocked in this past June's primary, garnering just 39 percent support, while over 65 percent of the voters gave the nod to rival Proposition 99, conceived specifically to counteract 98's draconian strictures.

But even with Prop. 98 dead and buried, manufactured-home owners still face hurdles in a seemingly inexorable drive by the MHP industry to sell as many asphalt lots as mobile-home park owners care to offer. Present state law provides fewer protections to manufactured-home owners than do many county and municipal ordinances. This is certainly the case in Sonoma County, where over 50 percent of a mobile-home park's resident owners must first opt to purchase what lies below them in order to convert, or, in the parlance that has emerged, condoize the entire park.

Now the fight to preserve low-income MHP rental space has shifted back to a municipality, in this case to Sonoma. On Wednesday, Aug. 20, the Sonoma City Council will vote on an ordinance that DiGiacomo claims will be "a tiny bit stronger" than the present Sonoma County protections. The ordinance is expected to pass, perhaps unanimously, but that doesn't mean DiGiacomo or the city of Sonoma are out of the woods yet.

L. Sue Loftin is a San Diego County–based attorney for Preston Cook, the owner of Rancho de Sonoma mobile-home park. Cook's park is situated just inside the city limits, and his intentions are clearly stated. "What I want to do with my park is make it a resident-owned community," he says, "so the residents of Rancho de Sonoma have an opportunity to own the land, instead of just their homes."

To realize his goal, Cook filed a claim on Aug. 6 against the moratorium on condo conversions. This claim appears to be the first step in a process that could lead to a lawsuit demanding big bucks from Sonoma, if, Loftin says, "we can't resolve the issues with the city."

Loftin says that Cook's conversion plans include $2 million in park renovations, affordable loans to low-income residents choosing to purchase and continued rent control for those who choose not to buy until such time as they either die or move away.

Meanwhile, the media have portrayed a divided MHP population, the majority of whom are over 55 years of age and living on fixed incomes. An ABC television report that aired last month, as well as articles in various regional newspapers, stress that there are mobile-home owners who either favor or will consider purchasing the property beneath their units.

DiGiacomo says there's no such rift. "It is notorious that they come up and try to disrupt the homeowners organization, and that is exactly what happened," he explains. "An ad hoc committee got together to unseat the current board and the current president—which never happened."

Close to 700 persons live in Sonoma's three mobile-home parks. Monthly rents range from $350 to $800. But, DiGiacomo says, "We have heard quotes that they'll charge upwards of $225,000 per space." Whether that figure is inflated or not, one thing is sure: by adding monthly condo fees to mortgage payments, this once affordable form of housing is, as Cook himself told the Sonoma Index-Tribune recently, "an endangered species. I would say there will be thousands of park closures in the next 10 to 20 years."

Santa Rosa City Council Approves Zoning Change for Affordable Housing

The Oakmont opponents of a medium to high density development at the Elnoka site on Sonoma Highway turned out in full force on July 1... more than enough to pack every seat in the Santa Rosa city council chamber, plus several dozen on the balcony and some outside.  Their purpose was to protest a rezoning to allow a higher density project on the site that would have about 30% of the units affordable to low and moderate income households.  Speaker after speaker denounced the proposal and the audience responded with cheers and waiving arms. Some cited potential traffic impacts; some cited "incompatibility" with their neighborhood.  Some were more blatant in their nimbie-ism. 

 

Four of the six council members are running for election this fall and speakers pointedly reminded them that 93% of residents voted in the last election.  It was looking grim. 

 

Then Dick Latimer stepped up to the podium and talked about the shortage of affordable housing in Santa Rosa and how this site is one of the 20 designated for development at 18 units per acre "by right" as a result of HAG's housing element lawsuit in 2002, and the city should have rezoned it years ago.  Then David Rosas approached the podium.  He's running for city council and this would have been a golden opportunity for him to nab several hundred votes by siding with the Oakmonters.  Instead, he said he lived in the Southwest quadrant of the city which has had 15 or so affordable housing developments.  He pointed out that the area around the Elnoka site had only a few affordable developments, and that the city needs to have diversity in all its neighborhoods.  He urged the council to approve the rezoning.

 

The crowd cheered briefly for Dick until the full realization of what he had said sank in, then there were loud jeers and shouts of "no...no."  David's remarks were followed by glares and stony silence. 

 

Both David and Dick showed amazing courage in speaking out in favor of the Elnoka rezoning in front of neighbors and all those voters.  And to the utter amazement of the crowd, the developer and myself, the City Council went on to unanimously approve the rezoning...  the PD will have more details, but probably won't mention the important role that David and Dick played in this.  Thanks you guys! 

 

Sac Bee Editorial: Speed up 1-C funding for affordable housing

Sacramento Bee Editorial: Speeding up grants for housing makes sense

                                                June 25, 2008

Proposition 1C projects are ready, and the state's economy could use the stimulus

California's real housing problem has little to do with the mortgage meltdown. The real problem is the giant gap between incomes and housing costs.

While housing prices rose dramatically between 2000 and 2006, incomes did not. Yet sales volumes were at record levels and first-time buyers were entering the market in record numbers. Aggressive marketing of risky, high-cost, no-documentation mortgage loans allowed people to buy houses at prices way beyond what they could afford. That, in turn, kept prices going up and up.

But as everyone knows only too well, that bubble burst. So we're back to the basic problem: California is not producing housing that residents can afford.

Fortunately, when California voters approved five bonds in November 2006 to update the state's increasingly outdated infrastructure, one of those bonds (Proposition 1C) was targeted at increasing the overall supply and affordability of housing.

The state has scheduled three rounds of funding, for June 2008, June 2009 and June 2010. This year's round of project applications produced more strong applications than there was money to support them. So now the Department of Housing and Community Development is recommending that the amount of money in the first round be increased to allow the state to get a full complement of strong projects under way. Legislators should heed that suggestion.

At this time of economic downturn and high gas prices, increasing the supply of affordable housing in urban infill areas and near transit hubs will provide jobs, transportation options and housing close to jobs.

Assembly Bill 1252 is the vehicle. The Senate passed it 35-0 on Monday. The Assembly should do the same today.

For the 2008 round, legislators originally had allocated $240 million for infill infrastructure grants (for sewer, water, roads and so on). That money ran out after 27 projects, which received amounts based primarily on the number of housing units that will be produced and the affordability level of those units. The railyard project in Sacramento was one of two projects that received the maximum $30 million funding.

The department would like to fund 19 more grants for infill infrastructure and add more money to four already funded projects. The Triangle project in West Sacramento would be a beneficiary of the change. That project was originally awarded $16.7 million and would get $6.3 million more if AB 1252 passes. The Township 9 project in Sacramento would get $19.1 million. Broadway Lofts at 19th and Broadway in Sacramento would get $4.4 million.

For the 2008 round, legislators also had originally allocated $95 million for transit-oriented development grants. That money ran out after 11 projects. Again, The railyard in Sacramento was one of only two projects to win the maximum award of $17 million. The department would like to fund five more transit-oriented development grants and add more money to a project in San Diego.

While it will reduce the funding available in the 2009 and 2010 rounds, speeding up the grants is justified. These strong projects are ready, and the economy needs the stimulus. The Assembly should pass this bill and the governor should sign it into law without delay.

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New York Times June 23, 2008

Home Not-So-Sweet Home

By PAUL KRUGMAN

"Owning a home lies at the heart of the American dream." So declared President Bush in 2002, introducing his "Homeownership Challenge" — a set of policy initiatives that were supposed to sharply increase homeownership, especially for minority groups.

Oops. While homeownership rose as the housing bubble inflated, temporarily giving Mr. Bush something to boast about, it plunged — especially for African-Americans — when the bubble popped. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it's a good bet that by the time Mr. Bush leaves the White House homeownership will be lower than it was when he moved in.

But here's a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

Listening to politicians, you'd think that every family should own its home — in fact, that you're not a real American unless you're a homeowner. "If you own something," Mr. Bush once declared, "you have a vital stake in the future of our country." Presumably, then, citizens who live in rented housing, and therefore lack that "vital stake," can't be properly patriotic. Bring back property qualifications for voting!

Even Democrats seem to share the sense that Americans who don't own houses are second-class citizens. Early last year, just as the mortgage meltdown was beginning, Austan Goolsbee, a University of Chicago economist who is one of Barack Obama's top advisers, warned against a crackdown on subprime lending. "For be it ever so humble," he wrote, "there really is no place like home, even if it does come with a balloon payment mortgage."

And the belief that you're nothing if you don't own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn't let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.

In effect, U.S. policy is based on the premise that everyone should be a homeowner. But here's the thing: There are some real disadvantages to homeownership.

First of all, there's the financial risk. Although it's rarely put this way, borrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.

This isn't a hypothetical worry. From 2005 through 2007 alone — that is, at the peak of the housing bubble — more than 22 million Americans bought either new or existing houses. Now that the bubble has burst, many of those homebuyers have lost heavily on their investment. At this point there are probably around 10 million households with negative home equity — that is, with mortgages that exceed the value of their houses.

Owning a home also ties workers down. Even in the best of times, the costs and hassle of selling one home and buying another — one estimate put the average cost of a house move at more than $60,000 — tend to make workers reluctant to go where the jobs are.

And these are not the best of times. Right now, economic distress is concentrated in the states with the biggest housing busts: Florida and California have experienced much steeper rises in unemployment than the nation as a whole. Yet homeowners in these states are constrained from seeking opportunities elsewhere, because it's very hard to sell their houses.

Finally, there's the cost of commuting. Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap. In an age of $4 gas and concerns about climate change, that's an increasingly problematic choice.

There are, of course, advantages to homeownership — and yes, my wife and I do own our home. But homeownership isn't for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.

O.K., I know how some people will respond: anyone who questions the ideal of homeownership must want the population "confined to Soviet-style concrete-block high-rises" (as a Bloomberg columnist recently put it). Um, no. All I'm suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.

And while we're at it, let's try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream — and still have a stake in the nation's future.

NY Times Op Ed: Home Not-So-Sweet Home

The holy grail of home ownership drives a whole range of public policies... transportation, land use, and taxes to name a few. Krugman points out that there are some serious downsides to this.   -- David Grabill

---

June 23, 2008

Home Not-So-Sweet Home

By PAUL KRUGMAN

"Owning a home lies at the heart of the American dream." So declared President Bush in 2002, introducing his "Homeownership Challenge" — a set of policy initiatives that were supposed to sharply increase homeownership, especially for minority groups.

Oops. While homeownership rose as the housing bubble inflated, temporarily giving Mr. Bush something to boast about, it plunged — especially for African-Americans — when the bubble popped. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it's a good bet that by the time Mr. Bush leaves the White House homeownership will be lower than it was when he moved in.

But here's a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

Listening to politicians, you'd think that every family should own its home — in fact, that you're not a real American unless you're a homeowner. "If you own something," Mr. Bush once declared, "you have a vital stake in the future of our country." Presumably, then, citizens who live in rented housing, and therefore lack that "vital stake," can't be properly patriotic. Bring back property qualifications for voting!

Even Democrats seem to share the sense that Americans who don't own houses are second-class citizens. Early last year, just as the mortgage meltdown was beginning, Austan Goolsbee, a University of Chicago economist who is one of Barack Obama's top advisers, warned against a crackdown on subprime lending. "For be it ever so humble," he wrote, "there really is no place like home, even if it does come with a balloon payment mortgage."

And the belief that you're nothing if you don't own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn't let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.

In effect, U.S. policy is based on the premise that everyone should be a homeowner. But here's the thing: There are some real disadvantages to homeownership.

First of all, there's the financial risk. Although it's rarely put this way, borrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.

This isn't a hypothetical worry. From 2005 through 2007 alone — that is, at the peak of the housing bubble — more than 22 million Americans bought either new or existing houses. Now that the bubble has burst, many of those homebuyers have lost heavily on their investment. At this point there are probably around 10 million households with negative home equity — that is, with mortgages that exceed the value of their houses.

Owning a home also ties workers down. Even in the best of times, the costs and hassle of selling one home and buying another — one estimate put the average cost of a house move at more than $60,000 — tend to make workers reluctant to go where the jobs are.

And these are not the best of times. Right now, economic distress is concentrated in the states with the biggest housing busts: Florida and California have experienced much steeper rises in unemployment than the nation as a whole. Yet homeowners in these states are constrained from seeking opportunities elsewhere, because it's very hard to sell their houses.

Finally, there's the cost of commuting. Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap. In an age of $4 gas and concerns about climate change, that's an increasingly problematic choice.

There are, of course, advantages to homeownership — and yes, my wife and I do own our home. But homeownership isn't for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.

O.K., I know how some people will respond: anyone who questions the ideal of homeownership must want the population "confined to Soviet-style concrete-block high-rises" (as a Bloomberg columnist recently put it). Um, no. All I'm suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.

And while we're at it, let's try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream — and still have a stake in the nation's future.

Op Ed - 40th Anniversary of the Fair Housing Act

IS LOCAL HOUSING REALLY "FAIR"?

SANTA ROSA PRESS DEMOCRAT, April 26, 2008

This month marks the 40th anniversary of the Fair Housing Act, which prohibits discrimination in the sale and rental of housing. President Lyndon B. Johnson signed the bill April 11, 1968, one week after the murder of Martin Luther King, and said "fair housing for all -- all human beings who live in this country -- is now a part of the American way of life."

The bill outlawed the common, open practice of denying housing and home loans based on race, and was later amended to ban discrimination based on religion, national origin, gender, age, disability and family status. So 40 years after the law was signed, do people in Sonoma County have equal housing opportunities? Overt discrimination is rare. Realtors and landlords are generally careful not to indicate discriminatory preferences. They face serious penalties if they violate the law.

But how does it happen that students in a few public schools in Santa Rosa are overwhelmingly Caucasian, while other schools are overwhelmingly non-white? Clearly a school's students reflect the characteristics of the neighborhoods the school serves, but how did those neighborhoods get to be mostly white or mostly non-white? The answer may be in the zoning code. One area -- Fountaingrove -- is dominated almost exclusively by large-lot expensive housing. Other areas of the city are zoned for high-density apartments. De facto segregation wasn't necessarily the goal of city officials who approved the zoning, but it's the result.

Another factor contributing to the racial disparity is the city's "inclusionary zoning ordinance," which actually operates to exclude affordable housing from new developments. Most cities in the county require developers to include some affordable housing in their projects, helping integrate neighborhoods. Developers in Santa Rosa are allowed pay an "in lieu fee" instead. The money is used to build affordable housing, but usually in neighborhoods which have lots of affordable housing.

Santa Rosa is not alone. Healdsburg is considering a proposal to build a 130-room luxury hotel and 70 elegant houses on 250 acres known as "Saggio Hills." The hotel will employ about 250 low-wage workers, and more will be employed as gardeners and maids in the fancy homes. The developer has offered to donate some land to the city which could be used for affordable housing at some future date, but the proposal does not include affordable housing for any of these workers. Nor is there housing affordable to them elsewhere in Healdsburg. So they'll have to commute from Santa Rosa or Ukiah.

The developer says the project will feature "green design." But color-wise, its residents will be mostly white. And any benefit from solar panels will be dwarfed by the huge environmental impact of hundreds of workers commuting on Highway 101.

A member of the Sonoma City Council recently objected to efforts to provide affordable housing which would serve farmworkers and other low-income, mostly non-white families. He derided it as "subsidized housing" and equated it to housing common in Eastern Europe. Nevermind that he and other wealthy homeowners get a huge housing subsidy -- in the form of mortgage interest tax deductions.

All of our city councils favor economic development. They want an abundance of workers, but they aren't ready to accept these workers -- who tend to be non-white -- as neighbors. Cities that welcome exclusive developments like Saggio Hills often have to be pushed to approve affordable housing developments which will be occupied mostly by non-white families.

But there are signs of hope. Petaluma has been more successful than most cities in encouraging diversity in its housing development. Affordable housing is integrated into single-family housing areas; schools have a good socio-economic balance. Can they do better? Of course. Can all of our cities do better, in order to make the promise of "equal housing opportunity" a reality for all persons regardless of race, national origin, disability, age, family status, religion and income source? Yes, and let's hope it doesn't take another 40 years.

David Grabill, Attorney with the Sonoma County Housing Advocacy Group
(www.hagster.org)

Affordable Housing Progress Report

Our Affordable Housing Progress Report has summaries of how each of the cities in Sonoma County, as well as the unincorporated County, have progressed in meeting their affordable housing needs during the last planning period (1999-2007).

No on 98 - Sample Letter

Please copy/paste this into an e-mail or letter and send it to as many friends and neighbors as possible urging them to vote NO on Prop 98 (but 99 is fine). Do it soon... absentee ballots for the election will be mailed out in a few days - DG
______________________


Dear Friend,

I'm emailing you today to make sure you are aware of a dangerous ballot measure on the June 3rd statewide ballot. Proposition 98 is a deceptive measure that a group of wealthy landlords spent millions to put on the ballot. These landlords want you to believe the measure is only about "eminent domain," but Prop. 98 is full of hidden provisions that would hurt all Californians.

• Prop. 98 attacks renters by eliminating renter protections and rent control.

• Prop. 98 guts important environmental protections like laws we need to combat global warming, and protect our land, air, water and coasts.

• Prop. 98 jeopardizes the quality of our drinking water and our ability to secure new water sources to protect our environment and fuel our economy.

• Prop. 98 will result in frivolous lawsuits, higher taxpayer costs, and hurt our economy.

That's why a broad coalition including AARP, League of Women Voters of California, the Coalition to Protect California Renters, California Professional Firefighters, California Alliance for Retired Americans, California Teachers Association, California Police Chiefs Association, California Chamber of Commerce and dozens of others all oppose Prop. 98.

Many of these same groups are also supporting a real eminent domain reform on the June 3rd ballot. Proposition 99 is the straightforward solution we need to protect against eminent domain abuse. Prop. 99 prohibits government from using eminent domain to take a home to transfer to a private developer. Unlike the landlords' Prop. 98, Prop. 99 is eminent domain reform with NO HIDDEN AGENDAS.

Please be sure you have the facts and vote NO on 98 and Yes on 99 on June 3rd

Visit http://www.no98yes99.com/ for more information.

Thank you!

Affordable Housing - Green and Beautiful

This article, from the 4/3/2008 NYTimes, shows an affordable development in NY city that was built to the highest "green" building design standards. Construction costs were essentially the same as conventional buildings. - DG


Here's an article from the American Planning Association journal about the developer, Jonathan Rose: Click Here

Escondido city council bans 4 bedroom condo's

The Escondido City Council recently voted to prohibit a developer from including some

4 bedroom units in his proposed condo complex, apparently concerned that some of

those beds might be occupied by (oh help us!) illegal immigrants.  Here's an editorial

from the San Diego Union Tribune about the council's concerns...  - dg

 

U-T EDITORIAL: NORTH EDITION
Big Brother in your (fourth) bedroom

April 19, 2008

Recently we opined on D.R. Horton wanting to offer four-bedroom townhouses at its Paramount project in downtown Escondido. The City Council was aghast, fearing apparently that illegal immigrants would start buying $400,000 condominiums or that families doubling up would result in the affluent buyers' BMWs taking up all the on-street parking spaces.

The city asked Horton to return with none of those sinful four-bedroom floor plans.

Horton, notorious for not speaking to either media or even city managers, cannot possibly make money on this project, some real estate observers believe. It bought the land at the height of the real estate boom, endured a catastrophic fire and more delays, and eventually will come to market when all prices have been pushed into the bargain basement. Horton, the observers say, simply wants to fulfill its civic obligation in Escondido, complete the project and move on.

Horton did return to the council and acquiesced. The condominiums offered will still have four bedrooms, though one may be opened somewhat instead of having floor-to-ceiling walls.

Buyers, to satisfy Big Brother Escondido, will have to sign that they will use the fourth room as a den, an office, anything but a bedroom. What's more, that provision will be written into the covenants, codes and restrictions for the complex.

Presumably, any buyer of a four-bedroom townhouse would choose to use one as a den or office, anyway. So, no harm, no foul?

Not so fast. Big Brother Escondido has now passed a law telling you what you can or cannot do in your own bedroom. It is no longer your choice. The vote was 5-0, with even Sam "I believe in the least government regulations on our citizens" Abed voting to interfere in a decision that really should be between willing builder and willing buyer.

There was no mention of what the penalty for violators will be, which sends our imagination soaring.

Perhaps, offenders will be deported just outside the Escondido city limits. Or, maybe they will be forced to register with other cities as "serial bedroom occupants."

Escondido's council majority clearly is caught up in an anti-immigration backlash and is swinging at even imaginary targets. This ordinance outlaws a market product quite popular in a number of California cities. In its paranoia, the Escondido City Council is actually taking away freedoms from American citizens.

This ordinance is both silly and sad. Sad in that this passes for "less government" in Escondido. Sad in that this restriction inevitably will pit some homeowner against a relentlessly rigid homeowner association. So much for harmonious quality of life in Escondido.

Next Saturday: Big Brother Escondido in your overnight parking space.

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