“FAIR RENT” – Sargent testifies for resident group in Rent Control Hearing
Attorney Bruce Stanton, representing the resident group at Idle Wheel Estates MHP, Woodland, CA, asked Deane Sargent, PMC Financial Services, to provide expert testimony about several issues in the Rent Adjustment Hearing requested by the park owner, Idle Wheel MHP LLC.
The owner went before the Woodland Manufactured Home Fair Practices Commission in March to request an increase in monthly site rents of $160/mo (45+%) from the current average rent of $362.06. The owner felt that it was not receiving a ‘fair return’ on the investment in the park.
Stanton asked Sargent to comment on two issues:
1) if the 9% return required by the owner was reasonable, and,
2) if the owner was entitled to any benefit because of ‘increased’ home prices due to low ‘rent controlled’ site rents.
Sargent stated that 9% was not a reasonable rate of return for a California MHP. California parks are considered low risk investments. The owner purchased the Idle Wheel Estates MHP only one year earlier at a price reflecting a 5.67% return.
Sargent also stated that the idea that owners were entitled to share in increased home prices for homes in rent controlled parks was bogus. Attorney Stanton had earlier indicated that the courts have rejected such arguments. Further, Sargent pointed out that the owner’s calculations for the so called ‘benefit’ was based upon bad and misleading data.
The Woodland Manufactured Home Fair Practices Commission plans on hearing comments from residents in early April and will render their decision later in the month.
For additional information, contact Deane Sargent (deane.f.sargent; 415-271-3919; www.pmcfinancialservices.com)