Bay Area mobile home parks owners set huge rent increase for Castro Valley tenants
SAN FRANCISCO — Residents at a mobile home park in Castro Valley thought their homes were protected by Alameda County's rent control law, but the property's new owner says they're not really mobile homes at all and is demanding huge rent increases from the terrified homeowners.
The sign outside seems clear enough: "Avalon Mobile Home Park." But when the Castro Valley property was purchased earlier this year by Three Pillar Communities, letters were sent to residents raising rents, in some cases doubling them, despite the fact that Alameda County has a mobile home rent control ordinance limiting increases to 5 percent per year.
"We found out this corporation has 70 parks throughout the states and they've done the exact same thing at every single park," said resident Tara Clancy. "We've talked to other parks, and we've been doing our homework. It's just something they do."
At Avalon, the company is trying to get around the rent control by claiming homes are actually recreational vehicles, not subject to the ordinance. In a statement, Three Pillar co-founder Daniel Weisfield said, "This only applies to recreational vehicles, which are not permanent residences. The park owner raised rent to less than the fair market value, and voluntarily offered rental assistance to anyone who is unable to afford the new rent amount."
To be sure, some look like RVs, but that doesn't describe Judy Espinoza's "recreational vehicle." The one-bedroom, one-bath manufactured home has wood siding, a gabled roof, a staircase and is anchored to the ground for earthquake safety.
"I bought this house with my husband with our retirement savings," said Judy. "This is all we had, and we've made it our home. Hooked it to the ground. We can't move it."
It's the same problem faced by all mobile homeowners. They own the structure but not the ground under it. Which means, if the rent is hiked, most have no practical way to go anywhere else. Appearing on a podcast, Weisfield said it's what makes mobile home parks such a profitable venture for investors.
"Mobile home parks provide some of the best risk-adjusted returns that you can find in real estate," he said. "We have a very stable cash-flow profile because our residents are homeowners, right? They own their home; they've got skin in the game. Our typical tenancy is close to ten years in our portfolio. So, I just love the fact that we're providing high quality affordable housing that I feel really good about and also that stability of income."
The problem is doubling the rent is making the housing unaffordable for most of the residents at Avalon. The company also owns a seniors-only park in Petaluma called Youngstown, which is also rent controlled. In that case, Three Pillar is reportedly suing Petaluma in federal court, claiming the city's ordinances violate a Constitutional guarantee to a fair and reasonable return on their investment.
"I believe that was their goal before they bought," said Youngstown homeowner Jodi Johnson. "And I believe that will be their goal to entice investors across the United States to them, under the premise that they'll be able to get rid of rent stabilization ordinances, senior-park overlays, and anything that stands in their way at making extraordinary profits."
Back at Avalon, the residents are gearing up for a fight of their own.
"Oh, damn right," said resident David Violante. "These people that are standing right here are very feisty. They're good to go. Know what I mean. We're going to put on our boxing gloves and we're going to fight like we've never fought before."
But Judy can't help wondering what will happen if they don't win.
"I'm just, it's affecting all of our health — Our wellbeing," she said. "It's our whole livelihood, and they're taking it away."
In this case, "affordable housing" will only be for those who can afford to pay more.