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Publication Date: Friday, August 10, 2001 "This came out of the blue, as far as I'm concerned."
@dropname:Frank Kalcic, manager and owner, Sunset Estates, on a proposal to study mobile home park rent control
"The city really hasn't had a focus on the fact that this is a large percentage of our senior housing."
@dropname:City Council member Sally Lieber
"Had I not known the Kalcics and what kind of people they are, and the Calas and what kind of people they are, I would have voted for rent control in a minute after hearing how Vidovich treats his people."
@dropname:City Council member Ralph Faravelli
Mobile home problems to be studied
Mobile home problems to be studied
(August 10, 2001) Rent control fails to gain council's support
By Justin Scheck
Shelving one member's request for a study of mobile home rent control, the City Council Tuesday voted to have city staff come up instead with a system for mobile home residents to deal with their complaints through city government.
After hearing residents' complaints, as well as arguments for and against rent control from various speakers, the council decided to have city staff formulate a process for residents to get their complaints to city government. However, the council would not approve a motion that specifically identified high rents as an item for study. Such a request had been made by Council member Sally Lieber.
More than 100 mobile home park residents attended the meeting, joined by park owners, rent control advocates, and industry groups opposed rent control.
Most of the two dozen speakers at the meeting talked about unfair rents, intimidation by park managers and owners, and the need for rent control; most also came from the two Mountain View parks -- Sahara Mobile Village and Santiago Villa -- owned by John Vidovich, a local businessman who has come under fire in recent months for his parks' management practices.
The discussion Tuesday highlighted a number of issues that have been brewing in the city for years, including the apparent contrast between management practices in Vidovich's parks and those in the other parks in the city, as well as the long-standing ties the mobile home park owners have with the city.
Pros and cons of rent control
The issue of mobile home park rent control appeared on the city's radar screen in January, when dozens of mobile home park residents called for rent relief at an Environmental Planning Commission meeting on housing.
Park residents and rent control advocates argued that such a measure would reduce the power imbalance between park owners and residents, who usually own their homes but rent the land where the homes sit.
They complained that rising rents may force many residents out of Mountain View, and that large rent increases for new tenants make it difficult to sell homes. Residents said Tuesday that the value of their homes is essentially lowered by the unregulated rent increases for new tenants, and that the loss on their investment further reduces their ability to move out of the park.
But park owners object, saying rent control unfairly limits their ability to make a profit. Frank Kalcic, manager and part-owner of Sunset Estates on Sylvan Avenue, and Vincent Cala, who owns the nearby New Horizons, told the council that they have owned the land for generations and take pride in charging their residents reasonable rents.
Kalcic said after the meeting that the problems voiced by residents seem to stem only from the management of Vidovich's two parks, and should not impact park owners whose residents are content.
"This came out of the blue, as far as I'm concerned," he said Tuesday. Kalcic said that he charges incoming residents a maximum of $651 a month, as opposed to the $995 charged in Vidovich's parks.
Kalcic said he fears a single operator's bad management practices could hurt the industry, and he hopes that the city's efforts will solve residents' problems and prevent future calls for rent control.
Park residents had mixed feelings about the council's decision. Tony Ban, a Sahara resident who has actively spoken out against management, said Wednesday that he is "very happy that something passed."
"I think there is an awful lot of validity in the fact that you have seven parks in the city, and two of them -- both, not coincidentally, owned by John Vidovich -- are the problem," said Ban.
In a city where affordable housing for seniors has been a constant source of discussion, the fact that mobile home parks provide relatively low-cost senior housing came up frequently at the meeting. Council members Mary Lou Zoglin, Ralph Faravelli, Mario Ambra and Sally Lieber have all spoken often about their commitment to preserving elderly housing in Mountain View, but only Lieber supported rent control.
"The city really hasn't had a focus on the fact that this is a large percentage of our senior housing," said Lieber.
Ties among local families
Another factor in the rent control equation is that the parks are owned by some of Mountain View's long-established and politically powerful families.
Faravelli said Wednesday that he has known the Vidovich family "for as long as I remember."
"I've known the Kalcics all my life. [Leo Kalcic, Frank's father] and I were classmates, and I've know Cala since I was in high school," Faravelli said.
He said that hearing complaints about Vidovich's management style disappointed him.
"Had I not known the Kalcics and what kind of people they are, and the Calas and what kind of people they are, I would have voted for rent control in a minute after hearing how Vidovich treats his people," said Faravelli.
Zoglin received a $300 campaign donation from Vidovich's DeAnza Building and Maintenance before last year's election, and she said she had spoken to Vidovich about the issue of rent control.
"I have spoken with them about this issue recently, but when people call me I don't know if it should go in the newspaper... I have no problem with it, but they might," said Zoglin. She said her conversations would not influence her consideration of the issue.
Faravelli questioned Lieber's motivations in bringing the item to the council.
"I like Sally Lieber, and I've endorsed her (in her bid for state assembly), but I think she's using it as a political issue, and I'm sorry to feel that way. But why didn't it come up last year or in other years?" Faravelli asked.
A question of profits
According to Ken Barr, a Berkeley attorney who has consulted numerous Bay area communities on mobile home rent control ordinances, owners in parks where there is rent control are still able to make healthy profits.
Barr said that park owners typically spend about 40 percent of park revenue on overhead, leaving the remaining 60 percent as profit after mortgage payments. And with space rents for incoming homeowners in Mountain View parks approaching $1,000 a month, he says rent control could limit rent increases and still allow park owners to make a reasonable profit.
Barr also said that in the past, competition among parks regulated rents. But with land costs at a premium, new parks are not being built, and park owners have little incentive to keep rent low.
"You have this peculiar situation where [people] have these homes they've invested a lot into that are sitting on land they don't own. It's basically a monopoly... There is the potential for abuse, and when you have a monopoly you need regulations," said Barr.
But Jorj Tilson, executive director of the Manufactured Housing Educational Trust of Santa Clara County, an organization that represents park owners, disagreed.
Tilson said that prior to moving into a park prospective residents are required to show that they have the financial means to afford the park's rent.
"What is disturbing about it from an industry point of view is that it's not a monopoly... What we are talking about is a person who has the economic means to support themselves within a park," said Tilson.
She said that, in such a situation, it is not fair to owners to have their industry controlled by something other than the market.
Tilson said she could not comment on how rent control would affect owners' ability to profit from parks in which rent is kept relatively low, but she said the principle of regulating profits is in itself problematic.
"The hurt comes from the fact that a business is not allowed to make a business decision... You are deprived the dignity of being treated as a rational business," said Tilson. She added that despite the overwhelmingly elderly turnout at the Tuesday meeting, the notion that mobile home parks provide predominantly elderly housing "is a complete, fantastical shibboleth."
Faravelli said that owners of parks that charge fair rents should not be punished for problems in one owner's parks, especially since they "have provided affordable elderly housing since before it was a concern."
But Ban said Wednesday that, as long as there is no legal protection in place, the possibility of abuse remains at every park in the city.
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