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SR 04-12-2016 8B 407-003-25/901-001-04 City Council Report City Council Meeting: April 12, 2016 Agenda Item: 8.B To: Mayor and City Council From: Andy Agle, Director, Housing Division, Housing and Economic Development Subject: Disposition of Mountain View Mobile Home Park Recommended Action Staff recommends that the City Council: 1. Approve a one-time, temporary lot-line encroachment exemption for eight existing households, which impact eleven existing vacant spaces; and 2. Authorize staff to issue a request for proposals from affordable housing organizations to acquire Mountain View Mobile Home Park and operate the property as affordable housing. Executive Summary Mountain View Mobile Home Park is currently owned by the City, with property management contracted to a management company. Recognizing that the City as an owner of residential property is not consistent with the core mission of funding affordable housing rehabilitation and development, staff recommends solicitation of proposals from affordable housing organizations to acquire and operate Mountain View Mobile Home Park as affordable housing. The proposals must preserve affordability, optimize housing opportunities, and operate the property for the benefit of current and future low- and moderate-income households. Mountain View Mobile Home Park has the capacity to house 105 tenant households in because the lots were established long after the park was created. Staff recommends approving a one-time, temporary lot-line encroachment exemption for the eight households to protect and preserve their current homes. 1 of 6 Background until purchased by the City in 2000 (Attachment A) to preserve the property as an affordable mobile home park for low- and moderate-income households. Restricted housing trust funds were used to acquire the property, requiring the recordation of an affordability covenant (i.e., deed restriction) establishing income eligibility requirements for future occupants. The Park is also subject to the Rent Control law, which limits rent increases and provides eviction protections for the residents. When purchased, the Park had failing infrastructure, roads not designed for emergency access, inadequate drainage with seasonal flooding, and homes that did not meet required minimum separation standards. To address these issues, the City focused attention on reconfiguring the Park and investing in safety and infrastructure improvements. In 2002 (Attachment B), the Santa Monica Rent Control request to remove 36 vacant home sites to accommodate the reconfiguration of roadways for emergency vehicle access and establish definitive lot lines for individual home sites to conform to statewide standards. On August 16, 2006 (Attachment C), the Planning Commission approved the reconfiguration, and lot lines were established for 105 permanent home sites. The reconfiguration required realignment or relocation of homes throughout the Park. The reconfiguration did not require all residents to relocate their homes, move ancillary structures, or limit yard areas to align with the established lot lines, resulting in the current encroachments of eight households. During 2008 and 2009, the City spent approximately $5 million on infrastructure improvements, including undergrounding electrical, telephone, and cable TV lines, installation of new natural gas, potable water, sanitary sewer, and street lighting systems, and construction of new curbs, gutters, and roadway pavement surfaces (Attachment D). After completing the improvements, 20 City-owned mobile homes at the Park were replaced with new manufactured homes in 2011 and 2012 at a cost of approximately $3 million (Attachment E). Additionally, nine residents participated in the Council-adopted financing program for Park residents (Attachment F), resulting in new manufactured homes installed during 2012 and 2013 at a cost of approximately 2 of 6 $1.5 million. Finally, staff coordinated the relocation of 12 residents displaced from Village Trailer Park (VTP) into the Park from 2014 to 2015, along with the installation of new manufactured homes paid for by the VTP developer. Lot Line Encroachment The minimum setback required by the State between homes is at least six feet with each home located at least three feet from the lot line or street. Non-conforming occupancies encroach into adjacent, vacant home sites, narrowing the usable building footprint and resulting in unusable home sites. Currently, eight households have encroachments into 11 adjacent, vacant home sites. Residents of the eight households own their homes and have lived and remained at the same locations in the Park for decades. Many of the eight households have expressed concern that the lot lines established by the City are not consistent with the area they have occupied for decades. Though one or more adjacent sites are effectively unusable, the eight households pay rent for one home site. Disposition At its December 11, 2012 meeting (Attachment G), Council directed staff to explore disposition of all City-owned properties managed by the Housing Division, including Mountain View Mobile Home Park. Pursuant to Council direction, the City has disposed of most properties managed by the Housing Division, with the Park as one of the final disposition opportunities. Owning and operating the Park requires significant staff resources, including property management company selection and oversight, preparing and monitoring property budgets and expenditures, assisting with resolving tenant issu matters. Transitioning the Park to non-City ownership would allow staff to focus more directly on its core mission of increasing affordable housing opportunities, while preserving the Park as affordable housing. Discussion affordable housing and protection of tenant rights. Consistent with those priorities, staff 3 of 6 recommends that an affordable housing organization be identified to own and operate the Park. A change in ownership would not affect tenancies, as the Park is subject to the Rent Control law, which provides eviction protections. Existing affordability covenants require the Park to be operated as affordable housing for low- and moderate- income households through 2062. Additional covenants associated with transfer of the Park could include deeper income targeting, longer deed-restriction terms, and an option for the City to repurchase the Park for $1 prior to the expiration of affordability covenants. Encroachments of homes onto adjacent lots resulted from the establishment of measurable lot lines in conjunction with achieving safety standards in the Park. Lot lines in the Park prior to the safety improvements were not documented and are unavailable. Currently, eight home sites effectively occupy more than one lot. Given the age of some of the homes, several may not structurally withstand relocation. Moreover, some homes are too large to fit on one home site. Therefore, staff proposes a one-time, temporary encroachment exemption that would be voided with major alterations to the home, or when the existing tenants terminate residency at the Park. Additionally, staff proposes that the exemption be non-transferable. One consideration related to the exemption is that affordable housing opportunities on the eleven affected lots will be delayed, potentially for decades. In addition, the financial feasibility for a new owner-operator would be impacted by the reduction in potential rental income. The recommended actions regarding encroachment exemption and Park disposition were presented to the Housing Commission on March 17, 2016 (Attachment H). The Commission generally supported the r specific concerns and recommendations have been incorporated into this report. Several members of the Park attended the Commission meeting and supported the recommended encroachment exemption. Park residents in attendance expressed mixed support for transitioning the Park to a new entity, with some valuing the security they feel with the City as owner. With Council authorization to seek proposals, staff would share a draft request for proposals (RFP) at a public Housing Commission meeting, as well as at a meeting with Park residents, to ensure opportunity for input from all 4 of 6 stakeholders. Prior to staff preparing a recommendation for Council regarding the selection of a new owner-operator, staff would solicit feedback from the Housing Commission. Request for Proposals If Council directs staff to proceed with the recommended approaches, staff would issue an RFP targeted to affordable housing organizations with appropriate experience to own and operate affordable housing and mobile home parks. The RFP would seek proposals to acquire the property, install new, sustainable manufactured homes on vacant home sites (currently vacant and as sites become available), and operate the Park as affordable housing for the benefit of low- and moderate-income households. The RFP would be evaluated on: thoroughness, completeness, and responsiveness; financial feasibility of the proposal; approach to managing and operating the properties; financial capacity of the organization;. demonstrated experience and capacity in owning and operating affordable housing and mobile home parks; approach to customer service in a multi-cultural and multi-lingual community; demonstrated knowledge and compliance with regulatory safety compliance requirements; and commitment to local hiring practices. Alternatives An alternative to transferring the Park to non-City ownership would be a ground lease to an owner-operator rather transferring ownership. A ground lease could achieve City goals of transferring operations of the Park to a qualified affordable housing provider while retaining City ownership. However, a ground lease may not provide the same degree of arms-length independence from property management responsibilities that a 5 of 6 transfer of ownership would provide. A ground lease could negatively impact the ability to access traditional financing for the Park should the need arise. Another approach would be for Council to provide alternate direction relating to the encroachment issue and the disposition of the Park. Financial Impacts & Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action involving a Request for Proposals. No budget action is necessary as a result of the approval of the encroachment exemption for the eight households, as potential rent revenue. Prepared By: Ava Lee, Senior Development Analyst Approved Forwarded to Council Attachments: A. Council Staff Report 11.14.2000 B. Rent Control Board Removal Permit Decision 7.11.2002 C. Planning Commission Staff Report 8.16.2006 D. Council Staff Report 1.22.2008 E. Council Staff Report 9.28.2010 F. Council Staff Report 12.14.2010 G. Council Staff Report 12.11.2012 H. Housing Commission Staff Report 3.17.2016 I. Written comments 6 of 6 Add to 8-B Add to 8-B 04/12/2016 04/12/2016 Anne Samartha From:Council Mailbox Sent:Monday, April 11, 2016 12:47 PM To:Tony Vazquez; Ted Winterer; Pam OConnor; Sue Himmelrich; Gleam Davis; Terry OÔDay; Kevin McKeown Fwd Cc:councilmtgitems Subject:FW: Mt.View Follow Up Flag:Follow up Flag Status:Flagged Council Pleaseseethebelowemailre:MountainViewMobileHomePark. Clerk Addtofor4/12meeting. Thanks, Stephanie OriginalMessage From:Drymon,Cheryl\[mailto:cdrymon@smmusd.org\] Sent:Thursday,April07,20162:21PM To:CouncilMailbox<Council.Mailbox@SMGOV.NET> Subject:Mt.View Iwouldliketoexpressmysupportofourcurrentmanagement. IhavelivedintheParksince1990andIfeelthatduringallthoseyearsnoonehasdonesuchafinejobofrunningthis Park. TheParkiswellmaintainedandthestaffishelpfulandfriendly. IunderstandyougetmanycomplaintsfromsomeresidentsoftheParkbutIfeelthatthesepeoplewouldnotbe satisfiedwithanyone. Iservedonourresident'sboardfor13yearsasmember,President(4times)andsecretary(6times).Whenthepresent BoardcameonIfeltIcouldnolongerserveontheBoardasmostofthemembersaretoodissatisfiedand argumentative.Ihaveevenstoppedgoingtothemeetingsalltogetherforthesamereasons. IfeelthemajorityofresidentsoftheParkarehappywithmanagementbut,asIdid,donotexpresstheir satisfactionbecausetheyarefeelingwellserved. nagement. Pleaseunderstandthat,inmyopinion,mostresidentsarehappywithourcurrentma Thankyou, CherylDrymon 1930StewartX1 SentfrommyiPad 1 Add to 8-B 04/12/2016 Anne Samartha From:Maria Loya <mloyadlt@gmail.com> Sent:Tuesday, April 12, 2016 10:52 AM To:Tony Vazquez; Ted Winterer; Terry OÔDay; Kevin McKeown Fwd; Pam OConnor; Sue Himmelrich; Gleam Davis; Rick Cole; David Martin; Clerk Mailbox Cc:p-n-a-board@yahoogroups.com; Catherine Eldridge; cristopher1@myway.com; Oscar De La Torre; beredeambo1@yahoo.com; Lorraine Sanchez; Dolores Sloan Subject:Agenda Item 8-B: Disposition of Mountain View Mobile Home Park To: Santa Monica City Council From: Pico Neighborhood Association Date: April 12, 2016 Re: Agenda Item 8-B: Disposition of Mountain View Mobile Home Park Dear City Council: The PNA Board of Directors is writing this letter regarding Agenda Item 8-B: Disposition of Mountain View Mobil Home Park and the possible unintended consequences of current long term tenants losing their rights under to proposed temporary lot-line encroachment exemption for eight existing households, which impact eleven existing vacant spaces. We are equally concerned with the potential impact to the preservation of Mountain View Mobil Home Park as the City considers options authorize staff to issue a request for proposals from affordable housing organizations to acquire Mountain View Mobile Home Park and operate the property as affordable housing. The PNA Board of Directors in consultation with Mountain View Mobile Home Park tenants recommend the following to the Santa Monica City Council. 1.Santa Monica City Council not support the City Staff’s recommendation to impose a temporary lot- line encroachment exemption for eight existing households. 2.Furthermore, the PNA Board of Directors recommend that the City of Santa Monica consider the alternative of having Mountain View Mobile Inn Tenants Association assume ownership. Proposed Temporary Lot-Line Encroachment On August 16, 2006, the Planning Commission approved the reconfiguration, and lot lines were established for 105 permanent home sites. The reconfiguration required realignment or relocation of homes throughout the 1 Add to 8-B 04/12/2016 Park. The reconfiguration process did not adequately engage the Mountain View Mobil Home Park tenants and many were unaware of the new lot lines. As a result, the new lot lines encroached on the existing lot lines that had been in place for decades. Furthermore, the reconfiguration did not require all residents to relocate their homes, move ancillary structures, or limit yard areas to align with the established lot lines, resulting in the current encroachments of eight households. Residents of the eight households own their homes and have lived and remained at the same locations in the Park for decades. Many of the eight households have expressed concern that the lot lines established by the City are not consistent with the area they have occupied for decades. The Park is also subject to the Rent Control law, which limits rent increases and provides eviction protections for the residents. The intent of the Rent Control law is to protect tenants from land lord harassment and forced evictions that result in tenant potential displacement. Yet, the City staff recommendations only work to position long term tenants of the Mountain View Mobil Home Park to lose their rights automatically. The State’s Housing Community Development code and Mobile Home Residency Law and Title 25 protect mobile home owners from Ellis and other resident type risks. Tenants of mobile home parks have special protections because of OWNERSHIP status. The City is using is authority as the “land lord” and a government agency to deny residents all the protections the state and federal government have put in place to protect Mobile Home residents from just such “taking” of their homes. The idea that the City has control over the space simply because a building permit is required is outrageous and unlawful. Building permits are needed for many routine, necessary maintenance tasks. Mobile homes require regular maintenance. If you neglect the maintenance, you will be cited by the park owner for letting your unit run down. However, with this plan, a tenant can have their lot line/unit deemed in violation and “taken”. Either way the City staff recommendation to establish a temporary lot-line encroachment exemption for eight existing households puts long term tenants at risk of losing their tenant rights. It’s important to note that there were no lot line violations prior to the city’s upgrades. Mountain View Mobile Home Park Disposition At its December 11, 2012 meeting, Council directed staff to explore disposition of all City-owned properties managed by the Housing Division, including Mountain View Mobile Home Park. Although many tenants are fearful that the disposition proposal will threaten the preservation of Mountain View Mobile Home Park, the PNA Board of Directors in consultation with tenants from Mountain View Mobile Home Park recommend an alternative of having Mountain View Mobile Inn Tenants Association assume ownership. The existing regulatory agreement says that the City of Santa Monica can transfer over to the residents if it’s feasible. Mountain View Mobile Home tenants must be given the opportunity to be considered in the City’s alternatives. This alternative would be consistent with those priorities, staff recommends that an affordable housing organization be identified to own and operate the Park. This particular alternative would not affect tenancies, as the Park is subject to the Rent Control law, which provides eviction protections. Furthermore, it puts existing tenants in a position to have a say in the future of their mobile home park allowing the City staff to focus more directly on its core mission of increasing affordable housing opportunities, while preserving the Park as affordable housing. 2