9.50.073 Factors to consider in fixing space rent through the hearing process.
If a proposed rental increase is submitted to the Mobilehome Rent Review Commission (“Commission”) pursuant to the provisions of this chapter, the Commission shall determine the rent that is fair, just and reasonable, and, in doing so, shall consider the factors listed below. The Commission has the authority to request information and/or documentation related to these factors that will assist them in making such determination. The City and/or their designee shall review all evidence to be presented to the Commission for their consideration. The Commission’s decision shall be based on the preponderance of the evidence at the hearing. The Commission shall consider the following factors:
A. The need for the proposed rental increase in order to permit the owner to secure a fair and reasonable return, when considering the existing rental scheme for all spaces in the park and all existing or expected expenses in owning and operating the park. A fair and reasonable return may be determined by the Commission by reference to industry standards, risk of investment, or other acceptable standards.
1. In considering the existing or expected expenses in owning and operating the park in following prudent business practices, the Commission should consider the following or any similar or related items of expense, the reasonableness of such items, and changes to them:
a. Actual financial investment in park improvements.
b. Property or other taxes.
c. Mortgage or ground rent payments.
d. Utility costs.
e. Capital improvements or rehabilitation work.
f. Repairs required.
g. Other operating and maintenance costs. Operating costs shall not include the following:
i. Avoidable and unnecessary expenses, including refinancing costs;
ii. Any penalty, fees or other interest assessed or awarded for violation of this or any other law;
iii. Legal fees, except legal fees incurred in connection with successful good-faith attempts to recover rents owing, and successful good-faith unlawful detainer actions not in derogation of applicable law, to the extent same are not recovered from residents;
iv. Depreciation of the property;
v. Any expense for which the park owner has been reimbursed by any security deposit, insurance settlement, judgment for damages, settlement or any other method. Cost of replacement or repair incurred or necessary as a result of the park owner’s negligence or failure to maintain, including costs to correct serious code violations at the park.
2. In considering the existing or expected income from owning and operating the park, the Commission should consider the rent schedule for all spaces in the park and any similar or related items verifying income for the mobilehome park for the last three years, the reasonableness of such items, and changes to them.
B. Rate of return earned by the park owner in previous years as determined by a fair return analysis expert. All parties, including the City, shall have the right to hire their own expert.
C. The extent to which the proposed rental increase will cause a reduction in the resale value of the mobilehome.
D. Changes in the Consumer Price Index for all urban consumers in the San Diego Metropolitan Area published by the Bureau of Labor Statistics.
E. Fair market rental value as determined by “comparables” of similar and existing mobilehome spaces or mobilehomes in the South Bay area of San Diego County, including those in Chula Vista, as determined by an MAI appraiser. All parties, including the City, shall have the right to hire their own independent MAI appraiser.
F. The timing and amount of rents and increases for this and other spaces at the mobilehome park.
G. The quantity and quality of the improvements and features at the mobilehome park and any decrease or increase in such improvements and features.
H. The quantity and quality of services offered to park residents and any decrease or increase in such improvements and features. (Ord. 3255 § 1, 2013; Ord. 3195 § 1, 2011; Ord. 2862 § 1, 2002).