WATSONVILLE >> Residents of Pinto Lake Mobile Estates, a 177-home community, were relieved in March when a Santa Cruz County hearing officer ruled against the owner’s 2016 request for a $211-a-month special rent increase.
Now the owner, Pinto Lake MHP, which is managed by Waterhouse Management of Roseville, is fighting the hearing officer’s decision in court.
Attorney Terry Dowdall filed the lawsuit May 30 on the owner’s behalf against the county in Santa Cruz County Superior Court, asking for the March 21 decision to be set aside and a new hearing on the special rent increase.
Both sides are to appear in court Oct. 3.
County spokesman Jason Hoppin said, “We look forward to defending the ordinance on behalf of our residents, many of whom struggle with local housing prices, in a court of law.”
“Naturally, I’m not happy,” said Patricia Thompson, a retiree who has lived at Pinto Lake Mobile Estates for 19 years and pays $462 a month, which will go up $11 in September after the general rent increase. “Some people pay less than I do and some pay more.”
When the owner requested a special increase, resident Gilbert Magana worried that older people would be forced to move out and be left homeless.
Waterhouse manages four more mobilehome parks with 411 spaces — Rodeo Gulch, Yacht Harbor, Pleasure Point and Pine Knolls — where the county’s rent ordinance applies so residents at those parks have been watching the case.
Jean Brocklebank, a member of the county mobile home commission, said the county had been sued before over its rent stabilization ordinance and won.
“It’s so well crafted that other counties look at ours as a potential template,” she said. “Mobilehome parks provide the lion’s share of affordable housing in the county.”
George Gigarjian, the hearing officer, used the formula in the county’s 1982 rent ordinance and calculated a “fair return” would be $909,844, less than the park’s actual 2015 income of $939,665.
In the lawsuit, Dowdall, the owner’s attorney, presents several arguments.
First, Dowdall contends Gigarjian erred by not allowing him to cross-examine the economic expert who testified for the residents in one area, the assumptions in his report, and thus the park owner was denied a fair trial.
Second, Dowdall contends the ordinance, which provides for 50 percent of an inflation index to maintain the owner’s 1979 net operating income, is unconstitutional.
He contends the park owner is being shorted $210 per month per space, a shortfall of $447,000 a year, and he wants a 100 percent inflation adjustment instead of 50 percent.
The hearing officer gave each side the time they requested, said Henry Cleveland, a member of the county’s mobilehome commissioner who attended the proceeding.
“Appellate courts have already held 100 percent is not required for a fair return,” Cleveland added. “One court held 40 percent was enough.”
[ED. NOTE: Pinto Lake has a GSMOL Chapter, #0902, and they have more GSMOL members in the park than they have spaces. ]