The Mobilehome Park Rent Review and Stabilization Commission will decide whether to agree to a proposed $350 rent increase to La Hacienda Mobile Estates by park owner Harmony Communities, or to increase rent by 6.6%, as permitted by law on Tuesday, following an initial hearing over the proposal on Nov. 14.
A city commission will hold a hearing today over a proposed rent increase at a Fresno mobile home park that residents say they can’t afford – while the owners say they can’t afford to operate the park without it.
The Mobilehome Park Rent Review and Stabilization Commission will decide whether to agree to a proposed $350 rent increase to La Hacienda Mobile Estates by park owner Harmony Communities or to increase rent by 6.6%, as permitted by law on Tuesday, following an initial hearing over the proposal on Nov. 14.
The commission is composed of property manager Shannon Mcculligh, Housing Preservation Manager for Habitat For Humanity International Jerry Zuniga, Executive Director of RH Community Builders Katie Wilbur and retired mortgage banker Al Moncada.
The commission can also choose to raise rent by 6.6%, with an additional amount considered “fair and just” to both the park’s owner and residents.
How did we get here?
During the hearing last week, Harmony argued that their new proposed rent of $650 is fair and just since it’s comparable to other mobile home parks in Fresno. They also said the increase is necessary to address health and safety repairs at La Hacienda and to recoup money lost due to the many park vacancies.
Senior litigator for California Rural Legal Assistance Mariah Thompson — who represents a portion of the remaining park tenants — argued that the ongoing efforts by Harmony to close down the park keep La Hacienda from being comparable.
The commission had trouble agreeing to any rental increase during the hearing since the amount of rent paid at La Hacienda — the amount that would be used to identify the cost of a 6.6% rental increase — was difficult to make clear. Thompson said tenants pay $300, but Harmony said rent prices vary and are higher in some cases.
Harmony submitted 700 pages of documents to the commission the night before the hearing, which Senior Deputy City Attorney Sarah Papazian called an “overwhelming wave of raw data.”
The commissioners said it was difficult to get through all the documents appropriately. They also questioned the intentions of the submission, arguing that a company like Harmony Communities should be able to provide more precise documents given their years of experience in the housing industry.
About 40 people were present for the hearing inside the Fresno City Council chambers, all either residents of the park or attorneys representing them. Nobody from Harmony Communities was present at the hearing, and their attorney participated virtually.
Park resident Leslie Wright asked the commission to reject the proposed rent increase during public comment. For Wright, the increase will keep her from affording the rest of her needs.
“For the first time in 23 years, I am concerned with where I’m going to be, how I’m going to pay [rent]. It’s not fair,” Wright said. “[Harmony] wants to raise [my rent] another $350. That’s more than double. That’s going to mean I can’t afford medicine, I can’t afford utilities … It’s going to make a big difference in my life.”
Harmony Communities Property Manager Matt Davies added that he must close the park if it cannot profit. Currently, 28 households live at the 60-space mobile home park, according to park resident and chair of the park’s rent commission, Patricia Shawn.
Mobilehome Park Rent Review and Stabilization Commission Vice-Chair Katie Wilbur asked Davies during the hearing if he had attempted to take in any new tenants since Harmony took over ownership of the park in October 2022.
Davies told the commission that his company had not taken on any new tenants and would only fill the empty rental spaces with a significant rent increase.
“Absolutely not,” Davies said. “If I were to fill the park tomorrow, I’d still be losing about $150,000 a year. If I were to fill the park, which is a hard process, I would ultimately either be putting in a ton of extra money or I’d still be in a position to close the park. It’s got to make sense for a private business owner to stay in business.”
Thompson, the resident’s attorney, addressed Harmony’s concerns about operating the mobile home park at a loss by offering to connect them with an investor who is willing to purchase the park. The undisclosed investor is offering to buy the park and run it as non-profit affordable housing instead of as a small business that needs to make a profit.
What Happens Next?
Today’s hearing comes on the heels of Thursday’s Fresno City Council meeting regarding Harmony Communities’ proposal to close the La Hacienda Mobile Estates mobile home park. City Council unanimously rejected Harmony’s proposal, with some council members harshly criticizing the park owners.
The park’s residents celebrated the Thursday decision, though the status of their homes remains uncertain.
The park’s operating status is only one of the two tenants’ struggles, as many have received eviction notices since Harmony took over ownership of La Hacienda Mobile Estates in October 2022. CRLA and Thompson have argued that the evictions are illegal, and they’re now fighting them in court.
During Thursday’s hearing over the proposed park closure, multiple councilmembers concluded the meeting by directing criticism toward Harmony over their management. Councilmembers brought forward the idea of a new park owner or acquiring the park through eminent domain, but they have yet to establish eviction protections for the residents.
Harmony Communities will also be allowed to resubmit a proposal to close down the park at a later date. When asked about the proposal’s rejection, Harmony Communities’ attorney Jason Dilday made clear that the company still intends to pursue a park closure.
“The use of ‘proposal’ suggests that the City must approve the Park’s closure. This is not the case. Thursday’s hearing concerned only the sufficiency of the impact report required under [government code]. This is an optional hearing, meaning it is not required prior to a park closure,” Dilday said in an email to Fresnoland. “City approval is only necessary when local government permits are required…The owner still intends to close the Park in August 2024 unless they can obtain a fair rent.”
In response, Thompson sent a message to Fresnoland refuting the validity of attorney Dilday’s statement.
“Compliance with State closure requirements is not voluntary,” Thompson said in an email to Fresnoland. “In announcing their intent to violate the law and shut down the Park irrespective of the City’s decision, the Owners are transparently attempting to strong-arm the Rent Stabilization Commission into approving an unjustified $350/month rent increase for the few residents they have not yet evicted. This is the same bad faith business tactic they have used in other California jurisdictions.”
The hearing is set for tonight at 6 p.m. at City Hall in downtown Fresno.