Mobile Home Conversions Subject to Coastal, Mello Acts, Cal Supremes Rule
The California Supreme Court ruled Thursday that the conversion of a mobile home park from rental to ownership status is subject to the Coastal Act and also to the Mello Act, which lays down procedures for replacing affordable housing in the coastal zone.
The court's key ruling in Pacific Palisades Bowl, Mobile Estates, LLC v. City of Los Angeles is that a mobile home conversion -- which involves a subdivision of property, is a "development" under the Coastal Act even if an immediate change in density or intensity is not contemplated. Relying on Public Resources Code section 30106, the Supreme Court said: "Any subdivison under the Subdivision Map ... is, by definition, a species of change in the density of intensity of use of land and is a 'development'." The court also noted that while Pacific Palisades Bowl appears to assume that the Coastal Act is intended to alter only increases in density, in fact the law uses the word "change".
The court also rejected Palisades Bowl's argument that the Mello Act does not apply, noting that the law (contained in Gov. Code Section 66590) requires local governments to find replacement housing for low- and moderate-income residents in the coastal zone if they plan to approve projects that will convert or demolish affordable housing.
Palisades Bowl also argued that the Mobilehome Park Resident Ownership Program, which was enacted prior to the Mello Act, should take precedence over the Mello Act. But the court noted that the MPROP program, which is designed to facilitate the purchase of mobile home parks by residents, is a state policy that does not override the Mello Act.
The use of the Subdivision Map Act to convert mobile home parks from rental to ownership is the latest tactic by mobile home park owners to get out from under mobile home rent control ordinances.
Mobile home residents typically own their residences but rent the "pad" on which their residence sits from a mobile home park owner. Over several decades, dozens of cities in California have enacted "mobile home rent control" ordinances limiting the increases on the pad rents. Park owners have argued in court, mostly unsuccessfully, that mobile home rent control constitutes an unlawful transfer of asset value from owners to tenants. In those cases when courts have acknowledged that the value of asset transfer has occurred, they have also concluded that the asset transfer was permissible in the service of a larger public purpose.