Golden State’s Dirty Secret
By Glen Bell (First of a three-part series)
Imagine if you will that you are a 72 year old widow. Twenty five years ago, you and your husband of many years decided to buy a home in a lovely hamlet, to reside in for the remainder of your golden years- a retirement community.
You both loved the home and the hamlet for a good 10 years before he died. It is a community with lovely neighbors and friends and many memories of happy times were born in this community. Nearly everyone was close to your age and all looked out for each other. It was a short jaunt to the beautiful community center with a library, a pool where you could swim without embarrassment, and the recreation center where the men could gather regularly to watch a boxing match on the TV, play poker and basically to get out of the house. Your home wasn't conspicuous. It was comfortable, like your marriage. And affordable, if you lived within your means.
For the convenience and comfort of residing in this Hamlet, you pay $200 monthly. The monthly fee was controlled and reasonable for many years. There was always an annual increase in the fee, but you planned for that. The normal increase was usually 3% per year; and you were able to cover it comfortably because you planned for it knowing that there would be increases in Social Security throughout the years.
Now, imagine on Christmas Day (2005), receiving a notice that your hamlet had been sold. And the new owner was increasing the fees with an equivalent of 17 years worth of increases in just a month's time.
You panic, not only for yourself, but for all your friends who may not be as fortunate as you. A little research shows you that the 3% yearly increase would soon become a 10% increase. As if to add salt to a wound the new owners accounting practices change the utility charges and some months the electric, gas and water bills increase over 300%.
There are no words to describe the stress and panic that goes through a human being when they suddenly realize they are just moments away from being homeless. When nearly every fiber of hope is shattered, the new owner decides he hates your beautiful garden and the porch that you spent many happy hours on suddenly is not allowed.
The particulars are left to chance, you have no idea what to comply with, but you have 14 days to do it in or you will be evicted. Some would say, Sell your home and move!” Just about anyone would call an attorney for advice, the Attorney General, or any plethora of Congressmen screaming of this injustice. But what if the law said that if you are evicted you have only a 60 day window to sell your home? That includes time to prep your home for sale, and remember, you are still imagining that you are 72 years old and on a fixed income.
If that same law, also, said a third party has the right to approve or disapprove anyone you wish to sell your home to and if that third party does not approve your prospective buyer, he can require you to have the home destroyed, and force you to leave, how angry would that make you?
If that third party could file for a warehouseman's lien, pay 30 dollars and receive an unfettered title on your home and then, sell it for hundreds of thousands of dollars, to his next victim, would you call that a crime?
Welcome to the nightmare of hundreds of thousands of Californians. Elderly, disabled, decorated war heroes and America's working poor fall victim to this abuse regularly.
My name is Glenn Bell and I am president of Neighborhood Friends, a coalition of Manufactured/ Mobile Homeowners in California. All that I have described above happens daily in Park after Park.
Over the last decade, up to 35% of all the manufactured housing communities in California has been purchased by extremely wealthy Corporations, who consciously, shovel human beings to the curb while stripping them of any means to acquire another home.
Want some of these corporate names? How about Kort and Scott Financial (K&S), Sierra Corp. Management, Equity Lifestyle Properties owned by Sam Zell who also owns the LA Times, Chicago Tribune and 24 other television stations. Beaumont Investments, The Waterhouse Group and a number of other Mega Million and, sometimes, Mega Billion Corps?
Demographic studies have shown that up to 67% of seniors, 15% Disabled and now a growing number of young Latino families are the residents of manufactured housing communities. These corporations exercise a business plan that, literally, bleeds people dry. They take over a community and institute unbridled space rent increases within days.
An example of this is Kort & Scott's purchase of Blue Star ( a park in Sylmar) MHC in Jan, 06. An average space rent that was $350 per month, now averages over $1,000 per month. Maintenance personnel were fired without notice. Repairs and Maintenance ceased and long term (15-20-25 year) leases became the norm. No one living on a fixed income could afford to stay.
These leases allow for the park owner to clear 6% to 7% increases per annum. At least that is the visible part. The hidden parts of the 28 (plus) pages of legalese also allow the park owner to pass on “surcharges” of their choice.
As an example, an owner can do work on other properties that they own and pass through to the renter. They can purchase an $80,000. truck and pass it on to the renter.
If someone signed one of their leases today, with space rent starting at $700.00, at the end of 30 years (the average tenancy in a MHC) that same space rent, not including any “pass-through” or “surcharges” would be $12,864.32 per month.
One would ask, “Why in the world would anyone on earth agree to that?” Good question. The fact is these lease offers are usually rendered on a take-it-or-leave-it basis. The people have NO choice and no recourse. Sign the lease or move your property within 72 hours. And since it costs $25,000.00 to move the property, you are left with a fool's choice. There is also another issue- no Manufactured Homes Community in California will accept a used home. What options remain?
Ian, a disabled war hero, who purchased a mobile home with a CalVet loan moved his wife and three year old daughter into a mobile home parked in a beautiful park. Veterans can utilize the CalVet program over and over, provided their previous loans have been paid in full. What will Ian do when he cannot get enough for his home to satisfy even one third of his VA loan? There are thousands of these outrages in California and the legislature fails (and refuses), year after year, to protect them.
Glenn Bell
President
Neighborhood Friends
818-890-1113
www.neighborhoodfriends.us
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