Rent control shrinks housing market

By: North County Times Editorial Staff - | Monday, October 10, 2005 9:28 PM PDT

Our view: Oceanside's mobile homes are a good deal for tenants that rest of North County is paying for

Rent control is great if you got it. For everyone else, rent control only exacerbates housing shortages like that gripping North County. Price caps don't solve the larger problem, but merely create classes of winners and losers ---- and the losers always outnumber the winners.

In Oceanside, last week's loser appeared to be John Grant, the owner of Catalina Mobile Estates, whom the city punished for the crime of charging his tenants rents they were willing to pay ---- prices that followed the laws of supply and demand but not the city's rent control ordinance.

Grant stands accused of overcharging a dozen tenants at his mobile-home park along the Coast Highway. By contrast, Oceanside and other North County cities with rent control are overcharging thousands of their renting residents and taxing unlucky landowners so that a lucky few tenants can enjoy artificially low rents.

Aren't low rents for poor and elderly people in Oceanside a good thing? Yes, but rent control ordinances supply them to only a sliver of North County's poor and elderly. The mass of renters, rich and poor, pick up the tab; while Catalina residents, for instance, enjoy below-market rents on the pads beneath their mobile homes, the rest of North County's renters make up the difference in inflated rents because the market is just that much smaller. Price caps like rent control always create such shortages.

Rent control also takes wealth from landowners by depriving them of the prices justified by the market. That makes landowners leery of investing in more affordable housing, which in turn makes the housing shortage worse. And shortages push up prices for everybody who wasn't lucky enough to snag a rent-controlled unit.

In protecting some, governments that opt for rent control expose the many to an artificially inflated market.

With rents inching higher as homeownership vaults out of reach for many, the episode stands as a reminder that city councils who turn to rent control end up hurting their poor and working-class residents.

4 comment(s)[-]Go to Top

Lynn wrote on Oct 12, 2005 8:13 PM:This is article is particularly biased and a one-sided argument of a multi-faceted situation. It is just not mobilehome residents who have rent control available! In addition, mobilehome residents OWN their mobilehomes...they are NOT RENTING the mobilehome, just the space upon which it sits. (How much should dirt cost?) All the improvements, landscaping, patios, sprinklers, etc, are at the expense of the mobilehome owner. Mobilehome rent paid is similar to an association fee, covering not only the use of the space or small plot of dirt, but use of common areas, maintenance of lighting, and water and sewer lines. Most mobilehome parks charge extra for water, sewer and trash services, just as regular home occupants pay. Electricity is paid for by the mobilehome park tenant. Again, the mobilehome DWELLING UNIT is not being rented, just the dirt! Rent control from the cities and County is also available to low income residents who live in certain apartment or condo complexes and OTHER qualified housing. Many cities own low income or adult low income housing complexes. Many low income INDIVIDUALs and families benefit from not only living in low income residences, but receive rental assistance as well. THIS is not limited to mobilehome parks, residents, or owners. Rental assistance is available to all who qualify (even illegal aliens). Seek out the truth before you start writing articles. The Staff Writer(s) who apparently don't want to reveal their names, should investigate ALL THE FACTS.

Tim wrote on Oct 14, 2005 12:31 AM:North County Times Way Off Base For a publication that professes to have its finger on the pulse of North County, a recent editorial by the North County Times regarding Mobilehome Rent Control demonstrated an amazing lack of sensitivity and understanding of the issue. The Times deserves a bushel full of raspberries for its reckless stance. The Times fails to appreciate the precarious nature of owning valuable property “permanently” affixed to some else’s land. Manufactured-home (mobilehome) owners provide the housing, not park owners. Park owners provide a patch of dirt for the home to set on and the homeowner is responsible for the costs of maintaining the home, utility usage and landscaping. It is disingenuous to compare mobilehome space rent to that of other rental situations. Mobilehome owners are trapped-captive customers with very limited ability to relocate their homes. Conversely, apartment dwellers can “move-out” if living conditions become intolerable. Rent stabilization (control) IS a good thing not only for those homeowners protected by such ordinances, but it also helps bolster the local economy and tax base. For every dollar rent is increased, homeowners have one less dollar to spend in the local economy, money that otherwise goes to park owners who rarely live locally. If rents increase to unfair levels, homeowners are often forced to seek governmental subsidies, creating an added burden to tax payers. Unlike the real estate and stock markets, rent stabilization ordinances provide park owners a fair and just return on their investment. Even in regulated areas, many park owners receive 50% or more return on their investment year after year. Do your investments perform that well? There is no such thing as a “fair market” within a monopoly having virtually no market forces! Without rent protections, homeowners are helpless prey to the monopolistic whims of unscrupulous park owners. As outrageous as gasoline prices have become, there are at least some market forces that could lead to a decline in fuel prices. Such is not the case in mobilehome parks; rents typically only go UP. Consider what the price of gasoline would be today if you could only buy gasoline at one designated station closest to where you live and the station operator knew he had a captive market who couldn’t go elsewhere. Some stations might charge reasonable prices while others might charge $10 per gallon, or more. That is what unregulated mobilehome parks are like. There are some good and decent park owners but; unfortunately, many millionaire park owners focus only on maximizing profits with no regard to the plight of homeowners. In areas of San Diego County where no rent protections exist, dirt spaces that rented for less than $100 per month thirty years ago now exceed $950 per month, surpassing the monthly income of many homeowners. Residents have been economically evicted from the homes they own because of park owner greed; plus, the high rents have made many homes unsellable. That is what could happen in all areas of the county if mobilehome rent protections are not preserved. Tim Sheahan Volunteer Homeowner Advocate State Board Member-Golden State Manufactured-Home Owners League San Marcos 760 727-4495

Linda wrote on Oct 16, 2005 7:43 AM:The editorial staff's version of this story is so far off base as to be clearly lies written to decieve readers. News conglomerate Lee Enterprises who owns North County Times boasts, "A reporter from one of our newspapers died with George Custer at the Battle of the Little Big Horn" Too bad the current editorial staff wasn't there to help him out of his pickle.

Gordon wrote on Oct 21, 2005 3:53 PM:I'm glad to see your editorial on Mobile Home Rent Control! It clearly expresses the greed and lack of compassion on your editorial staff...and their ability to twist the facts to support that greed. I'm sure other low to moderate income folks and seniors on fixed incomes were happy to know they can count on you for NOTHING!

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