MARINA MOBILE HOME REPORT
A Report Commissioned by the City of Marina
(The information and opinions presented are the views of the author, not the City of Marina, informants, or any of the stakeholders.)
This report describes economist Michael St. John's findings about mobilehomes, mobilehome park residents, space rents, and mobilehome values in Marina, California. The findings are based on survey responses by residents and park owners, interviews with stakeholders and others involved in the mobilehome market, and mobilehome sales data.
The report is responsive to the Marina City Council's search for information and perspective on mobilehome space rents. It addresses the insecurity some mobilehome residents feel about space rent increases – insecurity triggered by fairly major space rent increases at one Marina mobilehome park in 2007.
The report finds that space rents in Marina are moderate. Space rents in Marina are lower than space rents elsewhere in Monterey County. Space rents in four out of five parks have increased by less than the consumer price index for apartment rents (CPI-Rent) over the past twenty years. Even the relatively high space rents at the highest rent park are not higher than space rents in some parks in Salinas and elsewhere in Monterey County.
The report finds that mobilehome values, on the other hand, have increased in the past twenty years by more than the both the CPI and the CPI-Rent index, such that sales prices in some cases exceed the intrinsic value of the mobilehomes.
Mobilehome values and space rents are inversely related. Leaving market fluctuations aside, high space rents tend to decrease mobilehome values and low space rents tend to increase mobilehome values. To assure market stability, mobilehome values and space rents should be in balance. The report finds that the mobilehome / space rent market in Marina may be out of balance in the sense that increases in mobilehome values have, over the past 20 years, exceeded increases in space rents.
The report concludes with the following recommendations:
1. That the City sponsor a transparent, inclusive process involving all stakeholders in order to work out a cooperative solution to residents' insecurity regarding mobilehome space rents and mobilehome values.
2. That the City, mobilehome park residents, and mobilehome park owners explore the possibility that a renegotiated memorandum of understanding (MOU) and model lease would bring stability and balance to the mobilehome market.
3. That the City abandon the proposal to re-zone mobilehome parks and continue to seek locations for additional mobilehome park space outside the downtown revitalization project area.
4. That the City cover the administrative costs and consider making a matching contribution to a rent subsidy program funded by park owner contributions of 3% of gross space rentals, in order to address the income needs of the lowest-income mobilehome park residents.
Michael St. John, PH. D.
Michael St. John, Ph.D. is an economist, housing advisor, and property management consultant. His particular expertise is in rent control and, within that context, in fair return calculations. Dr. St. John has served as consultant and expert witness for park owners throughout California. He has also advised California cities and counties about rent control programs and fair return applications. Michael’s bio-data, more information about his services and experience, and copies of some of his papers and reports can be found at his website, stjohnandassociates.net. He can be reached at 510-845-8928 or at firstname.lastname@example.org.
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St. John & Associates
2115 West Street
Berkeley, CA 94702-1947
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Mendocino, CA 95460-0338