One of Modesto's nine mobile home parks decided not to go along with a voluntary lease program that could have spared it from the city's new rent control law.
Rents at Coralwood mobile home park off McHenry Avenue could be subject to the rent control ordinance within two weeks because its owner disagreed with the terms of the voluntary agreements.
The ordinance, which the City Council approved Aug. 14, calls for all rents to roll back to their April 30 level in parks that do not offer the Modesto- approved leases.
The council Tuesday signed off on a memorandum of understanding that exempts the other eight mobile home parks because they were willing to sign an agreement that:
Sign Up and Save
Get six months of free digital access to The Modesto Bee
Limits their rent increases to 7 percent a year.
Allows them to increase rent on a space by 15 percent if a tenant moves out.
Gives residents a choice of five-, seven- and 10-year leases.
Modesto's rent control ordinance has stricter terms, limiting rent increases to 6 percent a year and 10 percent when someone leaves a space.
The eight parks worked out the terms of the agreement over the summer after the council signaled its intent to pursue rent control in April.
The council this week also agreed to launch a rent subsidy program that would be funded by contributions from the mobile home parks and matching contributions from the city's Redevelopment Agency. It could give mobile home residents three months' worth of their rent and mortgage payments each year.
Peter Underhill, regional vice president for Coralwood owner Equity LifeStyle Properties, said Modesto declined to work with an offer to avoid rent control that his company made.
"We had a very reasonable agreement that was submitted, but evidently the City Council members chose not to negotiate with ELS," he said.
Equity LifeStyle was not willing to sign an agreement under the threat of rent control, Underhill said.
ELS has written the city letters saying it opposes rent control, and particularly the rent rollback. Underhill said he is evaluating the company's options. The company has sued cities to prevent rent control.
Councilman Will O'Bryant said the city rejected ELS' offer because of clauses the company wrote that would have allowed it to nullify the agreement at any time.
"That's very threatening to senior citizens," O'Bryant said.
Coralwood's fee increases have driven the discussion on rent control since 2004, when the company started a series of sharp rent increases designed to bring them on par with a broader real estate market.
Its average monthly rent, $677, is about $140 a month more than the rent in the next most expensive park. Underhill said about half of the park's residents are paying what the company considers market rents, which are $775 a month; the rest pay a lesser amount.
The company has slowed its rent increases and offered to create a hardship program, but the council said those measures were insufficient because they were overly burdensome on residents.
Bee staff writer Adam Ashton can be reached at email@example.com or 578-2366.