ANTHONY C. RODRIGUEZ
ATTORNEY AT LAW
1425 LEIMERT BOULEVARD
SUITE 101
OAKLAND. CALIFORNIA 94602-1808
TELEPHONE (510) 336-1536
FACSIMILE (510) 336-1537
September 12, 2025
The Mayor and City Council
City of Fortuna
621 11" Street
Fortuna, California 95540
Re: Proposed Mobilehome Rent Stabilization Ordinance
September 15, 2025 City Council Meeting - Agenda Item 6A Dear Mayor and City Council Members:
As you may recall, this office represents the owners of Royal Crest Mobile Estates.
I am writing with respect to the Staff Report regarding the proposed rent stabilization ordinance that is on the City Council's Agenda for September 15, 2025, as well as the various alternatives to such an ordinance.
In particular, my clients request each Council Member to review Exhibits B, C and D to that Staff Report, as they include many facts that are not specified in the body of the Report. Of particular importance, those facts include (1) since 2019 the parkowner's expenses have increased at a rate in excess of the increase in rent, and more than twice the increase in the CPI, (2) the increase in expenses during that period does not include several hundred thousand additional dollars for capital improvements, (3) over the past two years residents at Royal Crest have in almost all instances been able to sell their mobilehomes for more than their original purchase price, with an average profit of approximately $54,000 per unit and (4) for many years the parkowner has offered a subsidy program for qualifying low income households, which allows those residents to receive a credit of up to 10% on their monthly rent payment.
More specifically with respect to the parkowner's expenses, between January 1, 2019 and January 1, 2025, the Consumer Price Index increased by 25.45%, from 251.712 to 315.605. However, during that same period, total expenses at the park increased by 52.28%, from $885,308.85 to $1,348,116.94, or more than twice the increase in the inflation rate.
Both the dollar and the percentage amounts of those cost increases are summarized as follows:
Item 2019 2024 Increase
Total Expenses $885,308.85 $1,348,116.94 52.28%
The Mayor and City Council
September 12, 2025
Again, although many of the above described facts are addressed in more detail in Exhibits B, C and D to the Staff Report, some of the most important facts are summarized below, for your convenience:
Item Percent Increase Since 2019
Consumer Price Index 25.45%
Social Security Payments 26.00%
Tenants' Rent 44.21%
Parkowner's Expenses 52.28%
Finally, there is one other point in the Staff Report that must be addressed. The Staff Report states that one of the purposes of a Memorandum of Understanding ("MOU") is to guarantee the parkowner a "reasonable return" on investment (Staff Report, Page, 6).
However, the exact opposite true.
Under an MOU, parkowners actually waive their constitutional right to a "fair return" on investment, in exchange for stability and certainty. Thus, parkowners assume the risk that the rent increases allowed under the MOU will enable them to pay their expenses, plus earn a fair profit. If the rent increases allowed do not provide a fair return, the parkowner cannot sue to obtain additional rent increases.
By contrast, under a rent control ordinance, a parkowner can sue the City and/or the tenants whenever the rents allowed under the ordinance to not provide a fair return on investment, including the parkowner's investment in capital improvement projects. In the forty years that I have been representing parkowners in rent control proceedings, the overwhelming majority of those cases have involved litigation involving the right to a fair return, in dozens of jurisdictions, in both Southern and Northern California.
Those cases often last two or more years, but one case I was involved in against the City of Palm Desert dragged on for more than twenty years, with the primary issues being whether the City was required to reimburse my client for its attorney's fees and/or several million dollars in retroactive rents, after my client established the City had in fact deprived it of its constitutional right to a fair return.
After more than twenty years there was still no resolution regarding those issues, when the parties settled with the City of Palm Desert paying $750,000 to my client, who only The Mayor and City Council
September 12, 2025
accepted that sum because he was contemplating retirement. It is the ability to avoid the time, stress and cost of such litigation that is causing parkowners, tenants and local governments all across the state to be increasingly open to MOUs, as a viable alternative to a formal rent control ordinance. As the Staff Report accurately states, my clients are willing to attempt to negotiate such an MOU with respect to the rents at Royal Crest Mobile Estates, if the City is willing to do the same.
Very truly yours,
Anthony C. Rodriguez
CC: Client
Doug Johnson, WMA