A park owner may seek a rent increase in addition to those permitted by Section 15.20.080 pursuant to subsections A, B and C of this section. The park owner shall bear the burden of proof and provide the evidence to justify a rent increase based on any application submitted under subsections A, B, and/or C of this section. Subsection A provides for increases under a maintenance of net operating income ("MNOI") formula and it is presumed in the absence of evidence to the contrary that the MNOI formula provides a fair or just and reasonable return. An application pursuant to subsection C cannot be filed unless an MNOI application has also been filed and the two applications can be heard together. However, an application can be filed under subsection A without filing an application under subsection C. Subsection B provides for modifications of the base year net operating income ("NOI") used in the MNOI formula under specified circumstances.
The applicant for a special adjustment under this section shall provide documentation of its income and expenses in the base year and of its income and expenses in each of the last five years or since its last special adjustment and such other information and documentation as is necessary to properly determine an MNOI calculation under subsections A and B and/or a fair return application under subsection C. An application cannot be deemed complete until information and documentation, as set forth in Section 15.20.105 and the administrative rules adopted by resolution of the city council, has been provided and the required filing fee paid to the city. Except as otherwise provided in the administrative rules, an application cannot be set for hearing before it is deemed complete. The factors and methodology for the hearing officer to determine the gross income, operating expense and net operating income shall be as set forth in the administrative rules adopted by resolution of the city council.
A. MNOI Rent Adjustment. It shall be presumed in the absence of evidence to the contrary, presented pursuant to subsection B of this section that the NOI earned by the mobilehome park in calendar year 1987 provided a just and reasonable return to the park. Except as otherwise provided in subdivision (1) of this subsection, park owners shall be entitled to increase the park's 1987 NOI by sixty-six and sixty-seven one hundredths (66.67) percent of the increase in the CPI since December 31, 1987, to October 28, 1996, and eighty (80) percent of the increase in the CPI from October 29, 1996, to the date of the application. In the event that there has been an increase of more than three percent in the vacancy rate in the park since the base year, any rent adjustment under this subsection shall be governed by subdivision (1) of this subsection. For the purposes of this subsection, the 1987 CPI shall be one hundred fourteen and eighty one hundredths (114.80) and the current CPI utilized in reviewing a rent increase application shall be the CPI last reported as of the date the application is deemed complete.
1. In the event that there has been an increase of more than three percent in the vacancy rate in the park since the base year, the city finds that it would be contrary to the purposes of rent stabilization to authorize additional rent increases for occupied spaces in order to offset reductions in income due to increased vacancies which occur because there is not sufficient demand to fill the vacant spaces at the legal rent ceiling. In effect, allowing additional rent increases for occupied spaces because there are more vacant spaces in a park would allow park owners to obtain higher rents from existing tenants, than it is possible to obtain from the prospective tenants, whose homes are still "mobile" and whose options have not been restricted by the process of moving into the park. Therefore, in the event that there has been an increase of more than three percent in the vacancy rate in the park since the base year, rent adjustments shall be governed by the following:
a. Gross income per rented space shall be computed based on the total gross income of the park divided by the total number of rented spaces. The park owner shall be entitled to increase the base year NOI per rented space by sixty-six and sixty-seven hundredths (66.67) percent of the increase in the CPI since December 31, 1987, to October 28, 1996, and eighty (80) percent of the increase in the CPI from October 29, 1996.
b. Calculations of base year and current year operating expenses may be adjusted by the hearing officer so that a reasonable comparison of the expenses and charges associated with rented spaces is obtained for the purpose of comparing base year and current year operating expenses and to adjust for variations in operating expenses due to the increased vacancy rate.
2. In the event a park has received a special adjustment since the base year, the income and expense year on which the special adjustment was based shall be deemed the base year for the purposes of evaluating a rent adjustment application, and the CPI used as the "current CPI" in determining the prior special rent adjustment shall be deemed the "base year CPI" for the purpose of evaluating the special rent adjustment application.
B. Rent Adjustment Based on Re-adjusted Base Year NOI. A park owner may rebut the presumption that the park's 1987 NOI provided a just and reasonable return at that time by presenting evidence as set forth in the administrative rules adopted by resolution of the city council.
C. Fair Return Rent Adjustment. A park owner may rebut the presumption that the increased calculations provided in subsection A of this section and modified calculations provided by subsection B of this section are sufficient to provide a just and reasonable return by presenting evidence that the rate of return being earned by the mobilehome park is not just and reasonable as set forth in the administrative rules adopted by resolution of the city council. The park owner shall have the burden of proving the park is not earning a just and reasonable return.
D. Resident Meeting. The city encourages the park owner to meet with the residents prior to a park owner's submittal of an application for a special rent adjustment pursuant to subsections A, B and/or C of this section, in order to facilitate ongoing dialogue and communication between the park owner and park residents regarding the need for and basis of a proposed special rent adjustment, and to allow the park owner and park residents an opportunity to resolve any issues and disputes prior to the park owner filing its special rent adjustment application. Suggested procedures for use by park owners and residents for resident meetings are set out in the administrative rules adopted by resolution of the city council.
E. Rent Adjustment Based on Voluntary Meet and Confer. The city encourages park owners and park residents to voluntarily meet and confer in good faith in order to reach agreement on a proposed MNOI rent adjustment under subsection A or an MNOI rent adjustment based on a readjusted Base Year NOI under subsection B. Any such negotiated special rent adjustment shall be subject to all of the following requirements:
1. A special rent adjustment negotiated pursuant to a meet and confer shall not be effective unless consented to by at least fifty-one (51) percent of the regulated spaces in the park, and approved by the rent administrator, pursuant to the administrative rules adopted by resolution of the city council.
2. The special rent adjustment must be based upon an MNOI methodology, or MNOI based on a readjusted Base Year NOI, as provided in subsection A or B and the administrative rules. Costs associated with capital improvements shall be excluded.
3. The decision of the rent administrator on whether to approve a special rent adjustment pursuant to this subdivision shall be final and not subject to any public hearing before or appeal to the hearing officer. The provisions of subsection G of this section and Sections 15.20.105 and 15.20.110 shall not apply.
F. Nonretaliation. The city encourages park owners and residents to engage in the special rent adjustment procedures, including, but not limited to, resident meetings and meet and confer, without any fear of retaliation and in the spirit of cooperation.
G. An application filed under this section shall be reviewed and processed in accordance with Section 15.20.105 and the administrative rules established by resolution of the city council. The rent administrator shall have thirty (30) days in which to determine whether a maintenance of net operating income (MNOI) rent adjustment, rent adjustment based on a readjusted base year NOI, or fair return adjustment application filed under subsections A, B, and/or C, is complete in accordance with Section 15.20.105 and the administrative rules established by resolution of the city council. Hearings on applications shall be conducted in accordance with Section 15.20.110 and the administrative rules adopted by resolution of the city council.
(Ord. 422 § 1, 2023; Ord. 390 §§ 5, 6, 2020; Ord. 311 § 7, 2011; Ord. 255 § 14, 2007: Ord. 193 § 10, 1999: Ord. 161 § 9, 1996: Ord. 152, 1996: Ord. 126 § 9, 1994)