Tenants face eviction in wake of legal ruling
Mobile home park serves notice after losing appeal on rents
Nearly all residents of the R.V. Park of San Rafael received eviction notices this week after the property owner lost a rent battle in the 9th U.S. Circuit Court of Appeals.
In the Feb. 10 ruling, the three-judge panel affirmed the district court's dismissal of the contention asserted by property owner Donna Chessen that the city's mobile home rent stabilization ordinance represented an illegal “taking.”
The ruling was the latest development in the saga that ensued when the city sued Chessen and Harmony Communities, the Stockton-based property management group, in December 2021 for seeking rent increases greater than the ordinance allowed.
In the appeals court ruling, the judges wrote that the rent control ordinance had been in place for over 15 years before Chessen and her husband purchased the property in 2006. Furthermore, the ruling states there was a “final judgement from a state court concluding that the property is subject to the ordinance.” That refers to a 2004 ruling.
On Monday, eviction notices were delivered to approximately 40 addresses at the mobile home park at 742 Francisco Blvd. West, according to residents. The notice says tenants have until Oct. 31 to vacate and remove their homes from the property, or else they could face legal consequences.
“Where can I go? How can I afford to move?” said Alexander Vernimmen, a 70-year-old resident who has lived at the park for 18 years. Vernimmen said he lives with his 96-year-old mother, and their only income is Social Security payments.
Vernimmen said that separately he was served an eviction notice from the court on Dec. 30, giving him only two business days to reply due to the holiday weekend.
“They are preying on old disabled people and poor families with kids,” he said.
The dispute began in August 2021 when tenants were given notice of the rent increases, which Harmony said would bring the average monthly rent to $650. City officials and residents pushed back, stating that the increase was in violation of the city's mobile home rent stabilization ordinance, designed to protect the affordability of the park.
The argument hinges on what kind of homes are there. Harmony says they are recreational vehicles and thus exempt from a city rent control ordinance covering mobile or manufactured homes. The city and the residents say otherwise.
In court, Chessen argued that there are only recreational vehicles on the site. Under state civil code, if an RV is used as a residence for nine or more continuous months at the same site, it is a mobile home.
Marin County Superior Court Judge James Chou granted a motion for a preliminary injunction in July, prohibiting the defendants from collecting rent in excess of the city's mobile home rent stabilization ordinance. The ordinance caps the mobile home park rent increases at 75% of consumer price index adjustments.
In July, the property management company delivered tenants notices of intent to close the mobile home park, but gave no date. Closing an affordable housing mobile home park requires the owner to prepare a tenant impact report as well as take steps to relocate tenants or pay fair market value for displacement.
In the July letters to residents, Harmony staff wrote that “the park has been operating at a loss for several years and has been fighting to keep this park open so no resident will have to move. The reality is the land is worth much more than operating an RV Park for affordable housing.”
According to the property tax report, the 1.26acre lot was built in 1952. The property is owned by K&M Family 1997 Trust, an entity controlled by Chessen. The property has an assessed value of $2.92 million, recorded in 2022. Property taxes equaled $74,006 for last year.
Genevieve Coyle, assistant city attorney, said in an email that the city agrees with the 9th Circuit ruling, and that the city is still pursuing its separate litigation in Marin County Superior Court to enforce the city's ordinance. A trial is scheduled for May.
“We are aware of the eviction notices and are reviewing them,” Coyle said.
Fabian Quezadas is among a group of newer residents renting the mobile homes provided by Harmony. He lives in one unit, and his brother and his family live in a separate one. They're both experiencing leaks and plumbing issues, he said. Quezadas said they're paying $1,295 a month in rent for each home.
“These units are uninhabitable,” he said. “The first week of rains we had leaks, plumbing issues, I found black mold growing in the bathrooms and around the windows. When I told Harmony, they said I never notified them of any errors and now they're trying to evict me.”
Quezadas said the situation got so bad that he's temporarily staying at a hotel. He said complained to a Harmony Communities president Matthew Davies. “He told me, `If I don't like it you can move out. We can terminate your lease.'”
Attempts to reach Chessen were unsuccessful. Her attorneys, Dan Rudderow and Chris Chapman, did not respond to a request for comment.
Davies also did not respond to request for comment, but Heywood Jablóm, a company spokesperson, sent a statement via email.
“This property consists entirely of RVs which are legally exempt from the city's ordinance,” Jablóm wrote.
“The park is losing money because the rents don't cover the expenses. The city has been told the park will need to shut down because it is losing money, but the city has refused to compromise,” Jablóm wrote. “The city wants a private property owner to singlehandedly subsidize affordable housing in San Rafael, but the park has no cash and is losing money every month. Since the city has refused to honor its own ordinance, the only choice is to shut down the park. We anticipate all residents moving out by October and look forward to redeveloping the property towards a higher and better use.”
Resident Gilbert Nicholls, who has lived at his home there since 2004, said that after hearing the federal ruling, he is staying optimistic.
“They're picking at straws,” he said. “They're not going to win. They're not going to beat us.”
Harmony Communities was also involved in a controversial 2018 RV park rent hike in San Leandro, which does not have rent control. In a Fresno County case two years ago, residents at the Shady Lakes Mobile Home Park filed a lawsuit alleging the company unfairly hiked rents and harassed tenants. They are still facing rent hikes, according to reports.
Company representatives denied the claims in both cases. The company continues to buy affordable housing communities in low-income areas in cities such as Gilroy and last year in Golden, Colorado.