Basic Economics by Thomas Sowell.
He explains and demonstrates in very clear terms how rent controls cause housing shortages, among other very good, important economic lessons.
Posted on 09/19/2006 12:33:37 PM PDT by E-Mat
Do you live in a Mobile Home Park and rent a mobile home? Do you want your rent gauging stopped? Did you know that Rent Control Ordinances and the Mobile Home Residency Law could be lost if the initiative passes.
We the people that live in Mobile Home Parks must all unite and defeat Proposition 90. If we do not defeat Proposition 90, we the owners of our Mobile Homes are in a world of trouble.
We could lose our homes.
For more information on Proposition 90 - Go to Californians Against the Taxpayer Trap =>http://noprop90.com/facts/
There will not be any rent control and the park owners can raise the rent anytime, and any amount.
We the Mobile Home owners must speak out. Have meetings in your own individual park and discuss this matter. Make sure everybody in your park votes. If there are home owners who do not drive set up transportation for these people to get to the poles or make sure there book is filled out ahead of time and mailed.
Every vote counts:
We are the people Proposition 90 will affect. We must band together park to park and vote NO, on Proposition 90.
I'm meeting with a large group of these people this week on this issue and I’m willing to speak up if I have some solid facts.
I’m wondering, does Proposition 90 also protect the owner of the mobile home on the mobile home park’s land?
My thinking is, where rent control is in place, its removal by government would devalue the mobile home owner’s property and thus would be illegal under Proposition 90. (The opposite would also be true: Where there is no rent control, then adding it would devalue the park owner’s property and thus be illegal.) Would I be correct in saying this? I need to hear from someone knowledgeable on this proposed measure. http://www.90yes.com/language/
As it stands, all mobile home owners are getting thrown into a panic over Proposition 90 because they believe (and are probably correct) that all property owners who feel restricted by rent control are going to sue to have rent control abolished. If they succeed, then many mobile home owners (whose homes aren’t really that mobile), are going to be suddenly forced out of their homes by sudden space rent increases. It’s complicated owning property on someone else’s property.
I like how just about every political Proposition trots out FIREFIGHTERS is support of their position, no matter what it's about.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
And now I know how I'm going to vote.
Rent control sucks...
We the Mobile Home owners must speak out. Have meetings in your own individual park and discuss this matter. Make sure everybody in your park votes. If there are home owners who do not drive set up transportation for these people to get to the poles or make sure there (sic) book is filled out ahead of time and mailed.
All Bush supporters, I see...
< /sarc >
The trailer parks are rent-controlled to prevent the owners from charging market rates for rent and then the owners are prosecuted for not paying market rates to maintain the parks - leaving no incentive to anyone to invest in such a park. I would NEVER invest in a trailer park knowing that the government will seize it by fiat.
Tell them, that without Prop 90, the Government can force the owner of the mobile home park to sell his property to Walmart under eminent domain.
The trailer parks are rent-controlled to prevent the owners from charging market rates for rent ...
Here in San Francisco there is very strict rent control. I used to be a landlord here, but sold the property and moved to the burbs. Got tired of some bureaucrat telling me what I could charge for rent.
In my view, rent control deprives the owner of income by restricting what can be charged. You can't raise the rent and in many cases here you can't even evict the person.
If that's not "taking" I don't know what it.
Gauging (measuring) or gouging (cheating)?
That is the case in FL right now. If you are in a rental park and your home is more than a few years old, you would likely never get a permit to install it anywhere else in the state because of the stricter hurricane building codes. And the parks are selling out to developers because that's the cheapest available land in fully developed areas like Miami and Pinellas county. Developm a park in to townhomes that are selling for $300K minimum and you can make a fortune. Heck, the association fees are likely more than the lot rents from the parks, too. ANd the municipalities like it because it grows the property tax base. In FL, you pay tax only on the fixed improvements and not the home itself.
The way I read the Proposition, a property owner could claim that rent control is a taking and ask the government to pay the amount the rent is under market value. Rents could not be increased unless the existing rent-control law was repealed, which Prop 90 does not do.
More likely is the post by So Cal Rocket. For those NIMBYs who don't want mobile home parks in their area, the city or regional development authority could use eminent domain to take the land for a "better" purpose--a Wal-Mart, a new condo complex, etc.
Good luck with your challenge. Arguing property rights with people who believe they have a right to rent control is a tough task.
Same with law enforcement and it's usually bogus. They get one or two who agree with them, then say they are supported by that group.
Basic Economics by Thomas Sowell.
He explains and demonstrates in very clear terms how rent controls cause housing shortages, among other very good, important economic lessons.
Using rent control as an effort to help with a housing shortage results in a "cure is worse than the disease" situation. Rent control always leads to more shortages. And, as you have clearly described, it causes a decrease in new housing development.
The only cures for high priced housing are either
So what? It is private property. If the government doesn't want people to sell their trailer parks then the government can use eminent domain to go into the trailer park business themselves. Sorry about the tenants, but they're tenants whose rights should not be superior to the owner's rights. Perhaps the lesson is to own the land upon which your wobbly rests.
Excellent point! I fear your logic is wasted on trailer park tenants however. I know someone who bought a trailer in a park near Lakeside CA about three years ago so he could spend his time either drinking beer and watching TV on the couch or playing video games on his XBOX. He is 39 years old and weighs about 400 pounds. Luckily he doesn't vote since it is too hard for him to get off the couch.
The logic is wasted on mobile home owners no matter what.
Which owner of a mobile home, regardless of his economic philosophy, is going to volunteer for removal of rent control on his space?
That's over half a million votes down the tubes, plus concerned activists, friends, and relatives.
The fact remains: In most cases, both the owner of the park and the owners of the homes bought their properties with the understanding that rent control is in effect. Even if rent control is a bad thing, it is even worse jerking families around by suddenly changing the balance of personal property rights.
I was definitely going to vote for 90 in good faith, but this discussion is suddenly making me undecided.
"Perhaps the lesson is to own the land upon which your wobbly rests."
The other lesson is going to be: Land owners are going to start losing more of these elections the more renters outnumber land owners. And then nobody's going to own any of the land except the government.
Unless California can do more to stimulate individual land ownership, I see a downward spiral of self-interested renter controlled elections.
Was that a "Yes" vote advocated?
Was there any doubt? YES--Absolutely YES on Proposition 90.
Another point to consider is that some trailer (mobile home) parks, like the one in Lakeside, do not have rent control now. Whether Prop 90 passes or not will have no effect on non-rent controlled parks - and they will still be protected from big-box stores if the Proposition passes.
I posed these questions to a few people who seemed to give me more informed answers:
I’m wondering, does Proposition 90 also protect the owner of a mobile home on a mobile home park’s land?
1. I'm looking at the whole law http://90yes.com/language/ , and it does not seem to imply only land, but it looks like it refers to any private property including mobile homes.
2. The amendment SEC.19(b)8. states: ...“damage” to private property includes government actions that result in substantial economic loss to private property. Examples of substantial economic loss include, but are not limited to, the down zoning of private property, the elimination of any access to private property, and limitations on the use of private air space. “Government action” shall mean any statute, charter provision, ordinance, resolution, law, rule or regulation.
3. Under "Effective Date I read: "Other than eminent domain powers, the provisions added to this section shall not apply to any statute, charter provision, ordinance, resolution, law, rule or regulation in effect on the date of enactment that results in substantial economic loss to private property. Any statute, charter provision, ordinance, resolution, law, rule or regulation in effect on the date of enactment that is amended after the date of enactment shall continue to be exempt from the provisions added to this section provided that the amendment both serves to promote the original policy of the statute, charter provision, ordinance, resolution, law, rule or regulation and does not significantly broaden the scope of application of the statute, charter provision, ordinance, resolution, law, rule or regulation being amended. The governmental entity making the amendment shall make a declaration contemporaneously with enactment of the amendment that the amendment promotes the original policy of the statute, charter provision, ordinance, resolution, law, rule or regulation and does not significantly broaden its scope of application."
Taking these three points in account. Does this mean that standing rent controls will be left in tact, and, in fact, would be impossible to change under Proposition 90 when it would result in substantial economic loss to mobile home owners?
At the same time, would Proposition 90 also make it impossible (or very difficult) to enact rent control where there is no rent control already?
As it stands, mobile home owners are in a panic over Proposition 90 because they believe, based on experience, that property owners who feel restricted by rent control are going to sue to have rent control abolished based on the idea that rent control causes them substantial economic loss. This might be true except in most of these cases, both the park owner and the mobile home owners bought their respective properties with the understanding that rent control is in effect. Proposition 90 seems to confirm and solidify this understanding.
Am I interpreting these implications correctly?
Two answers below...
This answer from Bill Leonard, Member, Board of Equalization, District 2, http://www.billleonard.org/endorsements.php :
I believe you are interpreting Proposition 90 correctly. The opponents'
arguments are a load of hogwash!
First of all, Proposition 90 uses the same language that the United States
Supreme Court has used in interpreting the Takings Clause in the United
States Constitution's Fifth Amendment. If mobile home rent control has
not been declared to be a "taking" under the Fifth Amendment, there are no
grounds for believing that Proposition 90 (a similar amendment to the
California Constitution) would be interpreted that way, either.
It is well established law at the state and federal level that some
regulations create value for property, so they are not regulatory takings
at all but "givings," to coin a phrase. Many mobile home rent control
ordinances could fall within that category, which is one big reason the
courts have not overturned those ordinances as violations of the U.S.
Constitution. In many situations, mobile home parks are more valuable to
both owners and tenants if the rules concerning rent increases are
restricted by law or contract and tenants do not fear surprise evictions
or unpredictable rent increases.
Proposition 90 directly protects mobile home owners in two ways:
1) it states that their mobile homes cannot be taken away by government
and sold to private developers or sold for any other private use, and (2)
it requires governments to pay mobile home owners if government
regulations significantly reduce their economic value. For example, if
the county board of supervisors passed an ordinance to "reduce traffic
congestion" by making it illegal to move mobile homes on public roads, the
mobile home owners could sue for their economic damages (since mobile
homes that cannot be moved are worth significantly less than those that
can).
Proposition 90 applies to all private property, not just real estate. I
should also note that the distinction is meaningless for most mobile home
parks because the tenants have legally recognized property rights in the
real estate itself. California law has recognized leasehold interests as
real property rights since we became a state in 1850. Local governments
are forced to use the same eminent domain procedures to evict tenants that
they use to take possession from the property owners.
Proposition 90 was not designed to deal with rent control, but even if the
courts were to interpret it that way, the text makes it clear that
EXISTING rent control ordinances are not impacted in any way (in other
words, there is a "grandfather clause" for existing laws, ordinances, and
regulations). It would be no more difficult to enact new rent control
ordinances under Proposition 90 than it has been in the 220 years that we
have lived with the Fifth Amendment (which has been applied against the
states as well as the federal government for over 100 years).
Thank you for taking the time to write. And thank you for raising several
very important points.
Best regards,
Bill Leonard
I would say he is correct in his assessment. Certainly enacting a rent
control statute will devalue an owner's property, therefore the govt
would have to reimburse the owner for enacting the rent control. As for
dismantling a previous rent control law, It will probably be more
difficult but not impossible to get rid of them, given that the
provision allows for previous zoning and other laws to continue. The
initiative's authors probably had to add this section in or it would be
taken that all previous zoning laws would be abolished. And that
position would be seen as extreme and to most unnecessary. The language
was most likely added to ensure the smooth continuation of previous
city, county, and state laws. Certainly though lawsuits will arise from
disputes over compensation, and whether the laws can or cant be removed
and at what cost.
As for an owner of a home on a mobile home park land, I assume that as
an owner they have a certain amount of property rights granted to them
in the contract they sign with the land owner and under state law.
Therefore, as homeowners with property rights, they probably would be
eligible for any government reimbursement for any takings (regulatory or
eminent domain).
That's my take on it, although I am not a lawyer or am familiar with
mobile home real estate laws. This is just my understanding of the Prop.
I hope that helps. Feel free to pass this along to [E-Mat].
Best,
Anthony P. Archie
Policy Fellow, Business and Economic Studies Pacific Research Institute
www.pacificresearch.org
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