:: LOCAL GOVERNMENT AND AFFORDABLE HOUSING

How Can Local Government Provide Affordable Housing?

Cities and counties are obligated by state law to provide a certain amount of affordable housing within their jurisdictions. This housing element obligation is a significant challenge to local governments. Private developers want to maximize the return on their investment, and this objective seldom includes the construction of new low-income housing. Frequently, such development requires the demolition of existing low-income housing in order to develop office buildings and other commercial developments.

Cities and counties, in an effort to preserve existing affordable housing, will often adopt mobilehome rent control ordinances to provide some financial relief to senior and low-income households, while attempting to assure park owners of a reasonable return on their investment. Local governments frequently face an onslaught of lawsuits challenging such ordinances by park owners who claim they have been denied a fair return, and that the ordinance is a taking of their property. Although cities and counties have most often prevailed in such legal challenges, a financial toll has been taken on those local governments who have expended a large amount of money in legal fees and courts costs, and under current law stand little prospect of recovering those fees and costs even when they win such legal battles.

Fortunately, there are options available to local governments which can provide a permanent and affordable solution to the problem, and which preserve the affordable housing stock within their communities. The resident purchase of mobilehome parks is a viable alternative to local rent control, and one which can provide stable housing costs to residents while providing the selling park owner with a reasonable price for the park. Resident Owned Parks, Inc., as a non-profit housing corporation, has the expertise and experience to guide the residents through the complex demands of such a transaction. ROP can serve as a housing consultant to cities and counties who wish to support and facilitate the resident purchase of parks for the benefit of low-income citizens and for the financial benefit of the local government as well.

As a non-profit housing corporation, ROP can access tax-exempt bond financing which provides attractive tax benefits to the selling park owner, while providing affordable financing for the park acquisition. Such bonds can be obtained without financial obligation to local government.

ROP is committed to negotiating a park purchase that is in the financial interest of park residents. ROP, unlike other non-profit housing corporations, believes that park residents should only have to purchase the park once, not repeatedly. ROP can acquire the park, holding title and managing the property until the bonds are paid off, and then arranging for a transfer of title to the non-profit homeowners association. Alternatively, ROP can form a hybrid of ROP and the homeowners association, prior to close of escrow, and managing the park until the bonds are paid off. Thereafter, the homeowners association assumes full control and management of the facility.

Most importantly, the homeowners whose monthly payments have paid for the park acquisition, do not need to buy the park all over again from ROP!