By Jean Namamura | Source |
The Rancho Estates Mobile Home Park became a battleground over the theory that rent control was a “taking” of land, an argument by the property owner that the Ninth Circuit Court rejected in 2010 and that the Supreme Court subsequently refused to consider, essentially upholding rent control nationwide. The City of Goleta mobile home park was sold in November 2021, raising fears that tenancy of renters at the iconic property was once again threatened.
After the former owners — a trust formed by Dan and Susan Guggenheim — were forced to obey the rent control rules, they decided instead to subdivide the property under California’s condominium conversion rules, a right they won in a second lawsuit in 2012. But any subdivision sales are limited in a development agreement the Guggenheims reached with the City of Goleta.
The new buyer intends to proceed with the condo development, said city spokesperson Kelly Hoover, and is keeping the former attorneys and management in place. Susy Forbath, a spokesperson for the property’s attorneys, stated the new owners, a Southern California investment group, would encourage resident ownership of the divided lots. “Park residents, and only park residents, will have the right to purchase the lot beneath their homes at a discounted price and with certain financing assistance from ownership,” she said.
The subdivision agreement with the city protects lower-, moderate-, and above-moderate-income residents by offering a 15 percent discount on the appraised value of the lots. Each of the 150 homes, which are owned by the residents, perch on roughly 1,300 square feet of land, and recent sales show them going for more than $300,000.
The monthly rental of the land beneath the mobile homes run between $400 and $800, said Keith Traphagen, president of the park’s homeowners’ association. About a month before the $25 million sale became public, park residents received assessment valuations for the lots, which back down to the Ellwood Butterfly preserve. Traphagen, who recalled the asking price in the early 2000s was $34 million, estimated the total valuation among the various lots amounted to around $85 million. At the county assessor’s office, the property valuation for 2021 sat at $4.3 million.
The property would remain under both city and state rent control rules, Forbath said. Rent increased are limited — to 75 percent of the consumer price index — and “the subdivision project effectively takes any prospect of closing the park off the table,” she noted.