This article was posted on Monday, Jul 01, 2013

Dear AOA:

For the record, I just filed a complaint with the Grand Jury addressing this issue – The People’s case against the Los Angeles Housing Department (LAHD)

Having read the Alameda County Grand Jury Investigation of the Berkeley RSB, it was very telling just how blatantly private business is exploited for government use. To its credit, the Jury followed the money usurped from the rental housing industry and traced it right back to BRSB being distributed to its own constituents in the form of egregiously high paying manufactured government jobs, at least double the earnings of similar positions in the private sector.  Such proof of personal gain by RSB questions the ruling that any of this is okay.  It overlooks the obvious hypocrisy and self interest of a government agency policing itself, and suggests the Grand Jury did not do its duty.

The ultimate fraud is perpetrated on income property housing providers selectively targeted for enforcement, then delegitimized by an unprovoked enemy (the government) without imputation or suspicion of offence or crime. LAHD in lockstep with local unions, attorneys, judges etc.; all benefitting from this industry are extorting billions from it by devaluing and confiscating private property, then strangling owners in bogus regulation and exploiting tenants with intrusive recurring inspections of their homes. Tenants must then pay much higher rents just to offset the ridiculous costs incurred.

LAHD slashes and burns at will. It has pitted groups against each other (i.e. unions against business, borrowers against lenders and tenants against landlords,) claiming police power and sovereign rights to skirt the constitution. Existing programs including rent control had all been structured on an orderly complaint driven system, paid for by taxes in general with no added costs and no government interference. Alas, rent control was renamed “RSO” and sold back under the fallacy of “Eminent Domain,” (an ordinance which compensates for property acquired) having nothing to do with “rent control”, “property taking”, “price fixing”, “rent subsidies” or “forced funding of welfare programs” all now requisites of “RSO” with a trail of outrageous fees and fines. LAHD then introduced “Redlining” which forced banks to lend to unqualified borrowers causing the foreclosures and “housing collapse” we see today. LAHD always blames the People it harms.

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It is not news that LAHD is acting in violation of State and Federal laws by executing unconstitutional programs in its own interest, for example REAP, which enables confiscation of private property for its own gain.

We “The People” are now relying on the actions of an independent honorable jury to do the right thing. This case is about “inherent conflict of interests” and “equal protection of the laws”, not rent control.                                                  Sincerely, Lucy Gartlan

Dear AOA:

As we learn in economics classes just about the worse form of price control is price fixing land rents (rent control). Property rights at first and then financial damage to the community is enormous. In the U.S.A., rent controls are relatively rare. Virtually, all the history of rent controls is in Europe. Hundreds – even thousands – of times the artificial pricing of land rents (real estate economics can be boiled down to one thing: land valuation) have been enacted. Price controls by government began with the birth of civilization. It is treating the symptom without dealing with the cause.

Mobile home park rent controls (property controls) in California show perhaps the greatest damage to the community with Capitola and the small county of Santa Cruz as a perfect example of state seizure of property without just compensation.  Although rent controls inflict billions of dollars in economic damages to the state of California year, Santa Cruz provides the clearest example of governmental tyranny and massive financial damage.

In two square mile Capitola, California’s first beach town, there is Surf and Sand mobile home park, one of the premier parcels of land on California’s coast having a beautiful view of the Monterey Bay.

The Surf and Sand has severe remaining price fixed rents and has an assessed value at little more than a million dollars. Brought into development, the five acre parcel would probably become a commercial development helping business in the resort town of Capitola. At its highest and best use the property would probably be worth around 50 million dollars.

A couple of years ago the owner sued the city government of Capitola and in the process won the right to raise his rents to market when a tenant vacated. This happened also in the City of Santa Cruz ten years ago with another spectacular parcel of a rent controlled mobile home park, the DeAnza. The result:  dead and dying properties. Nobody will buy a mobile home where the land rents’ rents were about 10% of the actual land rents. Furthermore, fighting lawsuits over rent control on mobile home parks has cost the county of Santa Cruz a million dollars in legal fees and a little bit less than a million dollars in legal fees in the City of Santa Cruz. In tiny Capitola (population 10k) the bill for mobile home parks “affordable housing” was $1,770,242.00 in legal fees and other related damages (and still mounting).

About 150 acres of some of the most expensive land in America has been also swindled from the owners of the mobile home park land and the tax base in the form of “resident owned mobile home parks” because the owners had given up on governance in California. The owners have sold their land to the renters at prices between 10% to 25% of the land’s fair market price. These parcels of land now pay minimum taxes and are stuck in this situation for usually around 30 years. This conspiracy would put the local politicians in jail in most all of the U.S.A. Forty-four (44) stated have outlawed rent controls and it is common knowledge rent controls are bad.

In order to graduate from high school in California, students must pass a course in basic economics. One of the first things taught is about price controls – with NYC as the prime example via rent controls.

About ten percent of Capitola’s land is in the form of “resident owned” mobile home parks. Mobile home parks are a transitional form of land use. As land values rise, there should be an appropriate development on the land. This has not happened with the renters of mobile homes in Capitola and Santa Cruz forming into a very solid voting bloc and the politicians developing amnesia when it comes to election time. As a result, Santa Cruz has a large mobile home owner population – virtually all of whom are middle class based on sales price of the mobile homes worth about 10 to 20k selling for about 20 to 30 times their actual value, or more than the price of an average house throughout the U.S.A.

This interesting corruption goes on and on. The best single source is in the archives of the Santa Cruz Sentinel whose editorial staff because of political reasons has always been a strong supporter of rent controls. The other source is the Mid-County Post (now defunct). There is also the issue in Capitola when a water main broke in the parking lot mobile home park owned by the City of Capitola which flooded the town and became national news.

Meanwhile, the Surf and Sand and the DeAnza mobile home parks sit on the beach like dead immovable whales but perhaps leading the way to removal of rent controls in California.  Sooner or later economics trumps politics.

George Drysdale is a Social Science teacher.






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