AN ACT Relating to the mobile home park purchase fund and providing technical assistance; adding a new chapter to Title 59 RCW; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) The legislature finds:

(a) That manufactured housing and mobile home parks provide a source of low-cost housing to the low income, elderly, poor and infirmed, without which they could not afford private housing; but rising costs of mobile home park development and operation, as well as turnover in ownership, has resulted in mobile home park living becoming unaffordable to the low income, elderly, poor and infirmed, resulting in increased numbers of homeless persons, and persons who must look to public housing and public programs, increasing the burden on the state to meet the housing needs of its residents;

(b) That state government can play a vital role in addressing the problems confronted by mobile home park residents by providing assistance which makes it possible for mobile home park residents to acquire the mobile home parks in which they reside and convert them to resident ownership; and

(c) That to accomplish this purpose, information and technical support shall be made available through the department of community development.

(2) Therefore, it is the intent of the legislature, in order to maintain low-cost housing in mobile home parks to benefit the low income, elderly, poor and infirmed, to encourage and facilitate the conversion of mobile home parks to resident ownership, to protect low-income mobile home park residents from both physical and economic displacement, to obtain a high level of private financing for mobile home park conversions, and to help establish acceptance for resident-owned mobile home parks in the private market.

NEW SECTION. Sec. 2. The following definitions shall apply throughout this chapter unless the context clearly requires otherwise:

(1) "Affordable" means that, where feasible, low-income residents should not pay more than thirty percent of their monthly income for housing costs.

(2) "Conversion costs" includes the cost of acquiring the mobile home park, the costs of planning and processing the conversion, the costs of any needed repairs or rehabilitation, and any expenditures required by a government agency or lender for the project.

(3) "Department" means the department of community development.

(4) "Fund" means the mobile home park purchase fund created pursuant to section 3 of this act.

(5) "Housing costs" means the total cost of owning, occupying, and maintaining a mobile home and a lot or space in a mobile home park. The department's regulations shall specify the factors included in these costs and may, for the purposes of calculating affordability, establish reasonable allowances.

(6) "Individual interest in a mobile home park" means any interest which is fee ownership or a lesser interest which entitles the holder to occupy a lot or space in a mobile home park for a period of not less than either fifteen years or the life of the holder. Individual interests in a mobile home park include, but are not limited to, the following:

(a) Ownership of a lot or space in a mobile home park or subdivision;

(b) A membership or shares in a stock cooperative, or a limited equity housing cooperative; or

(c) Membership in a nonprofit mutual benefit corporation which owns, operates, or owns and operates the mobile home park.

(7) "Low-income resident" means an individual or household who resided in the mobile home park prior to application for a loan pursuant to this chapter and with an annual income at or below eighty percent of the median income for the county of standard metropolitan statistical area of residence. However, personal assets shall not be considered in the calculation of income, except to the extent that they actually generate income.

(8) "Low-income spaces" means those spaces in a mobile home park operated by a resident organization which are occupied by low-income residents.

(9) "Mobile home park" means a mobile home park, as defined in RCW 59.20.030(4), or a manufactured home park subdivision as defined by RCW 59.20.030(6) created by the conversion to resident ownership of a mobile home park.

(10) "Resident organization" means a group of mobile home park residents who have formed a nonprofit corporation, cooperative corporation, or other entity or organization for the purpose of acquiring the mobile home park in which they reside and converting the mobile home park to resident ownership. The membership of a resident organization shall include at least two-thirds of the households residing in the mobile home park at the time of application for assistance from the department.

(11) "Resident ownership" means, depending on the context, either the ownership, by a resident organization, as defined in this section, of an interest in a mobile home park which entitles the resident organization to control the operations of the mobile home park for a term of no less than fifteen years, or the ownership of individual interests in a mobile home park, or both.

NEW SECTION. Sec. 3. The mobile home park purchase fund is hereby created and shall be maintained in the office of the treasurer. The purpose of this fund is to provide loans according to the provisions of this chapter and for related administrative costs of the department. The fund shall include appropriations, loan repayments, interest, and any other money from private sources made available to the state for the purposes of this chapter.

NEW SECTION. Sec. 4. (1) Subject to appropriation, the department may make loans from the fund to resident organizations for the purpose of financing mobile home park conversion costs, as defined in this chapter.

(2) Loans provided pursuant to this section shall be for a term of no more than three years and shall bear interest at a competitive rate set by the department and adjusted by the department when necessary.

(3) Loans granted pursuant to this section shall be for the least amount necessary to enable a resident organization to acquire and convert the mobile home park in which its members reside. However, in no case shall the loan amount exceed fifty percent of the approved conversion costs.

(4) The department shall only make loans to resident organizations of mobile home parks where a significant portion of the residents are low income, elderly, poor or infirmed.

NEW SECTION. Sec. 5. (1) The department may make loans from the fund to low-income residents of mobile home parks converted to resident ownership or to resident organizations which have converted or plan to convert a mobile home park to resident ownership. The purpose of providing loans pursuant to this section is to reduce the monthly housing costs for low-income residents to an affordable level.

(2) Loans provided pursuant to this section shall be for a term of no more than thirty years and shall bear interest at a competitive rate set by the department.

(3) The department may establish flexible repayment terms for loans provided pursuant to this section if the terms are necessary to reduce monthly housing costs for low-income residents to an affordable level and do not represent an unacceptable risk to the security of the fund. Flexible repayment terms may include, but are not limited to, graduated payment schedules with negative amortization.

(4) Loans provided to low-income residents pursuant to this section shall be for the least amount necessary to reduce the borrower's monthly housing costs to an affordable level. However, in no case shall loan amounts exceed fifty percent of the acquisition costs of the individual interests in the mobile home parks. In addition, the total indebtedness upon individual interests may not exceed ninety percent of the value of the interests.

(5) Loans provided to resident organizations pursuant to this section shall be for the least amount necessary to reduce the monthly housing costs of low-income residents to an affordable level. However, in no case shall the loan amounts exceed fifty percent of the conversions costs attributable to the low-income spaces. Funds provided pursuant to this section shall not be used to assist residents who are not low-income, or to reduce monthly housing costs for low-income residents to less than thirty percent of their monthly income.

NEW SECTION. Sec. 6. In determining the eligibility for, and the amount of, loans pursuant to sections 4 and 5 of this act, the department shall take into consideration, among other factors, all of the following: (1) The reasonableness of the conversion costs relating to repairs, rehabilitation, construction, or other costs; (2) whether or not the project complements the implementation of a local housing program to preserve or increase the supply of housing for persons and families of low or moderate income; (3) whether or not state funds are utilized in the most efficient and effective manner in the furtherance of the goals of this chapter; and (4) any administrative and security factors affecting the department's program operation and administration.

To the extent consistent with requests for assistance, the department shall allocate funds available for the purposes of this chapter throughout the state in accordance with identified housing needs, including seeking to allocate not less than twenty percent to rural areas.

NEW SECTION. Sec. 7. (1) The department shall adopt regulations for the administration and implementation of this chapter.

(2) The department shall obtain the best available security for loans made pursuant to this chapter. The security may be in the form of a note, deed of trust, assignment of lease, or other form of security on real or personal property which the department determines is adequate to protect the security of the fund and the interests of the state. To the extent applicable, these security documents shall be recorded or referenced in a recorded document in the office of the county auditor of the county in which the mobile home park is located.

(3) The department shall exercise sufficient regulatory control with respect to park operations to assure the accomplishment of the purposes of the program authorized by this chapter.

(4) Before providing financing pursuant to this chapter, the department shall require provision of, and approve, at least the following:

(a) Verification that at least two-thirds of the households residing in the mobile home park support the plan for acquisition and conversion of the park;

(b) Verification that either no park residents will be involuntarily displaced as a result of the park conversion, or the impacts of displacement will be mitigated so as not to impose an unreasonable hardship on the displaced resident or residents;

(c) Verification that the conversion is consistent with local zoning and land use requirements, other applicable state and local laws, and regulations and ordinances;

(d) Projected costs and sources of funds for all conversion activities;

(e) Projected operating budget for the park during and after conversion;

(f) A management plan for the conversion and operation of the park; and

(g) If necessary, a relocation plan for residents not participating.

(5) The department shall, to the greatest extent feasible, do both of the following:

(a) Require participation by cities and counties in loan applications submitted pursuant to this chapter; and

(b) Contract with private lenders or units of local government to provide program administration and to service loans made pursuant to this chapter.

NEW SECTION. Sec. 8. (1) The department shall provide technical assistance to resident organizations or low-income residents who wish to convert the mobile home park in which they reside to resident ownership or to acquire an individual interest in a mobile home park. Technical assistance provided under this section shall be general in nature and shall not include the final details connected with the sale or conversion of a mobile home park which would require the department to act in a representative capacity, or would require the department to draft documents affecting legal or property rights of the parties.

(2) As part of the general assistance to mobile home resident organizations, park owners, and landlords and tenants, the department shall establish an office of mobile home affairs which will serve as the coordinating office within state government for matters relating to mobile homes or manufactured housing.

This office will provide an ombudsman service to mobile home park owners and mobile home tenants with respect to problems and disputes between park owners and park residents and to provide technical assistance under subsection (1) of this section. The office will keep records of its activities in this area.

This office will also provide an ombudsman service to mobile home park owners and mobile home tenants with respect to accessing governmental services related to health and safety within mobile home parks.

This office will further develop policies and strategies that will promote the development and utilization of mobile homes or manufactured housing and the conversion of mobile home parks to resident ownership as a means of enhancing the supply of safe, sanitary, low and moderate-income housing within the state, and advise the legislature, executive agencies of state government, and local government entities accordingly.

(3) The department shall establish the mobile home and manufactured housing affairs advisory committee. The committee shall consist of five members appointed by the director of the department of community development. The committee shall be comprised of one representative of mobile home park tenants, one representative of mobile home park owners, one representative of mobile home manufacturers, one representative of local governments, and one representative of the public at large with comprehensive knowledge of the mobile home landlord-tenant act. The director of the department of community development shall appoint the committee chairperson. The committee shall advise the office in implementing the provisions of subsections (1) and (2) of this section. The members of the committee shall not receive compensation or reimbursement for travel expenses.

NEW SECTION. Sec. 9. Within two years of the completion of a sufficient number of mobile home park conversions to allow for meaningful evaluation, the department shall undertake an evaluation of the program established by this chapter, and submit its findings to the legislature. However, in no event shall this report be submitted later than December 31, 1990. This evaluation shall include an examination of the financial, governmental, and institutional constraints on the conversion of mobile home parks; the impact of park conversions upon low-income residents, including those residents who moved from the parks during the conversion process or within one year after conversion; the distribution and average income and assets of residents who have participated; data on loan delinquencies and defaults; the costs of acquiring and converting mobile home parks to resident ownership; and a comparison of different resident ownership structures financed pursuant to this chapter.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act shall constitute a new chapter in Title 59 RCW.

NEW SECTION. Sec. 11. This chapter shall remain in effect until July 1, 1991, and as of that date is repealed, unless that date is extended.