HOUSE BILL REPORT

HB 995

BYRepresentatives Todd, Cantwell, Crane, Cooper, Leonard and Nutley

Establishing a mobile home park purchase fund.

House Committe on Housing

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (5)

     Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Armstrong, Ebersole and Todd.

Minority Report:     Do not pass.  (2)

     Signed by Representatives Barnes and Sanders.

House Staff:Charlie Gavigan (786- 7340)

AS REPORTED BY COMMITTEE ON HOUSING MARCH 3, 1987

BACKGROUND:

A mobile home park is a parcel of land under single ownership on which mobile or manufactured homes are located. Generally the land is rented out to tenants who own their mobile/manufactured home.  There is usually a certain amount of common space and common facilities for tenants.  A mobile home park may have a tenant organization to interface with the park owner.  Mobile homes have traditionally provided low cost housing for elderly and low income persons.

There is some evidence that rising costs of mobile home park development and operation, plus speculative investment, have reduced the primary benefit provided by mobile or manufactured homes: moderate and low-cost housing.  This implies that the sale of mobile home parks may often result in an increase in rents.

SUMMARY:

SUBSTITUTE BILL:  The legislative intent of this measure is to encourage and facilitate the conversion of mobile home parks to residential ownership, which would be accomplished primarily through private and public funding of mobile home park conversions (to resident owned). This is intended to maintain the affordability of housing in these resident owned parks for the low income, elderly, poor or infirm.

A mobile home park purchase fund is created in the office of the treasurer.  The Department of Community Development is charged with administering the program. Any state appropriation will be repaid through interest generated by the loans; thereafter interest will go to the fund itself.

Loans can be made to tenant organizations for conversion costs.  The loan is for the minimum amount necessary to enable the organization to purchase the park, but cannot exceed 50 percent of the conversion costs.  The loan term is a maximum three years; the interest rate is 8 percent.  Loans can only be made to tenant/ resident organizations in which a significant portion are low income, elderly, poor or infirm.

Eligible tenant/resident organizations are mobile home park residents who have formed a legal entity (i.e. nonprofit corporation)  for the purpose of acquiring the mobile home park in which they live.  It must include two thirds of the households residing in the mobile home park at the time of the request for assistance to purchase the park.

Loans may also be made to individuals to reduce the monthly housing costs for low income residents to an affordable level (30 percent of monthly income).  The loan amount is for the least amount necessary to reduce the borrower's housing costs to the affordable level, but not to exceed 50 percent of the acquisition cost of the individual's interest in the mobile home park.  The maximum term is 30 years; the interest rate is 8 percent.

The Department of Community Development must consider, among other things, local housing programs, the reasonableness of the conversions and whether it is the most efficient use of the funds.  The Department must seek to distribute the funds statewide, with a goal of at least 20 percent in rural areas.

The Department of Community Development can also give technical support.  This act will expire July 1, 1991.

SUBSTITUTE BILL COMPARED TO ORIGINAL: Legislative intent is clarified to emphasize that the assistance is primarily for residents who are low income, elderly, poor or infirm, by keeping mobile home parks affordable for this group of residents.  Loans can only be made to tenant/resident organizations in which a significant portion are low income, elderly, poor or infirm.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Fred Brume; Gary McFadden, Washington Mobile Park Owners Association; John Jensen, Mobile Home Owners Association; and Steven J. Kolcsey, Washington Mobile Park Owners Association.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     The increase in rents in mobile home parks would be more controllable if the tenants/residents owned the park. This would especially assist those low income and elderly persons who are being pushed out of the last vestige of affordable housing.

House Committee - Testimony Against: None Presented.