Tuesday Nov 08 2011
Rent-hike concerns hit Newcastle mobilehome park as sale nears
By: Gus Thomson, Journal Staff Writer
The prospective new owners of Newcastle’s Castle City Mobile Home Park attempted Tuesday to calm concerns by some of its 200 tenants over the possibility of rent spikes after it takes over. Speaking to the Placer County Board of Supervisors during a public hearing on a proposal to issue bonds to help finance the sale, the prospective purchaser’s director of acquisitions said that residents will not be seeing rent hikes they might be facing with another buyer. Inman said that Orange County-based Caritas Corp. is a non-profit with a goal of providing affordable housing. “Residents can be very fortunate that we’re purchasing, as opposed to a for-profit that would increase its return on investment every chance it gets,” Inman said. Average rent increases at the 14 other Caritas properties are less than cost-of-living index increases and those allowed under other city rent-control orders, he said. Supervisors adopted a resolution approving bonds issued by the California Municipal Finance Authority and worth up to $70 million. The county has no liability or obligation in the sale, county staff reported. Caritas could close the sale by January, Inman said after the meeting. Castle City is one of five properties Caritas is planning to buy, using the $70 million. A report from David Snyder, director of the county’s Office of Economic Development, said 20 percent or more of the residential units in mobilehome parks financed through the state-issued bond program are required to be occupied by people whose income is 50 percent or less of the area median gross income. The pending sale of the seniors mobilehome park was a concern to Cathy McGarry and Jane Sanchez, both residents of the park. They said a 5 percent rent increase was just announced by the current owner. Residents expressed concerns at a recent meeting, McGarry said. “This was perceived as unfair, since the new owners could also increase the rent again, once they obtain ownership,” the two wrote to the board. Residents, who will pay $455 monthly for a single unit after the 5 percent increase and $494 for a double, are basing their concerns on social security incomes of $800 to $900 a month, they said. “Should Social Security continue to increase as low as 3.6 percent or not at all, any new owner of Castle City who implements annual raises of 5 percent of above will plunge many seniors further below the poverty level,” McGarry and Sanchez stated.