The Committee on Commerce and Labor was called to order at 1:30 p.m., on Friday, March 19, 1999. Chairman Barbara Buckley presided in Room 3142 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Ms. Barbara Buckley, Chairman

Mr. Richard Perkins, Vice Chairman

Mr. Morse Arberry, Jr.

Mr. Bob Beers

Ms. Merle Berman

Mr. Joe Dini, Jr.

Mrs. Jan Evans

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Humke

Mr. Dennis Nolan

Mr. David Parks

Mrs. Gene Segerblom

GUEST LEGISLATORS PRESENT:

Assemblyman Mark Manendo, Assembly District 18

Assemblywoman Genie Ohrenschall, District 12

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

The meeting was videoconferenced to Las Vegas. Following roll call, Chairman Buckley explained Assemblywoman Kathy Von Tobel, the sponsor of A.B. 9, had been informed by the Department of Employment Security the bill conflicted with federal law, so it would be held for work session and was likely to be indefinitely postponed. Chairman Buckley apologized to those present to testify on A.B. 9. She also told the committee Assemblyman Douglas Bache was planning to testify on A.B. 361, but if he was not able to, she would present the bill for him, since she knew his intent.

Chairman Buckley opened the hearing on A.B. 477 and asked Vice Chairman Perkins to Chair during the bill.

Assemblywoman Barbara Buckley, Assembly District 8, presented the bill. She explained she represented many senior citizens who were residents of the seven mobile home parks in her district. She worked a great deal on mobile home issues; from incorporating additional rights to Nevada Revised Statute (NRS) 118B for mobile home residents as well as supporting rent justification for them. Individuals in her district paid some of the highest rents in Nevada. There were individuals who had paid $180.00 dollars when they moved in, and currently paid $500.00.

During the 69^th Session, there were a number of bills on behalf of the tenants that did not pass in the Senate. Also, there were bills on behalf of mobile home park owners that did not pass in the Assembly. A.B. 477 was a "consensus" bill of the owners and tenants, there had been "trade-offs" made by both. After the 69^th Session there were a number of sponsored meetings between the owners and the tenants which were facilitated by Renee Diamond, the Administrator of the Division of Manufactured Housing. Chairman Buckley attended most of the meetings as did Assemblyman Mark Manendo, and Assemblywoman Genie Ohrenschall. Assemblyman Bache and former Assemblyman Jack Close attended a number of them as well. Marilyn Mann of the Manufactured Home Community Owners and designated individuals from the Clark County Housing Authority attended the meetings and represented the park owners. They tried to meet every month or every other month. The group spent some meetings simply getting to know each other. Karl Braun, President of the Nevada Association of Manufactured Home Owners; Bob Varallo, President of the Meadows Mobile Home Park; and Harold Anderson, President of the Flamingo West Home Owners Association, represented the tenants. The meetings began with of assessment the different perspectives. It became clear after the third or fourth meeting there were some park owners and some tenants whose practices were "not the best." As the meetings progressed, the group talked about some of their "pet peeves." Complete consensus could not be reached on rent justification. However, after that topic was put aside the groups worked together to address different issues that affected them. A.B. 477 was the result.

Ms. Buckley stated section 1 clarified it was the landlord’s duty to remove snow from the sidewalks and streets within the parks and sidewalks adjacent to the streets. Marshall Schultz requested that on behalf of tenants from the northern part of Nevada.

Tenants from southern Nevada requested section 2. It clarified landlords had the duty to trim all trees located within the park and dispose of the trimmings from the trees, absent a voluntary assumption of that duty by the tenants., Many tenants complained they were not informed when trees were cut in the mobile home parks, and trimmings were left on driveways. When a senior citizen could not move tree branches to get his/her car out of the driveway, those individuals called the Nevada Association of Manufactured Homeowners, and it became their problem.

Ms. Buckley noted section 3 was requested by the park owners and pointed out that was a trend throughout the bill. A.B. 477 was a balanced process. Section 3 increased late charges. Currently there were no late charges within 4 days of when the rent was due; however, after that it was no longer capped at a dollar per day, the cap was increased to five dollars a day. The rational of the park owners was that it needed to be adjusted for inflation. Section 3-H was a provision for the tenants, which she believed came from Harold Anderson at Flamingo West. It clarified that any fees, surcharge, or rent increase to recover amounts for governmentally mandated services or taxes had to be passed through to the tenant without landlord added surcharges. The argument was that it was reasonable to pass through increases in water services or taxes; however, when the owner added an amount on to that, it was unjust.

Section 4 clarified the landlord shall not increase the rent and could selectively give discounts if a tenant paid his/her rent in a timely manner or paid by check or money order. Mobile home law continued to allow and mandate that an owner was required to take cash. That was a concession the tenants won some years prior. In discussing that during the meetings, the owners argued it was a dangerous way to keep money. The tenants agreed and the way they sought to resolve that was to allow the owner to add a little incentive. For example, if a long-term tenant paid rent on time and paid by check, he/she might be given a little discount. It might only be $5, but $5 to the tenant could be enough incentive to pay rent on time.

On page 5, lines 21 through 23, there was a change which again addressed the trimming of trees and clarified if the tenant had voluntarily assumed to trim the trees, the landlord could not force the tenant to trim the trees unless a hazard existed.

Page 6, lines 5 and 6, was a request of the park owners. In NRS 118B, it was illegal for a landlord or a manager to harass a tenant. The park owners wanted it to be illegal for a tenant to harass a landlord. Professionalism and civility were necessary even when parties disagreed, and so the tenants agreed to add that expansion in 118B.

Section 5, line 13, clarified the Division of Manufactured Housing could intervene if a tenant was harassing a landlord. Ms. Buckley stated there might be one other provision added for clarification, but in general, that was the bill. A.B. 477 was achieved through a very difficult process of consensus and she thought tenants and owners who participated felt it was a worthwhile process even though there were disagreements. She was very pleased in the efforts of both sides to compromise and develop A.B. 477.

Assemblyman Dini asked Ms. Buckley to explain the matter of paying rent in cash, and asked if it was in A.B. 477, or if it was already in the law.

Ms. Buckley stated it was already in the law, but it expanded the discounts a landlord could offer to not only long-term tenants and tenants who paid their rent on time but to tenants who paid by check or money order and would improve the practice. It was safer that way, but if the owner preferred cash, they were not required to offer a discount.

Vice Chairman Perkins suggested the committee hear testimony from witnesses in Carson City first and then take testimony from individuals in Las Vegas.

Assemblyman Mark Manendo, Assembly District 18, supported the bill. He noted diligent work had been done during the interim. He stated, for the record "Assemblyman Majority Leader Mr. Perkins really got the ball rolling on this and I think everybody really appreciates his leadership and guidance through this process in the direction he gave us." Mr. Manendo represented nine mobile home parks, so all mobile home bills were of interest to the people he represented. He noted the suggestion to give discounts for people who did not pay rent in cash came from the managers in a mobile home park in his district. He thanked the committee for their attention.

Marshall Schultz, Executive Director of Residents Information Center, spoke next. His organization offered rates on the Nevada Renters Hotline and published The Hotline News which was distributed free of charge. Most tax-supported agencies referred callers to the hotline for information when the agency was unable to help a caller because they were not permitted to give advise. The hotline was not tax-supported. They did not give legal advice but "practical" advice. Over a period of 3 ½ years of hotline operation, data sheets were collected on nearly 2,000 callers who complained about rental tenancies, mobile home parks, apartments, and single-family dwellings. His organization was the only source in the state at that time with information on all of those issues. He surmised they had the largest database of renters’ complaints in Nevada from tenants renting a dwelling of any kind. He felt A.B. 477 was a good consensus bill because there were a series of meetings in Las Vegas between the Nevada Association of Manufactured Home Owners and the Apartment Association. A.B. 477 revised NRS 118B in several positive ways as Ms. Buckley had mentioned.

Mr. Schultz had introduced the idea of snow removal, which was a problem in northern Nevada. He also approved of the idea of landlords being responsible for tree maintenance and prohibiting tenants and landlords from harassing each other. However, he strongly opposed the idea of raising the rental late charge by 500 percent. From his experience operating the hotline, he knew of people who lost their homes because they were behind in their rent and the landlord simply forced the sale of the home. He noted those were people who owned their homes for 10 or 20 years. If the rent was 15 days late, it would cost $75.00, and if the rent was 30 days late it would cost the renter $150.00. He personally knew people who called the hotline who would never catch up with their rent and they would lose their homes. His organization recommended an adjustment to that particular clause of the bill and increase the fine to $2.00 per day when rent was late. It had been mentioned in a consensus meeting there were many tenants who deliberately paid their rent late because a dollar a day did not bother them. He had never seen any statistics as to how many people actually did that, but there were some.

He was in the June consensus meeting in Las Vegas between the Association of Manufactured Home Owners and the park owners representatives, and he had never been requested to input any information to the Association of Manufactured Home Owners in Las Vegas. Three times in the ensuing 6 months, between June and December, he sent Karl Brawn, President of the Association of Manufactured Home Owners, email about those issues. Mr. Brawn never responded. Mr. Schultz believed there was consensus only among a small group in Las Vegas. The Association of Manufactured Home Owners headquartered in Las Vegas represented themselves not the entire state. He stated he essentially represented everyone in the northern part of the state because there was no one else doing anything.

Ms. Buckley clarified the consensus that was reached was just between those individuals at the meetings. The park owners group did not represent every park in the state and so some park owners may not like the fact that there were new tenant-friendly to which amendments that the park owners at the meeting had agreed. Similarly, not every mobile home park was in the Nevada Association of Manufactured Homeowners and they may not like some of the provisions in the bill, but the Nevada Association of Manufactured Homeowners in Las Vegas did represent a large number of groups as did the Manufactured Home Community Owners organization. Those parties felt A.B. 477 was a just consensus; if a park owner’s protection was changed, then a tenant’s protection was changed, so it was an even exchange.

C. Joseph Guild, Attorney at Law, representing the Mobile Home Community Owners, which was referred to as the "landlord organization" testified in support of A.B. 477. He congratulated all parties involved in reaching an agreement on issues that needed attention. He had been addressing the issues in A.B. 477 since 1985 on behalf of the landlords in the state to try and reach consensus on issues related to landlord/tenant relations. He hoped there would be continued efforts because there were always issues to be discussed in the interim. He urged the committee’s support of A.B. 477.

He noted the definition of tenant, upon which all parties agreed, needed to be added. He would provide a copy to the chairman after the meeting, as he only had one copy (Exhibit C). Exhibit C defined a situation where a tenant refused to sign a rental agreement and moved in without permission or knowledge of the landlord, or refused to qualify for tenancy within that mobile home park. He opined the committee would address that in work session.

In 1982, A.B. 432 made significant changes to the landlord/tenant law in Nevada, and it was in 1981 when the late fee was set at $1.00. The $5 increase, averaged over 18 years, would not be a significant increase. In most cases, those who were chronically late with rent, were " bad apples," and not well liked by other tenants. It was agreed upon by the representatives of the tenants in discussions that it was a reasonable increase.

Vice Chairman Perkins indicated it was a significant increase but recognized that the labors of writing A.B. 477 were "give and take." A.B. 477 was the first step to comprehending a number of issues in those areas.

Karl Brawn, President of the Nevada Association of Manufactured Homeowners testified from Las Vegas. Like Mr. Schultz, he was not overly content with the increase in the fine for late rent. However, he agreed with the park owners that $1.00 a day was not much of a deterrent to pay rent on time, and $5 a day certainly was. Good business practice was best for all parties. One of the most interesting things that came out of the monthly meetings was park owners and people in his association agreed on most issues dealing with mobile home parks.

Vice Chairman Perkins noted that in section 3, subsection (f), it did not only include the $5 increase, but there was also an exclusion for Saturdays, Sundays, and holidays which was a compromise on the part of the landlords.

Dee Burdell, 15-year resident of Pueblo Del Sol mobile home park, representing 453 individuals from the park, testified from Las Vegas. Many seniors who lived on $1,000 or less a month lived in the park. She noted if they did not receive their social security or disability checks on time, $5 per day was a bit ridiculous. They agreed to a raise in the fine, but $5 was too much, especially with escalating rents currently being paid. She had respect for all of those who worked on A.B. 477. She would agree to a higher fee on late rent because there were people who were habitual offenders. She did not feel park managers would be sympathetic in dealing with different cases of late rent.

Renee Diamond, Administrator, Department of Business and Industry, Manufactured Housing Division, testified next, and submitted written testimony (Exhibit D). She stated everyone had a great ability to advocate, articulate, and negotiate their constituents’ interests. She thanked all the participants for their patience, thoughtfulness, flexibility, and candor.

Cheryl Olson, Owner of a mobile home park in Reno, Nevada, testified next. She had realized there was nothing objectionable to her in the bill. She addressed the concern over the increase of the late fee and pointed out it was over an 18 year period, and that was only a 22 cents-per-year increase. Additionally, not including holidays, the removal of Saturday and Sunday actually reduced the fine to $3.57 per day

Vice Chairman Perkins noted it was a $5 cap, which did not necessarily mean that it would always be $5, but it could be as high as that. Certainly many owners would take advantage of the full-extended cap. He felt it was a significant increase but also recognized the hard work that was put into the bill with agreement between both parties.

Ms. Giunchigliani assumed there was a sliding scale and it was up to the park owners how much to charge; she thought many times the fee would not be implemented.

Vice Chairman Perkins closed the hearing on A.B. 477.

Chairman Buckley opened the hearing on A.B. 418. Since the bill was certainly contested, she would divide the time evenly between the proponents and the opponents to allow everyone a chance to testify. She also asked the witnesses not to be redundant.

Assemblywoman Genie Ohrenschall, District 12, presented the bill. She introduced George Flint, long time resident of a mobile home. He was also a businessman who kept regular records and was present to give the committee a documented tenant’s point of view.

She asked the committee to strike two provisions in the bill in order to eliminate the attached fiscal note. She had communicated with Renee Diamond of the Division of Manufactured Housing. The first elimination was on page 3, section 5, subsection 3, lines 8, 9, and 10, a provision for inspections by the Division of Manufactured Housing. The second elimination was on page 9, section 16, subsection 1, lines 5, 6, and 7, another inspection provision. It would be redundant to ask for an expensive and unwieldy inspection process.

Ms. Ohrenschall stated A.B. 418 made changes in approximately 11 areas. The most controversial of those areas was the area of how to calculate a rent increase, and because it was the most controversial, she would address it last.

She stated mobile home park residents often felt they were treated like second-class citizens. Many times they were. Mobile home owners deserved the same quality of life as those who chose to buy other kinds of housing. She clarified A.B. 418 was not an attack on mobile home park owners. She hoped responsible park owners would support the effort to crack down on the irresponsible owners, many of whom were out-of-state landlords.

A.B. 418 was designed to meet the needs for additional protection of mobile home residents which were not currently included in NRS 118B. Section 2 of the bill required personnel of the park to keep information concerning tenants confidential. That included not releasing such items as their social security numbers and whether or not they had a bank account or credit card. Those were types of things that anyone had a right to keep private.

Section 3 limited the entry of the park landlord into a manufactured home owned by a tenant, to once per year upon notice unless he/she had the consent of the resident of the park, there was an exception in the bill for an obvious emergency situation.

Section 6 provided that a rental agreement may not prohibit keeping pets or entertaining guests, although the guests may be required to register upon entering and leaving a secured park. That was in the bill as an attempt to bring legislation more into line with the U.S. Department of Housing and Urban Development (HUD) code of federal regulations (CFR) which applied to senior housing provisions and did not always specifically address mobile home parks. She pointed out that 24 CFR section 5.309, provided that a senior could not be denied the right to have a household pet. There could be provisions that if an individual had a cat, it was to be kept inside the unit, and if a resident had a dog, it would have to be on a leash at all times. If the owner made the park a no-pet park, and it was not a senior park, then rules and regulations needed to be clearly posted and not in the rental agreement. She gave an example of a park in southern Nevada in which, as the ownership changed, the park changed to a no-pet park. Tenants had different stipulations regarding pets in their rental agreements which caused confusion, and resulted in lawsuits. Many problems occurred with pet policies within rental agreements. She opined that was the reason the CFR had that provision and she thought that might be a wise provision for Nevada to have.

Section 7 required the disclosure to residents of rent charged for each lot in the park. It also required the posting of the name and address of the manager or another responsible person. Disclosure of address and telephone number of the local office of the State Division of Manufactured Housing was required, so if a resident wished to make a complaint, he/she would know where to go.

Section 18 required disclosure and a contract for the sale of manufactured homes stipulating that land was not included in the sale of a manufactured home. The second disclosure in section18 would be that the buyers should obtain legal advice before buying or signing anything. If there was an organization such as a legal aide, then disclosure of address and telephone number of that organization in the community was required. The third disclosure in section 18 would be dates of last maintenance and of any required maintenance or cleaning of major equipment such as a furnace, chimney, or water heater. The fourth disclosure in that section was if the owner of the park was the seller of the home, a disclosure of any known elements in the construction or connection of the mobile home to utilities that did not meet the standards required by statute or ordinance in that area. That section was aimed at a common problem where certain park managers sold mobile homes that became available through foreclosure because the tenant died and there were no heirs. That could also happen if there had been an electrical fire, and the insurance had paid the prior owners who then moved out. Sometimes the managers bought the mobile home and did cosmetic repairs and then sold it to people who were unaware of the electrical fire damage. Those mobile homes were older homes that were not up to all the code requirements. That danger existed frequently with older units, so she asked that section 18 be amended to apply only to units that were built on or before January 1, 1975.

Sections 9 and 10 provided attendance of a representative of the tenants in the park without charge in courses of continued education, which were required for managers of parks. There was a requirement in the bill that, if possible, meetings with landlords be set up at a time that would not conflict with the working schedule of the majority of the residents of the park.

Section 12 dealt with transfer of tenant’s interest. A problem with manufactured housing was most leases did not recognize assignability of the lease itself or of the unit underneath. There needed to be assignability from the resident to a new buyer who was of the same category or had the same qualifications as the resident who was selling. The resident who owned would be prohibited from selling the unit for $100.00 to someone who was not qualified, and sign the underlined lease.

There were leases that currently required residents to carry insurance on the lot, not on the manufactured home but on the lot. Since the lot was real estate and was the property of the owner, the owner should carry the insurance. So the bill included a prohibition against any requirement in a lease by a landlord that the resident had to insure the lot.

Section 14 required a reduction of rent if the amenities were not sanitary. If an individual moved into a park under the impression he/she was going to have access to a swimming pool and whirlpool, but the health department had closed them, she thought that individual was entitled to a reduction in rent.

Section 15 prohibited the interruption of water supply except in an emergency. It had been the practice of some parks to do work on water lines whenever it was convenient for the owner without notifying the tenant in advance, or giving very short notice that the water was going to be shut off.

Section 17 provided the penalties of NRS 118.260 were to be calculated at the rate of $50.00 a day. A fine of $50.00 day, was an incentive to the park owner to expedite repairs.

Sections 4 and 5 were controversial areas of the bill. Those sections required the administrator of the State Manufactured Housing Division to adopt an economically reasonable method of calculating periodic increases in rent under a rental agreement. It also provided that the landlord and resident would be required to follow that method once it was adopted. The reason she suggested the Division of Manufactured Housing deal with that issue was that every time new mandates were placed on mobile home residents, apartment residents argued about the same rules applying to them. Apartment residents were in a different category. Mobile home residents truly could not move out of their park unless they could afford it. It could cost anywhere from $5,000 to $15,000 to move a coach. It was difficult to find a park that had a vacancy and was willing to accept an older unit. Mobile home residents were in a different category and had special needs. They required special protection and the philosophy of A.B. 418 was not intended to extend to any other type of renter, because most mobile home residents owned their unit even if they were paying rent on the lot.

George Flint, Private Citizen, testified next in favor of A.B. 418, and provided (Exhibit E). He explained he was not there as a lobbyist, but as a private citizen and friend. In 1991 and 1993 he represented the mobile home owners. He mentioned he and Mr. Hettrick did not agree on certain mobile home park issues, but he respected that difference. He and Mr. Dini had even disagreed on that matter a few times, but it did not affect their friendship. His primary concern was the matter of "rent justification." He was offended when his opponents referred to it as rent control because it had no relation to rent control. He doubted the unique approach of A.B. 418 would pass the second house. He told of how he had lobbied for bills in the past that dealt with the issue of rent justification, but the bills had not passed. He explained the 1999 session would be his last, as he would be 70 during the next session. He and his wife lived in a mobile home by choice. The rent in the first mobile home park into which they moved in the late 1970’s started at $112.00 per month and had increased to $496.00 per month in 7 years. When they moved they had to remove 600 feet of deck, concrete had to be removed, and so did overhangs, and by the time all of that was relocated to another park in Reno, they had spent $10,500.00. So he disagreed with an estimated cost of $2,500 to move a mobile home.

Mr. Flint referred to Exhibit E that showed a constant increase in rent at his mobile home park over a 14 year period.

He and four other resident of his mobile home park had a discussion with the owner of the park, who was from Washington State and rarely came to the park, about rent increases. The following year the rent in the park did not increase by $18, but Mr. Flint said his rent increased by $35. The owner had two mobile home parks in Nevada and seven in California, the parks in California were under, as the owner put it, " rent control." He stated to Mr. Flint since there was no rent control in Nevada, he had to "exploit Nevada" as best he could. Mr. Flint pointed out all out-of-state owners did not operate in such a way. Mr. Flint opined mobile home parks had been sold for $2 million more than they were worth, because that money could be recovered rent increases. He thanked Chairman Buckley, Mr. Manendo, and Ms. Ohrenschall for their dedication to that issue.

Mr. Flint pointed out the payroll in the mobile home park was up 20 percent since 1985. The taxes were up about 12 percent. The other upkeep was up less than 25percent in their overall overhead. However, that park had 456 units, and every time there was a $15 rent increase it created $50,000 more a month for the owners. There were 60,000 people living in rental parks in Nevada in approximately 24,000 rental units. May 1, 2004, the rent in his park was going to be $625 a month, he said it had to stop somewhere. He and his wife had found a two-bedroom home in Reno for $135,000. He could sell his mobile home for $50,000, but he was only going to sell it of $20,000. With that as a down payment on the $135,000 house, he could get a 15 year mortgage for $100 more per month than he was paying just for the ground on which his mobile home was parked . He thanked Chairman Buckley for her courtesy of allowing him to discuss those issues.

Mr. Hettrick appreciated Mr. Flint’s comments, and pointed out the increase of $17.93 per year on a regular basis seemed to be reasonable because he was aware of other parks that had far higher increases. He noted Mr. Flint had mentioned payroll and other expenses, but he did not mention property taxes, insurance, and government mandates that might be included within cost repair or debt service. It was not known what the impact of that was beyond rent increases and he felt the committee needed to understand all of those issues to judge whether or not those were appropriate or inappropriate prices.

Mr. Flint stated the park to which he had referred was paid for 6 years after it was built, and by the owner’s admittance, there was no debt to retire. But, he agreed with Mr. Hettrick that they did not have his whole cost sheet.

Chairman Buckley noted she had constituents who were concerned with the comparison of mobile home rent to apartment rent; mobile home owners paid the same amount and they owned their home. It was generally concluded that when a person rented a piece of "dirt" it would be cheaper than incurring the debt to build. During the interim she addressed the board of the park owners, and it was a good exchange, even though no one’s mind had been changed about rent justification.

Mrs. Ohrenschall addressed the term "economically reasonable" which was specifically chosen and developed because owners needed to stay in business, and if the parks decided to close, or sell the land, there would be many people who had put their life savings in older units who would have no place to go. The right of a park owner to make a profit was recognized. "Economically reasonable" presupposed that both sides would contribute all of their details so such a determination could be made. She acknowledged park owners needed to make a profit but just as the tenants needed the owner, the owner also needed the tenant to continue to make a profit.

Chairman Buckley agreed with Ms. Ohrenschall.

Mr. Hettrick pointed out the single issue that could not be determined in A.B. 477 was what was "economically reasonable." If a single formula was produced it would not be satisfactory to everyone. He wanted to find a reasonable way to determine the concept of "economically reasonable" in a manner that would be satisfactory to everyone.

Ms. Ohrenschall agreed with Mr. Hettrick, and noted by having the Division of Manufactured Housing establish the regulations, they would have the responsibility to determine the concept of economically reasonable. She thought that was reasonable since the Division of Manufactured Housing was the only agency that dealt solely with manufactured housing issues.

Assemblyman Mark Manendo, District 18 testified next in favor of A.B. 418. He felt there were many important issues addressed in the bill. He noted mobile home park residents appreciated the amenities that A.B. 418 secured, such as access to a pool, or the ability to have a pet. Mr. Manendo commended Ms. Ohrenschall on the bill, and said he hoped some type of agreement could be made.

Karl Braun, Private Citizen, testified from Las Vegas. He acknowledged as a mobile home park resident, he was in a poor negotiating position. He rented the land on which his mobile home was located, and it was a very expensive proposition to move it; even if he wanted to move, he would have to move to another mobile home park.

Mr. Braun noted the Manufactured Housing Division published reports every year, which provided information about all mobile home parks in Nevada. The previous year, he and the Nevada Association of Manufactured Homeowners sent out rent history forms in an attempt to gather information on the various parks in Nevada. There were 918 responses. That gave him enough information, particularly when compared with the Manufactured Housing Division reports, to be quite confident of his rental increase information.

Mr. Braun lived in Boulder Cascade Mobile Home Park, which was owned by a corporation with offices in Denver, and a home office in Chicago, Illinois. The company owned five parks in the Las Vegas area. When he examined the rental history reports, he checked what the rent was in 1989 so he could compare the rent 10 years prior with the present rentals. His findings for the five parks owned by the Chicago based company in Nevada were: In 1989, the space rent in Boulder Cascade, for a doublewide home was $251 per month. It was currently $445 per month, an increase of about 80 percent. The second park owned by this company was Bonanza Village. In 1989 the rent for a doublewide was $240, it was currently $445 per month, an increase of 85 percent. That was an average of 8-½ percent increase per year. He found, in 1989 Flamingo West space rent was $295 a month, and was currently $462 a month, an increase of 56 percent. Cabana, in 1989 was $250 a month, and was currently, $470 a month, an increase of 88 percent.

The company had done a fine job in purchasing parks and maximizing the profits from those parks. Unfortunately, in that process, retired individuals on fixed incomes who lived in one of those parks ran into two problems. 1) Rent increased far more than increases in social security. 2) Property value decreased and the older the mobile home was, the more difficult it became to sell. So, seniors on fixed incomes in those parks were losing ground and they could not sell their homes.

Mr. Braun noted there were 439 mobile home parks in Nevada. There were about 30 that charged over $400 a month in rent, so A.B. 418 would only affect 30 or 40 parks in the state. Fourteen out-of-state owners owned 21 of the parks that charged $400 or more per month for rent. Based on the number of units and the rent charged, Mr. Braun surmised those owners would take approximately $33 million out of the State of Nevada in 1999.

There were four mobile home parks in approximately a six-city block square, which included Boulder Cascade. The others were: Maycliff, Riviera Vegas, and Palms. The three other parks charged about $100 less in monthly rent than Boulder Cascade. That totaled $360,000 a year that Boulder Cascade received in profits, over the other three adjoining parks. Mr. Braun found no mobile home park that filed for bankruptcy in the 18 months prior in Nevada.

Mr. Braun stated there were only two issues in disagreement by residents and owners of mobile home parks, "Who’s going to pay for it and how much does it cost." He noted public utilities were required to justify rent increases. The cost of the taxicabs in Las Vegas was controlled, so there were businesses with which the government was involved and over which it instituted some controls. He assumed that if three of four mobile home parks of comparable size in the same neighborhood charged around $350 a month, the one that charged $450 per month could continue to make a profit even if the monthly rent was $350. He noted from the information gathered from surveys and reports, the mobile home parks that charged over $400 a month in Nevada had been steadily increasing their rents every year at about an 8 percent increase.

He enjoyed where he lived and was able to afford it, but he was seriously debating protesting the increases at Boulder Cascade Mobile Home Park and picketing in the park with signs.

Harold Anderson, Member of NAMH State Executive Board, resident and immediate past president of West Flamingo Mobile Home Park, testified in favor of A.B. 418 from Las Vegas. He read written testimony (Exhibit F). He reviewed what had been happening at Flamingo West, which was typical of what had been occurring in the mobile home park industry, and now statewide. He mentioned the 30 mobile home parks, of more than 400 in the state that charged over $400, and noted the biggest percentage of those were in Clark County. He said it was past time for the Nevada legislature to stop "lining the pockets of out-of-state corporations with exorbitant rents squeezed out of hard-earned money from Nevada residents."

Mr. Anderson pointed out cumulative costs of manufactured homes in most parks exceeded the market price of most parks. For example, Flamingo West was purchased by a Chicago based company in 1994 for $7,850,000. However, surveys of each of the Flamingo West homeowners reflected an aggregate cost of manufactured homes in excess of $10,000,000. The homeowners, therefore, had more investment by far than the park owner and the homeowners’ total equity and investment needed to be treated with regard to fairness. According to Mr. Anderson, the posture of out-of-state park owners, in regard to rent increases, was historically "outright arrogant." There was no attempt by the Chicago company to meet with the mobile home park residents on common ground. The Company arbitrarily set their rent on three other parks and refused to consider Flamingo West residents’ well-prepared documented figures. Consequently, on April 1 1999, there was to be a $25 monthly increase at Flamingo West. He provided a copy of his written testimony for the record (Exhibit F) and noted the documents the Flamingo West residents presented in rental negotiations with the Chicago company were available upon request. He thanked the committee for its time.

Chairman Buckley asked proponents of A.B. 418 in Las Vegas to stand so the committee could see how many people were in support of it, see Exhibit B for names. She thanked them for taking the time to show their support for the bill. In order to give equal time and opportunity to the opponents of the bill, she stated she would to take testimony from opponents to A.B. 418 in Carson City.

Renee Diamond, Administrator of the Division of Manufactured Housing or the Department of Business and Industry, testified next. She noted the Division of Manufactured Housing no longer had fiscal concerns with the bill, as Ms. Ohrenschall had removed those sections. They did, however have "philosophic" concerns with certain sections of the bill, and she articulated those concerns (Exhibit G) She noted if certain responsibilities were required of the Division of Manufacture Housing, she would pledge her best efforts to carry out that responsibility. She reminded the committee NRS 118B was created to recognize the homeowner who rented land.

Mr. Hettrick thought Ms. Diamond should be very complimented by Ms. Ohrenschall’s faith in her in terms of calculating rents.

Michael Griffin, representing the Nevada Manufactured Housing Association (NMHA), noted the amendments Ms. Ohrenschall proposed under section 18 addressed pre-1975 units and would solve his organization’s problem with the bill, because 1975 was the year HUD standards came into effect.

Joseph Guild, Attorney at Law, represented the Manufactured Community Owners, which was the statewide mobile home park owners association. He noted Ms. Diamond had covered some points that he was planning to make. Page 6, section 13 of the bill would change the dynamics of park owned mobile homes and how the law affected them, so he thought that should be corrected. There was a problem on page 3 section 5, subsection 7, because parks needed to have some control over pets. He represented a number of different mobile home parks in Nevada, and he said for every 10 phone calls he received from a park owner, probably 8 had something to do with pets. In November of 1998 he attended a tenants meeting to fulfill the requirement of the statute to go over new rules and regulations. In the 3-hour evening meeting, an hour and a half was spent on the new provisions related to pets. He surmised Chairman Buckley received as many complaints about pets as he did from the other side. There had to be some ability to regulate pets in mobile home parks.

He referred to section 7 of the bill, and based on his experience, the publishing of different rents for different tenants would cause more problems than it would solve. Mr. Guild pointed out in 1991 the Manufactured Community Owners industry, imposed upon itself a continuing education requirement which was very successful. He guessed thousands of managers and park owners had taken advantage of that continuing education, and that was beneficial to all tenants in Nevada. He referenced section 9 of the bill, and said if the law required his organization to provide attendance to each course of instruction without charge to every resident for every park resident in the state, theoretically there could be 451 attendees, at $50 each. That was a significant cost that would have to be absorbed by the organization he represented. He noted all of the officers of the tenants organizations were invited to every seminar put on by his organization free of charge.

In section 11, there was a change requiring that the time for meetings between managers and resident group be within the normal working hours of the majority of the tenants. He did not know how the meeting time would be calculated. Also, in section 11 of the bill, the old language stated that the represented group of tenants must consist of no more than five persons. The suggested change was the word "may" consist of no more than five persons is, making it possible to for represented group to be made of 100 people.

Section 12 of the bill read, a lease may be assigned to a person similarly qualified to reside in the park but there was no specification about how that person would be similarly qualified. The park owner really had no recourse. Therefore his organization was opposed to that section.

His organization opposed section 13, line 34, which required a renter to obtain insurance of the rented lot. They also disagreed with the deletions on page 8, subsection 8, lines 7 through 10, because there had to be some control in mobile home parks on guests as well as pets.

He did not think section 14 of the bill was needed. If there was a health hazard and a swimming pool closed, that was the decreasing or elimination of an amenity, and he thought it was superfluous to the current section NRS 118B.153. In section 17, the $50 per day late fee seemed to be excessive. Section 18 did not affect mobile home park owners.

Mr. Guild noted everything Ms. Ohrenschall mentioned in her testimony could have been items of discussion in the consensus meeting that occurred during interim. He suggested if A.B. 418 did not pass, the issues it addressed could be included on the agenda of the first interim meeting and there could be continued discussions on them. Those issues may have validity from the tenant’s point of view, and he was willing to listen and discuss them.

Mr. Guild addressed "rent control." He noted Mr. Braun’s examples of rent increases were from five mobile home parks in Clark County that had a 5.6 percent to 8.8 percent increase over a 10 year period. Mr. Anderson compared the mobile home park he lived in to rental housing, and it was Mr. Guild’s understanding that there was a 5 percent increase per year, which did exceed the average in Clark County. Mr. Guild had figures from the Division of Manufactured Housing dated March 18 1999, on rent increase history for the entire state of Nevada. He noted that every mobile home park in Nevada was required under law to respond to the request for information by Ms. Diamond’s office. For all mobile home parks in Clark County the total rent increase over 10 years was 4.2 percent per year. He stated Mr. Brawn and Mr. Anderson’s figures were correct for the parks they discussed, but the legislature could not legislate for five or six mobile home parks in Nevada when there were approximately 450 mobile home parks in the state. In the same 10-year period in Washoe County where Mr. Flint lived, there was a 3.7percent per year rent increase per year. He noted there had been some significant increases in Mr. Flint’s mobile home park, but pointed out he lived in a in a beautiful mobile home in a beautiful park. Mr. Guild said there was a 2.8 percent per year rent increase for the entire State of Nevada in 10 years.

Mr. Guild did not think there was a problem for the State of Nevada. He noted there may have been a problem in Mr. Flint’s mobile home park, where the rent was high, but he indicated there was assistance for low-income mobile home owners through NRS 118B.21 that solved that problem. His organization had been responsible in addressing the needs of mobile home park dwellers in Nevada by agreeing to the rental assistance program, funding it entirely, and by responding to the need for educating managers and owners of mobile home parks Nevada in the needs of tenants and to the requirements of the law. He urged the committee to oppose the provisions in the bill which would impose upon Ms. Diamond the duty of creating regulations to work out an economically reasonable method for calculating periodic increases in rent.

Chairman Buckley pointed out however reasonable rents were across the state, rent gouging occurred, and that was the problem.

Theresa Malony, Partner of the Lucky Lane Mobile Home Park in Reno, testified next, (Exhibit H). She noted she and another witness, Cheryl Olsen, who owned a park in Washoe County, had both inherited mobile home parks from their parents. As to the provision for economically reasonable rent increases, she sympathized that there were problems in some areas, but noted "rent control" would affect 100 percent of the parks in Nevada. The 90 percent of park owners who implemented small rent increases every 2 to 4 years, would have to look at annual increases to be sure those restrictions did not impact them.

She had a concern about section 6, which eliminated the owners’ ability to limit or control pets in the parks. In section 7, the posting of the amount of rent charged for each lot may embarrass those tenants who received subsidies or discounts because of their particular financial situation. More people than just tenants visited the park offices. She was concerned with section 11 because normal working hours in a "24-hour town" would be difficult to determine. It seemed there were people with valid complaints and perhaps some particular issues needed to be examined but she did not want to legislate to the "lowest common denominator" and affect 460 parks in Nevada when there were maybe 10 or 15 in which the tenants had problems.

Mr. Goldwater noted real estate trusts were aggressive in purchasing mobile home sites, and asked if that was currently the trend in Nevada.

Ms. Malony said she received 3 to 4 phone calls per week from people pleading with her to sell her mobile home park to a real estate investment trust at any price.

Mr. Goldwater suggested that was a very good indicator to the committee that Nevada was tremendously "park-friendly" or "landlord-friendly."

Ms. Malony stated her family wanted to do business in the State of Nevada as they always had, but she was concerned in governing a rate, Nevada citizens who lived, worked and wanted to remain in Nevada would potentially be harmed.

Cheryl Olson, who owned and operated a park in Washoe County, testified next. She emphasized she was not an out-of-state owner, she was born and raised in Reno. Her parents developed the mobile home park in 1958. In 1982, when she began handling the park, she expected to keep it until she died. However, presently she knew that would not be possible. She concurred with most of Ms. Malony’s testimony.

She did not understand section 15 of the bill which required the landlord to give 24 hours notice in writing when they planned to do repairs, and additionally the owner shall not interrupt the supply of water except in an emergency. She wanted to know when she was supposed to do repairs. She reiterated her park was built in the 1950’s, and indicated there were frequent repairs done. She did notify residents 24 hours in advance when they planned to turn the water off to do repairs. However, if the water could only be turned off in an emergency, that meant she would have to wait until small leaks became exploding leaks. Repairs could be made much more quickly if they could be attended to immediately.

If she, as an owner was told what to do with her rents, rent control was being exerted upon her. She was amazed the committee would do this to her, a park property owner who had that piece of property in her family since 1958, on behalf of 9 percent of the trailer parks in Nevada. She assumed that 9 percent was indeed rent gouging, but it was not remotely logical to impose a rent control measure on her because of a small percentage of the total parks in Nevada. It had been 6 years since she had a rent increase in her park. There were many senior citizens in the family-owned park.

She noted the assessed valuation of her 1999 property tax increased 37 percent, that did not include what she had to pay Washoe County because Washoe County had passed school bond issues. She hoped the committee would not pass any kind of rent control measure. She reiterated that she was not going to be in possession of that mobile home park until she died, because the legislation was becoming too much for her to handle. In the past, owning a mobile home park was a nice, friendly type of operation, but presently it was strictly a business. She was not interested in testifying in the committee meetings on such matters, but she felt obliged in order to protect what she had. She speculated her park would be sold as property for a different function than a mobile home park. Therefore, the less than 100 people in her park were going to be moved someplace else to protect 9 percent of mobile home park residents, who were in parks that may be gouging. That did not seem logical to Ms. Ohrenschall. Her mobile home park was a good place for people to live, and she would much prefer to be in a mobile home park than to be in an apartment.

Ron Kendall, Owner of a mobile home park in Las Vegas, was last to testify. He and his wife had purchased a park in Las Vegas the previous year. Although they lived in Carson City and were considered "absentee" owners, they were constantly on the phone with the park manager in Las Vegas. Their goal was to run a safe, clean, family park and to try and keep it that way. They had learned a lot in a year, and they felt they had a partnership with their residents that if they provided a good environment in the park, the residents’ homes increased in value, as did the value of the park. He was beginning to notice there was not a two-way partnership, but a growing partnership with the government on the controls that were imposed on park owners. In the past year, Mr. Kendall and his wife had completely renovated the swimming pool, built a new block wall, and had an unexpected expense of removing diseased elm trees, which cost $12,000. He wanted to know how to factor those expenses into a rent increase. He surmised the majority of park owners in Nevada were similar to himself, Ms. Olsen, and Ms. Maloney. Some of the older parks, not the ones owned by them but around Las Vegas, were very run down, because of rent control. It seemed those improvements to the parks similar to what he and his wife did, in an attempt to refurbish an older park was not going to happen anymore, simply because it could not be done if there was rent control. The large number of inquires on the sale of the park, probably had to do with the population increase in Nevada. He thanked the committee for their interest in the mobile home park industry.

Chairman Buckley thanked the witnesses for their testimony, and noted that both sides had been heard, but she would keep the record open, so if anyone did not get a chance to testify, they could submit testimony. She adjourned the hearing at 3:50 p.m.

Mary Allard, handicapped senior citizen, and resident of Skyline Mobile Home Park, in Reno, Nevada did not testify, but submitted testimony which emphasized her opposition to the late fee increase to $5 per day (Exhibit I).

RESPECTFULLY SUBMITTED:

Meg Colard,

Committee Secretary

APPROVED BY:

Assemblywoman Barbara Buckley, Chairman

DATE: