Harmony Communities, the Stockton-based owner of the Shady Lakes Mobile Home Park in Fresno County, have raised rents nearly 100% for some residents since purchasing the park four years ago. Photo by Edward Smith
Written by Edward Smith
Almost four years after suing a Stockton-based investment company, residents of a Fresno County mobile home park have experienced a near-100% increase in rent.
Many of the 60 families at Shady Lakes Mobile Home Park near Chestnut and Lincoln avenues have lived there for well over a decade, drawn by the lower cost of living. But it only took four years under the ownership of Shady Lakes LLC and managed by Harmony Communities — both of which are owned by the same person — to undergo the triple-digit increase in rent.
“Their lives are — they’re constantly in crisis. It’s about whether or not they’re going to be there for one more month,” said Mariah Thompson, lead attorney for the community association Grupo Comunitario de San Miguel Cuevas and staff attorney with California Rural Legal Assistance.
Under terms of the lawsuit, residents would at most compel ownership to better maintain the property they acquired in 2019 as well as get them to undo what they say is retaliation against the lawsuit.
“There is no way to reverse the rent,” said Thompson. “What the residents want for Harmony Communities is to stop a number of unlawful business practices.”
Residents have now retained an attorney to negotiate a purchase of the property. But to lower rents, they would have to buy at a price that wouldn’t set in stone the increased rates.
The first hearings were supposed to begin this month, but both parties agreed to a six-month extension.
In the deposition process, it came out that the rent increase is part of Harmony Communities’ business practice to bring the property up to market rates, said Thompson. For a resident who was paying $395 a month for a site, they are now paying $690, not including water and trash, which at one time was included in the price to keep a home at the park.
At the time the lawsuit was filed, shortly after Harmony Communities had purchased the property, rent had increased 32%. Before the most recent increase it was at 72% bump. After adding new utility fees that had been parceled out and another increase, in some cases rent had climbed over 100% since 2019.
Harmony Communities spokesperson Heywood Jablom issued the following statement:
“Shady Lakes has completed close to $1,000,000 in repairs and upgrades to the park over the last 4 years, including water and sewer system upgrades as well as numerous road and lighting repairs. We continue to operate the park in compliance with all state laws and regulations and are deemed to be in full compliance by the State of California agencies. A plaintiff can make any allegations they like, but that does not make them true. In fact, we believe most all of the allegations are not only disingenuous but are outright falsehoods. The lawsuit is nothing more than an attempted shakedown in retaliation for not continuing to provide below market rents. Plaintiff’s counsel has a history of violating court orders and exhibiting unethical behavior. Rent increases are done on an annual basis and are generally in line with inflation. The rent increase from 3 years ago was larger than normal, in order to bring the rents closer in line with market rents, and allow the park to continue operations. We believe in charging a fair market rent as well as providing subsidies to those in need. The park continues to operate at a loss and requires ongoing cash infusions by the owners to keep the park open. ”
He added that “Shady Lakes is available for purchase. Unfortunately, the non-profit (who was in escrow for 1 year), was not able to secure any types of funding or even put the $1000 earnest money deposit into escrow for the entire year. Price and terms were agreed to but, again, they could not perform and ultimately backed out. We would happily engage with a non profit who was able to perform and transact at a similar price point.”
Kerrie Merrifield, a forensic certified public accountant and owner of Axiom Forensics in Los Angeles, said it’s hard to imagine even a 32% increase in rent — the original increase after the acquisition. Merrifield has been an expert witness in several cases where property owners requested increases for properties in cities that have mobile home rent control ordinances.
Since most residents own their own homes, costs are largely fixed for property owners, Merrifield said. Repairs and maintenance are usually baked into budgets. Replacing a laundry room or a lamp post may be expensive, but usually those rent increases will be temporary until the improvement has been paid off.
Utility payments are one example of a variable cost for property owners. Mobile home parks will have different contracts as to how electricity and water costs are divided between homeowner and property owner.
Investors have turned their eyes to mobile home parks because of the consistent cash flow. Turnover is very low because moving is so expensive. When someone does move, it is common that they will sell the unit to the property owner.
Because of the consequences of not paying the rent, people who own mobile homes will always pay the rent, Thompson said.
“They will do everything they need to do in order to pay the rent,” said Thompson. “Some are buying less food, not using electricity, cutting services, shopping for clothes less often.”
Some family members have gone out to work in the fields to make up for added costs.
One of Thompson’s clients is 80 years old, making $800 a month and paying $700 in rent.
Outside of the financial reasons keeping them there, most of the residents come from the same area in Oaxaca — a state in southern Mexico. They speak Mixteco.
“These are very community-minded folks,” said Thompson. “Decision making is done collectively. They want to be together.”
One of the complaints is that notices from Harmony aren’t served in both Spanish and English. Thompson was told via email that because of the lawsuit, they wouldn’t send notices in Spanish.
There are 14 claims on the complaint, including accusations of retaliation against members of the community association and to maintain a water treatment system on the premises.
Work was done to correct what was a terrible smell, but Thompson said many clients complain it still stinks from time to time.
Some residents believe the rental increases that occurred shortly after the complaint was filed were retaliatory. Many received notices saying they could be evicted from the park for reasons such as leaving things on the porch or having Christmas lights up.
In late 2020, Harmony Communities made water and trash utilities payments separate. A complaint was filed with the California Public Utilities Commission that the increases were not in line with actual costs. Water bills range anywhere from $50 to $200, Thompson said. A $20 service fee was added at the beginning of 2021. A meeting was held in May 2022 by the CPUC to hear the matter.
The complaint is still ongoing.
Thompson said the rental increases that took place at Shady Lakes would not have happened if they were within city limits because of the City of Fresno’s rent control ordinances for mobile home parks. Harmony Communities also recently purchased Trails End Mobile Home Park, now called La Hacienda. Thompson also represents the rent control group of residents at that mobile home park.
One concern Thompson has is that Fresno’s rent control ordinance has not been tested in courts. She said it is common for those ordinances to be challenged.
In San Rafael in 2022, Harmony Communities sent notices to residents that they were closing the park. The letter stated it was because the park was not profitable and a city ordinance had kept them from increasing rent, according to the Marin Independent Journal.
“The park has been operating at a loss for several years and has been fighting to keep this park open so no resident will have to move,” the letter stated. “The reality is that the land is worth much more than operating an RV Park for affordable housing. The City of San Rafael has not allowed the park to raise rents fast enough to keep up with inflation which is at an all-time high.”
Thompson said residents buying the park would be a win-win. There are programs that help mobile home residents secure financing. The problem is buying it at a price that would allow residents to bring down the rent.
Shady Lakes LLC purchased the property for $3.1 million, according to documents filed with the Fresno County Recorder’s Office. The owner of Shady Lakes LLC is Bruce Davies, the same owner of Harmony Communities.
“Attorneys representing them on that are working hard with, you know, community partners and the County of Fresno to try and obtain funding to help residents purchase the park in a way that can bring the rent down,” Thompson said.