Photos by Christopher GardnerFor families of modest means, mobile home ownership represents one of the last ways to secure a slice of the American Dream. At two local parks, however, it became a path to financial ruin when hundreds of buyers signed leases that trapped them in a spiral of increases that cost them their homes.
By Jennifer Davies
Shaggy vegetation lines the streets of Casa del Lago Mobilehome Park in north San Jose, and a tangled canopy of palm fronds and tree limbs arches overhead. Small patches of grass separate the rectangular mobile homes inhabited by single mothers, seniors and low-income families with school-age kids. The nicer ones resemble suburban homes. The the older ones frequently sit vacant with 'for sale' signs by their aging aluminum siding. In the middle of the park, fountains of blue-dyed water squirt from a pond.
It is at the edge of this winding lagoon where Ron and Patty Bishop hoped to settle down, considering themselves lucky even to be able to own a home. They had moved to the Bay Area from New Mexico, and spent several years living out of a small trailer when the company that hired Ron Bishop went belly up. To survive, the couple worked out deals with construction companies to guard sites in exchange for water and power hookups while they built up their own business in seismic retrofit parts. After years of scrimping and saving, the Bishops finally had enough money for a mobile home.
The Bishops looked around at several parks, but Patty instantly fell in love with the home that sat off the edge of the little pond at Casa del Lago. Having already purchased the $44,000 mobile home, the signing of a lease for space was supposed to be a mere formality. But as they sat in the manager's office, going over the pages of the lengthy lease, they felt uneasy.
The couple was anxious to move into their new home, and didn't have the $10,000 it would cost to move the home to another park. But the five-year lease and possible increases in rent raised "red-flags," Patty would say later. But the park manager, they contend, assured them that no one's rent had ever been increased to the full extent allowable under the contract. In his head, Ron Bishop says, he figured that if the rent rose too high, he could sell the home or change leases after five years. Against their better judgment, they signed the document.
Little did they know that buried deep within the pages and pages of dense legal prose was an automatic renewal clause that extended the lease for 25 years. And that despite the manager's representations, their monthly rent would double within five years. When added to their $400 mortgage and utilities, the Bishops would end up paying almost $1,500 a month--more than the cost of renting a three-bedroom, two-bath home with a yard in one of Silicon Valley's pricier neighborhoods. Ultimately, the Bishops abandoned their home, losing their investment, their equity and their credit rating.
Like the Bishops, hundreds of San Jose families have been ensnared by impenetrable lease agreements at Casa del Lago and Lamplighter, two San Jose mobilehome parks owned by Los Angeles businessmen Jeffrey Kaplan and Thomas Tatum. A loophole in San Jose's mobilehome rent-control ordinance, which exempts long-term leases from rent restrictions, has allowed Kaplan and Tatum to jack up rents and then seize the mobile homes when the owners can't meet the payments.
While San Jose's rent-control ordinance is supposed to limit increases in mobilehome rents to 5 percent annually, the leases at Casa del Lago and Lamplighter provide for 7 percent to 9 percent increases each year with a possible 17 percent to 19 percent jump in the fifth year. In just five years, many of the residents at these two parks have seen their space rent soar from $540 to more than $1,000, a figure which literally has forced hundreds of local families out of their homes. A list of debtors at Kaplan and Tatum-owned parks in California reveals that hundreds more families have fallen prey to high rents throughout the state.
Kaplan and Tatum are well-known in the mobilehome industry for their vigorous opposition to any sort of rent restrictions, bankrolling local campaigns and lawsuits to repeal rent-control ordinances in El Monte and other cities.
The Southern California-based business partners are two of the primary financial backers behind Proposition 199, a ballot initiative that would eradicate local rent-control ordinances, under the guise of providing rental assistance to needy individuals living in mobile homes.
"This new proposition they've got--you know, 199--well, they've got to be out of their mind," Patty Bishop says indignantly. "If people who have never owned or lived in a mobile home vote for this, they might as well kiss all the mobilehome owners goodbye. They'll do the same thing they are doing at Casa del Lago everywhere, and there won't be anything to stop them."
Diane Cushman, an 11-year resident of Lamplighter Park and president of its neighborhood association, has witnessed firsthand the destructive results of the leasing policies at her Kaplan and Tatum-owned park.
"If 120 families were run out their homes by a natural disaster like a flood or a hurricane, you guys in the media would be up here in a second to cover it," Cushman says. "Well, with this lease deal, 120 families have lost their homes in just four years, and no one knows about it. It's so complicated that it's hard to get people's attention."
Since 1991, Cushman has helped others in the park put together a civil lawsuit against Kaplan and Tatum. Cushman says she remembers first hearing about the lease problems and the huge rent increases at a 1991 homeowners meeting.
"At that point we just started knocking on doors, trying to see how many people were taken in by this," Cushman says. "It was pretty clear we needed a lawyer."
They contacted Bruce Stanton, a Saratoga attorney who had represented the neighborhood association in park maintenance matters. To fund the lawsuit, residents threw pancake breakfasts and spaghetti feeds in the parks' recreation centers. Each plaintiff--60 in all--has contributed $500 plus $10 a month to stay in the lawsuit.
Attorney Stanton contends that by presenting the space lease after escrow has closed on the mobilehome itself, Kaplan and Tatum forced their clients to sign a lease that resulted in rents far exceeding those allowable under San Jose's rent ordinance.
The Santa Clara County district attorney, meanwhile, is seeking a $250,000 fine for unfair business practices in a civil lawsuit against Kaplan and Tatum's company and New Horizons Mobile Home, a seller of mobile homes. The district attorney's office is seeking a minimum $250,000 fine for the unfair business practices.
The Bishops are not alone. Almost all of those interviewed tell an eerily similar story--a story of buying the home of their dreams and then sitting down with some version of the complicated lease and being told that they could not take the lease off the premises. Then, once they signed the lease, they found themselves caught in a spiral of ever-increasing space rents that would ultimately force them to move.
Former Casa del Lago resident Donna Schulken, who lost her home last year, says that signing the lease was a terrifying experience.
"When I started to read the lease, I just panicked," Schulken says. "I asked him whether I could take it to my lawyer and he said no. I was real confused. I mean all your bells are ringing in your head. I just felt like I was between a rock and a hard place. The deal was, either sign or walk."
Because the leases cover a period of five years, they fall outside the protection of San Jose's mobilehome rent-control ordinance, which caps rent increases at 5 percent annually on agreements of 12 months or less. As for the practice of forcing new mobilehome owners into long-term leases, Stanton says that state laws are primarily designed to protect existing mobilehome owners but not prospective mobilehome owners from these types of extended agreements.
Last year Assemblyman Mike Sweeney (D-Hayward) proposed legislation that also would protect prospective buyers from signing long-term leases like the ones offered at Lamplighter and Casa del Lago. The bill passed both the Assembly and the Senate, but Gov. Pete Wilson vetoed it, classifying it as an extension of rent control.
"If a prospective mobilehome buyer does not like the terms of a lease offered from a particular park, he or she may look at mobilehomes in another park," Wilson wrote in his veto of the bill.
But many of those in the civil lawsuit complain that they were unable to review the lease agreement until escrow closed, fundamentally depriving them of the opportunity to look elsewhere.
For those who are locked into the five-year automatically renewable leases, the rents steadily increase toward what Patty Bishop calls the "fifth-anniversary kiss." Many of those in the civil lawsuit against Kaplan and Tatum have not reached the fifth year, and the dread is evident in their voice when they talk about how much time they have left before their space rent becomes unmanageable.
Carol Lazetera, a Lamplighter resident who is in the lawsuit, says right now she's barely making ends meet, but she figures she can hold out until June when she'll get her fifth-anniversary rent increase, which will bring her space rent up from $751 to $890.
"This is a fight for survival to maintain your honor and your dignity," Lazetera says, her voice breaking just slightly. "This is everything I've ever worked for. When I got divorced, I told myself I was going to own something on my own. Something that nobody could take away from me. I'm going to continue to fight"
Contrary to their name, mobile homes are not that mobile. It costs about $10,000 to physically relocate a mobile home and that's only if an owner can find a park with space, difficult in crowded urban areas with high land prices.
Linda Camacho and her husband, Luis, and their two children lost their home in August because they could no longer make the rent. Linda relates she was a week late on her $800 rent and so the park started the eviction process. But the park management offered them a deal: they said they would give the Camachos a break if they would give up on the lawsuit, Camacho says.
"If we got out of the lawsuit, they said they would consider taking our rent checks--just consider it," Camacho says, her voice reflecting an incredulity that has turned to bitterness. "We sacrificed and lost everything just to stay in the lawsuit."
After losing their home, Camacho and her husband moved to Turlock because it was less expensive than renting in San Jose. Unfortunately, her husband's job is still in San Jose, so he now commutes to work five days a week.
"It's so sad, you know, my husband, he is working so hard, and he goes back and forth," Camacho says. "We can't catch up. It was a beautiful three-bedroom home. Now it's just sitting there empty with broken windows. A friend brought me down there the other day, and the door was open, so I went inside. I just sat in the empty living room and cried."
As a result of the space rents rising beyond their financial means, most families, like the Camachos, abandon the mobile home. If the home has been paid for in full, Kaplan and Tatum get to keep it outright in lieu of the back rent. If there is a mortgage, the bank pays the space rent and usually ends up dumping the home to Kaplan and Tatum at a fraction of the original cost. The Camachos' home has not yet transferred ownership, but Linda predicts it will be auctioned off soon.
Once Kaplan and Tatum buy a home from the bank, as they have in the past, they can resell it for well below market price, because they've paid almost nothing for it. This fact makes it almost impossible for anyone else in the park to escape the rising rents by selling their own home.
When Ron and Patty Bishop's rent became unmanageable, for instance, they attempted to sell the home and even found a buyer willing to pay $37,000 in cash. But the prospective buyer walked out of the deal when he found out that he would have to assume the Bishops' lease and pay more than $1,000 a month in space rent.
"A thousand a month to rent dirt," Patty Bishop says. "It's just unbelievable."
But the leases trap others in these mobilehome parks--even those with rent-controlled leases. Cushman, for instance, has been trying to sell her home for months but can't find any takers because so many in the park are selling for so much less than her $53,000 home. Many new homes being sold by the park owners are going for $20,000 or less.
A recent drive through Lamplighter reveals at least 40 homes that are either abandoned or for sale by New Horizons or Community Mobilehome Sales, the park owners' sales company. "There have been two private sales in the last three years," explains Mike Ray, a Lamplighter resident and the vice president of the homeowners association. "You can't sell your home because you're in competition with them."
Cushman says that most real estate agents won't even list homes in the two parks because of the problems with space rent.
"You tell them where your home is, and they practically laugh you off the phone," Cushman says.
Cushman, who pays a rent-controlled $562 a month, says only those protected under rent control have a prayer of even being listed.
Gregory Jones, a real estate agent who sells mobile homes as part of his business, says he had to sell a mobile home at another park for a rock-bottom price because of its $585 space rent.
When asked whether $960 was too much for mobilehome rent in the San Jose Area, Jones laughed.
"That's ridiculous. For $960 a month you could have your own condo or townhome," Jones said. "Yes, I have to say that $960 would be ridiculous."
In fact, census numbers provided by the proponents of Proposition 199 indicate that average mobilehome space rent in Santa Clara County is a mere $224 a month, though Cushman believes it's closer to $500.
So by creating leases that force people into much higher rents than would normally be paid, Kaplan and Tatum either get the rent or they get the home, which they are then able to sell for profit.
"They are really in a no-loss position," Stanton says of Kaplan and Tatum's leasing strategy. "It's just a matter of where the money is going to come from."
Cushman, who heads the Lamplighter neighborhood association, believes stereotypes surrounding mobilehome parks have hurt their cause -- making the media disinterested in the lawsuit. They are not trailer parks inhabited by shiftless poor people, Cushman interjects early and often. Mobilehome parks, she points out, provide senior citizens and young families with an affordable housing option in more expensive areas, like Silicon Valley and the Los Angeles area. Mobile homes can often be a working family's one chance to own their own home in the safety and familiarity of a small neighborhood.
"These are real homes, real communities with hard-working people," Patty Bishop agrees. "We don't sit in our front yard in our undershirts with cigars looking at our pink flamingos."
Many of those interviewed talked about how mobilehome living had appealed to them not only because it was what they could afford but because it also provided them a sense of community. The strong allegiances shared by those in the lawsuit have allowed them to persevere in the face of a depressing exodus of neighbors.
Part of the way the residents have stuck together is with their fundraisers of pancake breakfasts and spaghetti feeds.
Ron Bishop laughs when he thinks of how popular those events have been.
"Last year we had a spaghetti dinner and we were expecting about a thousand people, but it was during those storms last winter, you know, where roads were shut down and the winds were just wild. In any event, only about 500 people showed up, which isn't bad," Bishop says with a playful smile. "We decided we should hold another one because of the lower turnout. And at the next one it rained. We joked if there is ever another drought, we'll just hold another spaghetti dinner."
But despite the solidarity in the face of adversity, the two mobilehome communities are being pulled apart by the leasing practices of Kaplan and Tatum, Cushman says.
"This is your home," Patty Bishop says. "This is where you dream, where you raise your family, where you entertain you friends. But the problem is they've got you up against a wall and every month they have a hammer and they hammer you till you're sick to death."
It appears that hammer has been applied at other Tatum and Kaplan mobilehome parks. At the various parks, which are owned through limited partnerships, more than 250 families have lost their homes through rent disputes. This number isn't at all inclusive. For instance, it only counts around 50 residents who have lost their home in the two San Jose parks, when Cushman's estimates that at Lamplighter alone more than 100 families have lost their home in the last four years.
A former manager at Casa del Lago, who asked not to be identified, citing fear of retribution, says Tatum and Kaplan used the same lease agreement at all their parks.
"They've used that lease in all their parks," says the former manager. "They would do anything to get people to sign those leases. They offered them free microwaves and TVs--anything. At one park down south, I don't think there was a person who wasn't on that type of lease."
And the manager says that Tatum and Kaplan knew exactly what they were doing.
"We were very quick with the eviction notices. The rent was due on the fifth of each month and by noon on the sixth all the eviction notices were ready to go out," he says. "It seemed I went to court every month to evict someone. It was really rough, especially when there was kids involved."
Kaplan and Tatum's efforts to evade rent control have received plenty of attention in the Los Angeles Times and the other newspapers for their hardball tactics at their other mobilehome parks around the state.
In fact, Jeffrey Kaplan and his partner, Thomas Tatum, have long been known as political animals determined to oppose any type of rent control and to punish anyone who dares question their rental practices. Kaplan and Tatum went so far as to sue a 70-year-old retiree for defamation of character after he had written ill of them in a mobilehome park newsletter.
In the late '80s, Kaplan and Tatum bankrolled a campaign to defeat a rent-control initiative in El Monte, a Southern California suburb. The rent-control initiative was started by residents of a Kaplan and Tatum park, Brookside Mobilehome Estates, who had experienced a 12 percent annual increase after the pair bought the park in 1984.
In a vicious battle, Kaplan and Tatum outspent the residents by almost five-to-one and attempted to discredit the residents' claims of rent gouging by portraying the president of the local mobilehome park neighborhood association as a wealthy man attempting to live off the public trough.
One El Monte councilmember, who supported the rent-control initiative, commented to the Los Angeles Times, "It was big money versus no money. This has been one of the dirtiest campaigns I've ever encountered, and I've been in politics for a long time."
Problems in Kaplan and Tatum-owned parks are not exclusive to San Jose and El Monte. In 1992, more than 100 residents of Del Prado Mobile Home Park, a Kaplan and Tatum-owned park in Garden Grove, complained to the city council about huge rent increases and asked for some type of rent-control moratorium. One councilmember commented, "We seem to have a problem in one mobilehome park, but the solution is not to pass a moratorium on all 15 parks when we only have a problem in one."
Cushman, the president of Lamplighter's neighborhood association, couldn't agree more.
"It shouldn't have to be this hard," Cushman says. "I've said this before: We wouldn't need rent control if it weren't for park owners like Kaplan."
Back in 1993, Kaplan helped draft what has become Proposition 199. Originally supporters wanted to call it "Mobilehome Rental Assistance and Mobilehome Rent Control Restrictions Initiative Statute." But the state attorney general's office required them to change the title and begin the proposition's title with the rent control restriction aspect. After spirited legal wrangling by both sides, the ballot initiative now is called the Mobilehome Rent Control Restriction and Mobilehome Rental Assistance Initiative Statute.
Proposition 199 advocates state the measure will get rid of all rent-control ordinances over time and replace rent control with a rental assistance program for very-low-income mobilehome owners. This might sound charitable, but 10 percent of $960 would only bring the rent down to $864, still far more money than those on the rent control measures of most cities would allow. And in fact, only 10 percent of the mobilehome park's spaces would be eligible for the assistance, when a much higher percentage of its residents might need financial help. Additionally, homes still under rent control would count toward the 10 percent requirement. The park owners could terminate assistance for various reasons, including violations of rules by homeowners.
Ron Gray, a spokesperson for the Golden State Mobilehome Owners League, the lobbying group that opposes Proposition 199, likens the proposal to the Philip Morris anti-smoking initiative of 1994, which tried to convince voters into getting rid of stricter local ordinances in favor of a more lenient statewide statute.
"It's the old bait-and-switch approach," Gray says.
But Paul Kradin, spokesperson for the proponents of 199, counters that the proposition "is intended to reverse nearly two decades of unsuccessful mobilehome rent control experimentation." In a "Fact Sheet" produced by pro-199 forces, the measure is portrayed as a free-market tool which will bring investment capital back to the industry and will "cut red tape and reduce government interference in the private sector."
Despite the fact that Kaplan helped draft the initiative, the Yes on Prop. 199 campaign are now trying to distance themselves from Kaplan and Tatum, particularly in the wake of the Santa Clara County district attorney's lawsuit.
Dennis Wolcott, a spokesperson for Yes on Prop. 199, contends that Kaplan and Tatum aren't involved with the campaign and that attempts to link the lawsuit to Proposition 199 are just underhanded ploys by the proposition's opponents.
"The Kaplan situation is totally separate, totally unique, but our opponents will try to drag it in for purely political reasons," Wolcott says, seeming to ignore the fact that Kaplan helped draft it and that he and Tatum have each loaned the campaign $120,000 and contributed around $97,000 apiece since the campaign began in 1993--almost $55,000 each in 1995 alone.
Kaplan did not return calls but he did comment on the Santa Clara County district attorney's case in the December 1995 issue of the park owner's newsletter, Mobilehome Parks Report.
"GSMOL (Golden State Mobilehome Owners League) can't win on the issues so they are trying to attack the messenger. But I am no longer the 'messenger' because the initiative has won broad support from the park owners. The DA is overzealous, misguided and trying to curry favor with the park residents."
Cushman, who spends much of her free time working with other residents on park issues like the civil lawsuit and general maintenance, laughs at the idea she and her neighbors are a powerful political lobby.
"Oh yeah, we're real big-time here," Cushman says. "Anything you need, come to me and I'll see what I can do. I have a lot of influence, you know."
Wolcott stresses that the aim of Proposition 199 is to make mobilehome living more affordable. He contends working families and senior citizens can no longer buy mobilehomes because rent control ordinances have stifled the creation of new parks. The party line is that returning mobilehome space rent to the free market would stimulate competition and lower the cost of both the homes and their space rent. Wolcott says those opposing Proposition 199 are only concerned about their personal economic well-being.
"A lot of the people who are crying--well, I shouldn't say crying--but who are complaining about Proposition 199 have an economic stake in the outcome," Wolcott says without a hint of irony. "They are homeowners who realize rent control serves to drive up their home's sale price, which in turn has made mobilehomes unaffordable for others."
Wolcott says that a number of hidden costs in running a mobilehome park, such as road maintenance and park upkeep, make rent-control ordinances stifling to park owners. Wolcott characterizes park owners in general as honest business people just trying to make a living.
But Patty Bishop, who had to leave the home she and her husband loved, the home where her father-in-law spent his last days, doesn't buy those hard-luck claims about upkeep or how rent control makes it difficult for park owners to turn a profit. Bishop says the real victims are her friends and neighbors who have worked hard to buy a home and raise a family only to find themselves left with nothing but debts. As Patty Bishop talks about what she sees as Kaplan and Tatum's seemingly endless desire to make a buck, anger creeps into her normally relaxed, easy voice.
"At Casa del Lago there are 618 spaces at $500 a month; that's over $300,000 a month. That's not enough?" she asks. "I don't begrudge them making a profit. I understand about making a profit, but there's profit and then there's greed. And there is a big difference between the two."
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