Bay to Bay News | by Joseph Edelen
The House of Representatives’ Administration Committee voted to increase rent protection and add requirements to existing rental agreements for residents of manufactured-housing communities on Wednesday.
Senate Bill 317 was introduced after an earlier version, Senate Substitute 1 for SB 9, was tabled in the House Manufactured Housing Committee on June 2. The new bill would regulate rent increases, reduce the number of resident disputes, set clear limits on payment increases, strengthen the enforcement of health and safety standards, and expand eligibility for rent-assistance programs.
A second bill relating to manufactured-housing communities, SS 1 for SB 312, requires communities with private water systems to be inspected periodically. During these inspections, issues would be reported to tenants, as well as agencies such as the Division of Public Health, the Department of Natural Resources and Environmental Control and the Department of Justice’s manufactured-housing ombudsperson.
While SB 312 has received little opposition since its introduction, the same cannot be said for SB 317.
Earlier this month, the original bill was tabled in committee by Rep. John Kowalko, D-Newark, after not receiving the required support. After its defeat, SB 317 was immediately introduced via an agreement involving sponsors of the legislation and House Majority Leader Valerie Longhurst, D-Bear.
The agreement came because Rep. Longhurst was not given the chance to vote due to a conflicting meeting of the House Administration Committee, which she chairs. Rep. Longhurst, an additional sponsor, would have likely voted yes, prompting the introduction of the new bill.
While tabling the act, Rep. Kowalko expressed his preference for previous legislation that leveled the playing field for homeowners. He has since introduced two amendments.
The first would clarify the determination of market rent and prevent rent increases based on a market rate increase if the “yearly sales prices of homes sold by homeowners declines or remains the same.” The amendment clarifies similar facilities, services, amenities and management as an appraisal that includes specific determining factors for market rent.
The second amendment introduced by Rep. Kowalko would require the Delaware State Housing Authority to calculate the Consumer Price Index for All Urban Consumers for periods requested by manufactured-housing community owners for a rent increase that is less than 36 months after the most recent rise.
During Wednesday’s House Administration Committee meeting, Rep. Paul Baumbach, D-Newark, described the amendments as “unfriendly,” further stating that the bill would make “great advancements” for homeowners and manufactured-housing communities. Rep. Baumbach, who described the process as a “Jenga tower,” where stakeholders bartered back and forth, also applauded the Delaware Manufactured Home Owners Association for its role in drafting SB 317.
Rep. Kowalko’s amendments directly address lines 10-12, which relate to the determination of market rent. His concern was echoed by Dover City Councilman Fred Neil, who served as president of the Wild Meadows HomeOwners Association and volunteer public affairs officer for DMHOA from 2004-15. He said those lines defeat the purpose of annual rent increases and would cause financial distress to the communities the legislation is seeking to protect.
The language states, “In determining market rent, relevant considerations include rents charged to recent new homeowners entering the subject manufactured home community or by comparable manufactured home communities, or both. To be comparable, a manufactured home community must be within the competitive area and must offer similar facilities, services, amenities, and management.”
The councilman said these lines need to be stricken, as such comparisons for manufactured-housing communities are often uneven. He said the lines would allow landlords to abuse the system, raising starting rents to whatever they wish. The determination of market rent included in SB 317 would open up two loopholes the legislation does not fix, according to Councilman Neil, who added that landlords can ignore current state law by allowing homeowners to transfer leases that would affect the price paid for the home, as well as selling repossessed homes below the homeowner’s sale price and raising the lot rent.
“How does Delaware benefit from making this type of what has been affordable housing and permitting millions of dollars in annual rent increases from low income, seniors and retired military to leave our economy?” Councilman Neil wrote in a letter to the Administration Committee.
He said another concern of his was the “calculating, brutish” tactics by private owners of manufactured-housing communities like RHP Properties, which denies any real estate agent or financial adviser from attending lease signings. RHP, which has purchased six leased-land communities, including Wild Meadows, since 2017, will have the opportunity to financially abuse these communities if the loopholes are not closed, he added.
“Capitalism works because of competition, and with these changes, there will be none. I have the experience with manufactured housing communities, I’ve fought these battles before,” he continued. “This is a Brink’s robbery.”
Despite worry from lawmakers and stakeholders, William Kinnick, president of the Delaware Manufactured Home Owners Association, said the legislation is “very valuable” and would offer protection to residents.
Mr. Kinnick, who has worked on the bill since August 2021, said there were three major pieces to it. The first, he said, is establishing no lot rent increases for bad landowners. The second is controlling market rent by phasing changes in over a seven-to-10-year period, and the final piece is protecting seniors on fixed income through a lot rent-assistance program.
With the Administration Committee’s approval Wednesday, both bills now await consideration on the full House floor.
Additionally, a third bill relating to manufactured-housing communities, House Bill 374, also passed in the Senate Housing Committee on Wednesday. It would extend protection to residents even if their home does not meet the state definition of a manufactured home. In addition, it would extend protection for those living in camper trailers on rented land and protect individuals who have done so for at least five years. That bill now awaits consideration from the Senate chamber.