Bay to Bay News | by Joseph Edelen
Coming to a compromise for comprehensive legislation was no easy task for manufactured housing stakeholders, lobbyists and lawmakers this past legislative session.
Typically home to seniors on fixed incomes or low-income families, residents of manufactured housing communities have been subject to rent increases that often lead to drawn-out court cases and arbitration hearings.
Over the past several years, lawmakers had contemplated ways to level the playing field for residents. Legislators had been tasked with finding a middle ground in their discussions, primarily protecting residents of these homes from hefty rent increases while also allowing landowners to make a profit.
A bill formerly known as Senate Substitution 1 for Senate Bill 9, Senate Bill 317, sponsored by Sen. Jack Walsh, D-Stanton, was passed and signed into effect by Gov. John Carney June 30.
The bill has requirements for rent increases sunsetting five years after its enactment. The legislation sets standards for health and safety violations, preventing rent increases from occurring until the violation is corrected. The bill also expands the lot rental assistance program to increase eligibility, which Sen. Walsh said will help assist the state’s most vulnerable citizens in affording potential increases.
SB 317 establishes three ways a community owner can increase base rent for residents in their communities, either by an agreement with the homeowner for a period greater than one year, basing the increase on market rent, or basing the increase on the Consumer Price Index for All Urban Consumers (CPI-U) in the Philadelphia-Camden-Wilmington region for the previous 24 months. The amount in which rent is being increased is based upon a logarithm that was also subject to deliberation between stakeholders.
“It’s very challenging to get everybody on board on both sides of the aisle, and on both sides of the owners and the tenants, to get everyone on the same page. It was a lot of work, and this is what came out of those meetings,” Sen. Walsh said.
Negotiations
Bill Kinnick, who served as Delaware Manufactured Homeowners Association president while SB 317 was considered, said the rent increase logarithm was a concern during negotiations. The equation that was passed with SB 317 states that if the 24-month CPI-U is equal to or below 7%, a community owner may increase rent as long as it does not exceed 3.5% of the rent plus 50% of the 24-month CPI-U, or, if the 24-month CPI-U exceeds 7%, increases are based upon the 24-month CPI-U. Mr. Kinnick said the 3.5% stabilization was hard to come by, as community owners first wanted 7%, but after lengthy negotiations, a compromise was ultimately made.
“At one point, I got up and walked away from the table for a whole week, and I think that shook them up a little bit, because I told them I wasn’t playing. This is people’s lives, with their money at stake. So, we got back to discussions, and decided that we would give community owners 3.5%,” Mr. Kinnick said.
There were other areas of concern, according to Mr. Kinnick, including landowners and their lack of attending to issues within their communities. The purpose of the health and safety violation aspect was to “hold their feet to the fire,” said Sen. Walsh, who added that these landowners would not be allowed to increase rent until dealing with the problems in their communities.
Mr. Kinnick said that during negotiations, they decided the bill did not need any amendments, nor did they want any. He said they did not want to risk the bill’s failure as it would go on to help many of the vulnerable residents in these communities.
Amendment concerns
The decision to not allow any amendments was a topic of contention for many lawmakers, including Rep. John Kowalko, D-Newark, who sits as the chairman of the House Manufactured Housing Committee. Rep. Kowalko, along with Sen. Bruce Ennis, D-Smyrna, had previously worked on two iterations of legislation that would level the playing field for manufactured housing residents, albeit differently from SB 317.
SS1 for SB 9, which was the first version of SB 317, originally failed to receive the required number of votes in committee. The bill was tabled, but was copied verbatim and reintroduced as SB 317, drawing criticism from Rep. Kowalko for lawmakers’ decision to “betray the trust” of those who had worked on manufactured housing legislation, citing that the “behind-closed-doors” agreement was “the literal definition of a lack of transparency.”
Sen. Walsh said the decision to reintroduce the bill under a new number was a procedural move on the part of the Senate.
“We felt this legislation was much needed. It had bipartisan support and passed. It was very, very important to tenants in our neighborhoods that we get this done,” Sen. Walsh said. “As far as the Senate side, it’s perfectly in our purview to file a new bill and run it through the process.”
Although amendments were not going to be accepted, Rep. Kowalko introduced two, one that would set the baseline timetable for CPI-U increases to 36 months instead of 24, and one that clarified market rent determination. Both amendments failed after Rep. Paul Baumbach, D-Newark, deemed them unfriendly.
Fred Neil, Dover City councilman who served as president of the Wild Meadows Homeowners Association and volunteer public affairs officer for the Delaware Manufactured Homeowners Association from 2004 to 15, expressed his concerns with the bill on multiple occasions, including during committee consideration.
Mr. Neil decried what he deemed loopholes that allow for landowners to raise starting rents and abuse SB 317, though another concern was money leaving the state and going into the pockets of out-of-state landowners. Mr. Neil, like Rep. Kowalko, took issue with the “behind-closed-doors” deal that was struck, but took particular issue with the role of Senate Majority Leader Bryan Townsend, D-Newark, in passing the bill
“The Community Legal Aid Society helped draft this because of the gun that was held to their head by Sen. Townsend, because Sen. Townsend sat on SB 132, or Kowalko and Ennis’ bill, and would not release it,” Mr. Neil said. “Basically, they made a deal. If [SB 317] was amended, they would have sent it back to the Senate because it wasn’t agreed upon.”
Like Mr. Neil, Rep. Kowalko was concerned with Sen. Townsend’s role in the legislative process of SB 317. He said that for landowners, unfairness was “working behind the scenes with Bryan Townsend,” to get a deal done, while both men questioned his motives due to funding from special interests.
Sen. Townsend could not be reached for comment.
Housing’s future
On July 20, several Delaware Manufactured Homeowners Association leaders, stakeholders and others met to discuss the future of addressing the needs of manufactured housing communities.
Mr. Neil, who attended the meeting, said he is hopeful that the Delaware Manufactured Homeowners Association will push for comprehensive legislation that will continue to level the playing field.
Mr. Kinnick, who is assuming a new role as adviser to new association president Henry “Rick” Clum, said the next legislative session will provide the opportunity for those measures to take place.
“We’ve already started looking at how we can keep improving things in our community,” Mr. Kinnick said. “We will continue weighing those options and communicating with lawmakers on what we can get accomplished. I’m hopeful that we can make progress off of this great starting point.”