MEETING DATE:
May 19, 2026
SUBJECT:
Title
SPRINGDALE ESTATES RENT REVIEW HEARING
Body
Recommendation
Recommendation
CONDUCT the rent review hearing to consider the petition submitted by the affected residents of Springdale Estates.
Body
Board or Commission Action
Not applicable.
Relevant Council Strategic Theme
Not applicable
Relevant Department Goal
Not applicable
Executive Summary
The San Marcos Rent Review Commission is the reviewing authority for proposed mobilehome rent increases, pursuant to San Marcos Municipal Code (“SMMC”) Chapter 16.16. In September 2025, the owners of Springdale Estates mobilehome park (“Springdale”) notified the park tenants of a proposed 4% rent increase, to be effective January 1, 2026. In response, a majority of the affected park tenants signed a petition, which was filed with the City, requesting review of the proposed increase. Tonight’s hearing was scheduled pursuant to Chapter 16.16 to allow the Commission to consider the proposed increase.
Discussion
Background
The San Marcos City Council established the Mobilehome Rent Review Commission in 1978. The Commission was established to provide a process for mobilehome owners in rental parks to request a review of proposed space rent increases from mobilehome park owners. The Commission also provides a process for mobilehome park owners to receive a fair and reasonable rate of return on their investments.
Springdale Estates is an all-ages mobile home park located at 2907 South Santa Fe Avenue with 85 spaces. It is owned by Kleege Enterprises. On September 25, 2025, the City received notice that the park owner had notified its tenants of its intent to increase space rents by 4%, beginning January 1, 2026, affecting 84 of the 85 spaces. On October 26, 2025, the City received a petition signed by a majority of the affected Springdale tenants in response to the rent increase notice distributed to them in September 2025 (the “Petition”). Upon receiving the Petition, the City determined that it met the requirements of SMMC Chapter 16.16 and notified the park owner and tenant representative the rent increase was stayed pending a review and decision by the Commission.
Commission Review
The Commission is charged with conducting the hearing and reviewing the proposed space rent increase, pursuant to SMMC Chapter 16.16 and the Mobilehome Rent Review Procedures (the “Procedures”). The non-exclusive factors that the Commission is required to consider are set forth in SMMC Section 16.16.070(g):
“The mobilehome park owner shall bear the burden of proving by a preponderance of the evidence that a proposed space rent increase is reasonable and is necessary to enable the mobilehome park owner to receive a just and reasonable return on his investment. In evaluating a proposed space rent increase the Commission shall consider the following non-exclusive factors in addition to such other factors as the Commission deems relevant:
(1) Changes in the mobilehome park owner's gross income from the operation of the mobilehome park;
(2) Changes in the reasonable operating expenses relating to the operation of the mobilehome park;
(3) Whether the proposed rent increase will result in an increase in net income to the park owner from the operation of the park;
(4) Changes in the Consumer Price Index for the time period from the last rent increase;
(5) Changes in the services, amenities, maintenance and condition of the mobilehome park and the extent to which the rent increase is necessary to provide the services or amenities or to insure maintenance and good operating condition of the park;
(6) The extent to which the rent increase is necessary to pay for capital improvements and the amount of money allocated by the owner to a capital improvement or maintenance fund, along with the park owner's budget for maintenance, care and capital improvements for the park; and
(7) The extent to which the landlord receives net income from fees or charges for utilities, or incidental fees or charges for services billed separately from rent.
In accordance with the Procedures, the parties have submitted written briefings and rebuttals for the Commission’s consideration. In addition, the Commission’s consultant, Dr. Kenneth Baar has prepared a report for the Commission. These reports, the parties’ written submissions, the Petition and notice, as well as copies of SMMC Chapter 16.16 and the Procedures have been provided to the Commission for its reference and consideration in conducting the hearing.
Consideration of Evidence Presented
The Commission is required to consider the seven factors listed above in evaluating the petition and proposed increase.
The evidence presented at the hearing and in the submitted documents may contain information outside of the listed factors. The Commission has discretion to determine whether to consider such information. It may determine that information is relevant to determining whether an increase is necessary to enable the park owner to receive a just and reasonable return on its investment, or it may determine that the information should not be considered because it is, for example, irrelevant, outdated, or not reasonably supported by evidence.
In addition, the Commission will hear or read that certain filings were submitted late, or outside of the ordinary course of the proceedings. The Procedures provide some guidance on these matters. Specifically, the section entitled, “Consequence of Failure to Timely Submit” (Procedures page 9; Bates page no. SM 000419) addresses the consequence of a party’s failure to submit the required documentation or abide by the Procedures.
This section provides that the Commission may either make its determination on the basis of information received or, if such information is not sufficiently complete to enable the Commission to conduct the hearing, to continue the hearing and order the submission of the required documentation.
Attachments:
|
1 |
Staff Report |
N/A |
|
2 |
Hearing Format |
N/A |
|
3 |
Mobilehome Rent Review Commission Procedures/SMMC Chapter 16.16 |
SM 00409-00437 |
|
4 |
Park Owner Exemplar 2026 Rent Increase Notice |
SM 00226-00227 |
|
5 |
Rent Review Petition Cover Letter and Certification |
SM 00396-00397 |
|
6 |
Park Owner Initial Written Submission |
PO 00001-00142 |
|
6a |
Additional Park Owner Documents Supporting Initial Submission/Requested by Commission Consultant |
PO 00143-00330 |
|
6b |
City Documents Requested by Commission Consultant |
SM 00001-00403 |
|
7 |
Tenant Representative Response |
TR 00001-00026 |
|
8 |
Commission Consultant Evaluation |
CC 00001-00038 |
|
9 |
Tenant Representative Ex Parte Communication |
SM 00404-00408 |
|
10 |
Park Owner Final Submission |
PO 00331-00332 |
|
11 |
Tenant Representative Final Submission |
TR 00027-00071 |
|
12 |
Resolution |
|
Prepared by: Jill D.S. Maland, Assistant City Attorney
Approved by: Helen Holmes Peak, City Attorney
Reviewed by: Michelle Bender, City Manager