Old Orchard Beach voted Tuesday to pass Maine’s first rent control law for mobile home parks over a corporate owner’s objections.
The measure passed with 71.4 percent of votes. It makes the York County resort town one of only a handful of municipalities across the U.S. — including some in California, Massachusetts and New Jersey — that have passed rent control specific to mobile home communities.
The new rule will take effect in 30 days, capping the allowable annual rent increase at 5 percent of base rent, or up to 10 percent if the park owner faces “unexpected and unavoidable” expenses and can justify such an increase. Rent hikes will have to be at least 12 months apart.
The initiative was proposed by the residents of two mobile home parks — Old Orchard Village and Atlantic Village — after the owner increased rents by 14.5 percent in June, and then announced they were selling the parks to a California investor. Residents tried to thwart that increase by purchasing their own communities under a new Maine law, but were rejected.
Investors have been buying mobile home parks in recent years in Maine and nationally. Rent increases often follow. Rent control is “one of the very few tools” that municipalities have to “disrupt market forces that residents are struggling against,” Rebecca Graham, a spokesperson for the Maine Municipal Association, said.
“With a new owner coming in, they felt the need to do something to control any future rent increases to try to mitigate higher costs,” Diana Asanza, town manager of Old Orchard Beach, said of the initiative last week.
Residents wrote in their petition that the new ordinance will prevent excessive rent increases that would inflict “undue hardship” on vulnerable, low-income residents. They also said the parks’ owner will continue to see a return on its investment.
But that new owner, Follett USA, said the measure is unnecessary and “potentially unworkable” in a letter written to park residents last month that implored them to table the ordinance.
“We’re a family-owned company that’s dedicated to keeping costs reasonable for our tenants and providing the stability that a long-term lease — which is very unusual in the mobile home park business — can provide,” Erik Rollain, Follett USA’s president, said.
Charles Becker, an economist at Duke University who studies the mobile home market, said that while keeping affordable housing affordable is important, he agrees with Rollain that rent control is not the best way to contain those costs.
“I’m uneasy about outright rent control because it essentially transfers ownership rights fairly arbitrarily,” Becker said. “If it were me, I would build new communities with city [or] county money to let market forces keep costs down.”
