A bill that would lower rent for people living in manufactured housing communities seems headed to the House floor.
House Bill 212, sponsored by House Majority Leader Rep. Valerie Longhurst, D-Bear, would prohibit manufactured home community owners from increasing rent by more than 5% each year and require community owners to submit annually to the The Delaware Manufactured Home Relocation Authority the number of people using rent assistance.
While the bill only received four of the required seven votes to be sent out of House Housing Committee, it was to be circulated among members who were absent Wednesday because of a heavy committee day. The results had not been posted as of 2 p.m. Thursday.
Longhurst said that her bill hopes to address some shortcomings of Senate Bill 317, sponsored by Sen. Jack Walsh, D-Stanton/Newport, which was passed last year.
“That there were unintended consequences that happened with that bill, which I’m trying to correct today,” Longhurst said.
Under SB 317, rent increases would be tied to inflation. If the inflation rate is at or below 7%, rent could only go up 3.5% plus half of the inflation rate. If the inflation rate is above 7%, rent couldn’t increase more than the inflation rate.
Longhurst said that before SB 317 passed, people’s rent increased between $5 and $15, but after the bill passed, people in manufactured housing communities’ rent increased by $50 to $75.
“Now we all know that people that live in manufactured housing are our most vulnerable community members,” Longhurst said. “They’re Veterans, they’re seniors, they’re disabled people. They’re people that struggle day to day…some people in this room may think $30 isn’t a lot of money, but it is when you’re living paycheck to paycheck.”
Several people representing real estate groups spoke against the bill, while a former representative and city council member spoke for the bill.
Scott Kidner, speaking on behalf of the First State Manufactured Housing Association, said the housing industry is concerned with the bill.
“Why was there not an opportunity to come forward, particularly from the tenants side of the fence and say, ‘Hey, we really do have a problem. We need some time with you guys to fix this.’..Yet here we are in June,” Kidner said. “And we have a very important piece of legislation before us that clearly the industry is very concerned about and thinks we need a little more time.”
Jerome Heisler, executive manager of the Reybold Group, said the cap on rent increases will make it difficult for businesses.
“In a sense inflation was 8% last year at one point. People raised their rental rates based on that, and it was less than the inflation rate,” Heisler said. “And now we’re gonna have a cap. And then if we go above 5% in a high inflation environment, next year we get nothing. You can’t operate a business that way. It just doesn’t work.”
David Zerbato, managing partner at the law firm Morton, Valihura & Zerbato, LLC, said that the bill is unconstitutional.
“I believe on its face, what we have is a blatantly unconstitutional bill…with owners making business decisions a year ago under a law that they complied with,” Zerbato said. “We’re not here to discuss whether there was noncompliance or not. There’s no dispute. They had complied with what they were told to do based upon last year’s compromise.”
John Kowalk, a former state representative, said he had tried to close some loopholes in las year’s law with amendments that were defeated. In the end, he said, the law just contributed to the lack of affordable housing in Delaware.
Fred Neil, a member of the Dover city council, said that 214 members of the Wild Meadows Homeowners Association favor HB 212, but want the legislature to go further.
“The petition … requests you to fix 7013 and immediately strike the ability of the community owner to break a legal contract between a private seller and buyer, and purchase a home for 1% more than the good faith agreed purchase amount. By owning a home, the community owner can demand a lot of rent without limit, thus destroying the intent of 317, HB 212, and the current 7013 law.”
The petition takes issue with the ability for landlords to purchase homes at 1% more than the contract price and the requirement that tenants must sell to a landlord if the landlord wants to buy the manufactured home.
The bill, which doesn’t require a fiscal note, has eight additional sponsors and cosponsors, all Democrats.
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