After nearly 22 months of meetings between manufactured home community residents, landlords, tenant associations, lawyers, advocates and various governmental and non-profit agencies (known collectively as the Oregon Manufactured Housing Landlord/Tenant Coalition) the Oregon Legislature has passed a radically altered manufactured home community closure bill --- House Bill 2735.

Initially, the Coalition agreed to and introduced HB 2735 as a fair and comprehensive solution to the issue of “park” closures. The original draft bill called for payments to the residents of owner-occupied primary residences to receive $5000, $7000 or $9000 from the landlord as moving compensation, depending on the size of their home, coupled by extension of an existing $0,000 state tax credit for residents affected by closures. In return the landlords asked for and believed they would receive a 5 year property tax freeze on their land and above all else, preemption, meaning this would be a statewide law that would override any local ordinances. In the end, the lengthy measure (46 pages in all) provides that:

• Landlords must pay compensation to displaced tenants who own and occupy homes
• 5,000 - Single Section Home
• $7,000 - Double Section Home
• $9,000 - Triple or larger Section Home
• If the tenant abandons the home, the landlord cannot charge for the disposal costs;
• Landlords must follow a process when closing the facility;
• All cities are preempted from regulating this matter except for the four that already had existing ordinances Bend, Eugene, Oregon City and Wilsonville;
• These 4 cities can amend their ordinances during the next approximate 6 months;
• The existing law forgiving Oregon Capital Gains Tax if the community is sold to tenants or a non-profit continues for 6 more years
• The existing $10,000 Tax credit is reduced to $5,000 beginning next year and continuing for 6 years. However, the entire tax credit may be claimed in a single year without regard to income or tax liability.

Of all the things we wanted most, preemption was it, but also we based our 5/7/9 payments on state government’s willingness to EXTEND the $10,000 tax credit in order to help the residents. As it stands now, the landlords are still required to pay the maximum they offered, the residents got their tax credit cut in half and the landlords did not get the statewide preemption or the property tax freeze.

As an active member of the Coalition I take responsibility for its failures. We did not expect our bill, which in the past has always been welcomed by legislators as a bipartisan example of how big business, regulators and consumers can work together to achieve unity and produce meaningful comprise legislation, to be so radically changed. They listened to the passionate testimony of our members and supporters but in the end did whatever they wanted. So here we stand today, with a closure law more expensive for landlords than anyone imagined. The bright spot is that the tenants are getting more than they were entitled to previously but not as much as they deserved.

Government regularly thinks it knows what is best for us. They hide behind the defense that they held numerous hearings and “heard” hours and hours of testimony, talked to industry participants, met with lobbyists and did their best to make an informed decision. But in the end I do not think they listened much. Regardless, the bottom line is that HB2735 becomes law on January 1, 2008, so any manufactured housing community owner contemplating closure of their community would be a fool not to rush to closure now versus waiting until next year.

Regardless of your political leanings the Oregon House and Senate has decided that owners of manufactured home communities, regardless of the agreements, contracts, leases, statements of policy and disclosures that exist between them and their tenants, do not deserve the same property rights as most other Oregon landowners.

Thank you for letting me editorialize --- and have a terrific day.

Greg Harmon - President
Commonwealth Real Estate Services
E-mail: greg@cwres.com
Telephone 503.244.2300 Ext. 101