Laguna OKs Limits on Mobile Home Rent Hikes : Law: The temporary measure is designed to protect residents from unreasonable increases.

LAGUNA BEACH — A year after voters rejected rent control for the city’s mobile home parks, the City Council on Tuesday approved a temporary law that limits rent increases to 3% at the largest of those parks.

The decision--passed by 3-2 vote--is designed to protect residents from unreasonable hikes and to allow the park owners to raise relatively modest rents while the city awaits completion of a report outlining the impact of relocating the tenants.

Opponents said the action could prompt another referendum drive like the one that polarized the city in 1991, when the council sought rent control for all three parks.

During the contentious meeting Tuesday night, some tenants of Treasure Island Mobilehome Park asked for the temporary rent restraints, while other city residents repeatedly pointed out that voters had rejected rent control in the 1991 election.

“The good citizens of our town rejected rent control. . . . Here you’re back and doing the same thing all over again,” said resident Terry Ryan. “Please do not do this; we will have no choice but to fight you in other ways.”

“It’s really unbelievable,” said Darren Esslinger, who helped lead the earlier battle against rent restrictions. “I really think it’s a way the city has of circumventing the voters’ rejection of the rent control they tried to pass a year ago.”

The council members countered that the restraint is only temporary and not permanent.

This latest controversy revolves around an ongoing tug of war between the owners and tenants of Treasure Island, a sprawling, 29-acre oceanfront parcel that was purchased in 1989 by a partnership led by Costa Mesa businessman Richard Hall and the firm of Merrill Lynch Hubbard.

Residents have long feared that they eventually would be forced to move as the new owners pressed forward with plans to develop the land. While the owners have not talked publicly about building plans, they have continued to buy mobile homes as they came up for sale. Currently they own 75 of the 266 homes at the park, or 28%.

Without some form of protection, Councilman Robert F. Gentry said before Tuesday’s meeting, the landowners could continue to buy the mobile homes, effectively reducing any opposition to development.

To help protect the residents, the council previously adopted an ordinance that offered them some economic assistance if the park closed. The ordinance does not empower the city to stop the park owners’ plans for development.

Under that law, an owner can close a mobile home park when the owner has bought at least 25% of the homes. Treasure Island’s owners have not declared their park closed.

“As far as I’m concerned, we as a city needed to consider the park being closed the minute the landowner bought the unit that put him over the top of the 25%, and that has happened,” Gentry said. “I say we’ve got a whole park full of people whose housing is threatened and they are in a very vulnerable position, and the city needs to protect them. It’s a health and welfare issue, period.”

Gentry said Tuesday night’s vote was prompted by a breakdown in negotiations among the park owners, tenants and the city to try to come up with a compromise between the owners and tenants.

According to recently adopted regulations, the city is now preparing a Relocation Impact Report, which calculates the benefits that must be paid to residents to offset their moving costs. (The rent restrictions and other provisions of the law approved by the council Tuesday will remain in effect only until the report is adopted by the council. The report should be complete sometime this summer.)

According to the measure approved Tuesday, rent hikes are limited to 3% for existing tenants, while rent increases for new tenants are restricted to a 10% rise.