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to own land in the mobile home park, but the legislature realized it was difficult for them to get financing to purchase the entire park. He continued that In the 1980's, the legislature set up a system to encourage park owners to subdivide their parks and make them available to residents for purchase with pro rata ownership interest in the common areas. He added that the legislature also stated that those residents who do not want to buy can live in the park for as long as they wish. Mr. Close stated that the legislature also set up rules regarding rental rates in the park in that rents cannot go above the CPI for low- income residents. He continued that for non -low- income residents, State law provides that rent would go to market rate over a four -year period. He noted that low income for a family of two is $53,000 annually, and for a family of four, it would be $56,250. Mr. Close stated that the purpose of the conversion is to create affordable for purchase housing. He noted that the rules are very specific and added that it could be frustrating because this is a subdivision but not a regular one. He indicated that to encourage park owners to convert, the legislature indicated that as long as the rules that have been set forth are complied with, the City must approve the conversion. With respect to whether or not a resident who continues to rent would have to pay homeowner association (HOA) dues, Mr. Close said the answer is no. He explained that if a resident continued to stay in the park as a renter, he or she would pay rent to the owner, who would pay the dues to the HOA, much like in a condominium association. He added that over time, tenants will eventually control the operation of the park. Mr. Close indicated that there would be no change whatsoever in the park for at least ten years or longer. He stated that he was not sure why a ten -year period was suggested but believes it was something the owner preferred. Suzie Forbath, Gilchrist Rutter, stated that the State recognizes that affordable housing is different for people of different incomes, and this is the reason why the increase in rent is spread gradually over a four -year period. She noted that the State is trying to create affordable for purchase housing, which is a scarce commodity. She added that part of the reason why it is more of a form of affordable housing than what they have today is because while rents may be limited; there is no limit on the cost of the homes they must buy to rent the space. Ms. Forbath indicated that mobile homes do not qualify for real estate loans as they are deemed personal property, but upon conversion, the current residents who decide they want to purchase can take their old loans and roll them into a real estate loan with the property and qualify for lower interest rates. She noted that this would reduce the cost of what they were paying on their loans and would become affordable for them. Ms. Forbath stated that the State also wanted to encourage lower- income residents to be able to purchase their lots, and recognizing it may be difficult for them to qualify for EXCERPTS: PLANNING COMMISSION MINUTES, February 25, 2009 Page 6 of 19