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The property owner shall file a report on the economic impact of conversion upon the residents and shall make a copy of the report available to each resident at least 15 days prior to the hearing. In converting the Park to resident ownership, Section 66427.5 requires the property owner to avoid the economic displacement of all non-purchasing residents. This is accomplished in a number of different ways: offering each resident the option to purchase his/her lot (i. e., condominium unit) or continuing residency as a renter,' and as to non-purchasing residents, complying with State law as to how rents are to be calculated, depending on the income level of the resident household. Here, the Park owner has sent out to each resident a Tenant Impact Report (TIR), a copy of which is attached as Attachment 11. The TIR (the terms of which were negotiated with City staff provides that the sales of the lots/units will not occur for at least ten years, that the terms of the Rent Stabilization Agreement will remain in effect through at least 2017, that no one will be evicted upon conversion (ten years hence), that residents will have the option to purchase their lot/unit; and that rents, after conversion, will be in accordance with State law. Staff therefore recommends that this finding can also be made. Potential Additional Affordability Restrictions Staff observes that the conversion of the Park to residential ownership has both positives and negatives. The conversion would provide home-ownership opportunities at an affordability level not found elsewhere in the City. Ownership would also provide more control over Park improvements to the residents. The primary disadvantage of the conversion would be the potential loss of long-term affordable rental opportunities in town. Secondly, those residents who do not choose to or are not able to purchase their space, and are not low income so that their rents would be controlled by State law, would be subject to increased rents to market rate over a five-year period. To offset these potential impacts to non-low-income renters, staff has requested that the Park owner consider extending similar affordability opportunities to this subset of Park residents. At the time this report was prepared, staff had not yet received a response to this request. ENVIRONMENTAL ASSESSMENT The conversion of an existing rental mobile home park to a residential subdivision, cooperative, or condominium for mobile homes is statutorily exempt [California Environmental Quality Act (CEQA) Guidelines, Section 15282 (e)]. Therefore, no environmental documentation accompanies this report. CONCLUSION There are clearly legal issues for which no definitive answer can be provided at this time. Some of these issues are subject to pending litigation in other jurisdictions, but it will take some time for these issues to be litigated to the point where there is appellate Page 5 of 6