Mobilehome Rent-control Financial Consulting Services
Introduction
NewPoint Group (NewPoint) is a Sacramento-based management consulting firm that has been in business over seven years with a unique specialization in mobilehome rent-control financial consulting. NewPoint personnel have assisted a wide range of California municipal clients with mobilehome rent-control over the last twenty years.
NewPoint senior consultants are experienced with the many challenges that mobilehome rent-control poses. NewPoint has assisted clients with determining a fair return for park owners, calculating permissive rent changes, completing comparative rental surveys, acting as impartial hearing officers in rent and capital improvement disputes, and providing mobilehome rent-control expert litigation support.
NewPoint frequently presents complex financial results in simple, plain English to mobilehome rent control boards and commissions. In most cases, the board or commission either directly uses NewPoint recommendations, or uses NewPoint analyses, as the basis for deciding a rent increase. Often times, NewPoint expertise is provided in either a pre-litigation, or actual litigation environment, necessitating the utmost precision and attention to detail. It is not uncommon for NewPoint to be hired by city and county governments when other consultants, or "fair return" approaches, have proven unsuccessful, or have failed to reach resolution.
NewPoint Group's Mobilehome Rent-control "Fair Return" AnalysesA mobilehome park owner must receive a "just and reasonable" return on investment. Failure to provide this return results in an unconstitutional "taking" under the Fifth Amendment of the United States Constitution, and its counterpart in the California Constitution. The California and Federal constitutions thus demand that park owners are entitled to a "fair return." However, there is little agreement as to what constitutes a "fair return."
At least one court has phrased fair return as follows:
the rent provided must be high enough (1) to encourage good management including adequate maintenance of services, (2) to furnish a reward for efficiency, (3) to discourage the flight of capital from the housing market, and (4) to enable operators to maintain and support their credit. A just and reasonable return is one which is generally commensurate with returns on investments in other enterprises having corresponding risks. On the other hand, fair return is not so high as to defeat the purposes of rent-control, nor permit landlords to demand of tenants more than the fair value of the property and the services which are provided. (Oceanside Mobilehome Parkowner's Association v. City of Oceanside, 1984).
Under these circumstances, rent control municipal authorities have utilized a variety of formulas for calculating fair return rent increases. Rent control agencies are not obliged by either the State, or Federal, constitution to fix rents by application of any particular method or formula. Rather, selection of an administrative standard by which to set rent ceilings is a task for local governments. The only constitutionally significant factors to be considered are those that bear upon whether the park is earning a fair and reasonable return.
California courts have consistently accepted NewPoint's fair return approach, which is a return of adjusted net income (before interest and taxes), on adjusted total book assets (for example, Kirkpatrick v. City of Oceanside; Westwinds Mobile Home Park v. Mobilehome Park Rental Review Board; Yee v. Mobilehome Park Rental Review Board; and Appeal Decision of El Camino 76 Mobile Estates). NewPoint's mobilehome rent-control financial return approach is in contrast to the courts rejecting other financial methods, such as the return on equity approach (that hinges on discretionary financing decisions), or the return on value approach (that is inappropriately circular in argument). Similarly, courts have rejected other appraisal and economic approaches, such as comparable rent analyses and uncompensated equity transfer theories, as being irrelevant to determination of fair return. Some appraiser rent control experts erroneously rely on comparable rent analyses, and various economic theoreticians blindly rely on uncompensated equity transfer calculations, but most of these other approaches are largely irrelevant as they do not equate to whether a park owner is receiving a just and reasonable return.
Unlike other rent control experts, NewPoint has developed a rigorous, objective, and consistent financial analysis framework for calculating fair return to a mobilehome park owner. Other experts often opportunistically use different methods for different mobilehome parks, or rent increase applications, and as a result are without foundation for their arguments; hence their methods become subjective, spurious, and open to criticism.
NewPoint uses a unique and accepted financial analysis approach for determining fair return to a mobilehome park owner. NewPoint's methodology has continually held up under intense public scrutiny by financial and economic experts, appraisers, attorneys, mobilehome rent review boards, and courts throughout the State.
NewPoint Group's Mobilehome Rent-control Financial ConsultantsNewPoint's mobilehome rent-control financial consulting practice is led by Dr. James A. Gibson, a Resource Economist with over 25 years of management consulting experience. Dr. Gibson has been retained as an expert witness on over 150 separate legal cases concerning financial and economic damages. He has presented at least 33 formal court case depositions and participated in 17 judge and jury trials. Dr. Gibson has been appointed as a United States Court Special Master and has served as an impartial California Hearing Officer. He has made economic and financial presentations to mediation settlement conferences and local government board hearings. Dr. Gibson has financial consulting experience with mobilehome rent-setting and rent control in California on over thirty (30) separate consulting projects.
Mr. Erik Nylund, a Principal with NewPoint, has a Masters in Business Administration with an emphasis in Finance. He is also a Civil Engineer. Mr. Nylund previously worked for both Ernst & Young and Deloitte & Touche financial consultants, and he has completed numerous mobilehome rent-control analyses over the past ten years.
For confidential client inquiries concerning NewPoint Group's mobilehome rent-control financial consulting services, please call:
- Dr. Jim Gibson [Contact Jim]
- Director, NewPoint Group
- (916) 442-0189
Thank you for considering NewPoint Group's professional services.
Overview
Services
- Review and Analyze Mobilehome Rent Increase Applications
- Independent mobilehome fair return analyses
- Critical review of park owner's expert financial consultant rent increase analyses
- Calculation of permissive, special, and capital improvement rent increases
- Participate at Fair Return Hearings and/or Appeal Hearings and Provide Expert Testimony
- Analyze Maintenance of Net Operating Income (MNOI) and MAI Appraisal Comparative Rent Analyses
- Calculate Potential Financial Impacts of Interest, Retroactive, and Cumulative Rent Increase Components
- Provide Mobilehome Rent Control Expert Witness Litigation Support
- Independent mobilehome fair return analyses
- Critical review of park owner's expert financial consultant rent increase analyses
- Calculation of economic/financial park owner damage claims
- Serve as a Mobilehome Park Hearing Officer
- Review, Modify, and/or Help Develop Mobilehome Rent Control Ordinances
"Fair Return" Approach
Personnel
- Carnegie Mellon University, Advanced Training in Economics, Graduate School of Industrial Administration, 1988
- Iowa State University, Ph.D. Resource Economics, 1976
- Iowa State University, Full Research and Teaching Scholarship, one of the top three Resource Economic Programs in the country, 1971 to 1976
- University of California, Davis, B.S. in Applied Economics with High Honors, 1971
- University of California, Davis, Nominated for a National Science Foundation Graduate Fellowship, 1971
- 20 years of Mobilehome Rent-control Financial Consulting
- Director and Principal-in-Charge, Ernst & Young, LLP Public Sector Management Consulting Practice
- City of Fresno - Served as a financial expert witness on a complex mobilehome rent control case (Galland vs. City of Fresno) that had been tied up in litigation for years
- City of Concord - Calculated fair returns for two mobilehome parks (Adobe Mobile Lodge and Diablo Mobile Lodge)
- City of Palmdale - Quantified and analyzed twelve factors in the City Ordinance that needed to be considered for a mobilehome rent increase, and rebutted the park owner's expert financial analyses
- City of Oceanside - Calculated fair returns for two mobilehome parks (Mira Mar Mobile Community and El Camino 76 Mobile Estates), and presented oral testimony presentations before the Manufactured Homes Fair Practices Commission
- Contra Costa County - Served as the Hearing Officer on a trial for a petition for a mobilehome capital improvement rent increase
- M.B.A., Finance, University of California, Davis, 1993
- B.S., Civil Engineering, University of California, Davis, 1989
- 10 years of Mobilehome Rent-control Financial Consulting
- Manager, Deloitte & Touche LLP, Solid Waste Management Practice
- Senior Consultant, Ernst & Young, LLP, Solid Waste Management Practice
- City of Fremont - Performed a rent and vacancy decontrol analysis for South Lake Mobilehome Park and Niles Canyon Mobile Estates
- City of Escondido - Reviewed two separate rent increase applications to determine a fair return for the Town & Country Mobilehome Park
- City of Concord - Calculated fair returns for two mobilehome parks (Adobe Mobile Lodge and Diablo Mobile Lodge)
- City of Palmdale - Quantified and analyzed twelve factors in the City Ordinance that needed to be considered for a mobilehome rent increase, and rebutted the park owner's expert financial analyses
Qualifications
- Santa Cruz County
- City of Carpinteria
- City of Palm Desert
- City of Oceanside
- City of Fremont
- City of Escondido
- City of Hollister
- City of Calimesa
- Contra Costa County
- City of Palmdale
- City of Concord
- City of Clovis
- Shute, Mihaly & Weinberger - San Francisco
- Atkinson Farasyn - Mountain View
- Lozano Smith - Fresno
- Richards, Watson & Gershon - Los Angeles
- Brunick, Alvarez & Battersby - San Bernardino
- Best, Best & Krieger - Rancho Mirage
- Endeman, Lincoln, Turek & Heater - San Diego
