The owner of a controversial mobile home park is suing the city of Fresno for $1 million, alleging that rent control has cost the company money and diminished the park’s value.

The lawsuit from La Hacienda Mobile Estates says Fresno’s Mobile Home Park Rent Review and Stabilization Commission’s November 2023 decision to only allow a minimum rent increase has prevented the park from being profitable.

“The Commission approved only the minimum annual Consumer Price Index adjustment allowed under the ordinance of 6.6% — amounting to just $24.92 per month and far short of what would be required for La Hacienda to break even,” the lawsuit states.

La Hacienda is a subsidiary of Stockton-based Harmony Communities.

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The lawsuit goes on to say that commission member Katie Wilbur, executive director of affordable housing developer RH Community Builders, should have recused herself. The lawsuit states — incorrectly — that RH Community Builders actively sought to buy the park.

City records indicate that RH Community Builders didn’t submit a bid to buy Hacienda. Wilbur and city officials declined to respond to GV Wire inquiries.

Park Has Lost $1 Million in Value: Harmony

Harmony said it needed to increase rents at the park by $350 a month — a 150% increase — to earn a 12% rate of return on the company’s investment and help pay for significant repairs to the property.

Rent commissioners said Harmony Communities knew about the park’s condition before buying it.

“The laws haven’t changed, the rent increase and the laws around that haven’t changed since they purchased it,” Wilbur said during the November 2023 commission meeting. “So, I have a hard time understanding how they wouldn’t know this is what the pro forma would be for the property.”

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Since Harmony took over, occupancy at the park has fallen below 50% largely due to evictions, according to Mariah Thompson, senior attorney with California Rural Legal Assistance, who represents many mobile-home park owners at La Hacienda.

La Hacienda filed for bankruptcy in May 2024.

“Having been denied the ability to raise rents to realize any return on its investment, and having further been enjoined from closing the park or evicting tenants, La Hacienda was forced to file petition for Chapter 11 bankruptcy,” the lawsuit states.

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Lawsuit Incorrectly Describes Wilbur’s Interests

In May, Fresno City Council authorized giving Visalia-based non-profit Self-Help Enterprises a $3.5 million loan to purchase La Hacienda and operate it. Fresno Mayor Jerry Dyer said Self-Help’s takeover of the park will guarantee residents long-term affordable housing.

The lawsuit incorrectly states that RH was working with Self-Help to buy the property. The lawsuit also incorrectly states that RH is a non-profit business. RH is a for-profit business.

Harmony said that if Wilbur had recused herself, the commission would not have had a quorum in November 2023 and the rent decision could not have been made.