West Stockbridge — The town Rent Control Board has much to mull over following more than two hours of testimony at its February 28 session, with tenants of mobile home community The Residences on Mill Pond pitted against the park’s new owner who is seeking a rent hike that will triple the current fees.
Tom Lennon, Lennon Capital Group’s corporate agent, filed a Petition for Rent Adjustment at the end of last year, seeking an increase in rent from $241 monthly—as it has been since 2013—to a maximum of $797.51 monthly from tenants of the 35-lot mobile home community at 40 Albany Road, West Stockbridge. The issue came before the local Rent Control Board that also sits as the town’s Select Board.
How Lennon calculated the proposed rental fee increase
Although Lennon purchased the tract, which includes a house and outbuildings, in October 2022 for $900,000, he and his attorney Robert Kraus provided an appraisal showing the property valued a year later at $1.78 million, or $50,857 per lot pad.
Appearing at the hearing via Zoom, Kraus called the process of rent control “a quantitative analysis” and said three factors should be considered in evaluating the rental fee for tenants: the expenses associated with operating the community, fair market value, and rate of return on investment. He estimated a rate of return at 7.5 percent to 8.5 percent, although banks may charge a higher rate of interest for communities that have rent control because it is “unpredictable what can happen because it is a board of three members who can decide what the rent is as opposed to market forces.” Kraus relied on the property’s appraisal to represent fair market value. He said Lennon incurred annual expenses of $168,661.25, in addition to more than $220,000 of capital improvements Lennon made. With these numbers, Kraus computed the proposed rent adjustment by taking the park’s value at $1.78 million, multiplying that value by an 8 percent to 8.5 percent rate of return, adding in the annual expenses and then dividing by 35 lots before finally dividing again by 12 months in a year. Without the $12 monthly excise fee due to the town per lot, he said that total is $761.81, plus $35.70 per month factored in for Lennon’s capital improvements amortized over 15 years, for a total of $797.51 due per tenant per month.
“I know it sounds like to everyone in the room or in the park that that’s an extraordinary figure,” Kraus said. “It’s a quantitative discussion. We are not subsidized. We are not promoted by state government or any charitable entities.”
Citing a 36 percent cost of living increase from 2013 to the present as well as an uptick in expenses, he said “legally, and according to your own regulations and an analysis that’s applicable, my client is entitled to a substantial increase in the amount of monthly rent that’s payable by the residents.”
Lennon said he has been playing catchup since buying the property, fixing the park’s water lines amid its “astronomical” operating expenses, with no increase in rent. He said the majority of the homes in the park are paid in full, with its owners not incurring a monthly mortgage fee. According to Lennon, a two-bedroom home in West Stockbridge costs about $1,900 a month to rent, with the proposed rent a fraction of that charge and tenants permitted to have a shed and pets.
The town’s counsel, Timothy Zessin of KP Law, pushed Kraus on Lennon’s expenses and advocated he provide canceled checks showing payment rather than receipts or estimates. He said Lennon’s appraisal showed other neighboring mobile home parks charge an average of $425 to $450 per month in rent.
Kraus responded that West Stockbridge is a resort community, a very desirable area, accounting for a higher rental fee. Lennon added that mobile home parks don’t sell very often, and, when they do, the rents are increased.
Rent Control Board member Andrew Potter pointed out that the town of West Stockbridge appraised the 14.24-acre tract and structures at $845,400 for tax fiscal year 2022.
Chair Kathleen Keresey said that when the board was created, a precedence was established indicating that the lots occupy 25 percent of the total tract so the charges assessed in the rent fees can only be attributable to that portion of the tract taken up by the 35 lots.
In addition to the water system and landscaping, Lennon said he also installed fencing, signage, and a new mailbox center, additions that, with current rental fees and large operating expenses, have put him “way upside down” each month in terms of cash flow.
Park residents take a turn
However, the park residents viewed their community, the proposed rent hike, and Lennon’s improvements quite differently.
“We live there, we live in that mud pit,” longtime tenant Sissy Astore said of the park’s unpaved roads and drainage issues that have remained through multiple ownerships over the years. She said Lennon bought the property knowing it also had a water system failure pursuant to a previous conditions report that was promulgated in a defunct attempt by the park’s tenants to purchase the community.
“Don’t put that price on us,” Astore said of the rental fee increase accommodating the utility repairs. “This is due diligence. This [water issue] was there. This should not be our cost.”
She urged the board to require Lennon to produce the proper financial documents, including bank statements and canceled checks, for the work performed on the site, a request that had been made of two former owners who sought to raise the rents, with those rent hikes subsequently denied.
Astore distinguished between an apartment and her mobile home. “We are nothing like an apartment,” She said. “We don’t have those rights; we don’t have that protection.”
Astore described the park’s conditions: solid waste reversing through toilets, frozen pipes, pothole fills that washed away with the first rainstorm, and poor drainage that doesn’t allow her to park in her driveway.
“You cannot fill your pockets on the backs of poor people, on the backs of us,” she said, urging the board to protect the community’s tenants or “at least make it fair.”
Other residents addressed the unprofessional plumbing and tree work performed in the community. Former 15-year tenant Evie Kerswell, who was also a past president of Mill Pond’s tenant association, said the park’s operating expenses “are minimal” and the expenses for long-term system failures on the site shouldn’t be passed on to tenants. She urged the board to “vet the operating costs [and] come to a fair return of investment.”
“We will have no homes if this rent goes through,” Astore said.
The board requested Lennon produce canceled checks referencing paid expenses and upgrades and agreed to delay its decision on whether a request for memorandums written by Stockbridge Select Board member Patrick White regarding its decision will be approved as part of the proceeding’s official record.
