West Stockbridge — A proposed monthly rent increase that would more than triple the current rent for residents at The Residences on Mill Pond, a West Stockbridge mobile home community, has riled a former resident as well as an official of a nearby town who weighed in on the potential effects of such a fee hike.
On November 27, Tom Lennon, corporate agent for Lennon Capital Group LLC, as the owner of the 35-lot mobile home community at 40 Albany Road, West Stockbridge, filed a Petition for Rent Adjustment, requesting the West Stockbridge Select Board—that sits as the West Stockbridge Rent Control Board—approve a surge in rent from $241 per month to $797.51 per month. In his petition, Lennon alleges that the appraised value of the property is $1.78 million as of October 3, 2023, although he purchased the tract from former owner Gennari’s Mill Pond Trailer of West Stockbridge a year earlier, on October 28, 2022, for $900,000.
West Stockbridge bylaws provide that the maximum allowable rent for a mobile home in a mobile home park is the rent fee that was in place for the unit in 2013. For Mill Pond, that is its current rate of $241 monthly. All such rent adjustments must be made with board approval, with the group able to consider if the measure is necessary to remove hardships or correct inequities for the tenant or owner as well as provide a fair net operating income to the park owner, with that income tied to the fair market of the property. Although the sales price and appraisal attached to the petition are about a year apart, Lennon asserts that the fair market value of the property soared from $900,000, the 2022 purchase price, to $1.78 million, or $50,857 per park pad. Counting in the outbuildings on the tract that aren’t subject to rent, such as a five-bedroom home, the valuation increases to $2.3 million, the appraisal states. The rent has remained unchanged for the past decade.
West Stockbridge assessed the 14.24-acre tract and structures at $845,400 for fiscal year 2022.
Robert Kraus, of Kraus and Hummel LLP, Lennon’s attorney, told The Berkshire Edge that the increase in rent is based on the fair market value of the property, the expenses associated with the park’s operations, and a fair rate of return on the investment. “As you know, we are not a subsidized entity, and the fact that the rents have been kept down for years is not an issue that my client was responsible for,” he said. “And he’s put in a substantial amount of money in a water system throughout the park.”
For Kraus, rent control matters “are a mathematical equation” based on 12 months in a year and the number of units in the park.
Evie Kerswell, former president of Mill Pond’s tenant association and a 15-year past resident, eyes that calculation differently. With friends still living at Mill Pond, she said she heard about the proposed rent increase and became involved in the issue.
Although previous attempts have been made to increase the rent for park tenants, Kerswell said none have been successful to date.
In a January 3 correspondence to West Stockbridge Town Administrator Marie Ryan, Kerswell urged the board to reject the proposed increase and exclude any added value for water system upgrades Lennon made to Mill Pond from the property appraisal. In a phone call from her Colorado home to The Berkshire Edge, Kerswell said the park’s sewer and water system upgrades are expenses that shouldn’t be borne by the tenants in the form of a rent increase as Lennon knew the condition of the park when he purchased it. The condition of the water system at the time of purchase had “been in failure for over a decade,” as evidenced by a 2015 engineering report that examined the state of the site, she said.
“The fact that [Lennon] decided to purchase a park that was in such poor condition is not the problem of the residents of the park,” Kerswell said. “The cost of fixing the utilities is not on the residents, it’s on the owner. Because the park was in failure—the septic and the water and all these systems are in failure—he cannot pass that cost along to the tenants.”
Additionally, she said Lennon’s bank statements that would support evidence of repairs weren’t included in his petition as proof of what was spent on the project “and how much of it is a reasonable operating expense that can be passed on to the people who live there.” Kerswell advocated nixing other expenses Lennon included in the fair market value—expenses for repairs to buildings that are inaccessible by tenants.
Kerswell said the assessed value presented by Lennon for the tract is “grossly overestimated.”
Kraus disagrees. “That’s for the Rent Control Board to investigate because that’s how it works: The board is charged with the responsibility of investigating the expenses we have documented by receipts and submissions of a financial statement,” Kraus said, in addition to the certified appraisal and other papers provided by his client as to the park’s value. “It’s a quantitative discussion, not qualitative.”
A mobile home park is different from an apartment or private residence since the residents rent the land beneath their trailers and either own the trailer or take on a mortgage to pay for the trailer, Kerswell said.
Given the $900,000 price paid for the entire site that includes structures, and then accounting for only the land value of that tract, Keswell estimates that value at $178,000. She said the park tenants occupy only a quarter of the land since some areas aren’t common spaces for them to use. “The previous Rent Control Boards decided they would only count one-quarter of the land value [to determine rental fees] because that’s what we sit on, is one-quarter,” Kerswell said. “So that brings the assessed value down to somewhere around $50,000 because it’s just the land, and it’s just a quarter of the land.” She said the calculation then factors in a return on investment and operating costs.
Kerswell called Lennon’s October appraisal describing the park’s condition as “good” as “out of control in the land of reasonable.” “If you drive down there, when you pull in, picture someone you love at the end of the road having a heart attack and picture that you’re the ambulance trying to get to them,” she said. “Then you’ll see how slow you have to go because of the condition of the road.”
Stockbridge Select Board member Patrick White weighed in as a private citizen on the issue facing West Stockbridge’s Rent Control Board. He stated in an email to the West Stockbridge Rent Control Board that the subject matter “bears many similarities” to the Housatonic Water Works proposed rate increase for which his town has been named an Intervenor.
“I strongly recommend you use the purchase price of the property, and reasonable costs to maintain the property, as the basis for any rent control decision,” White stated. “Such an analysis will find that the current rent provides a reasonable rate of return for the applicant, which I would peg at [eight percent] above and beyond the carrying and maintenance costs of the property.”
Citing West Stockbridge’s recent creation of its Affordable Housing Trust to foster lower income residences, White suggests the board consider “the tenants’ ability to pay as the primary consideration when determining rent increases” because such a large increase “would vastly impact affordability in the Town of West Stockbridge.”
Kraus said his client will attend the West Stockbridge Rent Control Board hearing on Wednesday, February 28, at 6 p.m., and he will be at the session virtually. “None of the residents are going to be happy about an increase in rent,” he said. “It’s now a part of life but we just suffered through eight percent inflation a year and a half ago. My client undertook a substantial amount of repairs at great expense when they were needed, and he did it. The prior owner didn’t.”
