Connolly proposes rent control exemption for Marin floating homes

Assemblymember Damon Connolly has introduced a bill that would provide an only-in-Marin exemption from a rent control law passed in 2022 to protect residents who are renting or leasing floating homes.

The state Senate Judiciary Committee will conduct a hearing on the proposed new legislation, Assembly Bill 754, on Tuesday.

“AB 252 was enacted in response to significant berth rental rate hikes in Alameda County,” Marin County Board of Supervisors President Mary Sackett wrote in a letter of support for the bill, “but its one-size-fit-all provisions created unique challenges for Marin, where the vast majority of the Bay Area’s floating homes are located.”

Talia Smith, the county’s legislative director, said AB 252 was passed in a rush after Valley Investments-Redwood LLC acquired the Barnhill Marina in Alameda in 2021 and imposed rent increases as high as 178%. Floating home owners there, some of them seniors, faced possible displacement. Owners of floating homes buy the vessels but rent the marina berths they use.

In response, AB 252 capped annual floating home rent increases at 3% plus the rise in the consumer price index up to a maximum of 5%. The law also prohibited marina owners from increasing the rent of a homeowner who purchased a floating home without moving it to a new location. The bill only applied to floating home marinas in Alameda, Contra Costa and Marin counties.

At the time, Marin County and its representatives in the Legislature supported AB 252, but Smith said soon after the bill was enacted the county began hearing from Marin’s marina owners.

Sackett wrote, “The prohibition on berth rent adjustments when homes changed hands undermined marina owners’ ability to fund essential capital improvements such as raising parking lots, and dock and utility upgrades.”

The majority of floating homes in the three counties affected by AB 252 are in Marin. The county has five marinas and 425 floating homes, all in Sausalito. That compares with 42 floating homes in Alameda and 11 in Contra Costa County.

Becky Smith, the property manager at the Waldo Point Harbor in Sausalito, which has 282 floating homes, said she found out about AB 252 at the “last minute.”

“We tried to write letters in opposition and had no luck,” she said.

She said when AB 252 was passed, the Waldo Point Harbor was offering its residents 10-year or longer leases and limited annual rent increases to the consumer price index. She said it relied on larger rent increases when vessels were sold to cover expenses.

“Because CPI does not fully cover the cost of running and operating a floating home marina,” she said.

Smith said that in 2018, Waldo Point invested $22 million to raise its parking lots, improve seawalls and add docks. She also noted that the marina rents 38 of its berths at below-market rates without subsidy from the county.

The owners of floating homes also soon became aware of some potential downsides to AB 252.

Prior to its passage, most floating home owners held 10-, 20- or even 30-year leases, with rent increases tied to the consumer price index. Because the new rules allowed yearly rent increases of up to 5%, in many cases homeowners began seeing higher berth rent increases than previously.

In addition, marina owners began to shift residents from leases of 10 years or longer to one-year terms and introduce new ancillary fees to recoup revenue lost because of the vacancy control restrictions.

“AB 754 is the result of nearly three years of extensive, on-the-ground work in Marin County — dozens of meetings, a comprehensive public process led by the Floating Homes Association, and a significant investment of time by residents, marinas and county staff,” Connolly said in an email.

The Floating Homes Association, which is includes homeowners from all of Marin’s marinas, got the ball rolling. Smith said the association formed a legislative committee composed of representatives from all of Marin’s marinas, and the committee formulated the kind of changes to AB 252 it would like to see.

The committee then negotiated with the marina owners to arrive at the wording of AB 754.

“No side got 100% of what they wanted, but they both felt like the bill was fair,” said Smith, the county’s legislative director.

Under AB 754, marinas would be allowed to raise rents annually by the consumer price index with a floor of 3% and a ceiling of 7.5%.

“That is a substantial benefit to our community,” said Anna Shimko, who has lived in a floating home at Waldo Point Harbor for 22 years and served on the legislative committee.

If the bill passes, marina owners also would be allowed to raise rents up to 25%, or 0.15% of the home’s sale price, when a floating home is sold, but only if the tenant selling the home had or was offered a lease of 10 years or more. In addition, AB 754 prohibits arbitrary fees, requiring that charges for utilities or services be based on actual cost.

Floating home residents were surveyed to gauge the level of local support for the legislation before Connolly introduced the bill.

“Of the more than 400 floating home residents who participated in the FHA’s survey on the proposal, 94% supported the language now in AB 754,” Connolly said.

Said Shimko: “There is extremely strong support among the floating home owners.”

She said the legislation is likely to result in lower annual rent increases and fewer special fees than under AB 252. Shimko also liked the idea of returning to longer leases. She has a one-year lease, but prior to AB 252, she had a 10-year lease.

“We would expect that in the future we’ll have a 10-year lease,” Shimko said.

Sasha Cole, who has lived in a floating home at Sausalito’s Commodore Marina for 10 years, also served on the legislative committee.

“It’s a great deal,” Cole said. “It was a very difficult process, but we got to what I think is an amazing place.”