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DOWDALL LAW OFFICES A PROFESSIONAL CORPORATION ATTO R N EYS AT LAW City Council of the City of Santa Ana City of Santa Ana September 16, 2021 Page 12 have gone up in price to other items that have risen less, such as buying round steak instead of porterhouse. — The Bureau has long adjusted prices for quality improvements. If a product gets better or if useful features are added, its price is adjusted down. Thus, with automobiles, additions such as anti -lock brakes have sometimes resulted in price decreases in calculating the CPI, even though the actual cost of cars went up. — In the late 1980s and 1990s, new quality -adjustment techniques were introduced for a range of products, including washers, dryers and televisions. Each of these changes has had the effect of reducing the reported inflation rate (economist Walter Williams). — The Frequency of Applications, Petitions and Other Filings Will Spike because the proposed annual minimum adjustment ("permissive adjustment") would be a fraction of inflation measured by CPI. And then, CPI is a poor indicator of the "real -life" operating experience of the mobilehome park owner. Because CPI is politically driven to understate inflation, mobilehome park owners operating in the "real world" must apply for just return administrative relief to avoid confiscatory effects. The resulting staff expense, hearing time, administrative record keeping, enforcement, and litigation will result in significant increases in taxpayer burden. Even assuming the consumer present accurately measured the true effect of inflation upon the operation of a mobilehome park, anything less than 100% is merely to deprive the owners of the ability to maintain status quo of its operations. The quality of the housing will decline, and, or, it will be a frequency of petitions to seek the adjustments that should be allowed automatically. — 100% of reimbursements will be sought. The city will be required to face an avalanche of section 13 rent increase petitions for a fair return because the automatic allowance does not provide it. This may not occur immediately, but shall continue to increase over the course of time as the confiscatory effect of insufficient indexing begins to accumulate. — Higher Increases Sought: Park owners may stagger applications from year to year resulting in net operating income increases for exceeding the partial CPI indexing. By forcing an unrealistic change in operation with partial indexing, the city will be accelerating demands for even greater increases. — Legal Costs: Tenants will be required to obtain representatives to fight rent increase applications, year to year. Since the ordinance does not allow park owners to forbear from adjustments in any given year, the park owners are constrained to leave "nothing on the table." While forbearance in deference of increases is a very common practice among many landlords, this ordinance actually forces owners to impose rental adjustments, or else sacrifice the value of their property rights. -12-