Report 2023-112
December 19, 2023

Mobilehome Residency Law Protection Program
The California Department of Housing and Community Development Must Improve Its Oversight of the Program

December 19, 2023

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As directed by the Joint Legislative Audit Committee, my office conducted an audit of the California Department of Housing and Community Development’s (HCD) administration of the Mobilehome Residency Law Protection Program (program). The program allows mobilehome owners to submit complaints about alleged violations of the Mobilehome Residency Law to HCD. In response, HCD must identify the most severe allegations and, in certain circumstances, forward those allegations to a contracted nonprofit legal service provider (LSP) that can assist the homeowner. Our audit concluded that HCD must improve its oversight of the program.

Although LSPs are responsible for providing services to complainants, attorney-related privileges limit HCD’s ability to effectively oversee the work done by these contractors. The privileges prevent the LSPs from providing information—such as the number of hours they work on a complaint or investigations they perform to assist complainants—that HCD needs to determine if the LSPs are serving referred complainants. We also found that HCD did not take immediate action when LSPs notified it that they were denying services to complainants based on incorrect eligibility criteria and that HCD’s program data are not of good enough quality to allow HCD to report accurately or efficiently to the Legislature as required.

The program is funded by an annual $10 per lot fee paid by mobilehome park owners. Although we determined that HCD generally spent program funding appropriately, it has spent less than 40 percent of the program’s revenue it has collected and has consequently accumulated $8.3 million in unspent funds. Even if HCD’s annual costs grow, the amount of unspent funds will likely continue to grow if the Legislature does not reduce the fee. To assess the appropriateness of the program’s fee, we modeled different scenarios and determined that suspending the fee from fiscal year 2024–25 through the program’s sunset date in January 2027 would reduce the unspent fund balance and still allow HCD sufficient funding to address complaints.

Respectfully submitted,

California State Auditor