A manufactured home operator that purchased the Garlic Farm RV Park earlier this year is slowly converting it into a “tiny home” community.
But news of the purchase put the southern Gilroy RV park on the radar of city officials, citing a city policy that prevents housing developments on the east side of Highway 101.
The Gilroy City Council and new park owner Harmony Communities met May 10 to discuss the plan as well as consider an exemption to the policy.
Harmony Communities purchased the park at 5878 Garlic Farm Drive for $9 million, documents filed on Jan. 6 with Santa Clara County show.
According to the company, the 160-space park will be gradually converted into 400-square-foot homes, with a handful having already been placed.
The homes will start at $89,950, according to Harmony Communities.
Harmony Communities president and founder Matt Davies said current residents are not being asked to leave. Tiny homes will be placed as vacancies occur, he said, which could take five years or more based on current vacancy trends.
Harmony Communities also intends to install solar power to the entire park, as well as upgrade its roadways, among other improvements, according to Davies.
“When we came into Garlic Farm we were very excited about the opportunity to upgrade it and bring it back to some of its former glory,” he said. “We’re doing a majority of capital improvements to continue to provide clean, affordable, safe housing for everybody.”
But Davies said he was unaware of a city policy in place at the RV park since it was built in 2000, which limits stays to no more than 60 days.
In addition, since 2002, the city has prohibited residential uses east of Highway 101, as well as new RV parks.
Senior Planner Cindy McCormick said city staff learned of the purchase from newspaper articles, and shortly after contacted Harmony Communities to inform them of the city’s policies.
Davies said the park has been operating “almost exclusively” as long-term housing over the past 15 years and through different ownership, with the residents mostly consisting of families of four with an income of $50,000 or less.
He asked the city to “formalize what’s been in place for the last 10 or 15 years,” saying the park has had “zero demand” for overnight stays.
According to City Attorney Andy Faber, state law requires that cities must provide an exemption to the length of stay limit if it cannot prove that it would cause “adverse impacts,” among other requirements.
Councilmember Carol Marques said she spoke with some of the residents at the RV park, who said they were concerned about getting evicted because they were unable to afford a tiny home.
She said she wanted to see a commitment from Harmony Communities that it would limit raising rents, or not increase it at all.
“We cannot afford to have any more people homeless,” Marques said. “These people will have no place to go. I do not want to hear there’s been a mass exodus because they can no longer afford space rent.”
Davies replied that Harmony Communities increased rents by roughly $50 to $75 when it purchased the park, bringing most spaces up to a $975 monthly rent.
“We are in a market rate business,” he said. “We believe in keeping our rent increases fair. We don’t believe in shocking the system.”
He reiterated that tiny homes will only be placed in the park when vacancies occur, and “nobody is being displaced.”
“We are not asking anyone to leave,” he said. “They are welcome to stay as long as they want. I can give you my word, we are not economically evicting anybody.”
The council will consider the exemption at a future meeting.
