SAN JOSE -- In a decision cheered by affordable-housing advocates, a petition by the Colonial Mobile Manor park owner to raise the rent above what is allowed in the city's Mobilehome Rent Ordinance has been denied.

The ruling by city-appointed administrative hearing officer Michael Lowy, released earlier this month, determined that the owner would not receive more than the 3-percent hike currently permitted by the little-known ordinance. Colonial Mobile Manor, located just east of Highway 87 in South San Jose, had sought an additional $85 a month from a tenant population largely consisting of seniors.

The decision in the case, which had drawn attention from the City Council, comes at a time when the skyrocketing cost in the rental market is one of Silicon Valley's hot-button issues. Mobile homes have become an under-the-radar source of local affordable housing -- and San Jose has California's largest number of mobile homes with 58 parks encompassing 10,649 spaces.

So the holidays have been a little happier for park residents.

"There's been a big sense of relief because we've been in limbo for so long," Gail Osmer said. "Everybody was saying, 'Whew!' "

Tenants at Colonial Mobile Manor, which has about 200 spaces, had been riled by the prospect of a rent hike above the ordinance level for the second consecutive year.

"The residents were very concerned, which is understandable," said Dave Bopf, a division manager for the city's housing department, of Colonial Mobile Manor. "They mostly are senior citizens living on fixed incomes."

The attorney for Colonial Mobile Manor's owners has challenged the ruling, claiming "mathematical and clerical inaccuracies" in Lowy's decision.

But Sandy Perry, an organizer with the grass-roots Affordable Housing Network of Santa Clara County, said this is a victory for more than just Colonial Mobile Manor residents.

"This really affirms San Jose's rent ordinance," said Perry, who represented several park residents. "I think the message if the tenants had lost is that it would be open season on the ordinance, and other mobile parks would start filing petitions. We're hopeful that this will discourage that from happening."

Last week the city received a petition from another park, Summerset Mobile Estates in Alviso, which has 111 spaces. The owners have asked for a $185 increase per space, or about a 20-percent hike. The city is working to assign a hearing officer to that case, Bopf said.

The ordinance was enacted in 1986 with the goal of striking a balance between owners making a reasonable profit while keeping space rents affordable. A provision allows park owners to petition for increases above the ordinance rate, but that hadn't happened since 2002. Then Colonial Mobile Manor requested raises in two consecutive years.

The park was bought in 2009 by a partnership led by managing owner Peter Wang. The group sought an additional $114 a month last year and was awarded $46.30 by another hearing officer.

Residents, who generally own their units but rent the space below them, were angered when they received letters early this year that the owner was petitioning the city for another increase. For people on fixed incomes, the additional $85 boost would have been devastating, said Osmer, 67.

"I had to go back to work part-time," she added. "There are people in this park who are not making $1,000 a month, and they can't go back to work because of their age."

The case generated enough attention that the city's housing department prepared an informational memo for City Council members back in May. But after a series of administrative hearings, Lowy denied any added increase.

"As a city we need to be neutral, but we see mobile home parks as a critical part of the affordable housing stock in this area," Bopf said. "Certainly park owners are going to be watching the rise in all rents in Silicon Valley, and in some cases they're trying to see if they can leverage that to increase their rate of return."

Anthony Rodriguez, the attorney for the owner, said there are "obvious" math errors in the Lowy's decision that, if corrected, would result in a rate increase of about $39 per space. If the challenge is rejected by the hearing officer, a lawsuit could be a possibility, Rodriguez said.

"We have every confidence that the court can add and subtract, and correct those errors," he added.

Osmer said she is hopeful the decision stands.

"This case took so long because the hearing officer really took great care to dot all the 'i's' in the decision," Osmer said. "Right now, everybody is just happy that we don't have a rent increase."

Follow Mark Emmons at Twitter.com/markedwinemmons.