The Centers for Disease Control and Prevention (CDC) has issued an order temporarily halting residential evictions for failure to pay rent until December 31, 2020 if the resident provides the “declaration” that they meet certain criteria. This misguided concept is re-writing eviction laws once again and causing mobile home park owners to thank heaven that they are not apartment owners. So why will mobile home park owners fare better than apartment owners in this latest restriction in making some tenants pay rent?
Stakeholders vs. Non-stakeholders
Mobile home park residents are not like traditional apartment renters. While apartment clientele never own the unit they live in, roughly 80% of mobile home park residents do. This means that if they don’t pay rent they risk losing their own home. This is a very sobering possibility, and has keep post-Covid 19 collection rates to near their pre-Covid levels. While apartment dwellers are just going to avoid rent and throw their stuff in their pick-up truck and drive off when evictions re-start, mobile home residents see losing their personal residence – that they bought and paid for – as unthinkable and will get three jobs if necessary to get the rent paid.
Rents that are attainable even during Covid-19
The average apartment in the U.S. is around $1,200 per month. The average lot rent in an American mobile home park is around $280 per month – nearly $1,000 lower. That means that our customers have a much greater ability to pay rent despite employment uncertainty. When somebody is earning $50,000 per year and paying $1,200 per month, there’s no way to pay rent if their income drops on unemployment to $25,000 (it would be nearly 100% of their income). However mobile home park residents can cover $280 per month with one week of a minimum wage job.
Scarcity and appreciation of that fact
Mobile home parks in many parts of America are nearly 100% full. That means that if you lose your space in a metro mobile home park you may never again find a spot going forward. Waiting lists are already common in some U.S. markets, such as Colorado. If you factor in the potential to never again find a suitable mobile home park lot going forward, this alone is a strong reason not to give up your seat. Apartments, by comparison, are a dime a dozen.
More in-demand that apartments and for good reason
We have been setting company sales records since Covid-19 came out, thanks to the inherent benefits of mobile home parks in meeting residents’ requirements, namely:
- No neighbors knocking on walls and ceilings
- Parking by your front door.
- A yard.
- Home ownership.
Because of these factors, mobile home parks are gaining occupancy daily, However, much of this boost is the result of poor quality of apartment options, as well as the new Covid-19 focus on social destination and outdoor spaces (which equates to new interest in the mobile home park lifestyle).
Conclusion
Despite CDC orders, mobile home parks are well-situated to maintain superior collection rates while apartments struggle. While mobile home parks still hit 95% or better collection rates, some apartment complexes are only hitting around 70% -- and for good reason. With the Covid-19 pandemic potentially lasting well into 2021, this one trait of mobile home parks has become highly important.