Mobile Home Park News Briefing

Here’s the only quote in the article that makes any sense:

One of the mobile home park owners in Tehama County attributed the rent increases to necessary renovations and the desire to ensure a return on investment.

Well at least one person in Tehama County has a brain.

Without higher rents you get park demolition and redevelopment. That’s the choice. Higher rents or no parks. There’s really no long-term in-between option.

“That involves holding our residents accountable for their home conditions,” Booker said. “If someone doesn’t have the desire to improve their home, it’s not the best place for them to live. … Unfortunately, some residents, we’re asking them to sell their home.”

Isn’t this really what all these articles are about? In passing the baton from the old mom and pop owners to the new ones that have brand new and giant mortgages to pay and need to spend tens of thousands of dollars on capital repairs – the whole concept of bringing old broken things back to life – there are always a few tenants that don’t like living in a modern world. Even a few early employees of Apple Computer quit in protest when Steve Jobs moved the office from his dad’s garage to a real office building. Let’s all just admit that there is a tiny sliver of tenants in many mobile home parks that are not willing or able to pay market rents or maintain their property and need to move on to someplace they can afford or has lower standards. These are the folks that the media coddles and interviews – never the 99% of happy customers. So stop trying to make this simple fact of life some “evil plan” by the new landlord. The new landlord is committed to helping the 99% of tenants that CAN afford to pay a modern rent and DO want to elevate the qualify of life in the park. Society is based on what’s best for the majority – that’s the underpinning of democracy.

No, 40 families did NOT buy a mobile home park for $4 million. A non-profit bought the park. Those 40 families have no ownership of that property whatsoever and have no vested interest in the land at all. They will never see a penny of profit from it and, when they move out, they get paid zero for their supposed “ownership interest”. Let’s at least get the facts straight.

The more than eight million manufactured homes in the US that sit on borrowed land are facing rent increases and displacement pressures from owners looking to sell mainly to private equity buyers.

Could you jam more untruths into a single sentence? Let’s break it down:

1. There are NOT 8 million mobile homes in American mobile home parks. There are 44,000 parks with an average of maybe 80 units per park which only equals 3.5 million lots. At 80% occupancy, that’s around 3 million homes. The statistic this writer used is ALL mobile homes in the U.S. with the majority of those on private land and NOT in mobile home parks. He didn’t do his homework.
2. The land in a mobile home park is not “borrowed”. It is owned by the title holder to the property and the homes are there via a lease with the tenant paying rent.
3. All of America is facing price increases in every good and service, and mobile home park lot rents are not anywhere near the top of that list, based on actual dollar amount.
4. Park owners have no interest in “displacing” any tenant as all they seek is timely, monthly payment of rent. They want nothing to do with “churning” tenants. Every time a tenant leaves it costs them around $5,000 in legal, renovation and opportunity costs.
5. Sellers sell to the highest bidder. At least 50%+ of mobile home parks are not large enough to even interest private equity groups. Of the balance, buyers range from individuals to partnerships, to private equity groups – and even the tenants in certain cases. Who cares?

So what was the writer angling for? Why not just tell it like it is? Why lie to everybody? I’m betting you can guess why…

This article has a huge number of deliberate and incorrect statements and assertions. Let’s break them down:

However, as Montanans have sometimes seen, the purchase of these parks by private equity firms often results in the opposite, such as a severe degradation of services and drastically increased lot rents, at times up to 138%. 

When a private equity group – or any buyer – purchases a mobile home park, they do so using debt. The lender does a property condition report, and the buyer has to fix all the named items that the mom and pop sellers let fall into ruin over the prior decades. And the lender inspections continue on a regular basis, documenting the improvements in their collateral. I have never, in 30 years, seen a mobile home park purchased by a private equity group that was not brought back to life and massively improved through the investment of massive amounts of capital to fix the infrastructure (roads, pipes, etc.), remodel and sell the often dilapidated park-owned homes, install professional management, enforce the rules, and create a nice entry and signage. Yet the media uses this false talking point every week. Could someone please show me a single mobile home park example in the U.S. that has been bought by a new owner that does not look better today than it did prior to their purchase?

On the issue of rents, sure, mobile home park rents are going to go up, as they are ridiculously low. This article does not give any specifics on what the rent was and what it would be going to but instead uses the bizarre ballpark of “138% increases” statewide. Where did that random number come from? The average mobile home park lot rent in Montana probably goes up more like 5% to 10% per year – same as CPI. If we’re talking a lot rent of $300 per month going up to $700 per month, then that would be a one-time adjustment to get things to market levels – typically spread out over a number of years. But mobile home park lot rents start off ridiculously low due to mom and pop’s poor stewardship, and in many of these parks the only option is to tear them down and redevelop the land or raise the rents significantly. In Bozeman, with a single-family home average price of over $900,000, a $300 lot rent is not going to cut it – you could literally shut the park down and cut it up into single-family lots and be miles ahead.

A Resident Owned Community is a model where residents jointly own the land and infrastructure instead of relying on a single landlord or corporate owner.

No, a “Resident Owned Community” model is NOT where the residents jointly own the land. It’s where a non-profit group owns the land, and it’s their name on the title and the loan. The residents end up with the same lot rent increases with either a private owner or the non-profit. But they fare much worse under this “tenant-owned” structure due to:

1. The tenants have no idea how to manage the property so the general condition declines over time.
2. The tenants are unable to collect the rent – by refusing to evict for non-payment – so rents must go up to offset lower collections.
3. The tenants refuse to enforce the rules, so the park becomes a dump.

But the worst feature of these “tenant-owned” constructions is their longevity. That’s because the non-profits that put these together never can obtain normal financing with a dependable guarantor. When a legitimate buyer closes on a park, they typically have 10-year debt and guarantee the loan. When a non-profit does it, it typically has short-term (3 to 5 year) debt and the guarantor is some other non-profit that has no interest sticking their neck out for very long. As a result, after the headlines fade, the park ends up getting sold for redevelopment or simply defaults on the debt, such as these four “resident-owned” communities in Canon City, Colorado.

Just 12 days later, residents had gathered the requisite 51% of signatures required to unionize, and beat the deadline for a bid. 

Having 51% of the trailer park residents sign a petition is not too hard a task – you could probably get that done in a couple hours if you offered free hot dogs. The bigger problem – which this article does not address – is coming up with the cash for the down-payment and a non-profit nutty enough to guaranty the loan. That’s about as easy as winning the lottery – and with equal odds. As has been covered in this weekly missive, the actual closing rate on these “tenant-owned” transactions is so low it can’t really be measured.

In the end, the tenants will not come up with the money or the loan. The non-profit organizers will move on to the next P.R. opportunity after wasting everyone’s time. The usual story.

The end of Lil’ Abner is part of a troubling pattern emerging in Miami-Dade County and beyond. Since 2011, approximately 183 mobile home parks have closed in Florida, according to Florida Mobile Home Relocation Corporation and the Department of Business and Professional Regulation. From a development perspective, these parks represent ideal investments. They are relatively cheap to buy and prime locations for multifamily units or commercial projects. For residents, however, it’s their worst nightmare come true when their community gets sold.

Yeah, I know it’s another story about Lil’ Abner but just wanted to point out that this reporter has finally figured out what I’ve been talking about for years now: mobile home parks make for ideal redevelopment parcels. That’s why rent control simply leads to parks being built into better uses. If 183 parks have been torn down in Florida alone since 2011 – and Florida does NOT have rent control – you can imagine the future of New York, Washington and Oregon mobile home parks since those states have recently passed idiotic rent control laws. There will probably be over 1,000 parks torn down in those states collectively in the years ahead.

The fact that 1980s mobile homes that sold for $3 million are now crashing in value should come as no surprise to anyone with the intelligence of a ballpoint pen. 

Pacific Palisades has only issued 161 new building permits since the devastating fire burned down around 5,500 homes. Maybe they should focus on issuing permits instead of issuing new red tape?

OK, it looks like a review of the American political process is needed for those who apparently lack basic common sense. So here goes. Pennsylvania has a Democratic Governor and House but a Republican Senate. A VERY Republican Senate (28 red to 22 blue). There should be ZERO chance that a Republican Senate would pass a radical leftist bill for rent control that is simply designed to give Josh Shapiro a talking point for his run for President in 2028. And falsely claiming that park owners are raising lot rents 50% per year (the real number is closer to 5% statewide) is NOT going to convince Republican folks to give Shapiro what he wants. While Democrats seemingly defied gravity in the 2020 election cycle, now that Covid is over and elections are based on real ballots again, the general rule that Republicans don’t vote for socialist agendas is back in force.

I hate to spoil this woke sermon, but the fact is that the average single-family home in Bellingham costs $606,000. As a result, the prices at this mobile home park are ridiculously cheap. End of story.

Will this story ever go away? Every week there’s something new and crazy from Lil’ Abner, the mobile home park that’s being shut down for redevelopment. Now the residents want to fight their evictions due to the property being torn down and their notices to leave having expired. Look, I know this is America 2025 – a country where a Marxist is favored to be elected mayor of NYC – but the landlord appears to have followed all the laws and it’s his right to redevelop the land if he wants to. But instead of shutting all this never-ending idiocy down, the legal system appears to be simply delaying the inevitable and no judge has the guts to say “OK, I’ve had enough with this, so everyone needs to get out NOW”.

And with that, of course, another park bites the dust.

Back in the 1990s, James Carville (who worked for Bill Clnton) famously said "drag a hundred-dollar bill through a trailer park, no telling what you're going to find” as his reaction to Paula Jones accusing Bill Clinton of sexual assault. This entire debacle at Lil’ Abner mobile home park just keeps getting weirder and weirder. Every week there seems to be a new lawsuit by tenants who were told to move out for redevelopment months ago. You could probably just mount cameras in this park and produce a #1 rated reality television show.

And another park bites the dust.

This must be a friend of the woke journalist from last week’s “we need rent control in Montana” story. Here are the facts. Montana is a trifecta Republican state. In all of America history, rent control has only been adopted in trifecta Democrat states. As a result, there is ZERO chance of rent control in Montana. 

And another park bites the dust.

I guarantee you that if we drove around that town, we would find many worse violations in every single-family home neighborhood. This is not the first time a rogue inspector has decided to make it his life’s mission to harass good-natured mobile home park residents. The only way to cure it would be for each and every resident to demand a jury trial. That would clog up the courthouse docket so bad they would cry for mercy. 

An official from the Boa Vida Communities made a statement saying, "We have been in touch with Attorney General Heather Hamel on this matter over the past week. On Friday August 8th we inspected each space within the community with a licensed electrician. At that time, it was determined that there were numerous unpermitted alterations made by residents, which cause the power draw to greatly exceed the capacity of the system. These alterations are causing the main fuses to trip, interrupting service for them and their neighbors. Each resident is provided with 50-amp service, by bypassing or altering this without our knowledge or approval they are drawing more energy than the system can provide. This can and has caused outages either localized to their space or street, or even effecting the entire community," said Josh Court of Boa Vida Communities."We will continue to work with licensed electricians to make any repairs or changes needed to ensure the system is being used as designed, and ensure that our residents do not experience interruptions caused by other residents tampering with system," Court said. 

So what you basically have here is a master-metered electrical system with tenants deliberately exceeding the allowable amps by putting in window air-conditioners in excess of what’s allowed, which results in lines melting and fuses blowing. The guilty parties here are clearly the tenants who are cheating and not the park owner.

Yes, this is the same story as last week, in which the residents are trying to convince non-profits to buy them a park for over $1 million more than it is appraised for. This transaction has zero percent chance of ever closing and the tenants need to give up and move on and stop wasting everyone’s time.

Both council members asked questions others didn’t, such as whether owners were consulted and what could happen if parks closed. They also underscored the threat of legal retaliation. That threat was all but assured. In an email to the Argus-Courier on Wednesday, Davies said that Harmony “should have multiple suits on file” in the coming weeks, with more expected after.

I hope Petaluma has a big line item in their city budget for legal fees, or otherwise they have really screwed themselves. Common sense tells you they are going to lose this case and, if they do, the parks will also be able to get judgements against the city for their legal fees and damages.

Is this really the best way for Petaluma to spend their tax dollars – to squander millions to appease maybe fifty vocal mobile home park residents? Looks pretty stupid to me.

I also like the obvious fact that this whole bit of idiocy is being orchestrated by some “Soros-inspired” political action group – just look at how professional those protest signs are! I couldn’t get stuff that nice printed at Fastsigns. Are the folks holding these up even actual residents or just being paid to be there? Doesn’t look very authentic to me.

Maybe the idiot bureaucrats of Washington state should have thought this whole “rent control” thing through a little bit more before they blundered into it. Most mobile home park owners try to keep their annual rent increases to single-digit levels, even though market rents would allow for 50% in some cases. But when a state decides to “stick it” to landlords with rent control, the landlords have no choice but to return the favor to protect their investment. If Washington bureaucrats had simply not adopted what has proven to be the dumbest woke initiative since “defund the police” then the rents would have remained lower. But they chose this idiotic course and now they are guaranteed to have zero housing investment and massive numbers of parks redeveloped into other uses that do not have restricted rents.

In summary, Washington state politicians made a tremendous blunder and they will soon face the consequences. Just watch.

And another park bites the dust.

We’ve sold a few mobile home parks to the residents over the years. There’s nothing wrong with that. When the non-profits offer you $42 million for two “trailer parks” any smart person would say “yes., yes, yes”. It’s not rocket science. But will they actually close on the deal? That’s the big question.

I could have told these idiots that selling old mobile homes in an auction format like that would be a total failure. I’ve been to these type of tax sales and nobody ever shows up to bid. Bureaucrats should stick with things that they’re good at … which is basically nothing.

I’m not sure what they mean by “unaffordable” but it’s an absolute fact that lot rent, insurance, property tax, utilities – pretty much everything related to owning a single-family home, condo, or mobile home – is going up at a rapid pace. Who’s to blame? Not park owners. We’re the folks that have delivered the least expensive form of detached housing America has ever seen. The actual culprit is inflation, which has been the direct result of government over-spending (we’ve got $36 trillion in debt) and other failed policies. If you want to hate someone, hate the government. But blaming mobile home park owners for all the ills of America is ridiculous.

And another park bites the dust.