Mobile Home Park News Briefing

These are the two parks that a non-profit is buying for $42 million, MAYBE. They have promises of contributions from various non-profit groups (yet to be collected). They have a due diligence period which will take 45 days and the non-profit is already floating the concept that the deal could die if anything pops up with the infrastructure or other large cap-x project. Then they have to get the bank to sign off on it all. So really all that’s happened is they got PLEDGES of $20 million. Let’s see if this deal really closes. I’m not holding my breath.

"From the beginning, we have contested that DOLA's Notice of Violation was an unsupported overreach by the State, and more importantly, was not in the best interest of our community and its residents. We are grateful the judge ruled in our favor and overturned the Notice of Violation in full.  Ultimately, our goal is to provide a safe and clean community that our residents are proud to call home."

The judge figured out that when you have two free parking spots per lot – and roads are not wide enough for emergency vehicles if there’s on-street parking – the landlord can’t really be criticized as being “evil”. Hooray for common sense.

In 1997, the residents formed a group called the Park Acquisition Corporation (PAC) to try to buy the land, but somehow the city, which co-signed the loan, ended up as the only name on the documents. For more than 20 years, resident Gloria Gilbert's monthly payment has gone toward buying property for the city.  But she, like a lot of residents, thought they would eventually own the land.

For years now I have been tying to educate people that in the “tenant-owned community” model the “tenants” don’t actually own the property – the non-profits do. In this case, the “non-profit” happened to be the city that guaranteed the loan and now they say the property is theirs and they want $26 million for it or they’re going to sell if for potential redevelopment.

Pretty much ALL of the “tenant-owned” deals have these bizarre, flaky constructions and are simply a time delay for re-sale to private owners or developers.

Collectively, contributing entities have raised $14 million of an initial goal of $20 million…

When you’re $6 million short and the clock is about to run out, it’s easy to pledge an extra $100,000 since you’re never going to have to actually pay any of it. But it’s a great way to get free “virtue signaling” PR, right?

New state laws in Maine, aimed at protecting mobile home park residents from high rent increases, are now having the opposite effect. A state lawmaker says they're seeing unusually high rent increases at as many as one third of Maine's mobile home parks …

Can bureaucrats in Maine really be this stupid? What did they think would happen? Reminds me of the old Ronald Reagan quote that “the nine most dangerous words in the English language are “I’m from the government and I’m here to help”.

Yes, this is the same idiotic story of the nutty tenants that won’t move out – despite eviction notices – and the judge is too chicken to tell them to leave. One way or the other, this park is being demolished for re-development and all these antics are simply delaying the inevitable.

And, of course and as always, another park bites the dust.

"We’re trying to grow, we’re trying to make an impact, a positive impact, but having business is very difficult, doing business is very difficult especially in this space," he stated. "The cost of doing business is overwhelming."

Once again, Oregon’s rent control did not have the intended consequences. Maybe people should have studied the damage that rent control does before they enacted it – it’s right there on the internet for all to see.

So the tenants are going to pay $26 million for a 98-space park in which they currently pay $1,000 per month lot rent. Here’s what my calculator tells me: 1) that’s $265,306 per space 2) to cover the mortgage, the lot rent would have to increase to over $2,000 per month. Even the folks at the non-profit that promotes these transactions admit it’s dubious:

Tim Townsend, ROC program director with Boulder-based Thistle Community Housing, said that he’s met with Cavern Springs residents multiple times and remains open to working with them. But without at least $15 million in subsidies, the lot payments would rise more than residents could afford.  

Yet the tenants are going to waste everyone’s time with this absurd concept in conformance with Colorado law. Makes total sense right?

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…

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.

Now THIS is an interesting story. The city owns the mobile home park and the tenants want to buy it (sound familiar?). Yet the city is trying to stick it to them on the price:

The residents are offering $20 million. "The city flatly rejected that and came back with an ultimatum of $26 million, no negotiating.," said Hansen.

Looks like cities only enjoy the concept of “tenant-owned” communities when it’s not their pocketbook that’s being impacted. Kind of hypocritical, huh?

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.

And another park bites the dust.

And another park bites the dust.

“It's the residents’ demands, which I don't have an issue of them making demands … I think we need to clarify the fact that … we are not in the government's name saying here are our codes and you have not complied, ” Supervisor Rod Sullivan said at a work session this week.

So let me get this straight. A county board in Iowa – a state with no rent control of any type – sends a letter to a mobile home park owner asking them to please stop increasing their rents because it makes a few vocal and crazy tenants come to their county office and yell at them when they do? What business would take such a request seriously?

It’s a well-known byproduct of dangling any form of rent control for rents to automatically go up higher and faster to offset that risk. It’s not rocket science. Remember how grocery stores ran out of toilet paper during Covid after news that it might be limited in availability? Rent control discussion causes a stampede. And, as usual, Maine has proven to be one of the worst at running their state.

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.

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.

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.

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.

And another park bites the dust.