Mobile Home Park News Briefing

I don’t know the facts of the case but I’m betting that this park was on a “master-metered” gas system that has failed and there is probably no way of fixing it and turning it back on. They will probably have to convert to propane or all-electric. If that’s the case, it’s one more warning to park buyers about this type of gas system in which the park owner essentially acts as the gas company. I’ve written about this extensively as my very first park purchase 30 years ago lost its natural gas in the dead of winter and I had to convert all lots to propane. It was a nightmare.

I know nothing about this park but I do know that Kansas has below zero temperatures right now (the Chiefs game was 28 degrees below zero with wind chill on Saturday). At those temperatures you’re going to have a ton of water lines freeze. If this article was about an apartment complex it would never have made the paper but since it’s a trailer park the media loves to beat up on the owner as they have a perverse pleasure in holding park owners to a ridiculous standard that no other landlord has ever had to even remotely hit.

Yes, a ton of mobile home parks are going to be torn down in the years ahead. How can you save them? Raise rents aggressively to market levels so the land is worth more as a mobile home park than an apartment complex (which is what most are redeveloped into). Period.

Look, the owner for the past 70 years just died and the family wanted to sell the park to settle the estate. A regular person would have no idea that Maine’s bureaucrats were this stupid:

According to a law that went into effect in October, mobile home park owners are required to give 60 days' notice to both residents and MaineHousing via certified mail.  

So now the family will have to notify the tenants, waste 60 days while they do absolutely nothing, and then move on.

Why will nobody publish the actual numbers of how many park residents successfully act on these “first options”? I’m betting it’s something like .0000000000000001% -- and that’s being kind.

I didn’t realize that the biggest predator species in Colorado is apparently not mountain lions or bears but instead the dreaded “landlord” creature. I hear they live in the mountains and swoop down on the first of the month to get checks from their prey. They’ve tried to photograph them, but they are extremely elusive. 

“And in another example, in Jackson, Miss., a city pilot is trying to add more manufactured homes to vacant lots. And that really is aiming at buyers who have a pretty low budget - so less than $200,000. And that's just getting started there, but I think that shows a lot of promise”.

Only a journalist who lives in Manhattan would think that 1) a mobile home costs $200,000 and 2) that’s a low price.

I like this article because it’s honest. It does not sugar coat and the couple have a positive attitude and what they’re doing makes financial sense. It’s a shame that our industry does not seek this couple out and make them spokespeople for the new face of mobile home parks because many young people would identify with them. I may call them myself.

Funny that this would be the article following the park closure described above. Maybe common sense is not a part of the American way any longer, but if you harass owners about raising rents and making money they will simply shut down and find a better use for the land. Maybe nobody understands the drill, but here it goes again:

1. Mobile home parks typically have great locations, with major frontage, in attractive school districts.
   
   
2. Mobile home parks are the correct size for most pad users (2 to 10 acres) and therefore don’t need to be subdivided.
   
   
3. Cities will give park owners any zoning they want as long as it gets the mobile home park torn down.
   
   
4. The land under many parks has risen to a value level in which it is as, or more, valuable than the park itself.

Against that simple backdrop it is suicide for cities and residents to literally push owners into redevelopment at this point, which articles like this one – written by a woke author with zero business sense – clearly do. Is the media deliberately trying to eradicate U.S. affordable housing?

The title says it all. This is what happens when you don’t raise rents and, therefore, can’t make enough money to justify not developing into a different use. Basically, down goes the park and up goes the apartment complex or retail center.

And this is the future if residents and bureaucrats don’t accept the realities of life and economics.

This article contains more B.S. than the livestock pavilion at the county fair. Let’s break it down into bite-sized pieces and get a handle on all the misinformation this article shoots about like a lawn sprinkler.

1. “Now what’s happening because of rent increases … is people have to make a choice between their medicines”.
   
   Look, this worn-out expression is used by virtually every woke writer in the media today. Yes, the rent has gone up significantly (since it started at $350 in a market where apartments are $2,000 per month) but the seniors in this article are mostly on Medicare which – even if they don’t have supplemental insurance – pays 75% of their drug costs and, if they can’t even afford the 25% co-pay, the government has hardship programs to handle 100%. If these were NON-seniors, without health insurance, then this over-used narrative might make more sense. And for that matter, why is the rent singled out as the only straw breaking the camel’s back? Couldn’t you say the same about gasoline, insurance, food – everything in the current era of rampant inflation?
   
   
2. “Now residents are paying more than three-quarters of fair market rent for a one-bedroom in Clark County — just for the land on which their homes sit. Some are also paying on the loans they took to buy their homes. Most residents say they’ve reached a breaking point.”
   
   Look, if you’re paying only ¾ of the 1-bedroom apartment rent, then clearly this is really, really cheap living compared to literally all other forms of housing in this city – and only made more so because these homes are all 2 and 3 bedrooms and not 1. As far as people still paying on the loans, I see not a single home in the photos that could be new enough to qualify. I’ll bet $10 that there’s not, in fact, a single person in this park with an existing mortgage as the U.S. average is 80% own free and clear and that’s with the inclusion of non-seniors who are more prone to buy new homes with big notes on them. So, yes, the lot rent is their actual only housing cost.
   
   
3. “The residents would have to double their rent to cover purchase of the park, O’Banion said.”
   
   That’s exactly the point. That’s why the new owner had to raise rents by so much. Real estate is expensive and mortgage payments are large, as well. This “resident owned community” nonsense never includes the reality that when the tenants buy the park they often raise the rents higher and faster than professional owners do. Just ask the residents 5 years after they buy them. Most miss the days when professionals owned them and kept the rent collected and the bills down. There are already cases of these “tenant owners” putting their parks back on the market because they’re hoping to lower the rent through better management.
4. Woodland East residents have a Jan. 24 deadline to make an offer — 70 days after they received notice of the landlord’s intent to sell. The window is also closing for other eligible organizations — including local governments, housing authorities, nonprofits and community land trusts — to purchase the park.
   
   Look, if I went to a park owner and said “I need 70 days to make an offer on your park” they’d say “you’re an idiot and don’t call me again”. Most park buyers make offers on the spot or within a few days. NOBODY gets 70 days in the real world. On top of that, there is virtually ZERO interest by groups to co-sign on trailer park mortgages so the tenants can run the things into the ground. Only a bureaucrat would think this is a workable plan and that these tenant “first option” concepts have a prayer of getting off the ground. It is literally just a complete waste of time and nothing but virtue signaling by those who pass them into law.

First of all, whenever I hear of “San Dimas” I think of the movie Bill & Ted’s Excellent Adventure (which is where the fictional movie is located). And in this case San Dimas is on its own excellent adventure in actually advancing a good idea that is becoming more popular with many states, counties and cities:

“Grants of up to $40,000 will allow San Dimas mobile homeowners to “make critical health and safety repairs, as well as make meaningful upgrades to their homes for energy-efficiency savings, refurbishments, restoration, and more,” according to a news release. “This initiative is expected to enhance the quality of life for residents and extend the lifespan of these affordable properties.”

This is the framework of true affordable housing progress in the U.S.

So a school district can buy a mobile home park and then shut it down without warning or compensation and not a word is said – while at the same time an “evil” private sector developer can do the exact same thing and be met with litigation, the city council trying to block all redevelopment options and the media in a frenzy of outcry and threats?

Can you say “hypocrisy” anyone?

Can you spot a problem with the facts in this article:

The average sales price of a new mobile home in Idaho in 2022 was $168,500. That’s an 83% increase over the price in 2017, which was $92,300, the report said. The cost of a new mobile home is cheapest in Kansas, Ohio and Nebraska, where the average sales price in each in 2022 was around $101,000.

Then comes a clue:

Channel said one reason the average price of a mobile home is highest in Idaho is because residents are more willing to pay a premium for “higher-end” multi-section models, like a double-wide or a triple-wide, versus a typical single-wide, than people in other parts of the country. The U.S. Census Bureau’s Manufactured Housing Shipment Survey shows that in 2022 a majority of mobile homes shipped to Idaho were larger, more expensive models.

The bottom line is that many people in Idaho buy large, fancy mobile homes to put on their personal land and NOT into mobile home parks. If you take 50% off all of these prices, then you’re recalibrated back to singlewides that go into mobile home parks.

See if you can make sense of this story.

I looked up the Woodlands park that the story references and found it to have 1,235 lots at about a $700 lot rent, which equates to a revenue of around $10,374,000 annually. Assuming the other park is just as large then total revenue is around $20 million annually. It’s just basic math.

So if that’s the case, then how could the two parks pay $83.8 million in property taxes annually against $20 million of total revenue?

I’m assuming that the writer made a typo or misinterpreted the actual information. If we were on a game show we’d guess that the $20 million revenue yields $14 million in net income which equates to around $200 million in valuation and, at a 3% property tax rate = $6 million in annual property tax.

Therefore, I’m betting the actual number is $8.38 million and NOT $83.8 million.

If I’m wrong on this, please educate me on how any of this is possible mathematically.

Articles like this should serve as a wake-up call to the MH manufacturing industry as you have 400 sq. ft. tiny homes beating out 1,000+ sq. ft. mobile homes for demand – even at $1,200 per month price points.  The industry must accept that it must have a terrible stigma problem when you can re-package a smaller version of the product in any wrapper other than “mobile home” and it sells ten times faster and at a higher price per square foot. The only way to get rid of the stigma – it appears to me – is to radically change the exterior of mobile homes and tack on a better name. Just as the optics of an elongated rectangle sitting on stilts is clearly not a crowd pleaser, even the name “mobile home” or “manufactured home” is a sales loser. “Tiny homes” came out of nowhere and, with the aid of a few HGTV shows, have already blown mobile homes out of the water with consumer preference. Surely, manufacturers must find this alarming.

What a shocker – woke media outlets working in unison to try and brainwash you that the mobile home park business only works when the tenants own the land and are therefore free from “evil” developers.

"In recent years, the usual aggravations of life in mobile home communities have been overlain with a new anxiety: that landlords were looking to cash in by selling out to developers with other ideas about what the land is good for."

I wonder how many times you have to repeat the same false narrative before readers start thinking it’s true? Let me try it. CARTER WAS A GREAT PRESIDENT. CARTER WAS A GREAT PRESIDENT. CARTER WAS A GREAT PRESIDENT. Are you convinced now? Well, the media is hoping so. They are obviously working together to write multiple articles on the same narrative at the same time – kind of like a coordinated attack on our intelligence.

The narrative of park residents buying the parks they live in is reaching new levels of insanity, starting in Washington state apparently:

"Preserving low-income housing is growing increasingly difficult in western Washington, as developers gobble up land for pricey high-rises and condos. Often it's those who can least afford to relocate who are caught in the crosshairs."

Originally the narrative in these articles centered on residents who must be freed from “evil” park owners and now it has morphed into park residents who must be freed from “evil” developers. But here’s the big question: is this really the best use of public funds? If Washington starts to try and buy parks at elevated prices just to preserve them from being torn down for redevelopment that’s going to take money away from many other programs that might benefit a larger number of people, right?

For example, a park in Washington with development potential would probably be priced at $100,000+ per space. So a 50-space park would cost $5 million to buy. Is $5 million best spent helping 50 families live out their life in a dilapidated trailer park or would that money be better spent to build a $5 million library to benefit 100,000 people? 99% of all residents in Washington would probably vote for the library.

Of course, all of these efforts are nothing but virtue signaling. The non-profits want to pretend like they are the champions of the poor (and to them the label of “mobile home park” is perceived by their constituency as “the poor”). At least, that is, until they move on to something more interesting as Palo Alto just did.

People are wrong about America not producing anything anymore. We are the world’s #1 producer of hypocrisy.

This article was obviously written by AI but it does have some good points.

What this all boils down to is that the city is now saying that RVs can only be in the park for 6 months while people have been living there full-time for decades. Why the change in attitude by the city? You know the answer. It’s probably because kids are moving into those RVs with their parents and the city doesn’t want to pay the tuition (in fact, the article mentions the recent school crossing sign). So at a time when the affordable housing crisis in the U.S. is at its worse, here’s another government agency trying to basically shut a park down. In San Francisco they’re letting people live in tents on the city streets, but here we have a city that won’t let people live in RV park spaces at no danger to anyone and completely compliant with the precedent that’s been going on for decades.

Once again, there’s only word for this behavior: hypocrisy.

Ah yes, the power of manipulating data to focus only on percentages and not the actual price points. Sure, new mobile homes have gone up more than new single-family homes by percent – but that’s only because they started from a really low number in the first place. On top of that, the stick-built numbers have been corrupted by the author to include used units, too (since apples to oranges comparison was the only way to make their case).

"In 2017, the average sales price of a manufactured home in the U.S. was $71,900. By 2022, that number had spiked 77 percent to $127,300. At the same time, traditionally built single-family dwellings clocked in at $293,737 but only saw prices rise by 47 percent to $430,800 in that same period"

Look, I can play the same game:

1. Dollar Tree raised their prices from $1 to $1.25 so they went up 25% while Walmart only went up 10%. What an unscrupulous outfight the dollar store must be! But wait ... that’s wrong.
2. McDonald’s Value Meal product went from around $1 to $2 so they’re up 100% while Red Lobster only went up 20%. Darn that evil McDonald’s – how abhorrent! Hold on though … I know that’s not true.

The important data is the ACTUAL COST not the percentage of increase. A $127,300 mobile home is a heck of a lot cheaper than a $430,800 single-family home. In fact, if you’re obsessed with percentages, it’s 338% higher. I’m sure the author pushed the percentages to make their case, but only an idiot would come to their hoped-for conclusion.

One final problem with this piece of bad journalism. Used mobile homes sell for $1,000 to maybe $30,000, so if you include used mobile homes in those stats – which is only fair since you’re allowing used homes into the SF stat – then the actual statistically accurate price of the average of new and used mobile homes is more like $70,000 which is an even bigger gap with the SF number. To whoever wrote this article: nice try.

This is an issue that has been on my radar screen for nearly 30 years, stemming from my first acquisition called Glenhaven Mobile Home and RV Park. In many cities they claim that you can’t put RVs on mobile home park lots or mobile homes on RV park lots. But the problem is that RVs and mobile homes were the exact same thing when most of these parks were built (hence the words “trailer park”) and therefore the actual grandfathered permits have no such restrictions. Typically, the owners of the park just does what the city says  on this topic because it’s not that big a deal because they have few RVs or few mobile homes, but if Colorado wants to put a microscope on the issue they may soon find they’ve opened a Pandora’s Box as the park owners have been in the right all along and now the courts are going to prove it. Even now – with two conflicting rulings – Colorado is in a mess as there’s no clear case law on RV parks vs. mobile home parks (as long as they were built before the actual definition of mobile home came into play by HUD in 1976). This is one of those issues where both sides should just try to get along without looking to a court to give them a black and white answer on an obviously grey matter.

2024 has just begun and we already have a serious contender for Dumbest Article of the Year:

IDIOCY #1: “This model of collective ownership, also called resident-owned cooperatives or ROCs, is on the rise. In 2000, there were little more than 200. Today, there are more than 15,000, according to a 2022 study from researchers at the University of California Berkeley, Cornell and MIT.”

There are only 44,000 mobile home parks in the U.S. and ROC acknowledges they have only done around 200 deals since inception, so where did MIT come up with 15,000?? That would be over 30% of all mobile home parks in America, instead of the actual number which remains at around .0045%. That’s a pretty big error that you would imagine anyone with common sense would have spotted when proofing this article.

IDIOCY #2: “When residents own the land, they can move more quickly to upgrade infrastructure. That’s where climate change comes in. Renewables — especially solar — work uniquely well with these types of places, according to Kevin Jones, director at the Institute for Energy and the Environment at the Vermont Law and Graduate School. There’s nothing more perfect than these resident-owned communities because they already have a cooperative structure and, generally, commonly own the piece of land,” said Jones.  “[They] are just kind of natural communities to be able to bring the benefits of solar to more low to moderate-income people.”

This may come as a shock to a young journalist, but mobile home park residents have absolutely no money to fund infrastructure improvements in an ROC format, and certainly solar energy would NEVER be on that list if they could (fixing potholes is challenging enough when you have no deep-pocket owner to make those repairs).

Perhaps this writer went to the Marie Antoinette School of Journalism because something is definitely missing in their sense of reality. Perhaps the residents should eat cake while enjoying their new solar panels?

Even New York is jumping on the bandwagon of making free repairs to the residents of old mobile homes. This is a seismic shift that will benefit a huge number of people at a low price point.

Another smart initiative. Using state funds to fix old mobile homes is a win/win as it preserves home availability in a very low-cost method.

Well, the City Attorney certainly sounds reasonable enough … NOT. Check this out – it’s actually insulting:

“Our chief building official went out, found seven of the ten were either wrecked, damaged or dilapidated and should not be within the mobile home park,” he said, saying the repairs would need to be done outside of the physical location of the community, according to the city ordinances. That’s what we have asked for them to do… repair them up to the current federal government requirements and then provide us that certification that they meet those requirements. And if they repaired up to those requirements, then they could be moved back in and be permitted. But until that is done, that was the position of the city,” Maisch said.

So let me get this straight. You can’t renovate a mobile home on-site. And you can’t renovate a mobile home without the government inspecting the work. Well, I know nothing about this case but I’m betting the actual law may 1) allow you to make repairs to a mobile home without having to haul it out to do so and 2) mobile homes do not need to be reinspected by the U.S. government while making normal repairs unless you do things to them that are not allowed under the HUD code (such as add a heavier roof, etc.).

It looks to me that the city is simply trying to harass this park owner into giving up on bringing more residents into this park. I don’t know how else you can read this. They definitely have a motive since each kid that moves in costs the school district $10,000+ per year in tuition while bringing in negligible property tax revenue.

I hope the owner of this park will present these facts to a local attorney who understands property law and explores what his rights truly are. Additionally, he might want to have a discussion with HUD because this case seems uniquely odd and HUD is starting to take action on cases like this one:

• On January 18, 2022, the court entered a consent order in United States v. City of Arlington (N.D. Tex.).  The complaint, filed on January 13, 2022, alleged that the City of Arlington, Texas violated the Fair Housing Act (FHA) by discriminating on the basis of familial status when it blocked the development of an affordable housing project for families with children that had been proposed by a developer, Community Development, Inc. (CDI), and would have been financed using federal Low-Income Housing Tax Credits (LIHTC).  The complaint alleged that the City refused to issue a Resolution of Support or a Resolution of No Objection to CDI because the City had a policy of supporting LIHTC developments only for new senior housing intended for persons 55 years of age or older.  Under the consent order, the City will pay $395,000 in damages to CDI, maintain a non-discrimination policy for future LIHTC developments, provide Fair Housing Act training to certain city officials, and submit to compliance and reporting requirements for three years.  This case was referred to the Division after the Department of Housing and Urban Development (HUD) received a complaint, conducted an investigation, and issued a charge of discrimination.