Mobile Home Park News Briefing

With the help of the Community & Economic Development Clinic, attorneys secured a loan for the tenants with the state of California at an interest rate they could afford. Community Development Financial Institution ROC USA provided a bridge loan.

Common Sense Perspective: Can’t wait to check in on how this all turns out with a debt construction that sounds about as stable as the foundation on the Eiffel Tower.

On Friday, Idaho House lawmakers voted 66-0 to pass HB 590 from Rep. Elaine Price, R-Coeur d’Alene, after it went through a round of minor edits. The bill would require owners to give 15 days of notice to a mobile home park association before a park is sold.

Common Sense Perspective: No wonder it passed 66 to 0 without any discussion – it’s absolutely meaningless. It takes residents about six months to a year to get a deal done on average, not 15 days.

Common Sense Perspective: The residents are paying $11.5 million for a dilapidated park. The owner waited two years for them to gather the money. Do you think they might have overpaid? And then comes the issue that the financing is cobbled together from a bunch of non-profits on short-term loans. There’s no way this deal is going to make it without continual subsidies. What happens when the non-profits lose interest and move on to different virtue-signaling opportunities? The residents would have been far better off with a stable corporate owner with long-term debt.

Judy Youngs had gotten used to modest increases in her mobile-home rent. Then late last year, she learned it would soar by 60 percent over the next four years.

Common Sense Perspective: If you don’t raise rents significantly annually – to keep up with inflation that is averaging 5% right now – you have to play catch up and raise rents significantly higher later.

Another factor to consider is that Arizona is the 15th most expensive state to live in, right up there with New Jersy, Maine, Rhode Island, Connecticut, Oregon, Maryland, Vermont, New Hampshire, Colorado, and Washington. If you want to retire to an area that is affordable, Arizona is pretty much your worst choice. I know the U.S. has decided to eradicate all personal accountability, but maybe the first order of business if you can’t afford to live in Arizona is to move to a cheaper state?

“We’ve increased lot rent only once in the last four years,” said Gilsrud. “And that was by $6.” 

Common Sense Perspective: Inflation under Biden has gone up a cumulative 20%. Rents in this park are around $500 per month. They should have gone up $100 per month just to cover the increase in the park’s operating costs but instead the residents have voted to increase them only $6. Clearly the residents are on a financial suicide mission as they refuse to raise rents in keeping with inflation and will soon not be able to handle the capital needs of keeping the park running, leading to a special assessment that few in the park will be able to afford. That “$6 rent increase” quote is asinine, not something to be proud of.

Some residents in Old Orchard Beach recently learned their mobile home park, Old Orchard Village, was sold. This has prompted some to put together a last minute effort to buy the park themselves.”That’s why I’m out collecting petitions," Melissa Hilliard, who's lived in Old Orchard Village for 22 years, said. “So that we can form a co-op and buy it ourselves. It might be a longshot, but that’s what I’m working for today.”

Common Sense Perspective: At 371 lots and a value of around $70,000 per lot this would be a $26 million transaction. On top of that, it’s already sold. The residents’ chance of success on this project is lower than Joe Biden’s chances of making the Chiefs’ starting lineup.

Pinellas County has ordered dozens of residents in a frequently flooded mobile home park to elevate their homes to nearly 11 feet or leave by the start of hurricane season in June. Residents of Twin City park, which is in the Gandy area, say it makes no sense to spend as much as $50,000 to elevate homes that are valued at half that amount — or less.

Common Sense Perspective: Pinellas County finally found a way to shut down the trailer park which had probably been on their to-do list since the time of Jimmy Carter.

This is what many mobile home parks will look like in 50 years. But you better get ready for $1,000+ per month lot rents to make it happen and justify the capital cost to make this conversion.

Let’s cut through the B.S. and admit that nobody wants a mobile home to be placed next to their stick-built home. Even my small town of 4,500 people bans mobile homes on residential lots. However, my town recently passed an ordinance allowing tiny homes on those same lots. So the problem is not people living in smaller dwellings. The real problem is simply the “looks” of a mobile home and the stigma that goes with it. It’s 99% an aesthetics issue, and we all know that mobile homes exteriors are not as attractive as they could be. You are never going to be able to get cities and towns to allow mobile homes on residential lots until you get them off those stilts and down on the ground. Skirts are only a plus if you own a clothing store or are located in Scotland.

Let’s be honest, there is a huge delay between when something is talked about and when it actually happens. An enormous lag time. We’ve been hearing about these “affordable housing initiatives” from the Biden administration for three years now and have seen nothing come of it. With only eight months left until Biden’s era is over (according to the polls) does this narrative have any value at all? Not much. It reminds me of what Teddy Roosevelt told the native American leaders when they complained about their treatment by the U.S. government: “we shall endeavor to persevere” which means, actually, absolutely nothing.

Well, this is a description I have never seen before:

We ironically find in many trailer parks a kind of traditional urban design more common in European and Japanese cities.

I think what they are driving at is that mobile home parks are so high in density for detached structures.

So residents are paying $241 per month lot rent – unchanged since 2013 – in a market where apartments cost $1,900 per month. And they are up in arms about the owner increasing the rents to around $790 per month, which is 50% less than the apartments down the street. Maybe they don’t understand the position that they’re in. Here, I’ll help them out: if the rents don’t go up by at least that amount or more the owners are going to tear the park down and build apartments. How can these people be this blind?

Can there be any other mobile home park story with more hypocrisy than Palo Alto and their lone trailer park. Having gone to Stanford and having driven by this eyesore myself while heading to Taco Bell to stay up all night to cram for exams the fake commitment of the city to “save” the property from redevelopment is finally exposed with the announcement that they are going to tear it down and redevelop the land into nice, new, upscale things:

With the city and the county each kicking in $14.5 million for the purchase and Santa Clara County Housing Authority contributing another $24 million through federal funding to pay for necessary repairs, residents who had been bracing for eviction since 2012 could now breathe a sigh of relief. The council, for its part, could take solace for having preserved 117 units of affordable housing and having prevented displacement of more than 300 residents. Now, Buena Vista is preparing for its next phase. Its new operator, Housing Authority, submitted last month a formal application for redeveloping the park at 3980 El Camino Real. The plan calls for splitting the park into two sections and constructing a three-story, 61-unit apartment building in one section. The other would remain a mobile home park, with 44 spots for new coaches, which could be either mobile homes or recreational vehicles.

What makes this story even more ridiculous is that the non-profits cobbled together around $40 million to outbid the group that initially wanted to buy and redevelop the land. And now they are doing exactly the same thing that the developer proposed back in 2012.

So what was the actual point of all this? Clearly the politicians behind the purchase, at that time, were trying to win votes from lower-income Palo Alto residents (which are few in number) and wealthy residents who want to virtue-signal (which are large in number) and now the politicians and their supporters have moved on to new things and could care less what happens to the residents.

Thank heaven for America’s dysfunctional legal system in which citizens sue each other more than any other country in the world. Apparently, it even has the Chico city hall spooked:

The city's Internal Affairs Commission decided not to move forward with a recommendation to the city council on an ordinance. Councilmember Addison Winslow was the only city official on the three-person council who backed some form of a rent stabilization ordinance, but he couldn't garner the support of his other two colleagues. Vice Mayor Kasey Reynolds cited concerns with legal liability from a potential ordinance.

But then again, maybe the residents used a bit too much gaslighting in their crazy narratives such as this one and scared the sane adults in the room:

"When rent goes up and when PG&E goes up, we’re gonna have more homeless people. I just felt a lack of compassion," said resident Jean Marquardt.

It’s possible that the two other folks on the Internal Affairs Commission were more focused on the damage that rent control does to the supply of affordable housing (causing rents to actually increase) rather than the DEI-focus on “compassion”.

I don’t know how anyone does business in California, but I know I won’t be one of them.

A shockingly intelligent article:

Controlling prices is the wrong way to get affordable housing. Supporters of rent control want to make it easier for low-income families to afford rent. The best way to achieve that goal is through competitive markets. Markets, not state rules, are what allow people get better products at lower prices.

Just as the caterpillar turns into the butterfly, the trailer park turns into the apartment complex. The only thing holding that metamorphosis back is higher lot rents.

OK so let me get this straight. The non-profits paid $7.6 million for 60 lots, which equates to around $130,000 per lot. And the lot rent is being raised, as a result, to $500 per month from around $400 per month. So now let’s go where the journalist that wrote this never went: the actual financial impact. Current interest rates on a mobile home park like this is around 6%, so the interest alone on this deal is around $456,000 per year. At a $500 per month lot rent, using a more than generous expense ratio of 30%, and with 60 lots total the projected NOI is 60 x $500 x 12 x .7 = $252,000. That’s right, the total projected net income s only enough to cover 50% of the interest on the loan. This deal was probably structured on a short-term loan that the non-profit cobbled together. It will ultimately come due and, with these numbers, this deal will never clear the trees. There’s no way this deal could have been put together at $7.6 million in the private sector, which is probably exactly why the seller was probably more than happy to unload it on the residents. And it also means the rent will have to be around $1,000 per month for this park to continue in operation once the subsidies end. 

Ouch, that’s probably not what the writer wanted to include in a woke “residents need to own their own parks” article:

Off Lakeway Drive, however, a deal simply couldn’t get done, O’Banion said. In a Feb. 13 letter to Lakeway residents, O’Banion gave ROC Northwest’s “professional estimate” of the value of the park property as “a minimum $35 million.” Even with the benefit of a grant and a very low-interest loan for part of the sale, the total loan package “would be unaffordable for many people in the community and would create an unacceptable risk of nonpayment for lenders,” the letter said. ROC Northwest estimated that the loan repayments, coupled with the cost of day-to-day maintenance and operation of the park, would result in a rent increase of “well over 100 percent,” O’Banion said.

So what they’re saying is the rents would have to double for the park to continue in operation at the current value. What an admission. I hope the residents remember this lesson learned when the next private-industry buyer takes over and doubles the rent to make the numbers work. They can’t complain as they have already scientifically proven the necessity for that increase.

Represented by attorney Jeffrey T. Scrimo, the owners of Lake Onota Village have laid out a plan to hike monthly lot rents by $210 over the next three years. This adjustment would catapult rents from their current range of $330-$380 to $540-$590, marking a significant financial strain on the community's residents. The justification behind this steep increase is attributed to a significant rise in operational expenses since the last rate adjustment in 2012, with the owners aiming to achieve a 'fair rate of return'. The proposed hikes are not just numbers on a page; they represent a looming affordability crisis for the residents of these communities. Manufactured homes, often praised for their affordability and accessibility, are becoming less so as rental costs for the land they occupy skyrockets. Common Sense Translation: The rents have not been increased in twelve years. Going from $330 per month to $590 per month over twelve years equates to around a $22 increase annually. That’s ridiculously low. Stop whining about this more-than-reasonable increase and be thankful that you have found the lowest cost housing in the city.

Pam has lived at the Dakota Valley Mobile Home Park for three years. She said, "I don't want to go to the homeless shelter. I've been there before." When she moved in, the lot rent cost $395. On March 1st, it will increase to $675 a month. "The first time he raised it, I had to change my life. I was doing senior companions, and I had to quit that job because it didn't pay enough to accommodate his raise," Kifer said. Common Sense Translation: $675 per month is not excessive lot rent at all, in most markets. But if you were in a homeless shelter three years ago it makes sense that you should probably not be in the mainstream housing market and need to get on Section 8 or a similar government program because you really can’t afford to live in the modern world without assistance. It’s also a pretty safe bet that you don’t actually reflect the opinions or financial status of the rest of the mobile home park residents.

Several residents of a Hazel Dell senior mobile home park gambled that rent stabilization legislation would pass — and lost. Their landlord at Meadow Verde had asked them to sign a lease agreement that included a discounted rent increase if they signed by Sunday. Some of the residents weren’t due to sign a new lease for almost a year. The discount tempted many of the residents who live on fixed incomes. But they believed the early rental agreement was an effort to lock them in at rent increases higher than the 7 percent cap in a rent stabilization bill before the Legislature. So they didn’t sign, putting their future in the hands of lawmakers.Then, on Monday, that legislation — House Bill 2114 — effectively died when the Senate Ways and Means Committee refused to vote on it. “We really had a lot of faith in our elected officials on both sides to do what’s right. They failed the people that needed them most,” Bart said. Common Sense Translation: Ronald Reagan summed it up when he said that the nine most dangerous words are “I’m from the government and I’m here to help”. Rent control is such a bad idea – with plenty of economic stats to prove it – that even crazy, woke Washington couldn’t bring itself to pass it and the residents bet on the wrong horse when they believed the hollow promises of today’s bureaucrats.

Manufactured home residents have testified for more than a year to city leaders and staff that rent and/or leases continue to go up and that many of them are on fixed incomes and increases are making it difficult to buy necessities. They’ve also feared that, as manufactured home parks are being sold, they could be redeveloped. Judy Hatch, a manufactured home resident, spoke at the city’s Feb. 6 planning commission meeting, saying her park has seen an increase of $125 more a month and that, for some people, that equals their monthly food costs. She’s also been concerned about her park’s owner potentially selling and losing her home to redevelopment without anywhere to go. Common Sense Translation: You can’t have it both ways. You either like living in the mobile home park at the new rent or you need to move out. You can’t say you hate the park but also that you hate having to leave. There’s no way that the rents are NOT going to go up and still have the property remain as a mobile home park. This is no different that the grifter that goes to McDonald’s, orders the burger, eats most of it, places a cigarette butt under the bun, and then demands a refund from the manager for selling a dangerous hamburger. The residents are not going to get something for nothing – only the federal government engages in that misguided behavior. You can use the same argument on any U.S. product or service that inflated costs are taking away from food or other expense line-items. It’s an absolute fact that America is completely out of control with inflation and all Americans face tough choices. But is the park owner going to let the residents live in the park and lose money doing it? Absolutely not, so give up on that argument.

The less-than-4-acre property was for decades the Shade-A-Plenty mobile home park. After owner Barbara Leviner died in 2020 there was an attempt to rezone it, which the town rejected, and then it was sold in mid-2023 for $3.5 million. Unlike mobile home parks that rent land to people with homes they own, Arbor Point will own and rent all of the units. Branning said rates for the two-bedroom, two-bathroom homes have not been decided.

Apartment rents have also been soaring, up 39 percent in Mount Pleasant over the past four years, according to Apartment List. The estimated monthly rent for a two-bedroom apartment in the town was about $2,100 at the start of 2024. Refurbishing Shade-A-Plenty with new units avoided the need for zoning approval from Mount Pleasant since the land was already being used for that purpose. Town planning director Michele Reed said the area is zoned for single-family homes, but the mobile home park could continue to operate as an existing "nonconforming" use. Unlike the neighboring city of Charleston or Charleston County, Mount Pleasant has not devoted millions of dollars to affordable housing. And the town has prohibited new multifamily housing, such as apartments, for the past seven years and is in the process of extending that moratorium for two more. Common Sense Translation: The new park owner outsmarted the city and is converting the park into “detached apartments” which is exactly the housing subset the city has been trying to block for years through aggressive zoning laws intended to ban them.

Manufactured homes, including those located in parks, represent one of the largest components of unassisted affordable housing in the nation. In Virginia, mobile home parks provide some of the most deeply affordable housing in many of our communities. But these parks are increasingly at risk as many long-time, traditional park owners are aging and looking to sell as they retire. At the same time, large, national real estate investors are increasingly interested in purchasing these previously ignored assets. When parks are purchased, rents rise and frequently tenants also become responsible for water and sewer payments as well as other fees. Since 2020, Virginia’s Department of Housing and Community Development has received 146 notices of Intent to Sell or Purchase Offer from park owners, indicating how active this market has become. Park residents face challenges that typical apartment renters do not. If they own their mobile home, as many do, they have little choice but to pay higher lot rentals and absorb utility bill transfers since they are unable to move their homes. The term “mobile” is a misnomer; these homes are mobile only to the extent that they are transported to their initial location. After that, the cost and impracticality of moving them means that they stay put. Legislation is pending in the General Assembly that offers some relief. Del. Paul Krizek’s House Bill 1397 offers local governments, tenants and nonprofit organizations the opportunity to purchase parks when sales are pending to preserve affordability and improve living conditions. There is evidence that this approach can work. Common Sense Translation: To bring old mobile home parks back to life, the new owners must increase rents significantly. Residents don’t like to pay higher rents. They don’t need to move their homes if they have a better deal as they could just sell the homes where they sit, just like any other single-family home. The real reason they don’t move is because the cost of every other form of housing is significantly higher than living in a mobile home park. When bureaucrats opine on giving the tenants the first option to buy the park they know full well that the success rate for that concept is something like .0000000001% but it gives them an out to pretend like they really do care and to then shift the blame to non-profits who won’t co-sign the mortgage.

The Tellico is for sale now at a discounted price of $162,000, which includes the furniture and appliances shown in the video tour below. For this kind of money, you're promised nearly the same comfort of a proper home but with a smaller footprint, which should convince aspiring downsizers to take the leap and make the transition.
Common Sense Translation: Do you seriously believe that somebody is going to pay $162,000 for that thing? The folks that need to live in a tiny home have one common characteristic: a very small budget. At that price point I think closing on a sale would be more difficult than Biden walking up stairs.