Mobile Home Park News Briefing

What goofball judge would not agree with this common sense?

Harmony and their attorneys have said they are closing down the park and going out of business. They say they are not trying to repurpose the property, which would require government approval. They say that distinction is crucial and would mean the city and court have no authority to prevent a park closure, the company argued in a written filing submitted on Friday. “The government cannot stop someone from going out of business,” the argument reads. “The government may impose conditions and require a permit when the owner wishes to redevelop the park into something else.” 

But the same state that brought you the O.J. verdict may hold the judge just goofy enough to rule that the government can force a business to stay open indefinitely when it wants to close.  I doubt it will withstand an appeal to a higher court. However, if they rule that no business can close without government approval then I hope the government will force all Steak & Shakes to remain open as they are a great late-night stop when you’re out driving parks.

So the non-profit is buying a 19 space park for $1.5 million? That’s around $80,000 per space. The seller had no known intention of shutting the park down, but the non-profit was adamant that they had to buy the park to save it from the wrecking ball. Here’s a quick fact-check for these non-profits: nobody is going to pay $80,000 a space for a park in Belgrade, Montana to shut it down. Basically the seller is a lucky guy because the non-profit probably overpaid and did zero due diligence, as they were simply obsessed with a public relations opportunity for more fundraising. They bought this park with a two-year interim note. I can’t wait to see how this thing appraises two years from now and how much more money they have to dump in just to get it into permanent financing.

The owner gave the residents 15 days notice to try to buy the property. Over a month later they still had never made a formal offer for the park. So the owner sold to a regular buyer. Now the residents are enraged he never gave them a shot at buying it. This is the fallacy of these “resident first option” concepts, in which there is this false pretense that park residents can somehow magically pony up millions of dollars. In the entire United States there is something like ten to twenty of these “tenant buying the park” deals consummated – that’s it. To pretend that this concept has any real chance of success is statistically absurd. Why not also extend the first option to extraterrestrials by beaming the offer into outer space – because that’s about as likely to occur.

When you don’t raise rents to market levels you can’t inject capital back into the property and instead tear it down and convert it into apartments at rents five times higher.

And, of course, here’s the ever-predictable “residents owning their own parks is the solution to evil landlords pricing them out of buying food” articles, which is timed to come out exactly in tandem with the three articles above. Of course, what’s left out of these articles is that lot rent goes up just as fast – or faster – when the tenants own the parks. But nobody ever mentions that.

OK, now we have three “free rent movement” articles in a row. All you need is the first sentence to get the picture:

People living in a community tailored to seniors say they moved there because it was affordable. Now, they’re staring down a 40% rent hike.

In this case, it’s revealed later in the article that the rent has gone up only $200 per month. That’s less than these residents’ grocery bill increases and gas increases. But apparently only the rent increase matters and is making their life untenable NOT each and every other elevated cost they face every day.

Do you think there’s a possibility that all these publications have decided to fire off these nearly identical articles at the same time? You bet they did. It’s certainly not a coincidence. It’s a “free rent movement” brainwashing blitzkrieg. Aren’t you impressed?

Great, another “free rent movement” article – imagine that. And look, it’s the exact same format:

#1: Ham it up that higher lot rent will lead to famine, pestilence and nuclear war – take it completely out of perspective.

For some of her neighbors in the 55+ mobile home community, she said, “That is exactly what it has been. To have them spend their last few years fighting to keep a roof over their heads at 70, 80, 90 years old, is not right.” 

#2: Only talk about percentage increase and never the actual numbers.

Smith’s lot rental rate increased by nearly 25% since the new owners took over. Holy cow, Dollar Tree did the same increase recently from $1 to $1.25 – that’s 25%, too.

#3: Hide the important information.

“We don’t really have very robust laws to protect people from that type of pinch, in New Mexico,” University of New Mexico property law professor Elizabeth Elia said. So basically there’s absolutely nothing wrong with raising rents in New Mexico to market levels.

The problem with this “free rent movement” stuff is that you probably aren’t going to buy into the concept unless you’re an out-of-work Millennial. Articles like these are not going to actually persuade people. You either believe in “free rent” already or you don’t.

I’m glad to see the “free rent movement” gang is back in town. Here’s how to create a “free rent movement” article:

#1: Pretend that residents can’t afford both food and rent – really ham it up. Turn on the gas light.

One resident we spoke with told us now her rent has nearly tripled, she’s left with only about $47 each month after paying rent, her cable bill and heating her home.“Personally I’m on social security I’m very low income for me it’s the difference between going to get groceries a week or paying a bill or hearing my home,” said Sturtevant.

#2: Focus on the percentage of increase and not the numerical amount.

This is a story Western Mass News has been looking into and in our research we spoke with the Ludlow town administrator and he told us rent at the West street village mobile home park has increased by well over 100%. Adding that the Mobile Home Rent Control Board authorized an increase from just over $195 a month all the way up to $549.33 a month. 

#3: When the facts don’t support your theory, hide them.

Did you notice that little item from above that says the “the Mobile Home Rent Control Board authorized these increases”? Gosh darn it, that kind of really changes the narrative here. How is the park owner evil when everything he did was approved by a “rent control board”?

Bad news for the “free rent movement” folks: it’s NEVER going to happen. Even in Massachusetts you have this problem called property law. And if you don’t let property owners charge fair market rents then they just bulldoze the mobile home park and find another use that’s more profitable. The property owner always wins.

“Is this humane? What about humanity or is this all about the dollar?” Carpenter asked.

Kerr Properties is offering relocation packages to both owners and renters.

“As part of our re-zoning application, we have prepared and implemented a comprehensive relocation program which provides transparency and greater notification to residents,”  development manager Travis Tournier stated at the public hearing.

So where do the obligations of a parking lot owner end? Is the owner of a mobile home park required to take care of the residents even after the property is redeveloped? Is it some type of lifetime commitment? The park and the residents had a contractual agreement that allowed them to park their mobile homes on the land for a specified period of time. It was a mobile home park lease that was signed – NOT adoption papers.

Kain told Van Dyke that he believes from conversations with them and the property manager already, the new owners have plans to return it back to a cleaner and safer mobile home park for low-income residents in Tehama County.

New park owners doing what they do best: bringing old parks back to life.

So here we have a city tearing down a mobile home park because they want a better use of the land. It would be nice if the city was honest with the residents and just told them that and stopped pretending that they care and that maybe there’s a magical solution out there. Because there’s not.

During this tour, Corcoran told Simpson, “Here’s my Taj Mahal — everything’s little.” The interior offers a light, airy and sophisticated feel, boasting an open-concept boho aesthetic.

Look, any way you spin it, paying $1 million for a mobile home is just plain stupid. The mobile home parks in Malibu have long been the exclusive domain of television personalities who want to maintain a beach address when their careers and incomes are on the downward slope (Pam Anderson after Baywatch, Hillary Duff after Disney, etc.) – and everyone knows that. Give it up, Barbara Corcoran.

Can we get a little accuracy on these stats, please? The article fails to name even a single mobile home park that the residents have successfully purchased so far, but names 12 that failed to do so. When you use a title like “residents are seizing the opportunity” it seems more than a little inaccurate if there’s not a single example of this “seizing”. 

Wow, those are pretty stupid bills:

Under those bills, renters in manufactured home parks would be able to halt the automatic renewal of their rental agreement by notifying their landlord 60 days prior to the agreement’s expiration date. Tenants would also be allowed to not renew a rental agreement if the landlord changes its terms if they notify the landlord within 30 days of receiving the notice of the change. The bill also prohibits fees for late rent payments unless such fees are outlined in the rental agreement and caps them at 10% of rent or 10% of the balance the renter owes the landlord, depending on which is less. Additionally, the legislation would give manufactured home tenants the right of redemption, or the right to remain in their residence after being served with a court-ordered unlawful detainer for late or missing rent if they have paid what is owed.

So let me get this straight. Under these new bills 1) residents have the right not to have longer than a 30-day lease (which is what park owners actually want) 2) late fees are capped at 10% of what is owed (which is just about exactly what they are currently charged) and 3) residents have the right to live in their house if they pay the rent in full (which is all that park owners ask).

Another example of bureaucratic virtue signaling – nothing more.

I’m not sure how their new “destiny” is any different under a corporate owner or their own. Will it actually lower the monthly lot rent? No. These programs sound exciting to residents on the front end, but the reality is that running parks is hard and they will not enjoy evicting neighbors for non-payment and enforcing rules, nor will they like worrying about maintaining infrastructure and budgeting for capital repairs. It would be interesting if someone went to those tenant groups that have purchased their parks – five years or so later – and conducted interviews to see if the reality lived up the hype. My bet is the answer is “no”.

The bureaucrats in Vermont claim this is all for the public good – allowing grants for home remodeling and infrastructure – but the realist in me tells me that there are also negative aspects to declaring that basically all mobile homes on private land are actually “parks”. I’m all for the concept of having the state pay for infrastructure upgrades and making older homes in better repair, but it does seem odd to me that this new “classification” is not voluntary and will pin the “stigma” of mobile home park on thousands of people who are, by definition, not actually living in a mobile home park.

What protects tenants against “gouging” are other park owners who will relocate customers from parks that no longer offer a good value by offering free moves of the mobile homes to their properties. That’s always been the way the industry has regulated itself and it’s extremely effective and efficient. They are called “organic” moves and all park owners engage in them when the situation arises.

$35 million to house 140 individuals (assuming even one person per dwelling) works out to $250,000 per unit. At that price you could put them in custom homes on a golf course and let them play 18-holes all day. It’s unbelievable that these non-profits can get away with this stuff without any accountability. 

And another park bites the dust …

The Woodland East Mobile Home Park is a community of residents 55 and older in Southwest Washington, roughly 20 miles north of Vancouver. The Columbian recently reported on the plight of the many seniors who live there and struggle to pay $1050 per month to rent a lot, in addition to their mortgages, utilities and other expenses. The tenants claim the landlord has raised their rent by 250% since he purchased Woodland East in 2017 and have filed more than 100 complaints against him with the Washington Attorney General’s office. But now the tenants are facing their biggest hurdle. They received notice last Fall the community was up for sale and have until Jan. 24 to raise $33 million to buy the mobile home park themselves, although the property may already be under contract.

No way, three articles in a row about mobile home parks being redeveloped. What a shocker!

Apparently $1,050 per month lot rent is not enough in this market to keep the wrecking ball at bay. The property owner tried, but the tenants apparently thought that they could bully the owners endlessly and the plan backfired.

Mobile home park residents often own their homes, but not the land it sits on. This means as property in Idaho rapidly grew in value over recent years more and more mobile home parks have grown more valuable than the homes sitting on it, incentivizing land owners to sell and pushing out residents with limited resources.

This is not a problem that you can legislate a solution to. It’s based on economics. When the land is more valuable as an apartment complex or other use, the park gets torn down. Period. If you want to stop the redevelopment frenzy, then support park owners when they raise rents, educate residents on the necessity of higher rents, give grants to fix old park infrastructure, and offer preferable tax treatment for keeping a park a park.

Gee whiz – not another article on a mobile home park being shut down for redevelopment? I never saw that one coming …

“What we’re finding is that a lot of the park owners especially the newer park owners, may be large corporations or hedge funds. Do not become part of the associations, and in some cases, some of them are the bad actors,” said Paula Stark, State Representative for District 47.

I’m afraid that Paula has no idea what she’s talking about. I have been in the industry for 30 years and, without exception, the parks in the worst condition are those owned by moms and pops and NOT institutional owners. Paula may be unaware that big owners typically use sophisticated lenders that require property condition reports that stipulate minimum standards. Moms and pops have zero debt, zero loans, and zero supervision. It’s the institutional folks that are actually bringing these old parks back to life, not vice-versa.

The good news, of course, is that Paula’s bill will die in committee since she apparently also must think that Florida is located in California.

It’s not rocket science: low rents = redevelopment. The only way you slow the accelerating pace of these articles about parks being closed for redevelopment is for lot rents to increase enough that keeping the park in place is the most profitable use for the land. How much does that mean lot rents must go up? Again, it’s not rocket science. Apartments rents average $2,000 per month and mobile home park lot rents in the U.S. average $300 per month. Would parks survive from the wrecking ball at $600 per month lot rents? Not sure, but you have much better odds. Otherwise, why would any park owner not just ultimately tear the park down and build apartments?

I know Mike Cerillo and he is a top-quality operator of mobile home parks. Look at the photos in the article of the clubhouse and the street scene. To claim that he has let this property go down in quality is utter nonsense. There are always two sides to every story, but this author only offers one – and one that I believe to be as accurate as claims that Kamala Harris is managing the border well.