Mobile Home Park News Briefing

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.

Bob's Trailer Court's owner plans to create a different type of housing park along Marion Road after the trailer park closed amid a variety of struggles. Common Sense Translation: How happy do you think Bob is to ditch the dilapidated trailer court and convert it into apartments? He’s the happiest guy in town.

Hewitt said the owner of the park must fix the water and sewer, so one option is to repair that and “leave the trailer park like it is, and that is the primary option right now.” Another possibility is to close the park, replace the water and sewer and build new apartments and townhouses, though Hewitt added “this option is becoming very expensive”. The final option would be to sell the trailer park to a new owner and the new owner would decide what to do.  Common Sense Translation: There is zero probability that the park owner is not going to tear the park down and build apartments and townhouses.

“They have not presented any plans to the county for approval, and they won’t do that for at least another six months,” Hewitt stressed. “Once they do that, the process to approve whatever plan will be 6 to 12 months. So if they intend to do this it will be at least 18 months to 24 months until anybody is impacted.” Common Sense Translation: You better start packing because this thing is coming down in 18 to 24 months – and the zoning department will fast-track the plans for the redevelopment faster than a hypersonic missile.

“St. Mary’s County does not want to have people homeless, so we have land that the county owns,” Hewitt said, referring to parcels on Pegg Road and on FDR Boulevard near Route 4. “These two pieces of property we intend to build townhouses and apartments.” Common Sense Translation: We are going to charge $2,000 per month for these apartments and townhouses so don’t bother to apply.

Hewitt said residents can show property owners that “you are committed to your community and committed to keeping the neighborhood nice.” Common Sense Translation: If you were dumb enough to believe the earlier statements then we thought you might even buy this one.

“The fact that the owner decided to purchase a park that was in such poor condition is not the problem of the residents of the park,” Kerswell said. “The cost of fixing the utilities is not on the residents, it’s on the owner. Because the park was in failure—the septic and the water and all these systems are in failure—he cannot pass that cost along to the tenants.” Common Sense Translation: Well, if that’s the attitude of the tenants then they better not be shocked when the new owner shuts the park down and turns it into a different use (probably apartments). There are two ways to go through life namely 1) win/win and 2) win/lose. If the residents think there’s a win/lose option (in which they hold all the cards and the property owner holds none) then the tenants are going to probably soon learn an important life lesson when the eviction notices go out. They should instead be sending “thank you” cards to the new owner and happily paying a higher rent that fends off redevelopment.

This article is mostly stupid but hidden inside of it was a 3-D printing company name and I went to their website and I was blown away by the product https://www.azureprintedhomes.com/backyard-studio/. THIS is the future of pre-fab housing. Take a look for yourself. Consumers would buy this product even if it cost MORE than stick-built.

Could this be more cringe-worthy and insane? This park looks to be located (based on the photo), literally, in the middle of nowhere. Tiny homes are hot with Millennials but not retired folks. Where would a Millennial get a job in this location – on a farm? I hope there’s a Plan B since working remote is getting repealed by employers. If you could put this in the heart of a city, then it would work fine – but zoning would never allow for that. That’s the basic problem with all greenfield development.

Here’s the quick answer: modular has zero promise unless it sells at a bigger discount than just 10% (stick-built $300,000 vs. modular at $270,000 according to the author). Until you get to at least 40% off, forget it. Nobody is going to buy a fake Ferrari for roughly the same price as a real Ferrari.

I know that a lot of people will be worried about taking “home rule” away from towns, but that’s one of the issues that brought us into a housing crisis in the first place. If everyone focuses on a very narrow view of what is in their immediate best interest, municipalities tend to end up with, well, with the current housing crisis.

What a frightening woke narrative. Communities definitely need zoning in which the $1 million mansion is protected from having a mobile home move in to the vacant lot next door. Sure, the woke writer of this article could care less because they have nothing to lose – they’d be the one in the mobile home. But you have to protect property values with strict zoning and Houston proved once-and-for-all that a lack of zoning was a bad idea.

Yes, that’s what happens when lot rents don’t make the property more valuable as a mobile home park than as a different use. As I have said in every week’s news review: low rents = redevelopment.

Interesting to see how the old “trailer trash” term is making a resurgence in American culture. Wait, I thought that such hurtful slogans were off-limits in the new woke America. I guess not. Once again, mobile home park residents get no respect because they have no political clout.

Information from the NMHA indicates that changing public policy to incentivize park owners to sell their property to mobile homeowners, HUD properties and other nonprofits would create more housing security.

Wow, looks like MHAction has a new non-profit competitor called the “NMHA” (which stands for the “National Manufactured Homeowners Association). They support the same woke “free rent” movement and have pledged to annoy park owners and respectable bureaucrats throughout the country. Can’t wait to see this turf war escalate. I’m picturing the rumble from Will Farrell’s “Anchorman”.

A couple observations:

1. So much for the argument that mobile homes don’t appreciate (when they are sitting in a nice mobile home park) as the tax assessor found that the average mobile home sale went up 87% in price over the past few years.
2. If residents find this tax situation so bad, maybe they should have more empathy for park owners who are seeing the same escalation in property tax on the land only on a massive scale, and that’s why lot rents must continue to go up significantly.