The Future Of The Industry: HD Subdivisions

We’ve never been big fans of many of the names for what we do: “trailer park”, “mobile home park” or “manufactured home community”. The reason? It focuses on the home and not our business model. So we would like to make the following suggestion for a new name for our industry: “HD Subdivisions” which stand for “High Density Subdivisions”. Because that’s where this industry is heading over the next century – potentially away from “mobile homes” as we know them today and potentially into another product such as tiny homes or even something yet to be engineered. We do not think it makes sense to limit what we do as landowners in providing the best in affordable housing.

We’re in the land business – we have no vested interest in the home product

There is a basic misconception in the industry that park owners are tied somehow to the manufacturing and retail parts of the industry. Of course, this is completely erroneous. Mobile home parks derive their income not from building and selling mobile homes but instead by renting the land they sit on. Mobile homes have already gone through one complete cycle in most cases, with mobile homes from the 1950’s and 1960’s (also known as “pre-HUD” homes) replaced by newer “HUD-code” stock. And there is every reason to believe that the homes in all communities will cycle again in the decades ahead. The point is that we are not specifically in the “mobile home park industry” but really in the “land rental industry”.

Our value is in the permit

What makes our land special is one hugely rare and valuable asset – and that’s the permit that allows us to place personal property on our lots and charge lot rent. New permits for the construction of these type of communities ended in roughly the 1970s, and today there are only about 10 new parks built per year while about 100 are torn down for redevelopment we are effectively an endangered species, and those permits just keep climbing in value.

There is pressure to potentially change the personal property that sits on our lots

The “tiny home” movement is similar to that of Uber and Lyft that toppled the status quo of taxi cabs. The bottom line is that the demand for affordable housing – and the interest in “living small” – has grown in stature to such an extent that there is new thinking on the possibilities for creating smaller living spaces using new advancements in engineering. And we only see this accelerating in the years ahead.

The future of customer tastes dictates the future product – and it is always evolving

New American generations share some of the same desires of earlier ones, but also some that are completely new. Remember that mobile homes were a new idea in the 1920s that came out of nowhere. And there’s every reason to believe that there are new and better ideas for creating personal property to park on appropriately permitted land coming up in the future. We’ve seen the tiny homes on HGTV, but there may be new things to follow. If you look overseas, you will find new designs in Japan and Russia that are radical and may resonate better with newer generations if brought to market. Nobody has a monopoly on consumer tastes, but successful companies embrace that demand. That’s why it’s important for park owners to remember that we are not in the mobile home industry, but simply the land business, because we don’t need to limit that future.

The only certainty in life is change

Everything in life is always in a state of flux, and it’s shortsighted to not lump our industry into that grouping. Sure, we are low-tech and haven’t seen an iota of change in the last half-century, but that does not mean that new technologies will not create the opportunity for new personal property housing units that look substantially different from current offerings. I think that if we separate our thinking from this reliance on “mobile homes” and instead change over to HD Subdivision terminology it will give greater clarity to our actual business, which is renting land for personal property dwellings regardless of what they are called or what they are made of.

Conclusion

We need, as a collective group of landowners with unique permits, to separate our business model from that of personal property manufacturing. It’s about time that we start giving descriptive recognition to what we really do, and not relay on being told what our name is. We suggest that HD Subdivision is a better title than “mobile home park”. Sure, we’ll continue to use the same old jargon because that’s what Google analytics requires for reaching 99.9% of our customer base, but the point has been made.

Frank Rolfe Mobile Home Park Investment Expert
Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with over 250 communities spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.