America is filled with comeback stories. Apple began as a computer manufacturer. After initial success, the company ousted its founder, Steve Jobs, and entered into a period of continual decline. In 1997, teetering on insolvency, Steve Jobs returned and brought out the greatest line-up of products in technology history: the iPhone, the iPad and the iPod. Apple was back on top. And then there’s the story of the Kansas City Chiefs, which had a roughly half-century between being Superbowl champs. The underdog story is a part of American lore, and there’s nothing more celebrated than when something or someone rises from the ashes to regain their respect and victory.
In the 1950s and 1960s, mobile home parks were the hottest sector of real estate. The demographics of mobile home park residents was higher than stick-built dwellings. Elvis lived in a mobile home park in two movies. Frank Lloyd Wright designed a mobile home prototype, and Stanley Marcus – founder of Neiman Marcus – designed a prototype mobile home park. And then the industry fell into decline fueled by an exodus to larger, suburban tract homes as a result of mass prosperity, as well as continual negative media which built the stereotype in most Americans that mobile home parks were undesirable. Well, it took years of hard work to bring mobile home parks back to life, new home designs, a national shortage of affordable housing and the stress test of the Covid-19 pandemic for the industry to return to its rightful place.
We’re calling this comeback story the NEW Golden Age of Mobile Home Parks and it’s the topic of this Lecture Series event.
The host is Frank Rolfe who is not only one of the largest owners in the industry, but also the guy the New York Times calls the human “encyclopedia of all things mobile home park”.
If you want to learn more about mobile home park investing, take the Mobile Home Park Investor's Boot Camp. You'll learn how to identify, evaluate, negotiate, perform due diligence on, finance, turn-around and operate mobile home parks. The course is taught by Frank Rolfe who, with his partner Dave Reynolds, is one of the largest owners of mobile home parks in the U.S. To learn more, Click Here or call us at (855) 879-2738.
The New Golden Age of Mobile Home Parks - Transcript
This is Frank Rolfe. Thanks for joining us here at our next MHU.com lecture series event. And we're pleased you're here. We're going to go ahead and do this in the following manner. I'm going to go ahead and talk for a while about the industry, and then we're going to have Q&A after so you can ask, answer any questions you may have regarding mobile home parks, tonight's lecture information or just whatever suits your fancy. There's no question too taboo on our Q&A session. Again, I apologize for our technical problem, but hopefully it has now been solved.
So again, Americans love an underdog story. Don't we all. So if you think back, a lot of the stories in America that we all celebrate, one for example would be the story of Apple computer where you had Steve Jobs started up in his garage, made some wonderful initial products, then fell into disfavor, forced out of the company, was exiled, started another company called Next Computer. It bombed, and then suddenly he reemerges back at Apple at the very moment they're about to go insolvent and he saves them. He brings out the iPad and the iPhone and all kinds of wonderful devices. Once again, Apple was at the top.
So I think we all relish those stories. Tonight, I want to talk about a very special story that's in the same vein, and that is of the mobile home park, which oddly in tonight's lecture in fact the new golden age of mobile home parks. So let's first start off with the first golden age. So if we're saying it's the new golden age, that would therefor suggest there was a golden age once before. So what was the first golden age? Well, the first golden age sprang from this early creation, this new product the people used to pull behind automobiles in the 1920s. These were little land yachts, and wealthy people bought them because, until then, you would have to sleep on the ground in a tent when you were done with your motoring day.
There were no hotels along roads, only near railroad stations. So wealthy people didn't want to sleep on the ground in a tent, so what they did instead is they went ahead and had these land yachts created, and that's what allowed them to, at the end of the day, get out of their car, go in their very nice mahogany yacht creation, and it was very luxury travel. A lot of cities noted that, and they noted that a lot of wealthy people were driving through pulling these things. So [inaudible 00:02:33] said, "How do we get these people to stop? We want them to stop in our town." Because back then, they might not only eat or buy a souvenir. They might even build a factory, which is back when America was booming.
Later on, you had mobile homes introduced into these standard American fare for GIs during World War II. Then once again, following World War II, under the GI bill, they had to give college to all of these returning veterans, but there wasn't enough base housing for those colleges. There was nowhere to put them. So instead, what they did is they built mobile home parks around most American universities. In fact, I went to Stanford out in California, and there it's a very little known fact unless you went there, because it was hidden from view, was a mobile home park right near the quad called Manzanita, about 150 mobile homes. Been there since the days of the GI bill, four students per trailer.
People actually kind of liked it. It was so Bohemianly odd. Nevertheless, what happened was many service men, having lived in mobile homes during World War II, then having lived in them on the GI bill, they kind of liked it. They liked the lifestyle. For a brief moment in the 1950s and '60s, the demographics of people in mobile homes were higher than those in stick built houses. You don't believe me? You can Google it up. So how do I know this in modern culture? How do we see that? Well, just look at some of the movies during the period? The Long, Long Trailer with Lucy and Ricky in 1951. Ricky Ricardo was a very successful Manhattan architect. Decides to get out of his penthouse and go across America in his mobile home, work at various jobs he's working on. That wasn't truly reflective of a mobile home park. If you watch the movie, it's more kind of RVish.
Shows you some early visuals of the era, but a better example is the king, Elvis Presley, who lived in a mobile home park in two movies. It Happened at the World's Fair in 1963 and Speedway, 1968. Those are very reflective. If you look at the lifestyle in the parks in those movies and what most of our customers from the era have told me it was like. So you have Elvis and he's driving a sports car, and he's wearing a dinner jacket and a tuxedo when they go out to a fancy event, all inside of your classic trailer park.
So Americans saw this and they saw that their idol, number one star in America at the time, living in a mobile home park. Then even more so made them want to share in that lifestyle. You additionally had top architects of the era, Frank Lloyd Wright, and the top industrial designer of the era, Raymond Lowry, both building prototypes for mobile homes. They would not have done that if mobile homes were down scale. Far from it. Frank Lloyd Wright would have never attached his name to something that was considered down scale product. Nevertheless, there you have it. His was called the Americana Usetonia. Not sure what Lowry's name for his prototype was. Neither got manufactured. It turned out it was too hard to build them. It was just not practical to build those early prototypes, but nevertheless they exist.
Then you have Stanley Marcus, the founder of Neiman Marcus. He built a mobile home park prototype, located out of West Dallas. It resembled a Neiman Marcus store, the Clubhouse, and was top of the line in every regard. I toured that park back in the 1990s. It was still there. I'm not sure it's there today. It looked very much like I was in a Neiman Marcus store. That's what the building looked like that housed the office and the common areas. So Elvis in fact lived in real live mobile home parks. People were unaware that, when he wasn't at Graceland, but he was in Memphis, he would often go out to the mobile home park that he owned that is located about 10 miles from Graceland out in the woods.
He had mobile homes for all of his friends there, and he loved staying in the mobile home park. In fact, Priscilla Presley wrote in her book that she loved her time with Elvis in the mobile home park more then the Graceland. So mobile home parks were quite the thing back in the 50s and 60s. My first park, Glenhaven, when I bought Glenhaven, it came with a lot of stories. Some of the residents were still there from the 50s and the 60s, and they told me all about what it was like living there. They thought it was very, very stylish, very, very upscale. One of the first residents I met at Glenhaven was a gentleman wearing a tweed jacket and smoking a pipe. He looked like Clark Gable. He lived in two single wides that were connected at one end. They were L-shaped. He built it himself.
He explained to me he was an engineer and had been in Glenhaven following college, and had always enjoyed it and never elected to move. So I know for a fact [inaudible 00:07:26] was there because I've heard the stories of residents in those parks. I recently talked to a guy that was a mechanic for Lotus Automobile. Stared on the Jay Leno Show, his car show that he has, Jay Leno's Garage. His name was Detlas Claudius and he remodels Lotus automobiles, cars that James Bond drove in most of the movies. When he's talking to Jay Leno, Jay says, "So how did you get into this very specialized concept of remodeling Lotus automobiles?" The guy says, "Well, believe it or not, it started with mobile homes."
I thought that was fascinating, so I went and found his number and called him up. I got him on the phone. He's in his 90s and he told me that, yes, he started off engineering mobile homes. He gave up on it when the mobile home cost became only a thousand or two less than stick built homes. He wasn't sure what the future of it was. He wasn't sure why people were buying mobile homes at almost the same price as stick built homes. So it confused him. He was from Europe, obviously with a name like Detlas Claudius. So nevertheless, the bottom line is that this is an industry that started off very, very high regard. Lots of good things going on.
Then suddenly, and it's inexplicably, the industry fell out of favor. What happened was you had mass prosperity, so all those people who went to college and got out, and were living in parks like Glenhaven while they became lawyers and doctors and CPAs, and engineers, as their practices started to take off, and more importantly as their families started to grow in size, they couldn't easily fit inside of a mobile home anymore. Remember, the mobile homes back then were relatively small. Typically only around eight to 12 feet wide, and typically not more than about 50 feet long, so they needed more room.
You've all seen the pictures of suburbia America 1960s where there's all these moving vans and families moving to all these brand new subdivisions. Well, that was what caused people to start moving out of those mobile home parks. Then the problem was the second wave of residents just wasn't as upscale. Generationally things changed. You had the greatest generation. We've had the solid generation. Many different generations but, in this case, the next generation down from those folks at Glenhaven mobile home parks, the next people who needed that housing just didn't have the peenash perhaps. They just didn't come out of the war, they didn't wear smoking jackets anymore. So perhaps it just wasn't as hip as Elvis had been.
Then the product didn't hold up well to the change in taste. So at one time it was new. It was different and it was exciting, kind of like a new car model. Just like a new car model, eventually it just wasn't new anymore. Look at photos of cars from the 80s. Remember those cars back in the 80s? They seemed all kinds of new. Today they look all kinds of ugly. So the product just didn't hold up well. Then a big thing is moms and pops, well they got older and they lost interest in the business. They bought many mobile home parks with moms and pops who started out with lots of gusto, lots of enthusiasm, really thought they were building something new and important. Then, as they get older, they just lost some of their energy. They just didn't feel anymore like they were up to the task of running that mobile home park and it started to suffer from that lack of intention.
One immediate thing that happened was the infrastructure started to go out. Roads started to get potholes, water lines started to blow holes in themselves, sewer lines sometimes got packed with roots. All kinds of things kind of went down the drain a little bit. So at the same time they're losing interest, the parks themselves were kind of starting to fall apart. Meanwhile, the rents were too low to allow for them to put any money back in because mom and pop started doing quantitative using on their rents. This was very, very counterproductive. It didn't' get them anywhere near what they wanted. They wanted to provide a good product probably, but they couldn't do it on their ridiculous rents they were charging.
If you look back in time in the 1960s, the average rent in the 1960s back when Elvis lived in the parks was equivalent to $500 a month today. However, our average rent in the US today is only around $300 a month. So how is that possible? Well, mom and pops, besides not always being the best business people, often were maybe a little too kind to the residents, but they needed a little more tough love. By charring those lower rents, they had no money to re inject back into fixing the infrastructure or to get professional management. As a result, you just saw continual decline in the quality.
Also, there was absolutely no resell effort given on homes because, again, mom and pop didn't really want to get involved in the homes as they lost their allure for the industry. When homes came up on the market or homes became abandoned, they didn't really put any TLC back in them. They didn't try and promote the product. As the parks dwindled, the value of those homes went down. If you lived in the park, you were kind of trapped. Conditions were not looking as good as it was when you moved in, and now let's say you want to sell your home and move somewhere else when you can't get as good a price. Because now when someone drives through it's no longer that intriguing.
Another big problem you had is there was no new construction. As cities put the breaks on all mobile home construction in the 1970s, there was no longer anyone to remind people how ridiculously stupidly low their rents were. Unlike apartments, where you always have the advent of class A and then those with class B, class C, class D line up behind it. So if there's a new class A building at $1400 a month, then the class B guy goes, "Well, let's see. If class A is at 14, I should be at 12." Then the guy in class C says, "Well, then I should be at 11." The D says, "I should be at $900." We didn't' have any of that in mobile home parks. There was no reminder to anyone of what the rents could be or should be. So basically mom and pop just kind of lost track altogether of what those rents should be.
So then, if our theme tonight is the new golden age of mobile home parks, it would beg the question why, how? What brought this stuff back to life? If the thing was basically just going down the drain, which it was, what saved it? Well, the first thing that saved it was new investors who brought fresh energy. People were typically maybe a little younger and really wanted to make something of the property. Wanted to restore it to its former glory, wanted to make it the best that it could be. So those new investors, just in attitude alone, they brought forward a lot of energy, a lot of power. It was very, very important to people that they were able to do what they were doing, because they brought back that kind of energy and that's exactly what the industry needed.
Also, these new investors brought forth capital. A lot of this infrastructure was broken. You can't fix that by staring at it or having positive thoughts. It takes real money to fix these things. A lot of it you can do with sweat equity, but a lot of it costs money, and they brought in the money. Mom and pop didn't have the money, didn't want to put the money back in. But new groups said, you know what, let's fix these streets. Let's fix the Clubhouse. Let's go in and fix those water leaks, fix the sewer. Let's go ahead and put in new electrical. Let's do all these wonderful things. They brought the capital to do that.
Also, these new investors realized the necessity of higher rents to bring the parks back to life. They had the guts to raise them. Stories abound of mobile home parks that were only charging $150 or $200 a month where market rent's $550 or $600 a month. So what do you do? You've got to get those rents higher in order to have the money to pour back in the park. You can't do it without higher rents. Mom and pop didn't want to do it. They engaged in quantitative using. They made that conscious choice. The new buyers are saying, "No, I'm trying to run a business here. I'm trying to make this thing better than it is. I want to bring it back to life, and that requires having the guts to raise the rent and to stand up to those who criticize you when you do it."
Also, in the meantime, the homes themselves have become better quality and with better pricing. Better pricing because park owners today can buy the homes factory direct. Cuts out the middleman of the actual retailer. So, when the mark up on homes in the old days used to be 50% in many cases I've seen. Also, the quality is just generally better. There was a huge quantum leap back not that many years ago when Warren Bucket entered the industry with Berkshire Hathaway, and they set about bringing in new designers to bring forth new ideas, try and make these mobile homes look as nice on the inside as a nice condo or a house, or a classy apartment, and the succeeded in many ways.
You would not recognize the difference of the product today versus what it was only a decade or two decades ago. That's also had a huge impact. Also, at the same time, new financing programs made it possible for home ownership of these new homes. 21st Mortgage among the top of the pack, but there are other programs as well out there that allow people to buy new mobile homes without that addition of those sources of mortgage and, in many cases, without the park owner stepping in and backstopping those items, people cannot afford the new homes. The new homes are what are really improving not only the looks of the property but the quality of life, the lifestyle. People really, really appreciate that.
Also, the parks themselves. As the new generation of buyers have been pouring capital in and bringing them back to life, they become more attractive. They have more amenities. I know that we've spent, with our portfolios, trying to figure out how to stick an amenity in almost every unused part of the common area. All kinds of things, pavilions with picnic tables and grills, playgrounds for kids. Anything we can do to help people build that sense of community, we have tried to adhere to. People have been doing that nationwide.
Also, we've all, all park owners, have been focusing on what's called sense of community, building that sense of community. It was described in Time Magazine not too many years ago in an article called the home of the future. You're free to check it out. Time said the mobile home parks are the gated communities of the less affluent. It's kind of insulting because I don't think you can say that. I don't think that all mobile home parks are the less affluent. I know it's not true in Malibu, Montaque, many other areas of America, but those were their words, not mine.
Nevertheless, that sense of community, that support network, very vital as one of the amenities that all people enjoy in a mobile home park, and all park owners today are really working that amenity because we've found that, as residents have deep ties with their neighbors, they're more apt to have a happy life there and happy customers never, ever leave because they're happy. Also, you have the impact of two individuals, Sam Zell and Warren Buffet. Sam Zell, who's Sam Zell? Well, Sam Zell, if you've not heard of him, is the largest owner of office buildings, apartments and mobile home parks in the US. Now he's sold off a lot of his office buildings and his apartment holdings over the years, but he never sold a mobile home park.
When he entered the business, that gave people a feeling of some respectability because why in the world would the guy, who at that time was the only person in American history to ever be the largest, not one but two, real estate sectors looking at this new trailer park. Initially people were confused, and then they suddenly realized, wait, this can't be that bad an idea or he would not be involved in it. ELS, his rate, has been one of the top performers in the stock market the last few years. Warren Buffet is the other. We all know Warren Buffet. He does not need an introduction. He purchases Clayton Homes, Vanderbilt Mortgage, 21st Mortgage back in the time when the industry really needed him.
Just when we had what was called the great channel collapse, prior to the great recession of 2007, 2008. This began back in about 1999 to 2000. They've been doing mobile home loans very, very sketchy credit. No income dock, zero down, all the things that later was learned in the single family market didn't work about a decade later. Well, it stared with mobile homes. What happened was a lot of manufactures, a lot of them making those mortgages, they got killed with that stuff. The repossessions started just to pour in. They couldn't handle it. Suddenly, amidst the carnage, Berkshire Hathaway stepped in and bought up Clayton and Vanderbilt, and 21st, and really got the industry back on its feet.
The fact that Warren Buffet is involved, just the very association of his name with the industry, has been a huge blessing. Also, in 2014, you had the article in the New York Times. It began with me. He went to our bootcamp. He went out and lived in one of our mobile home parks for a week, the writer Gary Rivlin, and he wrote this glowing article on mobile home parks. It's kind of odd. You had this New York intellectual, someone who had never been in a mobile home park in his entire life, suddenly living in one for a week, in one of our mobile homes with a bunch of rent a center furniture and absolutely loving it. He wrote a glowing article about the industry, and that was the first glowing article in the industry that happened in the last two decades.
After that, you had articles in Bloomberg and many other publications kind of playing off of Rivlin's thoughts. People who were not cultured in the mobile home park as a living option suddenly were checking it out and saying, wow this is pretty good stuff. So that helped a huge amount. Then you had the great recession, and the great recession brought forward just the sheer pressure of affordable housing. How do we house people when their incomes have dropped? How do we house people when they're having trouble making an income at all? Mobile home parks have never been as hot as they were starting in about 2008. That really, really changed the dynamics.
Suddenly, our industry got a huge amount of respect because Americans really, really needed affordable housing and we're the only people who can deliver on that promise. Recently, you've got the pandemic. Now the pandemic has been very, very good for mobile home park owners. That's just the facts. What's happened is the pandemic put a new focus on detached dwellings, having a yard, outdoor space. Obviously, once again, it pumped the gas pedal on the need for affordable housing. Our sales went up 50% in 2020 during COVID. Why? Because you had many Americans who decided at one moment they no longer wanted to live in apartments. They no longer wanted to live in dense urban areas. They wanted to get out of that. They wanted outdoor space, a place that was safe.
Additionally, people were not working more and more out of their home. Once again, they wanted more space, and the mobile home park could deliver on that. Also, the pandemic has caused greater interest in our industry because it's ruined so many others. Talk to anyone who's invested in shopping centers or office buildings, or a hotel or any form of logging, or retail. What do you hear? Nothing but doomsday stories. I talk to people with shopping centers. They've only got 30% of their tenants still in business. Class A apartment people are only collecting 50% of their rent. There's a rent collection of moratoriums.
So bottom line is the pandemic itself changed the playing field. Going into it, mobile home parks were gaining respect. We weren't there yet. Then coming out of it we're the top of the heap. One of the few people out there during the pandemic that have shown increase and also weathered it well because our business is essential and most of our residents are also essential trades or retired. Then finally, you have the advent of clinical conduit and Fannie Mae Freddie Mac debt. When I got the business back in the 90s, most of that didn't exist. That was all new stuff. That's really happened honestly in the last 25 years, and with gusto.
Fannie Mae Freddie Mac and those agency debt right now is about 50% in dollar value of all the debt put on mobile home parks today, out of nowhere. As all these new lending sources came in, that once again gave people the ability to put more money back into their mobile home park. So what could still be done to boost it higher? If we're in the new golden age of mobile home parks, then to me the question would be can we go higher. What do we do? Where do we go from here? Well, the first thing we all have to do is continue with the program of bringing old parks back to life, even when there is inaccurate reportings in the media, even when we get pushback from people. We have to stick with that plan. That plan has worked very well for us.
Years ago we bought a park called [inaudible 00:25:39] Austin, Texas. The thing was a disaster. We bought this park. On the front end, it wasn't working. Not at all. It was hideous. The roads were shot. It was filled with trash. It was going nowhere but down. In fact, the other person looking at buying it was going to bulldoze it. We stepped in and we brought this thing back to life, painstakingly with large amounts of capital. We made it better than it ever was. It was never as good as we made it, and yet we were constantly faced with city scrutiny, endless bad press in the media because, despite the fact we had taken this place and made it horrific, into a nice place to call home, we had dared to raise the rent along the way. We had dared to make people pay their water and sewer bill in Austin, Texas.
The property, when we bought it, the rent was only $390 a month including water/sewer. All we tried to do was make it where the thing could make money and put money back in and have professional management. We sold that property very recently. Who to? The residents. If you talk to the people who put the deal together, the only reason the residents could buy it, because we stuck our neck out and saved it. If it was not for us, it would not exist. I guarantee you it would be long gone, and all of those affordable housing options where there was more than 60 families would have been erased. Yet, we never got a thank you, never. Never a nice, kind word from the city of Austin or the media.
In fact, the first thing the residents did when they bought it is they had to raise the rent again on themselves because it still wasn't as high as where we probably should have been. We've been holding back a little bit, trying to be nice in the face of all the negative adverse publicity. What do they do? They raised it again. No one ever said anything to us at all. But we can't stop because of that nonsense. We can't stop doing it because the media is unfair, people don't understand what we do. So can we still boost the industry higher? Yes. Just keep doing what we're doing, bringing these old parks back to life.
As we're doing that, you're going to see a continued fading of the whole trailer trash label. You find that everywhere. There's books in the library with trailer trash. Someone recently sent me at Christmas a snack called trailer trash. It's kind of a trail mix. They were playing off the concept of trail and trailer. It's crazy in America. We're so politically correct. We go into a tizzy on almost anything, but you call people trailer trash and no one says a word. There's a cartoon on Disney called trailer trouble. It's not an old cartoon. It's a new cartoon. In the cartoon it's about a little kid whose parents sometimes send him to stay with his aunt in a trailer park. She's got neighbors that are covered in tattoos and they're completely drunk, and there's always an action scene and he thinks he's going to die. Then she saves the day.
Seriously, Disney? That's the best you can do? However, we're seeing that label starting to fade, particularly in the northern states. A lot of northern states, you don't even hear the word trailer anymore. But we all know in the southern states you often hear trailer trash, and it's wrong. It's not for the people who live in them. I think we'll see that go away over time, and that's going to help boost the industry higher. Also, we need a stronger national association that pushes the PR narrative and protects community owners rights more aggressively. We sadly don't have it together as an industry regarding PR. What really makes it so apparent is what you see in the RV industry. The Go RV slogan, the GO RV PR narrative has been wildly successful.
The RV industry basically get together, they pass the hat, they raise money, they do some absolutely genius marketing, and it's paid huge rewards. RV sales right now are the strongest they've ever been in American history. The average American's opinion of RVs have never been higher. Why can't our industry do that? I don't know. I think it could. I think it should. I think it needs to. Also, we just need more time. More and more people are beginning to respect what we do, but it's not going to be an overnight sensation. This is an industry that's been trashed for half a century. It takes awhile. It takes awhile to regain respect after you've been down in the dumps for 50 years, but it can still happen.
So what are the risks to the progress of the new golden age of mobile home parks? Well, the first are misguided government programs like rent control and eviction moratoriums, and the SAFE Act. Things the bureaucrats don't think about because they have no real life experience typically. They don't realize, for example, that the SAFE Act, that's supposed to protect consumers, shut off almost completely the flow of credit to those who need it most. The minute they passed that, most mom and pop owners of mobile home parks simply stopped making mortgages. Is that really what helps people, making generational renters? I don't think so. I don't think that really was going to really work towards anyone's best interest.
This current evictions moratorium. What's the plan there? If you don't let people pay rent, if you don't make them pay rent every month, what happens? They grow in their balance to such a level they can never pay it off. The government has literally caused people to lose their homes, whether it's mobile homes, apartments or stick built. I was a restaurant really recently, a fairly upscale restaurant. I heard two millennials talking. I couldn't help but overhear the conversation. The one was [inaudible 00:31:41] the other that he didn't stop paying his rent earlier. The one guy was boasting, "Yeah, I haven't paid my rent. It's like $1400 a month. I'm going to try to milk it out to a whole year." The other guy was like, "But then what are you going to do?" "Well, I'm just going to run off. I'm just going to abandon it."
These guys hadn't lost their job. They're eating at a restaurant that costs $100. Nevertheless, they're gaming the system and the government allowed the system to be gamed. They should have never ever allowed the necessity to pay rent to not be number one priority for people, or they should have created programs to get people's rent paid using social program. I know they're trying to institute that now, but it's a little too late. When you're like nine months behind on your rent, giving people one month of rent, that's not really going to do much good to anybody.
Rent control, where in the world do people come off thinking that is a good idea? That's been proven to be a terrible idea. That idea is over 100 years old. Rent control began with World War I about 1917, 1918. In the ensuing century, only a handful of cities or states were dumb enough to adopt it. Look at the success or failure of those states? It's been abysmally terrible programs. Now, you can have fake rent control like Oregon did. I don't know what that was about, except Oregon wanted to pretend somehow that, oh we have rent control. We're progressive. The rent control was seven points plus inflation. That's about 10% a year. That's more than rents in Oregon has been going up, but it's not really a very smart political football to be playing.
Those who discuss rent control know nothing about economics. They know nothing about anything to do with housing Americans or people putting money back into properties, or even properties being available. There's no reason to really get into the housing industry, as New York is finding out, when you have rent control. Then there was Elizabeth Warren's famous letter to large portfolio owners in the mobile home park space letting them know she was going to be coming after them. That was during the presidential election. I'm not really sure what the point of was. They were asking them to give them an award, because that's what she should be doing. But instead it was all taken as though it was basically her pledge to cause trouble, to go on some kind of hunt for those who are putting money back into these dying communities and bringing them back to life.
I honestly don't think she actually knew when she did that what she was even thinning or what the plan was. It's probably something some associate made up for her. You're actually slapping the face though. What an insulting thing to do to people who are constantly out there helping people to have better lives. Bear in mind, the government has only one contribution in the world of affordable housing, section 8. A program that not only doesn't work, but right now there's an enormous number of people who can't get in the program. When I was on National Geographic, the people producing that segment said they were shocked when they went to Washington DC. They met with the head of [inaudible 00:34:52] and they talked to him about section 8. They had no idea that the program basically wasn't sustainable.
Why would it be sustainable? You're basically just covering people's rent. But you can't build on the program. The government is broke. You can't keep adding. It's not a sustainable thing. We're also big right how with this concept of green, sustainability and resources. You're not sustaining resources when you're giving handouts to people. That doesn't work. Mobile home parks are the only form of non subsidized affordable housing. Another risk of the mobile home park industry of course is mass prosperity. Well, that's what derailed it back 1960s. Well, I don't think that's even worth talking about at this point. Anyone who thinks America is in for a time of mass prosperity, I'm not sure what national publication you're reading, but I'm afraid that option isn't on the table at all.
Another is higher interest rates. We all borrow money to buy to mobile home parks and, to some degree, we're impacted by those rates. Those rates have paid very, very low. Ever since the great recession, again with [inaudible 00:35:58], they've remained low. Of course, during that period, our national debt has swollen to be the highest level in the entire world. We're roughly 20 trillion in debt, although I've lost track and you probably have too. They seem to tack another trillion onto it as frequently as most people go and buy a diet coke at the store. What it means is we're so heavily in debt, we can't let interest rates rise.
Unlike Reagan, when Reagan took rates to 16%, our national debt was under one trillion. It was in the billions. Today, at 30 times that, if you tried to do his experiment, what would you have? You'd have complete national insolvency almost immediately. So we don't expect rates to go up, at least not much. Now what with the future hold for mobile home parks looking forward? Where are we going from here? Well, one thing I think you'll see is eventually better looking home exteriors. This has been a pet peeve of mine for the longest time. I think mobile homes look fantastic on the inside today, not a big fan of the outside. Not that the outside looks bad. It just doesn't look as good as the inside. They've made such great advancements.
I'm still hoping someone comes up and unlocks that missing piece of the puzzle, how to make the exterior look fantastic. Now I know you can do it. I've seen them in tiny home shows on HGTV. I know it can be done, and I know that Clayton did it when they brought out the iHome and the eHome decades ago. So I know it's possible, but it has to be in a manner where the homes are still affordable and I don't think anyone's quite figured that out yet. But I'm hoping they can unlock that in the years ahead. Also, you're going to have higher demographic tenants that choose mobile home parks because the stigma has dissolved.
As everything I've discussed comes together, what will happen is you'll have a whole new generation of people who consider living in a mobile home part who never did before, people who are affluent. I was recently at one of our parks over in Illinois. I was sitting in my car, plugged in my GPS the next location, the next park to drive to, and suddenly I see a resident come out of their door. This guy looked like something out of an LL Bean catalog. Khaki pants, blue blazer, white shirt, top sidders. I thought, man, I would have never seen that back in the 1990s. A lot of young people don't have the same negative stigma to our industry that some of the predecessors did.
As time goes on and things get better, I think you're going to see more and more people consider this housing option who never did before. Another driver you have in the future is the great reshuffling. That's what they call it out there on the internet. I think Zillow coined the phrase. What it basically describes is the very real fact that people are leaving urban markets in droves. They're going out to suburbia, they're going out to exurbia. It's great for mobile home parks because most mobile home parks are in suburbia and exurbia. Exurbia is that next ring of cities of population beyond suburbia, for those who have never heard of exurbia.
I think you'll see even greater demand as they bring forth self driving cars. I know we all heard the news, there will be an Apple car by 2024. People, instead of commuting, basically have private time in their car to watch movies, play video games, take a nap, ponder life. They're not going to mind having a little bit extra commute. They're no longer going to think, well gosh, I better live in suburbia. It's only 30 minutes out, because exurbia is another 15 or 20 minutes out. They'll relish that. I think people will eventually get what they like one hour commutes because one hour is about the time the typical television show, or maybe the time they want to spend playing a video game.
That's very soon going to come to pass. In fact, when they bring out self driving cars, your commute time will all decrease because you won't have traffic jams anymore. You won't have car collisions, cars breaking down, things like that, at least not nearly so much. Also, as apartments deteriorate, parks simply become more valuable. They become more valuable because people compare them to what else is around them as their options and they say, "Oh gosh, I hate this apartment. I want to live in a mobile home park." We hear that from our customers all the time. If you talk to our customers, you'll find a little bit of every narrative is the simple fact that they hate their apartment.
Apartments apparently class B, class C, class D are going down the drain just like mobile home parks did back in the 70s and the 80s. They're following the exact same model and it's great for mobile home parks. Also, as the economy itself deteriorates, and make no mistake, it simply seems to be, parks become more valuable because, as the economy goes down, people need more affordable housing. We are in fact the only form of detached affordable housing in existence. As the economy goes down the drain, basically our demand, being contrarian, seems to only go up. Additionally, the land the parks sit on becomes more valuable because we've got special zoning potential.
Most people don't realize this, but I've written articles on it. If you wanted to develop just about anything that most of these wouldn't want, high rise building, some kind of use that typically cities don't allow or don't want, you can get it with a mobile home park. We'll do anything to get that mobile home park shut down. That makes mobile home park land amongst the most desirable in the whole city. You see that all the time but people don't realize it. They don't understand it. To think Home Depot bought that mobile home park because it was just the right size of land. No, they bought the mobile home park because, in getting rid of the mobile home park, the city would trade them almost anything they want, any variants they need, even the permit itself to build it.
So as time goes on, you'll find the land under the mobile home parks will simply become more and more and more valuable because, as the city grows around it, it gets more the middle of the city. At the same time, we've got a special zoning potential that makes parks super valuable. The higher land value is also going to backstop higher park prices because you have that one more option. Also, greater industry consolidation is going to bring a new challenge, an additional capital. It's to require or resolve in higher product quality and respectability. You already see that. You go to any mobile home park event, MHR show in Vegas, MHR show in Chicago, whatever you do, you'll see a lot of people who are dressed a little more formally than park owners used to in the olden days.
These people are much more serious about business, much more serious about providing the best product they can. Having them introduced in the industry definitely is a good thing. It brings in a lot new good thought. So how will we know that we reached the top? When will the mobile home park in the new golden age finally say, ah, well we have actually arrived now? If we're as good, or almost as good, as we were in the 50s, 60s, what takes us to even the top? How do we top out beyond that era?
Well, number one, when people stop using the word mobile home altogether. Just drop it. Just go with the word home. That's what you find in most of the northern states, like Wisconsin, Michigan, those types of areas. People don't say mobile home. They just say home. It's just a house. It's their dwelling. Why do you have to have the label mobile on the home? What's that all about anyway? I think it's kind of a marketing thing from the retailers. It's not good. No one considers the word mobile a good home. Even those who like the word manufactured, who wants to say I live in a manufactured home? What's wrong with just home? Why do we have to qualify it like it's something less?
I don't hear people living in condominiums say, "Yeah, I live in a condominium home." It's their home. One day maybe we can all just be in a home. Also, one day the media will celebrate owners who bring all parks back to life. I know it sounds ludicrous, but I myself have chosen to be the host of the show that never made it to the networks. It's all about rescuing mobile home parks. In the show, they were going to take old beat up mobile home park, and on the show we we're going to bring it back to life and show how it was done. Now it never made it because that genre of television became unpopular. This is probably about 15 years ago, and was replaced with much greater content like the Kardashians.
Nevertheless, it looked for the moment like it might go somewhere. That's important because at some point it will. At some point someone will launch a show that celebrates the very idea of bringing these old trailer park communities back in nice places to live. You've already seen that on mobile homes themselves. There was a show where people would go in and renovate a mobile home. Started the show, they showed how bad it was, the end of the show, how good it is. I think at one point we're going to see it on the mobile home parks themselves.
Also, at some point, the media will stop putting down residents. That includes in the movies, cartoons, anywhere. It's not right. It's not fair. It is absolutely an abomination that people can put down mobile home park residents with no pushback. The very groups that put down pushback on every other item, they turn their head and ignore it when people describe other people as trailer trash. Shocking. Some would say, why does it even go on? I don't know. Hard to say, but at some point I'm hoping it will stop. At some point, I'm hoping someone will stand up, maybe the industry lobby and say, no you can't do that. If you do that, we're going to litigate. If you do that, we're going to spread the word that you don't like eight percent of the US population, because that's right. About eight percent of America live in mobile homes now.
Finally, cities and states will one day embrace park owners as important members of the community. Now I know it sounds far fetched given what most park owners have experienced today, but [inaudible 00:46:28] court system, five different state supreme court cases ruled in the favor of park owners and their rights to exist. Those grandfathered rights. There's a growing feeling, I believe, across many city governments. If we're going to have affordable housing, gosh darn it, those mobile home parks are looking a lot nicer than the apartments do these days.
So maybe there will be a grassroots movement. I would love to see mobile home parks start being selected as businesses of the year, start being celebrated the same way that people do who bring old downtown back to life. I was over in some city recently. I can't remember where I was, Omaha or somewhere. Somebody was taking the city loft and they were totally restoring it back to its original grandeur, tearing off all the 1950s, 60s facades and making it back to looking like ... I think it was the 1890s or something, all kinds of fanfare. This developer is on the cover of local magazines and stuff. I'd love to see that about a park owner sometime. We do the same stuff everyday. Buy old stuff, bring it back to life. That's exactly what we do. At some point I think we'll get recognition for it.
But again, I'm pretty confident you'll look at the stats. If you look at the way things are today, we have entered the new golden age of the mobile home park. Now I'm going to open up lines for questions. Hold on here.