Mobile Home Park Mastery: Episode 2

The History Of Mobile Home Parks

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In this episode, Frank Rolfe discusses the surprising history of the mobile home park, and its impact on current investments.

Episode Transcript

Welcome to Mobile Home Park Mastery, this is Frank Rolfe, today we're gonna talk about the history of the mobile home park. Now, you might think, what the heck? Why would someone make an industry around metal shoe boxes filled with people? Well, it actually is a very, very colorful history and one that most people are fully unaware of, but I really doubt that any sector of real estate has quite as interesting a journey from its beginnings as the mobile home park has. So, let's turn the clock now back to roughly the 19 teens. The invention of the automobile. People now have cars, they're driving around in them, they're enjoying the scenery in their motorized carriage.

But, when night comes, where do they stay? Because bear in mind, we're spoiled today. There are hotels and motels all over the interstate highway system. But if you think back into the 19 teens, there are none. At that time, all the hotels in America were typically in downtown, near the train station because almost all people traveled by rail. And when they got off the train at night, if they weren't sleeping on the train, they would proceed to the local hotel where they would dine at a thing that used to be called The Harvey House and they would stay the night there. So, if you were on the open road, it was just that open, there was no place to stay.

So, in those days, people who frequented automobiles on road trips would sleep in tents. They would pack a tent in the trunk and when they couldn't go any longer, they couldn't see 'cause bear in mind, early car headlights were terrible. They would stop, set up the tent and sleep by their car. This was obviously not the most comfortable concept for people who were accustomed to finer things. So, wealthier people began having craftsmen build what they then called trailers. And these trailers were made traditionally with mahogany interiors, crystal chandeliers and they had their logo types and names, just like a yacht.

Might be Little Nelly, or might be Southern Pride, whatever it was. And then, what they would do is, they would also have china patterns and silver patterns that tied to the name of the trailer. So, as a result, you had these folks driving across America now, not only with their automobile, but also with their trailer. And, they're very sumptuous and these people had a lot of disposable income. A lot of towns noted that, oh gosh, look, there goes another one of those wealthy people in their car with a trailer. I wish they'd stop here and eat or shop at our local stores. How could we get them to do that?

And that's where the trailer park began. Cities started building free places to park these trailers and therefore, the name trailer park. So, the word trailer park, initially, back in the 19 teens, 1920's, was a very upscale concept. And if you go to any of the museums that feature these early trailers, you'll see very many notable celebrities owned. May West owned one, most of your Hollywood royalty owned them, the Rockafellers, the Vanderbuilts, the Asters, they all had trailers and they all lived, when they were on the road, in trailer parks.

So, what happened then was, our country entered the great depression. 1929 stock market crash, 1930's, people are losing their homes, losing their farms, losing their jobs. They need to find someplace to live that's cheap and people realize, well, those upscale trailer things, we could live in those, couldn't we? If we're able to spend one night in them, why can't we spend 365 nights in them? So, some people started using the trailers in desperation as a housing source. But, there just weren't that many trailers at that time, so it really wasn't a big issue. But, it was the first glimmer of the thought you could live in these things full time and not just temporarily.

But then, the industry got a huge break in the 1940's, on came World War 2 and overnight, the U.S. government needed massive amounts of base housing for all of these newly recruited service men. So, what do they do? Well, they went around and they bought every trailer, every mobile home, every RV they could humanly find on every lot in America. And they ended up buying about 500,000 units which was the entire capacity of the industry at that time. And they moved them into the bases and the people lived in those while they were in the army.

And then when they got out of the army, the government had a new dilemma. Under the GI bill, they had to provide free college to those who were in the service, but how do you house these people at college? There's not enough dorm space. So what do they do? They take those 500,000 trailers they own and they move them to colleges across America. Now, if you go to most of your big colleges in the U.S. you will find either, existing mobile home parks nearby, or you'll see in aerial photos, mobile home parks of the past. I went to Stanford University, out in California and our trailer park was called Manzanita.

Built during the GI bill, not far from the quad and it had, typically, three students per trailer, it had about 116 trailers total, so it ended housing about 400 students approximately and that was very typical across America in most universities. Some had multiple mobile home parks, some had just a couple, but it was a common fixture. And so, these service men had gone from living in trailers in the army to living in trailers in college. And then, as they graduated from college or even while they're still on their advanced degrees, getting degrees in medicine and law, they continue to live in these trailers.

And for one brief moment in American history in the 1950's, if you lived in a mobile home in a mobile home park, you had higher demographics than those who lived in stick build homes. I know you'll find that shocking, but it's entirely true. So, you if you lived in a mobile home park back in the 1950's, you typically had a higher income and higher educational status than those who did not. That was considered they hay day of the industry. That was it's zenith. And if you look at photos of mobile home parks during that span of time. You'll find that most people living in the park are driving a British sports car and wearing a jacket and the women are typically in cocktail gowns and wearing big Coco Chanel sunglasses.

And those were the upscale young folk of America at that time. But, then what happened is, they ultimately decided to have a family, they opened up their medical practice, they opened up their law practice, and they moved to the suburbs. You've seen those photos of all those moving vans moving to these giant acre upon acre of similar sized, cookie cutter homes. Well, that's what happened, they all moved to those developments. And as a result, the mobile home parks lost that high demographic customer base. But, nobody new exactly, even then, where it would head. What would happen to the industry? Would it maintain it's status of being upscale?

If you will watch two movies, the Elvis Presley movie, Speedway, from 1964, or, It Happened at the World's Fair from 1968, you'll see what mobile home parks were all about back then. They were all about Elvis being chic, being glamorous, that's what mobile home park meant. All the way through the 50's and even up into the 60's. But at some point, the glamorous people moved on, they moved into stick build housing, they decided they wanted something larger, and mobile home parks totally changed demographically and we segued from being very upscale to going straight into affordable housing.

Now another historical movie that's fun to watch, if you've never seen is The Long, Long Trailer with Lucille Ball and Desi Arnaz. Well, they travel America in their mobile home, driving around, and you really get to see how different things were back then. And it helps to explains why when you look at mobile home parks to buy, you'll frequently see these very upscale items. I once toured a mobile home park west of Dallas that was built by Stanley Marcus. One of the founders of Neiman Marcus. It had a clubhouse that looked like a Neiman Marcus retail store.

You'll also find, there were mobile homes built at one time by Frank Lloyd Wright, it was called the Usitonian Americana and Raymond Larry, the famous industrial designer. So, when you think mobile home park, don't think, oh gosh, that thing that's built around people with not so much money, that's not true. It's actual beginnings were extremely, extremely upscale. Let me also point out, for those that are unfamiliar with it, the mobile home and the RV used to be the exact same thing. If you go back in time, even back into the 50's and the 60's, you didn't say RV or mobile home 'cause there wasn't a mobile home back at that time. They were just all called trailers.

And they looked pretty much the same, RV's and mobile homes, there was no delineation between one and the other. All of that changed in the 1950's when someone found out they could build a structure greater than eight feet width that was accommodated by a special moving permit. Prior to that, everything that traveled down the highway had to be eight feet wide and no wider. So, everything was stuck at eight feet in width. When they found out that the states would allow them to go bigger than eight, if instead of pulling it behind the car, they pulled it with a regular truck with a CDL and one time moving permit. They first built the 10 wide, then the 12 wide, then the 14 wide, then the 16 wide, then the 18 wide. Pretty much, 18 wide is about as wide as you can go today on a mobile home.

But, at that moment, when they went from eight to ten, they forever severed the tie between RV's and mobile homes. Mobile homes went down the path of being extra wide and not being able to move while those RV's maintained their eight foot in width, and they built them to pull them anywhere that you'd like. And that's when they mobile home industry began. Now, you'll also notice, today they don't call them mobile homes, they typically called them manufactured homes. Why is that? Well, the mobile home is defined as being from that period when they started building them greater than eight feed wide up until 1976.

During that period, anyone could build a mobile home. The designs were unlimited and there were hundreds of manufacturers. In 1976, the federal government under Hud, declared that all mobile homes had to be built under the inspection of Hud and had to carry a Hud seal as they came off the assembly line. And thereafter, after 1976, they started calling them manufactured homes. Now, do most people do that? No. Certainly not, most people know the industry as mobile home park. In fact, I think if you search, Google analytics will show you that 95%, roughly, of all searches for the industry come under the word mobile home park.

But, you need to know that historical reference simply to understand when you see a term like manufactured home, what the heck they're talking about. Same thing, same thing as the mobile home, it's just built after Hud took over the industry. Now, let's talk for a moment about mobile home parks and affordable housing. So, here they are, you have all these mobile home parks that were built pretty much during the 50's and the 60's, which is the hay day of the industry, and then up into the 70's, that was kinda the end of the construction period in the 70's.

And all these parks you have today, they really are serving two groups. They're serving the affordable housing sector, but there's also some that you've probably driven by that are very, very nice. They might be on the coast and they look like a, kind of a Del Web community feel. And that's called lifestyle choice. So, you have basically two branches of the industry today, you have lifestyle choice and you have affordable housing. Very, very different objectives. Lifestyle choice, they view their competition as single family homes. Mobile home parks, the affordable housing side, they view their competition as apartments.

So, you've got two different sectors. So, when you think of mobile home park, you think, hey, they were really nice and now they've become affordable housing. Well, not all of them. Some of them stayed nice and often, even got nicer. And those are called lifestyle choice. Another item you need to know about mobile home parks is that they're not all about families. You know, when we think of a typical mobile home park, most of us think about a subdivision where anyone is allowed to live there. There are also what are called senior parks. These are parks that are under a Hud program designated to be 55 plus communities.

And what does that mean? It means it's the only time in housing you're allowed to discriminate between residents based on age. Under Hud, you could never discriminate, but yes, you can discriminate based on age if you have a senior community. So, another interesting topic you need to know. That not all parks are created the same, you actually have a senior segment and the family segment. So, what does it all mean? Let's wrap it up together here. Number one, mobile home parks, very, very upscale beginning. Very, very upscale place to live, all the way through the 50's, into the 60's, heck, Elvis lived in them twice in two different movies.

Then, in the 70's, segued more into what we now call affordable housing. Mobile homes and RV's were all the same thing up until they figured out that you can build a structure bigger than eight feed wide and pull it down the highway with a truck and that was the start of mobile homes. In fact, some people consider the 1954 Spartan to be the beginnings of the mobile home industry, it was built by Jay Paul Getty. Interesting side note, Jay Paul Getty was the richest man in America at that time and he also built mobile homes and today, Warren Buffet is typically the wealthiest or second wealthiest man in the United States and now, he builds mobile homes through the company, Clayton.

Interesting way the world is turning full circle there. Then, also, you've got the division between lifestyle choice and affordable housing. So, you still have an upscale brand of mobile home park in the lifestyle choice variety. And then, finally, you also have two divisions between seniors, or age restricted communities, and what we now call family communities which allow all ages. So, as you can see, it's more than just a bunch of metal shoe boxes out in a field. The industry has had a wild journey with lots of ups and some downs.

But, that may explain when you're out looking at mobile home parks and you see things that are uniquely upscale. For example, a mobile home park in Fort Worth that we know that has a giant two door mansion for the clubhouse. Or, when you look at a mobile park that has, in the middle of it, a giant amphitheater. You now know the story. The story is, the industry has not always been about affordable housing. At one time, it was all about upscale housing. Also, this is a thing you might know, if you're ever driving your LCART in Indiana of all places, there is a museum of the industry called the RV MH Hall of Fame and Museum.

It's a giant museum. It features most of the early mobile homes, trailers, and then, it also shows the 1954 Spartan, you can even walk through it. Fascinating historical place for people to go. But, now you know the truth, now you know the story of the industry and where it came from. This is Frank Rolf with Mobile Home Park Mastery and I'll be talking to you again soon.