This was not a hard one to call – just read my predictions in past issues. When you pay $25 million for 12 acres (which works out to $2 million per acre or $46 per square foot) the buyer is going to tear the park down, not introduce a new mobile home park prototype with a lot rent of $5,000 per month. There should never have been any question as to the future of the property.

In some cases, development can be delayed or eliminated with higher lot rents, but in this case that was not an option because of the park’s location. Some parks were born to be a temporary use, and this tract is one of those situations.

I know nothing about this case and have never seen the property, but I had a similar experience in Texas in the 1990’s. Turned out that the city had never bothered to subtract the individual tenants’ meter readings (for which they paid the city directly) from the master meter reading. They’d been doing that for decades. The amount they had overcharged the park was probably a million dollars. Cities make mistakes and – with scale – those mistakes can be gigantic. Before they shut this park owner’s water off, the water dept. better investigate what he’s saying because if he’s correct his damages against them will be crushing.

Replacing an equestrian center with a mobile home park is kind of like tearing down a Rolls Royce dealership to make way for Kia. That being said, all real estate has a higher and better use. And horse stalls do not rent for as much as mobile home park lots (which rent for less than apartments so that’s where this property probably ends up in 20 years).

Look at these photos and tell me who in the world is idiotic enough to pay $2 million for a mobile home in a setting like that? By any unit of measure these are the worst values in American real estate. No offense to Montauk fans but is that really the best you can do with $2 million on the East Coast?

In a 28-page suit in federal district court, park owners challenge the ability of the city to regulate, saying steps taken amount unconstitutionally depriving them of their right to an adequate rate of return. The suit cites hefty inflation and the city's effort to shield residents from it by reducing the cap on rent increases to below inflation. They argue they're being required to run their business at a loss. The suit also challenges the constitutionality of requirements that should park owners wish to close a park that they find comparable space in another park for the home or purchase then from tenants at 'in place value.'

Observation #1: you have to be nuts to own property in California.

Observation #2: thank heavens these park owners have the guts to fight this unjust treatment.

Here’s the basic article boiled into two sentences:

The sales prices of new mobile homes rose much higher than those of traditional, stick-built houses, according to a recent report from LendingTree. The online financial services marketplace found that the average sales price of mobile homes shot up 77.1% between 2017 and 2022, compared with 46.7% for single-family homes (excluding the land).

The problem is that the reason that mobile home prices in this study are up is probably not re-sale but new home prices that nearly doubled from manufacturers between 2017 and 2022. Virtually nobody bought a mobile home in 2017 and then sold it in 2022 for a 77.1% gain, right? The numbers for mobile home sales in this report are probably based on new home sales only, which is probably the only data that the government could attain.

More government and non-profit stupidity in action. Cotati, California is going to stop a park from changing from senior designation to all-age because they are afraid that having freedom of competition will force rents higher:

Concerned that an all-ages conversion could drive up rents if dual-income families were to move into the retirement-aged community, Countryside residents called on the city council to act before a state mandated six month grace period on the all-ages conversion expired in February, 2024.

Smart move. So now it’s pretty much guaranteed that the park will be torn down to make way for more profitable uses.

So here’s the deal. A park owner is raising the rents in a park in Olympia, Washington – just down the street from the Walmart Supercenter – from around $500 per month to around $750 per month. Olympia has an average single-family home price of $472,500 and an average apartment rent of over $2,000 per month. That new lot rent seems ridiculously low, right? Well, not apparently to the residents of Tumwater Mobile Home Park.

“I never thought it would happen here – with the history,” said John Stockman, a resident of 10 years. “We’re talking 50-60 years of [local] ownership.” Translation: “We like the old owner because he never raised the rent – even though he obviously should have”

With a record of monthly rent increases averaging just $10 to $15 a year, Western Plaza had presented itself as a forever home. Translation: “We thought we were going to get away with robbing the old mom and pop blind forever”.

Thurston County Assessor’s Office records show Legacy Communities paid $9 million for the park — more than double the amount it was priced at in 2008. Translation: “rents are going to have to go up a lot to justify the value of the land and the cost of running a business in a modern world”.

“It feels to me like society is just kicking Grandma to the curb,” Lucas said. “That’s how it feels – kicking Grandma out on the street. And I think that we’ve reached the point now where all of these elders are threatened with homelessness. This is elder abuse, and we as a society need to address it as we need to make some changes.” Translation: “We can’t really justify how this new rent is not still ridiculously low so instead we’re going to try and distract you with veiled threats of litigation and this false narrative that a $250 per month escalation in rents is going to make all seniors homeless so that maybe a politician will try to pass rent control really fast”.

The bottom line is that nobody likes higher rents but, in this case, they are more than justified.

And I urge you to look at where this park is located in Olympia vs. where the Walmart Supercenter is located at. I would imagine that the rent will have to be $1,000 per month shortly to have any hope of staving off the wrecking ball for a new retail center or $2,000 per month apartments. Translation: “you better hope for more increases because the alternative is redevelopment”.

Another story about a mobile home park being torn down to make way for a more profitable use for the land, probably because the rents were ridiculously low. Predictably, the park owner is blamed for the demolition and the resulting “homelessness” – but also would have been equally blamed if they had raised the lot rents high enough to keep the park intact. There’s no winning with the American media today so why worry about it?

Here’s the Cliff Notes version of this article:

“As the housing crisis in New York continues unabated, one demographic is being unexpectedly targeted by developers. Pre-existing infrastructure for water and sewer and cleared acreage at trailer and mobile home parks makes them an attractive acquisition for any developer. Many New York manufactured homeowners have already lost their homes to developers, including a lot in Saratoga County and on Long Island. New York state elected officials say they’re seeing an increase in the development strategy, so they’re working to help give the homeowners some power through new legislation. Landowners cannot be prevented from selling. The new law means homeowners in the parks – most of them own their trailers and rent their spaces – now have the first right of refusal to purchase the land. So if the owner of the land wants to sell, residents can collaborate and match the purchase price."

Great fiction writing. Here’s the reality:

• Only about .0001% of the time are the tenants successful in matching the price and closing on the deal.
• The bureaucrats only added this meaningless law to appear like they have power, because they have none. Even though New York has rent control it has no power to block the sale of land.
• In fact, it’s exactly the new rent control laws of New York that are causing park owners – in bulk – to redevelop into uses that are not rent controlled.

So how could the bureaucrats really help park residents if they wanted to? Simple:

• Abolish rent control.
• Stop harassing park owners who raise rents to meet market levels.
• Offer tax incentives for those who sell and keep the park in operation as opposed to having it torn down.

Think this will ever happen? Are you kidding me – this is New York!

No, wait, not another misguided non-profit in action? This story pins the “stupid meter” in two key ways:

1. The city thought that spending $3.5 million to save 11 mobile homes from being torn down was a great investment. I mean, that’s only around $300,000 per household to save a $3,000 dilapidated mobile home from demolition, right? In non-profit world that must be a great use of taxpayer money (assuming you’re a complete idiot) but do you really think that those 11 families would not prefer receiving $300,000 in cash each so they can go buy a brick home in a subdivision and get out of that old, high-density park?
2. The genius at the city that offered the $3.5 million to mom and pop just found out that the park was only worth $1.5 million and they have been “had” to the tune of $2 million. Boy, I never saw that coming.

So now what do the virtue signalers at the city do? I’m sure the only solution is to go ahead and pay the $3.5 million and spend another $2 million to build a solar array to make it more environmentally sustainable.

It’s a good thing that non-profits don’t rule the world as it would be a pretty sorry place to live. Take note of just two key factors in this article:

1. The mobile homes that this non-profit is providing cost $100,000 to $130,000. Any idiot with a dealer’s license can buy essentially these same mobile homes for $80,000 or so turn-key. Not exactly a good value.
2. Look at the photo of the park and then zoom in on each home and lot. It looks totally junky like the “before” photo of many turn-around parks. Not exactly a sign of good management.

Every week these type of articles beg the question “is this the best way to spend money?” and every week the answer is clearly “no”. Most all private-sector park owners can provide a better product than this at a lower price point. But, of course, that never gets mentioned because all park owners are “evil”, right?

I hate to throw cold water on this stuff, but tiny homes are never going to be a permanent solution to housing issues. They are too small and depressing to live in on a full-time basis. At 400 sq. ft. or smaller they are about the size of a hotel room. I know few people who could live their lives in a hotel room happily. On top of that, they are way too expensive for their size. If you hate mobile homes due to the stigma, at least consider a 5th wheel with pop-outs which are still far cheaper than a tiny home to buy but have the same sq. ft. You can get a used 5th wheel for as little as $3,500 (look at RV Trader’s website) and then when you can’t stand “living small” anymore you can sell it for $1,000 and walk away from it. With a tiny home you are stuck with tens of thousands of debt and a tiny market of interested buyers.

Another park being torn down for a new and better use of the land. And, in this case, the residents are suing claiming that they want more relocation money and freebies. Maybe they should have been as aggressive about pushing the owner to charge higher rents so they would not be cut loose?

Watch the news story video – look at the condition of this property -- and tell me if anyone with an IQ higher than a lima bean would even remotely believe that this land is worth $25 million as a mobile home park use. Clearly, it’s going to be redeveloped into a better use, right? I am forever blown away that people have zero understanding of basic economics.

Have you heard this narrative before? 

Owners Joy and Eddie Hanks purchased the park in 2020 for $600,000 along with several adjacent properties, according to property records. They revealed in July this year plans to construct “Digs on the River,” a 23-acre project to include apartment buildings, commercial and restaurant spaces, a boutique hotel and potentially a boardwalk down on the bank – but no trailer park. Those within the park, encompassing over 30 trailers, will be forced to move sometime after July 31, 2024, with 90 days' notice. 

Yes, it’s the fourth such article this week regarding parks being torn down for a higher use of land. If you want to stem this tide the simple solution is to make mobile home parks a higher use of land. And you only get there with much, much higher lot rents. As I’ve said a thousand times, low rents = redevelopment.

But here’s also a narrative you’re seeing a whole lot of this week:

Many claim their requests to meet face-to-face with the Hankses have been met with resistance. Morse, a resident of five years with her fiance and two young children, said discussions with the couple were “making progress” until about a month ago when Joy Hanks requested any further questions be sent in writing and declined to meet in person.“I just want to have a conversation,” Morse said. “I just want to have a real, human conversation, and I’m a businesswoman too. I plan to be perfectly professional, and I don’t want any conflict that she thinks will happen.”

Mobile home park residents and bureaucrats think they can talk owners out of making smart financial decisions. The problem is that only money talks in the investment arena. The owner is not going to meet with the residents because it’s pointless and only opens the door to litigation in a screwed-up America. If the rents had been higher there would not have to be a meeting and the park would continue on as part of that mixed use development. With apartment rents at $2,000 per month on average – and you can stack them two of three high – mobile home park lot rents would have to be triple the U.S. average in many cases to even dent the rate of speed you are seeing parks close down.

You guessed it – another article about “evil” park owners destroying lives with $50 rent increases. Except this one is different: the “evil” park owner is the country itself.

And when they were questioned about the increase at a county meeting, they didn’t mince words:

Commissioner Kent Becker said “commissioners look only at what the dollars are”.

That pretty much sums it up without a lot of B.S. 

If a park owner had said that they would have been tarred and feathered by the media.

The bottom line is that mobile home parks are income properties, and they only survive when they are the most profitable use for the land. Even the bureaucrats have figured that out in Hillsboro, Kansas.

Yes, the same tired narrative as the above article. And, yes, the goal here is for the media to brainwash you that all rent increases are “evil” and all park owners are “evil” if they regurgitate the same article 100 times in a row.

First of all, I love the lack of bias from the woke reporter:

Fresno mobile home park under the threat of closure by an unscrupulous owner with a cash register heart.

Second of all, this is an article that is the perfect illustration of why Ronald Reagan once said “the nine scariest words in the English language are “I’m from the government and I’m here to help”. This owner offered to keep the park free from redevelopment at a $650 per month lot rent, which was more than reasonable. The city blocked him and told him it could not be more than $350. He warned them, the park would be demolished if they refused to listen to reason but they wouldn’t budge. And now it will be demolished and everyone in the park will be homeless.

Here's a quick look at Fresno housing prices looks like: $359,700 on the single-family home average and $1,330 per month apartment rent on the two-bedroom unit and $1,800 per month on the three-bedroom.

So, $650 looked like too much, huh? Interesting logic.

But don’t worry, residents of the park, those same bureaucrats are ensuring you’re going to get at least 12 months’ notice to move out.

Think the residents would have voted to raise the rent to $650 per month as opposed to their new position as being homeless in a market with $1,300 2-bedroom and $1,800 3-bedroom rents?

I know nothing about the facts of this case, but let’s face it, if you live in California or Florida and your rent is too low the odds are 99% your property will be redeveloped. If I was a resident in a CA or FL mobile home park my question to the owners would be “how high does the rent need to be so the park won’t be torn down?” Isn’t that just basic common sense?

This is a 31-space park in poor condition. At $5.5 million that works out to around $200,000 per space. So, yes, this park is going to be torn down as far as I can tell. Everyone has to remember that there are many different options for every tract of land and mobile home parks are only one of those. It’s perfectly natural for a piece of land to go through a progression of uses over time – just as many mobile home parks started off as producing farms and then RV parks with gas stations and then on to mobile home parks. When a mobile home park gets turned into a nice apartment complex or retail center it’s simply called “progress”. There’s no deeper meaning.

Ditto. Same story as all the earlier ones. Fighting higher rents = certain closure of the park.

Looks like construction companies will have plenty of work redeveloping former mobile home parks in 2024.

The same tired story of how resident-owned communities saved a 13-space trailer park from demolition and can do the same for all the other 44,000 parks in the U.S. There’s only one problem with this story: resident-owned cooperatives have only done around 300 parks total in decades of existence. That works out to a .0068% success ratio. At the current speed it will take them roughly 3,666 years to tackle the rest of the parks! That seems like a reasonable use of this much attention and discussion, right?

The article fails to mention how many people live in this park (no doubt so you could not easily whip out your calculator and see what a monumental waste of money this non-profit inspired project was) so I did the research for you. Here’s the information on Mountain View Mobile Home Park. As you can see, it houses 34 trailers. When you see how many non-profits contributed to this deal you begin to realize why nobody wanted to identify the number of beneficiaries. Assuming they procured 80% LTV – and only counting the county’s contribution of $1 million as the total down payment -- then the park must have been purchased for around $5 million. At 34 total sites, that works out to $147,000 per household, and you know the actual number is probably closer to $200,000 when you add in all the extras from all the other non-profits. This then begs the question “is this really the best way to spend that money”? For example, they could have simply passed on buying the park and given each family $200,000 in cash and told them to go buy a nice brick house with no mortgage, a newer car free-and-clear, and have a happy life. But instead, they are going to force these folks to live in a highly dense 1960’s trailer park for the rest of their lives.

I promise you that not one single resident would have elected to stay if given the option of the money or their trailer. Shouldn’t they be given that choice in these transactions?

Looks like the same flight path as the earlier articles. When you fight lot rents going up even with CPI increases you are just asking for closure. Either these bureaucrats are completely incompetent or maybe their plan all along is just to get the parks torn down.