Another park re-development story. The bottom line is that only higher lot rents save parks from the wrecking ball.

So the non-profit spent $7 million cash for two mobile home parks with the intention of using the cash flow to buy more parks. Knowing how the world works, I’m assuming the non-profit bought these for a 5% cap rate and the two properties have an EBITDA of maybe $350,000 per year. That’s if they collected the rent and knew how to run a park, which they don’t. So the EBITDA may be more like $175,000 per year. And that means they will be able to buy a new park about every 20 years or so. Not exactly the potent force in housing they are claiming. Seen it all before.

I think you’re going to see more of this type of action in the years ahead as people figure out that a modular home – properly designed – looks no different than a stick-built. It makes no sense that a homebuilder can’t get portions of the home made in a factory (roof trusses, for example) where they can be made to higher tolerances and lower cost. Once that breaks loose then all of the mobile home manufacturing capacity will be changed over to modular components and the factories will go back to three shifts again. It’s just a matter of time.

Look at the photo and tell me that you would honestly not freak out if this went in next to your neighborhood? Of course you would. Why would bureaucrats and non-profits be shocked when neighborhoods push back against this type of development? This doesn’t even look good in the photo, which no doubt was staged by a PR firm to be at the most attractive angle.

A non-profit buys a 50-space mobile home park for a total package price of around $6 million (original price plus improvements) and saves the residents from the evil park owner and they live forever in a land of unicorns and pixie dust. Sheer genius, right? Well, they could just have given each resident $120,000 cash to go buy a nicer stick-built dwelling with zero lot rent (the lot rent is $483 per month). I can’t believe that I’m apparently the only one that sees these type of virtue signaling events make no economic sense. Either the folks who fund these non-profits have poor math skills or have never looked at Realtor.com.

Look, I know the media would like to convince us otherwise, but America is still a free country and this property owner can certainly tear the park down and redevelop it if they want to. It’s called basic American property law. The residents can protest all they like, but at the end of the day a mobile home park is a business and if the land is worth more in a different use then it’s going to be redeveloped. The property owner is not bluffing and threatening – just telling the truth. The media, in this case, is giving false hope.

41 spaces on 1.65 acres might just set a new density world record for a mobile home park. And the seller got over $100,000 per lot for this property? Wow, I don’t get California investing at all.

Bestplaces.net tells me that Louisa County, Virginia has a median home price of $299,700 and a three-bedroom apartment rent of $1,440 per month. So here’s what’s maddening about this article:

“In December, Six-0-Five’s management tried to raise lot rents by more than 40%. The increase would have meant Felipe’s monthly rent payment increased from $445 to $625.”

So the rent is going up $180 per month to $625 and somehow that’s going to render these residents homeless? At $625 that’s less than half of apartment rents.

I would contend that anyone who cannot afford $625 per month needs to immediately move out of Louisa County and move to someplace less expensive. There are many counties in the Midwest where housing costs are half that amount. But the era of mobile home park owners subsidizing residents (which is what’s happening when the owner does not charge market rents) is ending. It reminds me of the current homeowner insurance issues in Florida. If you can’t afford insanely high insurance on your house, you need to move to a place you can afford – but the insurance companies are no longer going to subsidize you living on the beach.

I know nothing about the tenant, the metering system, or the billing methodology. But can a tenant use $1,000 per month in water? Absolutely. If you have two bathrooms and both toilet flappers are broken you could accomplish this easily. Or if you fill up a commercial water tank on a trailer all night several times a week (a common tool if you are a landscaper, paver or mobile car wash) then you could easily exceed $1,000. There are two sides to every story and you are only hearing one so far.

You can’t even apparently redevelop a mobile home park without the neighboring residents complaining. The 5.5 acre tract is being converted from a mobile home park to a 155 unit apartment complex. The parcel is fenced off with “under construction” signs all around it. And yet the neighbors complain to the media of what an eyesore it still is. Is there anything more hated by the average American than a mobile home park? Doubtful.

There is no evil agenda going on here. The statement from the resident:

"When we realized we had a court date it was already too late, and they sent us an eviction notice, I think they want me to leave because I didn't remove the fence, they said my curtains are ugly and they told me to clean outside because it was messy," said Hernandez.

And now the statement from the park owner:

"Our priority at Wikiup is to provide a safe, well-maintained, and affordable community for our residents. We work with residents when there are violations to the rules and regulations of the community that present health and safety concerns for them and other residents.  If after repeated requests and notifications, residents fail to address those violations, for the sake of all residents, and as required under Colorado law, management, as a last resort, must take necessary legal steps to ensure compliance."

The bottom line is that the resident broke the rules, refused to fix the issues even after notification, and then the park owner gave up and evicted them for the good of the entire community at large.

It’s important to remember here that evicting any resident costs the park owner thousands of dollars: 1) legal cost 2) cessation of lot rent 3) demolition of the home. It is very rare for a park owner to evict for rules violations unless it’s a very serious case. There are two sides to every story and the writer of this article gave 99% of the benefit of the doubt to the resident and 1% to the park owner – and that’s clearly unfair.

Basically just more poor journalism that is simply geared to pander to their base at the exclusion of fairness.

Maybe they should change the signs to read “Welcome to Austin where the homeowners are terrified” – because they should be. If you can now place an RV or tiny home on basically any residential lot then everybody in Austin is going to see a huge decline in property values. Imagine the $1 million McMansion with an old $500 travel trailer next door (including two non-running cars and three hound dogs). Another Texas city (Houston) learned the hard way that this is just plain idiocy.

Ronald Reagan was wrong. The nine scariest words in the English language actually are “you now own a mobile home park in California”.

Pretty crazy when solar panels are deemed to be uglier than a mobile home park. 

I think this article pretty much sums up the new American concept that “people are too dumb to make their own decisions so the government must do it for them”. The park costs $600 per month in rent and the local 2-bedroom apartments are $2,000 per month. The average tenant makes $20,000 per year. So they obviously can’t afford anything but the mobile home park. And the danger in living there is arsenic in the water, which they clearly navigate around with bottled water. Meanwhile, the government wants them to relocate to $2,000 per month apartments (which is more than their gross income) but have safe drinking water. It’s kind of like the Covid-19 shot that, when Americans decided they were healthy and didn’t need it, were then forced to get it by a government mandate.

Another reminder of Ronald Reagan’s famous quote “the nine scariest words in the English language are “I’m from the government and I’m here to help”.

When FEMA gave this person $31,000 they should have immediately moved to a more affordable city and not kept beating their head against a wall of impossibly expensive housing (median home price of $800,000). I am forever bewildered by these cases of people who earn next to nothing trying to live in markets that are insanely expensive. “Move to the Midwest and have a good quality of life” is my opinion on this article.

Oh come on, seriously? “Interior air-conditioning units are not as efficient as window units since they release warm air back into the room”. That’s not the case at all. Interior air-conditioning units work just fine – I’ve been in places that used them and they can cool you to meat-locker levels. The real problem is that they are more expensive than window units. The park owner is trying to keep the park good-looking and window units look lousy. The interior units are fine and so is simply getting the central AC unit back to working, and they look fine from the outside. The real battle here is that the residents don’t want to spend the money and don’t give a darn about aesthetics. You can also put a blue tarp over the hole in your roof, which is cheaper than getting your roof fixed. And you can tape a black trash bag over your broken car window. This writer is a real idiot.

This is one of those strange cases where the word “park” has two meanings. The land in question is a city park that mostly serves the neighboring trailer park.

This group paid $16 million for less than three acres. Do you seriously think this is going to stay a mobile home park? I will bet $100 that there is something entirely different on top of this land by the end of the decade (which is about how long it may take to get the necessary permits and approvals to build something else on this land). If you assume a density of 12 units per acre, that would be like spending $450,000 per lot. Not sure how that computes except as a development site.

I’m not sure what to think about this new concept in which the non-profit owns the housing unit and the “homeowner” can’t sell it except at the price the non-profit demands to someone the non-profit chooses. Isn’t that really just a rental agreement disguised as a mortgage? If you take the ability to create wealth out of home ownership then you’re really ruining that person’s future well-being, right? One more case of groups that think they need to control lives because they believe that humans are naturally stupid.

Here’s the key quote from this article:

Given that prohibitive cost of moving a mobile home – often upward of $7,000 – homeowners find themselves stuck, forced to pay lot rent or abandon their home and asset.

Do you see something missing in that list of options? First of all, you can get another park owner to pay to relocate your home as long as it has a HUD seal (post-1976) and you have the basic verbal skills to ask them to do so, but leaving that aside, why would the only other option be to “abandon your home”? Whatever happened to the concept of selling your home? The article says that the median home price is gigantic and affordable housing is sparse so why would these folks who can’t afford to live there simply put their mobile homes on the market and sell them and then move? In most mobile home parks, homes sell for $5,000 to $50,000 based on age and location, but this bizarre concept that “mobile homes can only be abandoned” is just plain stupid.

The more I read about this lawsuit, the more I’m confused. Apparently tha plaintiffs are claiming that the park owners“ used “competitively sensitive market data” provided by Grand Rapids, Michigan-based Datacomp Appraisal Systems Inc. to exchange pricing information and conspire to raise rents”. Every industry group in the U.S. does continual market comp studies to see where they fit into the spectrum of rents and prices including every office, retail, lodging, self-storage and apartment group, right? “Price fixing” is defined as ”competitors that agree to set their prices at the same level”. Simply gathering market information does not seem to fit that profile. Not sure that any judge or jury would disagree.

Their other contention is that “Manufactured home lot rental prices were blatantly inflated at a staggering rate of 9.1% per year between 2019 and 2021.” If you simply go to Google and enter the words “apartment annual percentage of rent increases since 2019” the computer says the following:“Apartment rent growth averaged 11% per year during the rapid inflationary period of 2021 – 2022”. And that does not even count the same response if you enter in ”gasoline prices” which went up a cumulative 45% during that period and “single-family home prices” which went up a cumulative 32%. Once again, makes no sense.

As a result, I must be too stupid to understand this case. Does anyone?

After the flooding disaster in Vermont recently the government admitted that FEMA has only mapped out roughly 30% of the U.S. for flood exposure and that most of the maps are 15 years out of date. So who can possibly make this claim: “Mobile home parks are disproportionately located in parts of landscapes that are vulnerable to climate risks. So they’re disproportionately located in floodplains. They’re disproportionately located in places that are exposed to extreme heat. …They’re also disproportionately located in places that are close to other environmental harms.” 

The answer is apparently only this woke writer who apparently knows more than FEMA does. I hope he shares his voluminous research with all of us.

Is spending $800,000 to build a storm shelter for 50 lots really a good use of state funds? That’s nearly $20,000 per household – more than their mobile homes are probably worth. I am endlessly amazed at the level of financial waste at the state and national level. Don’t tell anyone but there is a product at most mobile home shows in which you put a solid steel storm shelter under the deck of your mobile home at a fraction of this cost.

“Price fixing” is defined by Webster’s as “the maintaining of prices at a certain level by agreement between competing sellers”. I haven’t read the case, but it appears that all the defendants did was to get market comps from the same source -- as well as other input from other sources probably -- to determine what the “fair market value” of rents are in that market. If researching what market prices are is wrong then, using this same argument, every gas station that looks at what their competitors are charging, every grocery store that surveys what the store down the street is charging, and every apartment, office, hotel and commercial building owner in the U.S. are also guilty of “price fixing” but I doubt that anyone will support that argument. When you add the fact that you have many of the largest REITs in the U.S. funding the defense, I doubt it will survive the first round (if it even goes that far).