Mobile Home Park News Briefing

This article is wrong on so many counts:

• The false assertion that lot rent of $1,000 per month in Albuquerque is “horribly high” when the average apartment rent in Albuquerque is $1,708 per month and the average single-family home is priced at $308,000. When mobile home park lot rents are 40% lower than apartments and 80% less than the single-family home mortgage and taxes, it would seem to me that mobile home park lot rents are actually very low NOT high.
• The false claim that corporate owners somehow lead to lower property condition when, in fact, they are well-known to inject million of dollars into large properties, such as this one, to bring infrastructure and cosmetics back to life – something that former mom and pop owners often let deteriorate over the decades and have no money to fix.
• The false concept that residents are having to cut back on prescription drugs and food solely as a result of higher mobile home park lot rents. As you may be aware, while all prices in the U.S. rose roughly 20% during the disastrous Biden administration, food alone is the fastest inflating commodity. On top of that, housing is only the fifth largest cost for Americans, eclipsed by health insurance, childcare, transportation and taxation. Those have risen faster than mobile home park lot rents and it’s beyond ridiculous to pretend that somehow only the mobile home park lot rent is the culprit of people being broke.
• The false narrative that somehow tenants could buy parks and lower the lot rents. Since the bulk of the cost would be to service the debt – at the exact same price as a corporate owner – plus utilities, insurance, property taxes and repairs that would all be the same regardless of ownership, the truth is that tenants pay the exact same amount no matter who the buyer is.

While the writer of this article may think that you are dumb enough that they can convince you that 2+2 = 5, hopefully they failed.

In addition to acquiring assets, Group Fund II is making renovations to properties, which includes improving infrastructure, bolstering amenities and common areas, paving and landscaping, as well as implementing new affordable homes. GMF, which has invested almost $30 million in its MHCs portfolio, hopes that these moves will provide a boost in value for both residents and investors.

Once again, I’m impressed that this writer, rather than advance the false narrative that “private equity groups make evil landlords”, instead told the truth that these well-capitalized buyers are the ones that have the money to bring old mobile home parks back to life.

No surprise for anyone who reads this weekly missive, as I have been writing for years about the fact that mobile home parks are perfect for redevelopment as they have great locations on major roads, access to water and sewer, and are just the right amount of acreage for most uses.

If lot rents don’t go up substantially, many mobile home parks will be redeveloped in the years ahead.

It’s strange that they would be that concerned about a storm shelter in an area that rarely has a storm but it’s nice that the city is FEMA is gifting $70,000 to a mobile home park for this project.

I have no idea how anyone in Pacific Palisades can ever overcome everything that has happened there, but just the fact that there were mobile home parks in such a prestigious area elevates most American’s opinion of the mobile home park product.

They better hope that large, well-funded groups keep buying these mobile home parks as they are the only people who have the capital to fix the flooding issues in North Carolina that FEMA has no money to help with.

I’m impressed that there was no negativity to this article – that’s refreshing.

While I disagree with the premise that mobile home parks are best served by resident ownership (which I have discussed in detail every week) the article explores more than that one item and concludes that mobile home parks are important for the community and should be saved from redevelopment by perhaps having the state/county/city gift the necessary infrastructure repair that many older parks face, as well as to help residents obtain the funds to buy them, when possible.

Once again, overall, a favorable article for the industry.

Great article. Fair and balanced. I’m impressed.

According to Brown, “What it really came down to, for me, was that this is truly affordable housing that you can own…[and] when investors buy these parks, they raise the rents and don't improve the infrastructure [and] it leads to ongoing issues for the residents.”

I have some basic factual problems with this often repeated, but factually incorrect, statement that include:

1. When a park sells – whether to an investor or a non-profit – a giant mortgage is placed upon it. This requires a huge increase in rent to pay it off. Mom and pop could charge a tiny rent because they owned the park free and clear. So the only way that you can stop rents from going up, in the event of a park sale, would be for mom and pop to give the park away for free. Unlikely to happen.
2. An investor and non-profit both have to pay the exact same water rate, sewer rate, electric rate, trash fee, property tax, insurance premium, repair bills – every single line item on the P&L. As a result, they both have to charge the same rent to cover those costs.
3. If you read these articles every week, you will note that just last week the non-profit admitted that the tenants will be paying the same – or more – rent by buying the park themselves.
4. Investors are much better managers and stewards of a property than the residents are. The residents lack the discipline to file evictions, make tough choices on rent levels, and enforce the rules.
5. Professional investors, in fact, are the ONLY ones out there fixing aging park infrastructure and taking these old properties to the next level.
6. I am yet to see a single park in the United States, purchased by a professional investor, that is not far nicer now than when they bought it.  

Would a “working group” accept these factual statements? Never. Common sense is left at the door when these types of committees get together. But the facts are still the facts and even if just one person reads this and understands the truth now, then it was worthwhile writing this. We can’t allow these lies to continue.

The city of Boise announced Tuesday the receipt of $6.7 million to be dedicated to its affordable housing goals. The award comes from the U.S. Department of Housing and Urban Development (HUD), with Boise being one of 17 nationwide recipients that will dedicate the funds to “maintain, protect and stabilize affordable hosing,” a news release from the city said. Boise’s award will be used to preserve and maintain the Sage Mobile Home Park, a 2-acre mobile home park on the Boise Bench that houses 26 families and was originally purchased by the city in 2022.

This is so stupid that it would make Gavin Newsom jealous. Boise, Idaho is going to spend $6.7 million to upgrade a 26-space mobile home park? That’s over $250,000 per mobile home! You could literally give each resident a mortgage-free, 3 bed/two bath brick home on an acre of land as opposed to wasting a quarter million dollars per trailer. How is this kind of stuff even possible? Talk about government waste! But where I’m really lost is that this park is already owned by the City of Boise. So are they saying they let the park fall apart to the point that it will take $6.7 million to put it back in usable condition? Surely the writer has these numbers wrong.

The mobile home park — already listed as “permanently closed” online and no longer accepting new tenants — is slated to be redeveloped into a 90-unit apartment complex in the next few years, eliminating one of the most-affordable housing options in the city. Average rent in Meridian is almost $1,500 a month, according to Apartment List, while residents on the 40 lots in Elm Grove own their homes and pay $590 a month.

And here’s another park closing for redevelopment. People who don’t own parks have no idea how strong the demand is for redeveloping the land they sit on. The typical mobile home park has a strong suburban location with great frontage and access to all utilities, which is perfect for apartments. And, as the writer duly notes, 90 apartment units at $1,500 per month is a whole lot more revenue than 40 lots at $590 per month. But the existing park didn’t need millions of dollars in construction capital and interest costs and there probably was a lot rent number that could have saved it. Was it $700? $750? Somebody should have asked when the first hint was given that the park might sell. Instead, the park is yet another victim of greener pastures and an escape from criticism.

Residents of a mobile home park in Bangor will be the second group in the state to purchase their community under a new Maine law. Residents of the Cedar Falls Mobile Home Park voted over the weekend to purchase their community for $8 million, using grants from Maine Housing and the city of Bangor, as well as loans from the Genesis Community Fund and a group of non-profits and banks led by Bangor Savings Bank.

Then, once the celebration is over, comes the ugly reality that they have an $8 million mortgage to service every month using their meager collections and untold maintenance surprises, all falling on a group of people who have never successfully managed anything in their entire lives. Kind of sounds like the Biden administration, right? With the same ending, no doubt.

Residents of the Woodland Estates Mobile Home Community learned about the park’s rezoning last year after the park owner reached an agreement with Core5 Industrial Properties, which filed plans to build 1.2 million square feet of warehouses on the property.

And another park bites the dust. Seeing a trend here? Guess why? The lot rents were too low to beat out the industrial redevelopment option.

Have you noticed that the follow-up footnotes to the “Shark Tank” cast hold nothing but bad endings? Mark Cuban revealed that he spent $20 million on start-ups during his decade on the show yet collectively never made any money from any of them. Meanwhile, Daymond John’s FUBU – his personal business – went down the drain. And then it was revealed that Barbara Corcoran was living in a mobile home in California, which now has burned to the ground.

I would recommend that people read actual biographies of real, successful investors going forward and steer clear of the televised “reality show” versions that are fictional at best and give about as much insight into successful entrepreneurial ventures as I could give on quantum physics.

A nonprofit that helps mobile home park residents create owner cooperatives is looking for land for a new park.
A private donor gave the Cooperative Development Institute $50,000 to jump-start the project, which is expected to cost millions of dollars and take years to complete.

Only an academic would be excited about a $50,000 donation to fund a study of a multi-million-dollar project. They will no doubt use the $50,000 for a feasibility study that will tell them – no matter what the truth is – that the concept of building a new park is absolute genius. Then, with the $50,000 gone, they will spend years forming committees and having endless discussions. At some point, to justify their existence, they will start passing the hat to raise millions of dollars for the actual construction, which will quietly never be mentioned again when they top out the fundraising at maybe $100,000. In the end the donor might have been better off just burning the $50,000 and grilling a hot dog on it. At least there would be a nicely cooked hot dog to show for it.

The management team is concerned about the long-term viability of the park.“The cumulative impact of delinquency, loss of units, and the need for significant investments makes it clear that the park’s current model is no longer feasible," the letter said.

Most residents – and certainly the media – don’t seem to realize that a mobile home park is a business, just like any other form of commercial real estate. Any business that does not make money ultimately shuts down. And any use of land that has a more profitable replacement will ultimately be redeveloped. In so many of these articles the attitude is that the mobile home park owner is somehow a governmental non-profit. They’re not. Nor did they ever ask to be.

First of all, Oregon already passed rent control in 2019. But to the “Free Rent Movement” folks that’s not nearly enough. Now they want to persuade you that mobile home park owners should not even be able to raise rents even in-line with inflation. And their rationale is that old moms and pops never did it so new owners shouldn’t be allowed to either:

“Corporate investment in these parks is really a nationwide issue. … You used to have traditional park owners who were regular people, who maybe lived in the same parks they managed and had a sense of pride in their parks. Residents often thought of park owners as extended family,” Marsh said.

Based on this logic, when you’re Grandmother dies you should be required to maintain their Reader’s Digest subscription and monthly membership to the Lucille Ball fan club. No, the truth is that the “mom and pop quantitative easing” is ending. It’s over. Residents will now have to deal with the real world where nobody operates mobile home parks at a loss anymore and every property is subject to redevelopment if there’s a more profitable use. I remember when a Duke University professor was writing an academic paper on mobile home parks and called me and asked “why do mom and pop owners charge rents that are so ridiculously low?” to which I said “because they view themselves more as philanthropists than landlords, I guess”.

Looks like Oregon wants to get rid of their mobile home parks because, if they pass this, any sane new park owner will simply redevelop into a use that has no such restrictions.

Or is that actually what they’re hoping for behind closed doors? We’ll see …

So check this out. The residents are paying $8 million to buy their mobile home park to fend off a $35 per month lot rent increase:

Residents of Cedar Falls Mobile Home Park in Bangor have secured financing to buy the land their homes sit on. Last year, they successfully submitted an $8 million bid to prevent the property from being sold to a Canadian developer that planned to increase monthly rent by $35 a year.

And now they just figured out that, upon buying it, they will have to raise the rent more than $35 per month:

With the interest on the loans and $300,000 in repairs that need to be done on the property, lot rent will have to increase.

So here’s the moral. When the tenants buy the park, the combination of mortgage and operating costs requires a rent that is just as much – or more – than when a professional owner steps in. But here’s the bigger problem. Residents are lousy managers as they refuse to evict for unpaid rent, make tough decisions that anger their neighbors, or vote to spend money on cap-x repairs, so the tenants pay not only more rent per month but their quality of life in the park is actually lower. Pretty stupid concept, right?

“Over the past months, we have conducted extensive financial modeling and assessments to determine the viability of maintaining the park,” according to the letter. “Unfortunately, we have come to the difficult conclusion that Pines Park is no longer sustainable as a trailer park and must be closed.”

Yes, this is exactly what I predicted months ago. FEMA and city governments have suddenly realized that all they have to do to get rid of mobile home parks is simply demand that every home be raised above the base floodplain elevation (BFE) – one home they even wanted to be elevated 12’ in the air – which costs a fortune and that no resident or owner can possibly afford. It’s really a clever scheme in that you can disguise closing down “trailer parks” while blaming it on simply looking out for the residents’ future happiness. If that’s not FEMA’s intention then they need to immediately cut out this nonsense and get these people back in their homes as quickly as possible. Have you ever heard of such a thing from a group supposedly devoted to helping those in need? That would be like the police showing up at your house and saying “sorry, but I can’t stop that burglar from strangling you until you replace your deadbolts, because it might happen again”.

And many mobile-home owners rent the land on which their home sites, she said. If they fall behind in their lot rent, they can be evicted. “Oftentimes, they can’t afford to move their own mobile home because that’s expensive … So they lose their home,” she said.

Did this writer even read their copy before they turned it in? Check out this logic. “if the resident is unable to pay the lot rent then they might not be able to relocate their home”. So if they’re too broke to pay rent why in the world would they even think of moving their mobile home? Yank it around on a bicycle?

What always blows me away with this narrative is this simple question. If they can’t afford the rent, why not sell their home right where it sits to someone who can pay the rent? Why abandon it when you could sell it? That seems like the dumbest thing they could do, right? There’s really no rebuttal to this. I posed this question to a frothy woke journalist once and they couldn’t even come up with a retort.

It’s good to see that the “Free Rent Movement” folks are back from their Christmas break. Here are some of the basic common-sense contradictions contained in this article:

Residents reached out to ABC Action News because they say several ongoing issues may force them out, including receiving fines for parking on lawns and not keeping the grass cut.

So let me get this straight. People are going to have to move out because the new owners are requiring them to mow their lawns and not park their cars in their yards? That’s maybe the dumbest quote so far this year. Where in America do you not have to mow your yard and not park in it? If that’s your goal as a resident, then you need to move out of this nice property and into a trailer park with no skirting and gravel roads. You’ll find one under the bridge and down by the river.

Lewis said the rent has continuously increased despite most residents having fixed incomes. In 2022, the lot rent was $566; this year, it’s $694. She said the fees also vary month to month.

The rate of inflation under the Biden administration – which covers the period 2022 to 2024 – was 20%. That would make a $566 rent $679 per month – which is pretty much exactly where it is now. You might say “but that’s just over three years’ time and not four” but remember that Biden had not screwed up inflation that much in his first year as he inherited a nearly 0% rate. If the residents don’t like the 20% inflation result then maybe they should have worked more diligently on the Trump re-election campaign in 2020.

The grants will fund bold projects such as replacing old units with new, energy-efficient homes, expanding existing MHCs, and creating entirely new, resident-driven communities.

First of all, Biden is leaving the building in a few weeks and I doubt this program will ever get funded as I assume Trump will undo every single thing Biden does in these final days (and for good reason).

But even if it did actually see daylight, there ae four basic problems with this concept:

#1: $225 million is not a game changer for “million of Americans” unless the plan is to give $10 to each of the 22 million folks who live in mobile home parks. Has that title been puffed up enough? In reality, most private equity groups alone have already poured more than $225 million into their own mobile home park portfolios via cap-x projects and with much greater impact (and no credit from the media).

#2: Nobody on earth cares about “energy efficiency” projects that cost more than they save and are part of the whole “green agenda” that was summarily flushed down the toilet on November 5th.

#3: The Federal government has no power to influence community zoning and has proven to be completely impotent when it comes to park expansions since the day Biden took office.

#4: There is no such thing as “entirely new resident-driven communities”. That’s the same “word salad” nonsense Biden shouted about for four years. None of it happened. His time is now over. Give it up.

STUPIDITY INDEX: 8

Here is an update on FEMA's progress on placing families in mobile homes. A top FEMA official pledged he would try to get 26 Helene-affected families placed in mobile homes by Christmas. Progress is slow-going at the site in Black Mountain. FEMA officials confirm only three families are in trailers out of 26 trailers total.

Does anyone on earth still seriously believe that the Biden administration can get anything done properly?

STUPIDITY INDEX: 8

To that end, Jacobo and roughly three dozen of his neighbors gathered on Dec. 21 outside their community, a 900-home trailer park, to protest its imminent closure. The park’s owner, CREI Holdings, informed residents last month that they had until May 19 to vacate their homes, continuing a statewide trend of trailer parks shuttering to make way for development.

If residents don’t want mobile home parks to be redeveloped, the only answer is to have much higher lot rents. Yet all the residents say – supported by the media – is that higher lot rents are “evil”. You can’t have it both ways. As I’ve been writing for years, LOW LOT RENTS = REDEVELOPMENT. You can either accept that reality or not, but it’s not going to change. There are too many other, more profitable uses for the land that most mobile home parks sit on.

STUPIDITY INDEX: 10

A two-bedroom, two-bathroom home will cost $870 a month to rent, while a three-bedroom will run $920 a month, commissioner Gwendolyn Hooker said. The housing commission owns the homes, but not the lots they sit on. Monthly rent includes a $440 lot rental fee. The home rent portion of the new homes would go directly to the housing commission, plans state.

I’m more than confused on how this is any different than what park owners who embrace rental homes have already been doing for the past 50 years? I guess it’s fine for the county to join in as it fills vacant lots without any cost to the park owner, but how is this even worthy of media time?

STUPIDITY INDEX: 5