Mobile Home Park News Briefing

Amid excavators and partially demolished homes, a handful of residents of the Shady Acres mobile home park in West Kelowna are holding on in the desperate hope of getting more for the homes they have lived in for decades. The mobile home park at 2355 Marshall Road is being redeveloped into a light industrial park, a process that has been paused twice by city council over concerns about how residents of the park were being treated.

Did you get the message yet? LOW LOT RENTS = REDEVELOPMENT.a

In a public hearing on July 17, the Springerville Town Council voted to revoke a previously approved conditional use permit for a proposed mobile home park at 64 North D Street, after hearing strong community resistance. The hearing, filled with concerned citizens and impassioned speeches, emphasized the town’s divisions over the development.

Gee, what a shocker. Never saw that one coming, right? Anyone who tells you that there will be new mobile home parks built in America in the years ahead is as out-of-touch with reality as the folks that refuse to accept that LOW LOT RENTS = REDEVELOPMENT. Nobody wants a new mobile home park anywhere near their property.

I will add that we have now entered the third week of my challenge for someone – anyone – to send me the address of these supposed new parks that are being built somewhere in the U.S. (that’s all you hear from attendees at various industry conferences, right?). To date I have received not one single address to research.

Residents at an RV and mobile home park in Ocala received a rude awakening last week. Belleview Hills RV Park residents said the original owners of the property informed neighbors that it had been sold. Residents were told they had until August 19 to vacate the premises. Residents first received a letter on their front doors last week that stated the property would be redeveloped.

Maybe these residents could cut out the middleman and talk to the ones that live in the Novato park referenced earlier before they end up with the same fate. While the Ocala residents now know that LOW LOT RENTS = REDEVELOPMENT the Novato ones have not figured it out yet. They will.

Sure, put a 4% rent cap on the park. Ignore the simple maxim that LOW LOT RENTS = REDEVELOPMENT. Then sit back and watch this park get torn down in the days ahead. It’s a given.

Residents and bureaucrats don’t want to accept the laws of gravity, much to their own detriment.

While residents weren’t specific about what type of support they need from the city, one commentor suggested a rent cap, like those proposed by President Biden the same day. According to a news release from the White House, “President Biden is calling on Congress to pass legislation presenting corporate landlords with a basic choice: either cap rent increases on existing units to no more than 5% or lose valuable federal tax breaks.”

I hate to rain on the parade, but Biden’s “5%” proposal cannot possibly make it through Congress. If it did, it would not – in any way – change rent increases since it’s an “optional” concept with the only carrot being tax breaks that few operators actually use. And then, of course, it would obviously be held up in litigation through the court system for years and then overturned by the Supreme Court. Remember the “student loan forgiveness” promise?

But here’s something that all residents need to remember: LOW LOT RENTS = REDEVELOPMENT. And that does not need any Congressional Act – it’s already the simple law of economics.

Is that all – just $4 million? When will people accept the fact that the whole “residents buy the mobile home park” fad is over? The tenants never bought them to begin with, non-profits did. Or actually didn’t, as these deals are falling apart faster than Biden at the debate. What a waste of time.

The title says it all. Once again, there’s no escaping the reality that LOW LOT RENTS = REDEVELOPMENT.

Another park that might have been saved with higher lot rents. Instead, as always, LOW RENTS = REDEVELOPMENT. 

Over the past thirty years we have turned-around dozens of “heavy-lift” mobile home parks just like this one. It’s the logical product of mom-and-pop neglect and the modern, professional owner is the only solution to bring these things back to life. That’s why it’s endlessly annoying when the media portrays professional owners as evil when they are the only possible thing standing between parks like these being demolished or put back in service.

You saw the earlier statistic: only 10 out of 700 Maine mobile home parks have EVER been successfully purchased by the tenants over the past 40+ years. With that in mind, this well-meaning concept has zero chance of ever being of any practical use. However, if they repealed the “sell to tenants” provision – and simply made the tax credit contingent on the park not being redeveloped – you might really have something.

When they build a 253-unit high-rise apartment complex next to a 50-space mobile home park, it’s pretty clear that the park is going to be redeveloped in the near future. The fact that nobody will tell these tenants the truth is all part of our new “politically correct” America, but common sense should already communicate that the park is doomed. While there is typically a lot rent that could economically stave off redevelopment, in this case there’s no way that 50 mobile home park lots can match the economic firepower of 250+ new apartment units at $2,000 per month, regardless of how high the lot rent is.

At the same time, people have to accept that redevelopment is a positive thing. It’s called progress. In the pyramid of real estate, mobile home parks are near the bottom of land use, and high-rise buildings are near the top. It’s a natural progression. It’s not evil or wrong.

Of course, it’s only logical that the residents are going to come up with $28 million to buy their park, right? Besides the basic issues of how they’re going to get a hand-out for an $8 million downpayment and a non-profit personal guarantee on the mortgage of around $20 million comes this very alarming statistic:

Maine has more than 700 manufactured and mobile home parks. Ten are resident-owned communities.

Are you serious? I hate to rain on the tenant-owned-community concept, but that’s a ridiculously small rate of success. Assuming that the resident-owned concept has been around since the 1980s (which it has) and there are only 10 tenant-owned parks in the state of Maine, that’s an average of less than one deal per half-decade. AND THAT WAS BACK WHEN PARKS WERE MUCH LESS EXPENSIVE.

These concepts simply don’t work – and everyone in the industry knows this. I wish the bureaucrats that pass these stupid laws would research the actual facts. It would blow their minds.

"We got 60 days to raise $4 million," Cook said. "That’s where we’re at right now."

No, the problem is WAY bigger than that. You see, at $18 million that’s over $200,000 per lot. There’s no way on earth that you are going to find a non-profit to personally guarantee a loan that big. Sure, the city tossed in $50,000 to give the optics that they are really devoted to this concept (why are the folks that pay the taxes not in an uproar over this use of their money?), but even the bureaucrats that threw that money in the trash know that there’s not one chance in a billion that the residents are going to raise $4 million cash or obtain the financing.

What a monumental waste of time.

Now, Habitat for Humanity of Greater Charlottesville is scrambling to put together an offer on the park on behalf of residents before that 60 days is up on August 6. “Nothing is certain at this point,” said Dan Rosensweig, Habitat Charlottesville’s president and CEO. “But we feel like we have a moral and ethical obligation, when people — especially vulnerable people — who are in harm’s way, to at least look at it.”

No, actually, something is very certain at this point: there’s no way on earth that the residents are going to come up with $7 million in three weeks. Or three months. Or three years. Or three decades. Or three centuries. That’s because these tenant right-of-first refusal concepts are in complete contradiction to the basics of common sense. Here’s the problem: the tenants personally have no money so they are reliant on a hand-out from a non-profit for the down-payment and a second non-profit to personally guarantee the mortgage. And when it comes time to pony up the cold, hard cash, even the most flippant do-gooders have seemingly forgotten their wallets like some dead-beat on a double date. It all reminds me of the time I got a call from a city councilman in Oklahoma City who wanted me not to evict some guy that had not paid his rent for a couple months and was heading to eviction trial (I’m assuming this tenant barged into his office, terrorized him, and he wanted to get him out of his office). So I told him “OK, no problem, you just pay the amount he owes currently and I’ll call the eviction off”. He responded “now wait a minute, I can’t afford to pay the rent” and I said “well, when you’re ready to pay it, just send in the money and we’ll call the eviction off.” Of course, I never heard from him again. All talk but no action when there was actual money involved.

When will bureaucrats figure out that they’ve all been conned into believing these tenant first-rights ever actually pan out? Because they don’t. Everyone in reality-land knows this and simply view the 60-day period as a complete and utter waste of time. Not because landlords are evil and don’t care about the tenants. Obviously, tenant money is as good as anybody else’s. But because these deals never, ever happen in real life. It’s just a statistical fact.

Tester’s Manufactured Housing Community Sustainability Act would create a 75% federal tax credit offsetting capital gains if the property is sold to a resident-owned cooperative or nonprofit. This economic incentive would help preserve more manufactured housing communities and keep more families in their homes, while protecting the long-term viability of this important piece the affordable housing market.

Well, this is sort of on the right track. The future success of keeping mobile home parks from being redeveloped could be achieved with aggressive tax abatement. I wrote an article years ago when a Congressman proposed that there be no capital gains tax charged when a mobile home park is sold without being redeveloped. Of course, that concept didn’t go anywhere. But tying that idea to selling to the residents is a death sentence for this vision to have any real impact, as the odds of the tenants successfully buying any park is about .00000000001%. If you remove that roadblock, you might really have something of value. Hopefully, Tester will soon realize this to be the case.

Kerr Properties intends to rezone the site to industrial use.The letter points out that the company contacted 20 nonprofit agencies seeking assistance in the relocation and support tenants.“The response to our appeal for help from these agencies was extremely disappointing with only one group responding. Fortunately, PIERS stepped up and offered assistance to all those willing, and in coordination with our relocation coordinator successfully relocated all tenants.”

Another article about a mobile home park being torn down to build a more profitable industrial use. What’s interesting about this is that 19 out of 20 non-profits rebuffed any assistance to the residents in relocation efforts. This further supports my theory that most non-profits only interested in fundraising or publicity – not because they actually care about people in need.

Another positive article about a city government realizing the importance of preserving mobile home parks.

This can’t be happening! Where did all the wokesters go?

More common sense takes hold! This is the way to preserve affordable housing: by helping park owners and mobile home residents make upgrades to homes, particularly in areas with severe weather risk.

I wish more counties would take this approach with their infrastructure funds.

Madison Township trustees have denied a rezoning request that would have allowed for the expansion of a manufactured-home park in the community. Trustees, during a recent meeting, voted unanimously to reject a zoning-amendment application submitted by James Place Properties Inc.

I find it endlessly amusing that people inside our industry (and on Biden’s soon-to-be-unemployed advisory team) claim that there’s a new era of mobile home park construction right around the corner when the truth is that absolutely no city or town in the U.S. is ever going to allow new park construction under local zoning laws.

I will note that another week has passed without a single person responding to my simple challenge to send me the information on any new parks that have been actually built and opened in the U.S. (not just talked about, applied for, or investor funds raised). The “new park narrative” is blatantly false and anyone who has ever actually applied for a permit to build a new mobile home park already knows that.

When Sylvester moved to the park, the rent for each lot was $359 per month, which she said was affordable as someone living with a disability and working at Stop & Shop part-time. Months later, the rent control board approved an increase to $410, and Leisure Woods management is now seeking to raise it to $588. “I haven’t even lived there two years, and if you take $588 out of my income that leaves me with nothing to survive on,” Sylvester said. “I would be forced to sell.”

Back to the old worn-out woke narrative that a mobile home park lot rent of $588 is too high in a market in which the single-family home is $265,000 and an apartment is $1,420 per month. Only a total fool would believe that narrative. But what’s more troubling is the writer’s contention that it is somehow the park owner’s responsibility to provide housing to people who claim to only make $600 per month. The writer forgets that it’s the government’s responsibility to house people who can’t survive in the real world under the Section 8 program (which has about a 5-year waiting list), not the park owner. In looking at the profit-and-loss numbers provided to the rent control board, I have no idea why this owner has not demolished this park already and redeveloped it into a more profitable use. They better not push the owner into that position – it’s a miracle that he’s willing to even accept $588 per month to begin with.

This sale is happening during a time when mobile home parks are rapidly disappearing all over the country. Statistics about this are surprisingly difficult to find, but the Associated Press reported on the trend last year, as did Forbes and Time. This is important because mobile and manufactured homes are the single largest source of non-subsidized, affordable housing in the United States, according to the U.S. Office of Housing and Urban Development. And once they’re gone, the parks are not being replaced. That is certainly the case in the Charlottesville area. Carlton Mobile Home Park is one of just two remaining parks in the city, and one of six if you include parks in Albemarle County. In the last 15 years or so, the  area lost at least four parks.

We’re on a roll this week. Another fair and balanced article. Looks like journalists are starting to realize that the big stories to cover are parks being torn down because rents can’t support keeping them as mobile home properties, not “evil landlords who raise rents”. Maybe media groups are finally taking back the reins from young, woke writers after the terrible Biden debate performance and the inevitable end to the age of stupidity.

Finally, a fair and balanced article about the mobile home park industry! It talks about the stigma against “trailer parks” and then goes over the benefits with profound accuracy. It notes that the buying decision was not made because mobile homes are “mobile” (which is why this person also bought an RV for travel) but because they are cheap and offer more financial freedom. She also likes the “support network” which her neighbors provide (and which Time magazine raved about a few years ago).

It appears there are still real journalists out there!

Mullin said Sharpe could sell the property and the development would have to move to another location since it's no longer in escrow, but he would like to see the development move forward in the same location. Sharpe didn't respond to a request for comment.

Gee, what a shocker – another new mobile home park development that never got off the launch pad. When will people learn that this stuff is just never going to happen? To build a new park you have to go so far out in the middle of nowhere to get the permit that no bank will finance the deal, and there’s nobody who wants to live there even if you built it.

“President Biden and I believe that every American deserves affordable housing, so they have a roof over their head and a place to call home,” said Vice President Harris. “That is why we have a plan to build millions of new units of affordable housing in communities all across our nation, which will bring down the cost of housing for renters and help more Americans buy a home. Today, I am proud to announce that we are taking a critical step forward by investing $85 million to help more than 20 communities throughout our country remove barriers to building more affordable housing.”

That sounds like a speech Huey Long would make in the 1930s to energize poor, stupid voters by claiming he would “put a chicken in every pot”. After last week’s debate and Supreme Court ruling, we all know that absolutely nothing will come of this and it’s just an attempt to appear relevant and distract voters from bigger issues like Biden’s disastrous debate performance.

As for this one particular program, the total value of all U.S. single-family homes is around $35 trillion. So exactly what will be accomplished with $85 million? Nothing more than a few non-profits engaging in meaningless studies. This is as stupid as me giving a televised speech in which I proudly announce that I will be investing $5 in space colonization, to move the needle on building a vast colony in the sky. But at least I won’t require a teleprompter.

Have you ever been to Delaware? Nobody wants to live there, nobody wants to visit there, and nobody wants to invest there. Crazy new laws such as these only further make the state dead in the water as far as any revitalization efforts are concerned.