Mobile Home Park News Briefing

Clearly this writer has no idea how the real-world works:

“I think a lot of these improvements in that industry have gone unnoticed by local officials, planning administrators, those who write those ordinances and regulations. I think it may be time to take a fresh look at that”

No, it’s not the fresh look of mobile home parks that will open the floodgates to new construction. The reason virtually no city in the U.S. allows for the construction of new mobile home parks is simply because they cost the city a ton of money on school tuition and city services while bringing in only a fraction of their cost in property tax. Since almost all U.S. cities are having a cash-flow shortage it’s fully understandable why they view new mobile home parks as economic suicide.

Come on – do you really think a 400 sq. ft. home for $220,000 is a great deal? That’s $500 per square foot – roughly ten times more than a mobile home costs. Sticking a piece of LED lighting on a wall doesn’t really change that fact. If you have a budget of $220,000 – and this is the best idea you can come up with – you need to move to the Midwest.

Another article about a park being torn down for a more profitable use. Week after week I remind viewers that low rents = homelessness. Apparently not enough people read this.

These articles just keep getting ever more ridiculous. Here’s a case of a private property owner shutting down a park as the result of rent control, and the residents wanting them to prove how not raising rents is a hardship before they can tear the park down – as though the owner has any legal requirement to get their approval.

“It was a despondent sight last week as the residents of Youngstown Mobile Home Park gathered on the corner of North McDowell Boulevard, protest signs clutched in hand. A similar scene played out on Aug. 29 at Little Woods Mobile Villa on Lakeville Highway.

At both protests, there was an air of desperation — these aren’t people fighting for a principle, they are fighting for their homes.

The owner of the Youngstown Mobile Home Park called for its closure shortly after the city capped rent increases at mobile home parks to 4% of current rates, or by 70% of the Bay Area Consumer Price Index, whichever is less.

“Some people have ended up in the hospital because of all the fear and anxiety,” Mary Ruppenthal, a park resident since 1987, told the Argus-Courier. “We tried to allay their fears and calm them down, but none of us know for sure what's going to come of it all.”

I know that 70% of Millennials have said they would vote for a socialist candidate (that study came out during the Bernie Sanders campaign) but here’s a painful fact: property owners have the right to do whatever they want with their property. Really want to stop parks from being torn down? Then embrace much higher rents as that’s the only shot you have. Otherwise, there are few parks out there that might not be more profitable as apartment complexes which rent for an average of $2,000 per month when parks average $300. Rent control is a death sentence for mobile home parks, which have rents so low that they’re not sustainable. Any sensible person understands this.

Wow, an article that is actually accurate! Finally!

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.

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.

Governor Kathy Hochul and a bunch of other New York bureaucrats spent $9 million to buy and renovate a mobile home park that currently serves around 100 families. That’s around $100,000 per household spent. I looked up Realtor.com and found that there are pretty nice houses for sale in Trumansburg, NY for about $150,000. Kathy could have given each household $100,000 in cash and then co-signed a $50,000 mortgage and these folks could have elevated their standard of living 1,000% at no greater cost to taxpayers. Once again, bad decision making with the only goal of virtue signalling.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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