Mobile Home Park News Briefing

Can we get a little accuracy on these stats, please? The article fails to name even a single mobile home park that the residents have successfully purchased so far, but names 12 that failed to do so. When you use a title like “residents are seizing the opportunity” it seems more than a little inaccurate if there’s not a single example of this “seizing”. 

Wow, those are pretty stupid bills:

Under those bills, renters in manufactured home parks would be able to halt the automatic renewal of their rental agreement by notifying their landlord 60 days prior to the agreement’s expiration date. Tenants would also be allowed to not renew a rental agreement if the landlord changes its terms if they notify the landlord within 30 days of receiving the notice of the change. The bill also prohibits fees for late rent payments unless such fees are outlined in the rental agreement and caps them at 10% of rent or 10% of the balance the renter owes the landlord, depending on which is less. Additionally, the legislation would give manufactured home tenants the right of redemption, or the right to remain in their residence after being served with a court-ordered unlawful detainer for late or missing rent if they have paid what is owed.

So let me get this straight. Under these new bills 1) residents have the right not to have longer than a 30-day lease (which is what park owners actually want) 2) late fees are capped at 10% of what is owed (which is just about exactly what they are currently charged) and 3) residents have the right to live in their house if they pay the rent in full (which is all that park owners ask).

Another example of bureaucratic virtue signaling – nothing more.

I’m not sure how their new “destiny” is any different under a corporate owner or their own. Will it actually lower the monthly lot rent? No. These programs sound exciting to residents on the front end, but the reality is that running parks is hard and they will not enjoy evicting neighbors for non-payment and enforcing rules, nor will they like worrying about maintaining infrastructure and budgeting for capital repairs. It would be interesting if someone went to those tenant groups that have purchased their parks – five years or so later – and conducted interviews to see if the reality lived up the hype. My bet is the answer is “no”.

The bureaucrats in Vermont claim this is all for the public good – allowing grants for home remodeling and infrastructure – but the realist in me tells me that there are also negative aspects to declaring that basically all mobile homes on private land are actually “parks”. I’m all for the concept of having the state pay for infrastructure upgrades and making older homes in better repair, but it does seem odd to me that this new “classification” is not voluntary and will pin the “stigma” of mobile home park on thousands of people who are, by definition, not actually living in a mobile home park.

What protects tenants against “gouging” are other park owners who will relocate customers from parks that no longer offer a good value by offering free moves of the mobile homes to their properties. That’s always been the way the industry has regulated itself and it’s extremely effective and efficient. They are called “organic” moves and all park owners engage in them when the situation arises.

$35 million to house 140 individuals (assuming even one person per dwelling) works out to $250,000 per unit. At that price you could put them in custom homes on a golf course and let them play 18-holes all day. It’s unbelievable that these non-profits can get away with this stuff without any accountability. 

And another park bites the dust …

The Woodland East Mobile Home Park is a community of residents 55 and older in Southwest Washington, roughly 20 miles north of Vancouver. The Columbian recently reported on the plight of the many seniors who live there and struggle to pay $1050 per month to rent a lot, in addition to their mortgages, utilities and other expenses. The tenants claim the landlord has raised their rent by 250% since he purchased Woodland East in 2017 and have filed more than 100 complaints against him with the Washington Attorney General’s office. But now the tenants are facing their biggest hurdle. They received notice last Fall the community was up for sale and have until Jan. 24 to raise $33 million to buy the mobile home park themselves, although the property may already be under contract.

No way, three articles in a row about mobile home parks being redeveloped. What a shocker!

Apparently $1,050 per month lot rent is not enough in this market to keep the wrecking ball at bay. The property owner tried, but the tenants apparently thought that they could bully the owners endlessly and the plan backfired.

Mobile home park residents often own their homes, but not the land it sits on. This means as property in Idaho rapidly grew in value over recent years more and more mobile home parks have grown more valuable than the homes sitting on it, incentivizing land owners to sell and pushing out residents with limited resources.

This is not a problem that you can legislate a solution to. It’s based on economics. When the land is more valuable as an apartment complex or other use, the park gets torn down. Period. If you want to stop the redevelopment frenzy, then support park owners when they raise rents, educate residents on the necessity of higher rents, give grants to fix old park infrastructure, and offer preferable tax treatment for keeping a park a park.

Gee whiz – not another article on a mobile home park being shut down for redevelopment? I never saw that one coming …

“What we’re finding is that a lot of the park owners especially the newer park owners, may be large corporations or hedge funds. Do not become part of the associations, and in some cases, some of them are the bad actors,” said Paula Stark, State Representative for District 47.

I’m afraid that Paula has no idea what she’s talking about. I have been in the industry for 30 years and, without exception, the parks in the worst condition are those owned by moms and pops and NOT institutional owners. Paula may be unaware that big owners typically use sophisticated lenders that require property condition reports that stipulate minimum standards. Moms and pops have zero debt, zero loans, and zero supervision. It’s the institutional folks that are actually bringing these old parks back to life, not vice-versa.

The good news, of course, is that Paula’s bill will die in committee since she apparently also must think that Florida is located in California.

It’s not rocket science: low rents = redevelopment. The only way you slow the accelerating pace of these articles about parks being closed for redevelopment is for lot rents to increase enough that keeping the park in place is the most profitable use for the land. How much does that mean lot rents must go up? Again, it’s not rocket science. Apartments rents average $2,000 per month and mobile home park lot rents in the U.S. average $300 per month. Would parks survive from the wrecking ball at $600 per month lot rents? Not sure, but you have much better odds. Otherwise, why would any park owner not just ultimately tear the park down and build apartments?

I know Mike Cerillo and he is a top-quality operator of mobile home parks. Look at the photos in the article of the clubhouse and the street scene. To claim that he has let this property go down in quality is utter nonsense. There are always two sides to every story, but this author only offers one – and one that I believe to be as accurate as claims that Kamala Harris is managing the border well.

I know nothing about this park or even Alaska. But I do know basic salesmanship and whoever thought that the best way to keep this park in operation was to sue the park owner apparently read one too many books from Barnes and Noble on win/lose negotiating and not enough books like Dale Carnegie’s “How to Win Friends and Influence People”. Not a great plan.

This article contains more B.S. than the livestock pavilion at the county fair. Let’s break it down into bite-sized pieces and get a handle on all the misinformation this article shoots about like a lawn sprinkler.

1. “Now what’s happening because of rent increases … is people have to make a choice between their medicines”.
   
   Look, this worn-out expression is used by virtually every woke writer in the media today. Yes, the rent has gone up significantly (since it started at $350 in a market where apartments are $2,000 per month) but the seniors in this article are mostly on Medicare which – even if they don’t have supplemental insurance – pays 75% of their drug costs and, if they can’t even afford the 25% co-pay, the government has hardship programs to handle 100%. If these were NON-seniors, without health insurance, then this over-used narrative might make more sense. And for that matter, why is the rent singled out as the only straw breaking the camel’s back? Couldn’t you say the same about gasoline, insurance, food – everything in the current era of rampant inflation?
   
   
2. “Now residents are paying more than three-quarters of fair market rent for a one-bedroom in Clark County — just for the land on which their homes sit. Some are also paying on the loans they took to buy their homes. Most residents say they’ve reached a breaking point.”
   
   Look, if you’re paying only ¾ of the 1-bedroom apartment rent, then clearly this is really, really cheap living compared to literally all other forms of housing in this city – and only made more so because these homes are all 2 and 3 bedrooms and not 1. As far as people still paying on the loans, I see not a single home in the photos that could be new enough to qualify. I’ll bet $10 that there’s not, in fact, a single person in this park with an existing mortgage as the U.S. average is 80% own free and clear and that’s with the inclusion of non-seniors who are more prone to buy new homes with big notes on them. So, yes, the lot rent is their actual only housing cost.
   
   
3. “The residents would have to double their rent to cover purchase of the park, O’Banion said.”
   
   That’s exactly the point. That’s why the new owner had to raise rents by so much. Real estate is expensive and mortgage payments are large, as well. This “resident owned community” nonsense never includes the reality that when the tenants buy the park they often raise the rents higher and faster than professional owners do. Just ask the residents 5 years after they buy them. Most miss the days when professionals owned them and kept the rent collected and the bills down. There are already cases of these “tenant owners” putting their parks back on the market because they’re hoping to lower the rent through better management.
4. Woodland East residents have a Jan. 24 deadline to make an offer — 70 days after they received notice of the landlord’s intent to sell. The window is also closing for other eligible organizations — including local governments, housing authorities, nonprofits and community land trusts — to purchase the park.
   
   Look, if I went to a park owner and said “I need 70 days to make an offer on your park” they’d say “you’re an idiot and don’t call me again”. Most park buyers make offers on the spot or within a few days. NOBODY gets 70 days in the real world. On top of that, there is virtually ZERO interest by groups to co-sign on trailer park mortgages so the tenants can run the things into the ground. Only a bureaucrat would think this is a workable plan and that these tenant “first option” concepts have a prayer of getting off the ground. It is literally just a complete waste of time and nothing but virtue signaling by those who pass them into law.

The residents are making the worst collective decision of their lives. They are hamming it up to the county officials, hoping to force the park owner to perhaps abate or lower rent and instead they are on the path to homelessness. When the bureaucrats say “the Yuma County Board of Supervisors is currently in the process of figuring out if they want to take receivership of the park but that would include calculating the cost of taking over the park and what the next steps could be” that translates to “thank you for giving us the opportunity to shut the park down and say it was your idea”.

It reminds me of the time I evicted a tenant and they told the judge (to try to get out of the eviction) “your honor I am very sickly and I almost passed out ten times driving over here” to which the judge said “well I have some bad news for you: not only am I granting the eviction for non-payment but I’m also instructing the bailiff to take your car keys and you’ll have to take a bus home and get your car later when you’re in a better condition to drive”.

Sometimes trying to manipulate the system has unintended consequences.

So here’s what the writer hides until the end of this article:

Tuesday evening, the Department of Commerce Division of Industrial Compliance shared the following statement:

The Ohio Department of Commerce Division of Industrial Compliance is aware of a water outage that allegedly occurred on Sunday from approximately noon to 6 p.m. Our investigation found that, as a result of the pump house’s door being left open or partially ajar, the extremely cold weather caused the pump and/or other components to freeze, which caused the stoppage. Water service resumed that same day (Sunday) and we have not received any additional complaints regarding that issue. We are aware that some residents may still be without water service due to frozen pipes; however, those issues would be the result of residents who did not take adequate steps to protect those lines from the cold temperatures. As far as we are aware, there are no remaining issues with the park’s water system.

Since the writer knew the entire story was a fraud invented by the residents, why did he still publish it? Gee, I can’t imagine

I don’t know the facts of the case but I’m betting that this park was on a “master-metered” gas system that has failed and there is probably no way of fixing it and turning it back on. They will probably have to convert to propane or all-electric. If that’s the case, it’s one more warning to park buyers about this type of gas system in which the park owner essentially acts as the gas company. I’ve written about this extensively as my very first park purchase 30 years ago lost its natural gas in the dead of winter and I had to convert all lots to propane. It was a nightmare.

I know nothing about this park but I do know that Kansas has below zero temperatures right now (the Chiefs game was 28 degrees below zero with wind chill on Saturday). At those temperatures you’re going to have a ton of water lines freeze. If this article was about an apartment complex it would never have made the paper but since it’s a trailer park the media loves to beat up on the owner as they have a perverse pleasure in holding park owners to a ridiculous standard that no other landlord has ever had to even remotely hit.

Yes, a ton of mobile home parks are going to be torn down in the years ahead. How can you save them? Raise rents aggressively to market levels so the land is worth more as a mobile home park than an apartment complex (which is what most are redeveloped into). Period.

Look, the owner for the past 70 years just died and the family wanted to sell the park to settle the estate. A regular person would have no idea that Maine’s bureaucrats were this stupid:

According to a law that went into effect in October, mobile home park owners are required to give 60 days' notice to both residents and MaineHousing via certified mail.  

So now the family will have to notify the tenants, waste 60 days while they do absolutely nothing, and then move on.

Why will nobody publish the actual numbers of how many park residents successfully act on these “first options”? I’m betting it’s something like .0000000000000001% -- and that’s being kind.

Want to lower your IQ in 10 seconds? Simple read the following:

As mobile home owners fight rising housing costs, some of them have hit upon a solution that also helps in the fight against climate change: banding together and buying the land underneath their homes. This model of collective ownership, also called resident-owned cooperatives or ROCs, is on the rise. The number of mobile homes attached to a  resident-owned cooperative grew from just over 200 in 2000 to more than 15,000 in 2019, according to a 2022 study from researchers at Berkeley, Cornell, and MIT. When residents own the land, they can move more quickly to upgrade infrastructure. That’s where climate change comes in. Renewables — especially solar —  work uniquely well with these types of places, according to Kevin Jones, director at the Institute for Energy and the Environment at the Vermont Law and Graduate School. 

So let me get this straight. Park residents are so rich that they are going to not only buy their park but then rip out all the infrastructure and replace it with “green” energy alternatives? Why stop there? Why not put in a giant greenhouse and grow all resident food needs? Why not put in a Tesla charging station at every parking pad? Seems like the author (who I hope is AI) just isn’t thinking big enough.

I didn’t realize that the biggest predator species in Colorado is apparently not mountain lions or bears but instead the dreaded “landlord” creature. I hear they live in the mountains and swoop down on the first of the month to get checks from their prey. They’ve tried to photograph them, but they are extremely elusive. 

“And in another example, in Jackson, Miss., a city pilot is trying to add more manufactured homes to vacant lots. And that really is aiming at buyers who have a pretty low budget - so less than $200,000. And that's just getting started there, but I think that shows a lot of promise”.

Only a journalist who lives in Manhattan would think that 1) a mobile home costs $200,000 and 2) that’s a low price.

I like this article because it’s honest. It does not sugar coat and the couple have a positive attitude and what they’re doing makes financial sense. It’s a shame that our industry does not seek this couple out and make them spokespeople for the new face of mobile home parks because many young people would identify with them. I may call them myself.