Mobile Home Park News Briefing

This wins the prize for dumbest article of the week: What in the heck is an “immobile” RV? Even the bureaucrats can’t actually define it as it doesn’t actually exist. They might just as well offer housing assistance if you provide a photo of Big Foot.

Reality check: in the entire United States there are maybe 300 resident-owned communities. There are around 44,000 mobile home parks in the U.S. That’s around .006%. Pretending that the simple fix for all mobile home parks is to have the residents buy them is as absurd (and statistically untruthful) as claiming that the solution to all Americans hating commercial air travel is for them all to go buy a private plane.

The only thing that’s not stupid about this article is found in the blog beneath it in which somebody wrote: “Um, no. That just feeds into the leftist narrative. What they can do (and should do if they’re smart) is hike rents to what the market supports. That’s what market price is. Seller’s objective is to get the most they can, buyer’s objective is to pay the least they can. Market price is the point in-between where both sides agree.”

Now connect another set of dots. This is the second article in which the tenants claim the rents went up and the quality of life went down. “They want the profit, but they don’t want to take care of the property,” said Yvonne Maldonado, a former mobile home resident in New York who serves now as co-director of Manufactured Home Action, an advocacy group for residents of manufactured homes”. That’s a lie and they know that. The rents did go up but so did the quality of the park, as capital was poured back in. I have never, ever, seen an institutional buyer that provided a lower park quality after purchase. Never. I don’t believe it for one second.

So let’s stop the lying in these stories and stick with the basic truth: tenants don’t like higher rents. But they will have to accept that reality or they will be homeless. The MHAction person summed that up when they unwittingly said “there is literally no other place to go.” Bingo. Even at the higher rents the mobile home park is still the cheapest option in town.

For those who cannot pay the higher amounts, they need to come up with a Plan B. There are federal programs offering housing assistance, or maybe they should move in with a family member. But there’s no way that park owners – particularly new ones – are going to keep the rents ridiculously cheap going forward. That era has ended. And if rents don’t go up significantly, there will be a huge number of parks re-developed for more profitable uses.

Connect the dots from the articles so far – this is the second one in which a mobile home park is being demolished and replaced with an equal number of tiny stick-built homes. If that concept heats up, then you will see a lot more parks be bulldozed as this is a win/win for all involved. I looked at doing this myself to my park in Grapevine, Texas 25 years ago, but sold the park instead. As the demand for smaller, affordable stick-built homes heats up, this is a quick development fix as all the utilities are already there and all you have to do is start pouring foundations and getting the mobile homes out. The big problem is that you can only rent – rather than sell – these stick-built homes, so the “parking lot” business model is out the door. However, some cities have allowed the park to be re-platted into individual lots and they then can be sold off.

I thought it was interesting how the developer has coined a new name for this type of development, calling it “innovate housing” and eliminating any reference to tiny homes. Nobody wants to be reminded that they live in a tiny home – it’s kind of insulting.

Look, I understand that the residents don’t like the rent going from around $700 per month to $900 per month over a five-year period (which is actually only about the rate of inflation) but NOBODY IS GOING TO BELIEVE THAT EQUITY LIFESTYLE IS NOT PROPERLY MAINTAINING THE PROPERTY. ELS is one of the best operators in the industry – and the largest owner – and they are known for exemplary property condition. I’m willing to bet $100 that if I flew out to that property right now it would be immaculate and everything the residents claim is completely false. This would be like a Kansas City Chiefs fan claiming that ticket prices have doubled (which is true) and the Chiefs are a lousy team that don’t deserve those higher ticket prices (clearly not true). Why can’t these people just be honest and say “I’m mad because my rent went up $40 a year for the past five years”? And then, if they are that mad, just move someplace cheaper and stop whining about it? As soon as the people named in this article get both sides of the story (and visit the property) they will know who’s telling the truth (ELS) and who is not (the residents).

Spending $500 per household is hardly worthy of this much fanfare – most mobile home park buyers spend far more than this on home renovations and clean-up. Only most park owners never get credit for it.

Removing the mobile home park and then replacing those mobile homes with stick-built structures has been done before (a large development in North Ft. Worth did it twenty years ago) but it’s interesting that there is no push-back on this from the media, unlike the Grand Canyon University project. That’s because they have neatly wrapped this up in a clever P.R. campaign that claims they are actually increasing the supply of affordable housing. They are not. It’s a lot-for-lot replacement of $10,000 mobile homes for $200,000 stick-built dwellings. They just did a better job of B.S. than GCU did.

Grand Canyon University apparently has little real-life experience with mobile home park residents. They allocated $500,000 to removing the roughly 60 households in the mobile home park they are demolishing yet are getting nothing but grief from the residents who refuse to take any action to help themselves in relocation. GCU spokesperson Bob Romantic (what a name) said “if there is someone saying they have no place to go … we can’t help unless they are willing to be helped”. Some residents, of course, are threatening pointless litigation and others refuse to answer their door or phone. If GCU offered every resident $1 million to move, they’d probably refuse and say it’s not enough. It’s hard to have compassion for people who will not lift a finger to help themselves, and instead want to wallow in self-pity and take the position that they are victims and deserve more. The media is somewhat to blame as they empowered these people to think they have more power than they do. As they will find out soon, they have none and should have worked with GCU when they had the chance.

Amber Caroll, director of the Brevard Homeless Coalition: “There is hope. There is hope. And the hope is here in this room.”

Maybe these folks should read the military officer handbook titled “Hope Is Not a Method”. The army found that one of the worst leadership traits is spouting out “hope” as opposed to reality-based action plans.

You cannot build an affordable home in the U.S. today, because construction costs plus lot costs equals $300,000 and up. “Hoping” you can accomplish that is just a waste of time. The only way to provide a detached dwelling at under $300,000 is a mobile home park. Period.

There are 44,000 mobile home parks in the U.S. The residents own 300 of these. That’s .0068 of all parks. Focusing on that initiative is hardly the way to accomplish the goal of helping affordable housing. Devoting millions of dollars for 55 residents to buy their own park is not nearly as smart as spending that same money to act as grants to fix roads, pipes and other infrastructure at many, many parks. Let’s be honest, this has nothing to do with the public good. This is simply virtue signaling by the City of San Antonio.

Guyon, Georgia has a new idea. They will require a Special Use Permit for each and every new mobile home to enter any mobile home park in the city. But this should not be considered a way for them to keep mobile home tenants from moving in but instead because “It allows the community the opportunity to participate in the future of their neighborhoods”.

Yeah, right.

Let’s see how that holds up in court.

This article is so stupid that its own conclusion negates it.

So, they are tied to a home they own and can’t move, facing added expense if they stay, leaving with a fraction of its worth if they choose to move on. “So, if I want to sell my house for probably half what I should get for it, then where do I go?” asks Marzan. “What else is affordable here that we could get into?”

The article starts off saying that higher lot rents make mobile home prices go down, as the potential home buyer has less cash flow to work with. Then it ends with the fact that they bought the mobile home, not for appreciation potential, but because it’s the cheapest thing in town. You can’t have it both ways. I know of no asset that is both cheap and appreciates wildly. If I go buy a car at a used car lot and say “what’s the cheapest thing you’ve got” I’ll end up with a 1985 Ford Taurus. Not a 1985 Ferrari. And that Taurus will have zero chance of ever being a collectible classic. If I buy the car that will appreciate – the Ferrari – it will cost as much as the ten cheapest cars combined.

So don’t go around telling me that anyone lives in mobile homes because they view that as an appreciating asset. They live in mobile homes because they represent the only shot at insanely cheap living. If you want a house that appreciates in value, the average single-family home costs $400,000 – that’s 100 times what many mobile homes sell for.

Classic tale of a city bureaucrat not understanding zoning law and, when a lawyer goes above their head, is immediately overruled and the mobile home is approved.

The tenants are buying this park for around $100,000 per lot. Clearly the seller has no problem with that. But I don’t think these residents realize what they’re getting into. To service that much debt, the rents are going to go up – way up. “Maybe not today or tomorrow but soon and for the rest of their lives” as Humphrey Bogart would say. To think that this transaction is going to keep rents low is a fallacy. It’s called math.

The Governor of Montana is this week’s Smartest Guy in the Room:

Gianforte said in his veto letter Tuesday that House Bill 889 “increases regulation of mobile home parks, disincentivizes landlords from maintaining or increasing the inventory of mobile home rental lots, and, in general, compromises the property rights of mobile home park owners.”

He must be an avid reader of this weekly publication as he fully understands that making mobile home parks a pain to own results in them being redeveloped into other uses. As tenants try to put burdens on park owners that are not in-line with American property laws, they set in motion the park owner selling the land for a different – and more porofitable – use.

As I recall, this was the park in which the residents tried to buy it under their first option and only raised $4,000 of the $16 million purchase price over a period of months. Was anyone surprised? To match the offer the tenants would have had to put up $1 million in earnest money on day one. Give me a break.

Here’s how it works in the real world: 1) file your complaint with the State of California 2) get some bureaucrat to go out to the park and find 1,000 problems with every square inch of it 3) notify the park owner that they need to do 160,000 repairs 4) park owner calls the local real estate broker and puts the land on the market for redevelopment 5) buyer makes an offer 5) park owner accepts it 6) developer requests mutli-family zoning and gets it immediately 7) park owner terminates all leases 8) park becomes 100 high-end apartment units and 9) the tenant who filed with the State of California cries and says “I don’t know how this all happened”. The winners in this story: 1) the park owner 2) the developer 3) the new 100 apartment residents 4) the city government and 5) the neighboring community. The loser: the tenants in the park.

The scariest words in the English language are “I’m from the government and I’m here to help”.

Do you seriously think that Cleveland needed this piece of land so bad to make way for a city park that they just had to evict those 100 park residents? Obviously, the truth is probably that Cleveland wanted to get this park torn down because it’s unsightly and costing the city a fortune in school tuition, hospital stays, and public programs. That’s like when the hotel says that it’s not going to wash your towels or sheets to save the environment from toxic chemicals.

At the May 3 Poulsbo City Council meeting, Councilmember Gary McVey told Josh Brooks and Shah, “We will take you at your word that you are not sprucing the place up to raise rents exorbitantly or to evict people who don't deserve to be so. We will hold you to that…”

And with those words the IQ of the entire room fell 10 points. Obviously, making the property nice should result in higher rents. Mobile home park lot rents are ridiculously low and until you break the $1,000 per month barrier in most markets (but not LA, Denver and others) you are not exorbitant. And park owners never evict people who do not need to be removed, as it costs a park owner about $5,000 in costs to evict a tenant when you factor in vacancy and home renovations.

The average park owner does not have access to the $30 trillion credit line of the U.S. government. Asking an elderly park owner to chip in $5,000 per day, for water alone, for 60 days totals $300,000. And that does not even cover the cost to replace the water lines. So what’s the solution? Do you think there’s a higher use for this land in Durango, Colorado? Are you serious? In this case, a park buyer took the property over and saved it from the wrecking ball. But in 9 out of 10 cases, this park would be torn down and made into a more profitable use. What should have happened differently? The state should have supplied the water and fixed the water lines and prayed that the stress of the situation alone would not have coerced the seller into calling a land broker. The article confirms that if the park was resident-owned the state would have provided grants or low-cost loans immediately to do just that. Since tenants own nearly zero parks in Colorado, the state might want to think about changing that program requirement.

Bingo.

At least six such communities have been torn down in Arizona in the last 18 months, he said, adding that Grand Canyon University "bent over backwards" to help residents more than other park owners."A lot of these parks are 70 years old," said Anderson, noting an uptick in demolitions of older communities for redevelopment. "It's going to be a big problem down the line."

So people are starting to have second thoughts about the importance of making sure that more parks don’t get town down. Easy solution. HIGHER LOT RENTS. You don’t need an academic study.

OK, let’s cut the B.S. Periwinkle Mobile Home Park is being torn down because student housing for Grand Canyon University is more profitable than a trailer park with $450 rents. The seller of the park weighed the offer from Grand Canyon University to what he was making with the park and the student housing offer was higher. How high would the lot rent have needed to be to make the Grand Canyon offer lower than the park was worth? I don’t know, but maybe $700 per month would have done the trick. That’s the issue that needs to be discussed in order to save parks from the wrecking ball. The question should not be “how can the park owner keep the rents ridiculously low” but instead “how high do the rents need to be to keep the park a park?” I’ve been preaching for a decade that the only thing that’s going to keep mobile home parks alive is much, much higher rents. If you don’t accept this, you’re an idiot.

Here’s a new take on the “victim” mentality that all American appear to share. In 1976 HUD kidnapped the mobile home manufacturing industry and declared that any home that did not have a HUD seal could not be brought into a mobile home park. Now they’re closing down Dee Mar and the pre-HUD homes can’t be relocated and the tenants are blaming the park owner for this.

At the end of the day, Gallipeau is less concerned about moving out and more concerned about not getting compensated. He said some of the trailers are valued at upwards of $80,000. “There’s no fair or just compensation for property that we own,” he said. “The developers own the land, we own the trailers.”

The fact that owners of pre-HUD homes do not know (or even research) the ability to relocate a pre-HUD home is not the responsibility of the park owner. If this tenant wants to sue anyone, the appropriate party would be HUD. Good luck on that.

Because of this reality, that’s one more reason that mobile home park rents need to go up in-line with market forces as the problems at Dee Mar on relocating homes will be shared with any park that is redeveloped.

One final note: don’t try to tell me a pre-HUD home is worth $80,000. Nobody is buying that.

The writer of this article just doesn’t get it.

“The plight of the residents, he maintains, underscores the need for legislative change to counter the power owners of mobile home parks have over tenants.“The man did win. Maybe that’s the way Utah legislative laws are set up. The one gets richer, the poor get poorer,” he said.”

No, Lesley’s mobile home park did not get torn down because mobile home park residents don’t have power over the owner of the park. It got torn down because 152 apartment units is way more profitable than 55 mobile home park lots. In this case, there’s no way you could have raised the lot rent high enough to stop the apartment development. Instead, you have to accept the reality that mobile home parks have really good locations and cities will provide the developer any zoning necessary to get rid of them.

The moral is that the tenants and media need to stop harassing and publicly shaming mobile home park owners because there is always some type of development that any mobile home park can be turned into – and pretty easily.

There is some part of society that celebrates taking conspicuous consumption to a new level. Paying $3.5 million for a 800 square foot mobile home is not prestigious or cool -- it’s just plain stupid. Wasting money does not make you a big shot, spending it wisely is what makes you superior. Think of everything that could have been done with that $3.5 million to benefit others. You could buy 10 people a debt-free home, for example, or put 20 people through college.