Month: October 2023

One likely reason site fees are up

Scarcely more than a year after ProPublica reported that algorithm-driven software was partly responsible for exorbitant apartment rents, the Wall Street Journal reported yesterday (subscription needed) that two of the companies behind such practices are being sued by tenants in federal courts in Tennessee and Washington. The lawsuits come as the U.S. Justice Dept.’s antitrust division continues an investigation that started last fall and considers potential enforcement action against RealPage, the company at the heart of ProPublica’s reporting.

At issue is a pricing system, used by dozens of landlords when setting their rates, that analyzes giant amounts of proprietary data —provided by those same landlords—to come up with “suggested” rent increases. This amounts to collusion that is illegal, anticompetitive and keeps rents artificially high, the lawsuits contend, pointing to such evidence as a landlord saying the pricing software enabled him to “push rents more aggressively” and “quickly.” Marketing materials from RealPage, meanwhile, boasted of the opportunity for landlords to “outperform the market by 3% to 7%.”

Why should that matter to you? Quite possibly because a similar dynamic is developing within the campground industry, as I reported in broad strokes just days after the ProPublica story, and then more specifically this past July. That’s when Campspot, a leading reservation software company now serving more than 2,200 RV parks and campgrounds, announced its release of Signals, a computerized database that enables campground owners to see the competition’s aggregate rates, occupancy, revenue per site and other variables in real time.

As with RealPage, Campspot maintains it’s simply amassing “anonymized metrics,” so no proprietary data is disclosed. And as with RealPage, Campspot stresses that it’s only enabling its customers “to compare their performance against a recommended comp set”—what they do with that information is up to them. Indeed, in a consolidating industry that is seeing a rapid increase of investor-owned chains, Campspot sees itself as providing smaller operators with tools to offset their larger competitors’ advantages of scale and marketing resources. “Our goal is to level the playing field,” a Campspot executive assured me in August.

Well, maybe. Then again, Campspot is rapidly closing in on oligopoly status—it claims to be processing approximately 25% of all campground reservations in North America—and can fairly be said to occupy the “big data” niche within the campground industry that RealPage is accused of claiming among landlords. Indeed, a letter from four U.S. senators to the Dept. of Justice earlier this year raised concerns that RealPage’s software, YieldStar, was playing a significant role in driving rent inflation in some of the country’s biggest markets—even though YieldStar’s data base represents only 8% of all rental units nationwide, or less than one-third Campspot’s market share of campground reservations.

“Given YieldStar’s market share, even the widespread use of its anonymized and aggregated proprietary rental data by the country’s largest landlords could result in de-facto price-setting by those companies, driving up prices and hurting renters,” the senators wrote. Similarly, the algorithmic use of “big data” across industries as varied as grocery chains, ride-sharing companies and the pork and poultry industry has resulted in ever more widespread automated pricing across the economy, increasing costs, reducing market competition and fueling rising concern in the Biden administration.

The campground industry is neither as large nor as vital to social welfare as its apartment counterpart—although the balance keeps shifting, as more money rushes into the sector and campgrounds increasingly accommodate long-term residents—and therefore tends to fly under the regulatory radar. But that creates a conundrum for Campspot, whose business plan depends on attracting attention, even if some of it is unwelcome. For example, the Inc. 500 for 2023, a list of the country’s fastest-growing private companies, was announced just a couple of months ago—with Campspot weighing in at #341, up from its debut appearance the year before, at #487. The company’s three-year revenue growth rate? An astonishing 1,693%. Those are the kinds of numbers, when viewed in the context of market share, that can make antitrust regulators sit up and take notice.

But unless and until they do, the juggernaut keeps rolling along. The National Association of RV Parks and Campgrounds (ARVC) announced mid-October that it has a vaguely defined “new partnership” with Campspot, even though a fistful of other campground reservation companies also are ARVC associate members. Just what this new partnership entails isn’t clear, other than scheduling Campspot to lead a “featured breakout session” Nov. 8 at ARVC’s annual convention. (The session title, interestingly, is “Navigating the Camping-Hotel Crossover: Lessons for Success in Outdoor Hospitality,” attesting to Campspot’s founders’ hotel industry roots.) But it does attest to Campspot’s increasing influence and agenda-setting capability within the industry.

Ultimately, being successful in business is neither a sin nor illegal. The point at which it becomes questionable, however, arises when “success” flows from unfair advantage. The lawsuits in Tennessee and Washington, as well as any Justice Dept. action against RealPage, may well signal whether big data has crossed that line—and if it has, whether Campspot has something to worry about.

Georgia: the future of RV park taxes?

Florida’s campground owners were jubilant recently over a failed effort in Sumter County to boost annual fire assessment fees. The fees, which pay for firefighters and emergency medical responders, had last been updated in 2006 and had become woefully inadequate in one of the state’s fastest growing areas. The failed proposal would have nearly tripled the existing rate, to $323.24 per household from the current rate of $124.

But here’s what really galled the RV park industry: the annual fee would have been levied against each individual RV site. Rather than one fee for an entire campground—the way a single fee would be levied against a hotel, whose assessment would be based on square footage rather than number of rooms—each site would have been treated like a separate structure. Have a campground with 200 sites? Be prepared to see your annual tax bill jump $65,000 a year.

No wonder they’re breathing easier in Florida—even though the question of how to pay for adequate fire protection and emergency medical services remains unresolved. But as a small county in nearby Georgia illustrates, the idea that RV sites rather than RV parks should be taxed for basic support services is still very much alive. And as more private campgrounds embrace long-term RVers and add park models, cabins and other quasi-residential facilities, the more local counties and municipalities will begin to view them as substantially like subdivisions, and therefore suitable for taxing like subdivisions.

Don’t see the parallel? Then consider this: what message does a campground convey when its gates become a regular school bus stop?

That was just one of the many considerations tossed around at a fascinating Oct. 17 meeting of the Monroe County board of commissioners, viewable on its Facebook page here (the relevant portion begins around the 57-minute mark). Unlike Sumter County in Florida, Monroe County is not big on RV parks—but that doesn’t mean it doesn’t have a lot of RVs. Like a growing number of rural areas with more people than housing and less money than land, its 400 square miles are dotted with RVs, singly and in clumps of two or three, as alternative housing. Monroe County also is working hard to attract new businesses and industry, and all those proliferating RV homes could be seen as detracting from its charms. Something had to be done.

The first step Monroe County took was to adopt on Sept. 5 a Unified Development Ordinance (UDO), a 312-page document two years in the making that was presented as a much-needed effort to get a handle on the RV problem—a problem that commissioners said had grown markedly worse even as the UDO was being developed. No surprise, then, that the new rules prohibit permanent resident use of an RV outside of an RV park unless it is on agriculturally zoned land of at least three acres, is occupied by the property owner or a family member, and has full utility hook-ups. Moreover, more than one RV per property is prohibited except in RV parks, for which additional requirements were to be adopted in October.

The kicker? Each RV on private property will be assessed $1,000 a year in lieu of property taxes ($750 for senior citizens), starting Jan. 1, to offset the cost of county services.

Having thus all but guaranteed that the county’s RV parks will get a surge in demand next year, Monroe’s commissioners took up campground regulations at their Oct. 17 meeting—and discovered that regulating RV parks is quite a bit more complicated than regulating individual properties. Although the board readily agreed that such campgrounds should have a minimum of 10 RV sites, in order to generate enough income to provide minimal services—“otherwise, it’s just an RV in a field,” one commissioner observed—and that such campgrounds should have a minimum size of 25 acres, the question of how full-time RVers should pay for county services proved much thornier.

Permanent RV dwellers in a campground, board members ventured, should pay an annual fee just like RV dwellers on private property. But in a campground, who’s “permanent” and how is that determined? As Keith Morey, the owner of L&D RV Park—one of only three parks in Monroe that county officials held up as meeting the new standards—pointed out, one of his customers leaves an RV parked at the campground for three months each year, but uses it only on the weekends when Mercer University has a home baseball game. Should he be charged the same fee as someone who lives at the park 12 months a year?

And what, exactly, distinguishes a permanent stay from a transitory one? Is it 90 days? Thirty days? Fourteen? Whatever the cut-off, what happens if an RVer stays that length of time, then moves to another site at the same campground? Does that reset the clock? Moreover, who determines how many RVers are permanent and how many transitory when a campground census is changing all the time? Is a single annual snapshot adequate? Once a month? Weekly? And who decides? The campground owner, or an already overworked county code enforcement officer?

The deeper into these weeds the commissioners waded, the more it became evident that a site-by-site approach was impractical—“a logistical nightmare,” in one commissioner’s words— and that the only workable solution is to have a flat fee per site without regard for how long the site is occupied, or if it’s occupied at all. As a result, the originally proposed $1,000 fee—matching the amount charged to individual property RVs—dropped to $500, then to $250. And so it was approved, by a unanimous 5-0 vote.

Whether Monroe County’s new RV regs will accomplish their intended purpose remains to be seen, of course—it’s already obvious that at least some tweaks will be needed, either by granting variances or through outright code changes. The 19-site Red Oaks RV Park, for example, despite being cited as one of the three campgrounds meeting the new standards, is less than a quarter the size of the newly mandated minimum 25 acres. On the other hand, county officials said there are a dozen or more sketchy facilities that need “a lot” of upgrades to meet the new code—too many, in most cases, to be worthwhile—suggesting the county may be well on its way to shutting down the worst RV eyesores.

Of wider relevance, meanwhile, is the county’s willingness to tackle an issue that has bedeviled many larger or more sophisticated jurisdictions. In California, for example, the president of the state’s RV association recently lamented that the trend toward permanent “campers” has created “the appearance of residential affordable housing”—an appearance “that will bury us in the legislature in the very near future.”

“If it walks like a duck and floats like a duck, then it must be a duck,” she added.  “If we look like and act like low-income housing, then that is how we will be perceived and regulated.  As an industry, we must operate our parks as though they are 100% transient even though we may have long term guests, but how do we do that?”

Good question. The answer in Monroe County, just to mix up animal metaphors, is that the horse is already out of the barn.

Cornwell crows about a sham victory

It’s only natural that Bobby Cornwell, president of the Florida RV Park & Campground Association, would preen about a legislative “major victory” in which he played—at best!— only a minor role; he is, after all, a politician of sorts, dependent on the association’s dues-paying members for his livelihood. Stretching the truth—and then some!—comes with the territory. But you can’t say as much for Woodall’s Campground Magazine, which at least pretends to be a journalistic product. Would that it were so, in which case its Florida readers would have some insights into what’s going on in their backyards.

I gave passing mention to Woodall’s continuing slide toward industry sycophancy a couple of posts ago, reporting on its superficial coverage of a Citrus County glampground, so there’s not much purpose in rehashing that issue here. But that was only one of the two “victories” recounted in a page 6 Woodall’s article under the assertive headline, “Florida Association Scores Major Property Tax, Development Wins,” in which Cornwell boasted of the association’s “necessary show of force” to prevent officials in two counties from “making a big mistake.”

That second averted mistake supposedly occurred in Sumter County on Aug. 22, when the county’s board of commissioners considered a proposal to increase its fire assessment fee from $124 to $323.64 a year for residents and businesses. The increase was needed, proponents said, to avoid $26 million in budget cuts for fire and ambulance services in the county as well as in The Villages, possibly the country’s largest retirement community, with which it shares emergency responders. Retirees don’t look on tax increases favorably, and they have a lot of time on their hands, so there’s no surprise that the Aug. 22 hearing was packed, passionate and ran for five hours. Cornwell’s contribution was a mere sliver of the whole. The commissioners, dutifully cowed, ended up defeating the entire proposal by a wobbly vote of 3-2.

Which, of course, didn’t resolve the underlying problem, so the cutting has already started. Sumter County’s fire chief says he’ll be laying off 30 firefighters and deep-sixing plans that had been made to hire an additional 27 employees next year. The chief of the public safety department at The Villages said he will lose 57 new positions that had been planned for next year, and has already lost three of the seven staffed ambulances the community had been leasing from American Medical Response. County officials said they’re trying to “come up with solutions.”

None of this was mentioned in Woodall’s coverage, nor in Cornwell’s public pronouncements, which would have us believe that the Florida RV Park & Campground Association had successfully repelled an attack specifically targeting RV campgrounds and not tens of thousands of homes and other businesses. Defeating the fire assessment fee “was a great night for Florida’s RV park industry,” Cornwell crowed, quite likely forestalling “similar proposals in other counties.” Yadda-yadda.

The point that Cornwell failed to explore—aside from, you know, that whole context thing—is the curiously specific number assigned to the proposed new fee: $323.64 a year according to press reports, $323.40 per RV site, according to Cornwell. Without getting into the complexities of how either number was derived, suffice to say that numerous variables were factored into the proposed fee, including ten years of actual responder histories, and the result was to be charged per single dwelling unit—which is to say, under the proposed fee schedule each site at an RV park was to be treated as a separate residence. And that, all by itself, deserves attention for at least two reasons.

Number one, it suggests that public officials are starting to view RV parks less as providing transient lodging akin to hotels and more as wheeled subdivisions, which means campground owners are seen as having a multiplicity of taxable units rather than owning just one large business entity. And number two, this shifting perspective means that RV parks are becoming recognized as an agglomeration of discrete cost centers, with separate and distinct demands on fire and rescue services, demand for road and school access and claims on other county amenities, such as libraries, community centers and landfills. Those costs have to be underwritten, and how to do that equitably without charging for each site?

Campground owners, of course, are aghast at such an idea. As Cornwell pointed out, a 200-site RV campground in Sumter County, had the proposed fee schedule passed, would have been on the hook for an annual (and additional) tax bill of $64,680. Others, pointing to a different aspect of the defeated fee that included square-foot calculations, said they would have been been hit with six-figure assessments—indeed, one unnamed campground owner with two properties told a local reporter her annual assessment would rise to $490,000.

Alarmist, perhaps—but also willfully determined not to recognize the perceptual shift that’s underway, much less how to respond in a meaningful way. It should be evident that much of this change is of the industry’s own doing, as campgrounds increasingly rent long-term sites to people who are not passing through but are, in fact, living in their RVs. And as recent events in Georgia have demonstrated, rolling back the tide in one state, however temporarily, doesn’t mean it won’t rise elsewhere—and, eventually, become an industry standard.

Next post: Monroe County, Georgia, approves a $250-a-year surcharge per RV site in its campgrounds for basic services, as it also clamps down on residents living in RVs on private land—potentially forcing some to move to those pricier RV parks, further enhancing their long-term housing attributes.

When RVs are for travel, not housing

No, that’s not a parking lot. It’s an RV park in Bruges, Belgium, which charges 30 euros a night in season (currently around $32) for an electric-only site. Room for your awning? Not so much.

My six-week hiatus from this blog was intended as a break from all things usual, resulting (among other things) in several hundred photos of European canals, cobble-stoned streets, cathedrals, castles, mountain peaks and refugios, from which I will spare you. But old habits are hard to break. Scattered among the mix are a few shots of RV parks continental-style that are worth sharing in this space, and most American RVers, I’ll venture, would not be pleased.

For starters, it appears that European RVs are built with an entirely different mindset than their U.S. counterparts. Smaller and sleeker, they’re clearly designed as transportation first and lodging second, whereas in the U.S. it’s typically the reverse. These are not houses on wheels. Not a fifth-wheel to be seen—or, for that matter, few trailers of any kind. The overwhelming majority are class Bs and modest class As (with scant evidence of slide-outs), an occasional class C (as visible in the picture above) thrown in for good measure.

Although some European RV parks have a limited number of full hook-ups, most seem to offer only electricity, and then to a centralized pedestal that has multiple outlets requiring lots of electric cord.

Nor are many RV “parks” the least bit park-like, more closely resembling parking lots than a campground—and not a tent in sight, either. Any grass tends to be in a centralized strip and is more landscaping than lawn. (Perhaps explaining why many European RVs don’t appear to have awnings.) Water and sewer dumps typically are available at a centralized location, and electricity can be tapped from a common pedestal that can have as many as half-a-dozen outlets. Because Europe transmits electricity at 220 volts, rather than the 110 common in the U.S., the correspondingly lower amperage allows RVers to run their connecting (and thinner) wire over longer distances, resulting in RV cabling running across roads and around other RVs for considerable distances.

(As a side note: perhaps because of this greater hook-up flexibility, there seems to be no standardization among European-made RVs for utility hook-up placement. American RVs have all their hook-ups on the left side, preferably near the rear on large units; in Europe, anything goes. Driver side, passenger side, back, middle . . . Just one thing to assess by Americans thinking of buying a European model for use in the States.)

All of this makes for a more Spartan “camping” experience than most Americans expect when they go RVing, with little to suggest that European RVers are looking to embrace the Great Outdoors. While I did see campers sitting on folding chairs outside their units for a morning cup of coffee, the sighting was rare and looked like a tightly hemmed-in experience—although these are people who also eat a lot of meals at sidewalk cafes, so who’s to say they felt the least bit discomfited? On the plus side, on the other hand, their RVs are suitably sized for narrow European streets, undoubtedly slurp less (expensive!) gas than American road hogs, and the RV parks they occupy charge rates that the U.S. hasn’t seen since the last decade.

A Walmart parking lot it ain’t—nor a Margaritaville resort.

Greed and fear: the twin motivators

On returning to the U.S. after more than a month of hiking and cycling in western Europe, I’m struck by how little has changed in the domestic RV and campground industry—and how much has changed in the world it occupies, and how little it seems to care.

RVing trends that were already evident in mid-summer continued as before: softening midweek campground reservations, ongoing declines in RV production and sales, relentlessly upbeat industry assurances that any downswing was bottoming out and that 2024 will see a rebound. The natural environment within which the industry operates, on the other hand, continued to grow increasingly inhospitable (as of Oct. 10, the daily average Northern Hemisphere temperature had been at a record high for 100 consecutive days and at least 65 countries recorded their warmest Septembers on record)—and was just as resolutely ignored by RVing promoters, who much prefer to rhapsodize about the exploding growth of glamping and the latest gee-whiz innovations in RV design than to wrestle with issues of climate change and global warming.

The industry’s determination not to acknowledge the existential threat on its doorstep has been enabled by a lack of internal critics, but outside business pressures may finally crack its insularity. In recent weeks, for example, First Street Foundation issued its ninth national climate risk assessment, this time focusing on property insurance—or, more precisely, on the skyrocketing cost or outright unavailability of such insurance because of increased wildfire, flooding and windstorm risks. (I’ve written about some of First Street’s earlier assessments, here and here.) It’s a sobering read. Campground owners will feel the squeeze twice over, first through the increased expense of insurance premiums and then—if they try to sell their property—through the devaluation of their capital investment, as higher expenses mean lower net operating income and a higher cap rate.

This dynamic was further explored in a Grist article published this past Tuesday under the headline, “As climate risks mount, the insurance safety net is collapsing.” Reporting that natural disasters now cost the U.S. insurance industry $100 billion a year, the article rhetorically asks, “What happens when no one wants to pick up the tab?”

The First Street report and Grist’s article both pay particular attention to Florida because of its hurricane vulnerability, so it’s ironic that there is no more extreme example of a state’s businesses and politicians remaining stubbornly oblivious to climate change. A prime example was provided in August by Citrus County commissioners, who voted unanimously to reverse their planning commission and approve creation of the Fishcreek Glampground, despite the coastal property sitting a mere two to three feet above sea level. Bobby Cornwell, president of the Florida RV Park and Campground Association, had lobbied on behalf of the applicants and was only too happy to describe the approval as a major industry victory.

“For well over a year the owners of Fishcreek, Jen and Dimitri Magradze, have meticulously planned the project to co-exist with the beautiful natural setting and to provide outdoor enthusiasts and nature lovers with needed accommodations and access to the waterway without harming the environment,” Cornwell gushed to Woodall’s Campground Magazine. “But even though they had everything perfectly planned for their land and had many local supporters and studies showing how the project would benefit the area and not harm the environment, there was a large, organized effort against their proposal.”

Imagine that. A “large, organized effort” that Woodall’s couldn’t be bothered to describe or Cornwell to rebut, but which was rooted in the same environmental considerations that had prompted the county’s planning commission to reject the proposal not once, but twice, by votes of 5-2 and 6-1. Mere weeks later, Hurricane Idalia struck. The putative glampground’s Facebook page advised followers Sept. 3 that “there is a trailer full of logs submerged in the water along Fishcreek. Please use extreme caution when navigating out here.” So it goes.

Meanwhile, a few hundred miles north, along the coast of North Carolina in the Cape Fear region, the Leland planning board unanimously reversed its own unanimous May decision and voted to allow RV parks in flood hazard areas. The decision was urged by developer Evolve Acquisitions, which contended that it was seeking to “correct a mistake”—that the town had not really intended for flood zones to be off-limits to RV parks. As further evidence of the reasonableness of its request, Evolve’s spokesperson averred that RV parks are often located in flood-prone areas. The case for putting people in harm’s way having been put forth so cogently, the Leland town council unanimously approved the change Sept. 14.

Back when I reported on capital markets, one of my mentors stressed that market movements can be attributed to just two basic impulses: greed and fear. So it is with most things in life. Greed initially has the upper hand when developers start trotting out their honeyed visions, but as the real costs of such laissez faire policies start accumulating, fear will start coming on strong—and then watch out. You’ll be amazed how rapidly things can unravel.

Oct. 14 addendum: Inside Climate News reports that the U.S. Fish and Wildlife Service will consider tightening protections on the West Indian manatee because of substantial scientific evidence that it faces renewed threats to its survival. Citrus County supports the state’s largest concentration of manatees in a natural spring area; the Crystal River National Wildlife Refuge, relatively near Fishcreek Point, was established specifically to protect manatees.