[Part II of a two-part look at the growing economic pressures squeezing mobile home parks, foreshadowing the future for many RV parks.]
As deep-pocketed investors continue vacuuming up mobile home parks at exorbitant prices, they have only two ways to make their purchases profitable. One is by replacing trailer pads with higher density housing, such as single family homes and apartments. The second is to jack up rents on the existing sites, in some cases simultaneously slacking off on maintenance and upkeep to reduce operating costs.
The first approach reduces the overall inventory of low-cost housing. The second raises the affordability bar for people most in need of low-cost housing, pushing them out of homes they may have occupied for decades and into the streets, for lack of anywhere else to go. Either way, the result is skyrocketing housing costs that add to inflationary pressures, even as county and city governments grapple with a tidal wave of homelessness that strains taxpayer revenues.
Meanwhile, the people profiting from the economic forces they’re unleashing rationalize their actions by blaming–well, anybody but themselves. Frank Rolfe, offering a prime example of deeply cynical self-serving rhetoric, contends that the U.S. is “in deep trouble” for one basic reason: “A dysfunctional Fed has driven rates up too far and too fast and there will be great economic suffering as a result.” In other words, the patient is sick only because of the medicine prescribed for an economic disease–a disease for which Rolfe is a primary but unacknowledged vector.
But Rolfe doesn’t stop there. “Bad times yield greater demand for affordable housing,” he writes. “So while Jerome Powell is busy raising rates and destroying the U.S. economy, he’s also acting as a powerful force to push mobile home park demand even higher.” The uncoupling of “affordable housing” from “mobile home park,” thanks to Rolfe’s (and his peers’) self-enriching actions, goes unremarked. In his own eyes, Rolfe is a savior of the working class, providing a praiseworthy safety net against the Fed’s recklessness.
The Frank Rolfes of the world owe their success not to any great investment brilliance, but simply to their understanding that residents of mobile home parks a) almost never own the land on which their mobile homes are sitting; and b) that “mobile homes” are almost never mobile. All of which means that the poor unfortunates inhabiting these homes are a captive audience, ripe for the plucking.
It doesn’t have to be that way, but creating the exceptions takes a lot of money and a fair amount of luck. Boston Trailer Park, for instance, which sits cheek-by-jowl with an apartment complex in which one-bedrooms go for $3,000 a month, is that city’s only mobile home park–but it exists today only because former mayor Tom Menino helped its residents take ownership of the land more than a decade ago. As a result, Boston has a little working class oasis in which residents pay just $425 a month for their sites.
Unfortunately, that sort of intervention is becoming increasingly difficult, thanks in no small part to the $4.5 billion in investment money that poured into mobile home parks across the country last year alone. Even though Massachusetts is one of a handful of states with legislation giving residents of mobile home parks a chance to match any purchase offers, outside investors are driving prices to unmatchable levels. Without government help and nontraditional financing, most mobile home residents may as well dream about living in Palm Beach or Beverly Hills.
Despite those odds, some successes have been notched. As NPR’s Morning Edition recently reported, the 200 or so residents of a mobile home park in Wareham, Mass. were able several months ago to match a $12 million offer from an Arizona-based investor–but only after obtaining loans from a nonprofit, ROC USA, and a $1.9 million grant from the state’s Affordable Housing Trust. Approximately five years ago, ROC USA also provided the financing that fended off an outside buyer seeking to acquire the 430-home Halifax Estates in Halifax, resulting in the country’s largest resident-owned mobile home community.
Colorado, where fewer than 10 of the state’s 900 mobile home parks have been purchased by their residents, recently had a similar success story. The approximately 200 adults and 100 children of the Parklane Mobile Home Park were able to recruit county assistance in tapping American Recovery Act funds for a $1 million forgivable loan, which in turn encouraged the private, family-run Bohemian Foundation to underwrite a $2.8 million low-interest rate loan . The balance of the $6.8 million purchase was then provided via a $3 million loan from the Impact Development Fund, a quasi-public financial organization.
Yet as these examples also illustrate, constructing such buyouts is a precarious business, requiring multiple financing streams of limited supply. Non-profits almost by definition have more limited financial resources than their investor-driven adversaries. Funding resources from the American Rescue Plan will be exhausted within a couple of years, if not sooner. And while some state governments are belatedly waking up to the housing crisis on their doorstep, their response is typically hesitant and restrained, hamstrung by concerns over interfering with market dynamics and worries about using tax dollars to intervene in the private sector.
Meanwhile, the mobile home version of Monopoly continues unabated. Earlier this month, it was the residents of Hi-Acres Mobile Home Park in Palm Beach County, Florida, who got their eviction notices, letting them know that the park’s new owners have other, unspecified ideas for their acquisition. One look at an aerial map of the property leaves little room for guessing what that might be: Hi-Acres is surrounded on three sides by a suburban development of single-family homes, and butts up against a golf course on the fourth. This is not an area that will long tolerate “affordable housing.”