Investors Buy Mobile Home Parks, Raise Rents for Low-Income Americans

Corporations are buying up mobile home parks across the U.S. and owners of the manufactured housing are being hit with increased rent for lots and new property requirements.

The New York Times focused on one such mobile home park in Colorado to represent the trend and its impact on residents, who unsuccessfully tried to buy Golden Hills after the owners put it on the market:

In July, the owners rejected their initial offer and a higher one a few months later, and sold the park instead to Harmony Communities, a manufactured-home operator with 5,000 residents in 33 parks across the western United States. The company quickly proved the Golden Hills residents’ fears correct, applying 50-percent rent increases and issuing a 12-page single-spaced list of new park rules.

Industry leaders are blunt about the business model: According to materials for a “boot camp” for aspiring mobile-home park investors prepared by Mobile Home University, which is run by two of the largest mobile-home park owners in the country, “the fact that tenants can’t afford the $5,000 it costs to move a mobile home keeps revenues stable and makes it easy to raise rents without losing any occupancy.”

Real Capital Analytics, a market research firm, said in a June 2021 report that institutional investors had accounted for 23 percent of manufactured housing park purchases over the previous two years, up from 13 percent in the two years before that. That has made the investors among the country’s largest landlords. Some 22 million people live in manufactured homes in the United States, according to the Manufactured Housing Institute, a national trade organization. And Fannie Mae said that manufactured housing represents more than 6 percent of the nation’s housing units.

The Times noted families and college students turn to mobile homes as an affordable way to become a homeowner.

“It is, and has been historically, an affordable home that people can own — at least, halfway own — and generate some wealth, some equity,” Paul Bradley, president of ROC USA, which supports resident-owned communities across the country, said.

In Colorado, legislators put in place a law to give park owners an “opportunity to purchase” but only three properties have become resident-owned in the state.

State Rep. Andrew Boesenecker, whose district includes a recent $57 mobile home park transaction, introduced a new bill that would give residents the right to make the first offer, according to the Times report.

The bill would also limit rent increases to 3 percent a year and give owners access to a loan fund that would allow them compete with private equity firms, some of which receive government financing to purchase parks.

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