Investors buy mobile home parks. Residents pay a price.
GOLDEN, Colo. — When Sarah Clement moved into Golden Hills Mobile Home Park two years ago, she felt like she had won the lottery. After years of sneaking into one-bedroom apartments with her, her 7-year-old son has finally settled into his own bedroom, his toys spread out in the yard and his school just on the edge of the park.
Mrs. Clement loved the friendliness of her neighbors and being able to watch the sun rise over the brushy mesa to the east and set behind the foothills of the Rocky Mountains to the west. And living there was affordable thanks to her salary as a sports trainer: after buying the manufactured home, the rent for the land it sits on was just $625 a month.
But barely six months after moving in, the plot of land and all the stability and comfort that came with it suddenly seemed to be ripped from her.
The Colorado couple, who had owned the park for years, had put it up for sale. Ms. Clement and her neighbors knew that if the park was taken over by one of the large manufactured home operators who were buying up parks across the state, rents would rise dramatically.
“It was like this deflated feeling of, oh my god, I thought we had it – I thought that was where our roots were going to be,” Ms Clement said.
Across the country, residents of manufactured home parks like Ms Clement find their homes at the center of a target, as a deluge of investment firms expand their mobile home park portfolios at a breakneck pace, threatening stability from one of the few remaining sources of affordable housing in the country.
The people of Golden Hills quickly organized. They formed a co-op to offer to buy the park themselves and were on track to secure funding from ROC USA Capital, which supports resident-owned communities across the country.
For months they were full of hope. The three-block stretch of one- and two-width beige houses was bustling with community gatherings; residents distributed flyers and newsletters. Local politicians rallied behind them, and the city voted to have the park reserved for manufactured homes.
But to no avail: In July, the owners rejected their original 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 Golden Hills residents’ fears were correct, enacting 50% rent increases and releasing a 12-page, single-spaced list of the park’s new rules.
A spokesman for Harmony Communities, George Antypas, defended the rent increase, noting that the new rents were still lower than at similar parks nearby. “We think it’s important to charge fair rent,” Mr Antypas said, adding that the extra revenue would go towards repair costs and the city had grants based on need.
Then, just a month after buying the park, the company offered to sell it to residents – at a much higher price than the company had just paid. Once again, however, the deal fell through when the company declined the residents’ offer in January.
Faced with both rent increases and the cost of modifying their homes to comply with new park rules, residents rush to seek alternative accommodations but find few to no options in Golden, a town in thriving just west of Denver. At an apartment complex down the road, one-bedroom units start at $2,400 a month, nearly $1,000 more than Ms Clement said she paid for a similarly sized apartment in 2018.
Industry leaders are candid on the business model: According to documents from a “boot camp” for aspiring mobile home park investors prepared by Mobile Home University, which is led by two of the biggest owners of mobile home parks nationwide, “the fact that renters can’t afford the $5,000 it costs to move a mobile home keeps income stable and makes it easier to increase rents without losing any occupancy.
Real Capital Analytics, a market research firm, said in a June 2021 report that institutional investors accounted for 23% of prefab housing stock purchases in the previous two years, down from 13% in the previous two years. This has made investors one of the largest landlords in the country. 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 manufactured homes make up more than 6% of housing units nationwide.
If residents of mobile home parks can’t keep up with rising rents or can’t afford to make the often significant changes to porches, gardens and awnings that are required by new management rules, they are quickly replaced. As prices and rents for all kinds of housing skyrocket in many parts of the country, the demand for prefab housing is increasing. Many young professional and student families are turning to mobile home parks as the last vestige of relatively affordable housing.
“It is, and always has been, an affordable home that people can own – at least half-own – and generate wealth, equity,” said Paul Bradley, president of ROC USA.
As park after park became corporately owned, momentum has built in mobile home parks across the country and in state legislatures to protect the affordability of parks by putting them in the hands of residents.
When the Sans Souci mobile home park near Boulder’s scenic Flatirons was purchased by a business owner in 2018, residents weren’t given the chance to bid. It wasn’t until residents received a notification of the new rules attached to their door that residents learned the park had even been put up for sale, according to one resident. A few weeks later, maintenance crews showed up and began mowing bushes, trees and flowers.
Under company ownership, Strive Communities, the park has raised rents by 12% and issued detailed new rules for park maintenance asking residents — many of them aging artists and self-proclaimed hippies — to remove years of art and decorations collected from their gardens. .
“They wanted a uniform-looking park,” said 23-year-old resident Cynthia Ceelen. “That was their end goal, so that in three to five years they could resell.”
According to Strive Communities, the rent increases were intended to bring rates closer to market, and the company invested nearly $1 million in improving the park.
Residents went to their elected representatives, demanding legislation that would require park owners to notify residents when they intended to sell, a provision called the “opportunity to buy” requirement. Governor Jared Polis signed the requirement into Colorado law in 2020, and similar laws are in effect in a number of other states.
The work of the people of Sans Souci quickly paid off. That same year, Strive Communities informed residents that the park was for sale.
Some of the residents resisted making an offer to purchase, resisting the $150 per month rent increase that would be required to fund the purchase.
But the majority felt it was worth it.
“It didn’t matter whether we bought it too expensive or not,” Ms Ceelen said. “Pure and simple, if we don’t buy it, it will be bought by another company.”
They made an offer, and in 2021 became owners of their park.
“People are proud now,” said park resident Peggy Kuhn, who said her neighbors have done a better job of maintaining the park since they took over ownership. There was talk of creating a community garden or creating a solar array for the park. “It’s optimism in the air – ‘oh, what else can we do? ‘” Ms. Kuhn said.
But in the two years since Colorado’s Opportunity to Buy Act went into effect, only Sans Souci and two other parks have been sold to residents. In 20 cases, park owners failed to notify residents as required by law before selling, according to data from the state Department of Local Affairs. In others, residents were notified but struggled to merge quickly enough to make an offer to purchase.
State Rep. Andrew Boesenecker, whose hometown of Fort Collins has seen a flurry of park sales in recent years, including a recent $57 million sale, said the Opportunity Act purchase does not go far enough.
In legislation introduced this month, Boesenecker proposes to require park owners to allow residents or a local government to make the first bid. The bill would also limit rent increases to 3% per year. Another bill is being drafted that would give residents access to a loan fund that would help them compete with private equity firms, many of which receive government-sponsored funding to buy parks.
In Golden Hills, residents feel the legislation is coming too late.
Patricia George has lived in the park for 12 years. But with her new rent of nearly $800 a month eating up most of her disability benefits, leaving her with just $250 left over each month, she can’t afford to stay.
She searched through her belongings and sold what she could to make up the difference: her TV, her mother’s antique crockery, her grandmother’s jewelry. She applied for senior housing, but the waiting lists are long.
“It’s almost inhumane what they’re doing,” Ms George said. “All we have to do now is pick up the pieces, whatever they are, and maybe work our way out. Or many of us could end up on the streets, in homeless shelters, if there is an open bed for us. It’s hard. It’s really difficult.”
Susan C. Beachy contributed to the research.