Rents are up as big pockets investors buy mobile home parks




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Jeremy Ward stands in front of his home last week in the mobile home community Ridgeview Homes in Lockport, New York. Ward is a Ridgeview resident participating in a rent strike after the park’s new owners announced they had raised rents by 6%. (Lauren Petraca/The Associated Press)

For as long as anyone remembers, rent increases rarely happen at Ridgeview Homes, a family-owned mobile home park in upstate New York.

That changed in 2018 when business owners took over the 65-year-old park amid farmland and down the road from a fast-food and grocery store 30 miles northeast of Buffalo.

The population, about half of whom is elderly or disabled with a fixed income, bears the first two increases. They hoped the latest owner, Cook Properties, would treat the bourbon-colored drinking water, sewage spurting into their bathtubs and potholed roads.

When that didn’t happen and they imposed a new lease with a 6% increase this year, they formed an association. About half of residents launched a rent strike in May, prompting Cook Properties to send out about 30 notices to evict.

“All they care about is a rent increase because they only care about money,” said Jeremy Ward, 49, who earns just over $1,000 a month in disability payments after his legs were nerve-damaged in a car accident.

He was recently fined $10 for using a leaf blower. He said, “I am disabled. You are not doing your job and I am getting a violation?”

The plight of Ridgeview residents is spreading across the country as institutional investors, led by private equity firms and REITs, sometimes funded by pension funds, step in to purchase mobile home parks. Critics claim that mortgage giants Fannie Mae and Freddie Mac are fueling the problem by backing a growing number of investor loans.

The purchases put residents in a bind, because most mobile homes – despite the name – cannot be moved easily or cheaply. Landlords are either forced to accept unsustainable increases in rent, spend thousands of dollars to move their homes, or give up and lose tens of thousands of dollars they invested.

“These industries, including [the] The mobile home park manufacturing industry continues to promote these parks, these mobile homes, as affordable housing. “But it’s not affordable,” said Benjamin Bellos, the assistant attorney general for Iowa, who said complaints have risen “100 times” since out-of-state investors began buying parks a few years ago.

“You put people in a trap and a trap, where they don’t have the power to defend themselves,” he added.

Driven by some of the strongest returns in real estate, investors have shaken up a once-dormant sector, which is home to more than 22 million mostly low-income Americans in 43,000 communities. Gardens are vigorously promoted by many as guaranteeing a steady return – by increasing rent frequently.

There’s also a growing industry, with guidebooks, webinars and even a mobile home university, that offers tips to attract small investors.

“I went from an environment where a local owner or manager was taking care of things they needed to fix, to where there were people who were looking at a cost-benefit analysis of how to get the least cash,” Billos said. “You can combine it with the idea that we can keep increasing the rent, and these people can’t leave.”

George McCarthy, president and CEO of the Lincoln Institute for Land Policy, a Cambridge, Massachusetts-based think tank, said the parks, which contain about one-fifth of mobile home lots across the country, have been purchased by institutional investors over the past eight years.

McCarthy singled out Fannie Mae and Freddie Mac by guaranteeing the loans as part of what the lending giants called an expansion of affordable housing. Since 2014, the Lincoln Institute estimates, Freddie Mac alone has provided $9.6 billion in funding to purchase more than 950 communities across 44 states.

A spokesperson for Freddie Mac responded that he has purchased loans for less than 3% of mobile home communities across the country, about 60% of which are refinancing.

Soon after investors began buying the parks in 2015, complaints about double-digit rents followed.

In Iowa, Matt Chapman, a park-resident mobile home purchased by Utah-based Havenpark Communities, said his rent and fees have nearly doubled since 2019. Another park bought by Impact Communities has seen rent and fees increase, Alex Cornea of ​​Iowa Legal Aid said. 87% between 2017 and 2020.

“Many of the people living in the park were on a steady income, disability, and social security and simply wouldn’t be able to keep up,” said Cornea, who met about 300 angry mobile homeowners at a massive church. “It almost led to a political awakening.”

In Minnesota, park purchases by out-of-state buyers grew from 46% in 2015 to 81% in 2021, with rent increases of up to 30%, according to the All Parks Alliance for Change, a state association.

US Senator John Tester of Montana spoke at this year’s Senate hearing, mentioning tenants who have complained about repeated rent increases at the Havenpark project in Great Falls. One resident, Cindy Newman, told the Associated Press that her monthly rent and fees have risen by $117 to nearly $400 over a year and eight months — the equivalent of an increase over the past 20 years. The company says the increase was $95 over three years.

On top of the rent increases, residents have complained of being inundated with fees for a variety of items, including pets, maintenance, and mess and speed fines — all tucked away in leases that can run as long as 50 pages.

Havenpark spokesman Josh Weiss said the company should charge prevailing market prices when it buys a park at the fair market price. However, the company has moved since 2020 to limit rent increases to $50 a month.

“We understand the concern that any increase in rent would have on residents, especially those on fixed incomes,” Weiss said. “While we try to reduce the impact, the financial reality does not change.”

The mobile home industry argues that communities are the most affordable housing option, noting that average rent increases across parks nationwide were just over 4% in 2021. Spending on improvements was about 11%. They said significant investment was needed to make improvements to old parks and avoid selling them.

“You have some people who come into the space giving us all a bad name, but these are isolated examples and these practices are not common,” said Leslie Gooch, CEO of the Fabricated Housing Institute, an industry trade association.

Both sides said the government could do more to help.

The industry wants to make Federal Housing Administration funding available to residents, many of whom rely on high-interest loans to purchase homes that cost an average of $81,900. They also want the US Department of Housing and Urban Development to allow housing vouchers to be used for mobile homes.

Resident advocates, including MHAction, want lawmakers to set a rent cap or demand a reason to increase or evict. This state legislation succeeded in Delaware this year but failed in Iowa, Colorado and Montana.

They also want Fannie Mae and Freddie Mac to condition their loans that rents remain reasonable. They support residents’ purchases of their communities, a batch that began in New Hampshire and has reached nearly 300 parks in 20 states.

A spokesperson for Freddie Mac said he’s created a new loan offer that incentivizes tenant protection, and last year made that mandatory for all future mobile home community transactions.

In Ridgeview, it is not clear how the rent strike will be resolved.

Cook, which claims to be New York’s largest mobile home park operator and has a tagline of “Exceptional Opportunities. Extraordinary Returns,” declined to comment. The company closed a $26 million private equity fund in 2021 that bought 12 New York parks, but it wasn’t clear whether One of them is Ridgeview.

The population, meanwhile, conscripted. Gerald Korb, a 78-year-old retiree, said he is still waiting for the company to move an electric pole and transformer that he fears will fall on his home during a storm.

“I bought a place and now they’re charging all of this on us,” said Korb, who stopped paying rent in protest. “They are absentee realtors that’s what they are.”

This story originally appeared in the Los Angeles Times.

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