One of America’s more affordable housing options is now a target of investors, leaving tenants out from the decision to move.
Housing in the U.S. is getting more expensive all the time — especially lately. A real estate research firm found rent across the country increased by about 11% last year. Now one of the last affordable housing options left in America are mobile homes, but people are being priced out of those, too.
A growing number of investors are buying up these parks as many of the long-time owners are retiring and looking to sell. While many people own their mobile homes, they still have to pay rent for the land they sit on. When investors come in, they’re known to raise that rent and other fees.
One report from June 2021 showed investors made up almost a quarter of mobile home park purchases between 2019 and 2021. Compared to the two-year period before, there was a 13% increase in investor ownership.
Mobile Home Park University is an organization that runs a bootcamp to help investors looking to buy these parks. According to them, “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.”
More than 22 million Americans live in mobile homes, and policy experts say they could face up to a 70% rent increase. It generally comes down to what the investor decides. For these residents, an increase would have a significant impact on their ability to keep up with their finances.
George McCarthy, president and CEO of the Lincoln Insititute of Land Policy, explains how this leaves many residents with nowhere else to go.
Affordable housing options are limited, and only 1 of 4 low-income households eligible for federal housing assistance actually receive it.
The federal mortgage company Fannie Mae says the annual median household salary of mobile homeowners is about $35,000, which is half of the annual median income for people who own homes built on site.
The thing is, these investors aren’t necessarily acting alone — they’re doing this with government support.
Investors have access to government loans from agencies like Fannie Mae, who has acknowledged those mobile homeowners tend to be lower income.
To combat this problem, some mobile home park residents are coming together to try and buy their park so they have more agency over the decisions made. But it can be difficult because they don’t qualify for the same government loans that the investors do.
There’s been a push for state legislation requiring parking owners to notify residents when they plan to sell so they have time to organize and decide if they want to make an offer, but only a handful of states like Massachusetts and New Hampshire have made this happen.