Mobile homes are an essential element of America’s residential makeup. But when a large investment company that owns thousands of them talks about its role in providing “affordable housing,” it’s an obvious warning signal.
Large companies have discovered that owning mobile home parks is a good way to make a lot of money. One such investor compared the steady stream of revenue from mobile homes to a “Waffle House where the customers are chained to their booths.”
Although the investor could have been a little more diplomatic in his choice of words, unfortunately he had a point. Most mobile homes, ironically considering their name, actually don’t get around much at all, largely because their owners can’t afford the moving costs. Generally, once a mobile home lands somewhere, it’s chained.
The revenue for renting out a mobile home, or a lot upon which to put it, is very reliable. The Washington Post cited a real estate research firm’s finding that said between 2004 and 2018, income from mobile home parks rose 87 percent. It never declined, not even during the nasty 2008 recession.
That’s one reason billion-dollar private-equity companies have been buying mobile home parks. These firms also have figured out how to increase their profits. The monthly rental increases an average of 4 percent a year, which amounts to almost a 30 percent rise over six years when compounded. One critic of private equity’s deep dive into mobile homes correctly wonders how this kind of price hike meets the definition of affordable housing.
In some places, rent checks paid more than six days late result in a $100 fine. Residents also can be fined for not cutting the grass or for breaking rules on parked cars.
Nobody will begrudge a property owner, who is putting his money at risk, a decent return on his investment. There must be thousands of families in America, including plenty of people in Mississippi, who have bought some land, set up a trailer park and made a living off it.
The question is whether the investment firms in the mobile home business are more interested in keeping their expenses down or tending to routine maintenance problems.
Residents of a Nashville mobile home park that’s one of 200 owned or managed by a California private-equity firm told The Washington Post that expense control clearly takes priority.
One renter, a medical assistant for a physician, said the park’s managers tend to ignore requests to fix problems with drainage, streetlights or potholes. They also are unconcerned that the uneven settling of her lot is creating a crack in her mobile home’s ceiling, which is separating the two sides of her double-wide.
One lesson in this story is that while mobile homes are less expensive than other housing, residents give up a lot in order to save money. The other is that if you’re moving into a mobile home park, it’s worth knowing who owns it.
A locally owned mobile home park may be more responsive to the needs of its residents — and more likely to keep the rent affordable.