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Massive rent increases hit mobile homes

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Virginia Rubio has lived in a trailer park in Forks, Washington for nearly 30 years and has a monthly rent of about $ 350. Now I’m aiming for up to $ 1,000.

Rubio, a retired home care assistant living on food stamps and $ 860 a month in social security, says there’s no way to get math to work. She owns a mobile home that she shares with her partner and her adult daughter, but if she can’t afford to rent the land beneath it, she must immediately abandon it.

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“We don’t know what we can do with this increase. We are all afraid of losing our home,” said Rubio, 75.

Soaring home prices and rents have spilled over into mobile home parks in countries where rising demand, low supply and increased corporate ownership are pushing up monthly costs for low-income earners with few options. At the same time, private equity companies and developers are rushing around to buy such properties and turn them into more profitable ventures such as timeshare resorts, wedding halls and condos.

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Mobile homes have long been one of the country’s most affordable housing options, especially for families without government support. According to federal data, about 20 million Americans live in manufactured homes, which make up about 6% of US homes. Some experts suggest that as more people are priced from traditional homes and apartments, their numbers can grow quickly.

Mobile home prices range from less than $ 25,000 in Nebraska, Iowa, and Ohio to over $ 125,000 in Washington. Overall, LendingTree’s analysis of census data shows that it tends to be three to five times cheaper than traditional single-family homes.

However, rising demand for affordable homes is putting particular pressure on the market. Nationally, average selling prices for homes manufactured rose nearly 50% from $ 82,900 to $ 123,200 during the pandemic, according to census data. Meanwhile, government statistics show that average new home prices during that period rose 22%.

However, little is known about how much mobile homeowners pay to rent land under their homes. Lot rents typically rise by 4% to 6% annually, according to industry sources, but there is little data on accurate cost or price increases. Its lack of transparency is complicated by the fact that few cities or states have rules governing rent increases in mobile home parks.

“Land prices are rising, home prices are rising, and that’s spilling over into mobile homes,” said Casey Dawkins, a professor of urban studies and planning at the University of Maryland. “There is a general shortage of affordable housing, especially in cities and the surrounding suburbs.”

At the same time, park owners and operators have higher costs of utilities, workers and property taxes, according to John Pawlowski, managing director of real estate research firm Green Street Advisors.

Residents like Rubio often own the trailer they live in, but are associated with homeownership benefits such as fixed monthly payments, tax cuts, and home valuation, as well as renting. He said he did not enjoy the flexibility and protection. They often said they felt they were in a state of confusion: their mobile homes are their biggest investment, yet it’s useless if they can’t afford to rent the land on which they are located. Moving a mobile home can cost as much as $ 15,000 if it is new enough to move. In other words, residents are often watched over by the park in which they live. Many municipalities also have rules governing when and how trailers can be transported.

Kate MacTavish, an associate professor at Oregon State University and focused on affordable housing and trailer parks, said: “They may own their own home, but they just can’t pick it up and move.”

In interviews with 12 mobile home residents across the country, they all said their rents had risen this year. Most reports have doubled or tripled monthly payments, but reported an increase of 10% to 25%. Their choices were also increasingly limited. Many said they bought a trailer after being priced from an apartment, house or condo and didn’t know where to go next. They ran out of savings or borrowed high-interest loans to buy manufactured homes with low resale value. Some were considering moving to a motel, clashing with friends, or living in a car until a more permanent arrangement was found.

Christy Andrews thought he was making a healthy investment when he bought a mobile home for $ 5,000 in Torrance, California six years ago. But now she says it was a big mistake. Her land rent (the monthly fee paid to the lot of land where the trailer is parked) almost doubled to $ 1,700 during the six years she lived in Knollsmanner, and is now nearly $ 1,900 a month. Occupies everything. With a social security disability check.

“That’s horrible,” said Andrews, 43, who quit her sales job in the aerospace industry because of renal failure. “There is no way to catch up. Do you pay rent, take medicine, buy gas and take your child to school?”

She said the only way to move was to give up the only house she had ever owned. The nearby rent is astronomical. Studios easily cost $ 2,000 a month, and two-bedrooms cost nearly $ 3,000. She said many of her neighbors would be kicked out and become homeless, and she fears she will soon live in her Chevrolet Tahoe with her rescue dogs, Josie and Nya.

Bessire & Casenhiser, who manages Knolls Manor, did not respond to multiple requests for comments.

Private equity companies such as Stockbridge Capital, Carlyle Group and Apollo Global Management have been rapidly acquiring mobile home parks for the past decade, using funds from government-sponsored lenders Fannie Mae and Freddie Mac. .. After they took over, one of their first moves was to raise rent, said MacTavish, Oregon.

However, industry groups say that these rent increases are often needed to cover the costs of improving and maintaining real estate premises, especially if park ownership changes.

Leslie Gooch, Chief Executive Officer of the Manufacturing and Housing Research Institute, said: “When the community changes hands, it is often due to the significant need for improvement and the lack of capital from existing owners to make such improvements.”

Increasing housing shortages during the pandemic have given park owners additional power to raise rents, as rising house prices drive renters out of apartments and homes, MacTavish and others say. increase. As a result, many small, independent park operators are also aware that rents can be increased without reducing potential demand.

“The owners of these creditors will continue to squeeze you until you run out of money,” said institutional investors soon living in mobile homes near Los Angeles, where monthly rents rose nearly $ 200, or 15%. Barbara, 78, said investors took over last year.

Like many others in the 55+ community, Barbara lives on bonds, asking her to be identified by her name because she fears retaliation. She retired from her decades career in her commercial real estate in 2014 and lives on social security for $ 1,700 per month.

She sold a two-bedroom condo two years ago and used the money to buy a $ 295,000 mobile home. Since then, she has spent another $ 30,000 to turn it into her “house of eternal dreams.” But with rising rents, she says she’s not sure if she can afford to stay there longer. Many others do similar calculations. There are already 14 mobile phones for sale in her park.

“I don’t know what to do, I really don’t know,” she said. “I was going to sell this, but where should I go? I ran out of cash and bought it.”

Few municipalities or states have rules governing rent increases and evictions in mobile home parks, but that’s starting to change. For example, in Vermont, park owners want residents to be informed of plans for sale and given the opportunity to buy real estate. Others, such as Oakland, California, are amending zoning legislation to allow homes manufactured in more parts of the town.

“Many municipalities continue to ignore mobile home parks, which are not a little related to the stigma around them,” said McTabish, Oregon. “This is one of the only forms of affordable housing we have, but we haven’t adopted it in a way that works much better for the family.”

The situation surrounding mobile home ownership is yet another way the housing market has exacerbated long-standing inequality. Consumer Finance Protection reports that homeowners enjoyed cheaper mortgages during the pandemic, but loans to buy manufactured homes have higher interest rates than regular mortgages and are refinancing. Opportunities are limited and protection is often low. According to the CFPB, mobile homeowners are more likely to lag behind their home payments than those who own homes built on the premises. Also, most residents own a home but rent land, so not being able to cover the rent often means losing the home they own.

Esther Sullivan, an associate professor of sociology at the University of Colorado Denver and a focus on mobile homes, said, “Almost entirely, park residents rent land under their homes.” rice field. “Therefore, missing lot payments not only puts their homes at risk, but can also wipe out their accumulated wealth.”

In Rochester, New Hampshire, 69-year-old Sue Veal bought a mobile home for a park over 55 for $ 119,000 six years ago.

Listed rents are steadily rising, rising 50% in six years, despite the park’s abolition of services such as recycling. However, demand is on the rise. A friend of the park recently sold a mobile home for $ 220,000 in cash a day. That’s almost double the amount you paid a few years ago.

“Prices are rising, but people will have nowhere to go,” said Veal, a retired biotechnology quality assurance manager who currently receives about $ 2,000 a month in social security. “We are all worried about the future when our money will run out.”

Linda den Ouden last year replaced a mobile home in a two-bedroom apartment near Portland, Oregon, thinking it was a good way to save money after her husband died. She used the money she received from his life insurance policy to buy a $ 70,000 unit. However, her rent has risen nearly 10% a month to over $ 1,000, making it nearly impossible to earn income from social security and small pensions.

This 68-year-old woman has begun regular doctor visits and postponement of mammograms to save money. It’s been many years since she went to the dentist.

“Living on bonds means that there is no room for additional costs,” she said. “I’m one catastrophe away from losing everything I left behind. It’s an endless worry that I live with every day.”

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