Rymer Report: Impact of Employment Figures, Illegal Immigrants, and Crime on Housing

By: Brad Rymer, MBA Haven Capital Ventures, Haven Fund II a MH Community Investment Fund and LP - Invest Now: MHC Investor Deck – Haven Capital Ventures

Introduction

The housing market in the United States is influenced by various factors, including employment figures, the presence of illegal aliens, and crime rates. This report explores how these elements affect apartment and home rentals and the potential shift towards mobile home parks as a more reliable, low-income housing alternative. Additionally, it examines the moderate growth of mobile home lot rents and home rents in rural and urban areas, improvements in the quality of construction, and the shift in perception of mobile home living.

Employment Figures and Housing Market

Resilient Employment Levels

The stability of employment levels is a crucial determinant of multifamily property values. A resilient labor market benefits apartment owners by ensuring a steady demand for rental properties 12. Full-time job reports, consumer sentiment, and household formation volumes are key indicators that support the multifamily market 34. The resilience of employment levels is a hopeful sign for apartment owners, suggesting that the multifamily market will stabilize before the end of Q3 2024 35.

Rising Rents and Wage Disparity

Rents have increased significantly, outpacing wage growth. Between 2019 and 2023, rents jumped 30.4%, while wages rose only 20.2% 67. This disparity has forced many Americans to spend more than the recommended 30% of their monthly income on housing, exacerbating the affordability crisis 4. The rising rent has also contributed to homelessness, pushing individuals to seek more affordable housing alternatives 89.

Impact of Illegal Aliens and Crime on Housing

Housing Demand and Crime Rates

The influx of illegal aliens can increase the demand for low-income housing, putting additional pressure on an already strained market 49. High crime rates in certain areas can deter potential renters, leading to higher vacancy rates and lower property values 49. These factors contribute to the overall instability in the housing market, making it challenging for low-income households to find affordable and safe housing options 5.

Crime and Immigration

The evidence, based on empirical studies of many countries, indicates that there is no simple link between immigration and crime 810. Immigrants with good labor market opportunities appear no more likely to commit crime than similar natives 11. Legalizing the status of immigrants has beneficial effects on crime rates 8. There is no evidence that immigration has caused a crime problem across countries 1213.

Shift to Mobile Home Parks

Affordability and Stability

Mobile home parks (MHPs) have traditionally been seen as a cost-effective solution to the affordable housing crisis 34. They offer community living at a fraction of the cost of traditional homes, making them an attractive option for low-income families and the aging baby boomer population 5. MHPs align with the tiny house movement and sustainability trends, offering efficient living spaces with a smaller carbon footprint 3.

Rising Costs and Investment Trends

Despite their affordability, the cost of mobile homes and lot rents has been rising, transforming what was once a beacon of hope into a financial burden for many 35. Private equity firms have increasingly invested in mobile home communities, leading to rent hikes and pushing long-term residents to seek cheaper alternatives 3. However, MHPs still offer stable, recession-resistant cash flows and lower maintenance costs compared to other real estate assets, ensuring consistent demand even in economic downturns 4.

Government Support and Resident-Owned Communities

Governments at all levels have been mobilizing to support residents of manufactured housing, especially low-income households 49. Legislation that gives residents the first opportunity to buy the property their homes sit on has been enacted in several states, helping preserve affordable housing 39. Resident-owned communities (ROCs) are emerging as a promising solution to maintain affordability and provide long-term stability for residents 129.

Quality of Construction and Improved Living Standards

Enhanced Construction Standards

Modern manufactured homes are built to high standards, with rigorous quality control measures in place. Advances in construction technology have improved the durability and energy efficiency of these homes, making them a sustainable and long-lasting housing option 1415. The HUD Code, which establishes national standards for the design and construction of manufactured homes, ensures quality, durability, safety, and affordability 1617.

Safety and Energy Efficiency

Manufactured homes are now as safe as site-built homes, with features designed to withstand wind, fire, and other disaster threats 189. They are also energy-efficient, incorporating modern appliances and improved moisture barriers, which contribute to lower utility costs and a smaller carbon footprint 18.

Affordability and Cost-Effectiveness

Manufactured homes offer a cost-effective alternative to site-built homes, with costs as low as 35% of an equivalent site-built home 919. The average cost per square foot for a manufactured home is significantly lower than that of a site-built home, making them an attractive option for low-income families 20. Additionally, building homes in a controlled factory environment reduces construction costs and time, further enhancing affordability 21.

Shift in Perception of Mobile Home Living

Overcoming Stigma

The perception of mobile home living has shifted significantly. Modern manufactured homes are nearly indistinguishable from site-built homes and are constructed to high standards 1422. Efforts to debunk stereotypes and highlight the quality and affordability of manufactured homes have helped change public perception 9.

Community and Ownership Models

Resident-owned communities (ROCs) are emerging as a promising solution to maintain affordability and provide long-term stability for residents 129. These communities allow residents to jointly purchase the land and manage their communities through a nonprofit board, fostering a sense of ownership and community 23. Government policies and support for manufactured housing parks also play a crucial role in preserving these affordable housing options 4.

Conclusion

The recent employment figures, the presence of illegal aliens, and crime rates significantly impact the housing market, influencing the demand for apartment and home rentals. While rising rents and wage disparity push many towards more affordable housing options, mobile home parks present a viable alternative despite their own set of challenges. Government initiatives and resident-owned communities offer hope for preserving affordable housing, ensuring that low-income families have access to stable and cost-effective living arrangements.

By understanding these dynamics, policymakers and stakeholders can better address the housing crisis and support the development of sustainable and affordable housing solutions for all Americans.

Thanks to all of the resources cited above.

The Mobile Home Park Broker Glenn Esterson, The Mobile Home Park Expert Manufactured Housing Institute ManufacturedHomes.com Capstone Manufactured Housing The Manufactured Housing & RV Group Deloitte Kerry Grinkmeyer Founder of Best of US Investors iSectors? LLC Moss Adams US Government Accountability Office adams #accredited #fund #banking #wealthmanagement #privatewealth #investing