Titans of the Trailer Park, Trailer Trash and The Trail of Tears

Manufactured housing - also referred to as “trailers” or “mobile homes” are almost never mobile. The cornerstone upon which the profit-rich, private equity mobile home park ownership model is based…….

Trailers are often attached to a foundation and cannot be moved easily - if at all.? Moving them is cost-prohibitive - averaging $5,000 to $10,000 per move.? An amount equal to approximately five to seven years’ worth of the home’s equity. Also, finding a new lot upon which to place older mobile homes is difficult as park owners prefer newer trailers.? This, too, is deliberate to the PE business model.?

Park owners often enforce sale restrictions - usually in the form of exclusive agent agreements, making sales intentionally more difficult - and more expensive.? Rent increases - that occur at the park owner’s discretion, drive down the value of these homes.? Sometimes significantly.? As of 2017, realtors estimated that for every $100 increase in space rent, a manufactured home lost $10,000 in value.? The average price of a trailer/mobile/home as of 2022 was approximately $127,250.? Therefore, the impacts of these rent increases can be devastating.

When owners cannot move or sell the homes (many facing eviction) they are forced to abandon the structure or sell it to the community owner – usually for a fraction of what it’s worth. In many cases, they sell for less than their mortgage.? Once park owners take possession, they are free to rent out or re-sell these homes.? Further in debt, homeowners are faced with few good choices.?

Over one-fifth of manufactured-home owners earned less than $20,000 a year as of 2021, and over half earned less than $50,000 a year. For manufactured-home renters, more than a quarter earned less than $20,000 a year, and almost 70% earned less than $50,000 a year. As of 2022, almost one-third (31%) of adult manufactured home residents were over 60.

In a 2017 report, Green Street Advisors stated that the manufactured home sector was the only major real estate asset class that had not experienced a year-over-year decline in net operating income in any year since 2000. Green Street advised manufactured home communities as offering the most favorable return profile among all property sectors (including apartments, office buildings, retail, hotels, industrial, and self-storage).?

Today, approximately eleven private equity firms own 1,114 manufactured housing parks in the U.S. with almost 243,000 lots. ? Nearly half (49%) of these were financed by Fannie Mae or Freddie Mac. In contrast, Fannie Mae or Freddie Mac financed just 9% of all the manufactured home parks in the U.S.

With the help of the Agencies three of the four largest private equity firms in the U.S. own manufactured housing portfolios: Apollo Global Management (Inspire Communities), Blackstone (Treehouse Communities), and The Carlyle Group.?

• In 2016, Fannie Mae financed a $1 billion loan to Yes! Communities that was backed by 120 manufactured home parks with over 29,000 lots in 13 states.?
• In 2017, private equity firm Apollo Global Management bought Inspire Communities, [5] a manufactured home park operator that currently has over 100 parks with almost 24,000 home sites. [6]
• The Blackstone Group, the largest private equity firm in the world, spent almost $1 billion between 2018 and 2020 to acquire over 50 parks, with over 10,000 home sites and operates them through its Treehouse Communities platform.?
• In 2020, the Carlyle Group expanded its presence in manufactured home communities with a $230 million purchase of four manufactured home parks, with a total of 1,583 homes, in Arizona.?

Manufactured homes comprise 6% of the country’s total housing stock. In rural areas, manufactured homes account for 14% of housing stock. Five million are owned by the household (71%), and 2 million units (29%) are occupied by renter households.??

America is soon to be a growing class of “trailer trash”.? Aided and abetted by itself. Unwittingly and unknowingly capitalizing its misery vis a vis two Agencies that fund predation and desolation with American tax dollars while making the elite - richer.? Perhaps, the “trashiest” move of all.?

Heavily excerpted: https://lnkd.in/gxA5XXec