Titans of the Trailer Park, Trailer Trash and The Trail of Tears
Michelle Young
Consumer Housing Advocate/Industry Advisor ?? "Get's it". Done. Consumer advocacy for sustainable, national housing policy reform.
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.?
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
Manager at Verbatim Resource Technologies LLC
3 个月Thanks for this eye-opening article. Did not realize just how minimal the incomes of most trailer park residents are. In light of that I think a 4 unit trailer design - four studio apartments per singlewide - is a good solution for individuals or couples who are ok with small digs: https://robertcarpentera.wixsite.com/mysite-1/single-post/fractional-mobile-home-vs-tiny-home
Seasoned Mortgage Leader & Sales Strategist | Thought Leader | Creatively Empowering Teams & Pioneering Market Expansion in New England
3 个月Private equity companies seem to ruin everything they touch, the goal is to suck all the revenues, refinance or sell the real estate jacking prices, jacks the value, then going bankrupt. It should be illegal.
Business Development ?? Credit and Score Expert ?? Published Author?? Box Burner ?? Passionate Developer of People?? Curious Student??
3 个月Michelle Young, 'trailer parks' where I live in the White Mountains of AZ are a cheap way to own a second home. We turned our second home into our fulltime home in 2022 after my layoff. At that time our park was second generation family owned. Homes sold for a premium because the rent was low. The park was sold in 2023 to a family who owns 12 other parks throughout the US. Most are full time resident parks, with rent ranging from 800/mo to over 1,000. Majority are 55+ parks. Meaning, fixed income whose COLA increases do not keep up with the lot rent increases. In 2022 when we bought, our lot rent was $280/month. The new owners made it clear they would be raising it to the average, which is over $600/mo .... and rising. We have seen home prices coming down as the new rent increases pinch the pockets of would be buyers. Parks similar to ours with rent averaging $570/mo sell their homes for $20K or more less than we typically sell for here. Our home will be worth about 30K less when we sell. Our dilemma? Average home price here is $350K for a fixer. I am living your story, and thank you for continuing to shine a light on the dark corners of our #housingmarket.
Wow. What an eye opening article. I had no idea. Thank you for sharing.