One of America’s most affordable paths to homeownership is slipping away. At manufactured home parks – sometimes called trailer parks or mobile home parks – rents are rapidly rising due to large-scale buyouts by private equity firms.
Over the past decade, rents in these parks have risen 45%, according to census data. Once a park is sold, the risk of eviction rises significantly in the following year. Over the past four years, I’ve watched communities get sold, one by one, to large investment firms. Many of the residents are desperately struggling to protect their homes — for some, their only source of wealth — in the face of exploding rents and threats of eviction.
Historically, mobile homes were trailers designed for travelers and workers living near factories. With so many veterans returning home after World War II, trailers provided an easy and affordable way for them to obtain housing in the face of shortages. The trailers could be moved from place to place as people either attended school or sought work.
A shift occurred in the 1950s. Those with higher incomes bought houses, and eventually, mobile home communities cropped up throughout the country as places for people to park their mobile homes for months, years or permanently. Nowadays, mobile homes are more often called “manufactured homes.” They are assembled in factories and rarely move once they’ve been purchased and settled. In fact, more than 90% never move from their original site.
Today, around 20.6 million Americans live in a mobile or manufactured home. About one-third of mobile homes are in mobile home communities, where the residents usually own the home itself, but they rent the lot that the home sits on. The park owners are responsible for park infrastructure, including street maintenance and sewage systems.
Although many Americans still think of these homes as mobile, they’re prohibitively expensive to move. Many have had the wheels or hitches removed years ago. Additionally, many owners of trailers or manufactured homes have invested in additions, such as porches or extra rooms, that have made these homes even more difficult to relocate.
Private equity swoops in
No state has enough affordable housing for those with the lowest incomes, according to the National Low Income Housing Coalition. In the midst of a housing affordability crisis, mobile homes are seen as a way for those with limited incomes to generate wealth and access to home ownership. Over half of all manufactured homeowners earn less than $50,000 and one-third are over age 60.
For private equity firms, housing has been a fruitful investment. But in order to maximize returns on their investments, they usually increase rents and cut costs. The firms hire on-site and regional managers who exercise disproportionate control over evictions and rule enforcement. In the past, manufactured home communities were largely “mom-and-pop” enterprises. The tenants usually knew their landlords and saw them often, and rents were much more stable.
In 2020 and 2021, institutional investors accounted for 23% of all manufactured home park purchases, up from 13% between 2017-2019. Now, 23 private equity firms own over 1,800 parks in the U.S.
Once bought, lot rents usually begin rising. Mobile home park residents are especially vulnerable due to their circumstances: Since their homes are so difficult to move, they are essentially trapped when faced with rising lot rents. One study of Florida mobile home communities found that in the months after a park sale, eviction filings increased by 40%. Residents often find themselves forced to choose between paying exorbitant costs to move their home or paying unaffordable lot rents.
Putting power back in the hands of residents
Currently, only 22 states have laws that require advance notice to residents of park sales. Most simply provide a timeline for owners to inform park residents of their intent to sell. Nonetheless, several states are coming up with strategies to keep residents from being forced out and help them assume ownership of the parks.
Many advocates are also pushing for rent control policies in mobile home parks, limiting the amount that new owners can raise rents annually. In 2019, New York state passed a law limiting annual rent hikes in mobile home parks to 3%, though this can climb to 6% annually in certain circumstances. Additional solutions include limiting evictions to narrow circumstances, tightening lot lease contracts to give residents additional protections and strengthening zoning rights for existing mobile home parks.
In my practice, I see park residents eager to maintain their long-standing homes and communities in the face of outside investors and unresponsive local governments. But until these solutions are widely adopted, residents will continue to lose their wealth – and with it, this crucial path to homeownership.
Cassie Powell is an attorney and an assistant professor of Law, Legal Practice at the University of Richmond. She wrote this piece for The Conversation.
