Precarious spot for mobile home owners as investors swoop in
ASPEN, Colorado (AP) — When the time came for her to sell the mobile home park she and her son owned near Aspen, 89-year-old Harriett Noyes had two big offers and an even bigger decision: Take nearly $30 million from a developer who would likely evict her family and friends to build luxury homes, or sell to the county for a fraction of that to preserve affordable housing in one of the most expensive areas in the United States.
She chose family and friends.
“I could see the need for the people to have a place to live, and this was their life and they had homes,” said Noyes, who has lived in the Phillips Mobile Home Park for more than four decades. “I just didn’t have the heart to just jerk it out from under ’em.”
Carved into a red-rock hillside along the banks of the Roaring Fork River in the mountains of western Colorado, the park is one of the last bastions of affordable housing in the area, which takes pride in its world-class skiing and is a veritable playground for the rich and the famous. Noyes and her son Hyrum, 61, sold the 76-acre park to Pitkin County for $6.5 million in 2018 with the promise of upgrades and to keep the community affordable. The deal preserved as affordable housing 35 mobile homes, four cabins and an old ranch house, according to The Aspen Times.
Across the country, mobile home parks are an attractive investment. Tenants own their homes but not the land they sit on, and because the homes aren’t actually easy to move, are at the mercy of landlords, who can increase rents or sell the land out from under them.
Some states are passing laws to increase protections for mobile home owners, while nonprofit groups are also stepping in to help residents facing rent hikes or evictions.
Here’s an explanation of the situation:
A PRECARIOUS POSITION
Advocates say mobile homes are often necessary for people who can’t afford to buy a traditional home, especially in rural areas with fewer affordable housing options. But mobile homes typically depreciate quickly, rather than increasing in value like a traditional house. Residents can be caught in a tough position if their asset loses value at the same time as their lot rent rises, said Nicole Mueller, a lawyer with Legal Aid of North Carolina who has represented mobile home owners facing rent hikes and eviction.
“You know as soon as they buy them, it’s just like a car basically, except that the car is chained to a piece of property and is really expensive to move,” Mueller said.
It’s a common arrangement for mobile home residents to own the mobile home but not the land underneath, paying rent or “lot fees” to a landlord who owns the park where they live. Mueller said that if lot rents rise too quickly, residents can be caught in an unfortunate position of having to pay thousands to move their unit to another park -- if they can find one.
WHAT’S HAPPENING NOW?
In recent years, a number of how-to sites have popped up to encourage mobile home investors . One Colorado-based site, Mobile Home University, says “Affordable Housing is the hottest arena in commercial real estate right now,” as apartment rents rise and comparatively cheaper mobile homes remain in demand for many residents.
In an article entitled “Why Invest In Mobile Home Parks,” the site explains: “It costs around $5,000 to move a mobile home, so virtually no tenants can ever afford to move. As a result, the revenues of mobile home parks are unbelievably stable. But what happens when a tenant cannot afford to continue to pay their rent? Then they normally abandon the home, and the park owner ends up with title under abandoned property laws.” A representative of the site didn’t immediately respond to an email seeking comment.
Advocates say that very arrangement can make residents more vulnerable. Over the past 20 years, mobile home parks that were once owned by local landlords have increasingly been bought by corporations, private-equity firms or other out-of-state investors, according to the California-based advocacy group Manufactured Housing Action. If that owner is driven by profit, the group says, they could raise rents and put residents in a tough spot.
“Residents are stuck, choosing between paying increasing rent, sometimes at the expense of food or medicine, or abandoning their homes,” the site says.
WHAT STATES ARE DOING
Colorado, where lawmakers estimate 100,000 people live in mobile homes in approximately 900 parks, enacted legislation this year to expand protections for mobile home residents, including more time to sell their home or move after eviction and longer to resolve late payments.
“Over the last several years, serious concerns have been raised by Colorado’s mobile home owners over mistreatment from park owners,” bill sponsor Rep. Edie Hooton, D-Boulder, said in a statement when the bill was signed by the governor in May. “This bill will give more tools to help protect Coloradans who are being exploited by relatively loose regulatory structures.”
Washington, which has longstanding law governing mobile homes, also made changes this year to expand situations in which residents are eligible for relocation assistance.
Arizona has also enacted legislation in recent years to govern mobile home lots.
WHAT MOBILE HOME OWNERS CAN DO
Mobile home owners facing rent hikes or otherwise caught in a tough position are urged to read the rent notices carefully, familiarize themselves with the law and consider their options. In Vermont, for example, mobile home residents can seek mediation from the state for rent hikes above a certain level, according to a website run by Vermont Legal Services and Vermont Legal Aid.
In North Carolina’s Robeson County, James Lesane said he faced a dramatic rent increase on his mobile home lot earlier this year that he said was impossible to pay on a fixed income. The rent increase came after the mobile home park was bought by the Florida-based company Time Out, which says on its website that it owns more than two-dozen properties in North Carolina and Illinois.
In July, Lesane was hit with an eviction notice. Mueller, the Legal Aid lawyer representing Lesane, said they’re arguing in court that Time Out made mistakes in its paperwork and the case is moving slowly. Meanwhile, she said, Lesane and another client of hers served with an eviction notice are trying to save money to move to another park.
Time Out said in a statement that it invested millions to make its communities clean and safe. The rent rates were woefully behind true market valuations, they said, meaning mobile home parks lacked the funds to maintain the communities and many fell into disrepair.
“Without Time Out and its efforts to make these communities both safe and financially viable, many would likely be sold and redeveloped into a more lucrative commercial use, thus robbing the community of much-needed affordable housing,” Time Out said in a statement. “Raising rents to market rates not only improves the quality of the community, but protects it from re-development and ensures that safe, affordable housing choices are available to more families.”
In Colorado, tenants were lucky that the park’s owner was willing to sell to the county. And even though the Noyeses are now millionaires, they still live in the mobile home park they sold, they don’t plan to leave anytime soon.
“I didn’t want to feel above the people. I was one of them that was just a common, ordinary person making a living and had the same problems they did,” Harriett Noyes said of her decision to pass up more than $23 million and stay put. “And we shared our problems. ... They turned into being my family.”
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Associated Press writer P. Solomon Banda contributed to this report. Peipert and Banda reported from Aspen, Colorado, and Drew reported from Raleigh, North Carolina.