Rents rise as deep-pocketed investors buy mobile home parks.

LOCKPORT, N.Y. (AP) — Rent increases have been rare for as long as anyone can remember, at Ridgeview Homes, a family-owned mobile home park in upstate New York.

That changed in 2018 when corporate owners took over the 65-year-old park, located between fields and down the road from a fast-food joint and grocery store about 30 miles northeast of Buffalo.

Residents, about half of whom are elderly or disabled on fixed incomes, bear the first two increases. They hoped the latest owner, Cook Properties, would address the bourbon-colored drinking water, sewer bubbles in their bathtubs and potholed roads.

When that didn’t happen and a new lease that year with a 6% increase, they formed an association. About half of the residents began a rent strike in May, forcing Cook Properties to send about 30 eviction notices.

“They only care about raising the rent because they only care about money,” said Jeremy Ward, 49, who receives more than $1,000 a month in disability payments after suffering nerve damage to his legs in a car accident.

He was recently fined $10 for using a leaf blower. “I’m disabled,” she said. “You guys aren’t doing your job and I’m in violation?”

The plight of Ridgeview residents is echoed across the country as institutional investors, led by private equity firms and real estate investment trusts and sometimes financed by pension funds, mobile Home parks rush to buy. Critics claim that mortgage companies Fannie Mae and Freddie Mac are fueling the problem by backing a growing number of investor loans.

Purchases have put residents in a bind, as most mobile homes — despite the name — can’t be moved easily or cheaply. Owners are either forced to accept unaffordable rent increases, spend thousands of dollars to move their home, or give up and lose tens of thousands of dollars in their investment.

“These industries, including the mobile home park manufacturing industry, continue to tout these parks, these mobile homes as affordable housing. But it’s not affordable,” said Benjamin Bayless, an assistant attorney general in Iowa, who said that complaints have increased “100-fold” since out-of-state investors began buying up the parks a few years ago.

“You’re putting people in a trap and a trap, where they don’t have the ability to defend themselves,” he added.

Driven by some of the strongest returns in real estate, investors have shaken up a once-sleepy sector that is home to more than 22 million low-income Americans in 43,000 communities. Many aggressively promote parks as a way to ensure constant returns – by increasing rents over and over again.

There’s also a growing industry, including books, webinars and even a mobile home university, that offers tips for attracting small investors.

“You went from an environment where you had a local owner or manager who took care of fixing things as needed, to where you had people looking at cost-benefit analysis,” Bellis said. were how to take the least amount of money,” said Bayliss. . “You combine that with an idea that we can just keep raising rents, and these people can’t leave.”

About a fifth of mobile home parks, or about 800,000, have been bought by institutional investors in the past eight years, said George McCarthy, president and CEO of the Lincoln Institute of Land Policy.

He was among those who helped Fannie Mae and Freddie Mac guarantee loans that the lenders billed as affordable housing extensions. Since 2014, the Lincoln Institute estimates that Freddie Mac alone provided $9.6 billion in financing for purchases to more than 950 communities in 44 states.

A Freddie Mac spokesperson responded that it bought loans for less than 3% of mobile home communities nationwide, and about 60% of those were refinances.

Soon after investors bought the parks in 2015, complaints surfaced of double-digit rent hikes.

In Iowa, Matt Chapman, a mobile home resident in a park bought by Utah’s Haven Park Communities, said his rent and fees have nearly doubled since 2019. Another park purchased by Impact Communities saw an 87 percent increase in rent and fees, said Alex Cornea of ​​Iowa Legal Aid. % between 2017 and 2020

“Many of the people living in the park were on fixed incomes, on disability, on Social Security, and they weren’t able to keep up,” said Cornea, who has about 300 disgruntled mobile home owners at a megachurch. Met. “It almost led to a political awakening.”

In Minnesota, park purchases by out-of-state buyers increased from 46% in 2015 to 81% in 2021, with rentals increasing by 30%, according to the All Parks Alliance for Change, a state association.

U.S. Senator Jon Tester of Montana, speaking at a Senate hearing this year, recalled tenants at the Haven Park development in Great Falls complaining about repeated rent increases. One resident, Cindy Newman, told The Associated Press that her monthly rent went from $117 to nearly $400 over the course of a year and eight months — the same increase as in the past 20 years.

On top of the rent hikes, residents complained of fees for everything from pets to maintenance and fines for disorderly and speeding — all laid out in leases that run upwards of 50 pages.

Haven Park spokesman Josh Weiss said when the company buys a park at fair market value, it must charge current market rates. That said, the company has moved to limit its rent increases to $50-a-month starting in 2020.

“We understand the concern that any rent increase has on residents, especially those on fixed incomes,” Weiss said. “While we try to mitigate the impact, the financial realities do not change.”

The mobile home industry argues that communities are the most affordable housing option, noting that average rent growth in parks nationwide in 2021 was just over 4%. Spending on improvements was about 11%. He said significant investment was needed to improve the old parks and save them from being sold.

“You have some people coming into the space who give us all a bad name, but these are isolated examples and these behaviors are not common,” said Leslie Gooch, chief executive officer of the Manufactured Housing Institute, an industry trade association. “

Both sides said the government could do more to help.

The industry wants to make Federal Housing Administration financing available to residents, many of whom rely on high-interest loans to buy homes that average $81,900. They also want the US Department of Housing and Urban Development to allow housing vouchers to be used for mobile homes.

Advocates for residents, including MHAction, want lawmakers to cap rents or require increases or grounds for eviction — state legislation that passed this year in Delaware but failed in Iowa, Colorado and Montana.

They also want Fannie Mae and Freddie Mac to bet on the loans they repay that rents remain affordable. And they help residents buy into their communities, which started in New Hampshire and has grown to nearly 300 parks in 20 states.

A Freddie Mac spokeswoman said it developed a new loan offering that encourages tenant protections and made them mandatory for all future mobile home community transactions last year.

In Ridgeview, it’s unclear how the rent strike will be resolved.

Cook, which claims to be the largest operator of mobile home parks in New York and has a slogan of “Extraordinary opportunities. Extraordinary returns,” declined to comment. The company closed a $26 million private equity fund in 2021 that bought 12 parks in New York, but it was unclear if Ridgeview was one of them.

Residents, meanwhile, soldier on. Joyce Bales, an 85-year-old resident, has started mowing her own lawn because crews only come monthly. Gerald Korb, 78, a retiree, said he is still waiting for the company to move power poles and transformers that he fears could fall on his home during the storm.

“I bought a place and now they’re forcing all this on us,” said Korb, who stopped paying rent in protest. “They are absentee landlords what they are.”

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