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For years, so-called mobile homes have been a major pathway toward ownership of affordable housing. The cost of a new manufactured home averages $70,000. About 20 million Americans live in them. But their communities carry what some say is an undeserved stigma that goes with the name “trailer park.” And in the past few years the affordability equation has changed for many who own the homes but not the land they sit on. Rents are rising, often rapidly due to a new breed of investor owners for mobile home parks. Meadowbrook is the name of one community, in Hudson, Mass., where residents are trying to avoid that potential fate. When the family that founded the park announced a plan to sell the land to an investor, residents like Wayne Grant took action. They formed a cooperative to buy up the land for themselves instead, at the same price. If all goes to plan, “we will be in control of what goes on here,” Mr. Grant says. “We’re not looking for profits. We’re looking to be a nice, safe, happy place.”
Diane Buchanan was headed out her door to an evening church service when she heard the news. “The park is sold,” a worried resident told her.
The park is Meadowbrook, an over-55s community of mobile homes where Ms. Buchanan, a retired bookkeeper, has lived for 18 years. Like other homeowners, she paid a monthly rent to the family-owned company that built the park in the 1970s. Now the family had written to the residents to inform them of a pending $8.25 million sale to an outside investor.
By the time Buchanan got the letter dated May 17 there was rising panic among neighbors over the news. Trailer parks have become popular investments, and a new owner would likely seek to make a higher return. That could mean higher rents, which would squeeze out low-income residents, or even the demolition of the park to make way for more profitable properties.
“I read it and I said, the park isn’t sold yet,” says Buchanan. “It was a proposal.”
Under Massachusetts law, the residents of Meadowbrook had first right to buy the land on which their 193 modest factory-made houses sat. If they could come up with $8.25 million, it was theirs. Which is how Buchanan, as treasurer of the residents association, found herself on a crash course in how to convert a trailer park into a resident-owned cooperative. “The whole purpose is to own the land. That way we have some control over it,” she says.
At a time of rising concern over affordable housing and income inequality, mobile home parks have emerged as a potential opportunity – and a potential pitfall. As many as 20 million Americans live in mobile homes, the largest number in rural tracts in the South and Southwest. A selling point is cost: New manufactured homes cost less than half as much to build as traditional homes.
While some buyers own their land, others live in designated parks like Meadowbrook. The risk is that rents go up and park owners can change. And far from being mobile – as the name for their homes suggests – residents who own their homes can find themselves with nowhere to go.
“They walk around with a pit in their stomach about what will happen if the wrong person buys this community,” says Paul Bradley, president of ROC USA, a nonprofit in New Hampshire that provides technical support and mortgage financing for mobile home cooperatives.
Five months later, Meadowbrook was on the verge of a successful buyout. Nearly everyone living in the park had agreed to pay $25 for a share in the new cooperative; Buchanan had been chosen to serve as treasurer. The next step was to hold an all-residents meeting at a local church to vote on an initial budget and choose a management company for the park. After that, the cooperative could unlock the financing they need to close the deal.
But first they needed those votes. And the board’s proposed buyout was facing a mini-revolt by disgruntled residents, a revolt allegedly backed by the putative park investor. Tensions in the park ran so high that the board had to ask for a local policeman to mind the church door.
Rise of cooperatives
Since 2008, ROC USA and its affiliates have helped over 130 parks to go coop, building on more than two decades of similar conversions in New Hampshire, a pioneer in cooperative mobile housing. Taken together, the total number of mobile homes put under coop ownership is 14,559. None of the coops has defaulted on its loans or reverted to outside ownership.
Even as most housing markets have recovered from the last precipitous crash, the pace of new single-family construction continues to lag behind previous economic expansions. The shortage has pushed up prices in many markets. In Massachusetts, the average single-family home costs $365,000, and nearly all towns and cities have a dearth of affordable units for sale or rent.
In the case of Meadowbrook, which is virtually all owner-occupied and has a waiting list of potential buyers, a two-bedroom house goes for around $100,000. A similar house elsewhere in Hudson, a town of 20,000 an hour’s drive from Boston, costs two or three times as much.
Absent a surge in new low-cost housing, mobile home parks offer an affordable alternative, which is why Mr. Bradley wants to make sure that coop ownership is on the table. “We’re preserving properties that are otherwise at risk of closure or displacement,” he says.
Not all parks are suited for coop conversions, says Kate MacTavish, a professor of human development and family sciences at Oregon State University. Oregon is one of several states that give residents the right to buy their communities, which creates an opening for ROC USA and its affiliates to work.
Some parks serve low-income families, including renters, and may be more transient and less cohesive, complicating any buyout. “The park has to have the human capital within their resident population and the desire to take on the management side,” says Ms. MacTavish, author of “Singlewide, Chasing the American Dream in a Rural Trailer Park.”
Even before she moved into her house with her now-deceased husband, Buchanan had her eye on it. It’s a two-bed, two-bath home, and when she sits outside on her swing chair she can watch the chickadees and goldfinches cross the wooded brook that hems the park’s southern border. Her street, Teresa Drive, like the others, is named for a child of the family that opened Meadowbrook in 1970.
Every year, the family held a Christmas Party for residents. Rents did go up, but not every year and then only by $25, which seemed manageable for retirees living on social security. Trash was collected, snow was plowed. “You felt safe and secure here with that family being in charge,” says Buchanan.
As a mobile home community for over-55s, Meadowbrook serves a growing need for affordable senior housing in New England, which skews older than other regions. More than half of all households are headed by someone aged 50 or older, according to a new report by the Harvard Joint Center for Housing Studies.
By now, the original owners of Meadowbrook are themselves retirees living on Cape Cod. The May 17 letter was the first that residents knew of the planned sale. It informed residents that rents would rise to $550 a month, then be frozen under new ownership for two years.
Wayne Grant, who had bought his house in 2010 and had just taken over as president of the residents association, was suspicious. “The guy’s an investor. The rent is going up,” he says.
The investor rush
That mobile home parks have become hot investments is in part an outgrowth of the 2007-08 housing crash. Millions lost their homes in the subsequent recession, and investors piled into apartments to take advantage of demand for rentals. After apartment yields leveled off, the same investors turned to mobile home parks, says Stu Silver, a Florida-based real-estate investor and author who runs trainings for aspiring buyers.
This rush of new money marks a break from the old model of ownership when local families converted part of their land into trailer parks and had a stake in them. “You were more likely to balance the need for them to make a profit with the idea of the community,” says MacTavish.
Mr. Silver recommends investing in parks occupied by homeowners, as opposed to renters, because they incur fewer obligations. “They own the mobile home. I own the land. If their oven’s not working on Thanksgiving morning it’s not my problem,” he says. Another bonus: a mobile home is akin to a giant security deposit. “That home is stuck there.”
In theory, a disgruntled homeowner could move out. As the name suggests, trailers were once designed to be towed by cars, but the cost of moving modern houses is prohibitive, and a mover needs to find a new site at a time when the overall number of parks is shrinking, not expanding. “Most people don’t look too kindly on mobile home parks,” says Silver.
One answer to the affordability puzzle
In 2017, 93,000 new manufactured houses were built, of which about one-third were installed in mobile home communities, either as replacement units or on new lots. The average price of these homes was $70,600, according to the Manufactured Housing Institute, an industry group. At its peak in the 1990s, manufactured homes made up 1 in 4 new single-family starts. Today the ratio is 1 in 10.
Bradley reckons manufactured homes can be part of the solution to housing affordability, and not just in preserving existing parks like Meadowbrook. That means overhauling mortgage financing so it’s easier to develop a mobile home community, but also changing how Americans see this type of housing, which is often perceived as synonymous with poverty and disorder.
Grant, who used to work as a custodian at Raytheon, says the social stigma never bothered him. “I saw this place and said this is a nice place to retire,” he says. (He still works as a school crossing guard in Hudson.) His single-fronted house was built in 1974, and like others has side extensions that make it feel roomier inside. He’s also added a wooden deck and garden shed.
The stereotypical trashy trailer parks that Grant still sees on TV seem a world away from the well-maintained streets and small lots of Meadowbrook. “It’s hard to explain to people what this place is. They have to come down and see it,” he says.
As president of the cooperative, Grant has worked for months with Massachusetts-based Cooperative Development Institute, an ROC affiliate, to prepare the legal groundwork for the buyout. If all goes to plan, “we will be in control of what goes on here. We’re not looking for profits. We’re looking to be a nice, safe, happy place.”
On Tuesday night, residents filed into the church to hear the board present their budget and to vote on its adoption. Representatives from three other resident-owned parks in Massachusetts spoke of their successful conversions. The eleventh-hour revolt fizzled; only one person spoke in opposition. Then the residents filled out their ballots and left, some no doubt anxious to be home in time for the first pitch in the World Series being played at Boston’s Fenway Park.
Buchanan and her colleagues tallied the votes. The budget passed, 145 to 12. Her dream of going coop is one big step closer to reality.