Rents soar as investors with big pockets buy trailer parks – Lock Haven Express | Hot Mobile Press


AP Photo/Lauren Petracca Jeremy Ward poses for a portrait outside his home at the Ridgeview Homes mobile home community in Lockport, NY June 23. Ward is one of the Ridgeview residents taking part in a rent strike after the park’s new owners announced a six percent hike in rents. “I moved here because it’s basically the most affordable life,” said Ward, who is disabled and on a steady income.

LOCKPORT, NY (AP) — For as long as anyone can remember, Ridgeview Homes, a family-run RV park in upstate New York, has seen rent increases infrequently.

That all changed in 2018 when corporate owners took over the 65-year-old park, which is nestled in farmland about 30 miles northeast of Buffalo down the street from a fast food joint and a grocery store.

Residents, about half of whom are seniors or disabled on fixed incomes, will take the first two increases. They hoped the recent owner, Cook Properties, would deal with the bourbon-colored drinking water, the sewage gushing in their bathtubs, and the potholed roads.

When that didn’t happen and a new lease with a 6% rent increase was imposed this year, they founded an association. About half of residents launched a rent strike in May, prompting Cook Properties to send out about 30 eviction notices.

“They only care about raising the rent because they only care about the money.” said Jeremy Ward, 49, who survives on just over $1,000 a month in disability payments after his legs suffered nerve damage in a car accident.

He was recently fined $10 for using a leaf blower. “I am disabled,” he said. “You’re not doing your job and I get a violation?”

The plight of Ridgeview residents is playing out nationwide as institutional investors, led by private equity firms and real estate mutual funds and sometimes funded by pension funds, invade to buy trailer parks. Critics claim mortgage giants Fannie Mae and Freddie Mac are fueling the problem by supporting a growing number of investor loans.

The purchases put the local residents in a quandary, because most motorhomes – despite the name – cannot be moved easily or cheaply. Owners are forced to either accept unaffordable rent increases, spend thousands of dollars moving their home, or give it up and lose tens of thousands of dollars they invested.

“These industries, including mobile home park manufacturers, keep promoting these parks, these mobile homes, as affordable housing. But it’s not affordable.” said Benjamin Bellus, an assistant attorney general in Iowa, who said complaints were received “100x” since foreign investors started buying up parks a few years ago.

“You put people in a noose and trap where they are unable to defend themselves.” he added.

Fueled by some of the strongest returns in real estate, investors have stirred up a once-sleepy sector that’s home to more than 22 million mostly low-income Americans in 43,000 communities. Many aggressively advertise the parks to ensure a steady return – by repeatedly raising rents.

There’s also a growing industry with how-to books, webinars, and even a mobile home university offering tips to attract retail investors.

“You’ve gone from an environment where you had a local owner or manager who would take care of things when they needed fixing, to where you had people looking at a cost-benefit analysis, to figure out how to squeeze the dime lowest.” said Bellus. “You associate it with the idea that we can just keep increasing the rent and these people can’t leave.”

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

He was among those who credited Fannie Mae and Freddie Mac for guaranteeing the loans as part of what the lending giants call expanding affordable housing. The Lincoln Institute estimates that since 2014, Freddie Mac alone has committed $9.6 billion to purchase more than 950 communities in 44 states.

A spokesman for Freddie Mac countered that it has purchased loans for less than 3% of the trailer parks nationwide, and about 60% of those are refinances.

Shortly after investors started buying up parks in 2015, lawsuits about double-digit rent increases followed.

In Iowa, Matt Chapman, an RV resident at a park bought by Utah’s Havenpark Communities, said his rent and fees have nearly doubled since 2019. Iowa Legal Aid’s Alex Kornya said rent and fees at another park purchased by Impact Communities rose 87% between 2017 and 2020.

“A lot of the people who lived in the park had a steady income, a disability, Social Security and just wouldn’t be able to keep up,” said Kornya, who was meeting with about 300 angry RV owners at a mega church. “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 rent increases of up to 30%, according to the All Parks Alliance For Change, a state association.

US Senator Jon Tester of Montana, speaking at a Senate hearing this year, recalled tenants complaining about repeated rent increases at a Havenpark development in Great Falls. One resident, Cindy Newman, told The Associated Press that her monthly rent has increased from $117 to almost $400 over a year and eight months — matching the increase over the past 20 years.

In addition to the rent increases, residents complained that they were being inundated with fees for everything from pets to maintenance and mess and speeding fines — all stuffed into leases that can be as long as 50 pages.

Josh Weiss, a spokesman for Havenpark, said the company must calculate applicable market prices when purchasing a park at a fair market price. However, since 2020, the company has moved to cap its rent increases at $50 per month.

“We understand the concern that any rent increase raises among residents, particularly those on fixed incomes.” said Weiss. “While we’re trying to minimize the impact, the financial realities aren’t changing.”

The mobile home industry argues that communities are the cheapest housing option, noting that average rent increases at parks across the country were just over 4% in 2021. Expenditure on improvements was around 11%. They said significant investment would be needed to make improvements to older parks and avoid a sell-off.

“There are some people coming into the room that give us all a bad name, but these are isolated examples and these practices are not common.” said Lesli Gooch, chief executive officer of the Manufactured Housing Institute, the trade association for the industry.

Both sides said the government could do more to help.

The industry wants Federal Housing Administration funding to be made available to residents, many of whom rely on high-interest loans to buy homes that cost an average of $81,900. They also want the US Department of Housing and Urban Development to allow housing credits to be used on RVs.

Resident advocates, including MHAction, want lawmakers to cap rent or require a reason for an increase or eviction — state legislation that succeeded in Delaware this year but failed in Iowa, Colorado and Montana.

They also want Fannie Mae and Freddie Mac to enshrine in loans they repay that rents remain affordable. And they’re helping residents buy their communities, which began in New Hampshire and has reached nearly 300 parks in 20 states.

A spokesman for Freddie Mac said it created a new loan offering that offers incentives to protect renters and made it mandatory for all future mobile home community transactions last year.

At Ridgeview it is unclear how the rent strike will be resolved.

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

Residents, meanwhile, soldier on. Joyce Bayles, an 85-year-old resident, mows her own lawn because teams only show up monthly. Gerald Korb, a 78-year-old retiree, said he’s still waiting for the company to move a power pole and transformer that he fears could topple on his home during a storm.

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



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