LIBERTY, Mo. — Over her 25 years living in a quiet suburban mobile home park, Kristi Peterman got to know the neighbors directly next door and a few across the street.

But since she and her neighbors collectively purchased the sprawling park outside of Kansas City from its longtime owner in 2021, she’s gotten to know just about every resident.

“It’s a community, and not just a neighborhood,” she said. “A neighborhood is a group of houses or homes that are in proximity of each other. A community is something entirely different.”

Housing prices are soaring across the country, and the shortage of affordable housing is a primary concern for many voters. As the crisis continues, an increasing number of policymakers are championing laws that promote the type of collective ownership at Liberty Landing Cooperative. Manufactured homes, long known as mobile homes, are widely viewed as the last bastion of affordable housing.

Millions of Americans own mobile homes but rent the ground beneath them. And despite the “mobile” moniker, these factory-built homes are difficult and costly to relocate. That makes owners of such homes particularly susceptible to rent hikes — especially as longtime communities get bought up by big investors.

Residents at Liberty Landing were “phenomenally lucky,” Peterman said. The park’s longtime owner was looking to get out of the business and suggested the resident-owned model. Working with a nonprofit organization, residents bought the park by securing a $9.5 million loan — debt that is being repaid by monthly lot rents.

Though they hired a property management firm, co-op board members, including Peterman, are now responsible for the finances and upkeep of the park. Like a homeowners association, they ensure residents are maintaining their lawns and homes. And the board evicts those who neglect their property or don’t make rent payments.

The co-op requires more work from residents, Peterman said, but assures they will control their own destiny.

“We really try hard not to have people come in with a renter’s mentality, because it’s a lot different than just going in somewhere and paying your rent,” she said. “You’re an owner here.”

Earlier this year, the federal government made available $225 million in grants for improvements at mobile home communities, including those owned by residents, and announced plans to allow resident-owned parks to access federally insured financing to keep rents low or make improvements.

But park owners and a leading trade organization for manufactured homes and park owners question the actual benefits of resident ownership and have expressed concern over governments tipping the scales in favor of the model over private ownership.

States embrace resident ownership

Because they don’t own the land beneath their homes, mobile home residents are at the mercy of the park’s owners, who could raise their rents or even shut down the park altogether as the land is redeveloped.

Currently, 12 private equity funds own more than 1,300 American mobile home communities, home to more than 250,000 lots, according to the Private Equity Stakeholder Project, a nonprofit watchdog group that tracks the impact of private equity investors.

It can cost thousands of dollars to move a manufactured home, and some older models are essentially considered immobile. Without long-term land leases, that leaves many residents vulnerable, said Carolyn Carter, deputy director of the National Consumer Law Center.

“Residents in manufactured home communities, while they’re subject to a lot of the same abuses as apartment renters, they need even more protection,” she said.

Currently, 22 states have laws requiring or encouraging owners of manufactured home parks to give homeowners the opportunity to purchase their land collectively. Those laws can vary wildly, with some requiring that the residents be given the right of first refusal, while others simply require park owners to provide notice of their intent to sell.

“There’s lots of interest in the states,” Carter said. “More than I’ve ever seen.”

Last year, six states enacted or strengthened laws encouraging resident ownership, Carter said. This year, Illinois passed legislation requiring community owners to give residents advanced notice of potential sales and an opportunity to purchase the park collectively.

Last month, New Jersey Democratic Assemblyman David Bailey Jr. introduced a bill to strengthen the state’s resident ownership law after visiting several mobile home communities.

“This model works. It has worked. It’s extremely successful,” Bailey said.

A bill passed in Maine last year requires park owners to give residents and the state 60 days’ notice of a potential sale. The owner also must disclose the sale price and give residents the option to make their own offer and “negotiate in good faith.”

“For me, it was a matter of fairness and providing an option for people in that situation, so they don’t lose their home,” said Maine Democratic state Rep. Traci Gere, who sponsored the bill.

Residents in Brunswick, Maine, were the first to benefit from the new law. They paid $26.3 million, raised through loans and grant money, to purchase the Linnhaven Mobile Home Center, which has nearly 300 homes.

“It’s an example to others — not only in Maine, but across the country — that you can do this and you can take control of your own futures,” Gere said. “And it’s such an empowering feeling for everybody.”

But park owners have pushed back on some of these laws, which they argue can complicate sales. Another mobile home community owner in Maine, for example, told The New York Times that the notification and negotiation process can drag out the sale, creating a “horrible, horrible experience.”

And the industry doesn’t necessarily agree that resident ownership is good for homeowners.

“In some cases, it could be beneficial to the residents, and there are other cases where a lot of problems can come from that,” said Lesli Gooch, the chief executive officer of the Manufactured Housing Institute, a trade group that includes manufacturers, retailers and community owners.

She said cooperatively owned communities may not have the same resources available to private owners to invest in long-term maintenance and infrastructure needs. And many residents just don’t want to be in the business of property management.

There are various structures of resident-owned communities involving assistance from nonprofits or government groups. And homeowners may never see a financial return on the purchase of land.

“The residents need to make sure that they understand what they’re getting into,” Gooch said. “And so, if there’s legislation that puts the finger on the scale toward one form of ownership over another, we are concerned about that.”

‘The stigma is changing’

Manufactured homes face unique financing and land use challenges — not to mention growing concerns over their ability to withstand disasters in the face of climate change. But many site-built homes face the same issues as those built in factories, said Arica Young, an associate director at the Lincoln Institute of Land Policy, a research organization that studies the issue and advocates for the use of manufactured homes.

“Given how critical our housing issue is, we need everything on the table,” she said.

On a square-foot basis, manufactured homes cost 45% less to build than site-built homes, according to Freddie Mac.

But many communities have resisted their use, either with outright bans or with more subtle regulations on design features such as roof pitch or windows that effectively keep out factory-built homes, Young said.

“A lot of the regulations, a lot of the unease around it, comes from stigma,” she said. “That is the underlying problem that I think not a lot of people are willing to talk about.”

Local opposition has pushed some legislatures to step in.

This year, Maine and Maryland enacted laws allowing manufactured housing in any location that allows single-family homes. And in New Hampshire, a bill was signed into law that requires municipalities to provide “reasonable and realistic” opportunities for new manufactured housing parks and blocked zoning codes that effectively bar housing parks.

“I think the stigma is changing, but slowly,” said Republican state Rep. Joe Alexander Jr., who sponsored the New Hampshire legislation.

Alexander views manufactured homes as a viable option for many young people, who simply can’t afford to purchase a site-built home in a high-cost state such as New Hampshire.

Aside from their affordability, he said, manufactured homes are more energy efficient than many other homes. He hopes to bring a manufactured home to the statehouse lawn in Concord next year to show off their benefits.

“These units are a lot nicer than some of the old trailer park ideas from the past,” he said.

‘What’s the goal?’

In Massachusetts, mobile home park owner Tom Lennon came under fire for raising mobile home lot rent by nearly 150%. In February, the monthly rent at his West Street Village Mobile Home Community in Ludlow rose from $207 to $503.06.

That move was sanctioned by the town’s mobile home rent review board — a decision being challenged in court.

Lennon, who owns eight mobile home communities, said that increase was needed because the previous owner was charging too little for too long — the park has only seen two rent hikes over the last five decades, he said. That left the park poorly maintained, he said, with a backlog of costly upgrades needed. Since his purchase, Lennon has paved roads, added fencing and installed new mailboxes, among other improvements.

Lennon, who also sells mobile homes, noted they offer big cost savings compared with other types of housing.

But residents in co-ops are not building long-term wealth on their investment in the land because they’re still paying rent on their lot, he said.

“What’s the goal for these people?” he said. “There isn’t one.”

Mike Bullard, vice president of communications at ROC USA, an organization that works with mobile-home owners across the country, acknowledged that owners generally don’t buy their parks with hopes of a big financial return. They do it to keep their rents affordable and ensure stability over the long term, he said.

The mobile home park in Missouri, for example, doesn’t expect residents to ever fully pay off its debt. Rather, the co-op plans to refinance over time and draw on equity to fund needed infrastructure improvements.

ROC USA has helped create more than 330 resident-owned parks across the country. Bullard said the organization generally helps communities secure a 10-year loan with a balloon payment toward the end. The idea is that communities build a financial track record within a few years of conversion and can refinance in traditional lending markets.

“They have the equity, so they can pull some equity out and repave their roads or replace their, you know, septic systems,” he said. “That’s a sound and smart approach.”

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