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MHPros, Community Owner-Operators, Take Note: Happy, Concerned Resident Leaders, Elected Official’s Perspectives – What Lies Ahead?

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In publishing in this report two letters from resident-leaders below, it should not be assumed that we thereby agree with all that is said.  The views are those of their respective authors. They are shared precisely to present the thinking of resident leaders, so that manufactured home community professionals and others in our industry may better grasp such views and concerns.

 

This letter will be followed by second one.  That will then be followed by some brief analysis. The authors of these letters, to our understanding, are readers at MHLivingNews.com.  These have not yet been published there, but we may opt to do so in the near future.

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The first of two emailed comments follows.

1)  

Letter To The Editor

            Two years ago this month, my husband and I bought a new Clayton manufactured home in Mobil Country Club, Rancho Cordova. Being retired, and my husband a veteran, we made the decision to go into a manufactured home in a senior park for the following reasons.     

            1. Affordability of space rents ($664) vs. apartment rents ($1200 +)

            2. We had a large dog, which most apartments only allow small dogs

            3. We like the community feel of a senior park

            4. Affordable housing for living on fixed income from Social Security 

            We moved in and love our new home. It is perfect us. Our neighbors are friendly and  we all watch out for each other. There is a monthly dinner and breakfast and lots of activities in the clubhouse. Everyone keeps up their homes and landscaping. We landscaped our front and side yards. We thought our decision was one of the best we’ve made. 

            I became involved with the Home Owners Association (HOA) and slowly discovered the dark side of living in a manufactured home park owned by investors. Here was our first clue of things to come: 

            We bought the home from Storz Realty, who also manages the park under Storz Management Co.  When we were approved for the park, I asked the onsite manager what the space rent increases were and how often rents went up. I was told rents went up just once a year and only by $10 – $20 month.  We thought that was manageable on our fixed income.

            On our October 2017 invoice, our space rent was listed at $699. I went up to the office to let them know there was a mistake on the invoice, our rent was $664. I was told that a rent increase of $35 had been implemented, but since we were new to the park, the increase would take effect December 1, 2017. This was a space rent increase within 3 months of moving in. The space rent does not include any utilities.

            December 1, 2018, space rents increased $50 to $749.  A week ago we received notice that December 1, 2019 space rent goes up $46 to $795 and some who moved in after the 2018 increase are paying $10 more per month, $759. They also received a $46 increase to $805 per month.

            That is an increase in space rent of 18.56% vs Social Security COLA Increase of 4.83% over the same three years.

            After the 2018 rent increase notice, the HOA conducted a survey of residents, using HUD’s guidelines, on the cost of rent/utilities vs income (we included mortgage payments where applicable, as we own our homes and many residents have mortgages) Here is the result:

                                                Moderately Burdened                         Severely Burdened

            Under 30%                    30% to 49%                                      50% or more

               11%                                      46%                                                   43%

 

            The HOA invited Storz Management to meet with the residents to discuss the increase. Storz management couldn’t fit the meeting into their schedule, thus, did not meet with the residents. When I spoke to a Storz Representative about the rent increase and how it was hurting seniors and veterans on fixed incomes, his response was, “Well, then their kids and family need to step up and help them. After all the investors want their money!”

            One more interesting bit of information, I read in an article, dated January 2015, from the Sacramento Business Journal and Storz Management (who owns our park under Country Club Investors, as well as manages it) refinanced the property for $15 million.  Evidently the investors are getting their money and our rent increase(s) goes to paying off their loan — instead of improvements in the park. This is very common for investors to do this.

            Although we still love our home and our neighbors, our great idea of clean, and affordable housing, in a wonderful senior community, it is not quite what we envisioned and hoped for. We thought this would be our last home, allowing us to enjoy our senior years. Unless we can get Space Rent Stabilization enacted in our city or state, for all manufactured homeowners, we figure we have one more year before we, like many other seniors and veterans in the park, will need to sell our home and look for a new home and life outside of California.

Helen C. Fredericks
Manufactured Home Owner
Secretary
Mobil Country Club Home Owners Association
Rancho Cordova, CA

 

— End of letter to the editor of MHLivingNews. —

Here is another message from a different resident leader, which specifically is in response to the MHLivingNews article linked below. The same disclaimer at the top applies here or to other sources cited.

FrankRolfeSaysWhyYouShouldNeverBuildMobileHomeParkSeriouslyFactCheckAnalysisManufacturedHomeLivingNews
https://www.manufacturedhomelivingnews.com/frank-rolfe-says-why-you-should-never-build-a-mobile-home-park-seriously-fact-check-and-analysis/

The name ‘Tony’ in the emailed message below is a reference to our publisher, L. A. ‘Tony’ Kovach. The highlighting was added by MHProNews to emphasize that point, but is not in the original. Where the … appears below a duplication of the word ‘community’ – an apparent typo – has been edited out for clarity.

— Start of second hereby published message to MHLivingNews. —

ExtendedQuoteSymbolSBManufacturedHomeProNews
Start of extended quote from the source shown.

Tony, 

Unless the market is flooded with affordable housing rent control is needed, otherwise investors are taking advantage of home owners who pay for moving their homes or taking a huge loss when selling. As an elected official, I see money flowing from the hands of home owners who can’t spend in the rent increases in the local economy at Retail and Service Businesses, and Restaurants, etc.

Worse, the investors don’t invest in the States and don’t pay personal State income taxes.  Some domestic community…owners may re-invest, but not that much. With many inequities in Delaware law, they can pass increase taxes to the home owners that never goes down if taxes do.

The reason why Delaware’s Laws are so holey, can be laid at the door of Campaign Contributions, available to be reviewed on Followthemoney.org.  

If leased land home owners would wake up and vote they would discover votes mean more than money.

As I see it, taxpayers are being asked to subsidize affordable housing in increasing amounts whereas leased land home owners are not, They should be protected by fair but enforceable laws.  Housing is more like a utility.  Profit is necessary but It requires oversight as utilities do. 

Quote if you desire. 

Fred Neil
3rd District
Dover, DE

— End of second message to MHLivingNews. —

 

A prior report by MHProNews that cited Councilman Neil is linked below. 

Resident Councilman leads charge for new law that Manufactured Home Community Owners, Industry Professionals say Harms All

 

The video below reflects the argument by community owners from the Western Manufactured Housing Communities Association (WMA).

 

 

Note that they allude to the need for more communities being developed? Bear in mind, that MHProNews has critiqued some items from WMA, but this one is an example of the principle of wheat and chaff.

It is worth noting that ROC USA’s president Paul Bradley likewise didn’t embrace rent control, yet he is clearly an advocate for resident protections.

 

PaulBradleyPresPhotoROCUSALogoRentControlManufacturedHomeLandLeaseCommunties-768x607

MHProNews Initial Analysis

MHLivingNews recently did a deeper dive into Frank Rolfe’s position on why no new manufactured home communities should be built.  That failure to do more developing is arguably part of the problem for Helen Fredericks, and growing numbers of residents like her.

MHProNews understands the desire by some to a have rent control. One might craft – in theory – a program that could be a bridge until federal, state and/or local action removes the road-blocks that keep those that want to develop with affordable manufactured homes from doing so.

Neil observed: “Unless the market is flooded with affordable housing rent control is needed…”

In a sentence, Neil got in the first part of that line to the cause of the ‘need’ for rent control.  There must be millions of more affordable housing options, as scores of researchers agree.  For owners of manufactured homes, that means more privately owned and land-lease community sites needs to be made available.

With those in mind, ponder the prior letter from Marty Lavin, J.D. to MHProNews.  As the WMA pointed out, there is a relationship between rent control and community closures. 

MartyLavinJDMobileHomeParkManufacturedHomeCommunityClosuresMHProNews
See the entire commentary at this link here. https://www.manufacturedhomepronews.com/industryvoices/manufactured-home-communities-aka-mobile-home-park-closures-viewpoint-by-marty-lavin/

 

Then, ponder anew the points made by the Manufactured Housing Association for Regulatory Reform, linked below.

 

MHARRLaunchesFightingDiscriminatoryZoningMandatesManufacturedHousingProject
https://manufacturedhousingassociationregulatoryreform.org/mharr-launches-fighting-discriminatory-zoning-mandates-manufactured-housing-project/

MHProNews understands the rationale or desire for rent control.  It may be that something like rent control as an emergency and temporary measure – as occurs during emergency declarations to keep price gouging from occurring – may be useful to protect the interests of those who through no fault of their own suddenly find themselves in a land lease community that one month was affordable to them, and then after a sale, suddenly becomes unaffordable.  That is a debate worth having.

But the long-term solution ought to be to including the following, in no specific order of importance:

·        foster more resident ownership where that is practical, in a fashion that respects the rights of all involved.

·        Full enforcement of the Manufactured Housing Improvement Act of 2000 (MHIA), so that more developing of sites occurs and are made available.

·        Use antitrust and other existing laws to break up the purported bad actors that are bidding up the costs on properties that are fueling an image issue for the entire industry, not just those who are actually engaged in ‘predatory capitalist’ practices.

Something might be legal, and still may not be moral or prudent for the long term interests of a business or industry. But that doesn’t stop short term thinker from doing slash and burn tactics that let them get in, get out, and make significant profits while causing financial harm to the residents of the communities that they acquired.

A balance is needed, and this article should be viewed as the start of a professional conversation that fuels long-term solutions, while protecting the interests of those who don’t have a choice, and operated fine until a new owner suddenly and sharply raises site fees.

The free market and the interests of ethical people in the mix can be found.That’s all she wrote on this second episode today of manufactured housing’s runaway, most-read Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © Thank you for making and keeping us #1. ## (News, analysis, inspiration, and commentary.)

SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach for MHProNews.com.
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.

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