How Wall Street Holds a Gun to the Head of Manufactured Home Residents

Jessica and her family come to court in a panic. Jessica contracted Covid and missed several weeks of work, which caused her to fall behind on the rent she owed to a mobile home park. Now, she and her elderly mother and disabled brother, who live together in the family home, are facing eviction today.

The good news is Jessica and her family came to court with several folded and dog-eared money orders they had cobbled together, which together added up to the rent due. The bad news is that the landlords say they won’t dismiss the eviction case unless Jessica pays for their attorney’s fees, too. Jessica says OK. Oops, the attorney says, we forgot to add on court filing fees to the list, and you have to pay that as well.

It is more of a shake down than negotiation, but Jessica sees no choice but to agree again. “We’ll just have to figure out how to get the money,” she tells me. “We can’t risk getting evicted.”

But even the dismissal of this case won’t eliminate Jessica’s risk. The landlord refuses to let Jessica or any other park resident sign a long-term lease. They insist on keeping everyone on month-to-month terms, meaning the residents can be forced out with as little as 30 days notice.

For Jessica and her neighbors, that is a disastrous prospect. They own their homes, with Jessica paying $37,000 for her home fifteen years ago and putting thousands of dollars and countless hours into improvements, including an attached deck on the back. But they don’t own the land under their home, the so-called “lot” it sits on. For that space, the landlord charges them $470 per month.

The secret about so-called mobile homes like Jessica’s is that they are really not very mobile at all. It can cost as much as $14,000 to move a manufactured home, assuming the home is sturdy enough to move at all and the owner finds another place to site it. Jessica’s home has sat on the lot for more than three decades and she is not at all confident it can be relocated intact. “If we get evicted, we lose everything we have worked for,” she says.

Her landlords are aware. In court we see mobile home park residents who report that park owners have refused to renew leases by the dozens. That leads mobile home owners to abandon their houses, which the park owners snatch up and then resell or lease.

Jessica and her family are among what the trade group Manufactured Housing Institute says are 22 million people—one in every 15 people in the country—living in mobile homes, also known as manufactured housing. (The U.S. Department of Housing and Urban Development (HUD) refers to these homes as mobile homes if they were built before 1976, manufactured homes if they were built later. In our practice and in much of the public discussion, residents and landlords use both terms without much regard to the age of the structure. )

Those homes on average can be purchased for less than one-third the cost of traditional single family homes, making them the largest source of unsubsidized affordable housing in the United States, according to the I’m Home Network, which advocates for policies to protect people living in manufactured housing. Like Jessica, most of those people own the homes—80% of manufactured housing is resident-owned. But, like Jessica, many of those people are economically vulnerable: the median income of manufactured home owners is less than $58,000, just over half as much as the income of more traditional homeowners.

Purchasing a manufactured home does not bring with it the same kind of stability associated with site-built homeownership. If the purchase was financed with a loan, that loan is likely a so-called “chattel” loan, with higher interest rates and a shorter pay-off period more akin to a car loan than a traditional home loan. Lending companies factor in the instability caused when the land underneath the manufactured homes being owned by someone else. That is part of the reason these home depreciate in value in way seldom seen in site-built homes—even though newer manufactured homes have been held to higher construction and safety standards that make them far more durable than older versions.  The personal finance radio host Dave Ramsey calls manufactured homes “a car you can sleep in,” bluntly labeling them a terrible investment.    

“Sell to the Masses, Eat with the Classes”

But that terrible investment for residents creates a money-making opportunity for others. The history of capitalism shows us that when low-income persons have a desperate need,  exploiters will soon step in. As one mobile home park owner says, being the landlord for people like Jessica provides an enticing “sell to the masses, eat with the classes” opportunity.  

These particular masses are all but forced to pay whatever price is charged. Frank Rolfe, whose 250 mobile home parks make him one of the top five owners in the industry, boasts, “We’re like a Waffle House where everyone is chained to the booths.”  Rolfe and his partner also operate Mobile Home University, which provides training and materials to aspiring mobile home landlords. Part of the pitch to sign up for their courses is the gun held to the head of residents like Jessica: “The fact that tenants can’t afford the $5,000 it costs to move a mobile home keeps revenues stable and makes it easy to raise rents without losing any occupancy.”

Some of the world’s wealthiest people have noticed. Investment firms like Blackstone, Apollo Global Management, the Carlyle Group, and Stockbridge Capital Group all have bought large interests in mobile home parks. Warren Buffett owns both the largest manufacturer of mobile homes and some of the largest holders of the high-interest mobile home purchase loans. Equity Lifestyle Properties, a real estate investment trust founded by the multi-billionaire Sam Zell, accused of “gouging grandma” via rent increases and spending millions to resist rent control, is the largest mobile home park landlord in the country.

For these uber-capitalists, part of the attraction is that mobile home park landlords like Zell have significantly less obligations than landlords of traditional housing. All of the maintenance and upkeep of the actual structures is the sole responsibility of the mobile home owners. Mobile home park investor Michael Torres told NPR in 2022, "It's just basically resurfacing roads and having a shared community center. You don't own walls and roofs." The largely passive income opportunity plus the inability of Jessica and other land tenants to easily move makes being their landlord, "the gold standard of investing in property," Torres says.

Yet those park landlords often shirk even the most minimal obligations. That NPR story and others have chronicled flooding, power outages, and sewer back-ups in parks due to neglected maintenance. That neglect is not exactly accidental: at least one landlord company gave its park managers bonuses based in part on keeping repair costs low. The bottom line, Rolfe claims, is that mobile home parks have the highest yield in real estate.

Remarkably, the federal government is helping contribute to those profits. A 2021 NPR story unsubtly titled, “How the Government Helps Investors Buy Mobile Home Parks, Raise Rent, and Evict People” revealed that the government-backed mortgage finance agencies Fannie Mae and Freddie Mac provide billions of dollars in low-interest loans that huge investment companies use to buy the parks. The Lincoln Institute for Land Policy told NPR that Freddie Mac, whose mission is to make housing more affordable, has provided nearly $10 billion in financing to buy over 900 mobile home communities in the last decade.

Perversely, a company spiking rent in one set of parks improves its chances to get more government-backed loans since it boosts cash flow. “"What's ironic about it is that one of the missions of Fannie Mae and Freddie Mac is to help preserve affordable housing," Lincoln Institute’s George McCarthy told NPR. "And they're doing exactly the opposite by helping investors come in and make the most affordable housing in the United States less affordable all the time."

How We Fix This

We can protect mobile home residents, and we should. Residents of mobile homes and advocates like the Lincoln Institute and Mobile Home Action point out that the lower purchase cost for manufactured housing can make it a valuable option for U.S. households if they are protected from exploitation. Common sense proposals include:

Good cause requirements for lease non-renewal or eviction. States like Oregon and Delaware recognize the unique vulnerability of mobile home lot renters like Jessica. So they require lot owners to renew leases unless there is good cause, like non-payment of rent or breaking reasonable rules, not to do so. Investors who own parks know the significance of these protections, which is why Mobile Home University advises prospective landlords to avoid “tenant-friendly” states.

Rent control. Rent control is well-justified in every landlord-tenant relationship, but particularly necessary for mobile-home lots, where landlords openly brag about their unfair bargaining position.  Communities in California,  New Jersey and Massachusetts already have rent control for mobile home lots, and it is has been proposed as a statewide law in Colorado.

Protected rights for residents to purchase mobile home parks. Massachusetts is one of the states that provides mobile home park residents with the first opportunity to purchase the park—often called a right of first refusal—if it is up for sale.

Funding to support residents’ purchasing mobile home parks. The same advocates who rightly criticize Fannie Mae and Freddie Mac for subsidizing big investors’ purchases of mobile home parks are calling for the government-sponsored entities to instead offer those low-interest low-down-payment options to resident groups who want to buy their parks.

As the existing laws and ongoing campaigns show, resident-led advocacy can make a big impact. In September 2021, Freddie Mac announced it would require all future manufactured housing community borrowers to agree to tenant protections like renewals unless good cause, right to cure late rent payments, and the right to sell a manufactured home without onerous requirements by lot owners. There are already about 1,000 resident-owned communities of mobile homes, with many more possible if the right financing is made available.

For all of us pushing to make housing a fully-realized human right, there is an exciting prospect here: mostly white, often rural manufactured housing owners share key interests with the mostly urban, often Black or POC renters of traditional housing. Together, these households can build a powerful coalition that can reshape housing rights in our nation.