When we moved into a manufactured home community last year, we rejoiced over the massive reduction of our monthly housing expenses after getting rid of our mortgage. However, since then we have come to understand that others in this community are not happy with the current state of affairs. Immoderate Rent Increases every December are destroying the lives of many in our community.
In 2017 the rent increased from $664 to $699, a 6.64% increase — Social Security 0.3%
In 2018 the rent increased from $699 to $749, a 7% increase — Social Security 2.8%
The 2019 announcement will come in August and everyone is bracing for another $50 increase.
The impact on our residents
In the fall of 2018, the Home Owners Association (HOA) put together a survey to see how residents of our community, commonly but inaccurately called a mobile home park by many, would be affected by the 2018 rent increase proposal. The response was about 25%. From the answers they received, here is how our community, with over 400 households, stood based on HUD standards related to the percent of their income that is spent on housing costs.
| HUD Standard | HUD Interpretation | Percentage in this Category |
|---|---|---|
| Under 30% | Not Burdened | 11% |
| 30% to 40% | Moderately Burdened | 38% |
| Over 50% | Severely Burdened | 41% |
Of the 38% moderately burdened: 1/2 are in the 40% to 49% range. So one more rent increase will put them into the severely burdened category. Of the 41% who are severely burdened: 1/3 are at 80% to 100% of their income! If this year ends with another $50 increase, what will happen to these fellow residents?
Because we own our homes, yet rent the land that our homes are sited on, the survey instructed anyone who had a mortgage payment to include that amount in the equation. We also pay taxes on our homes and pay for all repairs. Finally, we are expected by the community management company to improve the land around our homes, via landscaping, at our own cost.
The unique situation of MH Space renters
Because they rent the site or lot their home occupies, manufacturing home community residents are in a unique situation. It costs several thousands of dollars to move a manufactured home to a new location. Those thousand dollars are sums that these people cannot afford.
The community we live in is age restricted, you must be over 55 to own a home here. We are talking about seniors and veterans who are potentially being priced by site fee increases right out of their homes. They are being forced into an “economic eviction”.
We are not alone.
This scenario is not isolated to our community. In fact, it appears we are luckier than many other people in our area.
This chart came from John Bertaut, GSMOL Vice President Zone A.
Can you imagine living on a fixed income and having your rent go up 62% in a five year period? I don’t understand how the managers of the Placerville location can sleep at night.
But this scenario is unfolding in other parts of the U.S. too. Senator Elizabeth Warren and Last Week Tonight with John Oliver’s viral, but misnamed video, dubbed “Mobile Homes” underscored similar challenges in other parts of the U.S.
Why is this happening?
The answer is simple. No competition.
I will have to address this in another post, but the bottom line is simple. The zoning, regulatory and banking environments have made it difficult to open new communities. Many of the older communities were family operated. They are being bought out by predatory business enterprises that see quick easy money to be made. Unfortunately, many of these amoral investors do not care about those they trample under their feet, as long as they get their percentage of the blood money.
Back in August of 2018, the acting President of the HOA asked a representative of the management team at our community about the next rent increase. He would only say that there would be a notice about the rent increase in September. When she stated that the rent increases were making it harder for some of the residents, who are on a fixed income, his reply was, “It’s time for their kids or families to help them. The investors want their money.” He obviously was only thinking about his job, his employers and not his customers, the residents of the community.
The solution, in short, is to address the market imbalance that exists between land-lease community operators and the residents who years ago could have turned to new developers as an exit strategy. When new land-lease communities or homeowner owned site developments are opening, the developers of those properties are looking for new tenants. Historically, they offered residents of other developments an opportunity to move their home to the new development at no cost. If predatory community operators thought that raising site fees too dramatically would cost them more than it earned them, they’d have good reasons not to behave in that manner.
That is why the Manufactured Housing Association for Regulatory Reform’s (MHARR) initiative to spark new development and new siting options is arguably so important. Learn more at this link here.
Some comment from the residents:
I will close with comments submitted by some of our community members when they answered the survey. As you read these, remember that we were one of the least impacted sites. The situation in some of the other communities is much worse.
“My 401K has run out, living on Social Security. After 23 years of rent increases, I think it is time for a break, I am afraid I am going to lose my home.”
“I’m not asking to lower my rent, just lower the amount of the increase to an affordable amount.”
“If I didn’t get help from a friend, I could not stay in the park. 100% of my income now goes to rent and utilities.”
“At 75 years old, I must find a job. I am on a fixed income. 75% of my income goes to rent/utilities”
“With the $50 rent increase, which we cannot afford, we will have to move. We have lived here since 1987.”
“Living on a fixed income and cannot afford these large rent increases. Last months rent/utilities were $880, leaving $49 dollars to live on.”
“100% of my income goes to rent & utilities – I have no money to live on.”
“When I first moved in here, I was told rent increases would be $10 to $20 a month. Do not have the money to make necessary repairs to my home.”
“90% of my income goes to rent & utilities, even when I get a 10% discount. My son has helped me with food and repairs.”
What was once an affordable housing solution is now becoming a nightmare for many. It is important to look to long-term solutions, not band-aids. That should start with immediate federal and state investigations into allegations of collusion that have led to these tragic situations.