While much of the conversation around real estate in Idaho has focused on how rising rents and home prices affect those who live in apartment communities and single-family homes, one segment of the housing population that is frequently left out is those living in manufactured or mobile homes.
Housing advocates say manufactured home communities are one of the last affordable housing options available to Idahoans and are also some of the most vulnerable to displacement when developers or investors purchase them. That is even more true in today’s market, when home values across the state have increased significantly in the past year.
One of the areas with the most significant property value growth is Kootenai County, where a manufactured home community called Oak Crest is dealing with the consequences of that growth. An investment company based in Orem, Utah, called Havenpark Communities purchased Oak Crest a little over a year ago, and rising rents prompted 34 residents to reach out to the Idaho Capital Sun anonymously about the difficulty of paying for those increases.
Havenpark Capital Partners has acquired other mobile home parks around the country, including in Iowa, and increased lot rents by as much as 69%. The company has taken a different approach with rents at Oak Crest, allowing existing residents to be grandfathered into a lower rent while new residents are charged more.
Mobile or manufactured homes are most often owned in the same way a vehicle is owned, with a title and ownership of the home itself. In most cases, the owner pays lot rent where the home is parked or placed, which is typically much lower than the average rent for an apartment or rental home.
Lot rent jumps at North Idaho manufactured home park
According to letters from residents of Oak Crest, lot rent for existing renters increased about 23% from $365 in August 2021 to $447, which will take effect Nov. 1. Prior to Havenpark’s ownership, residents say they were told rent would increase 2-3% per year.
The letters also say the lot rent for new residents has increased 33% from $595 per month in August 2021 to $795 per month, which residents say makes it difficult to sell the homes to prospective buyers if they are thinking about moving elsewhere.
Those who wrote letters said they are on fixed incomes with Social Security and disability benefits, and the new rents will create financial burdens that will be difficult to shoulder, plus few options for recourse. Several letters were from elderly and disabled veterans and other retired people in their 70s and 80s who said the new rent will cost as much as 60% of their monthly income.
“Affordable housing is very difficult to find, and mobile home parks are our last refuge in Kootenai County,” one letter said. “With property prices increasing, affordable housing (is) even more important here and throughout our state. Because of this, affordable housing needs to be protected or we will have increased homelessness here as well as other counties in our great state of Idaho.”
In response to the concerns, Oak Crest management distributed letters to residents saying the increases are part of bringing the community up to market rates and making improvements to sections of the road throughout the park, adding new amenities such as playgrounds and sports courts and installing new signage. The company also said it was one of three potential buyers of Oak Crest, and the seller chose Havenpark because they plan to keep it as a manufactured home community for “decades to come.”
“In order for us to preserve Oak Crest as a manufactured home community, we had to pay a market price that was competitive with what the development companies were offering,” the letter said.
The letter added that inflation contributed to the rent increases, and they are hopeful inflation will slow down to allow much lower rent increases moving forward.
“While our plan is to issue very reasonable annual rent increases to manage upkeep and keep up with ongoing costs, we want to clarify that there is no plan for our ‘grandfathered’ residents to ever pay the same rental rate as our market rent residents. We are intentionally taking this approach to make annual rent increases more manageable for our long-time and loyal residents,” the letter said.
City of Boise purchased mobile home park as part of preservation pilot project
Nicki Hellenkamp, housing adviser to Boise Mayor Lauren McLean, said rough estimates show there are about 46 mobile or manufactured home parks across Boise, making up more than 2,500 units and about 2.5% of the city’s housing market. That’s down slightly from 50 communities with about 2,700 units as measured by a study from Boise State University in 2007.
In an effort to preserve the affordable housing of mobile homes, Hellenkamp said the city of Boise purchased Sage Mobile Home Park at the end of August, a 2-acre park of about 26 homes on the Boise Bench with access to public transportation. Hellenkamp said that is one way the city has tried to avoid situations where developers or investors purchase a mobile home park and increase rents or displace residents, who are often required to either move their homes or demolish them at their own cost.
That purchase will also allow the city to pilot a housing preservation program with the Boise City/Ada County Housing Authorities to gauge the successfulness of this management model, Hellenkamp said.
“We can build and build new units until the cows come home, but if we’re not also looking at the reality, which is that we’re losing these affordable units, then we’re not making all of the progress we would hope we’d be,” she said.
Deanna Watson, executive director of the Boise City/Ada County Housing Authorities, said in the 26 years she has been working with the housing authority, she has seen the market squeeze out many mobile home residents.
“It always breaks my heart, because a lot of times people who purchase a mobile home are making a choice to live independently without a lot of support services, but then when the rug gets pulled out from underneath them, they don’t have that safety net to hold onto them,” Watson said.
She expects to see more mobile home parks around the state sold to developers in the future, in part because they are often located in prime areas for public transportation and other city amenities.
Residents can look at forming cooperatives in Idaho before being acquired by developers
One option available to mobile home owners who are worried about developers taking over is to form a resident-owned community program, also known as ROC. LEAP Housing Solutions, a Boise nonprofit organization that works on affordable housing efforts, manages 10-year contracts for one ROC in Garden City and one in Caldwell.
A resident-owned community program can be formed by people who own mobile or manufactured homes in one area and come together to create a limited equity cooperative that can purchase the land so that each mobile home owner owns the land instead of paying lot rent to another entity. LEAP helps facilitate the loan for the purchase and contracts with the communities for 10 years to help them become independent operations.
Holly Apsley, ROC program manager for LEAP, said every situation is unique, but there are about 301 examples of the model across the country.
“It’s definitely a growing model because it recognizes that it’s really a win-win solution,” Apsley said. “It requires a lot of due diligence to make sure the sale price would balance out with keeping rents affordable, but they’re still happening across the country.”
It can be difficult to form a ROC after a purchase has already occurred, Apsley said, so it’s helpful when state law requires residents to be notified when the land is for sale.
According to the National Consumer Law Center, “Idaho requires a community owner to give notice to residents within 15 days of entering into a listing agreement with a licensed real estate broker for the sale of the community, but only if the residents have formed a notice for the purpose of purchasing the community and given the community owner an annual written notice listing the names and addresses of three designated members or officers.”
States like Connecticut and Rhode Island, according to the law center, give residents the right of first refusal before selling the community.
Hellenkamp said changes at the state level around the law would help preserve the affordable housing of mobile and manufactured homes and avoid displacing people.
“(Mobile home ownership) has many of the risks of homeownership and not that many of the rewards,” she said. “It’s not real property, it depreciates in value over time the same way a vehicle does. … The idea of stability, the belief that I own something and have some level of control, that is all an illusion, basically, because you don’t own the land. If the landowner makes a decision to sell, you don’t have much recourse.”
Letters from Oak Crest residents also requested help from the Idaho Legislature to take action that would help protect them from losing their homes, saying intervention is needed immediately.
Others made a simple plea for relief.
“In today’s economy, it’s getting more and more difficult for us and a lot of people like us, as you well know,” one of the handwritten letters said. “How can you just move in (and) take every penny from the low income in these ever-more expensive times? I know you have the power to do it, and the legal right to, but how do you have the lack of empathy to do it?”
— This article was originally published on idahocapitalsun.com.