How renters can buy mobile home park land before developers

With mobile home communities around the United States a prime target for investors, there is a movement to put park ownership in the hands of the residents who live there.

The resident-owned community model aims to safeguard against mobile home parks’ largest precarity — that people can be ousted at any time when the land beneath their homes is sold to a new owner.

That’s happening in Countrywoods Mobile Home Park in north Charlotte, the community at the center of “Pushed Out,” The Charlotte Observer’s current news series revealing how profit-driven owners have upended what was previously a reliable affordable living option in the region.

“Historically these communities were built on the fringes, in the outskirts of cities,” said Mike Bullard, spokesman for ROC USA, a nonprofit that helps establish resident-owned manufactured home communities. “Then as the cities expand and grow, suddenly that land is much more valuable than it was when they built it.”

That makes it attractive for investors seeking to buy parks, raise rents and cut amenities, experts say, or close the park and build something else entirely. Both paths put residents at risk of displacement.

ROC USA launched in 2008 as a spin-off of a New Hampshire organization that created the first co-op mobile home community in 1984 where residents owned their respective homes and an equal share of the land in the community.

Now there are nearly 300 communities home to about 21,000 households in 20 states, according to the organization. The first North Carolina community was purchased in late 2020 with the help of a local cooperative development organization by the residents of Oak Meadows in Asheboro, a 60-home community about 80 miles northeast of Charlotte.

Investors target mobile homes

It began after a new owner bought the Oak Meadows mobile home community in Asheboro and quickly raised lot rents, said Christopher Alvarez, who moved there with his wife and two daughters around 2017. But the owner wasn’t interested in keeping it long, Alvarez said, and expressed interest in selling it again.

Alvarez knew if the residents didn’t buy it themselves, their situation would only get worse if a corporate owner snapped it up.

“They’re going to treat this as an investment tool” and raise rents, he said. “They don’t have to explain it, it’ll be ‘take it or leave it’ and how many people can afford to leave?”

That has been especially true during the pandemic, Bullard said, as land and rent prices increased, putting a squeeze on tenants and making selling an attractive proposition for park owners. But those looking to buy these parks are often out-of-state investors, who experts say raise rents and frequently displace longtime residents.

ROC helps tenants secure financing for a loan, which is paid back by lot rents.

Security that comes from knowing the park won’t be sold out from under them is huge, Bullard said, recalling a common refrain from residents: “For years we lived with this nagging fear that some day you come home from work and there’s that flier on the door …. and you’ve got 90 days.”

The organization mostly works with low- and moderate-income households and caps per-household buy-in investment at $1,000, though it is often much lower.

Nearly one-third of residents in the communities in the program are extremely low-income, earning no more than 30% of the area median income, which in Charlotte is around $25,000 for a family of four. It’s especially important for those families, Bullard said, to have access to the stability of owning their own communities.

Residents all have voting rights and elect a board, deciding on things like whether to take on infrastructure improvements or add amenities like a playground. And importantly, the residents decide if and when rent goes up.

“There’s a real sense of community,” Bullard said of the process to purchase. “People get to know their neighbors much more than they did before.” ROC USA or a local affiliate organization provides technical assistance and guidance to educate residents and help them before and after the purchase.

Alvarez, who was president of the Oak Meadows resident organization during the purchase process, said his family planned to stay for many years and only moved out when an opportunity to buy another house was too good to pass up.

He still gets three to four calls a week from companies asking about purchasing the park.

“I feel strongly we did the right thing, especially in this market where outside companies are buying mobile homes,” he said.

This model offers a way for owners to get out of the mobile home business for a fair price, said Thomas Beckett, executive director of Carolina Common Enterprise, a community development organization that helps small businesses, farms and other organizations become co-ops, including Oak Meadows.

“It’s a reliable cash exit,” Beckett said. “They have the moral benefit of helping their residents. It’s a good thing to do and it makes business sense.”

The organization is now working to add more resident-owned communities in North Carolina.

Opportunity to purchase

People wanting to pursue a resident-owned model will have an easier time in states with opportunity to purchase laws, which give tenants in apartments or mobile home parks the ability to buy their community when an owner wants to sell.

They exist in states like New York, California and Massachusetts, but not North Carolina.

In 2020, the Colorado legislature passed “opportunity to purchase” legislation specifically for mobile home residents, giving them the option to make an offer if the owner plans to sell or change the use of the land.

But subsequent reporting by The Denver Post showed its effect has been limited, in part because several park owners failed to notify tenants of their plans to sell as required by law; others rejected tenant offers in favor of higher bids.

Bullard said establishing more resident-owned communities has become harder as land prices increase and the emergence of private equity firms increasingly interested in buying mobile home parks.

Some states have other protections in place for mobile home residents, including required notice when an owner intends to sell, right of first refusal for current residents to buy, and tax incentives for owners selling to residents, according to research from the National Consumer Law Center.

Tax incentives were enacted by North Carolina lawmakers in 2008 for owners who sold to existing residents, but those credits expired in 2015.

U.S. Rep. David Price, a Democrat representing North Carolina’s 4th District, co-sponsored two bills in Congress last year that would establish a bill of rights for tenants of manufactured housing and create a grant program to help organizations and residents purchase mobile home parks, The News & Observer reported. Neither bill has advanced.

Lauren Lindstrom is a reporter for the Charlotte Observer covering affordable housing. She previously covered health for The Blade in Toledo, Ohio, where she wrote about the state’s opioid crisis and childhood lead poisoning. Lauren is a Wisconsin native, a Northwestern University graduate and a 2019 Report for America corps member.
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