Although it’s mentioned in the article, I’m surprised that the author didn’t place more emphasis on the different set of state laws that typically apply to mobile homes given their status as (theoretically) moveable property. The relative ease of eviction compared to real property (houses, condos, things without wheels) is probably the primary factor for the private equity investment thesis. It’s a material driver of the economics of these investments and substantially reduces the risk profile of the generally marginal tenant base.
Nothing in America is left un-exploited. Incredibly tragic to see yet another sizable contingent of Americans, often particularly vulnerable ones, squeezed by capital. What foes.
Private equity is such a vicious foe to mankind. Hostis humani generis: this profit motive corrupts our world, erodes at humanity, in every way it can. Just once, I'd like to see amalgamated capital try to improve the lot of the world, help humanity along. But no, never: always the swirling draining negative to suck life from the world.
Housing as an investment vehicle is ultimately the problem. Those who buy into it expect prices to keep going up, like any good investment. If rising prices falter, there’s big rippling consequences, especially for those whose net worth is mostly their house value, bought with debt.
On the other side is those who need shelter, who don’t have unlimited income to afford the price of something that rises faster than they earn.
Mobile home parks are predatory. Unlike a traditional home, "owners" own only the home and pay an exorbitant land rent each month. So, unlike a traditional home where the land appreciates and you maintain the home, you get in effect, the worst of both worlds. You get zero land equity for rents approaching mortgages (YMMV. They are very high in desirable CA locations.), and still pay to maintain the home.
Of course, private equity firms love the idea. Price-fixing among park owners happens. [1] Some comments [2]
Pro's and Cons[0]
I live in a double-wide manufactured home in the country, and own the land, quite a bit of it (sharpens chain saw ) Spare you the details.
> "owners" own only the home and pay an exorbitant land rent each month. So, unlike a traditional home where the land appreciates
Isn't this the same as many apartments with body corporates that lease the land they are on? Called "Stratum in Leasehold" in New Zealand (although uncommon except for some inner city - I think because riskier so harder to get a mortgage).
Leasehold isn't common for residential in New Zealand AFAIK. And mobile home parks are uncommon too.
It's hard for me to rag on the opportunists when the opportunity is there. PE firms don't magically make something profitable - they're just scooping up underpriced/undervalued assets and extracting the value off of them.
That said, the extent that PE firms are willing to scrape the bottom of the barrel for things to make a buck off of is becoming shameless. My dad ran a mobile home park for a while, and let me tell you - the idea that it's some sort of sustainable investment vehicle even at maximum extraction is ludicrous.
It's just further evidence that the markets are flush with more capital than they know what to do with. We have a massive savings glut due in no small part to inequality and our aging population. And failure to deal with it at a policy level will just continue to grow the affordability crisis.
20 years ago In my area, a an owner of a mobile home part wanted to kick everyone out, sell the land do developers. The land is worth a lot due to its location very near a "tier 1 city".
The residents contacted the AG and the AG and State forced the owner to sell to the residents. Which happened. When I drive by that park now, even now it looks 100x better then it did before they bought it.
Washington State Housing Finance Committee has worked with residents to help them buy the land and turn it into a housing co-op, in partnership with ROC Northwest. That company also helps private businesses convert to worker-owned businesses. If we really love democracy as much as we claim here in the USA, let's bring it to where we live and work :)
This article praises mobile housing too much. For a lot of people, this is substandard living conditions. Yes, there are nicer parks, but that’s not the norm across the country.
In my opinion, states should convert the zoning for all mobile home parks to multifamily (apartment complexes), and require developers to give each of the residents their own paid for unit. Then the land is more productive and the previous owners are upgraded to a higher quality living experience.
(I live in southern CA and many parks are located on land that would be very very well suited for large apartment complexes)
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[ 0.20 ms ] story [ 33.2 ms ] threadPrivate equity is such a vicious foe to mankind. Hostis humani generis: this profit motive corrupts our world, erodes at humanity, in every way it can. Just once, I'd like to see amalgamated capital try to improve the lot of the world, help humanity along. But no, never: always the swirling draining negative to suck life from the world.
I guess PE firms have realized that putting humans into debt that they have to work endlessly to repay is very profitable.
On the other side is those who need shelter, who don’t have unlimited income to afford the price of something that rises faster than they earn.
It doesn’t seem like a sustainable system.
I think this was best put into words in the form of "Houses are for living in, not for speculation"...
Of course, private equity firms love the idea. Price-fixing among park owners happens. [1] Some comments [2]
Pro's and Cons[0]
I live in a double-wide manufactured home in the country, and own the land, quite a bit of it (sharpens chain saw ) Spare you the details.
[0] https://www.luxwisp.com/pros-and-cons-of-land-lease-communit...
[1] https://www.classaction.org/news/class-action-alleges-mobile...
[2] https://www.reddit.com/r/povertyfinance/comments/s0jh8a/what...
Isn't this the same as many apartments with body corporates that lease the land they are on? Called "Stratum in Leasehold" in New Zealand (although uncommon except for some inner city - I think because riskier so harder to get a mortgage).
Leasehold isn't common for residential in New Zealand AFAIK. And mobile home parks are uncommon too.
That said, the extent that PE firms are willing to scrape the bottom of the barrel for things to make a buck off of is becoming shameless. My dad ran a mobile home park for a while, and let me tell you - the idea that it's some sort of sustainable investment vehicle even at maximum extraction is ludicrous.
It's just further evidence that the markets are flush with more capital than they know what to do with. We have a massive savings glut due in no small part to inequality and our aging population. And failure to deal with it at a policy level will just continue to grow the affordability crisis.
The residents contacted the AG and the AG and State forced the owner to sell to the residents. Which happened. When I drive by that park now, even now it looks 100x better then it did before they bought it.
Hopefully the same happens to these parks.
In my opinion, states should convert the zoning for all mobile home parks to multifamily (apartment complexes), and require developers to give each of the residents their own paid for unit. Then the land is more productive and the previous owners are upgraded to a higher quality living experience.
(I live in southern CA and many parks are located on land that would be very very well suited for large apartment complexes)