Wall Street Is Holding a Gun to Mobile Home Residents’ Heads

In mobile home parks around the country, millions of tenants and owners are being mercilessly exploited and regularly evicted, often by giant Wall Street firms like Blackstone.

The Isle of Palms mobile home park in Saint Petersburg, Florida. (Karl Mondon / MediaNews Group / the Mercury News via Getty Images)

In the Indianapolis eviction court where my students and I work, Jessica and her family come to court in a panic. Jessica contracted COVID-19 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 a brother living with disabilities, who all live together in the family home, are facing eviction.

The good news: 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: the landlords say they won’t dismiss the eviction case unless Jessica pays for their attorney’s fees, too. Jessica says okay. Oops, the attorney says, we forgot to add on court filing fees to the list, and you have to pay those as well.

It is more of a shakedown than a 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 thirty-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 “lot” it sits on. For that space, the landlord charges them $470 per month.

The secret about 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 mobile 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 that 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 twenty-two million people — one in every fifteen people in the country — living in mobile homes, also known as manufactured housing. 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, 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. And purchasing a manufactured home does not bring with it the same kind of stability associated with traditional homeownership. If the purchase was financed with a loan, that loan is likely a “chattel” loan, with higher interest rates and a shorter pay-off period more akin to a car loan than a traditional home loan.

“Sell to the Masses, Eat with the Classes”

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 their landlords decide to charge. Frank Rolfe, whose two hundred fifty 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 crows about the benefits of holding a gun to the head of park residents: “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 multibillionaire 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.

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 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, whose mission is to make housing more affordable, provide billions of dollars in low-interest loans that huge investment companies use to buy the parks.

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 of Land Policy’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 US households — if they are protected from exploitation. Here is how we can provide that protection:

  1. Good cause requirements for lease nonrenewal 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 nonpayment 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.
  2. 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 has also been proposed as a statewide law in Colorado.
  3. 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. Selling parks to residents would increase stability and longevity of tenure in those parks.
  4. Funding to support residents’ purchasing of 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 there is 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 a thousand resident-owned communities of mobile homes. If the right financing is made available, residents could buy many more.

With this crisis comes an important opportunity: mostly white, often rural manufactured housing owners share key interests with the mostly urban, often black renters of traditional housing. For example, Louisville Tenants Union leaders come both from historically black neighborhoods in Louisville and Appalachia. Together, these households can build a powerful coalition to reshape housing rights in our nation.