Update: A little while ago I noted that a rent control law was going to be on the next ballot in Huntington Beach, and that I’d write about it soon. I went to do this today, only to find that the city council actually voted to take the measure off their ballot. This is what I wanted to say in the comments section, but their comments are via Facebook only, so I didn’t submit them there. But, for your consideration, I post them here:
People need to stop moving into MH parks – this is such garbage. I’ve been looking into MH parks for about 18 months now, and the way they are being run is bizarre–they are just a money-sucking form of profit. If you buy a condo (or house, of course), you own the property and your monthly payments are always the same. In MH parks, you have to buy the home but pay yearly increases on the rent of the land. If you are like most lower income people (or are on a fixed income), your pay doesn’t go up yearly anywhere near the amount that the vast majority of MH park owners raise the rent. I only know of one park that raises their rent based on the Consumer Price Index (actual inflation). After a number of years of steady 5% (or higher) increases, I don’t see how anyone would be able to maintain living in a park. On top of that, mobile homes go down in value, especially so in parks with high and increasing rents. MH parks are draconian in their present form (at least here) – people need to be able to own the lots their homes are on.
I don’t know about where you live, but in my urban region there is not a comprehensive list of manufactured (mobile) home (MH) parks that I’ve been able to find. If you know of one, please inform me! My intention here is to compile information on any and all MH parks in Orange County, California, for the benefit of anyone trying to make a good decision in buying a MH. If you have anything you want to share about a specific MH park, please comment below.
I have spent a great deal of time trying to find MH parks in my area and researching the ones I know about. It is quite the frustrating time-consumer, and the results dismal. I have talked with four real estate agents and have had two be my agent in the last several months, and no one can provide a list so you can check out the parks. In fact, people seem kind-of tight-lipped about the whole thing.
Why is knowing of all of the parks important? If location is important to you, and certainly it will be at some level (length of drive to work, value of property in the area, etc.), then it’s not very helpful to just wait until a unit becomes listed in an MLS. For one, not all MH’s are listed in the MLS, but on sites like Mobile Home Village; in fact, the only way you’ll find out that certain homes are for sale is by driving by and seeing a sign. Two, the best thing to do would be to check out the MH parks in your area of interest first, since you need to apply to be accepted to lease a lot in the park. You need to know if you’d even qualify, and perhaps more important, you need to know if the terms of the lease are acceptable to you. You could get your list down to only the parks you could afford and be willing to live in, then only look at homes for sale in those parks. I think this makes sense, right? This would save both you and your agent time.
That is, if a seller will even accept you–the buyer–having an agent. The commission on the sale of a lower priced home is obviously not the nice chunk of change that agents are looking for. I have had more than one seller’s agent not want to do business because I had my own agent. However, with the high rate of foreclosures in the manufactured home realm, it is important to get good advice and assistance of some form when buying a mobile home and leasing in a park.
A word of warning about Orange County. More and more, there are nightmare cases where a park is sold to a corporate owner who raise the rents and add fees to a ridiculous level. This also sometimes happens when the children of the original owners take over. The state does not see fit to enact any kind of rent control, even though you own a large and normally expensive piece of property on someone else’s land. The situation is not anywhere near the same as renting an apartment, where you can leave without any other financial consequence. But in parks, if rents are increased significantly and you feel you need to sell, your chances of selling are lower and you will invariably get less–maybe far less–for your home. All due to no fault of your own. It’s a risky business owning a MH on someone else’s land.
The El Monte article referenced below provides an example of immoral and seemingly illegal rent increases. Large rent increases happened in Fountain Valley not too long ago, too, when a corporation took over a MH park there; the home owners claim that they were denied lease renewals–which is illegal–and that they would be forced to sign new leases with large rent and fee increases, or leave (a link to an article on this is given below). There is no relief for home owners when these laws are broken, unless they take the time and expense to take the park owner to court. Even then, without rent control, the owners can raise rents basically with impunity. (Since this article was originally written, a park in Huntington Beach suffered the same fate. It was sold to a corporate owner and lots that were $1000 a month were raised to $1700.)
So why am I, and my family, interested in a mobile home? Well, prior to starting this post, I was told by agents that there is some kind of rent control, around 10% maximum per year. This is not the case at the state level, and I have not found any rent control measures in the cities we are interested in living. This makes me even more leery than before. We would need to thoroughly check out the lease agreement and the park ownership/management before leasing with them. Obviously this takes a lot more work and consideration than buying a condo or house. And besides that, any built-in rate increases that are more than inflation need to be carefully looked at (who can afford 10% increase every year when their pay only increases by 0%-2.5%?).
Ok, so the reasons for wanting a MH instead of a condo (we can’t afford a house here whatsoever) are: we would be on one level and not be upstairs; hopefully the park would be quiet; we might have a little yard for a little dog (we are trying for this, yes); we would have a washer and dryer – believe it or not, no low-end condos here have those (many or most are converted apartments – woohoo!!); and, we would probably have more in the way of household amenities than a condo, depending on the unit. So it’s a a matter of quality of life vs. return on investment. A condo that we could afford here would be in an outright slummish place, or a not much nicer white-washed slummish place.
Thanks for reading. Please write comments or questions below. I will be compiling park lists with information about the parks. This will be an “ongoing” project, as I think this information is urgently needed. Many people have lost, and many continue to lose, their homes and all the money they invested in them, while the park owners sit secure and do virtually nothing for the money they receive. The only real solution, it seems to me, is to make any form of leased land homes illegal. Perhaps after reading this and any of my other real estate related posts (particularly, America the Greedy I: Homes on Land-lease Land) you will feel motivated to ask your representatives for this change in law.
Below are charts I’ve worked on enough to post; Santa Ana is coming soon. I’ll update them as necessary. The charts are by zip code and include family parks only, not parks for seniors.
Mobilehome Residency Law (California) There is NO limit to rent increases per state law
Rent Control in Orange County (index page of articles in the Los Angeles Times)
Great and informative comments after the article: Why Mobile Home Park Rents Can Be Pushed Higher Than Others
Concerning the weirdness of mortgages “after the ‘recession'” Can the Real Estate World get any Weirder?