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.
The boogeyman we have made out of private equity is pretty silly. It's not like being purchased by a publicly traded corporation is that much different, or even just a private buyer.
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.
No, lack of supply is the problem. If there wasn't a lack of supply then housing wouldn't be an investment vehicle. Nimbys and over regulation has made it impossible to build which creates the lack of supply which is what drives the price up and makes the incentive to invest.
The issue is lack of supply. That is enforced by zoning, which is ultimately dictated by politicians, who know they won't get reelected if they make policy changes that gut a significant portion of their constituents' savings.
It's a fairly straightforward example of systemic dysfunction with no obvious solution.
China (like the USA) didn't let the market handle it. China built without letting market demand dictate supply. USA did the opposite, didn't builders meet supply. They try, they try all the time to built more, they get stopped by nimbys and over regulation.
You could literally surround the PE mobile home park with new, available lots. But as the article states, it is prohibitively expensive for these current "mobile" home owners to move-- their abodes are no longer mobile in any practical sense. And, as the article also states, many have porches and other bespoke add-ons-- dismantling and rebuilding would add even more thousands.
This should be obvious on the face of it-- if those homes were truly mobile, like campers, the camper owners would just scoot (as camper owners do) when PE tried to jack up the rent.
I'll go further and speculate that a sizable portion of the owners are fixed income with very little savings. You could even offer free lots 500 feet down the road and some still couldn't take you up on it (at least without racking up some seriously predatory CC or other debt). No doubt these PE firms had a firm grasp on the owners income levels, home ages/prices, and all kinds of other data before they bought up the lots and jacked up the rents.
Unless your grand plan to flood the market with mobile home lots includes a "let's teach the users" campaign to tell everyone in the next generation to buy campers instead of mobile homes, adding supply won't help them, either.
Edit: formatting, clarification
If the land is rented, the mobile home will often depreciate, much like a used car. Nobody wants to live in a mobile home with 1970's decor. So those owners are likely going to take a bath.
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...
This is also not a surprise that they don’t own the land. At any time they can move their mobile home, unlike a house or condo. They fully know what they signed up for.
A Condo owner owns the land and pays property tax and HOA fees, which can be steep, so there's land appreciation.
Why pay so much every month to get zero land equity and zero home maintenance?
Run some numbers. I did sometime back. And don't forget, these are microscopic lots. Barely room for a couple of storage shelves under a car awning.
The references say that the mobile homes depreciate, so they're not even worth moving, and landlords charge anyway. I linked to very short ones that bring up key issues.
In a condominium you are a member in the association that owns the common areas and have a voice. The board is other people who own condominiums there, and will at least try to do things in the best interest of the condominium owners.
But I don't know how change in ownership and/or tricks can figure into things.
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)
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