As a private investor in manufactured housing communities throughout New Hampshire, I’ve seen park owners like me painted as villains in the public conversation. We’re not. I have devoted my career to buying and operating properties to improve them and offer residents a great place to live.
Private investors in manufactured housing communities have gotten a bad rap, and in some isolated cases, it’s deserved. But mostly, it’s the result of confusion around a genuinely complicated issue. So, let’s begin to set the record straight on manufactured housing in New Hampshire.
Most of my properties were in rough shape when I purchased them. Turning them around meant spending serious capital. After an acquisition, roads need to be repaved, water and septic systems need to be addressed and safety problems need to be rectified. These improvements can cost upwards of $1 million depending on the size of the park. I take these expenses on because, by making the property better, I grow my investment while improving life for the people who live there.
One of the most pervasive myths is the idea that residents are always better off when a manufactured housing park converts to a resident-owned cooperative (ROC). That is simply not true. When a community forms a ROC, they become solely responsible for all the expenses related to owning a park. That’s in addition to shouldering the cost of purchasing the property.
The result is that residents often end up paying higher monthly payments when they form a ROC than they would have if an investor had purchased the park. In one documented New Hampshire case, a co-op’s own break-even analysis projected a 48% lot rent increase — from $680 to $1,010 per month — an amount a former co-op board member said publicly would have forced some residents out of the community.
In short, there is nothing inherently more affordable about ROC arrangements than private ownership. Like any ownership model, it all depends on the purchase price, financing terms and operating costs of the property.
Another common misconception is that investor ownership of manufactured housing communities suppresses home appreciation. To the contrary, one look at the publicly available home prices at Meadows of Hopkinton and Deer Meadow Mobile Home Park in Hopkinton shows this is not the case. In those investor-owned communities, we see homes that have increased in value by as much as 100% or more since prior sale.
As someone who has spent his life in this industry, this is notable, since manufactured homes were never expected to appreciate in value the way traditionally-built homes do. Rather, the conventional wisdom states that manufactured homes would typically depreciate like automobiles. That is no longer always the case in New Hampshire, and investor ownership encourages rather than dampens this positive trend.
Lastly, some politicians have cynically exploited manufactured housing community residents for political gain. More and more, rent control is floated as a “solution” to New Hampshire’s high housing costs. Rent control is always enticing as a “silver-bullet fix,” and yet it always fails in practice for the same reasons: rather than addressing the underlying supply-and-demand problems, it simply shifts cost burdens from one group to another. In the case of manufactured housing, capping lot rents below market rates artificially inflates home prices, because the locked-in low rent gets bundled into the home’s value. The next buyer pays an inflated price for an aging home, and therefore the affordability benefit accrues to the seller, not future residents.
In addition to that, when lot rents are held artificially low for long enough, the economics of operating a park break down. This leads to deferred maintenance and eventually the infrastructure of the community deteriorates. This downward spiral decreases the value of the park property. Eventually, owners are forced to sell, usually at a loss. The final result is often that parks are sold for redevelopment, the very outcome rent-control advocates say they’re trying to avoid.
Manufactured housing in New Hampshire is a nuanced issue, and it deserves to be treated that way. Unfortunately, a combination of incomplete information and cynical political posturing has allowed a lot of this confusion to take hold. To help clear things up, the New Hampshire Manufactured Housing Association has launched ManuFACTCheck.org, a website dedicated to providing clarity on manufactured housing in the state. As we consider the future of manufactured housing in New Hampshire, we owe it to the people who live in these communities to know the facts.
Mark Tay is the president of the New Hampshire Manufactured Housing Association.