The Denver Post, NPR, New Yorker, Time, and years of other regional or national news media have periodically told the troubling story about affordable manufactured home community living gone awry. So, the latest report below from the Los Angeles Times (LA Times) is hardly a first, but it does add an interesting wrinkle to the tale that all affordable housing advocates, conventional as well as manufactured homeowners, public officials and others should give attention to understanding and then solving. Their report begins with the quote from a manufactured homeowners association (HOA) leader who makes the claim “It’s a conspiracy…” By accident or design, that raises a key issue in understanding what’s occurring in the most proven unsubsidized form of affordable housing in modern American history. Note for newcomers looking into manufactured housing. There are ‘white hat’ brands as well as black hats. There are stunningly appealing manufactured homes and 50 + year old mobile homes that may need updates. This report will focus on the dark side and possible solutions for those issues. But for a lighter side and shoppers guides, click here and here.
To set the stage for the LA Times/Daily Pilot article by Matt Szabo, which will be extensively quoted below, some added facts are useful. Roughly half of all manufactured home residents live in a land lease community, also often commonly called – if errantly so – as a “mobile home park.” A significant percentage of negative news about manufactured home living arises from the types of issues Szabo’s LA Times article illuminated. No single such report is perfect or complete, and they often suffer from similar limitations. That said, Szabo’s quotation from that manufactured homeowner and MHC HOA leader could prove to be an important issue for mainstream media breaking fresh ground on this topic.
Following extensive quotations from Szabo’s report will be some MHLivingNews context, related facts and expert analysis. As a teaser to that segment of the report is this. What is often lacking in even good reports could be summed up as a less than complete understanding of the nuances of the 21st century manufactured home industry. There’s good news as well as vexing realities. As lawmakers and public officials in numbers of towns, counties, states, and nationally struggle with similar issues, the big picture facts and finer insights that follow Szabo’s article could yield solutions based on existing state and/or federal laws. Rephrased, the solutions are hiding in plain sight, because existing laws could rapidly correct the abuses of so-called predatory firms. Aspects of Szabo’s report will be useful in in illustrating that point. Meanwhile, the rights of millions of mobile and manufactured homeowners and ethical professionals can and should be protected by applying existing laws intelligently and as swiftly as possible.
With that backdrop, here is Sazabo’s report in the LA Times/Daily Pilot. The original article includes photos and some added text not found below and is linked here. Bracketed items are added by MHLivingNews. Ellipsis … reflects parts of his narrative and/or illustrations (photos) that have been edit out but can be seen in his original report, linked above. Highlighting is also added by MHLivingNews, and is not in the original.
‘It’s a conspiracy’: Huntington Beach mobile home residents allege rent gouging
By Matt Szabo 2.3.2022
Lynn Plumb has lived in the Skandia Mobile Country Club in Huntington Beach since the late 1980s.
The 86-year-old has a cozy mobile home which she maintains on her fixed Social Security income and what she calls her “measly” savings.
She doesn’t want to leave. Where would she go? Plumb had two sons who have already passed away. She could live in the basement of her daughter’s home in Buffalo, N.Y., but she’d certainly rather stay in Surf City.
“I can’t even picture leaving here,” Plumb said. “All of the people here are like family to me.”
Plumb and many Skandia residents, though, say they’ve been unfairly pinched for the last several months, since Investment Property Group [IPG] bought the 167-unit senior property from the Coulter Family Trust last August .
IPG raised their space rents $75 a month each year for the next three years, larger rent hikes than they’ve previously seen. The company, which owns about 100 mobile home parks [i.e. manufactured home land lease communities] nationwide, has offered the residents long-term leases to sign, but many don’t feel like that’s in their best interests, either.
Additionally, Skandia Home Owners Assn. president Carol Rohr said property values have plummeted since IPG raised the space rent for new home buyers from $1,445 to $2,195 per month.
That’s the cost to rent the living space [$2,195 per month] — on top of owning the mobile home [more correctly, manufactured home] itself.
“Of those parks, in the last seven years, six of the mobile home parks have been purchased by corporate conglomerates that have raised rents to levels that people can no longer afford,” Rohr said. “It’s a conspiracy, honestly, to get rents much higher for all mobile home parks in Huntington Beach.”
IPG regional manager Valerie Ayala, reached by phone on Wednesday, declined to comment.
Rohr and many of her fellow residents picketed in front of the Skandia park on Bolsa Chica Street on Tuesday, the same night they spoke in front of the Huntington Beach City Council wearing shirts that read “S.O.S. — Save Our Seniors.” They’re trying to get a rental stabilization ordinance on the ballot in November for mobile home parks in Huntington Beach, not all rentals.
The city passed Measure EE in 2002, which prohibits RSOs, but Rohr said the Skandia residents are seeking what’s called a “carveout” to Section 803 of the City Charter that would allow for rent increases of 3% or the Consumer Price Index, whichever is less.
“One of the reasons we selected this park was that we felt secure in the fact that it wasn’t corporate-owned and that it would stay in the family,” Alexander said. “We knew what the rent adjustments would be each year, which was never more than 3%, about $30-40 a year. Now it’s gone to $75, which isn’t horrendous, but it’s hurtful to a lot of people that are on fixed incomes. After the three years, we’re concerned that they’re going to just raise, raise, raise.”
IPG also had two representatives call into Tuesday night’s City Council meeting. Ayala mentioned that IPG has offered a rental assistance program through the Manufactured Housing Education Trust, which two Skandia residents have applied for. The program offers 10% off a resident’s rent.
However, the MHET subsidy has qualifications such as the applicant’s real value (besides his or her mobile home) cannot exceed $20,000, the space on which the applicant resides is not regulated by rent control, and not more than 10% of the residents of the park are already receiving assistance.
A prerecorded message when calling MHET states that all new applications have been delayed indefinitely.
IPG president of property management Julie Rodriguez also called into the meeting and said the company plans to own Skandia for many decades. She noted that IPG has already invested $85,000 in asphalt repairs and $15,000 on new pool furniture for the property.
“The property taxes were reassessed in the amount of $290 per site, per month,” Rodriguez said during public comments. “The rent increase of $75 does not nearly cover the increase in property taxes of the community, but we kept the increase low in order to ensure every resident can stay in their home.”
Rohr counters that the residents should not be expected to pay taxes for an action they had no control over or knowledge of.
“This is taxation without representation,” she said in an email.
Michael Lugenbuehl hopes for relief quick. Lugenbuehl, 61, has lived in Skandia for three years with his wife Julie, 70.
“She wants to retire, but we just couldn’t afford it yet,” Michael Lugenbuehl said. “We definitely can’t afford this. Some people are saying, and I completely agree, the joy is just out of this place now. The feeling of freedom is all but gone here. We are free to pay to beyond our means, we are free to leave, but we’re not free to stay here in a fair way.” ##
A letter from an IPG resident which includes a copy of a Time magazine article on the topic is linked here.
Spectrum News reported on the developing concerns at Skandia’s manufactured home community too. Their report is linked here, and the toplines are as follows.
What You Need To Know
- Residents living in the Skandia Mobile Country Club are expecting to receive a notice detailing a rent increase of $75 per year for the next three years
- Residents say they’ve been told that after the three years, the new ownership could push rents to be at market value
- The residents are looking at the city of Santa Ana as a beacon of hope since its council approved a rent control ordinance and just cause eviction ordinance for tenants last week
- The rent control ordinance prohibits landlords from hiking rent on tenants by more than 3% per year, and those renters get stronger protections against getting evicted from their unit
Yelp is the source of this next image collage. It sheds light on why this is not some run-down so-called ‘trailer park,’ or a mobile home park, even if the name “mobile” is in the name of a given property. This is a modern manufactured home community. There are numbers of such properties across the nation. That said, be it a ‘one star’ to ‘five star’ property, each of them is at least potentially providing the most affordable housing in that locale.
Additional Information, More MHLivingNews Analysis and Commentary
The statement and quote by resident leaders below are useful in grasping the nuances referenced above. The late Bob Van Cleef spent the last few years of his life working to mitigate the very kinds of issues that Szabo’s LA Times report reflected. So too has Tim Sheahan, another Californian. Both Van Cleef and Sheahan took aim at the national aspects of local issues.
The desire for rent stabilization or rent control is a common, and understandable, desire by residents anywhere in the U.S. that find themselves caught in this often-unexpected development for manufactured home land-lease community residents. A ‘family owned’ community often has a close and cooperative relationship between the owner(s) and their residents. When done correctly and ethically, both residents and the property owner’s benefit. This is reflected in years of third-party research by Foremost and others that indicate satisfaction. It should be stressed that extensive anecdotal evidence exists that most of the negative news reports about ‘predatory’ companies are precisely those that are acquired and/or have been operated by conglomerates that have purchased the location from a ‘mom and pop’ owner.
Restated, the bulk of the “predatory” allegations are connected to communities that are owned by a corporation. Numbers of those firms that are publicly traded and/or make a pitch for private investors often frankly state that they aim to consolidate a ‘largely fragmented’ industry. Something similar has been occurring among manufactured home producers and retailers too.
Perhaps one of the best-known reports on this topic was a satirical, but largely factually accurate video by HBO’s Last Week Tonight with John Oliver incorrectly dubbed “Mobile Homes.” The terminology matters, for reason that linked reports herein explain. Mobile homes are not a manufactured home, nor are manufactured homes a mobile home. What’s correctly called a “mobile home” has not been built in the U.S. since June 15, 1976.
What Oliver’s report highlighted was predatory behavior. While he did not make the link, a previous and popular report on MHLivingNews connects the dots that each of the ‘predatory’ brands identified or featured by Oliver just happens to have connections to the Manufactured Housing Institute (MHI).
MHI claims to represent “all segments” of manufactured housing. That noted, what is obviously not represented are residents and their interests. While ‘white hat’ independents are members of MHI, a close examination of the reports and quotes graphic shown and linked that follow reveals the following. MHI seems to be focused on aiding larger ‘insider’ brands to consolidate smaller ones.
The pull quotes from emails from the Tennessee Board of Professional Responsibility indicates the reasons for concern as well as possible solution to problematic behavior in manufactured housing.
“Mr. Kovach: In response to your question, the breadth of your complaint is much broader than the parameters of the Rules of Professional Conduct. Tennessee Supreme Court Rule 9 Section 32.9 allows the Board of Professional Responsibility to report evidence of a crime to law enforcement.
Chief Disciplinary Counsel
Board of Professional Responsibility
of the Supreme Court of Tennessee
10 Cadillac Drive, Suite 220
Brentwood, TN 37027”
In another message, Garrett said about the Tom Hodges/Clayton Homes/Manufactured Housing Institute (MHI) related report linked below said: “this matter appears to be more appropriately addressed by elected officials and/or the U.S. Department of Justice.” Restated, Garrett is indicating that there is evidence of one or more possible felony (criminal) behavior.
Her professional observations align with the well footnoted (over 130) legal concerns raised by Samuel “Sam” Strommen at Knudson Law. Note that a follow up from Garrett is expected. That said, consider what she stated in the light of what Strommen’s legal thesis revealed.
Why is manufactured housing underperforming during an affordable housing crisis? The short answer is the one given by voices such as Doug Ryan with Prosperity Now and Mark Weiss, J.D., the President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR), and his colleague, Danny Ghorbani.
Summing Up and Conclusion
Minneapolis Federal Reserve and other researchers, lawmakers, and mainstream media reports have spotlighted aspects of these heart-breaking issues for years. While they often bring up valid concerns, what they sometimes lack is the broader picture that allows these issues to occur in the first place. That underlying issue is that for whatever reason(s), the Manufactured Housing Institute (MHI) has often raised the correct concerns without actually addressing those concerns in a fashion that leads to an actionable solution.
MHI has a code of ethical conduct. They have an antitrust statement. But what is missing, per professionals inside and outside of MHI are actions that they claim to support but they don’t pursue with legal or other common-sense action. Rohr’s point brought to light thanks to Szabo’s report was made for Huntington Beach, CA. But it could be made for much of the country; per Rohr: “It’s a conspiracy, honestly, to get rents much higher for all mobile home parks…” Who says? How about Frank Rolfe, a prominent and notorious MHI member.
Rolfe has made it no secret that he believes in a monopolization process that includes the Buffett moat and what amounts to an oligopoly as opposed to a traditional one big dominant company monopoly. Sheahan made the point in reverse, from the community resident’s perspective. It is a lack of competition that is creating this troubling dynamic.
The solution, therefore, should be to punish those firms and individuals who have worked to make this troubling pattern a reality. Some of the possible causes of action that attorneys and/or public officials could raise include, but are not necessarily limited to, the following.
- Antitrust/market manipulation. Realized or not, this goes to the heart of the concern raised by Skandia’s Rohr when she claims there is “a conspiracy.” If so, antitrust is one possible tool. State and/or federal antitrust laws exist.
- RICO (Racketeer Influenced Corrupt Organizations action. Again, this could be brought by private attorneys and/or public officials. See the report linked below.
- Hobbs Act. There are those who believe that they are purposely being intimidated. Why not explore pressing public officials into a Hobbs act case?
- Manufactured Housing Improvement Act of 2000 (MHIA). Ultimately, the issues that face manufactured housing, and affordable housing in general boil down to supply and demand. When the supply is being artificially limited, then the kinds of ‘predatory’ behaviors seen in manufactured housing can and do occur. See Strommen and other linked reports to learn more.
- Duty to Serve (DTS) Manufactured Housing is mandated by the Housing and Economic Recovery Act of 2008 (HERA). See some of the linked reports to learn more. But in brief, the proper use of DTS and the MHIA could open up numerous affordable housing opportunities that would make the type of predatory behavior Szabo reported less likely.
So, public officials must be held to account when they fail to use the legal tools at their disposal.
Whistleblowers and advocates are needed at the local level. When residents or others with documents and evidence-based insights reach out to MHLivingNews/MHProNews, we stand prepared to do what we did with Van Cleef and other whistleblower/advocates. The suit linked immediately below that included RICO allegations is but one of several possible examples of how the lessons already learned could be refined and put to work. It may not take too many cases brought before the predators would get the message and back off vulnerable residents. To learn more, see the reports linked above and below. ##
We lay out the facts and insights that others can’t or won’t provide. That’s what makes our sister site and this location the runaway leaders for authentic information about affordable housing in general, the politics behind the problems, and manufactured homes specifically. That’s a wrap on this installment of “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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