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Trailer Parks Emerging as an Answer to Low-Income Housing Crisis

June 6, 2023

Article courtesy MIRS News for SBAM’s Lansing Watchdog e-newsletter

Mobile home parks don’t always come with the greatest reputations, but in 2023 – with low-to middle-income housing for workers sparse in many areas of the state – today’s manufactured housing communities are emerging as a solution.

Today’s parks are unlike those of years past, President and CEO of Michigan Manufactured Housing Association John Lindleyrecently told a Senate committee. Instead, they can be a cheap, quick way to build homes for people who are in a pinch.

“Not to be clichéd, but this isn’t your grandma’s trailer park anymore,” Lindley said.

Lindley said the low-income housing crisis is a supply-side problem and pointed to Gov. Gretchen Whitmer calling for 75,000 new housing units to be built in Michigan over the next five years.

“Manufactured and modular housing provides a wonderful solution to those supply issues and affordability issues,” he said.

He said that all housing options needed to be on the table, but he said there are issues manufactured housing faces that are unique: Zoning and issues of NIMBY, an acronym for “not in my back yard,” on a local level.

He said manufactured homes have changed since they were first regulated by the Department of Housing and Urban Development, or HUD, as a low-income option in the 1970s. He said they are energy-efficient and built to code.

He said there are between 1,000 and 1,100 manufactured housing communities in Michigan, and that most of what is driving Michigan being a top-10 purchaser of manufactured housing was redevelopment of those communities.

“You can count on a couple of hands the number of ground-up development communities across the state over the course of the last few years,” Lindley said.

He said Michigan and local governments need to change zoning laws to make it easier to develop land, especially removing language that excludes manufactured housing from being considered for development assistance from the Michigan State Housing Development Authority.

“When people come to the table with real solutions for these problems, they’re met with a response of, ‘Well, we didn’t mean that kind of housing,’ and that’s the kind of mindset that has to be eliminated,” he said.

Jennifer Rigterink, assistant director of theMichigan Municipal League’s State and Federal Affairs, said it was disingenuous to make the argument that zoning and NIMBYism were the only issues faced by mobile home communities.

“Manufactured housing communities and mobile home parks are a draw on municipal services and they really do not pay their fair share,” Rigterink said. 

She said the owners of the communities don’t pay the same in property tax as a traditional residential neighborhood.

She said the amount that is charged for mobile home lots has not been changed in decades and is minimal for owners.

“Our municipalities service those parks no matter what,” she said.

There can be health and safety violations. There can be licensing issues, among other things.

Another issue she pointed to was that manufactured homes were not anchored to a foundation and were easily damaged or destroyed and cause damage to other dwellings during severe weather or natural disaster events like floods.

“If you look at the tornado a few years ago that went through Gaylord, look where the most damage, and some of those things that happened, were in the mobile home park up there,” she said.

She said there are issues in parks over who has jurisdiction over rules and regulations, outside of zoning, for the community. 

“We do not have the ability to implement rules and regulations in those manufactured home communities like we do everywhere else in the community,” Rigterink said.

LARA Bureau of Building Codes Director Andrew Brisbo said the parks are subject to all regulations that are under state law and must routinely be recertified by the agency.

Brisbo said it is the Manufactured Housing Commission that has much of the power when it comes to rules and regulations surrounding mobile home communities.

“They determine the sufficiency of local ordinances that pertain to mobile homes, then they conduct hearings as well so they have public meetings of their public body that has to meet regularly,” Brisbo said.

He said the commission also makes determinations on the penalties for any violations filed against the parks, which was set by the Mobile Home Commission Act in 1987.

Brisbo said to build new parks and get licensed the agency inspections would have to include certifications from the local health departments, certifications from the Department of Environment, Great Lakes, and Energy regarding water supply and wastewater systems, a commitment from a construction company, certification of the park’s electrical system and a sitemap.

He said these things are also checked when a park goes through an ownership change, expansion or inspection.

“There are some idiosyncrasies when you look at mobile homes specifically,” he said.

He said while the parks are licensed by LARA, the titles that grant ownership of the mobile homes are done through the Secretary of State rather than the mortgage process.

Michigan State University College of Law Teaching Fellow Lauren Rogers works in the Housing Justice Clinic and said the titling process raises a host of issues regarding protections for the low-income people in them.

She said they are treated more like a vehicle, there is no foreclosure system in place and the process is much faster to repossess the manufactured home.

“Mobile home really is a good name for it, because in many ways it is treated more like a vehicle as far as things like financing,” Rogers said.

She said while there are risks associated with mobile homes, that the price between $30,000 to $80,000 was within reach of lower-income people.  However, the interest rates tended to be between 8% to 10%, making the loans more difficult to maintain.

She said it is hard to find financing for mobile homes, because credit unions and most banks don’t offer loans. The people buying a manufactured home need to go through national financing agencies or the community owners.

“Often you are financing though the park, which creates its own challenges and possible conflicts of interest,” she said.

The parks will sell the mobile home, but then rent the land where the mobile home sits and combine all the payments into one.

She said the parks usually take advantage of the lot-rent model, in that if a person ends up owning the mobile home, but misses rent, they can be evicted from the park and they have 60 days to remove the manufactured home from the lot.

After that, a person has 90 days to either sell or relocate, but you can’t live in the park.  She said moving a home is expensive and sometimes impossible depending on the age of the home.

She said people get stuck into selling the mobile home back to the park, usually at a loss.

“Always read documents before you sign them,” she said.

Rogers said manufactured homes have been trying to rebrand over the past 10 years because of stigma attached to the communities.

“We see all sorts of imagery in pop culture of trailer trash, hillbillies and all sorts of pejorative terms and negative stereotypes around people who live in mobile homes,” she said.

She said mobile home parks can be very accessible for lower-income people who don’t want the shared space of an apartment.  She said some of the newer communities have amenities, like gyms and pools, and could be well-served as a downgrade for people looking to retire.

The lot-rent sometimes even fits well into a fixed-income situation. A report by Donald Layton, a Senior Visiting Fellow at the New York University Furman Center, confirmed that the depreciation for manufactured housing can be fine for a retired person. 

Robert Silverman, a professor in the Department of Urban and Regional Planning University of Buffalo, agreed with the idea of retirement, but said they could also be used for filling in the blank spaces in urban or suburban settings.

“The older neighborhoods that might need some redevelopment and maybe they’re not areas primed for new housing or some type of gentrification or other type of investment,” Silverman said.

Rather than see the neighborhood empty out, Silverman said a city could consider manufactured houses as a strategy.

Rogers said the mobile home communities are also eligible for people with Section 8 vouchers looking for housing.

She said there were some things that lawmakers could do that would protect the consumers and residents. The first would be to put a cap on how much lot rent could be raised, so a low-income option is available. 

She said the inspections already exist, but they should be actually done and the standards enforced through LARA or the Mobile Home Commission Act Brisbo talked about.

“A lot of it is there, but it’s not always used to enforce,” she said.

She said because the people living in the parks are typically low-income who also can’t afford legal representation to take on any other issues that are not backed up by the local, state and federal governments. 

“Definitely not a silver bullet, but definitely needs to be part of the strategy and included in the mix,” Rigterink said.

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