Guest Commentary: The Cost of Not Going Co-op

If You Can Buy Your Mobile Home Park You Should; Residents Benefit from Cooperatively Owning, not Renting, Their Parks

By David J Thompson

For most landlord owned mobile home parks (MHPs), the residents live in a feudal fiefdom and face annual unfettered space rent increases with not a semblance of tenant protection.

Compare the space rents in two parks over 27 years (one rental, (Leisureville) that became a cooperative and one rental (Rancho Yolo) where the owner refused to sell at market value to the residents as a cooperative).

Clearly, substantial savings exist for the residents when they own the park and substantial increases for when residents cannot buy the park they live in.

If you rent space in a landlord owned Mobile Home Park you’d better plan a different future after reading the following article. 

“Why big investors are buying up American trailer parks,” Financial Times February 7, 2020.

A Tale of Two Parks

Leisureville Mobile (LV) Home Park in Woodland, Calif. is a 150-space mobile home park (MHP) transformed from rental to resident ownership during 1995. January 1, 1995, was the beginning of the first full year of the residents owning the community as a limited equity housing cooperative.

The transformation process began with a December 1993 letter the absentee owner sent to the nearly 200 residents of the LV mobile home park. It stated brusquely, “From January 1^st 1994 on, we will be raising the rents 11 percent yearly for the next three years at least.” Fear fanned out amongst the mostly low-income residents. That is another $100 additional rent in three years, an increase of one third on the basis of the existing 1993 rent of $304. With a majority of the Leisureville households having annual fixed incomes of $8,000 to $15,000, few could afford to pay the increases.

Over a hundred angry residents packed the February 1994 meeting of the Woodland City Council and pleaded for immediate rent control. The council did not want to do that on the spot, but they did invoke a 90-day moratorium on rent increases and told the owner to work out something better with the residents. The author read about it in the local paper and immediately got in touch with Rev. Donald Wells, a resident and the spokesperson of the park residents. The author said, “Your best bet, believe it or not, is for the residents to buy the park as a limited equity cooperative.” Less than two years later in 1995, the residents bought the park (See their story in NAHC’s Cooperative Housing Bulletin January-February 2007.

The contrast occurred at Ranch Yolo (RY) in nearby Davis. In 2000, a leading resident of the 262-space Rancho Yolo in nearby Davis contacted me about their residents buying the park. Sadly, the first effort fizzled out. However, in 2008, a larger and more determined group of RY residents took up the baton. The Davis City Council generously provided a grant that helped pay for the formal studies needed to determine if the residents of Rancho Yolo could buy the park. The study determined the residents could, and they voted to make a bona fide market value offer. The Rancho Yolo Community Association put in the offer to buy the park from the owner in December 2010. Regretfully, and almost immediately, the resident’s offer was turned down by the park owner in January 2011.

Leisureville Mobile (LV) Home Park in Woodland, California. The 150-space mobile home park (MHP) transformed from rental to resident ownership during 1995. January 1, 1995, was the beginning of the first full year of the residents owning the community as a limited equity housing cooperative.  Under California law Leisureville and Rancho Yolo are both seniors only (55+) parks. Due to both these parks being developed in the 1970’s I am calling them mobile home parks (MHP’s). If they were started today they would be called manufactured housing communities.

Twenty seven years allows for a strong valid economic comparison between residents renting in RY versus the LV residents who cooperatively own their mobile home park.

The first table shows the comparison in the average space rents (ASR) between the two parks from 1995-2022.

• Average rent is $750 plus a separate water bill average of $30 per month = $780
• Water is included in LV space rents

The next table shows the percentage increase in ASR of both parks over the same 27 year period.

In 1995, the renter residents at RY were only paying $492 more per year than LV. On average, the renters at RY in 2022 are each now paying $4,902 more per year than the resident owners of LV.  The difference is 10 times more in space rents for the renters at RY.

Over half of the residents living at LV are low or extremely low-income and about 40 percent of the residents at RY are in the same income categories. A number of residents of both communities are single, divorced or widowed women. They receive either Social Security retirement or disability income. Because they own their mobile homes none of the income eligible residents in the two communities are receiving Section 8.

Due to the change in rents as a percentage of income over the 27 years, the extremely low and low-income residents on fixed incomes at LV have gained more disposable income while those at RY have much less. Disposable income is critical to the quality of life for low-income seniors.

Resident ownership brings many advantages to seniors on fixed incomes, but the most important is that extremely and very low-income seniors have extra cash in their pockets each month.

Table 3.Yolo County Median Extremely Low-Income (EXLI) 1995 vs. 2022

In examining average space rent as a percentage of income, a single extremely low-income senior ($20,850) living at Leisureville will be paying 23 percent of their income for space rent. That is well under the HUD guideline that people should not pay over 30% of their income on housing. On the other hand, that same extremely low-income senior living at Rancho Yolo will be paying 45 percent of their income. In reality, a number of the single female seniors receive fixed incomes of $20,000 or less.

In conclusion, let’s reverse the situations. If the renter residents of Rancho Yolo had the same annual increases as the resident owners of Leisureville they would be paying $447 in monthly rent rather than the average $780 they pay in 2022. By not going cooperative, the 162 space RY residents are paying $1,046,925 more annually just in 2022. If LV had not gone cooperative, they would be paying $687 per month for rent in 2022 rather than $386. By going cooperative, the 150 space LV residents had $694,000 more real cash in their pockets just for the year of 2022.

By the early 1980’s, usually by accident, there were just a few resident owned MHP’s in California, where the residents formed a resident owned community or co-op to buy the park. In 1981, as Western Regional Director of the National Cooperative Bank, I co-funded La Cooperativa Santa Elena in Soledad, California as a cooperative MHP. From that day on, 100 hard-working Hispanic farmworker families living in their own mobile homes also became owners of their park.

However, after a group of mobile home renters in Meredith, NH went co-op in 1984, the New Hampshire Community Loan Fund started a structural program to help NH residents buy their parks. This was the first formal MHP to co-op program in the United States. By April of 2022, the NHCLF has financed 143 MHPs going co-op just in New Hampshire. Because NHCLF restricts itself only to parks in New Hampshire they joined forces with other funders in 2008 to create the national program called Resident Owned Communities USA (ROC USA). Residents of almost any park in the USA can now be helped by affiliates of ROC USA. https://rocusa.org/about-roc-usa/

David J. Thompson co-led the successful cooperative purchase of Leisureville by the residents and led the effort of the residents to buy Rancho Yolo as a cooperative which was rejected. Thompson was inducted into the US Cooperative Hall of Fame in 2010.

He is the author of four books and over 400 articles about affordable housing and cooperatives. During his professional career, Thompson has developed or co-developed housing that is home to over 10,000 people.

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