Manufactured Homes, No Longer Mobile, Nor Affordable

The residents of mobile homes own the roof over their head, but not the ground beneath them. That can cause problems when the rent on the land shoots up.

By EVAN McLAUGHLIN Voice Staff Writer

Monday, July 3, 2006 | Before retiring two years ago, Homer and Virginia Barrs charted out their silver years. They soon realized that they would have to move from their Tierrasanta home to more affordable quarters after losing the steady income Homer Barrs earned as a real estate and mortgage broker.

The Barrses considered moving to another state. Instead, they chose the path traveled by many retirees in order to remain in San Diego: they moved into a manufactured-home park.

The affordability of manufactured-home living in Mission Valley Village provided the opportunity to spend their silver years in the city they adore among other seniors, and just a chip shot away from the Admiral Baker Golf Course.

After purchasing the manufactured unit — commonly known as mobile homes although most units are now set on concrete foundations like typical single-family houses — the Barrses replaced it with a new home that included thick plaster walls, a solarium and flowing awnings.

They were set for comfortable, twilight living, except for one thing: The Barrses, like other manufactured home owners, don’t own the land below their homes.

That detail has caused significant amount of uncertainty for seniors in every corner of the state who have sometimes faced wild fluctuation in their rents while remaining on relatively fixed incomes of social security, a small pensions or nest eggs.

Since moving to Mission Valley Village, the Barrses’ rent has increased from $485 to $695 — a 43 percent jump in two years. The increase spurred Homer Barrs and similarly situated manufactured home owners in the city of San Diego to rally around a proposal to stabilize rents at these private parks, a controversial move that other cities in the region have adopted.

The debate over this type of rent control focuses on the unique arrangement of these land-renting homeowners. If the market for living in a manufactured home booms, it affects both the value of the home and the land underneath. The question centers on who absorbs the increases: the park owner, who then passes it on to his tenant, or the homeowner, who builds up equity with every increase in value.

“We have no qualms with them making money. They have a good investment, they should make money. We just want them to be consistent,” said Homer Barrs, who has been chosen by the homeowner associations of eight parks — a combined 1,500 units — to advocate the proposal.

Barrs’ group hopes to tie rent increases in the parks to San Diego’s consumer price index — a standard that is used to measure inflation in the area. That rate of increase would typically be between 2 percent and 4 percent, as opposed to the 10 percent and 20 percent increases he says his members often see.
Park owners argue that controlling the price of the rent hinders their investment while the homeowner is then allowed to soak up all of the new value. For example, if rents are artificially low, the homeowner can sell his home for much more if the value of living in that park has appreciated.

“Rent control is a failed economic policy that only benefits the incumbent homeowner,” said Sheila Day, the executive director for Western Manufactured Home Communities Association, a political arm for park owners. “It takes the societal burden of affordable housing and transfers it to one segment, the mobile home park owner, and that’s not fair.”

Rent control opponents argue that restricting the leases can lead to the slumming of rental communities because there is less incentive to maintain the facilities around it. Barrs rejects that argument for manufactured home parks, saying he estimates that $100,000 is spent on maintenance at Mission Valley Village while the 119-unit park generates about $900,000 in revenue annually.

Cal-Am, the property manager for Mission Valley Village, did not return calls seeking comment for this story.

Homeowners argue it will be more difficult to sell their homes if would-be buyers find out they’ll be paying unexpectedly high rents once they set up shop.

A Bay Area television news report cited an instance where a manufactured home park in Santa Cruz increased rents up to $5,000 per month, leaving residents with a purchased home, but not enough money to pay for the land beneath it.

The homes, however, are stuck to the land, Barrs said. They may be called mobile homes in some circles, but moving them out of a park that that charges too much in rent is a hassle, he said.

“We’ve got these people who can’t move, and if we raise the rent 20 percent, where are they going to go?” he said.

The cities of Chula Vista, Oceanside, Vista, San Marcos, Santee and Escondido currently have rent control ordinances in place for manufactured home parks. A group like Barrs’ is also asking the Board of Supervisors to pass a similar law for the unincorporated parts of San Diego County.

Real estate analyst Gary London said that governments have begun to shrug off proposals for rent-control laws in general, but have embraced ordinances that pertain to manufactured homes because they tend to help a more vocal constituency with whose needs they empathize.

“Mobile-home rent control typically targets seniors on fixed incomes, because there are  greater political sensitivities to their needs,” London said.

Day said that manufactured-home owners shouldn’t be looked at as a monolithic demographic of fixed-income, senior citizens.

She argued that a fair housing law forced more parks to accept all demographics, and as a result, people over the age of 55 own about one-third of the nation’s manufactured homes when they owned three-fourths of those units in 1988, when the law was passed.