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    Posted September 6, 2014 by
    steve0425
    Location
    Franklin, Idaho

    The Forgotten Homeowner: Folded, Spindled, and Mutilated and Nobody Cares

     

    The Manufactured Home Homeowner

    Do they have any rights? Is there any justice?

    By Steve Anderson,

    A former manufactured home homeowner

     

               The story you are about to read is true! Names were changed to protect the innocent victims of discrimination because they do not have the financial means to alter their circumstances or seek justice from a system that seems to ignore their plight.

               This is not a story of race, but of class. It is about the low to moderate income person who wants to enjoy the blessings of home ownership, but can’t. The reason being is that they are owners of manufactured homes, commonly referred to as mobile home owners, who live in manufactured home communities, commonly referred to as mobile home parks or trailer parks.

               Imagine if you will a scenario where you are sitting in your home and somebody tells you that they don’t like the color of your drapes and orders you to change them. If you are anything like me, you would gladly tell them where to go and what to do when they got there.

               If you are a manufactured home homeowner, you had better pay attention because the person saying it is the park owner or their representative and if you do not change the curtains to meet their desires, you will probably be evicted from your home.

               Believe it or not, this actually happened in several manufactured home communities. In another community, the park’s management ordered everybody to replace their storage sheds because somebody from the ‘Parade of Homes’ complained that they were ‘unsightly’ as those taking the tour drove by the community to a featured subdivision.

               The community residents were given two weeks to come up with $1,000 to replace their existing storage sheds. They didn’t have a choice! It was either perform or be evicted from the home they own. What was interesting that when I investigated the situation, I discovered that the park’s management told homeowners that they had been told that local city officials were demanding action. City officials denied this allegation in no uncertain terms.

               Unfortunately, stories such as this are all too common throughout the country. Nevertheless, they are only the tip of the iceberg. The community I lived in was a ‘senior community’ that required the residents to be over the age of 55. Most were well beyond that age.

               The park owner seemed always eager to collect money and raise rents, but did very little when it came to maintaining the community. Within the community, there are a large number of homeowners who use a cane, walker, or other assistive device to move about.

               The road system was in such a state of disrepair, many homeowners were not able to move about unless they drove themselves to visit a neighbor just a few doors down. Efforts were made by the local mayor to get the park owner to do something about the situation. The park owner steadfastly refused and cited that the community was private property and the city had no right to even suggest he do something.

               This same park owner decided that he had the ability to unilaterally alter the month-to-month rental agreement – there wasn’t a park owner in the state who offered any type of long-term lease. He decided to change the ‘grace period’ about the due date of the rent and eliminated the clause that said the water, sewer and garbage were provided by the park and was included in the rent.

               Both had pecuniary consequences on the homeowners. It also resulted in his ‘employee,’ a family member who was not a licensed plumber, to install water meters throughout the park on each home on the undercarriage of the homeowner’s home, without asking their permission.

               Had he installed the water meters below the connection to the house, it would have been done on his property, but this was on the homeowner’s property and was not done in a way that was consistent with local building codes. Is he the first park owner to ever do something like this, absolutely not.

               A constant irritation is the space rent charged by park owners, with little in the way of service returned in exchange. Park owners state that they are only keeping up with increased costs of running the facility. In fact, it is completely false.

               In the eight years I lived in this community, which also included the recent recession, rents increased by 48.6% while the cost of living increased in the 20% range. When rents in all other areas of the real estate sector were reducing during the recession, these rents continued to increase.

               This is not unique to this park, but is common everywhere there are manufactured home communities. In one community I know of, during that same time period, the rents increased by 146%. This resulted in another unspoken scenario, the financial eviction.

               Financial eviction occurs when a park owner raises the space rent over and above the homeowner’s ability to pay. The cost to move a manufactured home within the local area runs in the neighborhood of $20,000. Since the homeowners are amongst the low to moderate income brackets, moving their home from one park to another is not an option.

               The end result is that the homeowner walks away from their home and the park owner assumes ownership of the home. One radio commentator called this ‘stealing.’ This is true because the homeowner receives no financial compensation for the home. They are basically getting away with the ‘clothes on their back’ and not much else.

               In one situation I know about, a senior woman – a widow on a fixed income – wrote a letter to the park owner, complaining about the rent and her relationship with the park’s management. She was served with a cease and desist order within a couple of days after the letter was mailed. She was also told that she could count on being evicted if she ever sent another letter.

               This brings me to the situation of the insensitivity of the elected officials towards this problem. A bill was introduced in the Utah legislature a couple of years ago that called for ‘non-binding arbitration’ between homeowners and park owners to discuss issues such as park rules and rents.

               There was a financing mechanism where the homeowners would pool resources and pay for all the costs of mediation. In most businesses, the entrepreneurs not only want feedback from their customers, they rely on it heavily. This was not the case with this bill.

               The park owners fought this with tremendous vigor. They did not want to hear from the homeowners and their attitude, as expressed in a committee hearing by their lobbyist, “if they don’t like it, they can just move.” At a minimum cost of $20,000 per move, the result is a ‘captured renter’ who lives in servitude to the landowner.

               To illustrate this point, in one park the manager sent out a set of new rules. Included in the rules were the following items: (1) a prohibition of homeowners eating or drinking on the deck of their own home; (2) a set time when garbage cans could be placed outside for trash removal; (3) a prohibition of being on the streets of the park after 8:00 PM; and (4) a provision that violation of any of these rules was grounds for immediate eviction.

               Although homeowner association are supposed to be protected by Utah law – as part of legislation granting basic civil rights to manufactured home homeowners, most corporate park owners did everything they could to do away with associations.

               For example, in one community, the homeowners organized into a homeowner’s association. They managed to have a meeting with management where there were only two items of discussion: (1) the inability to read the street signs within the community.

               Signs were faded and could not be read. This was a source of concern to the homeowner’s in the event emergency vehicles needed to enter the park. The second item was their desire that management clean up the children’s play area.

               Drug dealers from outside the park and their customers discovered that management was absent from the community in the evenings and saw this as a great location to do their business. Drug paraphernalia was throughout the area so that parents could not take their children to use for fear of serious injury to their children.

               After the meeting, park management decided to make life ‘miserable’ for the officers of the homeowner’s association, and eventually forced the organization to fold.

               People often view manufactured homes as a home that loses value too fast. This is true; however, it is not because the homes are poorly built. It is because manufactured home homeowners are denied the financial tools available to any other homeowner.

               During the Bush administration, Congress passed a bill directing the Federal Housing Finance Administration (FHFA) to come up with a set of rules that would better serve ‘underserved markets.’ This was known as ‘Duty to Serve.’ As of this writing, nothing has happened that has addressed the issues concerning the financing of manufactured homes.

               I learned the hard way about the lack of these financial tools when I attempted to finance the move of my home onto a piece of land in a small town in the state, place it on a permanent foundation, and transform the property to real estate. I contacted every lender in the State of Utah and found nobody who would touch the loan.

               This was in spite of the fact that the loan-to-value ratio was at 65% and the debt to income ratio was less than 20%, including secondary debt. Lenders insisted that I purchase a brand new home, which made the entire transaction financially impossible because the loan-to-value ratio would have been over 100%.

               The home was relatively new and was constructed according to HUD standards. It was originally built in 1996. All of the banks agreed that this move made financial sense; however, they wouldn’t touch it. Lenders in surrounding states said they would do it – if the property was in their state.

               The end result was that the only buyer for my home would be one who had cash and didn’t need to finance the home. This turned a $60,000 investment into an item that I was able to sell for only $9,000.

               This is not physical depreciation, it is a phenomenon known as external depreciation – or more specifically – financial obsolescence due the lack of financial tools and the resources to bring new participants into the marketplace.

               One might ask whether this situation is unique, the answer is no because it happens throughout the country, furthering the feeling of ‘serfdom’ amongst manufactured homeowners. This is further exasperated when considering the treatment of homeowners by park owners and the fact that most states do not have laws that protect manufactured home homeowners with the basic constitutional freedoms everybody else enjoys.

               The National Manufactured Home Owners Association (NMHOA) has been pressing Congress for a bill that would guarantee all manufactured homeowners basic constitutional freedoms. To date, nobody has lifted a finger to help.

               Is it because manufactured home homeowners are low to moderate income? Perhaps it is because representatives believe stereotyped images portrayed by shows such as ‘Cops’ and ‘Trailer Park Boys.’ Whatever the reasons, there is a class of people who continue to be ignored that comprise of roughly 10% of the housing market.

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