Backers see triumph for affordability as residents buy mobile home park
By JOHN TOWNES Contributing writer
PITTSFIELD, Mass. This fall, a group of residents of Lake Onota Village, a mobile home park off Valentine Road on the west side of Pittsfield, joined together to buy the park for $5.5 million.
The purchase, concluded in October, means 89 of the park’s households now jointly own its land and infrastructure as members of the Lake Onota Village Association Inc.
The deal kept the park’s previous owner, MH Communities of Nashua, N.H., from going forward with a plan to sell it to a private equity firm based in the western United States — a change many tenants feared could lead to higher costs, reduced maintenance and less control over the fate of their homes.
The park’s residents were able to buy it using Massachusetts’ “right of first refusal” law, which gives resident groups the option to purchase when owners of mobile home parks decide to sell them. The Lake Onota park’s residents received help from a nonprofit group that provides expertise and financial resources to support these types of purchases.
Against the backdrop of a national shortage of affordable housing, supporters say the Pittsfield transaction represents one strategy for preserving a supply of housing for the people with low to moderate incomes who traditionally have lived in mobile home parks.
As the national housing shortage has worsened over the past decade or more, private- equity investment firms with large amounts of capital have increasingly been buying up mobile home parks as well as houses and apartment buildings. Critics say this conversion to investor-owned properties is one factor in escalating prices for all types of housing — and often leads to the displacement of current tenants in rental properties.
Michele Rogers and Bill Lyman are among the new owners of Lake Onota Village, a mobile home park in Pittsfield, Mass. They joined 88 other park households to jointly buy the land under all their homes.
But unlike apartment tenants, who only have to take their possessions when they move, occupants of mobile home parks are more restricted in their ability to move if the new owner of their house lot raises their lease payment or fails to maintain the infrastructure in the park. A recent article in Forbes magazine pegged the national average cost of moving a mobile home to a new site at more than $9,000.
Those who follow the industry say 23 private equity firms now operate more than 1,800 mobile home parks across the United States, and these firms are continuing to acquire more.
“There’s a huge flood of private investors buying up mobile home parks,” said Nora Gosselin, the director of resident acquisitions for New England Resident-Owned Communities, a nonprofit organization that helps park residents. “When that happens, the residents get the worst of the situation. The investors know that many people in mobile home parks can’t move, and we typically see an escalation of rents and a decline in maintenance.”
Gosselin said the strategy of resident purchases of mobile home parks first emerged in the 1980s, but in recent years it has become a vital tool for protecting the affordability and condition of parks. Laws governing the sale of mobile home parks and their tenants’ rights vary by state, but lately there has been a push to strengthen the rights of tenants in these situations.
New York and most New England states have laws giving residents or their representatives a “right of first refusal” in the event that a mobile home park is offered for sale. (New York strengthened its law in 2023 to cover any sale; previously it had only provided for resident purchases in situations where an owner or buyer was proposing a change in use of the property.) Some states either have no such protections or a weaker version that residents be notified of a potential sale and be given an “opportunity to purchase.”
Homeowners on leased land
Mobile homes, also known as manufactured housing, are built in facilities elsewhere before being transported to a site and connected to its infrastructure. The average cost of a new mobile home now ranges from about $80,000 to $150,000.
Although some purchasers of manufactured homes place them on land they own, many others choose to rent or lease sites in mobile home parks whose operators pay land taxes and maintain neighborhood infrastructure such as water and septic systems and in some cases roads and amenities such as laundry facilities.
Traditionally, under independent owners, park rents were relatively stable and interactions with management were direct and personal. The combination of loan payments for a home plus the ongoing site rental was low enough to be affordable for people on moderate incomes.
But if a new owner raises prices or neglects property maintenance, it becomes harder for homeowners to sell their homes in place. And because of the high cost of relocating a mobile home, residents with tight budgets and limited savings can wind up as captive tenants — or even at risk for eviction if they can’t keep up with payments.
MH Communities, the company that owned Lake Onota Village until October, made a deal earlier this year to sell eight mobile home parks in New England and New York, including the one in Pittsfield, for $87 million. The buyer was Crown Communities LLC, an investment firm based in California and Wyoming that acquires and manages mobile home parks in the Midwest and Northeast.
Under Massachusetts law, mobile home park residents automatically have the right to purchase a mobile home park that has a potential buyer, provided they are able to match the other offer. Residents have 45 days to make an offer, plus 90 days to arrange for the sale. Any group purchase requires that at least 51 percent of homeowners approve.
In April, New England Resident-Owned Communities contacted residents of Lake Onota Village to inform them of the option of purchasing the park themselves — and to offer the organization’s assistance in helping to arrange the transaction.
Since its founding in 2009, the nonprofit group has supported the conversion of 65 manufactured-home communities across New England to resident ownership. (The group is an affiliate of the Cooperative Development Institute, a regional nonprofit founded in 1994 that supports the creation of democratically owned cooperative enterprises and networks in the Northeast.)
“We have a relationship with the state attorney general’s office,” Gosselin said. “They provide us with notices of these proposed sales. We then contact the residents.”
Whether residents are willing or able to buy a mobile home park varies by community, she added.
“This model is very community dependent
because it involves neighbors going into business with each other,” Gosselin said. “We help them to achieve that. But we don’t want to pressure people into making a purchase or have them be surprised later. We explain the law and all of the steps that are required, and then we leave them to make the decision. If they choose to do it, we can work with them.”
Organizing and persuading
At Lake Onota Village, the idea initially was a hard sell, with most residents either skeptical or resistant to taking on such an ambitious and expensive project.
Among the skeptical was Renee Marcantel, the president of the Lake Onota Village Association Inc.
“At first I thought it was a scam,” she said.
But said she changed her mind after investigating the situation further. Although there had been some issues with the park’s former owners, she concluded that the prospect of it being taken over by a large investment corporation was potentially worse.
“I researched what has happened in other parks that have been taken over by these private equity firms,” Marcantel said. “It wasn’t good. I was ultimately convinced that trying to purchase it ourselves was the best option.”
Marcantel, who is a nurse, added that she also was concerned for some of her neighbors. “There are a number of seniors living on fixed incomes here,” she said. “I was really worried at what would happen to them. Rents are really high in all housing, and there is a two-year wait for senior housing.”
Marcantel and several other proponents began a concerted effort to win the support necessary to move forward.
“There was serious resistance at first,” she said. “It took a lot of knocking on doors and convincing people. We also held a community picnic and other events and had a table set up by the mailboxes to explain it to people.”
By mid-May, they had reached the threshold of approval and submitted an offer. The Lake Onota Village Association was established as the legal purchaser and owner. It is structured as a cooperative in which participating residents own shares in the overall venture.
Gosselin said she was impressed by the residents’ efforts.
“This group has a lot of heart,” she said. “They were determined and worked hard to make this happen.”
In the end, 89 households out of the park’s 110 eligible owner-occupied dwellings opted to participate in the purchase. The remaining households that chose not to participate may continue to occupy their homes as tenants, and they also are able to buy into the ownership group at any time.
Taking charge
The buyers are financing the purchase through ROC USA, a national organization that provides low-interest loans and technical expertise for the purchase of mobile home communities by residents. The Lake Onota association also has received a $2 million grant from the state Affordable Housing Trust Fund.
Participants said the purchase required a lot of detailed business planning to ensure the effort would be viable and to satisfy the terms for financing. The buyers also had to undertake due diligence to assess the property’s
environmental and physical condition and what basic repairs would be needed.
One necessary initial expense is to upgrade the park’s water system, which has broken pipes and other problems.
The buyers also were required to hire a professional property manager to handle ongoing operations, such as maintenance, collecting and accounting for rents, leasing sites and other responsibilities. They have contracted with Moresi Associates, a development, real estate and property management firm based in North Adams.
Members of the new ownership group also had to determine what rents would be.
“The rent has to be all inclusive and enough to cover the purchase, maintenance and all other expenses involved in ownership,” Gosselin said.
The previous monthly site rents ranged from $350 to $400. The members and their advisers decided to set a basic rent for all sites at $522.
“We had to raise it somewhat, but we kept it as low as possible,” Marcantel said. “A major difference is that the money won’t go into the pockets of outside owners as profit. Instead, we will invest the rent income to make the property safer and more beautiful.”
She said the resident-owners are considering future improvements and amenities such as adding a community center.
“If possible, we’d also like to lower the rent at some point if that becomes feasible,” Marcantel added.