Daily Inter Lake
By: Shelley Ridenour
August 12, 2010
Aug. 12--The new owners of a mobile home park in Kalispell made history Friday when they formed a cooperative and bought the court where they live.
Ownership of Green Acres Court at 1721 S. Woodland Ave. officially transferred to the Green Acres Cooperative, which consists of the 32 residents of the park. Today the cooperative owns the land where the homes are located, and individuals own their own homes. Prior to the sale, the land was owned by George Everett.
John Sinrud, president of the new cooperative, said co-op's creation was "an opportunity for all of us to own a piece of the American dream."
Green Acres has existed since the 1970s, Sinrud said. He's lived there about a year.
In 2009, Montana lawmakers approved legislation that offers a capital gains tax break to people who sell trailer parks to cooperatives or other qualified entities, Mary Lou Affleck of NeighborWorks Montana said.
Such sales may prevent families from being displaced. Trailer parks in Whitefish and Bozeman closed recently, she said, because the owners sold the land for commercial development. The residents had no say in the sale, she said, and were forced to move.
Those sales were part of the reason Sinrud said he wanted to get the ball rolling on the Green Acres project.
He and Everett knew one another, and Sinrud knew Everett was considering selling the land, so the effort to form the co-op and buy the land began. Both men are former Montana legislators.
"When the future is unknown, it is scary," Sinrud said in a press release. "We solved that by taking our destiny into our own hands and that gives us great optimism and confidence about the future of this community and our homes in it."
Montana is one of five states where a tax incentive is offered to mobile home court owners who sell to residents, according to Paul Bradley, president of ROC USA, a national nonprofit organization that works to help residents of mobile home parks form cooperatives and buy the courts. Tax incentives are also offered in Washington, Oregon, North Carolina and Vermont.
Rep. Keith Regier, R-Kalispell, said the bill provides a "good opportunity to help people in trailer parks to be owners," and from that perspective the bill is good.
Regier voted against the legislation when it was before the Montana House of Representatives. Legislators who voted no did so because of a "reluctance to grant tax breaks," he said.
Green Acres residents were generally enthusiastic about the venture, Sinrud said, once they understood how it would work. "At first some were unsure because they didn't know all the details."
In a press release, Everett said he was happy with the sale. "I have come to know and like the homeowners. They're hardworking and decent people and I wanted to provide them an opportunity."
Affleck and other NeighborWorks Montana staffers worked with the Kalispell homeowners as part of that group's objective of providing resources to low- to moderate-income families.
"We are in the business to provide and preserve housing for Montana residents," Affleck said.
Rep. Mike Jopek, D-Whitefish, was pleased to learn about the sale this week. Jopek supported the legislation in 2009.
"I always think it's exciting when people are able to live in their houses, take an ownership stake and acquire wealth," Jopek said.
Especially in the Flathead, where "affordability thresholds are so high" and many people can't own their homes because they can't afford the land, sales such as the Green Acres venture are a benefit to Flathead County and the state, Jopek said.
NeighborWorks will continue providing technical assistance to the cooperative and will monitor its financial records to "make sure they are successful," Affleck said.
NeighborWorks is a technical assistance provider for ROC USA. The Montana organization is one of 11 nonprofit organizations that work with ROC USA "on the ground helping owners form co-ops and helping them with the paperwork to buy their parks," Bradley said.
Bradley said ROC USA was formed to help replicate across the nation a successful effort that's been under way in New Hampshire for 25 years. There a community loan fund has been established to help residents of trailer parks create cooperatives and buy the parks. About 20 percent of all trailer courts in New Hampshire are owned by co-ops, he said.
"We are trying to prevent people from losing the ground under them," Affleck said of NeighborWorks.
The support and assistance from ROC USA and NeighborWorks Montana was crucial in this venture, Sinrud said in a press release. "We could never have gone to a private bank with this. We didn't have the down payment nor as a new business did we have the credit rating to make this happen."
Residents of mobile home parks typically face two barriers if they want to own the land where they live, Bradley said -- the know-how and financing to buy the land. ROC USA formed two subsidiaries to help with those tasks.
ROC USA Capital provided the mortgage loan to the Green Acres Cooperative to buy the park in Kalispell. Some financing also came from a community development block grant program authorized by Flathead, Lincoln, Sanders and Glacier counties to ensure affordable housing in the state, Bradley said.
When homeowners own their mobile home parks, they gain economic security, Bradley said. They also eliminate risks to their homes and lifestyles, including the "risk of a third-party investor raising rents excessively, of an absentee landlord neglecting the infrastructure and the worst risk of all -- community closure and eviction."
Population growth has put "significant pressure on affordable" homes in Flathead County, ROC USA Capital Managing Director Mike Sloss said. That's part of the reason ROC USA Capital wanted to help with the Green Acres venture, he said.
This land sale isn't significantly different than the process used by people who own townhouses or homes on some golf courses, Jopek said.
"The concept seems odd and foreign to a lot of people, but that's how townhouses work," Jopek said.
People own their townhouse, but rent the land it sits on from a homeowner's association that oversees various responsibilities, such as lawn care or exterior painting.
"It's an old concept being refined to work better and better in today's world," Jopek said.
Residents of Green Acres still have the option to sell or move their house, Bradley and Sinrud said.
Essentially the sale would proceed like most real estate sales, but the new buyer would have to apply for membership in the cooperative, Bradley said. Assuming the buyer is approved, the seller sells his or her share in the cooperative back to the co-op, which then sells it to the new owner.
Co-op members don't buy their individual lots, he said. The corporation owns all of the land, but the shareholders -- who are the residents -- own the corporation.
The co-op relies on the concept of one member, one vote, ensuring that everyone has the same basic interests in the park, Bradley said. In Green Acres, each homeowner has bought one share and now has one vote on matters of the community.
An elected board of directors, of which Sinrud is president, handles daily issues, and the members will vote on major issues including the annual budget and bylaws and rules that govern the cooperative.