Des Moines Register
By: Lee Rood
September 8, 2010
Georgia Ripley is blind in one eye, has a bum heart and juggles 13 medications daily that can cost as much as $747 a month. The 87-year-old, who is divorced with three grown children, knows exactly what her retirement and Social Security will cover - and these days that's not much.
Ripley and other seniors at Western Village in West Des Moines were notified this month that the costs of living in their mobile home park were going up, but no one has been able to tell them exactly how much more they will have to pay. They now pay $315 a month in lot rent.
The uncertainty about how high the rental fee is going, and the effect that will have on her pocketbook, is making Ripley feel sick all over again.
"I don't know what I'm going to do," she said, sitting in the kitchen of her 1976 mobile home. "A lot of us could wind up homeless if they keep doing this."
The feeling is more common right now than Ripley realizes.
From Florida to Oregon, Minnesota to California, residents of manufactured-home communities have been hit hard by rising lot rents as park owners have seen their own costs and vacancies rise.
But unlike some other states - where some cities have the authority to establish rent-control rules or commissions to protect tenants from unreasonable charges - Iowa law prohibits such options for mobile home residents.
The state also lacks the sort of nonprofit advocacy organizations, common in many states, that protect residents' legal rights, help them form associations and ownership co-ops, and lobby for more protections under state law.
There's another reason many mobile home owners grouse but keep their mouths shut:
Iowa's law governing landlord-tenant agreements in manufactured housing is one of the weakest in the country for residents, and it allows park owners to evict tenants for almost any reason and to force them to move their homes in as little as three days.
Times are harder now for owners of homes
Joe Kelly, executive vice president of the Iowa Manufactured Housing Association, concedes times are more difficult today for the owners of mobile homes than they were when state laws governing manufactured-home communities were written.
"This is not the same scenario it used to be," he said. "When the industry started in the 1950s, there used to be real mobility of homes. They used to be more like travel trailers. Today, people spend $75,000, $80,000, even $85,000. ... It's a big deal to move them and much more expensive."
Moving a mobile home can cost from $3,000 to more than $14,000. For fixed-income owners like Ripley, who own the oldest homes, it becomes almost impossible because older models no longer are accepted in many mobile home parks.
Kelly's group represents about 300 park owners in Iowa. He is mindful of problems and plans to propose some changes this year to Iowa legislators to better protect consumers.
Among other things, he said, he would like to give homeowners more time - 60 days instead of three - to move homes when evicted. The group also would like to give residents more time to move - six months instead of 60 days - when park owners sell their land for other uses.
But he cautions that times also are difficult for the owners of manufactured-home communities. One of their biggest expenses: Iowa also has some of the highest property taxes for mobile home parks in the country because owners must pay commercial, not residential, taxes.
"It's tough," he said. "There are a lot more vacancies. Businesses have closed. People have lost their jobs. Costs keep going up every year."
In the well-kept community at 2000 Grand Ave. where Ripley lives, residents have been upset by the new owners' recent decisions to begin charging residents for their sewer service and to move to one bundled phone, cable and internet provider.
Ripley moved in five years ago. She said costs have gone up noticeably since Western Village was purchased in October 2008 from local owners. Lot rents increased twice.
New managers call the park affordable
But the new managers of Western Village say the park is very affordable compared to apartments and, at $315 a month, the lot rent is well within what other parks in the metro area are charging.
"Relatively speaking, it's a bargain," said Eric Hagen, managing director of Mobile Home Park Investments of Des Plaines, Ill. "We're good business people, we're not going to price ourselves out of the market."
Hagen and his brother Jason, vice president of operations for the company that manages 46 similar properties nationally, said the measures the company is taking to improve the park's infrastructure and reduce water usage are key to preventing unnecessary increases in lot rents years into the future.
Many parks, for example, have installed water meters at individual homes to encourage residents to conserve and make parks as environment-friendly as possible.
Residents in Western Village will pay existing city rates for their usage. In exchange for tenants agreeing to pay more of their own costs, the company promised not to raise lot rents for at least a year. "I know this is a little painful," Eric Hagen said. "But this is our opportunity to improve a lot of things at once."
Jason Hagen said an underground water leak this spring cost $50,000 and delayed plans to improve roads and other infrastructure. The company, he said, forged a contract with a private company to update fiber-optic technology and the park and others, provided it costs residents less than the current market rate.
With 255 residents, the company is collecting about $80,325 monthly - or just under $1 million a year. The Hagens would not say what the company pays for operating expenses and debt.
"We don't really share our numbers with anyone but our investors and the bank," Eric Hagen said. "But trust me, no one's getting rich."
The park and related property are taxed about $223,000 a year, according to the Polk County treasurer's office.
More parks owned by investment firms
Iowa has an estimated 800 to 900 manufactured-home communities.
Under law, owners of the communities are responsible for maintaining common areas such as roads, clubhouses or pools, and infrastructure like water, sewer and sidewalks. Residents own their dwellings but pay rent for their lots.
More mobile home parks have been purchased by investment and management companies, a switch from when many were family-owned and local.
Financial advisers say they are a good investment, and can carry fewer costs than other real estate. Some even tout the immobility of residents as one of the biggest reasons.
In an article last year, "Why Mobile Home Park Rents Can Be Pushed Higher Than Others," the online real-estate publication biggerpockets.com noted mobile home parks owners did not have to be as scared as other landlords to push up their rents every year.
"Basically, you can continue to raise rents because the cost for the tenant to move is far higher than the resulting rent increase."
In Iowa, tenants who find themselves locked in disagreements over costs with park owners often find they have two choices: move or pay up.
But Iowa tenants and agencies could do more, advocates in other states say. Illinois, Wisconsin and Minnesota, for example, all belong to the Manufactured Home Owners Association of America, a national organization that provides leadership in organizing mobile home communities and legal advocacy.
In Minnesota, groups like All Parks Alliance for Change have been successful in helping form residents' associations and co-ops, changing state laws, and establishing trust funds to help residents relocate when parks close.
Justin Bell of All Parks Alliance said his group connects residents with pro bono lawyers. It helps residents form associations to speak on their behalf or explore the possibility of buying the parks where they live.
"But jacking up the rent is still a tricky issue," he said. "Our state law says rents have to be reasonable, but reasonable is not defined. And rent control here is a very serious word."