Protecting Homeowners in Manufactured Home Communities

(This article has been written by Regional Housing Legal Services.)

Residents of manufactured home communities (MHCs) are organizing to protect their investments in their homes by making sure high lot rent increases don’t strip away their equity. The Coalition of Manufactured Home Communities of PA is working with PA Reps. Hanbidge, Ceratto, and Webster and Sen. Schwank to move legislation that makes sure any increases in lot rents are in keeping with inflation as indicated by the Consumer Price Index (CPI) or are otherwise justified by increases in costs.

What are lot rents? Residents of MHCs generally own their homes but rent the ground that the homes are situated on. The land is owned by the MHC owner, traditionally a small mom-and-pop investor but more recently a private equity firm or other institutional investor. As MHCs are sold to private equity firms, whose business model is to get as much profit out of an asset as quickly as possible, even at the risk of destroying the asset, residents are seeing their lot rents skyrocket.

Reps. Hanbidge, Ceratto, and Webster introduced HB 1250 to ensure that lot rent increases are reasonable. The bill also guarantees residents the right to gather and meet on MHC property. HB 1250 was reported out of the House Housing and Community Development Committee in late April.

In the Senate, Sen. Schwank introduced SB 745, which is similar to HB 1250. She also introduced SB 746 to provide the residents, collectively, with the right to match a purchase offer for the sale of the community. The right to purchase could also be exercised by a nonprofit organization endorsed by the residents.

Sen. Schwank intends to introduce a third bill to address the problem of titling manufactured homes. Under current law, the homes are titled as vehicles, even after they are affixed to a foundation and even though the homeowners pay property taxes. Titling the homes as vehicles means they are not eligible for purchase mortgages or home improvement loans.

Manufactured home communities offer a valuable source of unsubsidized affordable housing. The General Assembly should do everything it can to protect the investments of MHC homeowners and make the manufacture, purchase, and ownership of manufactured homes more attractive.