All METARs are aware of the increase in the price of housing all over the country.
Many people who can’t afford to buy a home live in mobile home parks. They own the mobile home (which is not really mobile since it would cost a lot to move it) and rent the land for a modest amount. This has been a stable system where local land owners maintained the mobile home park (kind of a mini-community). A friend of mine and her handyman husband inherited a mobile home park from her father. It’s a win-win situation since many of the tenants are poor and/or elderly, on a fixed income. The landlord makes a living and maintains the property while the tenants have a stable, affordable place to live.
That is changing as private equity is buying up mobile home parks and jacking up the rents, while neglecting maintenance.
https://apnews.com/article/mobile-home-parks-rent-investors-…
**Rents spike as big-pocketed investors buy mobile home parks**
**By MICHAEL CASEY and CAROLYN THOMPSON, Associated Press, July 25, 2022**
**....**
**The plight of residents at Ridgeview [dramatically rising rent and neglected maintenance] is playing out nationwide as institutional investors, led by private equity firms and real estate investment trusts and sometimes funded by pension funds, swoop in to buy mobile home parks. Critics contend mortgage giants Fannie Mae and Freddie Mac are fueling the problem by backing a growing number of investor loans.**
**The purchases are putting residents in a bind, since most mobile homes — despite the name — cannot be moved easily or cheaply. Owners are forced to either accept unaffordable rent increases, spend thousands of dollars to move their home, or abandon it and lose tens of thousands of dollars they invested. ...**
**Driven by some of the strongest returns in real estate, investors have shaken up a once-sleepy sector that’s home to more than 22 million mostly low-income Americans in 43,000 communities....parks containing about a fifth of mobile home lots nationwide have been purchased by institutional investors over the past eight years. ...** [end quote]
This is similar to the way that private equity is buying many private homes for cash, jacking up the prices so families can’t afford to buy. Except in the case of the mobile home parks, the private equity firms are financed by GSEs meant to make housing more affordable for ordinary people.
This is a trend which is very harmful on the inividual level as helpless people are wrung dry. It’s also harmful on a Macro level because people who are spending more on housing have less to spend on consumer goods and services which would stimulate the economy.
I HATE PRIVATE EQUITY!! THEY DO SO MUCH HARM IN SO MANY WAYS!!
Wendy
