In California, tenants of a mobile home park try — but fail — to stop a corporate takeover
FRESNO, CA — A judge has authorized the sale of a local mobile home park at the center of an affordable housing battle to a national corporate landlord, dealing a blow to residents, lawyers and housing advocates who had hoped their bid for a cooperative — in which tenants each own a piece of the property — could become a model for a city short on housing solutions.
For months, residents of the Trails End Mobile Home Park feared a purchase from Harmony Communities, a Stockton-based mobile home operating company with 33 properties primarily in the West. Trails End marks its third property in the Fresno area. It has slowly grown into one of the larger mobile home-owning operators in the country, at times acquiring parks, renovating them and raising rents in the process.
More than 20 million people live in this type of housing across the U.S., largely due to its affordability, and as interest from investors has grown, particularly during the pandemic, mobile home park residents and advocates have grown concerned that they may be at the mercy of decisions from new owners who could push them out with strict rules, higher rents or evictions. Renters at Trails End are protected by a rent control measure specifically intended for mobile home park residents, which states that a rent increase can not exceed 75 percent of the “previous year’s consumer price index.” But this has not been used in years, according to advocates.
Families living at the park, who traveled in a caravan of vehicles from their homes in the north part of the city, tightly packed four rows of wooden benches inside a downtown Fresno courtroom after weeks of anticipation, wearing stickers with the number of their mobile home on their chests. The night before, they had met with local housing advocates, as they had nightly for several weeks, preparing for one of two scenarios: convincing the judge of their ownership plan, or walking away with new landlords and considering what options, if any, they had left. After a roughly 30-minute discussion among attorneys for the park owners, the city and the tenants, Judge Kristi Culver Kapetan determined she would approve the sale to Harmony Communities, prompting an eruption of tears and frustration from those who had tried to put together an alternative purchase.
Residents — some wearing headsets to hear an English translation of the discussion – took in the news for a few seconds, then began to sing, “No, no, no nos moveran,” Spanish for “no, no, we shall not be moved.”
Harmony Communities is no stranger to efforts to resist its ownership including in one community late last year in Colorado, according to local reports, a state that recently revised provisions surrounding mobile home park ownership in an effort to give people more control over their lots and communities. A month after purchasing the park, Harmony offered to sell it to the residents, at a higher price than the company had just paid for it, the New York Times reported. Residents made an offer, which the company declined in January. Harmony has referred requests for comment from the PBS NewsHour to Mark Adams, the legal custodian from California Receivership Group requested by the city to make sure the cleanup of Trails End is complete and violations were corrected.
When asked about residents’ concerns, Adams said “No two properties, no two communities and no two states are the same.” Adams said the company is interested in talking with Trails End residents as part of the transition.
In the case of Trails End, the company offered $1.7 million to purchase the property from an elderly couple who no longer felt they could run the park following a number of housing violations, which have caused unsafe living conditions for those who live there.
Alexandra Alvarado, a housing advocate with Faith in the Valley, a nonprofit that has worked extensively with the residents, said the judge’s decision to allow the sale to go forward was not the outcome residents hoped for, but that the fight for Trails End has a larger meaning.
“This is more than just a fight for Fresno. There are families all over this country who deserve a home, who have the right to live with their families in their neighbors and in safe, clean, affordable and accessible homes,” said Alvarado, who held a banner filled with tenant signatures reading “Support Trails End Residents.” “Everybody deserves this.”
Mobile home park economics
In 2021, sales of mobile home parks to private investors surged across the country, primarily in the Southeast region, which saw a 70 percent increase in mobile home property purchases, according to Marcus and Millichap, a California-based commercial real estate company. Sales in the Pacific region also saw higher values for the parks compared to other regions – up to $70,000 per unit.
The Urban Institute, a Washington, D.C., based nonprofit research organization, calculates that mobile home renters were at a disadvantage when it came to rent assistance during the pandemic because it is largely up to the mortgage lender for the property to decide whether any sort of rent relief is applicable — as it would be if a mobile home were mortgaged by a federally-backed loan, which is rare, according to the institute.
The Fresno judge’s decision follows a year already filled with anguish for many residents at Trails End who had faced crumbling housing conditions.
Since last year, the park has not had a legal permit to operate due to a number of violations cited by the California Department of Housing and Community Development, the agency that oversees mobile home parks in the state.
Two large fires caused by unaddressed electricity issues at the park killed a resident last spring and destroyed five mobile homes, and many have since gone without gas or hot water, residents previously told the NewsHour and relayed to the judge through documents and their attorney in last week’s hearing.
After the city of Fresno was made aware of the issues by residents who sought help, the city requested permission from the state to assume inspection authority of Trails End and other parks, in addition to having a receiver oversee cleanup at Trails End. City leaders visited the park on multiple occasions.
Through it all, residents pleaded with officials for support and to back their effort to search for different ownership than Harmony Communities. The city initiated bringing the case to court. However, in court, attorneys representing the city rarely spoke and did not offer comments in response to questions from the judge about the cleanup process or other repairs to gas and utilities. When asked if they had any preferences on the sale, they said they wanted to leave the decision up to the court. When reached by NewsHour following the sale, a city spokeswoman declined to comment.
A system “stacked against low-income people”
In court, attorneys for the current owners said the couple was strongly in favor of Harmony Communities and eager to complete the purchase and get the park up and running like before. Tenants have not had to pay rent ever since the park permit was suspended, but won’t be asked to repay the missed rent, according to Thompson.
The defeat in court for the Trails End residents was not for lack of trying, their attorney said.
Mariah Thompson, an attorney with the California Rural Legal Assistance, told the judge it was difficult for the groups assisting her in exploring a co-op to procure financial documents detailing operating expenses related to the park in order to secure financing with banking institutions that lend for community investment projects.
That information was needed as residents explored a housing cooperative model, a growing housing model at mobile home communities where residents – assisted by financing – pitch in to run the park themselves. Another mobile home company also expressed interest in buying the park – and Thompson supported them – but the company also couldn’t access the needed financial information from the owners, attorneys for that company told the judge over the phone during the hearing.
The proposals were submitted to the judge before the deadline anyway, but the judge said without accurate figures there was no way she could consider the alternative offers. Thompson said the refusal of owners to hand over information, as well as lack of support from the city, dimmed hopes for residents. She had hoped the judge would grant more time.
The sale and the challenges tenants encountered to put together their own bid for ownership underscores the large disadvantage tenants and nonprofit development groups have in the face of corporate property managers with deep pockets. A 2019 report from the Joint Center for Housing Studies of Harvard University noted that an existing challenge for groups attempting to implement affordable housing methods in communities is the vast financial resources of private investors who can move more quickly to complete a purchase, compared to community development groups who must jump bureaucratic hurdles to secure funding.
“In such places, private investors often snatch up properties soon after they become available. And, although community development groups often look to public subsidies to enable them to make properties affordable to low-income households, the subsidies come with regulatory requirements that slow the efforts of nonprofit developers to acquire properties,” the researchers wrote in the report.
In their unsuccessful effort to bring a cooperative to Fresno, Thompson said the group simply didn’t have the resources they needed.
“I think it demonstrates how stacked against low-income people these systems are,” Thompson said. “That really tells the story of what it’s like to be a poor person trying to interact with the systems. You get steamrolled through the entire process.”
The housing struggles of renters at mobile home parks are also found outside the parks. In 2017, then-Fresno Mayor Lee Brand enacted the Rental Housing Improvement Act, which went after landlords who didn’t make necessary repairs at their properties. Roughly half of the city’s registered housing units are rentals, and with housing prices rising, residents have called on the city to act again, only this time addressing the cost of housing directly.
The current Fresno mayor, Jerry Dyer, recently released a $260 million proposal to improve housing affordability and prevent displacement. Among the solutions being proposed is increasing housing availability. The city estimates 13,233 single-family units are needed to meet the current demand for housing in Fresno.
But Thompson said Trails End presented an opportunity to keep things affordable for people where they already are, if the city had supported the efforts by residents to purchase the park. Residents have said they likely could struggle to find affordable homes in the city if they have to leave the park.
“This would have been such an easy opportunity for the city to do tremendous good,” Thompson said. “Not only did they not support us, they didn’t even tell us that they weren’t going to support us. It was radio silence.”
New owners, new priorities
Adams, the legal custodian charged with overseeing the Trails End cleanup and correction of violations, will stay on until he is discharged in about 90 days, and said he may also continue to monitor the conditions at the park even after his official role ends, though he hasn’t made final plans.
As part of Adams’ cleanup process, Harmony Communities’ contractors were brought on to bring the property up to code, and the work done to clean it up so far has been “night and day” from the state of disrepair it was in, Adams said.
But Adams said the distrust among residents against the company may require some attention to make sure tenant concerns are addressed.
He spoke with the owner of Harmony Communities, Matthew Davies, following the sale and Adams said Davies expressed interest in speaking with residents and “creating peace” with them.
“I think that me serving as a monitor or somebody else serving as monitor would calm things down, because then people would know there’s somebody that’s going to have their eyes on this site every single day,” Adams said. “It’s not a bad idea to put some sort of a check in place so that the current people that are living there understand that there’s somebody for them to call.”
Renters voted before the sale to form a rent control committee at the park. The advocacy organizations working with residents have expressed interest in remaining in contact with the tenants as the new landlord takes over, Thompson said.
One of the things Adams said he’s hoping to address before he completes his receiver role is to make sure some owners of mobile homes on the property are not charging their subletters more than what the actual rent at the park is supposed to be under new ownership. He said he also expects Harmony to follow the city’s rent ordinances for mobile home park residents.
Thompson, who represents about a quarter of the park’s mobile homes, is aiming to work with the California Department of Housing and Community Development to start a process of getting homes registered before the sale is completed, in order to make sure the park’s renters have the paperwork they need.
Mobile home renters pay fees similar to a vehicle registration. A previous state law waived the payments and late fees for those who never obtained proper mobile home registration, but the law has since expired. Costs can vary depending on the mobile home. Making sure this is in place can help the state keep rent in check, too, Adams said.
Thompson said residents still have lots of questions and are scared, especially after exterior coverings added to the entrance of some mobile homes, some of them installed without permits, were recently taken down by the workers contracted for cleanup, surprising residents. Adams said that was part of addressing violations for unpermitted structures that were built at the park.
“The [residents’] fears are definitely there and I think the fears are warranted. I think that what is a great risk right now is an escalation of the conflict,” Thompson said.