How Resident-Owned Communities Can Create Mass Affordable Homeownership

Creating and preserving quality affordable housing is notoriously difficult, with the number of available units declining each year as landlords raise rents ever higher. An underappreciated tool for closing this gap–potentially benefiting millions of U.S. households–involves resident-owned manufactured housing communities.

Roughly 22 million Americans live in manufactured homes misleadingly called “mobile homes” – misleading because moving these homes is not a viable option for most manufactured home owners. About 60 percent of people who own their individual manufactured homes do not live in communities commonly known as mobile home parks, while roughly 40 percent (three million households or about eight million people) have homes sited on land in these estimated 45,000 manufactured housing communities operating across the United States. A Freddie Mac Multifamily survey conducted in 2019 estimated 45,000 manufactured housing communities operating across the United States.

Despite their shortcomings, these communities represent a major source of subsidized affordable housing for low-income people. Is it possible to preserve the best features of this form of housing while eradicating the worst? The short answer: it is–through resident land ownership.

Of course, “mobile homes” theoretically can be moved. However the cost to move is not trivial. One source notes that “moving a double-wide mobile home or triple-wide manufactured or modular home can cost $15,000 or more,” while even single wide homes can cost $3,000-$9,000 to move – money, in short, the most low-income families do not have. As a result, opportunities for landlord exploitation of manufactured housing residents remain high as comedian John Oliver illustrated in a Last Week Tonight episode a few years ago.

There is another option–a cooperative option. Resident-owned communities (ROCs) are distinguished from third-party or investor-owned manufactured housing communities because residents collectively own the land underneath their homes, meaning residents get to vote on certain issues impacting the community and build home equity on secure, affordable land that they collectively own.

Rather than pay rent to a landlord, the residents pay site fees to a co-op that they own. Because the coop owns the land, resident ownership is secure; this enables residents o qualify for a lower interest home mortgage loan, rather than a higher interest, personal asset chattel loan. In short, ROC’s offer a powerful tool to secure housing affordability through collective ownership, one that is growing in popularity.

Behind every conversion to cooperative ownership, there are many stories of lives transformed. As one manufactured home owner told a reporter a few years ago. “It’s our property now, so that’s a good feeling. You are not at the mercy of someone.”

Source: Excerpts from a much longer narrative by Rutledge A. Simmons posted by NPQ February 7, 2024