Lawmakers rejecting protections for mobile home park residents
| April 25, 2021 11:00 AM
Mobile home parks are one of the last strongholds of reliable affordable housing in Montana, helping people of a wide range of income levels become homeowners, even as prices for most other residence types in across the state continue to spike.
But as investment firms snap up properties across the state, there are signs that even mobile homes may soon become out of reach for many Montanans.
It’s certainly a worry for Cindy Newman, who owns a mobile home in the Highwoods Mobile Home Park in Great Falls, which Utah-based investment firm Havenpark Capital bought in late 2019.
“For the entire winter, I sat here and thought ‘I’m going to lose my home,’” Newman said in an interview.
Newman said she saw moving into the Highwoods park 21 years ago as an affordable option to live with and care for her ailing mother, who has since passed away. Back then, Newman said it cost about $166 per month to rent the ground beneath her home. Over the next 20 years, the 68-year-old said rent gradually increased to $283 per month. After Havenpark bought the park, she said her monthly bill jumped $80 in a single year, with evidence prices could increase even more.
Three bills introduced in the Montana Legislature this year sought to protect mobile home owners like Newman from the rising tide of housing prices, but only one is still alive -- the others stalling in committee during a session that has seen many affordable housing bills struggle to gain traction.
The House of Representatives passed Senate Bill 269 on April 21, sending the bill to Gov. Greg Gianforte’s desk for a signature. In its final form, the bill seeks to increase incentives for mobile home park owners to sell their park to their residents by completely exempting those sales from capital gains tax. It also requires the Board of Housing to send annual notices to mobile home park owners explaining the capital gains tax exemption and other potential benefits from selling their park to residents, as opposed to other potential buyers.
Sen. Brian Hoven, R-Great Falls, sponsored the bill after Newman contacted him about her situation in the Highwoods. Newman says she had been looking into Havenpark’s practices in other states and discovered the events in the Highwoods were part of a widely-reported trend in mobile home parks across the country that saw large, for-profit firms purchasing the facilities in droves and quickly jacking up rents. Hoven, who represents the district Highwoods is located in, says he was struck by Newman’s determination and search for solutions. When he looked into Havenpark himself, he said he saw a predatory company seeking to take advantage of a “cash cow.”
“These people are retired, elderly, low-income, people with disabilities, and these private equity firms are coming in and taking advantage,” Hoven said in an interview. “To me, it’s wrong as wrong can be.”
Hoven and Newman developed SB 269 alongside NeighborWorks Montana, a statewide affordable housing organization. Executive Director Kaia Peterson said the organization has been around for 20 years, and for the last decade, has been helping residents of mobile home parks in the state come together and finance the purchase of their parks, forming “resident-owned communities.” Peterson said the organization started the program as a way for residents to take the future of their communities into their own hands after a Whitefish mobile home park closed for redevelopment 10 years ago, leaving more than a hundred residents without a place to keep their homes.
“That was just a real call to find an alternative, just recognizing that was such a large source of stable and affordable housing and was really destructive,” Peterson said in an interview.
Now, Peterson said their work is even more important as more parks are sold to investor firms like Havenpark. Peterson said mobile home lot prices are historically about 50% cheaper than apartment rates, as residents aren’t paying for their homes, but for a space to put them and for other amenities like sewer and garbage. She said often, companies like Havenpark see prices as below market value and increase rates to match other types of housing.
For their part, Havenpark denies any wrongdoing or nefarious intent behind their actions at the Great Falls mobile home park. In an email, Josh Weiss, a public relations representative from the company, said the previous owner of Highwoods had been “deliberately subsidizing” rent in the park. The representative said the $283 price of rent was “the lowest of any mobile home park in the area,” and said Havenpark made $460,000 in improvements. He added that Havenpark increased rent by $47 in January 2020, but did not implement further increases. However, Havenpark did “unbundle” water and garbage services from rent, increasing monthly expenses by an additional $28-$33.
“Given that The Highwoods is the highest quality mobile home park with the most amenities in Great Falls, and is still significantly less expensive than nearly every other park in the area, we feel like our approach to increasing rents was fair and equitable,” Weiss said.
Havenpark owns communities in several states across the country and seven parks in Montana, as reported by the Flathead Beacon. The company has an average rating of one out of five stars on the Better Business Bureau, with dozens of reviews and complaints listed from residents referencing rent spikes, poor management practices and unfair evictions.
'No free market'
Montana does not have laws protecting mobile home park residents from unfair rent increases. Another bill sponsored by Sen. Hoven, Senate Bill 362, would have changed that, with provisions protecting homeowners from retaliatory actions by landlords and providing for an appeal process for residents if a landlord increases rent by more than 3% at once. However, the bill died in the Senate Business, Labor and Economic Affairs Committee in February after park owners slammed it as a continuation of an “all-out assault” on the mobile home park industry, saying it would unfairly hamper small “mom and pop” owners.
The committee also voted down Hoven’s second bill on the subject, Senate Bill 268, which would have directly helped residents of parks in similar situations to the Highwoods by allowing residents to petition a local governing body to condemn their park if rent increased “significantly above the consumer price index.” The homeowners would then have been allowed to form a “resident-owned community” and purchase the park from the city or county. That bill also met with vehement opposition from park owners and a lobbyist representing Havenpark who criticized it as an improper use of eminent domain.
Even Hoven’s surviving measure, SB 269, was heavily amended to appease Republicans who saw it as interfering with the free market. The bill would’ve originally required park owners to notify their residents 90 days before the date of sale, giving residents an opportunity to organize and buy the park themselves.
Hoven and Newman both said they’re frustrated at the failure of their bills to gain any ground, with Hoven adding that Republicans should pay more mind to the market mobile home owners find themselves in -- with few open lots in the state’s aging parks, most are unable to flee increasing lot rents.
“There is no free market here. These people can't move -- they don’t have any choice,” Hoven said. “When business takes advantage of people, regulation occurs. Businesses bring regulation on themselves by being greedy.”
Peterson said it’s important to preserve the lower rent rates found in mobile home parks, as they’re one of the last bastions of affordable housing in a state where the average price of a single-family home is $329,000, according to real-estate site Zillow -- up 11% in a single year. But the Legislature has had little appetite this session to take up the issue of affordable housing at all.
House Bill 21 would have doubled available loans for the development of low-income housing and apartments from $15 million to $30 million from the coal tax trust fund and passed the House in January. However, the bill languished in the Senate Finance and Claims Committee for three months before members tabled the bill. Committee Chair Ryan Osmundson, R-Buffalo, said there wasn’t enough flexible money in the account this session to fund the increase.
Meanwhile, Gov. Gianforte signed House Bill 259 on April 19, a controversial law backed by Republicans that ends the practice of “inclusionary zoning” in the state. The law prohibits local governments from requiring developers to set aside a percentage of their housing units for sale at a reduced price. Democrats decried the measure, saying cities and towns ought to be able to try different solutions for affordable housing without interference from the Legislature.
GOP leadership has pointed to House Bill 632, which divvies up billions in federal COVID-19 relief funds, as a favored route to boosting affordable housing, as well as several bills cutting regulations for housing developers that Republicans say will increase the housing supply and drive down prices. But while HB 632 contains $11.5 million to boost a state affordable housing loan program and $152 million for emergency rental assistance, the funds are not ongoing, and will expire after they’re used.
Not even Hoven’s remaining mobile home parks bill can offer any reprieve to Cindy Newman. Havenpark’s public relations representative said new lots in the Highwoods are advertised at $450 per month for rent -- an indication of where the company may be aiming to eventually raise rents for current residents. And with the next Legislative Session two years away and Hoven leaving the Senate due to term limits, Newman isn’t sure whether she’ll make another run at passing protections for mobile home owners like herself.
“I don't really have an answer to that,” Newman said. “I don't really think a lot of us are going to make it two years.”
Austin Amestoy is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation. He can be reached at email@example.com.