Mobile home owners frustrated by rising rents, veto of tenet "bill of rights"

Corrections and clarifications: This story has been updated to remove references to a specific increase in rental prices at The Highwoods mobile home park that was calculated in error. In addition, a statement from the company that owns The Highwoods has been added since the initial publication.

Drive through The Highwoods mobile homes park and you’ll find well attended residences with mowed lawns, flower gardens and freshly painted sheds and porches. It’s a quiet neighborhood on the east end of Great Falls where retirees and young families of modest means live side-by-side in the mobile homes they hold title to.

With 264 lots and a resident population of roughly 500 people, The Highwoods forms a small component of Montana’s mobile home community. The Montana Department of Public Health and Human Services reports that at end of 2020 there were roughly 1,325 mobile home communities and 28,500 mobile homes in the state, housing slightly less than 6% of Montana’s total population.

The appeal of mobile homes is their affordability. According to the Association of Independent Mortgage Experts the average price of a new single-wide mobile home is $80,900 and $150,300 for a double-wide. Compared to the $348,000 average price for a stick-built house in Montana it’s easy to understand why manufactured homes are frequently referred to as “the largest sector of unsubsidized affordable housing in the United States.”

However, many mobile homeowners living in mobile home parks are now being confronted with an expensive and frustrating reality they have no control over and little legal recourse.

Over the last two-decades large private equity and real estate investment firms have poured billions of dollars into buying mobile home parks nationwide. Their appeal is that operating costs at mobile home parks are relatively low, rents can be increased steadily, and unwanted tenants can be evicted for almost any reason.

As these companies buy up what historically were mom-and-pop operations they are raising lot rents, changing the terms of leases, and redefining park rules. Under current Montana law mobile homeowners who are dissatisfied with those changes can be forced out.

It’s the situation mobile homeowner Cindy Newman finds herself in today.

“These people have seized upon the opportunity to make boat loads of money off people who are typically lower to middle income,” she said.

Newman purchased the double-wide mobile home at The Highwoods with her elderly mother 23 years ago. In 2019 The Highwoods was purchased by the investment firm Havenpark Capital Partners. Since then, she’s witnessed monthly lot rents for new tenants at The Highwoods increase by more than 145%.

“Three-and-a-half years ago you could move your manufactured home into this park for $283 a month,” she said. “A new resident now pays $694.”

In the 20 years prior to Havenpark’s purchase, Newman’s lot rent at The Highwoods increased by just $117. She says that many of the residents at the mobile home park are simply unable to afford the sudden increases in their lot rents.

“Eight out of 10 homes on my street are owned by senior citizens on a fixed income,” Newman said. “These are people looking ahead to the more modest financial means they face in retirement. We know we’re on a fixed income, and now they’re asking us for half of what we make each month in our social security checks.”

In responding to Newman's allegations Havenpark's Chief Executive Officer Robbie Pratt supplied the following prepared comment.

“Havenpark has made every effort to keep the rents as affordable as possible for all the long-time residents who have lived at The Highwoods prior to our ownership. For example, the residents who were paying $283 when we purchased the property nearly four years ago currently pay a rate of $377 for site rent, well below the going rate of $694 that new move-ins now pay. This allows us to keep the rents affordable for our legacy residents, have a market rate that is agreeable to our new move-ins, and be able to make the upgrades and improvements to the property to ensure it continues to be a very nice place to live.”

However, Newman points out that raising lot rents isn't only change Havenpark has made at The Highwoods. She observed that basic utility services including water, sewer and garbage disposal were once covered by The Highwoods tenant's lot rent. Those services have since been decoupled from rents. Tenants now receive a separate bill from Havenpark for utilities, pushing the total monthly cost for a new tenant up toward $750. Park amenities have also been reduced including access to a garage and a storage facility, and the Highwoods clubhouse that was once free for the use of tenants is now only available upon payment of a rental fee.

Founded in 2015, the Orem, Utah-based firm had purchased more than 25 mobile home communities across the country by 2019 and has continued to expand rapidly. Havenpark currently owns seven mobile home parks in Montana, promising high yield returns to investors “without the inconvenience of directly owning and operating the property.”

Montana law also allows mobile home park owners to refuse to renew a renter’s lease for little or no reason, and to reject any potential buyer of an existing mobile home without cause. If a landlord terminates a mobile home owners rental agreement for non-payment the mobile home park owner can demand the resident vacate the property within seven days.

In Montana, mobile homes are considered personal property — property that can be picked up and moved. But in reality, mobile homes are frequently far from mobile. Older mobile homes are often structurally incapable of withstanding the stress of a move. Some movers won't move homes that are over a certain age.

“Once you’ve hooked them up to utilities, built porches and once they become a certain age, they’re not moveable,” Newman said.

Moving a mobile home is also expensive, averaging between $10,000 and $25,000 for a double-wide, and there are few places to move them to.

“They haven’t built a new mobile home park in Great Falls in eons,” Newman explained. “We don’t even have a manufactured home dealership in Great Falls anymore. They’re not mobile, basically at all.”

“It’s kind of like having your customer chained to the bench of a waffle house,” Newman quipped of tenancy under Havenpark. “In other words, these people can’t go anywhere. A lot of people actually walk away from their homes because they can no longer afford the lot rent.”

During Montana’s last legislative session, Democratic Rep. Jonathan Karlen introduced a bill to address the concerns of mobile homeowners across the state. House Bill 889 was labeled as a "mobile home tenant bill of rights," and would have expanded lease minimums from month-to-month to at least a year, required a 60-day notification from the landlord before terminating a rental agreement, prohibited a landlord from disapproving the sale of a mobile home based upon the home’s age, and stop landlords from engaging in retaliatory conduct or enforcing existing mobile home park rules in an “unreasonable or non-uniform manner.”

Karlen’s bill enjoyed broad bipartisan support, passing the GOP-controlled legislature by a 68 to 31 vote in the House and a 30 to 20 vote in the Senate, but was opposed by the Montana Landlords Association.

Despite HB 889’s popularity, following the end of the legislative session Montana Gov. Greg Gianforte vetoed it.

In his veto letter, Gianforte said he's committed to increasing Montanans' access to affordable, attainable housing, including measures that ensure the availability of rental lots for owners of mobile homes.

"House Bill 889, however, unduly increases regulation of mobile home parks, disincentivizes landlords from maintaining or increasing the inventory of mobile home rental lots, and, in general, compromises the property rights of mobile home park owners," Gianforte said.

Gianforte also said the bill unreasonably limits a landlord's ability to change the use of a mobile home park by imposing a moratorium on termination of existing leases for a period of at least 12 months after receiving local government approval of a proposed change of use.

"This provision encumbers the property rights of the landlord and his or her ability to use the land as he or she sees fit within the rule of law," Gianforte said.

The veto drew immediate criticism from House Democrats.

“HB 889 was a compromise that I crafted with legislators of both parties and with stakeholders, who all recognize that Montanans living in mobile home parks are on the front line of our housing crisis and deserve the same rights as other homeowners,” Karlen said in a press release. “The governor’s veto made it clear that, when it’s time to act rather than talk, he stands with a minority of bad landlords and out-of-state corporations rather than with the tens of thousands of hardworking Montanans and senior citizens suffering from unfair and predatory practices.”

At The Highwoods Cindy Newman said that despite the setback she will continue in her efforts to change Montana law and obtain just and equitable treatment for mobile homeowners.

This article originally appeared on Great Falls Tribune: Montana mobile home owners confront increase in lot rents