Building a Legacy

ROCs are an expanding solution to a genuine affordable housing crisis.

In housing, the term “cost-burdened” describes anyone who pays more than 30 percent of their income for housing.

Harvard’s Joint Center for Housing Studies reported this summer that 47 percent of people who rent are cost-burdened. And, 83 percent of low-income renter households are cost-burdened.

The amount of low-rent housing (those $800 per month or less) also dropped by about 4 million units between 2011 and 2017. And, most of the dwindling low-rent housing left is old — 43 percent of it was built 50 years ago or more.

Across the country, people are paying more of their incomes for housing, while the amount of housing available to them is either decaying or disappearing.

It’s harder to discern what’s happening in the manufactured housing community sector, as it’s too small to attract much research. But, based on what I see, the picture is equally troubling.

More communities are being closed than new communities are being built. Community closure laws vary by state – you get a 60-day notice in Indiana and 18 months in New Hampshire – but in every case, a closure means homeowners are displaced. It is happening in hot and cold markets and it is painful to witness.

Existing communities are being aggressively pursued by new and existing investors. Mobile Home University boasts graduating more than 100,000 investors. That’s more than two times the number of communities, now reported at 44,000 nationwide.

Competition leads buyers into having to raise rents significantly to generate profits. Case in point: A community in Iowa City was recently acquired by a Utah-based company that raised lot rents by more than 58 percent.

Apart from the eye-popping accounts of increases like that, the average lot rent increase of 3.9 percent per year done consistently year-after-year is also costly. (2019, MH Village)

Apply a 3.9-percent increase annually for five years to a $400 a month lot rent and you’re paying $484.

The average monthly increase in a ROCs – and this we know from actual data from ROCs that ROC USA® Capital has financed – is 0.86 percent per year. Applied for five years to $400 a month, rents climb to just $418.

That comes out to a savings of $66 a month, and $792 a year after just five years.

Removing communities from the speculative real estate market makes good economic sense. The numbers are clear.

It becomes even more significant when you consider self-made communities like yours preserved more than 2,000 home-sites in 2019 alone. Individually and taken together, this is a significant contribution to the future of affordable homeownership in your area and in our country.

Twenty and 30 years from now, there is going to be a group of very secure Members enjoying affordable lot fees. I encourage ROCs to keep historical documents so future Members will know what you and your contemporaries accomplished. Save pictures, and label them.

Like Exeter-Hampton did last month, some day Members in your community will be celebrating an anniversary and the stories will be important to retell. It is your legacy, and we are all better off because of it. Thank you.