More than a fifth of Maine’s mobile home parks are owned by out-of-state investors, with one of the nation’s biggest such companies becoming the major player here over the last decade.
It is part of a national trend that accelerated during the COVID-19 pandemic and the housing affordability crisis that followed. Long ago, these parks were generally owned by the family owners who built them. Many of those owners are hitting retirement age and selling to corporate investors eager to scoop up some of the last bastions of affordable living.
Sun Communities, a Michigan-based real estate investment trust with a $16 billion net worth that says it is the nation’s second-largest mobile home investor, owns 10 parks here. Some other large players in the Maine market include C37 Capital, a New York company with nine and Philips International, another New York investment firm with seven parks.
In all, 53 unique investors own more than a fifth of Maine’s mobile home market, according to data from the state Manufactured Housing Board. Their strategies are transparent. Almost always, they immediately increase lot fees on the residents that typically own their homes and steadily raise rent thereafter. New parks are almost never built, keeping rents high.
“It’s an attractive investment,” state Rep. Dick Bradstreet, R-Vassalboro, who is also the president of the Manufactured Housing Association of Maine, said. “They’ve been seeing that the rents are a little bit under market, so there’s a little bit of room to increase the rents.”
Sun Communities, which owns nearly 300 mobile home parks across the U.S., expects to increase net income by up to 6 percent this year, according to an investor presentation published online this month. That is driven by rental rate increases expected to ring in at 5.4 percent on average — a rate that goes beyond inflation — and occupancy gains.
A Sun Communities spokesperson was unavailable last week to comment on company strategies. But the disclosed plans will add more pressure for residents stretched by rent increases and higher costs in general.
Justin Chartier, 51, who owns a home at the Sun-owned Holiday Park Estates in Bangor, said his lot rent has increased about 25 percent since 2020.
“You feel helpless,” Richard Spencer, 75, a disabled Army veteran of the Vietnam War living at Holiday Park, said. “I make it OK, but my water bill has doubled. That’s a lot of money.”
Since mobile home park residents often only rent the land they live on and own their homes, Charles Becker, an economist at Duke University in North Carolina, said investors see fairly low operating costs owning a park as opposed to an apartment complex.
“It’s much lower risk,” Becker said. “People have incentive to maintain their own structures, because it’s their property.”
The Sun presentation notes the market and regulatory forces at play. It cites national figures showing that effectively no new mobile units came on line between 2015 and 2021, while multifamily stock rose 2 percent per year in that time.
That’s because mobile homes depreciate quickly and parks are hard to finance. Some cities and towns regulate them heavily. Both the industry and progressive groups have touted other types of manufactured homes that resemble stick-built ones as solutions to the affordability crisis. They have also tried to combat what they call a stigma against these kinds of homes.
There’s not much a mobile home park resident can do in the face of lot rent increases. Landlords are within their rights if they give due notice. Tenants in two mobile home parks in Wiscasset have banded together as an informal group to push for rent stabilization measures. Residents at two parks in Old Orchard Beach are trying to raise $40 million to buy them.
Bradstreet and Becker think the solution mostly lies with state and local lawmakers. Earlier this month, Democratic Governor Janet Mills signed a bill into law that would force cities and towns to allow mobile homes on any lots zoned for single-family homes. That could alleviate cost pressure over time.
“Supply will eventually keep the prices down,” Bradstreet said.
