Mobile home parks have long been a vital source of affordable housing in the United States, providing an avenue for home ownership for those on modest incomes. However, the development of new mobile home parks is facing significant challenges that hinder their ability to meet the increasing demand for affordable housing. Chief Executive Officer at Keel Team Mobile Home Park Investments, notes several factors contributing to the stagnation of new mobile home park developments.
One of the primary obstacles to developing new mobile home parks is NIMBYism, where local property owners resist the establishment of mobile home parks in their neighborhoods due to fears of property value depreciation. This stigma surrounding mobile home parks, coupled with concerns about property values, often leads to community resistance, thwarting efforts to develop new parks. Despite the urgent need for affordable housing, NIMBY pushback remains a significant hurdle for mobile home park developers.
Financial challenges also pose obstacles to new mobile home park developments. Municipalities are burdened by the financial responsibilities associated with supporting low-income tenants in trailer parks, as the tax revenue generated by these communities is minimal compared to other housing developments. The cost of providing essential services, such as education for children residing in mobile home parks, can create a financial burden for local governments, discouraging them from facilitating new park developments.
Access to public utilities, such as water and sewer systems, presents significant challenges for new mobile home park developments. Utility lines are typically located in densely populated urban areas, making it difficult to establish parks in close proximity. The installation and maintenance of private utility systems, such as well water and wastewater treatment plants, entail substantial upfront costs and ongoing expenses, further impeding the development of new mobile home parks.
Despite the obstacles facing the mobile home park asset class, there are opportunities for contrarian investors. By acquiring existing parks, investors can preserve much-needed affordable housing units in cities across the country, while potentially investing in an asset class with restricted new supply. Renovating older mobile home parks can add value for both residents and investors, given the lower cost per unit compared to building new developments.
While challenges such as NIMBY pushback, the stigma surrounding mobile home parks, and utility access issues may seem daunting, the importance of mobile home parks in addressing the affordable housing crisis cannot be overlooked. Some developers have found areas more favorable for mobile home park development, such as Texas, with supportive zoning laws for new communities. Overcoming these obstacles is crucial in expanding the supply of affordable housing and addressing the growing demand for accessible housing options.
