Operators of Residential Mobile Home Sites

SIC 6515

Companies in this industry

Industry report:

This category covers establishments primarily engaged in the operation of residential mobile home sites. Establishments primarily engaged in the operation of sites for overnight or transient use for travel trailers are classified in SIC 7033: Recreational Vehicle Parks and Campsites.

Industry Snapshot

Mobile homes, also referred to as manufactured housing, accounted for about 8 percent of U.S. housing in the 2000s. Approximately 19 million Americans lived in manufactured homes in 2009; of these, almost 4 million lived in rented mobile homes. Thirty percent (3.15 million) of mobile homes were located within mobile home communities, and the remaining 70 percent were located on private property. In 2009 the industry shipped 49,789 manufactured homes, down significantly from more than 130,000 in 2003 and 2004, when the industry participated in the housing boom brought on by low interest rates.

Increasingly, mobile homes mimicked the size and amenities of conventional housing units, as the share of mobile homes consisting of multiple sections grew. Mobile homes came into direct competition with conventional units, especially as double-wide units gained market share. In 2009, multisectional housing accounted for about 62 percent of all manufactured housing shipments.

The industry remained generally unsophisticated in the 1980s in comparison to other sectors of the housing ownership and operation industry. However, during the 1990s, it underwent a transformation based on its significant affordability advantage over single-family, site-built housing. As a result, in 2004 one out of every 10 new home builds was a manufactured house.

Organization and Structure

Land owners who get permission from local zoning authorities can develop a mobile home park with a relatively small investment. The only significant costs involve bringing utilities, including water, gas, sewerage, and electricity, into each site and developing vehicle access within the park. For parks that are unpaved, improvement costs are negligible compared to the costs associated with traditional site-built housing communities. Because there are so few barriers to entry, the mobile home operation industry has traditionally been dominated by small companies.

How the Industry Operates.
Mobile home buyers can choose single-wide homes, which in the 2000s averaged 1,120 square feet in size, or double-wide multisectional homes, which averaged 1,715 square feet. Some new multisectional homes also allow triple-wide structures. Although residents usually rent their lots, most buy their dwellings. The standard purchase agreement allows the dealer a markup of 20 to 25 percent over the wholesale price of the home. The dealer sometimes arranges financing of the home through the manufacturer, though banks finance most mobile homes. Additionally, the dealer usually assumes responsibility for delivering the home to a community and installing it on a lot.

Many local authorities have used zoning laws to ban mobile home parks, restrict their size, or relegate them to the least desirable parts of a community. With supply constrained, occupancy rates have historically remained above 90 percent, which compares favorably with apartment buildings.

Turnover of mobile home residents is very low with only 5 percent for the actual homes and 10 percent among homeowner-renters who generally sell their homes in place before relocating. Turnover is so low because the larger single-section and multisectional homes are quite difficult and expensive to move. Rent in manufactured housing communities is typically one-third that of nearby townhouse apartments.

In addition to mortgage payments to the manufacturer of their home, most mobile home park residents pay rent to their community owner/operator. Monthly rent typically ranges from $150 per month, although high-end developments with amenities usually charge more than $500 per month. Most fall in the range of $200 to $400.

One reason park owners and operators do not allow residents to buy lots is that they may be able to sell the land for higher prices in the future. In fact, many land owners operate mobile home parks with the specific intent of eventually converting, or selling, the property for a more lucrative purpose as it becomes more valuable.

Regional and Demographic Variations.
Profiles of typical mobile home parks differ principally by region and by the age and economic status of its residents. For instance, some communities cater to retirees, offering smaller lots for smaller homes. Other communities cater to families and provide big yards, more parking, and amenities that appeal to children such as swimming pools and playgrounds. Developments designed to appeal to low-income residents offer small lots, few amenities, and unpaved streets. Conversely, most communities aimed at the upscale segment of the market provide paved streets and sidewalks, recreational facilities, large lots with lawns, wooded public areas, off-street parking, and adequate outdoor lighting.

Regional differences result from variations in housing prices as well as demographics. Parks in the Midwest, Southeast, and Northeast are characteristically traditional. They are usually arranged in grid patterns, are more apt to appeal to low-income residents that are elderly or childless, and charge monthly rents for lots. Mobile home communities in western states and in Florida, on the other hand, are more likely to appeal to families and middle-income residents. These developments also are more likely to have curved, paved, and wooded streets. They also offer more financing options to their tenants, such as condominium or lease-to-buy arrangements.

The migration of population to the Sunbelt was one of the most significant factors that affected mobile home output and sales in the 2000s. Nearly 55 percent of mobile homes sold in 2004 were placed in the South. The West and Midwest sold 20 percent and 16 percent, respectively, while the Northeast accounted for only 9 percent of home placements.

Background and Development

Uniquely American, the mobile home operation industry emanated from the invention of recreational trailer-coaches in the 1930s. During this early stage, mobile home parks were designed to serve temporary guests who needed a place to park their trailer for a short time. By 1940, more than half of all trailers were being built for permanent housing, and parks began serving permanent, as well as overnight, tenants. The industry gained public recognition when the government bought large numbers of mobile homes to house servicemen and defense workers during World War II. This led to mobile homes becoming an acceptable housing alternative in the 1950s when a national housing shortage left many people out of the housing market. As site-built houses caught up with demand in the 1960s, mobile home operators began offering facilities for larger, comparatively luxurious homes.

In the 1970s, two factors spurred growth of mobile home parks. First, productivity advances in manufactured housing technology allowed mobile homes to become increasingly price competitive with other types of housing. For instance, the average price of a manufactured house, including land development costs, increased from $18,000 in the mid-1970s to $27,800 by 1990. During the same period, the average cost of a site-built house jumped from $44,000 to $150,000. Second, the development of larger, more luxurious homes changed the public perception that mobile homes were temporary housing trailers. Many newer mobile homes in the 1970s offered central air-conditioning, covered parking, and garbage disposals. Also, since 1976, manufactured homes have been required to meet a federal preemptive building code known as the National Manufactured Housing Construction & Safety Standards Act. This code ensures a high level of product quality and allows manufactured housing to cross state lines for siting in almost any locale.

A number of changes occurred within the manufactured-housing industry in the last quarter of the twentieth century. In the early 1970s, nearly 80 percent of manufactured homes were located in manufactured home communities. By 2000, half of the new, larger manufactured homes were being placed on privately owned, scattered building sites and in housing subdivisions. Second, few new manufactured-home communities were developed after the 1970s, and existing ones were nearly full with an average of 94 percent occupancy in 1995. Furthermore, the vacant rental sites that did exist often could not accommodate the increasing popular larger manufactured home.

New manufactured-home production went through a boom and bust cycle. In 1973, the industry shipped 579,960 homes. This fell to only 212,690 home shipments in 1975. In 1994, 303,932 homes were shipped, which was the first year since 1974 that shipping was over 300,000 homes. In 1995, 339,601 homes were produced. The number of manufactured homes shipped dropped from there, reaching 250,550 in 2000 and 146,744 in 2005 before declining to fewer than 100,000 in 2007 and fewer than 50,000 in 2009.

The Allure of Mobile Home Communities.
The greatest appeal of manufactured housing for most residents is that it offers many of the advantages of home ownership at a cost comparable to renting an apartment. Most residents in manufactured housing communities have their own yard and parking space. They also are allowed to add personal amenities to their property, such as shrubs, covered parking, decks, and storage sheds, that would not be allowed at most apartment complexes.

Mobile homes are comparatively inexpensive in comparison to traditional site-built homes because they are built entirely in factories. With drywall construction, brand-name appliances, and other quality features, multisectional manufactured homes are often almost indistinguishable from site-built, single-family houses. These multisectional houses increased from 28 percent of total manufactured home shipments in 1980 to 50 percent in 1996. By 2009 they accounted for 62 percent. In 2008, multisectional manufactured housing cost approximately $42.87 per square foot. The average cost of site-built houses was almost twice as much at $88.55. Mobile home community residents also benefit from low maintenance, attractive financing terms, and tax advantages. Manufactured homes are usually easy to trade-in, move, or sell.

The traditional residents of mobile home communities are either first-time home buyers, between the ages of 25 and 44, or elderly retired people. While these groups benefit from cost advantages, disadvantages include limited appreciation in property values and minimal land use rights. Insurance rates for manufactured homes are typically 10 to 20 percent higher than those of site-built homes because of increased wind and fire risks. Furthermore, residents of mobile home parks often are alienated from surrounding communities because of the negative image associated with manufactured housing.

By the late 1990s, demand for manufactured housing was boosted by considerably more favorable public regard for the units, as well as by various economic and demographic factors. After suffering for many years from a poor public image, manufactured home builders upgraded the quality of their product offerings.

In the 2000s, the industry focused on selling manufactured homes and sites as a unit. The Federal National Mortgage Association (Fannie Mae) buys and secures residential mortgages on manufactured housing, as long as the house and land are sold together in a single transaction.

Another factor making manufactured homes a more desirable living alternative was the long-term trend toward producing larger multisectional units. In the 1980s, 80 percent of new manufactured homes produced were single-section, 12 to 14 feet wide by 50 to 60 feet long. At the century's close, only a slight majority were single-section, and even these were larger than they previously were at 16 to 18 feet wide and 70 to 80 feet long.

Rising consumer acceptance, favorable demographics, readily available credit, and a slowdown in low- to middle-income apartment construction kept demand relatively strong in the late twentieth century. The relative affordability of manufactured housing helped the group to build market share versus conventional, site-built homes. Manufactured housing represented about one-quarter of all homes built in the United States during the 1990s. Furthermore, the industry had significant growth possibilities due to the replacement of the large number of older manufactured homes coming to the end of their useful lives.

Industry Trends.
Although many mobile home operators still catered to traditional buyers in the mid-1990s, most newer developments tried to attract more sophisticated residents. As a result, manufactured housing developments grew larger and more expensive and began to resemble site-built communities, rather than traditional trailer parks.

Trend-setting states, including Washington and California, broke new ground in the industry, and operators in other states hurried to follow their lead. California operators lured residents with larger developments, larger lots, aesthetic neighborhood designs with woods and lakes, and recreational amenities. These changes reflected the fact that in 1990 fewer than 20 percent of Californians could afford site-built housing, compared to 50 percent who could afford manufactured housing in a park.

Between 1980 and 1990, the average density of mobile home communities in California fell from 10 to 6 units per acre and the average lot size nearly doubled to 4,800 square feet. During this same period, the number of larger multisectional units in California housing parks increased 100 percent, to nearly one-half of the market. Furthermore, 80 percent of new mobile home sites being developed in the 1990s were "family projects." Most of the homes in these new projects had three or more bedrooms, a site-built two-car garage, a large front lawn and back patio, and used traditional building materials such as roof shingles and aluminum siding.

An important change in trend-setting markets like California was the profile of the mobile home operator. While most manufactured housing site operators in traditional markets such as the South were small operations, site owner/operators of newer developments were more likely to be larger, traditional tract housing developers. These developers used manufactured homes to reduce costs and speed product delivery in an effort to lure more traditional, and wealthy, home buyers. These communities differed from traditional mobile home parks because the homes were more permanent and usually sold on-site.

Financial Markets.
One factor that increased the popularity of mobile home communities was financial market activity that provided easier financing for manufactured home buyers, as well as more capital for community owner/operators. The Government National Mortgage Association, the Federal National Mortgage Association Fannie Mae, and the Federal Home Loan Mortgage Corporation (Freddie Mac) all offered secondary markets whereby lenders could sell portfolios of mobile home loans. The secondary markets were only available for loans on houses that were permanently attached to their lot and were sold as one transaction. Throughout the 2000s, these secondary markets increased the popularity of larger, more modern mobile home parks that sold homes on-site.

Another source of financing for the mobile home park industry in the capital-starved economic environment of the 1990s was locally sponsored tax-exempt bonds. Recognizing the need for affordable housing and the advantages that properly planned manufactured housing communities could deliver, cities increasingly tried to create a friendly political environment for mobile home operators. One way of doing this was to help owner/operators finance new developments to serve the local community. Beside issuing tax-exempt bonds to finance new projects, some cities also eased zoning restrictions and created agencies to help residents in buying units and lots in mobile home developments.

A third source was the real estate investment trust (REIT). In 1992, real estate mogul Sam Zell arranged to sell a 64 percent stake in Manufactured Home Communities Inc., a Chicago operator of 40 mobile home parks in 16 states, as part of an REIT. Three other major operators of mobile home parks followed Manufactured Home Communities in forming REITs: ROC Communities Inc. of Englewood, Colorado; Sun Communities of Farmington Hills, Michigan; and Chateau Properties Inc. of Detroit, Michigan.

During the first half of the 2000s the mobile home market continued to evolve to meet the changing needs of consumers. Manufactured housing offered many of the same features of stick-built homes, including vaulted ceilings, fireplaces, recessed or whirlpool tubs, and high-quality appliances, with many options to customize the homes. Doublewides dominated the market by the mid-2000s, growing in market share from 59 percent in 1997 to 80 percent in 2003. Two-story homes were also introduced to the market. In 2003 the average cost of a manufactured home was $54,900 and the average size was 1,615 square feet. Singlewides sold at an average price of $31,700, and doublewides, $59,800.

Traditionally used for housing needs in rural areas, urban and suburban settings became more popular as improvements in exteriors made manufactured housing nearly indistinguishable from site built housing, prompting more developers to build communities in higher density areas. In addition, the aging U.S. population provided the industry with a growing number of retirement age customers seeking affordable housing in planned communities that offered amenities such as yard care and maintenance. Thirty-nine percent of those who lived in manufactured housing were over the age of 60, and 59 percent were over the age of 50. Thirty percent of inhabitants were retired.

An estimated 50,000 to 60,000 mobile home communities operated in the United States in the mid-2000s. Although newer developments were stocked with newer manufactured homes, which included updates in quality and protection against weather-related damage, older communities were facing maintenance problems and, in some cases, park closure. Pre-1976 mobile homes made up about one-third of all existing manufactured housing structures. Owners in land-lease communities faced the threat of closure as property values rose, which prompted small park operators to sell out to developers. Although some states legislated protection for tenants in land-lease relationships, regulations vary and usually simply stipulate the length of notice required prior to closure.

During the mid-2000s, historically low interest rates prompted many Americans to purchase homes, although by late in the decade the boom turned into a bust known as the subprime mortgage crisis. Foreclosures on homes reached record numbers, as the low introductory rates of adjustable rate mortgages expired and homeowners found they could no longer make their house payments. This situation, in addition to the meltdown of the U.S. financial services sector, the drop in housing prices, and rising unemployment, all contributed to the economic recession that began in 2007.

Current Conditions

Some claimed that the economic recession and subprime mortgage crisis actually helped the mobile home industry, as people who could no longer afford their stick-built homes downsized and moved into mobile home parks. This was good news for mobile home park operators, who found an increase in demand for rentals. As of 2010 there were about 50,000 manufactured housing communities in the United States.

According to Dun & Bradstreet, 14,986 establishments were primarily engaged in the operation of residential mobile home sites in 2010. The industry employed about 43,790 people and generated $2.4 billion in annual revenues. California had the most establishments, with 2,387. Florida and Texas had 1,609 and 1,062 establishments in the industry, respectively. Together these three states accounted for almost 37 percent of total revenues. Other states that were home to a large number of operators of mobile home sites included Michigan (720), North Carolina (598), Arizona (545), and Washington (532).

Industry Leaders

In the late 2000s and early 2010s, the manufactured housing community management market remained a highly fragmented industry, with the top five management companies controlling just 6 percent of the market. According to the National Communities Council, in 2009 the top 10 largest firms in the industry collectively owned or managed 1,240 land-lease communities containing 369,969 rental homesites. The top four companies were Equity Lifestyle Properties, Hometown America, Affordable Residential Communities, and Sun Communities.

Equity Lifestyle Properties, an REIT based in Chicago, operated 300 lease communities in 30 states, with a total of more than 110,000 lots. In 2009 Equity posted revenues of $489.9 million and employed 3,200 people.

Hometown America LLC, also located in Chicago, owned 130 communities totaling 45,000 home sites in 20 states. Most were in Florida, and about a third of the communities were targeted toward elderly residents. A privately owned company, Hometown's revenues were $252.8 million in 2009.

Affordable Residential Communities Inc. (ARC), of Denver, Colorado, operated as a REIT and owned and managed 260 communities, totaling more than 55,000 home sites, in 23 states. In 2004 ARC purchased 90 communities from Hometown America and completed an initial public offering.

REIT Sun Communities, based in Southfield, Michigan, owned 135 properties, including 42,000 mobile home sites, with another 6,000 under development as of mid-2010. Sun Communities operated primarily in Michigan, Florida, Indiana, Texas, and Ohio. The company posted revenues of $256.6 million in 2009.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Operators of Residential Mobile Home Sites

Protection for those living in mobile homes.(News)
Daily Post (Liverpool, England); February 1, 2012; 372 words
...long-term mobile home residents from...abuse by rogue site owners. A debate...who live on a residential mobile home site. Consumer...problems with site operators blocking the sale of homes, causing financial...such homes to Residential ...
Park-Home Company to Support Children's Charity
Northumberland Gazette (Alnwick, England); May 25, 2016; 361 words
A national park-home company, which has two sites in north Northumberland...largest park-home operators in the UK, with 46 residential and holiday mobile-home sites spread across England...Felton and a retirement site in Wooler. Throughout...
Woman fights to keep her pet; Terrace Heights Mobile Home Park resident battles dog-breed ban
Telegraph - Herald (Dubuque); September 30, 2004; 689 words
...does not stop at home. In her quest...that owns her mobile home village...based Affordable Residential Communities took...the Affordable Residential Communities management...to Affordable Residential Communities and...According to its Web site, Affordable...private owner and ...
Eyemouth Mobile Homes in Place of Permanent Houses
Berwickshire News (Berwick upon Tweed, England); November 29, 2014; 453 words
...Holiday Park operators Park Resorts...to build 23 mobile homes on land allocated...as a housing site, but despite...the site with residential standard lodges...homes under the Mobile Homes Act...retaining the residential housing status...
Raise Riches on the Roof; A Mobile Mast Can Be a Home Moneyspinner
The Mail on Sunday (London, England); November 5, 2000; 699 words
...big money in the mobile phone revolution...month. 'Some new sites are to fill gaps...some of their mast sites, most are leased...market. Of course, operators do not just site their masts anywhere...Locating a mast on residential property could...one or more mast sites as ...
Noble Occupation; Tom Fleming Spoke to a Property Lawyer Who's Seen It All Before
The Birmingham Post (England); May 15, 2009; 700+ words
...one. My colleagues in residential say things are moving...Droitwich, which is also his home, Mr Noble later moved...between land owners and mobile phone operators on site leases. So what are the...the arrival of email, mobile p
A first look at Xohm.
Telephony (Online Exclusive); September 29, 2008; 700+ words
...deployment of a mobile WiMAX network...major wireless operator. While the...typically pay for home DSL or cable...by wireless operators and residential broadband offered...offering the residential connectivity...offering both residential and mobile broadband...access ...
Manx Telecom Stands Ground over Mast Site
Isle of Man Newspapers (Douglas, England); March 22, 2016; 611 words
...opposed to plans to site a mobile telephone mast yards from their homes. Planning approval...further away from residential development...some prospective home buyers, a property which has poor mobile coverage may...suggest any of the mobile telephone base...mobile ...

Search all articles about Operators of Residential Mobile Home Sites