(Source: AZCentral): Catherine Reagor – Almost 85,000 trailers, manufactured homes and mobile homes dot metro Phoenix.
The Phoenix area has historically had a higher percentage of households living in factory-built homes than other major cities around the West. These mobile-home parks have been a significant part of metro Phoenix’s housing market since the 1950s, particularly for retirees and low-income families.
But as house and land values rise, mobile-home parks are being increasingly pushed out of the Valley’s more urban areas. Investors are buying a record number of parks this year, according to an analysis of sales by The Arizona Republic.
Some investors are purchasing popular newer communities with golf courses and other upscale features to rent to the mobile snowbirds visiting in the winter. Others are buying to become landlords because the parks are usually full and provide a steady flow of rents.
But a growing number of new owners of older mobile-home communities are working on turning them into new, higher-priced developments.
“Land values of many older Valley mobile-home parks are much higher now,” said Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University’s W.P. Carey School of Business. “It’s basic urban economics that investors and developers will buy and look at redeveloping them.”
While that may be good for investors, experts say, it may not be great for the Valley’s overall housing-market health.
Stapp said the Phoenix area has an affordable-housing problem that will get worse with fewer mobile homes.
Mobile-home building boom
The Valley’s mobile-home park building boom started in the 1950s, when the area’s housing boom started.
Retirees from the East and Midwest followed, purchasing what the industry called mobile homes before 1976 and manufactured homes after that.
During the 1980s, cuts to federal funding for affordable housing led to another boom in mobile-home parks. Factory-built housing is the biggest stock of unsubsidized affordable housing in the U.S., meaning the federal government provides little to no assistance to most people buying or renting these homes.
The Southeast and Southwest have the most mobile homes in the U.S., according to an analysis of U.S. census data from national research firm Apartment List.
About 5.1 percent of Valley households live in mobile homes. That compares with 1.8 percent in Los Angeles, 1.6 percent in Denver and 3 percent in Dallas.
Metro Phoenix’s mobile-home supply will keep shrinking as more older parks closer in are redeveloped into more expensive real-estate projects.
Buying homes built to move
What the growing number of buyers do with the parks depends on where they’re located, who is living in them and when they were built, according to an analysis of park sales by The Arizona Republic.
Investors have spent more than $225 million on 40 metro Phoenix mobile-home parks so far in 2018. The parks are both new and old, and most are located near freeways or the light rail.
That’s more than double the money investors poured into buying Valley mobile-home parks during all of 2015, the second biggest year ever for sales.
During the first week of July, one of the world’s biggest real-estate investors, New York-based Blackstone Group, spent about $120 million to buy nine Valley mobile-home parks, mostly in Mesa and Apache Junction.
Blackstone, which spent millions on Valley foreclosure homes during the crash, declined to comment on its recent purchases.
Real-estate magnate Sam Zell owns more than 40 mobile-home and RV parks in Arizona.
“Manufactured housing is a recession-proof investment,” said Andrew Warner, a Phoenix real-estate broker with NAI Horizon who specializes in the market.
He said the parks, old and new, produce a steady income, and investors typically don’t have to worry about the renters walking away from their homes without paying.
Also, Warner said few new mobile-home communities have been built in metro Phoenix during the decade, and demand to live in existing parks is climbing.
Losing a home
Earlier this year, a company called Treehouse told residents of Tempe Mobile Home Park near University Drive and Smith Road that it was selling their community. Tenants were given six months to get out.
The park, built in the 1970s, is being redeveloped, but Treehouse hasn’t disclosed who it’s selling to.
“It’s become a bit of a ghost town,” resident Syndi Flores said. “There used to be kids playing around out here all the time. Now it’s just quiet.”
Flores has lived in the park since she was 5 and now, after 18 years, they are leaving.
“This is my home,” Flores said, crying.
Treehouse worked with Blackstone to buy thousands of Valley foreclosure homes during the crash.
Treehouse bought Tempe Mobile Home Park for about $2.5 million during the crash in 2008. It has been mum about what will be built on the land, only saying through an attorney that the new owners do not intend to run a mobile-home park.
The park’s central location, right across from the light rail, has been a bonus for residents. But as renters and buyers are willing to pay more to live near the light rail, the location makes it prime for redevelopment.
Under Arizona law, mobile-home park residents who are displaced because of redevelopment are eligible to receive up to $5,000 from the state’s relocation fund.
Residents who have to leave their homes on the property because they can’t be moved can get $1,250 from the state relocation fund.
Most of the mobile homes in the Tempe park are so old, they cannot be moved to another park, either because they would fall apart or because they don’t meet current wind-resistance codes.
Losing affordable homes
Metro Phoenix has already lost about 4,500 mobile homes due to parks closing since 2000, according to the U.S. census.
Few new parks are planned in Arizona, and none in central neighborhoods of metro Phoenix.
In 2015, residents of south Scottsdale’s Wheel Inn Ranch RV and Mobile Home Park received eviction notices after it was sold for $3.6 million and then renovated into a higher-end RV park.
The park that opened in 1958 was sold again earlier this year to homebuilder Taylor Morrison for almost $8 million.
Another park near Scottsdale, Roadrunner Lake Resort, is closing next year. The park in the Salt River Pima-Maricopa Indian Community along Loop 101 is home to hundreds of residents.
“It’s sad to see people losing their homes as older manufactured-housing parks get redeveloped,” said Tom Ruff, real-estate analyst with the Information Market. “It’s part of the cycle of growth for not only the Valley but other big metro areas.”
The number of families living in metro Phoenix mobile homes dropped 30 percent between 2000 and 2016, according to the most recent census data.
The average monthly cost to live in a mobile home in the Valley is $618, compared with almost $1,000 to rent an apartment.
“With a growing gap between the supply-and-demand of low-cost housing, mobile homes may be one of the faster and cheaper ways to provide housing for lower-income households,” said Sydney Bennet, senior researcher at Apartment List.
The federal government is looking at ways to encourage more manufactured housing because it typically isn’t subsidized, meaning that vouchers or other forms of government aid aren’t needed or provided.
It might soon be easier for mobile-home buyers to get more affordable government-backed loans.
But few new mobile-home parks are being built in metro Phoenix, and those that are planned are on the Valley’s fringes.
The new parks don’t work for residents who need to be near buses or light rail for jobs, school or medical needs.
The median household income of a family living in a Phoenix-area mobile home is $34,000 a year, according to Apartment List’s census analysis.
The overall median income for Valley households is about $60,000.
“We really have an affordable-housing problem in metro Phoenix,” Stapp said. “Finding a solution and a place for people displaced when their manufactured-housing communities go away is an important part of our future economy and growth.”
Explained: Mobile homes, trailers and manufactured housing
Mobile-home parks have homes that can be moved but are permanent residences.
A trailer park can have homes like that, but often the homes are semi-permanent dwellings, with trailers commonly seen at campgrounds.
Also, the date the home was built is key. Until 1976, the common term was “mobile home.” Then changes to local and national codes came about, and the term “manufactured home” was adopted for houses that were more permanent than portable.