Comedian John Oliver on Mobile Home Perils
Investor · Phoenix, AZ · Member since 2014 · 230 posts · 122 votes
This made me cringe...
We've got mobiles rented in NorCal by people of very modest means and have been mindful of that.
https://slate.com/culture/2019/04/john-oliver-mobile-home-rent-rolfe-last-week-tonight.html
John Oliver is not a newscaster, he's a comedian.
Not sure how I went from the New York Times calling me "the best thing going in affordable housing at a time when the nation's need for low-cost places to live has never been greater" in 2014 to being the brunt of a roasting from a comic on HBO, since we haven't changed our business model in over 20 years.
The truth is that when you upgrade and invest millions of dollars in old mobile home parks, the rent has to go up significantly. It's either that or simply bulldoze them and sell the land for a higher use. This is no different than when apartments, hotels or any other asset is redeveloped. And, in the same vein, there's no doubt that some residents will be displaced. But the vast majority of residents are happy to pay more rent for a nicer place to live.
With the median apartment rent in the U.S. standing at $1,200 per month and the median single-family home at $1,450, it's hard to believe that any sane person would consider the median lot rent in the U.S. incredibly high at $285 per month. If a 5% per year rent increase sounds too high -- which is about normal at most parks and equates to about $15 per month -- then can somebody explain to me how anything from Obamacare to cable TV rates are survivable?
Don't get your facts from a HBO satire show. If you are really interested in affordable housing, do some factual research. The reason that so many private equity groups are quietly buying mobile home parks is that it's probably the best business model on earth. It took the industry 60 years to get in this position, and it gutted out some terrible decades to come out on top in terms of providing the least expensive detached dwelling in the U.S. at the very moment that our country's housing market priced nearly 50% of the population out of the ability to be a homeowner. I didn't create these market forces, I simply invest in them.
Always people out there who take advantage of others, in any business. It's very unfortunate.
With that said, I don't put a lot of stock in Slate, or Oliver to a lesser extent.
He has definitely brought a lot of attention to the topic of Mobile Homes, but I'm curious to see if it gets any traction. Attention spans are short these days.
I saw the piece live last night. It was cringe-worthy live too.
Most of it was targeted to the predatory practices of the biggest fish in the industry. Frank Rolfe (MHU), but it also called out the biggest manufacturer as well.
The hope is that they don't paint all mobile park owners (or landlords in general) with the same brush that they were painting Rolfe with. It was quite obvious that he is a slime, and has no ability to empathize with any of the home owners in his parks.
I am glad several people posted on this. I'm looking at two different mhps right now and firmly believe that there's an ethical way to run these and landlord in general
Squeezing people for their last dollar simply isn't a good long term business strategy, in addition to being morally questionable at best.
The Golden Rule should apply, I think, in any business situation. Both sides should benefit.
John Oliver is not a newscaster, he's a comedian.
Not sure how I went from the New York Times calling me "the best thing going in affordable housing at a time when the nation's need for low-cost places to live has never been greater" in 2014 to being the brunt of a roasting from a comic on HBO, since we haven't changed our business model in over 20 years.
The truth is that when you upgrade and invest millions of dollars in old mobile home parks, the rent has to go up significantly. It's either that or simply bulldoze them and sell the land for a higher use. This is no different than when apartments, hotels or any other asset is redeveloped. And, in the same vein, there's no doubt that some residents will be displaced. But the vast majority of residents are happy to pay more rent for a nicer place to live.
With the median apartment rent in the U.S. standing at $1,200 per month and the median single-family home at $1,450, it's hard to believe that any sane person would consider the median lot rent in the U.S. incredibly high at $285 per month. If a 5% per year rent increase sounds too high -- which is about normal at most parks and equates to about $15 per month -- then can somebody explain to me how anything from Obamacare to cable TV rates are survivable?
Don't get your facts from a HBO satire show. If you are really interested in affordable housing, do some factual research. The reason that so many private equity groups are quietly buying mobile home parks is that it's probably the best business model on earth. It took the industry 60 years to get in this position, and it gutted out some terrible decades to come out on top in terms of providing the least expensive detached dwelling in the U.S. at the very moment that our country's housing market priced nearly 50% of the population out of the ability to be a homeowner. I didn't create these market forces, I simply invest in them.
Sorry, here's the link to the New York Times article https://www.nytimes.com/2014/03/16/magazine/the-cold-hard-lessons-of-mobile-home-u.html
Mr. Rolfe one problem with your statement is the following. The problem is that not all corporate investors actually do any upgrades to the mobile home parks they purchase, such as SCI (Sunrise Capital Investors) who purchased our Akron Mobile Home Park in Akron NY (yes the one shown on the HBO report). They have done nothing hew to upgrade the park in the 18 months they have owned us. All they want to do jack up lot rents for pure profit, which in turn leaves the 67% (in our park) of the low income, fixed income, retired vets, and elderly (that are living comfortable in the MHP) to think what they are going to do and most likely have to leave the park. Oh and by the way before SCI took over our MHP was making, although not big, but a modest profit (we have the old park manager on our board so we know this for a fact).
Mr. Rolfe, we have done extensive research on you and others like you and we see what you say in your seminars. Some of the things you say I just can't believe comes out of you mouth and others like you. Pathetic!!
Luckily we organized as a tenants association (which you preach in your seminars as what to not look for in a MHP) and are in the process of getting our MHP back.
We have been in TIME magazine on the NPR The Capital Press Room with Susan Arbetter, and on our local CBS station WIVB and we be in the New York Times soon. A whole lot more of the country is going to find out your practices. We are getting our voice out to as many as we can.
Mr. Rolfe, tell Sunrise Capital Investors to not get their facts from a 10 minute TED talk either. Esther Sullivan did the research and wrote the book on mobile home parks and the investment industry and how they are killing futures for responsible home owners. John Oliver merely reflected the research she has done. Read the book, Manufactured Insecurity.
SCI refers to her research when making the convoluted point that they are "saving" affordable housing by investing in parks and jacking up the prices so their investors get their pockets lined. Mr. Rolfe, your Mobile Home University is all about getting rich off the poor. You are very transparent in your claims to save the parks and the fact that you say, "I didn't create these market forces, I just invest in them" reveals your shame. In actuality, you are helping to create misery, dislocation and homelessness for HOMEOWNERS whom you see as prey. It is possible there are investors in parks who are decent people. From my view, though, this is not an industry to invest in, at least not in the way of Frank Rolfe and his Mobile Home University or Sunrise Capital Investors or any of them. Investors, find another way to invest your money...a way that leaves you able to sleep at night without the cringe factor.
By the way, here is the link to our Time Magazine story. They are real journalists, too. I'm pretty sure Mr. Rolfe got from the being "best thing going in affordable housing" to new national media attention due to his business model. I'm thinking it has to do with ethics, the "cringe" factor and the amount of destruction that has been caused to others.
You may have to cut and paste to use this link.
In addition, the NY Times article cited by Mr. Rolfe is over 5 years old. Times are changing. People are getting smarter and refusing to succumb to the fear factory cooked up by these predators. There is no honor in taking advantage of people, kicking them because you can and then trying to sell it all as "saving affordable housing." We are learning the hard way in our community. These hucksters have sold investors a bill of goods that stinks to high heaven. The disdain Mr. Rolfe uses when speaking about the residents of manufactured homes REEKS of disdain and prejudice. They are so beneath him...
If interested, you will find a recent podcast in the iTunes Store. It is from the Capital Pressroom with Susan Arbetter (another highly respected journalist) dated January 18, 2019. It is titled Affordable Housing. Well worth the time to investigate both the Time Magazine article and this podcast.
Sorry Mr. Rolfe that NY Times article is 5 years old. Times are changing and were are making strides in legislature for better laws to protect MHP's. Look at all the articles out on social media. The word is getting out all over the country about how corporate investors are taking over MHP's and we are helping many deal with these situations. We will soon be in the NY Times as well (article in the works).
Mr. Rolfe - I am looking at your response to this and it is very disappointing! You say that your model has taught these other Investors to raise their rent $15 a month, then in another breath you state that mom and pop parks need to go up significantly - which is it? Shame on you! What you actually taught them is to look for the blue sky! Had you listened to Mr. Oliver, you would have heard that your former students are coming in and raising the rents as much as 68% the first year! And what you also taught them is that Private Equity Owners have limited incentives to invest in the upkeep of the Community. I would also like to know where they think $285 is too much, and if any of your parks pay this low of lot rent? Probably not! I also cannot understand how you can say you don't create these market forces, yet you run a University teaching people just how to do this? Oh and just a quick note to you, since I am part of those whose lives are affected by this....sure people would pay higher rents for a nicer place to live. Sadly your teachings and models work the opposite. People are paying more to watch their communities turn into the worst place to raise families and enjoy their retirement. Your investments have done nothing for affordable housing other than create economic evictions of those who have worked hard to have an affordable home and are losing that opportunity to better your bottom line. Shame on you!
Every day, we deliver affordable housing and a great quality of life for thousands of residents of all financial backgrounds. Our team strives to provide safe, clean, quiet, affordable housing for our residents at below market rents. SCI is not funded by large private equity firms.
We understand that no one likes rent increases. But like other community owners (resident and investor owned), SCI needs the flexibility to cover annual cost increases for utilities, taxes and infrastructure repair in order to maintain quality community standards. Restricting the community owner’s ability to cover these costs can often have harmful unintended consequences for the residents the community is trying to serve.
At Akron Mobile Home Park, we have taken a gradual approach to increasing lot rents to the market rate over several years in an effort to alleviate the burden on our residents.
I think John Oliver's bit is distasteful at the very least. I'm sure there are predatory MHP investors, but I don't believe Franke Rolfe is one of them. Frank offers up a tremendous amount of his personal time for free to help operators properly manage MHPs so those parks don't turn into dumps. From what I've seen he has created clean, safe, affordable housing communities for many people that were formally living in run down trailer parks.
Don't gloss over the fact that John Oliver also bashed Warren Buffet, who is THE most respected investor ever, and Clayton Homes, which produces very nice mobile homes. I think it's great that someone like Warren Buffet invested in providing high quality mobile homes and loans for low income earners to purchase those homes. It helps alleviate the affordable housing need in the USA.
If it weren't profitable for companies to produce and sell mobile homes, then companies would stop making them. If it weren't profitable for operators to own mobile home parks, then all the parks would eventually disappear. The current owners would die and then the land would be used for something that's profitable. Then those that love living in their MHP would have to find some other housing.
The media love to portray irresponsible adults as victims. If you get a loan to buy a car, then don't make the payments, the bank will eventually repossess your car. If you get a mortgage to buy a house, then don't make the payments, the bank will eventually foreclose on the house and you will get evicted. If you rent an apartment and don't pay the rent, you will eventually get evicted. If you don't pay your property taxes, the government will evict you! Why should it be different for loans on mobile homes or rents in mobile home parks?
MHP lot rents and mobile homes for rent are the least expensive housing you can find. Where else can you get 2 or 3 bedroom housing for so cheap?
I can see both sides here. I feel more sympathy for the tenant side of things.
I don't invest in or live in a MHP. It seems a nice idea for the tenants to aquire the land and form an HOA, or something like that. But paying for the land, lawyers, etc is a problem. Most of the tenants probably don't have the money, then how do you organize and push everyone into the HOA? Now you are herding cats too.
The landlords job is tough too, but some of Rolfes comments were ridiculous and egregious. Heartless indeed.
I am trying to understand the statement, "The media love to portray irresponsible adults as victims." Are you suggesting that manufactured home owners are irresponsible?
For everyone who is saying Frank Rolfe is the devil, you do realize that if operators don’t come in, rehab the parks and raise rents, that some developer is going to purchase the park and bulldoze it for something more profitable?
If you own a park and want to artificially keep rents low, then that is one thing. But to shame others for not doing the same is ignoring economics in general.
Owners shielding their tenants from appropriate rent increases (unless they intend to hold the park for life) are gradually exposing them to the much bigger misfortune of a developer coming in, and the tenants being forced to find an apartment at 2x their prior rent.
@Taylor Chiu - Good point. When it comes down to it. Folks that live in a MHP are generally just gonna get shafted for their poor purchase decisions. Purchase and rehab might be a better outcome than full blow development.
I think the point of the Oliver piece was to illustrate how predatory the entire process of buying mobile homes, to getting loans, to renting the land has been for the poor folks that bought into these places.
It’s sad and there are not many good solutions unless the residents can afford to form an entity and purchase the land for themselves. I think in most cases that is very unlikely though.
OK, then. The residents of mobile home parks lack reasonable financial acumen. I think my next door neighbor who ran his profitable business for 25 years would be surprised to hear that. Also, the retired Marine and the civil engineer. Maybe the father of the local school principal and the master's prepared social worker would take issue as well. Persistent, inaccurate, negative ideas about who lives in manufactured home communities allows others to make judgements because they fail to recognize we are just as diverse, talented, community-oriented, good and bad as everybody else. What is the deal?
To disparage MHC residents is distasteful. When my parents divorced decades ago, my father moved to Gary, IN (where crime & poverty run rampant) & my mother chose to live a mobile home on the south side of Chicago. This was a much preferred living arrangement for her & her children. We had our own home, lawn, shed, etc. These are items we wouldn’t have had in a shoddy apartment. My mother has a degree in accounting, so her financial acumen is quite alright. We had simply fallen on hard times. The lower entry cost of the MHC allowed us to get back on solid footing. And it is the fundamental reason why I ultimately chose to explore providing more affordable housing throughout the country.
The land-lease model brought forward in MHCs can be a mutually beneficial scenario. If it wasn’t mutually beneficial, mobile home parks wouldn’t exist. Both sides of the table in this discussion want the same thing — affordable housing. We simply disagree on how best to preserve it. This is not a win/lose situation. Community operators can generate solid returns while still providing residents with a phenomenal, affordable product.
The real issue is redevelopment & constricting the supply of MHCs. More MHCs are torn down each year than are newly developed. Dr. Esther Sullivan was mentioned earlier, and she points out the issues with redevelopment in her recent book.
Anyone interested in investing in MHCs should pick it up and read it. After turning the last page, the majority of investors would understand that investing in MHCs is a good thing for society at large - as it helps preserve the country’s affordable housing stock.
Dr. Sullivan’s research chronicles the hardship families face when manufactured housing communities are redeveloped, which occurs when the highest-and-best use of the land is no longer a MHC. When original owners sell to redevelopers, residents are evicted and forced to relocate.
The point she drives home is exemplified in one of our communities in GA — Country Oaks. Had we not gone in, increased rent, & improved the community, it would have eventually been redeveloped into a higher-and-better use. At that point, all residents inside the MHC eventually would have lost their homes to redevelopment.
Affordable housing is in short supply, and we should all do our best to keep the current stock that has been developed.
You may be able to defend the MHP model, but what the defense for some of the video clips of Rolfe's seminar comments? Sorry, but that was some pretty vile comments being made about his tenant clientele...... don't see a real defense for them..... I can see the common "it was taken out of context" defense coming.....
Dave Ramsey's comments were eye opening also...... buying a MH is like buying a car and living in it....its depreciating item from the day you buy it.... they rarely go up in value...they are rarely worth rehabbing, you just tear them down and get a new one.....and they aren't really "mobile" at all since its pretty expensive and detrimental to "move" them
As investors and essentially business owners, we get into it to make $$...and expense go up.....costs of things go up....so rent HAS to go up also. I'm sorry that your income or budget never goes up, but the cost of EVERYTHING around you does, so rent HAS to go up over time to even keep pace.
Much like landlords in D class markets...... short term loans....pawn shops etc etc..... there are unquestionably predatory behaviors within those models.....