WASHINGTON DC (May 28, 2019) — Senator Elizabeth Warren and Representative Dave Loebsack today sent letters to the investment firms behind some of the country's largest manufactured housing communities (MHC) to request information about their use of predatory practices to boost profits in the communities they own. Sen Warren and Rep Loebsack sent letters to Stockbridge and Havenport Capital, following recent reports highlighting the abusive practices of private investment firms in MHCs. In addition, Sen Warren sent letters to Apollo Global Management, Blackstone, Brookfield Asset Management, Federal Capital Partners, The Carlyle Group, and TPG Capital.
In a statement released alongside their letters, the lawmakers said, "These are some of the country's wealthiest firms, preying on rural and lower-income communities to turn a profit. This kind of corporate abuse is unacceptable — and the American people deserve answers."
Manufactured homes, sometimes referred to as "mobile homes," are factory-built structures that are transported and anchored on a plot of land. Individuals who purchase manufactured homes can place those homes on plots of land they already own, or they can place their homes on rented land. Nearly 3 million manufactured homes in the United States are located in "land-leased communities," in which MHC owners rent out the land where individuals place their manufactured homes.
Manufactured homes provide a critical avenue to affordable home-ownership for millions of Americans due to their substantially lower prices than typical housing, making them attractive purchases for low-income and rural families. Investment companies are also attracted to MHCs, largely because MHCs are stable sources of revenue, particularly during economic downturns. This stability stems from residents' lack of economic mobility, as manufactured homes can be difficult to resell, and the low-income homeowners who reside in manufactured homes often do not have access to more-affordable housing options.
The lawmakers' letter cited recent reports highlighting the predatory management practices of firms that own MHCs, such as dramatically increasing rents to quickly increase their profits. The lawmakers also noted that while investment firms claim to use rent-increases to pay for maintenance and community improvements, residents often "don't see what improvements they've made."
"MHC residents' lack of economic mobility also makes them vulnerable to exploitation — and investment firms often engage in predatory management practices that boost profits at the expense of manufactured home owners," the lawmakers wrote in their letters. "Unable to afford moving, and unable to sell their manufactured homes, some residents report that they are forced to choose between 'paying for increased housing costs and other basic necessities, like food and medicine, or abandoning their homes.'"
To better understand the management practices that the companies engage in, and the impact of those practices on the MHCs they own, the lawmakers asked the firms to answer the following questions by June 18, 2019:
- How many manufactured home communities do you own?
- For each property you own, please provide:
- The average lot rent for residents in the last full calendar year the day before you purchased the community.
- The average lot rent for residents today.
- The number of times you have raised rents in the community and the rationale for those rent increases.
- The number of residents who have been evicted since you took over the community.
- The number of manufactured homes abandoned since you took over the community.
- What additional fees, if any, do you charge residents at each of the MHC communities you own?
- What restrictions do you place on the behavior and activities of residents living in your communities?
- For each MHC you own, please provide a list of profits reported to shareholders, investors, or limited partners for each year you have owned the community.
