A nonprofit housing group in western Colorado has a plan to save trailer park communities in danger of being swallowed up by private equity firms looking to cash in on land values that have skyrocketed in the state’s resort-heavy western region.
The solution? Buy up the parks and transfer ownership to the residents before land speculators can get their hands on the property.
A 20-unit park just outside Glenwood Springs that went under contract for $2.4 million earlier this month to Manaus, a nonprofit based in nearby Carbondale, could serve as a test case. Manaus still must raise $250,000 for its affordable housing subsidiary, Roaring Fork Community Development Corp., to complete the financing by the April 30, 2023 closing date. Leaders are optimistic they’ll meet the deadline.
The group would then serve as caretaker of Three Mile Mobile Home Park, named for the nearby Three Mile Creek, while seeking additional grants and donations to set up a self-governance framework and lower the final cost for residents to take ownership during the next three to five years.
“We don’t want to be long-term landlords. We just want to be a bridge to ownership,” Sydney Schalit, executive director of Manaus, told The NonProfit Times.
While the term “trailer park” sometimes carries seamy connotations in the popular media, the reality for those who live there is often quite different. Many are neighborhoods with a distinct identity and are home to families who have been there for decades and raised children there. They are also one of the last remnants of affordable and low-income housing that isn’t publicly funded.
Residents, however, are uniquely vulnerable to having their lives upended when hedge fund developers and other investors intent on cashing in on a real estate boom begin eyeing the communities for redevelopment. For the residents, who own their trailer homes but not the land underneath, there is little protection to be had when an investor decides to evict them outright or imposes draconian rent hikes designed to have the same effect.
If all goes according to design, the group will look to replicate its current plan at Three Mile Park to preserve at least five more of the region’s estimated 55 trailer park communities during the next five years, said Schalit.
It’s an “audacious” plan, she said, but one that federal and state laws have sought to make easier by facilitating low-interest loans to support the conversion of mobile home parks to resident-owned communities.
The problem is that for small communities of fewer than 30 homes like Three Mile Park – where the $54,000 median household income is just more than half the $94,200 countywide average reported by the U.S. Department of Housing and Urban Development – the cost of the property, along with the legal and technical costs needed to complete the transfer, is often more than a limited number of people of limited means can bear.
Manaus is trying to fill this gap by taking advantage of a Colorado law that allows a nonprofit to negotiate the purchase of a mobile home park on behalf of its residents if more than half approve.
The group previously pulled together financing to acquire two other mobile home parks that went on the market, only for outside investors to bid up the price each time to a point where it became untenable to try to compete, Schalit said.
The group members learned from that experience and developed a strategy that aims to get out in front of well-heeled investors by partnering with trailer park residents and their owners before a park is listed for sale.
In the case of Three Mile Park, whose owner Ben Krueger died a year ago, the four surviving children all agreed their father would have wanted to preserve the community he tended for nearly 40 years. The children were thus willing to accept a modest premium over the $2.16 million appraisal obtained by Manaus even though they almost certainly could have gotten more.
The group is now in the process of identifying other like-minded trailer park owners who are interested in selling at a fair price while preserving their affordable communities, Schalit said.
“(We) are optimistic because of owners like the Krueger family, who are not an anamoly,” said Schalit. “In fact, we’ve been approached by other owners in the region already. We are in the nascent stage of this effort but have no reason to think this won’t be fully supported by nonprofits, local government, and philanthropy.”
She also sees this effort as a tribute to her organization’s name, which it shares with the Brazilian city of Manaus. Located at the confluence of two major rivers that come together to form the mighty Amazon, the city takes its name from the native people of Brazil and is seen by many as a symbol of what can be achieved through cooperation.
“We see our namesake as a nod to the importance and power of partnership, solidarity and collaboration,” Schalit said.