An examination of mobile homes in rural pennsylvania

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An Examination of Mobile Homes in Rural Pennsylvania

An Examination of Mobile Homes in Rural Pennsylvania

By: Brent Yarnal, Ph.D. and Destiny Aman The Center for Integrated Regional Assessment (CIRA) at Pennsylvania State University

November 2009

The Center for Rural Pennsylvania Board of Directors

Senator John R. Gordner, Chairman Representative Tina Pickett, Vice Chairman

Senator John Wozniak, Treasurer Dr. Nancy Falvo, Clarion University, Secretary

Representative Tim Seip Dr. Theodore R. Alter, Pennsylvania State University Dr. Stephan J. Goetz, Northeast Regional Center for Rural Development

Dr. Keith T. Miller, Lock Haven University Dr. Robert F. Pack, University of Pittsburgh William Sturges, Governor's Representative

This project was sponsored by a grant from the Center for Rural Pennsylvania, a legislative agency of the Pennsylvania General Assembly.

The Center for Rural Pennsylvania is a bipartisan, bicameral legislative agency that serves as a resource for rural policy within the Pennsylvania General Assembly. It was created in 1987 under Act 16, the Rural Revitalization Act, to promote and sustain the vitality of Pennsylvania's rural and small communities.

Information contained in this report does not necessarily reflect the views of individual board members or the Center for Rural Pennsylvania. For more information, contact the Center for Rural Pennsylvania, 625 Forster St., Room 902, Harrisburg, PA 17120, telephone (717) 787-9555, email: info@rural.palegislature.us.

Table of Contents

Introduction ..................... 5 Goals and Objectives ...... 8 Methodology ................... 9 Results ............................ 12 Conclusions ................... 16 Policy Considerations ... 16 References ..................... 19

Executive Summary

National trends and other data suggest that mobile homes are an important feature of rural America's and rural Pennsylvania's housing landscape, providing greater affordability, availability and flexibility than traditional site-built housing.

These trends and data also suggest that, like mobile home residents nationwide, rural Pennsylvania's mobile home residents may face issues of land tenure, financing and ownership, spatially restrictive institutional barriers, and increased vulnerability to hazards not experienced by traditional site-built homeowners. Little is known with certainty, however, because mobile home data specific to rural Pennsylvania are difficult to find and, when located, difficult to work with. This study, conducted in 2007-2008, sought to paint an accurate portrait of mobile homes and mobile home residents in rural Pennsylvania, and, from that portrait, identify mobile-home-related public policy considerations.

To complete the study, the researchers conducted a phone survey of all 48 rural Pennsylvania county tax assessment and related offices to find mobile home data in electronic format. They used a representative sample of the data to determine the nature and geography of mobile homes in rural counties. Finally, they conducted a mail survey to learn more about mobile homes and their residents. The combination of phone survey, data analysis and mail survey provided a clear picture of mobile homes in rural Pennsylvania.

Following are some of the major findings from the study: ? Mobile homes in rural Pennsylvania are much older, much smaller, and in much poorer condition than the national average; most have never been moved. ? Most mobile homes are primary residences, most residents have lived in their mobile homes for decades, and nearly all residents are satisfied with their housing choice. ? Most mobile homes are located in rural municipalities far from services and employment, requiring residents to drive considerable distances every day. ? Most mobile home residents own their mobile home, but most do not own the land on which the home sits, living either in mobile home parks or on single plots of varying acreages; land rents and mobile home mortgages tend to be low. ? Most rural mobile homes are inhabited by older white individuals with a high school education; many are retired married couples and widowed individuals living on very small pensions; and only a small proportion are younger individuals with families. ? Many mobile homes are located in floodplains and are at high risk of flood damage. ? The wide variety of formats and definitions used by tax assessment and other county offices result in incompatible mobile home data that are extremely difficult, if not impossible, to reconcile and use. In terms of policy, the researchers recommend the following considerations: ? Ensure that comprehensive policies to address affordable housing in rural areas include mobile homes. ? Enact legislation to protect mobile home owners from wholesale eviction resulting from the sale of mobile home parks. ? Develop strategies with large employers and local governments to encourage and subsidize car pool, park-and-ride, and other transportation management programs. ? Provide information, incentives, and help to weatherize mobile homes on leased land. ? Initiate programs that move mobile home residents out of floodplains.

Introduction

Relevance of Mobile Home Study

As the housing choice of nearly 20 million Americans nationwide, mobile homes1 are an important but understudied feature of the American housing landscape (U.S. Census, 2005a). Having grown steadily since World War II, new mobile home construction now accounts for one out of every seven new housing units in any given year (HUD, 2002). This growing popularity has been attributed to the relative affordability, availability and flexibility of mobile homes as compared to traditional site-built housing (Genz, 2001). Mobile home residents, however, face unique challenges related to this housing type.

Affordability In a historically tight American housing market,

housing advocates have recognized the mobile home as an increasingly important component of the unsubsidized affordable housing sector (HUD, 2002). The relative affordability of mobile homes puts homeownership within reach of millions of households and is perhaps the single largest contributor to their increasing popularity (Genz, 2001). For example, in 2005, the average price of a single-wide mobile home in Pennsylvania was $38,900, and the average price of a double-wide was $63,600 (U.S. Census, 2005b), while the average cost of a new, unoccupied, conventional site-built dwelling was $165,344 (U.S. Census, 2005a). Because mobile home owners, on average, have significantly lower incomes than owners of site built homes (Genz, 2001), and affordable housing alternatives continue to dwindle, the relative importance of mobile homes in the affordable housing market can be expected to grow.

Availability and Flexibility The availability and flexibility of mobile homes also

contributes to their popularity in the American housing market. Mobile homes can be shipped nearly anywhere in the 48 contiguous United States, including locations where it would be difficult or expensive to find a builder or supplies. In addition, due to their smaller overall square footage, mobile homes require less physical space than most newly constructed site-built homes. Moreover, because they rest on a chassis, mobile homes do not require a foundation or a basement ? meaning that it is

1 Mobile home was the official term used for a manufactured home built before June 1976, when the name formally changed to manufactured home. In 2005, the majority of residents living in this housing type referred to them as "mobile homes." Only 16 percent called them "manufactured homes." This work will refer to these dwellings as mobile homes (Foremost Insurance Group 2005).

possible to site them nearly anywhere permitted by building codes (NAHB Research Center, 2000).

Ironically, the same unique qualities that make the mobile home a popular alternative housing choice also create unique challenges for its residents. Mobile home owners face issues of land tenure, financing and ownership, spatially restrictive institutional barriers, and increased vulnerability to hazards not experienced by traditional site-built homeowners. Often these issues arise, in part, from the mobile home's historical classification as a travel trailer, the vestiges of which persist even though mobile homes have become a more permanent housing solution.

Land Tenure and Ownership Land tenure is one quality that distinguishes the mobile

home from virtually any other type of permanent housing. By definition, the earliest mobile homes were designed to be transient, and land was not included in their purchase (Wallis, 1991b). Mobile homes were sited in campgrounds and parks, designed for temporary use. However, over time, mobile homes have increasingly become less "mobile." In fact, according to the U.S. Census, 60 percent of mobile home owners in 2005 stated that their mobile home had never been moved (U.S. Census, 2005a). While mobile home owners may purchase land and subsequently place their homes upon it, roughly half of the mobile home owners in the United States lease the land for their mobile home (Foremost Insurance Group, 2005). This unique land tenure situation produces distinctive challenges and vulnerabilities for mobile home owners. Wallis (1991b) explains that as early as the 1950s and 1960s, mobile home park tenants (who typically owned their home but rented their park lot) were often required to comply with oppressive park regulations including gratuitous fees and visitor and utilities restrictions. Wallis suggests that these abusive practices arose in part from the absence of the "clear and significant" rights afforded to traditional homeowners, and were often exacerbated by the scarcity of park space. For example, where there was high demand and few vacancies, a park operator could force prospective tenants to purchase a unit from the operator or from selected dealers. The enforcement of other rules could even include eviction: a tenant late on rent could discover his home sitting outside the park (Hart et al., 2002).

Although landlord-tenant protections have been extended to mobile home owners since that time, landleasing mobile home owners still encounter hardships related to land tenure. High demand for limited park space continues to be an issue for mobile home park residents today, and land values in the real estate market

An Examination of Mobile Homes in Rural Pennsylvania

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in some areas have tempted park owners to sell their land to developers. Across the country, park sales have forced mobile home owners to relocate their homes (often at their own expense) to other mobile home parks (The Spokesman Review, 2007; The Idaho Statesman, 2007; Deseret Morning News, 2006; Saemann, 2007). Complicating this issue are the regulations governing age and condition maintained by remaining parks: even if a resident's home is in moveable condition (many are not), the owner of an older mobile home may have trouble locating a park that is willing to accept it. In perhaps the most extreme example of the relative housing insecurity faced by mobile home owners, those that cannot move their homes for one reason or another are forced to abandon them (Sarasota Herald-Tribune, 2008).

Institutional Issues and Barriers Institutionally, mobile home owners face unique issues

in financing and real estate. As opposed to the traditional mortgages offered for site-built homes, financing procedures for most mobile homes today are similar to those for automobiles ? yet another holdover from the housing type's origins as a travel trailer (NAHB Research Center, 2000). In what has been cited as a salient example of the "poor pay more" effect, this specialized type of lending results in interest rates up to 5 percentage points higher than a regular mortgage (Genz, 2001). Additionally, manufactured housing lenders specialize in subprime lending, which itself can be as much as 3 percentage points higher (Genz, 2001; Renuart, 2004). Mobile home residents are also disproportionately affected in the wake of the current U.S. housing crisis, in which the American housing market is experiencing high rates of foreclosure (RealtyTrac, 2008). Mobile home foreclosure is a much more rapid process than traditional home foreclosure and can be completed in as little as 30 days (Capozza et al., 2005). By contrast, traditional foreclosures typically takes several months, during which time a debtor may be able to halt the process by paying delinquent payments and fees. Early legislative responses by some states to address the foreclosure crisis have not engaged the special needs of mobile home residents, leaving little relief for mobile home residents at risk of losing their homes (Grand Forks Herald, 2008).

Because mobile homes do not appreciate in value at the same rate as traditional site-built houses (in fact, two thirds of mobile homes actually depreciate, much like an automobile), mobile home owners are denied much of the financial flexibility and opportunity offered by traditionally financed site-built housing (Capozza et al., 2005; Genz, 2001). Although touted as an affordable alternative to site-built housing, mobile home ownership

can put residents at risk for a number of other hidden costs. For example, Salamon and MacTavish (2006) found that high energy costs associated with older, poorly insulated mobile homes can quickly consume small household budgets. Poor quality structural features including fixtures, trim, and floor coverings lead to high costs of repair and maintenance for mobile home residents (Consumers Union. 2002), and those living in the oldest mobile homes may face a losing battle trying to maintain homes designed for short-term use.

Other institutional barriers encountered by mobile home owners have a distinctly geographic bent. Historically, mobile homes were often restricted to the campground-like parks that were established to serve them during their travel trailer days (Wallis, 1991a). By the end of World War II, mobile homes began to be perceived as a threat to both real estate values and to a community's "moral character," and in many communities, the parks themselves were limited to commercial and industrial areas (Wallis, 1991b). Over time, Wallis argues, unfavorable zoning regulations in cities pushed mobile home development to more rural locations.

It is possible that mobile home owners are today faced with many of the same spatial and social limitations encountered by their historical counterparts. A study using Geographic Information Systems (GIS) found that, all things being equal, proximity to a mobile home decreased the value of nearby site-built residential properties in North Carolina (Wubneh and Shen, 2004). Social inequality continues to be an issue for mobile home residents, especially in the face of increasing economic stratification (MacTavish and Salamon, 2006). A 1998 survey of 199 North Carolina county and municipal planning directors found that administrative districts can differ in the level of zoning restrictions pertaining to mobile homes; municipalities tend to be much more restrictive toward mobile homes than counties (Lowrey, 1998). These restrictive zoning regulations can force mobile homes farther away from community services. In fact, in a rural context, when compared to other forms of housing, mobile homes have been shown to be farthest away from all community services including hospitals, health care clinics, and police and fire stations (Shen, 2005). For non-critical (but still essential) services including banks, restaurants, shopping centers and daycare centers, mobile residents were forced to travel two to three times longer distances than residents in single-family homes (Shen, 2005).

In addition to the social stigma associated with the housing type, from a strictly financial perspective, it is easy to understand why local governments do not have incentives to create a mobile home friendly environment. Because mobile home values are much lower than those

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The Center for Rural Pennsylvania

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