Sterling View Mobile Home Park's cooperative board
Just hours after the residents of the Sterling View Mobile Home Park in Hyde Park took ownership of their community through a newly formed cooperative on April 2, a pump that was part of the effluent system broke down. Suddenly the group had its first problem to solve as property owners.
“We went from celebrating in the morning to not celebrating in the afternoon,” said Jan Kuhn, a retired elementary school teacher and resident who worked to put the deal together.
Fortunately, the former owner of the park had a new pump in storage and he donated it. The celebratory mood returned.
“It’s been an adventure, and it’s just beginning,” said Paul Nesky, president of the mobile home park’s board.
Nesky and Kuhn worked with a variety of lenders and advisers to help their community buy Sterling View, a community for people ages 55 and over, for $3.25 million. The park has 113 homes.
Nearly eight years ago, its residents started to look for ways to finance a purchase after the couple who owned the park told them they wanted to sell. About two and a half years ago, the pace of work picked up when Nesky and Kuhn started talking to the Champlain Valley Office of Economic Opportunity and to the Cooperative Development Institute. The latter is a nonprofit organization in Northampton, Mass., that has helped 14 groups of Vermont mobile home park residents create cooperatives.
The park cooperative borrowed the purchase price, and every household bought a share, said Nesky. Monthly payments — which previously landed between $300 and $318 — increased $48, which puts them well below the state average, he said.A nonprofit lender called Resident Owned Communities, or ROC, lent the cooperative the purchase price, and CDI provided nearly two years of coaching and training, Nesky said.
"Quite frankly, the method of their financial oversight was, 'We want to make sure we give you enough money to be successful,'" he said. "They will continue to guide us for several years."
Mobile home parks have a sometimes fraught history. Many were originally established as parks for structures that were truly mobile. But they evolved over the years into dense pockets of unmoveable affordable housing, much of it in rural areas. According to the National Manufactured Home Owners Association, nearly 7 million manufactured homes exist nationwide, and about 43 percent of them are in privately owned communities or parks.
Vermont has 239 mobile home parks with about 7,000 households, according to the state Agency of Commerce and Community Development, which maintains a registry of the parks. In many other states, parks can be purchased by investors, often without any prior warning to residents. And an investor who is at a distance usually has only the bottom line in mind, said Nesky.
“They don’t have a track record of being favorable to their tenants in terms of the cost of rent and the method of how they do business,” said Nesky. “I can name two or three in north central Vermont where the tenants were left to mow all the grass, take care of the common areas, plowing was up to the people who lived there, potholes, you fix them," he said. "No, thank you.
"We’ve not lived that way here, with the prior owner, and we don’t intend to that for ourselves.”
Vermont law requires park owners to notify residents when they plan to close or sell a park, and to give them a chance to come up with an alternative such as cooperative ownership.
In Vermont, the parks are recognized as homes, not as vehicles or other property.
“That’s a key distinction,” said Jonathan Bond, the director of the nonprofit Housing Foundation, the largest mobile home park owner in the state. Home ownership is a goal for many, and owning the park also makes it easier for residents to get mortgages and insurance. When a park is privately owned, mobile home residents often own their home but rent the parcel it sits on.
“In Vermont, we recognize that you don’t have to own the land to be a homeowner,” said Bond.
Vermont's 14 co-ops all formed during the past decade, and more are likely to organize. Two large parks in Colchester, Breezy Acres and Hillcrest, recently went up for sale. The parks, which are adjacent to each other and have the same owner, accommodate 135 mobile homes, and have a combined price of $14 million, said Vermont Housing Commissioner Josh Hanford.
While the two attracted some private interest, the residents have been able to obtain purchase agreements to buy the parks as a cooperative, said Hanford. Now they have a long road ahead of them in securing the financing they’ll need.
In the case of Sterling View, the owners, Ken and Martha Harvey, worked closely with residents through the years as they slowly formulated a financing plan, said Nesky. Ken Harvey is the one who suggested they seek help from Champlain Valley Office of Economic Opportunity, or CVOEO, Nesky said.
“He envisioned tenants would own it some day; that was basically his vision, not ours,” said Nesky.
Getting an opportunity to put in an offer is the biggest hurdle to residents purchasing their own community, said Mike Bullard, ROC-USA’s communications and marketing manager.
The smaller size of Vermont’s parks has helped keep them in local hands, said Laura Mistretta, a resident organizer for CVOEO’s mobile home program. Most Vermont parks have fewer than 20 lots; the largest, Tri-Park Cooperative Housing in Brattleboro, has 300. Outside investors wouldn’t be interested in a park with fewer than 100 lots, Mistretta said.
“I think we’re pretty protected from those really corporate speculative purchases,” she said.
She noted, however, that sales prices for mobile homes are going up, just as are prices for traditional homes.
That affects residents' ability to form co-ops. “It means lot rents are going up,” Mistretta said.
The state’s mobile home residents are still vulnerable to some forces beyond their control. In Brattleboro, board members of Tri-Park have been working for years to create new housing lots after the town ordered them to remove manufactured structures from a flood plain in the wake of disastrous damage from Tropical Storm Irene in 2011. Recently, the group decided to move a maintenance shed to make room in the park for 18 homes.
“The 18 will be squeezed in within existing homes, which won’t make everybody happy, but we don’t have a choice,” said Kay Curtis, president of the park’s cooperative board.
State policymakers have been struggling for decades to come up with an answer to Vermont’s housing problems. The state has some of the oldest housing stock in the country, and in many areas, there aren’t enough homes to meet the needs of the population. In the last few years, home prices and rents have risen sharply, making it difficult for low- and medium-income residents to find a place to live.
While market forces are driving multifamily construction in Chittenden County, homebuilders say high costs of materials and labor, and onerous regulation, have made it too expensive to build homes in the $175,000-to-$350,000 range outside of that populous area. Employers say that, in turn, makes it hard to find workers who are able to live nearby.
The shortage has focused attention on mobile home parks, which provide dense, affordable housing in rural areas. In his proposal to spend $250 million of federal COVID-19 relief money on housing, Gov. Phil Scott specifically included improvements at mobile home parks.
“It’s often a lower-cost public investment as a form of affordable housing than some of the other models we have,” said Hanford. “It’s something that deserves attention and support.”
Nesky, who used to be in the insurance business, enjoyed working on the co-op with other park residents. Some of his neighbors were helpful experts — including an accountant and a retired water quality engineer.
“I’m sure we’ll be challenged with the adventure we’ve been on, and there will be times that we'll wring our hands, just like anyone who owns a physical property,” he said. “But this will be a good thing not only for ourselves ... but [for] those who come behind us.”