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No easy way out

California’s Tenant Protection Act caps rent increases to 10% total or 5% plus the percentage change in the cost of living — whichever is lower — over a 12-month period.

According to the Skyline Ranch Country Club Manager, Chris Ingersoll, the average annual rent increase in the park over the past decade has been 5.5% — with residents seeing hikes in the range of $100 to $400.

Ingersoll told ABC 10 News the 2024 hikes rent are necessary to stop the mobile home park running “at a loss,” adding: “The Park’s analysis took into consideration the fair market values of rents, the expenses required to operate and maintain the amenities of the Park, and the Park’s ongoing and recurring expenses.”

The club manager said residents were given notice about the increases in December 2023, giving them “enough time to get their financial affairs in order.” But that proved tricky for Keyser and other senior residents who are now looking to sell.

“It seems like every week somebody's putting their house up [for sale],” Keyser said.

With so many people seeking to leave the space, there seems to be no easy way out for the struggling residents of the Skyline Ranch Country Club — and if they want to stay, they’ll have to pay up.

“It's not affordable for some of these people who have lived here 20-30 years now,” Keyser said. “That's what makes me the maddest.”

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Homes vs. business

Mobile home parks used to stand out as one of the more affordable living options for seniors on a tight budget.

But while these parks are home to many Americans, they are first and foremost a business for their private owners. And as Ingersoll pointed out, those owners — who have faced a lot of cost pressures recently, due to sticky inflation — want to do much better than just break-even.

In recent years, the mobile home park industry has caught the attention of institutional investors looking to make a quick buck. The Associated Press (AP) reported in 2022 of a nationwide trend of institutional investors — led by private equity firms and real estate investment trusts (REITs) — swooping in to buy mobile home parks and then repeatedly raising rents.

At the time, Benjamin Bellus, an assistant attorney general in Iowa, told the AP: “These industries, including [the] mobile home park manufacturing industry, keep touting these parks, these mobile homes, as affordable housing. But it’s not affordable.”

He added: “You went from an environment where you had a local owner or manager who took care of things as they needed fixing, to where you had people who were looking at a cost-benefit analysis for how to get the penny squeezed lowest … You combine it with an idea that we can just keep raising the rent, and these people can’t leave.”

Today, you can see the same dynamic playing out in single-family home and apartment markets — with corporate landlords accused of buying up properties and driving up rents to make maximum returns.

At least a few lawmakers seem to be paying attention to the crisis. In February, California Assemblymember Alex Lee introduced a bill that would ban companies that own more than 1,000 single-family homes from buying additional properties and converting them into rental units. The bill was passed by the State Assembly on May 21 and is currenty before the California Senate.

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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

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