Mobile home opportunity or potential pitfall? - Posted by Debra G.

Posted by Bill K. - FL on March 07, 2000 at 12:04:50:

Here we have thousands of condos whose taxable value because of the $25000 homestead exemption is less than zero hence no taxes are collected. Using your reasoning we should ban all of them also. Most of these condos are occupied by seniors who put a strain on our medical services. I guess with politics as with many other things it just matters whose ox is being gored.

Mobile home opportunity or potential pitfall? - Posted by Debra G.

Posted by Debra G. on March 06, 2000 at 14:08:38:

My county has just recently passed a new zoning ordinance, that prohibits any mobile home that was built before 1976 from being set up in the county. It doesn’t matter if the home is being moved between parks, or put on private land. They can stay where they are set up right now, but they can never be moved. Basically, that makes them worthless and will cost hundreds to be hauled away and dumped, if they are ever asked to be moved out of a park.

Now, that means these homes are a REAL headache to any dealer that takes them in as a trade-in. They move most trade-in’s to their lots and resell them there, rather than paying lot rent. These homes are now worth LESS than nothing to them. I’ve already found out that most park managers and dealers have NOT yet found out about this new law.

That should provide me an opportunity to buy these homes at bargain basement prices (or perhaps totally FREE, to save the dealers money!), and owner finance them myself cheaply. BUT, if I repo a home, and the park then asks me to remove it rather than allowing me to resell it, it will cost me a bunch of bucks to comply and stay in their good graces.

I would appreciate any feedback or suggestions about this issue. I’m leaning against dealing with them, primarily because so many people have said how hard it is to sell the older and narrower homes. And I’m afraid they may offer more potential liabilities because they may have dangerous wiring. BUT, what a waste it would be to throw all these homes away! Any ideas, folks?

Re: Mobile home opportunity or potential pitfall? - Posted by Patrick-MD

Posted by Patrick-MD on March 07, 2000 at 14:43:26:

What a great discussion! Ray sounds like the person we NEED in the planning commission. May I put in my oar, to help Mark or anyone else who cares, gain a little bit of an historical background? This is right from our Smart Growth Policy class notes in the U of MD’s Environmental Policy Certificate course.
The initial planning and zoning laws grew out of the public’s desire to shift the balance of power to decide planning and siting issues, from the scandalous good-old-boy political system of the Teapot Dome era, to a fair and community-responsive system of planned growth controlled by locally elected government.
At the turn of the Century, New York City passed the first zoning ordinance to ensure tenament rooms had access to light and air. In the 1920’s, the balance of population shifted, from most of the population living in rural areas to most of the population living in urban areas. The need for a coordinated planning effort to protect the public from predatory activity in an open market, to protect property values, and to ensure delivery of required services for health and commerce became crucial. Enter then-U.S. Secretary of Commerce Herbert Hoover. (Look up his biography in an encyclopedia sometime. A very experienced, very misunderstood public servant. World depression can wreck a political career.) Mr. Hoover drafted the first Zoning Enabling Act as a granting-of-authority law to protect property values in 1920. His Standard Plan Enabling Act came on its heels in 1924 after the Court said, "Sure, under the Constitution, zoning can be planned and enforced, but you need a specific zoning PLAN to enforce specific zoning ordinances."
The test case of “How can the government tell me what I can do on my own land?” came in the Euclidian Zoning Ordinance case. No, some Greek god didn’t deem the community with all-encompassing powers. It was a case of the City of Euclid, Ohio,(adjacent to Cleveland) vs. a gas station owner who asserted his right to locate his business in a residentially-zoned neighborhood. The Court ruled that a community government - Euclid - had a right and a duty to protect the community (from the siting of a gas station) as granted in the Constitution. The Constitution states that the government has the right to assign powers or organize groups or agencies - police, food and safety inspection, zoning and planning - for the protection of the health and safety of its citizens.
The argument that, by passing an ordinance upgrading the minimum age of a sited mobile home to coincide with the passage of the national building code, the government is performing a “taking” and leaving the property owner with property worth nothing can’t be made. A taking is defined as an action by a government body that leaves no reasonable use afterward. The park will still have a “reasonable use” afterward, albiet an upgraded, modified use. And the government is performing its delegated function, to keep the citizens safe and the property investment values up.
Those two acts, the Zoning Enabling Act and the Standard Plan Enabling Act set up the structure at the federal level, so that the power that the Constitution delegates to the states would have a specific legal foundation to build on. The important ideas to remember here are “delegated power” and “specific legal foundation”.
See, what the government keeps trying to do, if they follow the plan that Tom J. and Ben F. put down,
is pass the power on to US! You and Me, folks. But just like a tenant, you’ve got to remind them from time to time who owns the structure. We call that voting where I come from. When it’s used right, Democracy is pretty cool!
Thanks for letting me horn in. creonline.com is like a breath of fresh air!

BIG BROTHER!! (nt) - Posted by corbay

Posted by corbay on March 06, 2000 at 20:19:50:

.

Hmm… - Posted by Jacob

Posted by Jacob on March 06, 2000 at 17:48:53:

Hi Debra,

Decided to post here after your email as a way to get even more insight. This is an interesting situation for you.

Older homes can sometimes be a hassle to sell, but I market them without mentioning age. Meaning, if I am selling a 1972 model, I don’t place an ad saying “Lovely 1972 …” It’s psychological to most. Same reason why I won’t touch any 1960’s models.

I have a hunch that your people skills combined with your problem-solving skills could try something here. When dealers take a trade, they usually don’t move the home immediately (at least not here.) Assuming that you have built up some good relationships with several park managers, make arrangments to buy the home before the dealer pulls it out. You have excellent leverage as the home is nearly worthless after it’s moved. I think this is quite possible, but I’ve obviously never tried it. Your people skills will make the difference on this one. No reason you couldn’t pick some up for $500-$1000.

As far as the marketing end of it, that again depends on how good you are. If a home is pre-1976 (Like you mentioned in your email) then many times it will only retail for 5-$10,000. Many people could come up with 20% of that. And, if you wanted to pake a page from my book and market “no money down” that wil attract a lot more prospects.

Not to beat a dead horse, but your people skills will make the difference between a fabulous opportunity and another pain-in-the-a$$ government regulation costing you money. It’s up to you, and I have no question where you stand.

Jacob

it is NOT unbelievable - Posted by MilNC

Posted by MilNC on March 06, 2000 at 17:44:35:

Several counties near me have a 10 year age limit on MH, including ones set up on private non-MH Park
acerage.
I never saw this addressed in Lonnie’s materials.

I can’t say for sure if it is only counties that rule
this way, but here in NC, it is the counties that are
posing these rules. My county is more lenient that
adjacent counties, and I’d like for that to be an
advantage, vs the cost of moving them.

Re: Mobile home opportunity or potential pitfall? - Posted by Robert (NC)

Posted by Robert (NC) on March 06, 2000 at 15:31:11:

If the park asks you to move the home maybe you could donate the home to an organization to help the homeless and use it as a tax write-off. Couldn’t hurt to check around.

Robert

Re: Mobile home opportunity or potential pitfall? - Posted by Bill K. - FL

Posted by Bill K. - FL on March 06, 2000 at 15:25:13:

Hi Debra,
Do you live near the county line? If you get them cheap enough and have the PM’s permission to keep them there it could still be worth it. Or, just deal with the newer ones and don’t worry about it. I wouldn’t want to have to move any of em new or old. “If” the old site will not accept a new home, the dealer will probably have the old home hauled away for junk unless you buy it. Some of the dealers around here are doing their own Lonnie deals as well.

Unbelievable… except it’s all TOO believable… - Posted by Mark (SDCA)

Posted by Mark (SDCA) on March 06, 2000 at 14:58:22:

What county is this??? I never cease to be amazed by the incompetence of the people in government. What business do they have telling me what age mobile I can put on my property??

Mark

Thank you! - Posted by ray@lcorn

Posted by ray@lcorn on March 07, 2000 at 15:40:20:

Patrick,

I haven’t heard anyone cite “Euclid” for ages! Thanks for the history lesson.

Contrary to popular belief, zoning is not a communist plot. It is, as you so ably pointed out, the best and most immediate way for the people of a community to create the community they want to live in.

Thanks for joining in, and I hope we hear more from you!

ray

Ohhh, we are very competent… - Posted by ray@lcorn

Posted by ray@lcorn on March 07, 2000 at 24:06:12:

Mark,

It just so happens that the County that Debra is speaking of is also my home County. And it just so happens I am on the planning commission of that County. And yes, I was involved with the zoning ordinance rewrite that banned pre-HUD homes (older than 1976). In fact, I was in favor of the ban.

Now before you lock and load, let me explain my background and my reasons. If after hearing me out you still want to call me incompetent, please spell my name right.

First, I literally grew up in the mobile home business. My father was one of the pioneer dealers in the Southeast, and at one time had sales centers in seven states. My first jobs were all connected to mobile homes or parks in some way. I have towed, serviced, sold, repoed, traded for, financed and even scrapped more mobile homes than many people would even see in a lifetime. I’ve done single-wides, double wides, triple-wides, modulars and even a two-story manufactured home. We currently own a mobile home park in this county that we are in the process of spending major money on in order to maximize our investment. So please believe me when I say I am qualified to speak to this issue.

I have served on our local planning commission for most of the past ten or eleven years. I am a graduate of our state’s Certification program for citizen planners. I fought long and hard for the new zoning ordinance, and I was especially involved in the sections on manufactured housing and mobile home parks.

The key words here are “citizen planner.” Planning Commissions are made up of people from the community they serve. They often have little expertise when they first start, and the on the job training is pretty rough. There is very little thanks to what is basically a volunteer job. Meetings are frequent and sometimes go long into the night, and very few people call you up to tell you what a good job you’re doing. Above all, most citizen planners seek to find the solution that contains the greatest good for the greatest number. That was the case here.

You see, we didn’t just decide to arbitrarily ban pre-hud homes. We had hard data that documents the problems and expense involved in allowing these homes to continue to be placed on lots. Our area has grown at a blistering pace in the past fifteen years. The zoning ordinance we overhauled was adopted in 1969. Our population has doubled since then. We had no tools to deal with this growth, and as a consequence, development springs up randomly, with no regard to utilities, roads, schools or other infrastructure. We are currently faced with $50 million dollars worth of schools needed, and they will be full the day they open at our current rate of growth. We are expecting tax increases of 8-10% per year for the next few years just to stay even.

We also have some interesting numbers. For every dollar collected in taxes from residential development, a residence requires $1.20 in services. For every dollar in commercial/industrial development, only 9 cents in services is required. For agricultural uses, 35 cents is expended by government in services for each dollar in revenue collected. This is pretty typical of most jurisdictions in the country by the way.

So you can see that residential development is a net drain on the county budget. Add to this the fact that most mobile homes are taxed as personal property in Virginia, and as such the value and the taxes are less each year. Once a mobile home reaches about 15 years of age (I need to double check the exact age), tax is no longer assessed at all. Yet mobile home residents still have children to be educated, drive on county streets, and use county facilities. The service to revenue deficit is actually much worse for mobile homes than the average house.

Now don’t think we singled out mobile homes as the whipping boy for our fiscal problems. The new zoning ordinance put some very onerous restrictions on developing land for residential use without being zoned for it. (Most of the county is zoned agricultural, though little of it is actually farmed. We are far too urban in most places for farms to remain viable. Our biggest crop may be streets.) Our intent was to better manage our growth. To put it where we could support it and afford the support.

In the case of mobile homes, we greatly simplified and enhanced our standards for new mobile home parks. You can actually get one approved here if you do your homework. Had I not been on the Planning Commission, chances are that parks would have been banned as well. The decision to ban pre-HUD homes was actually picked up from local park operators, of which we are one. Our parks have long required the replacement of older homes, thought we have never given a resident a deadline to trade or move. We prefer to replace units through attrition. The value of a park is directly affected by the average age and condition of the homes in it. In order for us to maximize the value of our investment, it is in our best interest to upgrade homes at every chance offered.

Same goes for the county as a whole. Add to this the fact that a pre-HUD home has no building certifications whatsoever, yet cannot be inspected by the building inspectors and you have a pretty weak argument for keeping them. All existing units are grandfathered, so if an old home is on a private lot it can stay there indefinitely. As Debra and others have correctly surmised, that creates both problems and opportunities. Which is greater will be determined by the stance of the observer.

One of the largest independent mobile home dealers and realtors in the area was also involved in this new ordinance. He never objected to the pre-HUD ban, but he raised he** over the residential development restrictions. Why? He knew as a dealer that the ban would have very little effect on his business A trade for a 1975 home is a paper shuffle from the start. Take the home off the lot even without the ban and they are worth $500 max. Whatever trade-in allowance for an older home shown on a retail contract is pure smoke. The ban raises the bar for participation in the county housing market. Is this unfair? I don’t think so. I think it is the right of the people paying the band to call the tune.

As for an answer to your rhetorical question of what business the local government has telling you what you can and can’t put on your lot, the short answer is everything. The rest of the community is clearly subsidizing older mobile homes. Older mobile homes are high probability safety hazards. The community should not be asked to subsidize any one type of housing without being given a choice in the matter. As a citizen, I have exercised my choice by being involved with the process and influencing the outcome. As a businessman, I believe that as the area upgrades, so will my business. Will there be problems? Probably. But in the long run, the quality of our problems should improve, and that is what it is really all about.

Enough of me on a soapbox.

ray

North East VA is same way - Posted by Tony-VA

Posted by Tony-VA on March 06, 2000 at 15:43:27:

They are probably making the argument that the homes are not HUD approved and therefore their quality and safety are called into question.

Several of the local jurisdictions in my area of Northern Virginia have this rule.

Tony-VA

It’s a county in southwest Virginia (nt) - Posted by Debra G.

Posted by Debra G. on March 06, 2000 at 15:13:59:

nt