MHP Tenants Are Getting a Raise

As we highlighted in a previous post Are Mobile Home Parks Still Recession Proof? mobile home parks have been remarkably resilient regardless of economic conditions.

But a recession sparked by extreme inflation is a unique beast.

Our tenant base is taking it on the chin right now. Lower income families pay a larger portion of their incomes to basic goods and services (gas, food, housing), which make up the majority of the inflation spike.

But there is a little hope ahead for a large percentage of mobile home park residents - namely those that depend on social security payments.

Social Security roughly ties its annual cost of living adjustment (COLA) to CPI. As of today that projected increase should be a spicy 9.1%+.

This will help absorb the mobile home park industry’s typical 3-6% rent increase, which is downright cheap compared to the 10-20% apartment rent increases the last two years.

For example, according to wall street predictions, Sam Zell’s ELS (Equity Lifestyle Properties) is likely to raise mobile home rents 6.5% next year to keep up with their expense inflation.

While a grand total of ZERO tenants will celebrate that 6.5% rent increase, the reality is those on social security will technically be gaining ground on that spread.

Weak in the knees socialists will argue that housing is a right and the country would be better off if rent increases were always linked to CPI, i.e. rent control (ick, we don’t even like typing those words). To which we say phooey!! We’ll save our more coherent argument against rent control for another time. :)

Now, we’re not saying this social security boost is a good excuse for all park owners to jack lot rents next year. Far from it. However, it’s nice to know that mobile home tenants on fixed incomes have a little relief on the horizon.

Happy Trails,

MHP WEEKLY