There are more than a few signs in North America that the hey-day of the much maligned North American trailer park is over. Try: ‘Naturally-Occurring’ No-Subsidy Affordable Housing. Too Bad It’s Dying!
Say it ain’t so!
And guess what? The National Real Estate Investor is prepared to say just that by touting the benefits of a manufactured home Real Estate Investment Trust (REIT).
These Trusts are regulated investment vehicles somewhat like mutual funds. The investment vehicle is not a portfolio of stocks but instead a portfolio of real estate. A manufactured home REIT aims to make a consistently profitable investment out of collections of manufactured homes grouped in some sale or rental framework and situated on inexpensive land in a manufactured home park. Manufactured home parks have proved to be solidly permanent communities and a profitable investment for the REITs.
Manufactured homes are the approved industry name for houses built in a factory and shipped on temporary wheels to a permanent location. They have been commonly termed single or double wides, along with other modern, sturdier, and more high tech offspring. And they are the cheapest of all forms of permanent housing, according to a recent report by the non-profit Urban Institute.
At the moment, the horizon is just a little cloudy. Although the REIT industry is prepared to promote sunny prospects for investment in manufactured home parks, the number of houses being produced is down from a few years ago. Nevertheless, with conventional builders fixated on the luxury home market, the affordable housing future of manufactured homes might indeed glow more brightly in coming years.
A somewhat worrisome note within the National Real Estate Investor article? The U.S. Housing and Urban Development Department (HUD) is considering deregulating manufactured homes construction ‘while maintaining consumer safety standards.’ Trailer parks and manufactured homes have a record of faring badly in weather crises such as floods and wind storms. Safety issues in the past have been the principal reason for robust regulation, and while deregulation might lead to increased supply (as well as profit), consumer safety may not, despite HUD‘s promises to the contrary.
Now, what does this article offer housing activists? Why spend any time at all on this account of windfall profits being made on the backs of low-income citizens? Manufactured home REITs are touted as an inexpensive investment model that produce a high rate of return. The model might appeal to NGOs thinking about land trusts and reinvesting the profits to provide more sites for affordable manufactured housing.
For more on the sparkling future of not-trailer-parks, with their not-trailers, read in the National Real Estate Investor: Manufactured Home REITs Outperform the Market
