Rent Control for Manufactured Homes: Good Intentions Yield Unintended Consequences

“I believe manufactured homes should continue to have rent control.”

--      Salud Carbajal, Democratic candidate for the 24th Congressional District

"Our rents have to make economic sense or we have no business."

-- Sam Landy, president, CEO UMH Properties

  SANTA MARIA, CA - 09/16/2016 (PRESS RELEASE JET)

An ice cream social at a California manufactured home community was the latest forum where the political struggles and economic tensions over rent control were on full display.

Candidates for local, state and national office mingled with residents at the Casa Grande clubhouse in Santa Maria this week to offer their support for affordable housing concerns.

At center stage: the issue of rent control.

“I have no problem with someone trying to make an honest return on their money but not at the expense of a very unique demographic in our community,” said City Councilman Mike Cordero, who is running for mayor of Santa Maria.

It is a sentiment echoed in municipal circles around the nation. Who can argue with the quest for affordable housing for all?

However, one of the challenges facing the manufactured housing industry in general, and manufactured home communities in this particular case, is how ignoring the laws of supply and demand – the operation of a free market – often harms the very affordability for which candidates’ advocate.

“I have asked that large residential developers….I haven’t been successful yet, but I think that is critical,” said Santa Maria Councilmember, Terri Zuniga

"Rent control is proven not to work, save to drive out more affordable housing over time,” said Brad Nelms, of California based ManufacturedHomes.com.

In the case of manufactured home communities (MHCs), rent control is a factor that drives out new construction. That, over time, will also tend to drive up the prices of existing communities.

Site fees for residents rise, as competition is decreased.  And thus, the very people the rent control laws are intended to help, are in fact slowly, over time, harmed.

Sam Landy, president and CEO of UMH Properties, says rent control is a short-term solution with long-term adverse consequences.

"In the short term, a single landlord can create a bad situation for hundreds of home-owning residents by raising rents in excess of market rent," says Landy. "The market will eventually force the landlord to lower rent over time, but many residents may object strongly before that happens."

Governmental entities respond to the objections with rent controls before market forces have a chance to respond to the laws of supply and demand.

"Our rents have to make economic sense or we have no business," says Landy. "Therefore, in the long term, there is never a need for rent control."

Writer Joe Dyton examines these dynamics and more here at MHProNews.com.

(Image caption - Casa Grande Mobile Home Park, Santa Maria, CA - photo credit, Trulia, text credit, MHProNews.)

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