Why Don’t We Build Trailer Parks Anymore?

Trailer parks are the rural and suburban answer to “the projects” in urban areas: both unfairly and fairly maligned, poorly understood, a convenient shorthand for looking down on a certain group of people.

This is really unfortunate, because trailer parks are a great way to provide affordable housing in a rural or suburban setting. Now, I’m not talking about the trailer parks that persist in places like Santa Monica because zoning and NIMBYs preclude redevelopment, with hugely subsidized rents for people like UCLA philosophy professors earning six figures. Not at all. I’m thinking about places near the suburbanizing edge of western Riverside County, like Nuevo or Hemet; places like the Coachella and Imperial Valleys, with high cost of housing burden for low income service and agricultural workers.

Popular stereotypes hold that trailers and mobile homes are shoddily built. This is probably because the housing stock in most trailer parks is pretty old. Modern manufactured homes, as the fabricators prefer they be called, are well built in a controlled factory environment, and they meet the building codes like any new construction. There’s probably a parallel with dingbats, which everyone holds to be a crappy form of construction, just because we zoned new construction out of existence and all the dingbats we have are 50 years old.

Mobile home park densities aren’t going to knock your socks off, but they’re not bad for suburbia. This large area in Hemet checks in at around 6.3 dwelling units per gross acre. Hop over to Zillow and enjoy the affordability. The lot sizes aren’t too much smaller than the classic 5,000 SF lots that were developed into low-rise apartments in places like Palms, which raises the enticing prospect of neighborhoods of mobile homes slowly getting replaced by dingbats.

Note that there are also many older subdivisions of conventional construction about the same size and comparable (or higher) densities, like say this area just west of that Hemet mobile home park. Properties there are selling in the high $100k’s, a considerable premium over the manufactured homes. Meanwhile, new conventional SFR construction in the area starts somewhere around the mid $200k’s. You can see a similar dynamic over in Menifee. Shouldn’t there be a market for new subdivisions of manufactured homes, selling at a similar discount to conventional construction?

So why don’t we build new mobile home parks? Is the market really just not there? Have communities zoned them out completely, because they attract the “wrong” kind of people? Are cities worried they’ll attract people with kids but not generate enough revenue? Other thoughts? Like low-rise apartments in cities, manufactured homes in suburbia seem to be yet another affordable option we’ve denied ourselves.

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4 thoughts on “Why Don’t We Build Trailer Parks Anymore?

  1. Irwin

    A couple of plausible theories [note – I used to work for an accounting firm that had lots of trailer park operators as clients so I’ve seen my fair share of them up and down the state]:

    1. Local zoning precludes new trailer park or favors subdivisions – this is certainly the case in may municipalities in LA County. Not sure about the exurb fringe area you are referring to but I’m guessing it’s not as easy to build a trailer park as you think in Hemet.

    2. Subdivisions generally nets the city more proceeds in the long run because of the subdivision process and subsequent sales of individual real properties resets assessed value for Prop 13 purpose. Trailer parks are a single parcel and building improvements (like roads, sewer, landscaping, clubhouse, pool etc) doesn’t really expand the municipality tax base. Trailer homes are personal property not real property so again, it doesn’t dramatically expand the tax base like a new subdivision with cookie cutter houses would.

    3. Trailer parks are more like apartments than subdivisions – the developer owns the land and has to run the park (hire professional managers). The economics of new trailer parks in place with high land value and high cost of living (and that includes pretty much all of California) doesn’t tend to pencil out. Many trailer park owners eventually go bankrupt or become disinterested in maintaining the property. Many municipalities have had to step in and takeover such parks. Banks are loath the loan to trailer park construction as well due to low returns.

    4. The public sector servicing costs and demand for services in trailer parks are generally not all that different than subdivision – e.g. trash, utilities, school, library, police and fire protection – so the economic incentive is not aligned for municipality to invest in these types of housing. Unless of course they are required to do so. Most municipalities that I’m familiar with, allow new trailer parks developments to meet their low income housing requirements. So that in term attracts… well… low income residents. I’m not casting dispersions, just explaining the rationale behind why a City may not want to build too many trailer parks.

    5. Trailer parks offer low cost living, if you own your own trailer home outright. Most people living in trailer parks do not… they pay to rent the trailer home, and pay again to rent the space. So in short, the demand for this type of housing is quite limited overall. If you have to take out a mortgage to buy a trailer home, you still have to pay rent to rent the space. So most people can do the simple calculation. They rather just pay some extra in mortgage (say an amount equal to the trailer park rent) to get in an actual home, especially one without HOA fee, and this will give them additional tax benefit too in higher mortgage interest deduction.

    Reply
    1. letsgola Post author

      Thanks for your insights. That confirms some of my suspicions (zoning and city rationale for keeping out low income residents). Had not thought of the tax implications because of personal property vs real property, which is certainly another reason for cities to favor cookie cutter built-in-place subdivisions…

      Reply
  2. Purple City

    Another issue is that trailer lots held in fee simple tend not to develop into stickbuilt SFRs. In your Hemet example the mortgage cost for a single-family home on slab are double that trailer park despite equivalent lots. That differential is made possible by having a big arterial road with trailer streets on one side and slab streets on the other.

    What doesn’t really work is a mixed neighborhood. If you allow trailers, very few people will pay for new SFR construction on slab on the lot next door. Hence the trailers (and older structures that may predate the trailers) tend to stick around until there’s sufficient demand for the area to domino to some other use, such as apartments or light industrial. That’s great from an affordable housing perspective, but not necessarily from a “highest and best use” perspective, which is to say, how much property tax does this generate.

    Reply
  3. Mobile home resident - are you?

    Let’s sum it up. Discrimination, bias, and greed – wonderful character traits made manifest by bankers, construction, realtors, and cities. The news media is filled with discussion of “affordable housing” and the high cost of housing, but it’s just talk. Elitism reigns supreme and Americans are herded to make the most costly purchase of their lives in the most expensive way possible. These same elites want the presence of low-income people, because they keep wages down, but they can live on the outskirts in slums. That’s the system. Occam’s razor.

    Reply

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