Tenant OPPORTUNITY to Purchase 

For the People


Why Tenant Opportunity to Purchase?

In recent years, the Carlyle Group, Apollo Global Management and TPG Capital, some of the biggest private-equity firms in the country, have been buying up Mobile/Manufactured Home Parks (MHPs). Carlyle Group bought Bow Lake in SeaTac for 20 million over market value. Carlyle also recently bought Friendly Village Senior Community, a 245 home community in Olympia. These groups can make a huge return on investment by significantly increasing rents or by selling the property for redevelopment a few years later. 

In a Washington Post article, 'A billion-dollar empire made of mobile homes', residents report that the rent in their community has been rising 4% or more a year. The residents have no choice but to pay because they can't move. A segment of Last Week Tonight with John Oliver also highlights these tactics and points out how there are institutions like Mobile Home University that teach people these methods. The segment shows a class at Mobile Home University in which  the instructor tells participants: 

 "They don't have any option. They can't afford to move their trailer...so the only way they can object to your rent raise is to walk off and leave the trailer, in which case it becomes abandoned property and you recycle it - put another person in it."   

This kind of predatory tactic is what these communities are facing, forcing people out when then have no where else to go.  For this reason, having OTP policies in place can be extremely beneficial in preserving these communities and in turn preserving affordable housing.  Preserving what already is in place is the most cost effective scenario. Every park that is not preserved is at risk of re-development, further diminishing affordable housing stock.  

Private Equity Threatening affordable housing

During the 2008 housing crisis, private-equity firms snached up properties when prices for real estate were low. By 2018, private-equity firms accounted for 11.3% of all home purchases in the US. Instead of reseling the homes, the firms have held onto them, keeping them as rentals and as such making more profit from rental income. 

Outlined in the book "Evicted", authour Matthew Desmond goes into detail about it is more profitable for landlords to evict tenants who are behind on rent than it is to fix-up and maintain properties. Like with MHPs, the firms can buy a property, raise rent, price people out or evict those who fall behind, then simply get another renter to keep the money flowing. 

Rent in Washington State and all over the country has been increasing faster than incomes. The US National Housing Act of 1937 states that for housing to be affordable, rent (or mortgage, utilities and maintenance for homeowners) should not exceed 30% of household income. To be paying more than 30% of household income puts one in the category of "cost burdened". An estimated 46% of Washington households renting are cost burdened. Moreover, half of this population is considered severely cost burdened, that is, paying over 50% of their income towards rent.