A program to help mobile home park residents got a huge revamp last year because nobody was using it. Will more than tripling the size of the loan fund and streamlining the application process yield results?
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Mobile home residents in California face an outsize risk of failing utility systems, flooding and fires as a result of infrastructure that frequently hasn’t been updated or repaired in decades.
In 1984, California passed a law to help remedy this: a loan program, paid into by the residents themselves, to buy and in later iterations, fix their parks.
But that solution, for the past 10 years, has helped only one of California’s 4,500 mobile home parks.
State administrators approved a single loan application, in 2021, from a fund now worth $33.5 million, the state’s Housing and Community Development Department confirmed to CalMatters. The loan went to a nonprofit organization to rehabilitate a run-down park in the Eastern Coachella Valley, a region notorious for its dilapidated mobile home parks. The last two applications it approved before that were in 2012, according to Alicia Murillo, speaking for the department.
Housing experts, including from the housing department, attribute the program’s failures to limited demand and an overly complex application process. Yet the need among poor residents is greater than ever, as living conditions at parks slump, chances of corporate ownership steepen and alternative affordable housing options vanish.
So, in 2022, the Legislature revamped the loan program, which is now known as the Manufactured Housing Opportunity & Revitalization Program, or MORE. The new version of the loan program will fold in an additional $100 million over the next two years and has fewer restrictions. The loans will now be forgivable; usable for more kinds of rehab work that prioritize health and safety; and available to private park owners, who were previously ineligible. The state will begin accepting applications by May.
Disillusioned lawmakers and housing experts told CalMatters they plan to watch its implementation carefully, in the hopes it doesn’t lead to more of the same.
“I’m going to wait and see what this does and monitor it very closely,” said Assemblymember Eduardo Garcia, a Democrat from Coachella who authored a bill to reform the program in 2018.
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What went wrong?
The original intent of the fund was narrow: Help residents buy their parks.
“This program was intended for a very specific purpose. When we’re thinking of all the needs of parks and residents, it’s easy to assume it was meant to do it all,” said Sasha Hauswald, assistant deputy director at the housing department.
During a conversion to resident ownership, residents can turn the lots into condominiums they buy individually, or create a nonprofit cooperative that owns the land and issues shares to participating residents.
Housing experts say resident ownership is one of the best ways to remedy poor habitability and economic conditions at mobile home parks, which house some of the state’s most vulnerable residents. Because they rent the land their trailers sit on, residents are often at the mercy of park owners, who have little incentive to make the capital improvements old parks need.
But if they were to own their park, residents could pool their money to make repairs. After buying a park in Houston, Texas, for example, residents together bought a storm water management system that later protected them from Hurricane Harvey.
At its inception, California’s program was designed to combat rent hikes, poor management and park closures, which were increasingly common as the infrastructure at parks, which were often built to poor standards, began to fail and the land around them grow in value, said Jerry Rioux, a former housing department employee who helped write the legislation for then-state Sen. John Seymour.
“At that time there were more applications than we could fund,” said Rioux, who is now consulting with the state housing department on behalf of the California Coalition for Rural Housing, a Sacramento-based nonprofit. “Residents wanted to buy their parks.”
The barriers to entry for resident ownership are now much higher, especially in California. Land costs more and residents trying to create a co-op must now compete against a growing field of investor-buyers. There are also more protections in place. Rioux said it’s much, much harder to shutter a mobile home park now, and more than 100 cities and counties have enacted rent control measures.
“Into the ‘90s there were enough protections in place that residents weren’t as hot on the idea of buying their park,” Rioux said.
Sixty-six of the roughly 70 loans the program awarded since its 1985 inception were parsed out before 2001, according to an Assembly analysis of Garcia’s 2018 bill and a 2022 report from the housing department addressed to the state Finance Department. Until Garcia’s 2018 bill, the loan program only funded rehabilitation of a park together with purchase, according to the bill analysis. The law, which went into effect in 2019, also allowed the program to issue grants instead of just loans and use the money to rebuild parks following natural disasters.
But the program was still run inefficiently, multiple nonprofit directors who applied on behalf of residents told CalMatters. One problem: Loans could take months, if not years, to approve, which made it hard to compete with deeper pockets. Institutional investors accounted for about a quarter of park purchases across the United States in the previous two years, according to a June 2021 report by Real Capital Analytics, a research firm.
“With [the housing department] taking so long to process the loan program, it became virtually impossible to get a deal done,” said Maurice Priest, who runs Affordable Communities, Inc. nonprofit housing corporation in Sacramento and said he tried to sell a park to its residents using the program without any luck. Priest, like Rioux, also helped dream up the program, on behalf of mobile home resident group Golden State Manufactured-Home Owners League in the 1980s.
In the previous decade, three staffers were assigned to the program at any time — but they were also working on other projects, amounting to one full-time employee, said Murillo, speaking for the housing department. Three staffers will work on the new program full-time.
One in 4,500 mobile home parks
“I’ve never dealt with a governmental program that was meant to give out money that was so inefficient at doing so,” said Bob Solomon, a law professor at UC Irvine who co-directs its Community & Economic Development Clinic, which provides pro bono legal services to low-income park residents. He should know — he ran a housing authority in Connecticut for more than a decade, and secured multiple loans from the U.S. Department of Housing and Urban Development, he said.
Starting in 2012, Solomon and his colleagues at the UC Irvine clinic represented a group of nearly 150 farmworker families at Capistrano Terrace who wanted to buy their park from its owner, whom they had successfully sued over neglect of the park. The 18-acre Orange County park was long plagued by failing electrical and sewer systems. The center helped families form a resident-controlled nonprofit corporation and submitted multiple applications for the state’s loan program to buy and fix up the park. None succeeded.
The last, final rejection from the housing department for what Solomon said was a $3.5 million loan said the application didn’t demonstrate “financial feasibility,” according to a 2018 letter the housing department shared with CalMatters. The group secured a nearly $10 million loan anyway — from Clearinghouse CDFI, a private lender, Solomon said.
Solomon was shocked to hear the Caritas Corporation, a nonprofit, scored the 2021 loan to rehabilitate Shady Lane, a mobile home community in Thermal, California — an unincorporated part of the Coachella Valley home to 32 migrant farmworker families. Caritas applied for a $3 million loan, according to their application, obtained through a Public Records Act request from the housing department. The housing department confirmed the full amount was approved.
“Literally my mouth was open when I heard Caritas had gotten an application,” he said.
But not because the park didn’t need help. Park residents successfully sued the owners in 2012, alongside Solomon’s group and California Rural Legal Assistance, a legal aid group, over unlivable conditions. Raw sewage regularly flooded the park’s roads and backed up into residents’ sinks and bathtubs, said Tracy Bejotte, chief operating officer of Caritas. A failed electric system left families without air conditioning during sweltering summers and children played amidst piles of garbage and sewage, according to Caritas’ application letter.
“It was horrible out there,” Bejotte said.
Caritas took over the park in 2017 and installed new septic tanks and electricity upgrades — a temporary solution. It applied in 2020, and was approved a year later, for a loan from the housing department to rebuild the park and add eight more spaces. It plans to start redevelopment next year, which will involve paving new roads, building a clubhouse and laundry facilities, and replacing dilapidated mobile homes. Before it starts, it’s waiting for the city of Coachella to connect the park to public water and sewer lines, Bejotte said.
The application process — which multiple experts with experience applying for government loans described to CalMatters as complicated — involved gathering a list of documents including an appraisal, a hydrology study and land use permit from the county. The application even included the appraiser’s resumé.
Multiple sources expressed skepticism that anyone without extensive professional experience tackling such programs would be able to successfully navigate the process solo.
“The folks in this park I don’t think would have had the ability to do everything that was needed for (the housing department),” she said. “It’s just not what they do for work. You need, like, a Caritas that wants to come in and help.”
Solomon said there’s a reason the housing department approved the application: Caritas has dependable managers and owners with technical expertise.
“There seems to be very little attention to the starting point,” Solomon said. “Which is, ‘Where’s the greatest need? How can we preserve housing?’ And that does not seem to be where people start. The funders seem to start with who has the nicest application.”
Hauswald, assistant deputy director at the housing department, insists the new program will be “a different story” because, in part, it was simplified and recrafted alongside many of the same stakeholders that struggled with the original program.
The biggest change: Park owners will be eligible to apply for the new funding to make repairs that fix health and safety violations, as long as they keep rents affordable. Of that money, $25 million will be available this year, and an additional $75 million next year. Park residents will also be able to access the money to fix problems in their homes, through nonprofit partners who will administer those funds. The loans will also be forgivable.
“It remains to be seen whether we can do it,” said Brian Augusta, a longtime housing policy lobbyist in Sacramento. “A critical piece is that the state has signaled that they want to be an active partner. And I think a lot of people are hopeful that we can see more money get out the door and save some parks and create better living conditions.”
This article was produced as a project for the USC Annenberg Center for Health Journalism’s 2022 Data Fellowship.