Making the best of our bad bargains, per the NYTimes:
“Don’t get too hung up on appearances,” Frank Rolfe reminded us as our tour bus made its way to the first of several trailer parks we would visit on a bright Saturday afternoon in Southern California. “Remember, you don’t have to live in these homes.”
It was Day 2 of Mobile Home University, an intensive, three-day course on how to strike it rich in the trailer-park business. Seventy-five or so students had signed up for the class, which Rolfe offers every other month in different places around the country. Most of the enrollees weren’t real estate speculators; they were jittery members of a hard-pressed middle class. They were nervous about retirement. Or they were worried about their jobs moving overseas. Or they were making $100,000 a year, maybe even $200,000, but felt the need to earn more. All of them, though, had somehow come to see the lowly mobile home as their vehicle to financial freedom. “It’s about self-preservation,” one 42-year-old attendee told me. He had flown down from San Francisco for the seminar because he hated his job selling health care plans.
Our first stop was Green Lantern Village in Westminster, a city of 90,000, landlocked between Santa Ana and Huntington Beach. Green Lantern is a giant patch of asphalt crammed with 130 trailers. We gathered in a circle around Rolfe and the lot’s manager and listened as the manager explained that rents at Green Lantern had been bumped up by more than 30 percent over the past three years. The Mobile Home U. students nodded appreciatively: They learned early in the course that one of the best things about investing in trailer parks is that ambitious landlords can raise the rent year after year without losing tenants. The typical resident is more likely to endure the increase than pay a trucking company the $3,000 it can easily cost to move even a single-wide trailer to another park. As Rolfe put it, an “extra $10 or $20 a month isn’t going to bankrupt anyone.” He compared the hikes with cable companies’ annual bump in fees, which get people into “the habit.” Raising rents by 30 percent might sound steep for trailer-park tenants, who at Green Lantern earn $40,000 on average, but the manager explained why that isn’t the case, as if he were reading from the 500-page instruction manual Rolfe distributed on the first day. For years, Green Lantern rented only to people 55 or older. But these days, the manager told us, a trailer is just as likely to be filled by a two-income family “making minimum wage at a Taco Bell.” There was a murmur of approval: Another early lesson was that whereas seniors tend to live on fixed incomes, greatly limiting their ability to absorb rent increases, working parents “can always pick up extra hours,” as Rolfe put it, even if they’re struggling….
There were 211,000 fewer units of public housing in the United States in 2012 than there were in 1995, according to the Center on Budget and Policy Priorities. Federal spending on rental assistance programs has remained flat in recent years, according to the center, even as the number of households that the Department of Housing and Urban Development classifies as “worst case” rose by 43 percent between 2007 and 2011. A study by the Center for Housing Policy found that among renters who have a job, one in four was spending at least half of his or her income for an apartment. “We’re trying to make things as cheap as possible,” Rolfe said.
While Rolfe, who is 52 and has a degree in economics from Stanford, can come off at times as a caricature of the coldhearted capitalist, during his Mobile Home University courses, he also gives voice to left-wing critiques about the profound fissures in our economy. One in five households, he told the class, lives on less than $20,000 a year. A significant portion of the 10,000 Americans who turn 65 every day are facing life on a fixed monthly income of $1,200 or less. He is an admitted profiteer thriving on the collateral damage caused by our winner-take-most economy, but he also is a zealous student of the constantly changing landscapes of American poverty. “The bottom line is Americans as a group are getting poorer,” he told his students — and while that’s bad news for those living on the economic fringes, it also means opportunities for those willing to take advantage of the trend…
Rolfe confesses to feeling some guilt that he owns the largest house in his hometown while his customers are making do in cramped quarters. It breaks his heart, he confesses, when they evict a family even as he tells himself it’s for the best. He acknowledges he has made millions of dollars warehousing those living on the economic margins. But what if you simply want to keep your monthly living expenses low so you have a nest egg for emergencies — or have the option to take in a movie or buy some wooden ducks every once in a while? Or what if Pontoon Beach is simply your best option? With around 10,000 lots scattered mostly across the Midwest and the Central Plains, Rolfe and Reynolds are about equivalent in size to a public-housing agency in a midsize city — and in an important way, they play the same role. Those living in public housing are generally required to pay up to 30 percent of their household income as their share of the rent. Rolfe and Reynolds’s living in public housing are generally required to pay up to 30 percent of their household income as their share of the rent. Rolfe and Reynolds’s tenants pay on average closer to 20 percent. And unlike the civil servants working for a housing agency, their managers know they must enforce the rules or they’re out. “We go through managers like crazy,” Rolfe says.
Their tenants, though, tend to stay if for no other reason than a lack of options. The average resident has “such bad credit,” Rolfe said, that it would be a deal-killer for most landlords running credit checks on potential tenants. Those who are retired are thankful that they own a place of their own, even if it’s only a metal box, because it allows them to live on the little they have. And here Rolfe and Reynolds are providing safe, low-cost housing to those who can’t afford to pay more or choose not to.
“We’re the Dollar General store of housing,” Rolfe said, adding, with an amiable grin, “If you can’t afford anything else, then you’ll live with us.”