Factors Leading to Park Owner's Monopoly

MOVING COSTS VERSUS INCREASED RENTS

A commentary in the publication Urban Lawyer points out:

"Moving costs are typically in the range of several thousand dollars. In addition, there are additional costs of setting up the infrastructure associated with the placement of a mobilehome in its new space, which are typically in the range of $10,000 for a doublewide."

As a result of the impracticality of moving mobilehomes, park owners may obtain 'quasi-rent' in addition to 'competitive' rents. . . . The fact that it is quite costly for a tenant to move after having located in a park gives landlords the opportunity to seek larger rent increases than they would otherwise obtain . . . . Other things being equal, a mobilehome owner is better off paying the additional $100 to $150 per month in space rent to stay in place, rather than moving to an otherwise comparable space in an equally desirable location in another park."(1)

FEW NEW PARKS

The lack of normal bargaining power in the mobilehome space rental relationship is reinforced by zoning regulations in urban areas which severely restrict the supply of mobilehome spaces. In these locations vacant mobilehome spaces may be non-existent because public regulation (zoning) effectively prohibits the development of new parks.  While city regulations do not contain outright prohibitions on new park construction, the combinations of various types of local regulations nonetheless lead to this result, and few new parks have opened for business after 1980.

REFERENCE

1. Baar, The Right to Sell the “Im”mobile Manufactured Home in Its Rent Controlled Space in the “Im”mobile Home Park: Valid Regulation or Unconstitutional Taking? (1992) 24 Urban Lawyer 157, 170-171. Sections of this passage within quotation marks are from Werner Z. Hirsch & Joel G. Hirsch, Legal-Economic Analysis of Rent Controls in a Mobile Home Context: Placement Values and Vacancy Decontrols (1988) 35 UCLA L. Rev. 399.

Source: The GSMOL Mobilehome Rent Stabilization Ordinance Handbook, Second Edition: Guidelines for Drafting and Enacting a Mobilehome Rent Stabilization Ordinance.

Prepared by: Bruce Stanton, Esq., Corporate Counsel
Image courtesy of photostock at freedigitalphotos.net.