JMD MHC

According to data from the 2013 US Census, approximately 22 million people live in manufactured housing communities across the United States.

Manufactured Housing is a highly fragmented industry and has traditionally been dominated by “mom and pop” operators, with families passing down the properties to the next generation to run and manage.  However, recent trends demonstrate an opportunity for consolidation in the marketplace.   Large institutional buyers such as Berkshire Hathaway, Brookfield Properties and Equity Lifestyle Properties continue to purchase communities, manufacture homes and even act as a mortgage lender to potential residents.

 

“We believe that MHPs…are a tangible asset that fulfills an under-supplied fundamental and growing need for affordable housing, can offer immediate cash flow, and can provide opportunities for value creation…”

-Jilliene Helman, CEO of Realty Mogul regarding a mobile home park fund Business Wire, Los Angeles, September 30, 2015

 

The rise in manufactured housing is also due in large part to the evolution of both the quality and scale of home production.  According to facts provided by the Manufactured Housing Institute, as of 2017, there were 121 manufactured housing production plants in the US.  These plants contribute nearly $3 Billion to the GDP per year and translate to approximately 40,000 US jobs.  In terms of improved quality, efficiencies such as controlled year-round indoor production conditions, bulk material purchases and energy efficient building are just a few factors which have lead to year over year increased production.

With around 50,000 manufactured housing communities existing across the country, potential residents have a myriad of neighborhood options to choose from.  Some communities consist of just the homes themselves, others boast amenities such as fitness centers, swimming pools and clubhouses for community events.  Additionally, different categories of communities exist.  While most communities are all-age or “family friendly,” some are designated 55 and older and deemed retirement communities.   In addition, some of these neighborhoods may offer further options including RV parking or storage for seasonal residents.

 

“The typical reaction to seeing a manufactured home and visiting a manufactured home community for the first time is overwhelmingly positive.

-Marguerite Nader, CEO of Equity Lifestyle Properties in an interview with MHPRONews

 

Many of the financial benefits of the manufactured housing industry rest with its nearly recession-proof growth.  According to a recent study by the Lincoln Institute of Land Policy, manufactured housing accounted for nearly two thirds of new affordable single-family housing in 2015.  Often payments can be secured for as low as $500 per month; making owning a home a reality for low-income families.

Typically, a resident will own their own home, paying the community owner a lot rental fee on a monthly basis.  While the community owner is responsible for maintaining the infrastructure and common areas, the homeowner is responsible for maintaining their home, which generally results in a more predictable revenue structure.  It is due to this structure that the market sector is recognized for strong cash flows and steady growth.  The manufactured housing sector has continually proven that it has the ability to offer a low-cost housing solution while homeownership and rental costs continue to rise.