As traditional housing rates increase, cost-effective mobile homes seem to be on the way out.
With housing prices trending to all-time highs, mobile homes represent an affordable option for lower-income Phoenicians. Or they did, anyway.
Back in 2000, there were 88,853 mobile home households in the Valley. In 2016, the number dropped to 84,519, per online search firm Apartment List. With developers buying out mobile home parks at an increased rate this year, the number will only go down from there.
So far this year, investors spent more than $225 million on 40 metro Phoenix mobile home parks, according to the Arizona Republic. That’s more than double the number investors paid in 2015, the second biggest year for sales.
Why is this year different than others? Catherine Reagor, senior real estate reporter for the Arizona Republic, says big investors like New York-based Blackstone Group see Phoenix as a strong market. The U.S. Census reported that Maricopa County grew 1.7 percent from 2016 to 2017, the largest county growth in the country during that time. To serve the growing population, real estate investors like Blackstone buy out mobile home parks and turn them into apartments or condos. “They are considered a recession-proof investment because they’re affordable housing and provide a steady stream of money from rents,” Reagor says.
This trend has caused some experts to take a second – even surprisingly wistful – look at mobile homes. “Removing them [mobile homes] exacerbates matters” in the affordable housing crisis, says Mark Stapp, executive director of the master of real estate development program at Arizona State’s W.P. Carey School of Business.
With more mobile home parks closing in Tempe, Mesa, Glendale and Scottsdale, residents are forced to look elsewhere. The problem is there are not any recent plans for new developments. Other places in the state offer more parks, but they lack the access to health care, education and jobs that residents need in the Valley. “Some [residents] have been there for decades, so it’s hard,” Reagor says.
The Department of Housing provides up to $5,000 from the state’s relocation fund, which helps displaced residents, but there is still more to be done. As rents climb and more parks are purchased by investors to develop into higher-priced properties – and residents are squeezed out – this department will have its hands full.