“Opportunity to Purchase” for Mobile Homeowners

Mobile homes, or “manufactured homes,” provide the most affordable housing option in the market today. The average price of a new manufactured home is $74,200, compared to the average price tag of $296,400 for a newly constructed single-family home. The cost of renting a manufactured home site is typically less than half the cost to rent a two-bedroom apartment, making this the most cost-effective housing option in a booming market.

Unfortunately, this affordability comes with significant risk. While more than 90% of park residents own their homes, they do not own the land under those homes, and that land can be sold for development without the renters even knowing! When a park closes, most homes are lost—many can’t be moved, and others are too old to be accepted by another park. As a result, more than a thousand households were lost during the last 10 years. This “halfway homeownership” presents many issues: owning these units becomes potentially unstable, the rent of the land can increase without warning, health and safety risks become more predominant, and so many other harrowing factors.

That’s why I took the opportunity last Session to author SF-1282, which is important legislation that at least gives these residents the opportunity to join with at least 51% of their fellow homeowners to put in an offer on the land when it comes up for sale. This “Opportunity to Purchase” legislation is simple: it requires the landowner to tell the homeowners if there is a planned sale, and it gives the homeowners 60 days to put together an offer to buy the land.  We need to ensure that homeowners are provided an opportunity to purchase the land beneath their homes. Currently, most homeowners aren’t even made aware of the sale of their community, because landowners do not consider them “viable buyers.” This sad situation must be remedied!

This proposal replaces a current notice requirement that only applies if a park is officially listed for sale with a real estate broker or through public advertising, but this kind of formal listing rarely happens. Through these unlisted and unadvertised sales, parks are increasingly being bought by national chains and out-of-state investors. Minnesota has over 45,000 home sites and close to one third (13,950) have been sold since 2015. Out-of-state buyers account for more than half (8,100) of these sales, and, in 2021, they purchased 81% of home sites that changed hands, which was a record-setting 2,300 sites. It is upsetting that Minnesotan families are getting displaced due to an outdated system that favors out-of-state buyers. We need to update this system.

Who owns these communities has an impact. In the Twin Cities, the 10 parks with the highest rents are all owned by out-of-state buyers, including Cimarron, a park with 500-home sites in my district, which often ranks near the top of the list. On the other hand, the residents of the Park Plaza Cooperative less than a 30-minute drive away in Fridley have owned their community for the last 10 years and have seen no rent increases or increases as small as $6.00 per month. At the same time, the residents of Park Plaza have also replaced the park’s roads, upgraded its water and sewer systems, built a new storm shelter, and added a playground.

This type of notice requirement has worked smoothly in at least 6 other states, including New Hampshire where it has been used for over 30 years. My bill simply gives homeowners the opportunity to put in an offer to buy the land where they live. This bill will keep housing affordable, and will allow Minnesotans to save their homes in the communities they’ve built their lives in.