Around Christmas 2020, residents of the Selah Hills mobile home park received letters from their management company stating the park was up for sale. Kurtis Drake, who has lived in Selah Hills for 32 years, was familiar with the way management companies buy new parks and either raise rent or demolish them for redevelopment, sometimes kicking out residents in the process.
"That was actually pretty terrifying," Drake said. "It's just around Christmas, you're figuring things out and you don't know what's going to happen to your home. Are we all losing our homes? Are we going to get someone who is going to tack up the rent?"
After the initial concern, Drake saw the letter also offered residents an opportunity to buy the park before other offers were entertained. During past attempts to sell the park, Drake said, Selah Hills' management company had been approached by ROC Northwest, an organization working to help trailer park residents maintain affordable housing. While previous negotiations had proved unsuccessful, the management company was now ready to sell.
Resident Owned Communities, or ROCs, help tenants form a cooperative business, secure financing and purchase the community in which they live. As many mobile home park residents continue to see rent increases and changes in park ownership, ROCs have become more popular nationwide.
ROC Northwest monitors manufactured home parks to see when they are put up for sale. When communities are put up for sale, ROC Northwest representatives reach out to tenants and explain the benefits of coming together to buy their own community, said Victoria O’Banion, a marketing and acquisitions specialist for ROC Northwest.
"Once a park is under contract, we go in and we tell the resident group what is happening," O'Banion said. "We tell them that we've negotiated the terms of an agreement and residents now have the option to buy. We work with the residents to help them understand the opportunity. From contract to close, we have about 90-100 days."
After the first letters went out, Drake said ROC Northwest representatives started going door-to-door and hosting meetings to explain how Selah Hills' transition into a ROC would work. After the purchase of Selah Hills was finalized, Drake was voted in by community members as president of the board of directors.
ROC staff spend time with residents explaining every detail of a standardized set of rules, policies and bylaws needed to establish a housing cooperative. While residents get familiar with the potential change, O'Banion oversees property inspections, works on getting appraisals and secures financing for the purchase.
ROC Northwest uses funds from community development financial institutions like the Washington Community Reinvestment Association, an organization made up of financial institutions like Wells Fargo, Olympia Federal Savings and North Cascades Bank.
"It's from those funding sources that we are able to get permanent financing," O'Banion said. "We are going to fund the purchase at over 100% meaning residents do not need to put in large sums of equity into the purchase. The only equity they put in is for the co-op's membership fee which is about $100. That's all we request from the residents when we are looking to purchase."
The benefit of turning a mobile home park into a co-op, O'Banion said, is there is no profit incentive. The resident's rent goes toward paying off the park's mortgage loan and other monthly expenses. There is no longer a company trying to widen its profit margins by increasing rent and other fees. O'Banion said on average, rent inside co-ops goes up about 0.3% annually.
O’Banion said oftentimes sales of mobile home parks are not made public by management companies. In some cases, tenants don't know the parks they're living in have been sold until after a deal is struck.
In the Yakima Valley
In 2021, ROC Northwest started working with tenants at Selah Hills Mobile Estates in Selah and White Dove Community LLC in Union Gap to help buy their manufactured home communities.
Residents of the 100-unit Selah Hills community voted to turn it into a co-op.
O'Banion said Selah Hills residents initially took a raise in rent after having to account for the higher value of the park. Less than a year later, after assessing their budget for 2022, they were able to bring the rent back down for all residents.
"They are about a year-and-a-half old, they are addressing many infrastructure issues like septic, sewer and water line issues. Often times we see large property owners will do the minimum because they are looking to make a profit," O'Banion said.
Residents of the 15-unit White Dove community chose to not be a co-op. The park was sold to Hurst & Son LLC, O'Banion said. Six months later, she said she started receiving calls and messages from White Dove residents whose rent had risen past what they could afford.
"It's very unfortunate but it serves as an example of why we do what we do," O'Banion said.
It's not always an easy process. Reactions from residents at Selah Hills were tepid at first.
"The majority of people, they didn't believe in it at all. They stonewalled ROC Northwest, they thought it was a scam. Like me, they'd probably never heard about ROC Northwest or a homeowners' cooperative," Drake said.
When it came time for residents to vote on whether to buy the park themselves, Drake said he wasn't sure how the vote would turn out.
"We passed by the skin of our teeth," Drake said. "We needed a 51% majority to pass the vote and we got exactly 51% of the votes."
Drake said he understands the reasoning behind not being supportive of the change. In low-income neighborhoods, residents don't often have the time or resources to help manage a mobile home park while also working one or more jobs, caring for kids or simply struggling to get by.
While Drake said he's glad the change was made, noticeable improvements to the neighborhood have been slow.
During the initial phases of the purchase when ROC Northwest representatives like O'Banion are securing funds for the purchase, a 10-year improvement plan has to be laid out and presented to funders. Improvements to the park are planned years in advance and are contingent on the effective management of the park by residents and support staff like a part-time property manager who works with multiple ROCs.
"The biggest thing is infrastructure," Drake said. "Our previous owner, they owned this park for a long time. They didn't invest. They repaired. They didn't replace."
Selah Hills' first major project will start late this winter. The park's old lift station, a pump used to move wastewater, will be replaced with new pumps. This will allow residents to disconnect from an old septic line and move their wastewater more efficiently into the city. After that, the neighborhood's roads will be repaved.
During the co-op's first year in operation, rent was raised from $405 to $509 to account for almost three years' worth of inflation during the statewide rent freeze. In 2022, rent was not raised at all. Even without raising rent, residents were still able to get new mailboxes that are now being installed, Drake said. He recently stepped down as president.
Drake said he's glad to own the park alongside the rest of his neighbors. He said at times, it's been difficult to get others involved and that often, it's been just a handful of people who oversee operations at the park. Drake said the extra effort is worth it in exchange for knowing an uninterested third party can't come in and decide what is and isn't in the best interest of the community.
"There's absolutely nothing stopping anyone from buying your home and raising the rent until you can't afford it and then they bulldoze your property and make apartments," Drake said. "It's important for people to be informed on the option of community ownership and what that entails. I think to some people it sounds like fearmongering, 'Buy your community or you're going to be raising 100% more rent next year,' but it's true."
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