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Answer: Currently, ORS 90.600(2)(b) limits rent increases to 7% plus CPI (“Cap”) for any 12-month period. For 2023 that resulted in a Cap of 14.6%.[1] This amount surprised some, and we can fully expect the Oregon Legislature to pass a new law that could effectively reduce the Cap.

Note, that I do not read the law to limit rent increase after the first year of a month-to-month tenancy to only once per year – so long as the annual Cap is not exceeded in total. However, I believe that rent increase are generally limit to one-a-year by most Oregon MHP landlords.

Note also, that since ORS 90.600 only applies to periodic tenancies, i.e., month-to-month, the Cap does not apply to rent formulas in leases, i.e., fixed term tenancies. However, it has been my understanding that this was a legislative oversight in 2019; if so, the 2023 Legislature may change that, as well.

Currently, the text of ORS 90.600 provides that the landlord may not increase the rent (a) without giving each affected tenant notice in writing at least 90 days prior to the effective dateof the rent increase; and (b) during any 12-month period, in an amount greater than seven percent plus the consumer price index above the existing rent.

My reading of this is that so long as the rent does not exceed the Cap during a particular year – there is no limit on when the notice of 90-day increase may be issued. To put it another way, “increasing the rent” is not the same as “giving notice” of an increase in rent. There is no restriction against the frequency of the notices, just increases that exceed the applicable Cap.

For example, say word was out that the 2023 Legislature was going to dramatically reduce the Cap going forward. In my opinion, a landlord having already issued a 90-day rent increase notice in September 2022, effective January 1, 2023 (or later) would have two choices:

1. Rescind the 2022 notice before it becomes effective, and re-issue a new 90-day notice for a different rent effective in 2023, so long as it was done before the effective date of the new legislation and did not exceed the 2023 Cap establish in 2022.

2. Don’t rescind the earlier 2022 notice but issue a second rent increase notice that does not, in total, exceed the 14.6% Cap - so long as it is issued before the new 2023 legislation becomes effective.[2] Caveat: The 2-notice approach needs to make sure that the rental agreement or other park docs don’t limit increases to one per year.

Note that for both Nos. 1 and 2 above, the rent increase notice cannot be sent to any tenants who still have rent payments due on their first year of tenancy (including occupancy that may have preceded the signed rental agreement).

SB 608, the 2019 law amending ORS 90.600 and creating the Cap, applied to “rent increase notices delivered on or after the effective date of this 2019 Act.” In other words, the Legislature did not attempt to retroactively (and likely illegally) interfere with a rent increase that had already been issued before SB 608 went into effect.

Following that logic, should a landlord wish to rescind a 2022 90-day rent increase for 2023 and reissue a different one, it should be entirely legal so long as it is issued before the effective date of the legislation creating a new Cap.

Caveat: Landlords should check with their own legal counsel before rescinding any 2022 90-day notices or reissuing a second 90-day notice for 2023 rents under the 14.6% Cap.

[1] https://www.multifamilynw.org/news/2023-oregon-maximum-rent-increase-is-146

[2] For example, a 5.00% increase notice issued in September 2022 and a second notice for something less than 9.6% issued before the 2023 legislation becomes effective.

Does Section 8 apply to manufactured housing parks?

There have been questions recently from MHCO members as to whether Section 8 housing assistance programs apply to manufactured housing facilities. The short answer is "yes," parks are required to comply with Section 8 housing requirements.

Why have things changed?

In 2014, the laws in Oregon changed to prohibit landlords from refusing to rent to people based on their source of income. Before that, landlords could refuse to rent to tenant applicants if they received government rental assistance. Now that is unlawful. Landlords cannot refuse to rent to someone solely because they receive Section 8 rental assistance. (And there are other government rental assistance programs that are equally protected, although Section 8 is the most common.)

Why does the law apply to manufactured housing facilities?

The governing Oregon statute (ORS 659A.421) prohibits discrimination based on source of income in "real property transactions." This is defined to include the rental of "vacant land" used as the location for any building intended for occupancy as a residence (i.e., a manufactured home on a rental space).

How does Section 8 work?

The tenant negotiates directly with the landlord to apply for tenancy, and the landlord is entitled to screen tenants using the same rental criteria used for any other tenant applicant (i.e., criminal background, credit history, evictions, etc.). However, the tenant's income level must include the amount received from the Section 8 assistance program.

If approved, the tenant signs the park's regular rental agreement and other tenancy documents. But there are several important differences from a non-Section 8 tenancy:

1. The park will need to fill out and sign one or two short forms for the tenant to submit to the housing authority confirming that the tenant has been approved for tenancy.

1. The local housing authority will conduct an inspection to ensure that the "rental unit" is sufficiently habitable. In an apartment setting, this would mean that the landlord would be responsible for ensuring that the apartment is fit to live in. In a mobile home park, it means that the rental space (not the home itself - unless the park owns it) must simply be suitable for occupancy. In other words, it must have the usual park-provided utility hook-ups for water, sewer, electricity, etc., and must be designed to support the installation of a mobile home in the usual manner.

1. The housing authority will also make a determination as to whether the park's rent is a "fair market rent." If they determine it is not, the housing voucher payment will not be approved. While landlords cannot be forced to adjust their rents, they should obviously be very careful to not charge a higher rental amount to Section 8 applicants, which would quickly lead to a housing discrimination charge.

1. The park will be required to sign a "Housing Assistance Payments Contract" which will become an addendum to the park's regular rental agreement.

What terms are in the "Housing Assistance Payments Contract?"

There are a number of terms, but the most important ones relate to termination of the tenancy. For the most part, landlords can still terminate a tenancy for "good cause" like any other mobile home park tenant. This can include disturbing the peaceful enjoyment of neighbors, destruction of park property, failing to maintain the rental space, and the failure to pay rent.

However, there are several potential problem areas:

1. The contract requires landlords to provide a fixed-term lease of at least one year instead of a month to month rental agreement. Since ORS 90.550 requires at least a 2-year minimum lease term for mobile home park tenants, that would need to be the stated term of the lease.

1. The contract states that tenancy termination must involve a "serious or repeated violation of the lease." This could potentially lead to difficulties if the park needed to issue a 30-day notice for something that was a violation of the park rules, but yet does not rise to the level of a "serious or repeated" violation.

1. All termination notices must be additionally served on the housing authority. While not a significant issue, it does add another layer of administrative burden.

1. The contract form (which is provided by HUD) is not designed for mobile home park tenancies. It contains certain terms that would not and could apply to a mobile home park tenancy (i.e., "The lease must specify which appliances are to be provided by the landlord"). For this reason, it would be wise to consult with an attorney before signing the HUD contract form.

What if the park simply refuses to sign the "Housing Assistance Payments Contract?"

If the park refused to sign the contract without good reason, it would likely lead to a housing discrimination charge. However, in certain situations there might be legitimate legal arguments supporting this position. Consult with an attorney before making this kind of decision.

How is rent paid?

Voucher amounts for rent are paid directly to the landlord by the local housing authority, with the tenant responsible for the remainder of the rent based on a percentage of their income.

What if the tenant fails to pay their portion of the rent?

Since the failure to pay rent would be a serious violation of the lease, the park could issue a 72-hour notice just like it would with any other tenant. A copy of the notice would need to be served on the housing authority as well. (And consult with an attorney on whether the voucher payment should be returned to avoid taking a partial payment and perhaps raising a waiver issue.)

Do these rules apply only to new tenants, or are existing tenants covered too?

The statutes specifically state that a landlord cannot "expel" a tenant based on source of income, so the rules would cover both new and existing tenants. This means that if an existing tenant came to the park with a Section 8 voucher application packet, the park would most likely need to comply. Again, however, consult an attorney if there are specific circumstances that might lead to a legitimate legal argument to the contrary.

Where can I get more information?

Do an online search for the local housing authority in your county (i.e., __________ County Housing Authority). Each housing authority's website has information specific to the county where your mobile home park is located.

Mark L. Busch
Cornell West, Suite 200, 1500 NW Bethany Blvd
Beaverton, OR 97006
(503) 597 - 1309

mark@marklbusch.com

www.marklbusch.com

Items that are prohibited from a Rental Agreement are covered in ORS 90.245. The following items are prohibited from inclusion in a Rental/Lease Agreement:

1. Agreements to waive or forego rights or remedies
2. Confessions of Judgement.
3. Certain limitations of liability

Note: Landlord may be responsible for 3 times the monthly rent in damages for attempting to enforce prohibited provisions. 

When you drive through a "pure mobile home park" and then drive through a park with a lot of RV tenants you can feel the difference in overall quality. The overall value of a MHP with "Permanent RV" tenants mixed in with Mobile Home tenants is lower than a MHP which is completely filled with Mobile Homes. RV's are not really permanent homes so MHP buyers and banks see RV occupancy as more risky than Mobile Home occupancy. The appraised value is lower, the interest rate that the bank charges can be higher and the pool of interested buyers is smaller. There are a number of MHPs in Oregon which have RV tenants who have been tenants in the same space for over 15 years, but even if you prove this to a bank, they can still be hesitant to lend on the park. Many buyers will simply not look at MHPs with a high percentage of RV tenants. One advantage of having RV tenants to fill spaces is that you can give them a 60 day no cause notice to move out. This can be beneficial for two reasons. Firstly, if the tenant turns out to be a problem tenant who does not adhere to the rules, it is easy to replace them with a good tenant. This also allows a MHP owner to temporarily fill spaces with RV tenants but replace them with Mobile Homes when they find one to put into that space. Of course, it is always a good idea to inform an RV tenant that this is your intention before they move in and expect to live there for years.

Not only does the park income rise when spaces are full, but the overall feeling of full occupancy is good for tenants, management and once full, parks with 100% full lots tend to stay that way for a very long time. Vacant spaces can make a Mobile Home Park feel old, neglected, and undesirable even if it is well maintained otherwise. Also, we all know that it is expensive to bring even a used Mobile Home into a park. The purchase of the house, moving expenses, set up, and final touch up will generally run at least $17,000 for a single wide and anywhere from $35,000 - $60,000+ for a double wide home. Other items to consider are the sales commissions for the Mobile Home Dealer and it can prove to be difficult to get both a house, and a tenant to both qualify for bank financing. Having the park buy and set up mobile homes can be a risk but may be worth it. There is really no calculation or standard that determines what the reduction in value of a MHP with RV tenants is but it certainly is the case that the demand is lower and lending is more difficult.

By using a good Mobile Home Dealer who can find used mobile homes to fill spaces, arrange them to be moved and set up and then sell them is a win-win situation. There are a number of highly reputable licensed dealers who can seamlessly fill vacant spaces and in the end the cost is usually worth it when you calculate the improvement made to the park. If you are thinking about selling your MHP, and even if you are not expecting to, it makes sense to improve your property for long term value.

On the other hand, simply having RV tenants pull their RV into a space has many short term benefits for both the tenant and the MHP. The screening criteria is still the same so the RV tenants make up a very good pool of possible tenants. All in all a pure MHP is more desirable but RV tenants can be as long term as Mobile Home tenants and with the trend heading in the direction of very small living spaces, RV living may be considered a luxury before long.

Kim Berry, Principal Broker

Rundle CRE - Mobile Home Brokers

5319 SW Westgate Dr. Suite 232

Portland, OR 97221

503-980-3512

CELL: 503-807-2568

FAX: 360-935-3512

Answer: It means that for month-to-month tenancies, you may not convert from a base rent model to a straight pass-through within 12 months following the date you gave a 90-day rent increase notice under ORS 90.600.

The only exception to this rule is if the rent increase is a part of a formula provided in a fixed term rental agreement (i.e. a lease) that had been entered into one year or more before the conversion to a pass-through program.

Second Question: ORS 90.532(2)(a) (Billing methods for utility or service charges; system maintenance; restriction on charging for water) provides:

****

(2) A landlord may not use a separately charged pro rata apportionment billing method as described in subsection (1)(b)(C)(ii) of this section:

(a) For garbage collection and disposal, unless the pro rata apportionment is based upon the number and size of the garbage receptacles used by the tenant.

When it states "number and size of garbage receptacles", is it referring only to bins located at each tenant's space, or can we pro-rata based on the larger trash dumpsters like the 4 yard trash dumpsters our community uses?

Answer: The term "garbage receptacles" is found at four places in ORS Chapter 90. In three of them the term stands alone, and arguably could be construed to refer to either cans or dumpsters. However, only in ORS 90.532(2)(a) does the text add, "used by the tenant." That suggests to me that the drafters intended to limit the term in Subsection (2)(a) to the tenant's garbage receptacles, rather than park-owned dumpsters and bins.

Answer.  First, let’s deal with the vacant mobile home next door to the troublesome neighbor. You need to review your community rules and the rental/lease agreement to see what restrictions might apply. 

The MHCO Rental/Lease Agreement contains a quiet enjoyment provision similar to ORS 90.740which requires that the tenant “…(b)ehave, and require persons on the premises with the consent of the tenant to behave, in a manner that does not disturb the peaceful enjoyment of the premises by neighbors.”[1] 

I assume you have already contacted the problem tenant and requested he/she refrain from such conduct. I would elevate this to a written warning, so you have documentation in the file should he refuse to stop.

The next step, if he/she continues, is, depending upon the applicable provisions of your rules and rental/lease agreement, to issue a notice of termination under ORS 90.630(1)(b) for a material violation of a “… rental agreement[2]provision related to the tenant’s conduct as a tenant and imposed as a condition of occupancy….”

And thanks to a 2019 legislative change, ORS 90.630now provides that a 30-day notice of termination may be issued if the prohibited conduct is a “…separate and distinct act or omission *** the tenant “…may avoid termination by correcting the violation by a designated date that is at least three daysafter delivery of the notice.” (Emphasis added.) If substantially the same conduct is repeated with six month after the termination date, a landlord may issue a non-curable 20-days’ notice of termination.[3]

As to the other tenant interfering with your manager’s efforts to rent an RV space, the manufactured housing section of ORS Chapter 90,[4]does not apply, so you must look to that portion of the landlord-tenant law that applies to all other rentals, such as homes and apartments, etc.[5]

You still need to review your rules and rental agreement for a quiet enjoyment provision, or use the statutory equivalent found in ORS 90.325(1)(g). The non-manufactured housing termination for cause statute, ORS 90.392applies. It contains the same “distinct act” and non-curable “repeat violation” provisions. It providesfollows:

· The notice must:

• Specify the acts and omissions constituting the violation;
• State that the rental agreement will terminate upon a designated date not less than 30 days after delivery of the notice; and
• If the tenant can cure the violation, state that the violation can be cured, describe at least one possible remedy to cure the violation and designate the date by which the tenant must cure the violation.

· If the violation described in the notice can be cured by the tenant by a change in conduct, repairs, payment of money or otherwise, the rental agreement does not terminate if the tenant cures the violation by the designated date.

· The designated date must be:

o At least 14 days after delivery of the notice; or

o If the violation is conduct that was a separate and distinct act or omission and is not ongoing, no earlier than the date of delivery of the notice as provided in ORS 90.155.

· If the tenant does not cure the violation, the rental agreement terminates as of the termination date provided in the notice.

· If substantially the same act or omission occurs with six months of the designated termination date, the notice of termination must be not less than 10 days after delivery of the notice, and the tenant does not have a right to cure the violation.

Lastly, I regard this conduct as a different type of activity than the normal Chapter 90 violations. You might consider discussing this with your attorney, since it clearly interferes with your ability to run your business. The loss of potential tenants can have serious financial consequences. Perhaps a letter to the troublesome tenants would be appropriate, warning them of financial claims if the conduct continues. 

Financing Your Community  

By:  J. DiMarco and Gerard D. DiMarco

Almost every community owner at some point in time will experience the need for financing of some kind. There have been many ups, downs, and complexities of the financial markets over the past 25 years, and the impact these fluctuations have had on available loans has been huge. In this article we will address some of the important issues that community owners may face during the lending process.

Lenders are back after the credit crunch of a few years ago

Since the financial crisis that began around 2007, the capital markets began to slowly re-emerge in late 2010 and early 201 for manufactured home community lending on a wide scale. Today's lending market, combined with historically low interest rates, is the strongest it has been in years. Lenders are eager to provide long term fixed rate, non-recourse loans with 30 year amortizations on manufactured home communities. We are currently helping a customer refinance a five year commercial mortgage-backed security (CMBS) loan that closed in March 2010 (our records indicate it was one of the nation's first CMBS loan post financial crisis) with a ten year fixed rate loan at less than 4.25%. The existing loan the borrower is paying off had a rate of 6.5%.

A few other real world examples include recently helping a client lock a ten year fixed rate loan at 3.51%! Additionally, another client just secured a 4.2% long term fixed rate, replacing a rate of 6.5% from the previous note. The market has improved dramatically!

There are currently numerous lending platforms and options available for community owners including conduit lenders (CMBS), life insurance companies, Fannie Mae, Freddie Mac, credit unions, and traditional bank loans. There are also a wide range of product options and features available in today's financial market including bridge lending, short term floating rate debt, interest only, mezzanine debt, and flexible prepayment options. With so many options available, finding loan that suits your specific needs as a manufactured community owner is possible.

How to obtain a mortgage

There are two major components that lenders review when analyzing a loan request; the guarantor, and the property itself. On the guarantor side, most lenders look for an individual to have a credit score of at least 600 and a sufficient net worth. Even though most of the loans we offer are non-recourse, our lenders still look for those minimum requirements. On the property side, as a general rule, our lenders require a minimum loan amount of $500,000, a minimum debt service coverage ratio of 1.25x, and paved roads. There are also numerous aspects to manufactured home communities that make them unique compared to other asset classes.

Every community can qualify for a loan!

We have financed deals with low occupancies, private utilities, and low populations. However, having a better understanding of what lenders prefer can be helpful in assessing your property, or a potential acquisition, in preparation for a new loan. The type of loan and benefits of the mortgage depend on the checklist" of items a lender reviews. Some of the key components that determine the rate and terms of a loan include:

• Community quality
• Borrower experience and equity
• Loan-to-value (LTV)
• Financial and occupancy trends of the property
• Infrastructure quality - roads

Financing Your Community

Feature Article: Anthony J. DiMarco and Gerard D. DiMarco

Almost every community owner at some point in time will experience the need for financing of some kind. There have been many ups, downs, and complexities of the financial markets over the past 25 years, and the impact these fluctuations have had on available loans has been huge. In this article we will address some of the important issues that community owners may face during the lending process.

Lenders are back after the credit crunch of a few years ago

Since the financial crisis that began around 2007, the capital markets began to slowly re-emerge in late 2010 and early 201 for manufactured home community lending on a wide scale. Today's lending market, combined with historically low interest rates, is the strongest it has been in years. Lenders are eager to provide long term fixed rate, non-recourse loans with 30 year amortizations on manufactured home communities. We are currently helping a customer refinance a five year commercial mortgage-backed security (CMBS) loan that closed in March 2010 (our records indicate it was one of the nation's first CMBS loan post financial crisis) with a ten year fixed rate loan at less than 4.25%. The existing loan the borrower is paying off had a rate of 6.5%.

A few other real world examples include recently helping a client lock a ten year fixed rate loan at 3.51%! Additionally, another client just secured a 4.2% long term fixed rate, replacing a rate of 6.5% from the previous note. The market has improved dramatically!

There are currently numerous lending platforms and options available for community owners including conduit lenders (CMBS), life insurance companies, Fannie Mae, Freddie Mac, credit unions, and traditional bank loans. There are also a wide range of product options and features available in today's financial market including bridge lending, short term floating rate debt, interest only, mezzanine debt, and flexible prepayment options. With so many options available, finding loan that suits your specific needs as a manufactured community owner is possible.

How to obtain a mortgage

There are two major components that lenders review when analyzing a loan request; the guarantor, and the property itself. On the guarantor side, most lenders look for an individual to have a credit score of at least 600 and a sufficient net worth. Even though most of the loans we offer are non-recourse, our lenders still look for those minimum requirements. On the property side, as a general rule, our lenders require a minimum loan amount of $500,000, a minimum debt service coverage ratio of 1.25x, and paved roads. There are also numerous aspects to manufactured home communities that make them unique compared to other asset classes.

Every community can qualify for a loan!

We have financed deals with low occupancies, private utilities, and low populations. However, having a better understanding of what lenders prefer can be helpful in assessing your property, or a potential acquisition, in preparation for a new loan. The type of loan and benefits of the mortgage depend on the checklist" of items a lender reviews. Some of the key components that determine the rate and terms of a loan include:

• Community quality
• Borrower experience and equity
• Loan-to-value (LTV)
• Financial and occupancy trends of the property
• Infrastructure quality - roads

Financing Your Community

Feature Article: Anthony J. DiMarco and Gerard D. DiMarco

Almost every community owner at some point in time will experience the need for financing of some kind. There have been many ups, downs, and complexities of the financial markets over the past 25 years, and the impact these fluctuations have had on available loans has been huge. In this article we will address some of the important issues that community owners may face during the lending process.

Lenders are back after the credit crunch of a few years ago

Since the financial crisis that began around 2007, the capital markets began to slowly re-emerge in late 2010 and early 201 for manufactured home community lending on a wide scale. Today's lending market, combined with historically low interest rates, is the strongest it has been in years. Lenders are eager to provide long term fixed rate, non-recourse loans with 30 year amortizations on manufactured home communities. We are currently helping a customer refinance a five year commercial mortgage-backed security (CMBS) loan that closed in March 2010 (our records indicate it was one of the nation's first CMBS loan post financial crisis) with a ten year fixed rate loan at less than 4.25%. The existing loan the borrower is paying off had a rate of 6.5%.

A few other real world examples include recently helping a client lock a ten year fixed rate loan at 3.51%! Additionally, another client just secured a 4.2% long term fixed rate, replacing a rate of 6.5% from the previous note. The market has improved dramatically!

There are currently numerous lending platforms and options available for community owners including conduit lenders (CMBS), life insurance companies, Fannie Mae, Freddie Mac, credit unions, and traditional bank loans. There are also a wide range of product options and features available in today's financial market including bridge lending, short term floating rate debt, interest only, mezzanine debt, and flexible prepayment options. With so many options available, finding loan that suits your specific needs as a manufactured community owner is possible.

How to obtain a mortgage

There are two major components that lenders review when analyzing a loan request; the guarantor, and the property itself. On the guarantor side, most lenders look for an individual to have a credit score of at least 600 and a sufficient net worth. Even though most of the loans we offer are non-recourse, our lenders still look for those minimum requirements. On the property side, as a general rule, our lenders require a minimum loan amount of $500,000, a minimum debt service coverage ratio of 1.25x, and paved roads. There are also numerous aspects to manufactured home communities that make them unique compared to other asset classes.

Every community can qualify for a loan!

We have financed deals with low occupancies, private utilities, and low populations. However, having a better understanding of what lenders prefer can be helpful in assessing your property, or a potential acquisition, in preparation for a new loan. The type of loan and benefits of the mortgage depend on the checklist" of items a lender reviews. Some of the key components that determine the rate and terms of a loan include:

• Community quality
• Borrower experience and equity
• Loan-to-value (LTV)
• Financial and occupancy trends of the property
• Infrastructure quality - roads

Such shifts in the American population will bring significant changes to America - from the way products and services are developed and marketed to this expanding audience to the types of homes people will choose to purchase - including where these homes are located. When baby boomers choose to relocate/downsize from their existing "McMansion" homes, they will have a wider variety of housing options to choose from than today's senior home owners. Manufactured home builders and land"lease manufactured home communities will find themselves in an increasingly competitive housing marketplace where innovation and creativity are essential to success.

Housing Realities and Impacts

Forty"six percent of all households in America are headed by baby boomers (45"64 years old). If you add in those already aged 65 years or older, the number of these senior households grows to 60 percent. According to METLIFE Insurance Company, a large percentage of these heads of households will be grandparents. Due to economic necessity, many grandparents will be financially supporting their children and grandchildren, including having their children and grandchildren live with them. At the other extreme, 20 percent of these seniors will be living alone (this jumps to 38 percent of seniors over the age of 75). Because their children delayed having children until later in life, more of these seniors living alone also will have grandchildren who visit frequently.

Approximately 35 percent of Americans over the age of 65 rely almost entirely on Social Security payments for income, with the average Social Security benefit for a retired worker in 2011 about $1,177.00 per month. The Council on Aging estimates that while many aging Americans perceive their health as excellent or good, the reality is that most older adults have at least one chronic condition and many have multiple conditions. Older Americans spend approximately 13 percent of their total expenditures on health - more than twice the proportion spent by all consumers.

So what do these demographic changes mean for an owner of a land"lease manufactured home community? According to the U.S. Census Bureau's 2010 report, manufactured home community owners should expect the following housing impacts: expect people to double up or share their homes by renting rooms; they will have less income available to deal with higher utility bills and the need to financially support their extended families; and more home"bound residents will not have the option or won't be able to afford other living arrangements.

The impacts and challenges continue. Are 55+ communities realistic considering the need to allow extended or non" traditional families in manufactured home communities? Does offering homes for rent in these communities make economic sense? Should communities build playgrounds (maybe with adult exercise equipment) as a way of making them more family"friendly? Should people be allowed to rent rooms in their homes? Can duplex manufactured homes be developed to replace older homes in communities? Are manufactured homes able to accommodate residents who want to "age in place" in their homes? What kind of "assisted living" rental income homes with "age"in"place" technologies will keep residents in their communities longer?

Innovative Approaches and Solutions

The Newport Pacific Family of Companies is a manufactured home community, marina and apartment property management firm, managing properties and home owner associations in five states stretching across the country. Its full"service property management strategies have one goal: to create successful communities and increase their value for owners and residents alike. It has been a pioneer in addressing many of the issues created by an aging population within manufactured home communities.

Mike Sullivan, CEO and principal of Newport Pacific Capital and President of Cirus Development, is a certified property manager, a California General Contractor and a manufactured home retailer. As former President of the Board of Directors of the Western Mobilehome Park Owners Association (WMA) and President of the Santa Clara County Manufactured Housing Education Trust, Sullivan has an extensive understanding and appreciation of the challenges facing land" lease community owners.

Sullivan explains that land"lease community owners face an increasing problem as community residents get older. "One of my communities was facing the situation where it lost 10 residents in one month, 18 percent of its residents in one quarter, and the children of the deceased residents had stopped paying space rent," Sullivan noted. "We had to be creative in order to stem the problems this community faced." Another fact he uncovered in his research was that their original 55+ aged residents (now 75 to 85 years old and older) were being marketed to heavily by the local assisted"living companies surrounding their communities. "We had become the feeder lot for these organizations," said Sullivan.

Newport Pacific created a subsidiary, Lifestyle Services, Inc., to develop solutions that could address the many issues being raised by an aging resident population. Its Lifestyle Services Concierge Service helps seniors stay in their homes longer by helping them retain their independence as long as possible. The service assists residents with tasks that they can't easily do - or at all - any more. Additionally, the service offers family members who can't be with their aging loved ones as often as they would like the peace of mind of knowing that they are being well"cared"for. Services include housekeeping and yard maintenance, running errands and handyman services, and modified house sitting services.

Another approach has been the development of technologies such as the "Close"By" Network that provides in"home monitoring and reporting of behavioral patterns like eating, sleeping and medication use directly to the doctors of the aging residents. The service also allows routine medical tests, such as blood pressure, to be performed directly in the resident's home, enabling doctors to monitor the procedures and results via direct video links. "It's a virtual doctor's office," said Sullivan. The service can even be expanded to offer in"community services in a community's clubhouse.

Next Steps Forward

One of the company's more innovative approaches has been the development of its Net Zero model home and electric car. Newport Pacific's sister companies, Modular Lifestyles and Cirus Development, began developing and building "Net Zero Green" homes in 2008 for a new 62+ community, Oak Haven, located in Ojai, CA. The new modular homes incorporated maximum energy"efficiency technologies that operate at or near "Net Zero" energy use. The home has a home energy rating system at the factory that is 21 percent better than standard"built homes. The homes are 90 percent constructed in the factory, with minimal waste and the onsite work requiring only two 8x8x8 dumpsters.

The first model of this new generation of homes was placed in the community in 2008 and proved to be quite successful. The community began filling up with these innovative homes within two years, and won the 2011 MHI "Homes Under 1800 Square Foot" award category with Cavco Industries.

When Florence Roach's Santa Barbara condominium sold the first day on the market, she knew that her decision to move was a good one. Considering her future retirement, Florence had wanted a less expensive place to live and maintain. With her daughter living in Ojai, Florence checked out Oak Haven's advertising claims of "low cost" living with "green" solar"powered, energy"efficient modular homes. Florence was sold on the Ojai Valley and purchased one of Modular Lifestyle's homes.

Before coming to Ojai, Florence had experienced respiratory problems that could come on without notice along with allergies and osteoarthritis. Since moving into her new home, she has had unexpected health improvements which she attributes to the dry heat and the less toxic interior environment of her new home. The whole"house fan in the new home continuously replaces the home's interior air with filtered air.

The homes include extra ceiling, wall and floor insulation that keeps their interior temperature moderate, with Florence's electric and gas bills at or near zero every month, even during her first hot summer in Ojai. These are the kinds of operating costs she can afford for the future. In fact, from July 2011 to July 2012 she has a cumulative negative $19.50 credit on her electric bill.

The company then turned its focus to developing and building its "Quest" home. These solar"powered, energy" efficient modular homes also include other energy"saving features such as tankless water heaters and propane"powered generators so that the homes are virtually independent of outside electrical service. Due to the high number of 30" and 50"amp "mobile home parks," this home solves the overall issue of aging infrastructure.

New Thinking

Senior communities, such as Oak Haven, are proving that land"lease communities are well"positioned for the upcoming Baby Boomer population explosion and have a unique opportunity unlike any other multi"family housing project. They have existing facilities that can be upgraded to incorporate services and products that more directly appeal to seniors. But to be successful, land"lease communities must embrace the changing housing marketplace with creative thinking and innovation. By doing so, land"lease communities can compete with and be attractive alternatives to the newly" built senior apartments and assisted"living developments. The reality of the generational changes taking place in the housing marketplace requires new thinking and new approaches...all at a very accelerated pace of just a few short years.