Preserve manufactured housing communities by strengthening models that sustain them

Congress stands at the crossroads of enacting the “21^st Century Road to Housing Act.”  A key priority of this bill is manufactured housing – and manufactured housing communities – with the objective of expanding our nation’s affordable housing supply.    

As part of this effort, Section 304 of the latest draft of this bill would create a permanent authorization for Preservation and Reinvestment Initiative for Community Enhancement (PRICE) grants, a HUD program that awards grants competitively to owners of manufactured home communities to repair aging communities, help residents and preserve these communities.  

PRICE grants must support all qualified community owners

Unfortunately, Section 304, as drafted, fails to address two significant problems that arose when HUD doled out $225 million in taxpayer funds two years ago for the PRICE program.

The first problem was the systematic bias in the grant award process that resulted in zero funds going to for-profit manufactured housing community owners.  For-profits own the overwhelming majority of manufactured home communities and have the expertise and resources to leverage PRICE program taxpayer grants and to financially sustain the communities over the long term.  To exclude them from eligibility for preservation grants makes no sense.

But because the appropriations bill funding the grants was not sufficiently clear that for-profits should be eligible for the grants, the HUD selection process systematically excluded them from funding.  

Instead, most of the grants went to non-profits and “resident-owned” communities, which spent as much as $160,000 per home in grant funds.  Since this costs more than simply building a new manufactured home, it is hardly an efficient use of taxpayer funds.

Section 304 risks the same bad outcome, with ambiguous language that does not clearly state that for-profits are eligible for the grants, and that the funds should be awarded based on the best grant application, not based on how the community is owned.    

Therefore, before passing the housing bill, this problem should be fixed.  

The second problem is that grants to certain so-called “resident-owned” ownership structures could put resident homeowners at financial risk without further protections.

“Resident-owned” should mean real ownership

To most Americans, resident ownership has a straightforward meaning: Residents own the land beneath their homes, build equity and share in appreciation.   In the case of a manufactured home community, it would mean full and direct ownership.

Unfortunately, this is not always what happens.  Some ownership structures labeled as “resident owned” instead have what is known as a limited‑equity ownership (LEO) model.

Under (LEO) structures, residents typically purchase shares or memberships, while land ownership, control, and appreciation are enjoyed by others. Residents have responsibility for long-term financial risks – like debt and future maintenance, repair and infrastructure replacement costs – but do not enjoy all the benefits of ownership.

As such, the LEO model is resident ownership in name only.

If Congress is going to award federal funding based on the premise that a community is “resident-owned,” it should require what any reasonable consumer expects: A direct, beneficial ownership interest in the land, not a membership certificate, not a limited‑equity stake and not a structure designed to shift future financial responsibilities to residents while gains flow elsewhere.

Long-term stability should be required for grant recipients

Additionally, non-profit grantees, often without a strong financial balance sheet or easy access to capital, should demonstrate they have the financial resources to sustain the manufactured home community over the long term.

Manufactured housing communities require constant capital reinvestment in infrastructure – roads, utilities, water systems, drainage and common areas. When ownership models rely on collective debt, thin reserves and volunteer governance, the result can be deferred maintenance, rising site fees to service debt and mounting financial stress.

These risks are not hypothetical.

Residents in Cañon City, Colorado, lost their community to foreclosure. In North Adams, Massachusetts, residents faced a balloon payment, refinancing denial and rent increases simply to avoid default. In both cases, residents were promised ownership but left exposed when the financing structure failed to deliver long‑term stability.

Therefore, Section 304 should be fixed to ensure that grantees that advertise themselves as “resident-owned” are truly resident-owned.  And they should demonstrate the financial resources and access to capital to ensure the communities will be sustained over the long term.

Done right – with these two changes – Section 304 could strengthen manufactured housing communities nationwide – and promote affordable homeownership.   This issue is too important not to get right.

Sam Landy is the President and CEO of UMH Properties Inc.