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Omar bill seeks to ease path for mobile home residents to buy their parks

mobile home park
Industry research places the total number of Americans living in manufactured housing at 22 million, with a median household income of $30,000.

In 2016, Lowry Grove was a mobile park still home to 90 families. In 2017, real estate developers in St. Anthony were entertaining a grand design familiar to most rapidly changing neighborhoods around the country: What if the land had luxury apartments on it instead?

The families in the park were evicted in favor of this plan. And the situation surrounding the closure of the park is exactly what has prompted Rep. Ilhan Omar, who represents Minneapolis and some of its suburbs, to introduce the Manufactured Housing Community Sustainability Act (H.R.2832), which uses tax credits incentivize owners of mobile home communities to sell their property to residents.

“Those closure of the Lowry Grove mobile home park in St. Anthony really exemplifies what this bill is designed to prevent,” Omar said. “Ninety families were kicked out of their homes with little notice.”

The bill’s full name is actually The Frank Adelmann Manufactured Housing Community Sustainability Act, named for a resident in the park, Frank Adelmann, who had nowhere else to go and took his own life days before the closure. Another resident recalled to MPR at the time that Adelmann, who had lived in the park for more than a decade, was adamant about not leaving: “He told me very carefully: This is my home. I’m not going to leave Lowry Grove.”

Prof. Edward Goetz, Director of the University of Minnesota’s Center for Urban and Regional Affairs at the University of Minnesota Humphrey School of Public Affairs, has studied the situation around Lowry Grove extensively.

“A number of people moved to other mobile home parks — those were the ones lucky enough to have manufactured homes that could be moved,” he told MinnPost in 2018. “Other folks, families have split up and people have moved away from the region or moved out of the Twin Cities. Other people went through periods of homelessness afterwards, so there’s a wide range of experiences.”

Omar’s predecessor, Rep. Keith Ellison, made protections for manufactured home owners a key part of his policy agenda prior to leaving Congress, pushing for a comprehensive overhaul. One of those bills was the first introduction of the The Frank Adelmann Manufactured Housing Community Sustainability Act.

Lowry Grove
MinnPost photo by Greta Kaul
Rep. Ilhan Omar: “Those closure of the Lowry Grove mobile home park in St. Anthony really exemplifies what this bill is designed to prevent.”
The bill would create a 75 percent tax credit on the sale of a mobile home park, provided it is sold to a cooperative of the residents of the community.

“Many sellers are private individuals who have owned their communities for decades. Often they face very significant income tax liability on their gains from a sale of the community. Because of a feature of U.S. tax law if they hold on to the community until they die, their heirs can sell the property with minimal tax liability,” said Shaun McElhatton, Senior Development Counsel at the Northcountry Cooperative Foundation, an organization that provides assistance to community-owned mobile home parks.

“The proposed legislation would mitigate the tax liability on a sale and, hopefully, incentivize more investor owners to sell manufactured home communities to the residents.”

The Northcounty Cooperative Foundation is an endorser of Omar’s bill and worked with Ellison, who is now the Attorney General of Minnesota, to craft the original language.

“We updated the bill to ensure that related state laws are taken into account, so that no parks are inadvertently left out, but the core of this bill was built on the excellent work of Attorney General Ellison and Sen. Jean Shaheen [D-New Hampshire],” Omar said. “As the new representative for the 5th District, I am proud to take up the baton in fighting for fair housing.”

Everything helps

Industry research places the total number of Americans living in manufactured housing at 22 million, with a median household income of $30,000. (The phrase “mobile home” technically refers to buildings built prior to 1976, before the Department of Housing and Urban Development expanded on quality standards. “Manufactured homes” are those built after 1976.)

In Minnesota, while no new mobile home parks have opened since 1991, at least 12 parks have closed. And the parks are a critical resource for families who often cannot afford to move.

In the case of Lowry Grove, the luxury apartments never came to be. After significant protest from local neighbors and community activists, the City of St. Anthony voted down the proposal. The current plan is to turn the land back into a mobile park called “Urban Grove.”

But the residents from 2016 were still evicted. Their homes were torn down.

Omar’s legislation, had it been in place at the time, might not have made much of a difference in the Lowry Grove case. “The circumstances that led to the Lowry Grove sale were not related to the lack of tax incentives, and one can’t say for sure whether such incentives would have changed the situation in Lowry Grove,” Goetz said, noting that the owner found a buyer who paid him “$2 million more than it was worth as a mobile home park,” in the hopes of turning it into an upscale development.

Still, Goetz favor’s the bill: “Everything helps,” he said.

The bill is currently cosponsored by seven members, a majority of whom are affiliated with the Congressional Progressive Caucus, where Rep. Omar serves as Whip: Representatives Barbara Lee, D-CA; Joe Neguse, D-CO; Mark Pocan, D-WI; Chris Pappas, D-NH; Annie Kuster, D-NH; Ro Khanna, D-CA; and Peter DeFazio, D-OR.

The bill will now go to the House Ways and Means committee, and Omar said she hopes the bill makes it out easily and then eventually, to a floor vote.

“You can never say for certain what would have happened in the past,” Omar said, “but the goal of this bill is to encourage owners of mobile home parks to sell to the families that actually live in the parks — rather than for-profit developers.”

Comments (12)

  1. Submitted by LK WOODRUFF on 05/23/2019 - 12:09 pm.

    They are manufactured homes, Manufactured Home Communities, and Homeowners now. And owning the land their homes are on has long been a missed but very important step for the Homeowners. These homes rarely ever move. The communities are full and some offer amenities. And the Homeowners have been ~cash cows~ for the property management companies for years because of the ever increasing lot rent paid–which can be increased twice a year with no justification whatsoever. This money–over $700/mo in the larger communities now-would be far better applied to buying/owning the land. MN Legislators need to change that law, and also think about classifying the homes differently. They are currently under…Weights and Measures?? They are not trailers. They are homes. And the newer ones now cost b/n $80-100,000.00. So this Omar/Ellison et al bill is a good start but still more needs to be addressed and updated and changed.

  2. Submitted by joe smith on 05/23/2019 - 02:18 pm.

    How about what is best for the person who owns the land? If I own a 10 acre mobile home park, what is my incentive to sell the land to renters when I am making a living off renting it? So instead of collecting a monthly fee for a rental space, you now want me to determine a price for each lot, become the bank and finance the interaction and make sure I have 100% compliance with all the lots turning over to renters (for ownership) at roughly the same time. If I don’t have 100% participation, the value of my subdivided 10 acres goes down dramatically. I own the land and should be able to determine how to use the way I see fit.

    Funny I didn’t see a bill (coming from Twin Cities) to help folks who had places on lakes up here in the 60’s when the Federal Government decided to make our area a National Park. You took the Government price or they burned down your cabin. I guess since it was a Government program , all was good.

    • Submitted by Pat Terry on 05/23/2019 - 03:37 pm.

      Did you even read the article? Literally nothing you are talking about is part of the bill.

      What the bill says is that if a mobile home park is sold to a cooperative of renters, the seller would get tax breaks. There’s no subdividing. The renters would have to do the organizing and raise the money/obtain the financing. The owner can still sell to whoever they want, but gets tax breaks if they sell to the renters cooperative.

      • Submitted by joe smith on 05/23/2019 - 04:25 pm.

        Pat, how are you going to transfer the land from the current ownership to renters? How does that benefit the current owner? That is the end game with this bill, is it not?

        • Submitted by Pat Terry on 05/23/2019 - 04:55 pm.

          The exact same way real estate is usually transferred. The renters cooperative gets the title to the land, and the seller gets the negotiated amount of money. The benefit to the current owner is that they get tax breaks if they sell to the renters instead of something else.

        • Submitted by RB Holbrook on 05/23/2019 - 05:38 pm.

          It’s a voluntary transaction, with tax breaks to the owner as an incentive. No one is being forced to do anything.

    • Submitted by RB Holbrook on 05/23/2019 - 04:13 pm.

      Frankly, I’m a little more concerned about the folks who live in manufactured home parks than I am in the people who had places on lakes up there.

      • Submitted by joe smith on 05/23/2019 - 05:07 pm.

        Of course you do. When the Government forces someone off their land, it is a noble cause. When an individual (who legally owns the land) does it, very very bad. Socialism at it’s finest.

        • Submitted by RB Holbrook on 05/24/2019 - 11:45 am.

          Fifty years ago, some people lost their vacation homes through lawful eminent domain proceedings, but didn’t get as much money as they thought they were entitled to. Fifty years ago.

          Cry me a river.

    • Submitted by lisa miller on 05/23/2019 - 05:24 pm.

      So how is this different than subsidizing farmers for the greater good. It says it would be a tax break if they sell to the mobile owners instead of to a large development. It allows those who can garner the funding an even chance to compete against large developers and helps to maintain an affordable housing source vs having more homeless and the government having to bail them out.

      • Submitted by Brian Gandt on 05/28/2019 - 12:28 pm.

        Agree. I’d argue that since most trailer park folks are probably lacking economic clout, any help they can get to be stable is a good thing.

        It’s fitting that a supporter of the current POTUS, with a fake working man ethos, would jump out against this.

      • Submitted by Paul Udstrand on 05/29/2019 - 08:44 am.

        “So how is this different than subsidizing farmers for the greater good.”

        It isn’t really very different, it’s pretty much the same principle. That’s we subsidize farmers.

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