When Patricia Yauch moved to the Sunset Village trailer park in Glenview,
she thought she and her husband, a retired janitor, had found a haven for
their golden years. She never dreamed that stiff rent increases eventually
would force her to seek handouts from the food pantry.
"It was not too bad as long as my husband was alive, because we were
getting two pensions," said Yauch, who is 64 and disabled by arthritis of the
spine. "Many times, I have to decide between paying the bills or eating."
Yauch pays more than half of her monthly $1,009 Social Security check to
rent the space where she parks her mobile home. When she and her husband,
Harold, moved to Sunset Village eight years ago, park owner Capitol
Development Corp. of Chicago charged them $350 a month. Yauch now pays $510.
Blame it on the discovery by park owners that the humble trailer park, long
the butt of jokes, can be transformed into a not-so-trashy moneymaker. After
decades in the backwater of the real-estate scene, mobile home parks like
Sunset Village are caught up in the booming housing market. With Wall Street's
blessing, big companies are gobbling up the largest chunks of what had been
primarily a mom-and-pop business.
From Kankakee to the North Shore suburbs, owners of mobile homes,
especially the elderly on fixed incomes such as Yauch, say life in a single-
or double-wide is becoming increasingly hard. They complain that rents rise
far faster than their income and that more increases are inevitable as the
corporate owners aim to sell new, bigger homes to a younger, more affluent
market.
An estimated 20 million people, including 400,000 in Illinois, live in
mobile homes. Most mobile home residents own their homes but not the land,
which they rent from the park owners.
Those most affected by the changes are retirees who depend on Social
Security checks and pensions. Nearly half the nation's mobile home owners are
older than 55.
"The companies are not in the social service of providing housing for the
elderly. They're in business," said George Allen, an industry consultant in
Indianapolis. "The question is, where do you draw the line between social
consciousness and what you need to do to satisfy the people on Wall Street?"
Many tenants are not as happy as investors are. Since mobile homes are, in
fact, very difficult and expensive to move, there's not much they can do.
At Whippletree Village, a Wheeling trailer park owned by Capitol
Development, residents asked the City Council for relief from rent increases,
but officials rejected a rent-control proposal they debated in 1996. The
company is facing a class-action lawsuit for allegedly pricing tenants out of
Whippletree Village.
Richard Klarchek, president of Capitol Development, did not return phone
calls seeking comment.
Bud Zeman, a Chicagoan who owns several mobile-home parks in the area,
invited any tenant unhappy with rent increases to find a cheaper conventional
housing alternative. Asked about this year's $35-a-month increase at his
Rosebud park in Bridgeview, Zeman said most dissent is heard from a vocal
minority of tenants.
"You talk about rent increases; they don't even like paying any rent at
all," said Zeman, who is a director of a clout-heavy statewide industry group.
"They want to live for free."
As they lounged on the porch of their manufactured home, Howard and Betty
Yount explained the difficulty of fighting rent increases. The rent for the
narrow, tree-shaded lot where they park their double-wide went up $25 a month
this year.
The Younts and their neighbors at Willow Lake Estates in Elgin filed a
class-action suit in 1988 challenging rent increases. A federal judge ruled in
their favor, agreeing that their leases stipulated that rent should increase
only as fast as the cost of living.
The celebration ended the next year, when the Illinois legislature rendered
the ruling moot, changing the law to allow unlimited rent increases when a
lease is renewed.
"There's no point in trying to beat Sam what's-his-name, the big shot,"
said Betty Yount.
That's Sam as in Sam Zell, the Chicago billionaire. Zell's Chicago-based
Manufactured Home Communities Inc. is the country's largest owner and operator
of mobile-home parks.
The company, which acquired Willow Lake Estates in 1994, told tenants that
the strong local real-estate market justified a $25-a-month rent increase this
year. For many homeowners the increase translated into more than twice the 2.7
percent inflation rate, bringing the average rent at Willow Lake Estates to
$583 a month.
Modest gentrification has begun to transform Willow Lake Estates as well as
some other corporate-owned parks. Newer models at the Elgin park boast 1,800
square feet of space, with remote-control fireplaces, whirlpool tubs,
cathedral ceilings and names that evoke nearby affluent suburbs: the St.
Charles, the Inverness, the Glen Ellyn. The most expensive new home, the Lake
Forest model, lists for $118,900.
Many longtime homeowners see the newer, relatively opulent homes as a
harbinger of still higher rents and complain that management wants to target
for a younger market a park that was founded in 1964 as a senior community.
The women getting perms at the park's Steel Magnolias beauty salon on a recent
morning also said they don't like new rules that allow children and pets at
Willow Lakes Estates.
"Everybody has been very upset," said longtime homeowner Marilyn Ramel.
"All management wants to do is sell new houses. The rest of us--pardon my
language--can go to hell."
A top Manufactured Home Communities official said market forces and the
desire to prevent the company's parks from deteriorating prompted the rent
increase.
"If we try to keep rents at stable or declining rates, new homes won't be
brought in, and we'll fulfill the prophecy of the trailer park," said the
company's chief executive officer, Howard Walker. "Today's retiree has more
money, a higher level of expectations. They don't want to put their nice, new
homes between two old, unkempt homes."
A famed dealmaker, Zell made one of his best moves in 1993, when he took
Manufactured Home Communities public as the first big real-estate investment
trust involving mobile-home parks. Between 1996 and 1999, the company's
revenue more than doubled. The company now owns or has a controlling interest
in 157 mobile-home parks in 26 states.
The growing value of the parks is partly the result of simple
economics--increased demand and limited supply. With municipalities hesitant
to approve new ones, the number of parks in the country has remained fairly
constant since the 1970s, industry experts say. It's only in the last few
years that demand for pads has outstripped supply. The demand is expected to
increase further as Baby Boomers age.
At the Holiday Hills community, a Manufactured Home Communities property in
the Denver suburb of Federal Heights, elderly residents picketed in vain over
rent increases last year. Counterparts in Illinois also have been unable to do
anything about rent increases.
Bills introduced on their behalf in Springfield invariably perish against a
powerful lobby. The park owners' group, the Illinois Manufactured Housing
Association, has an office in Springfield with a lobbyist who was part of the
movement that promoted legislation crushing the idea of rent control.
People who challenge the landlords fare poorly. The late William Becker
found challenging a rent increase costly as well as fruitless.
The retired electrician and World War II veteran last year filed a
small-claims case against Manufactured Home Communities, claiming it
overcharged him $6 a month in rent by raising his bill for a lot at Willow
Lake Estates faster than the inflation rate.
The company prevailed in Kane County Circuit Court. Its lawyers then
demanded Becker pay $5,000 in legal fees, although court records show that the
judge did not order Becker to reimburse the company. After suffering a heart
attack, Becker decided to pay, saying he did so to "put an end to this
madness."
Days before he succumbed to cancer at age 75 in May, Becker still insisted
he had been right to challenge the increase.
"Courage, I've got," he said. "Money, I don't."
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