In America, trailer parks have long been stigmatized as economically undesirable — last-resort stops for poverty-line families and the elderly, where crime is rampant and living conditions are squalid.
But as the middle class continues to shrink and the housing affordability gap continues to widen, Americans are increasingly turning to mobile homes — and a new breed of investors is eager to welcome them.
Across the country, real estate companies are snapping up old trailer parks, remodeling them into attractive complexes, and rebranding them as “mobile home communities.”
How the trailer park came to be
Facing job scarcity and housing shortages, many post-Depression era Americans built mobile trailers to follow transient work opportunities. By the 1950s, these trailers were seen as a cheaper alternative to buying a fhouse, and semi-permanent communities of them were formed.
As opportunities for more stability arose, trailer parks came to be seen as undesirable and “low-down” — but now, that’s changing…
Because the housing market sucks
Today, the average home in the US costs $286k (about 8 years’ worth of median income), while a manufactured home (the “modern incarnation” of a trailer) can be had for $70k. Likewise, rent on one of these homes is 30-50% that of a traditional 2-bedroom apartment.
As housing prices continue to climb, median-income Americans are changing the demographics of trailer parks.
And as a result, they’re getting a lot nicer
Developers and investors (including Warren Buffett) have dumped money into purchasing run-down trailer parks and revamping them into amenity paradises, complete with swimming pools, clubhouses, and on-site maintenance.
Some are capitalizing on the tiny house craze and marketing energy-efficient abodes to entice millennial families into these parks.
And the strategy is paying off: According to Quartz, these companies have seen “some of the highest operating income growth in the real estate sector.”