The Planet Money podcast recently featured the success story of how the Brookside Residents Association in Plainville, Massachusetts purchased their community. It also highlighted a national policy issue, one that affects the entire co-op MHC world.
First, let me set the scene. Listeners met Charlie Smith, the co-op’s president. Charlie is a tremendous ambassador for his community. He does a very effective job at laying out the situation. He explained that the homeowners received a notice that the community was for sale in 2019. When they went to match the offer, the competing buyer sued the seller, claiming the co-op’s bid was ineligible. That was not true, and the court agreed. The co-op’s matching offer of was accepted. In July 2020, the co-op bought the community.
The residents received notification because Massachusetts is just one of six states in which homeowners get notice of a potential sale and given the right to match the offer of an outside investor-buyer. A so-called “Opportunity to Purchase” notice is often the only way to ensure homeowners get the chance to buy the land beneath their homes.
Brookside Village residents had seen site-rents in other communities go up month after month, year after year.
Their site-rent to the previous owner was well below market – like $150 below average for their local area. The problem is the price for the land that they had to match reflected those market site-rents. It meant the co-op would have to impose a $180 increase on themselves.
They decided to make their offer after having gathered, as Charlie put it, “like in the revolution when people would meet in taverns.” After all, this is Massachusetts – and not too far south of the Minute Man trail!
With site-fee increases of more than 20%, our lending division, ROC USA Capital, a Community Development Financial Institution (CDFI), requires a high percentage of the community voting in favor of the purchase. We always want to ensure that people understand the situation – and make the decision for themselves. Our goal is to foster informed democratic decisions to purchase.
Brookside Village residents voted unanimously in favor of purchasing even with that significant increase.
This was community-driven ownership in action: The members of the community understood the situation and voted overwhelmingly for ownership and control.
After 30 years, it is still thrilling to see homeowners band together with the support of a few nonprofits and out-perform some of the best capitalized private equity firms and REITs (Real Estate Investment Trusts) in the world.
Now, to the policy concern covered in the Planet Money story. The reporter raised the issue that we face, the one around how Fannie Mae and Freddie Mac offer billions of dollars a year in low-cost loans to MHC investors, but do not lend to co-op MHCs like Brookside.
These agencies have refinanced a few co-ops (four to be exact). But what would really help co-ops compete – and lower borrowing costs – is to gain access to the same purchase-money financing that now only the big boys get. In Brookside’s case, it could have saved each household perhaps $25 per month over the life of the loan.
The problem is fixable. And we’ve offered two solutions in our recent comment letter to their federal regulator, the Federal Housing Finance Agency (FHFA).
The fix still would involve a CDFI, like ROC USA Capital, because limited equity co-ops like Brookside need access to loans that exceed the value of the MHC. Low-wealth communities need to borrow subordinate debt to pay for the community and cover closing costs. Fannie and Freddie won’t ever provide the subordinate portion of the debt package, but that’s okay.
In our view, the FHFA has two options: 1) Fannie Mae and Freddie Mac could be allowed to make portfolio loans to co-op MHCs, or; 2) the two agencies could invest in a vehicle with CDFIs, so that we could make the portion of the loan that the agencies can’t.
There is no word yet if they’ll step up. But there is hope under new leadership at the FHFA. We are working with them and others to change the situation.
And, while we’re at it, we’re endeavoring to fix co-op MHCs’ inability to assume the Fannie and Freddie loans that are on many properties. Changing that restriction would protect co-ops from paying outrageous defeasance (akin to a pre-payment penalty) to pay off the seller’s loans.
Admittedly, such a change would be an even greater challenge. But where there is a will there is a way. And homeowners continue to demonstrate tremendous will. We shall see. Stay tuned.
–Paul Bradley, President, ROC USA
A Press Release From PNW Co-Ops
July 6, 2021 – In June three manufactured housing communities in Central Washington were added to the ROC Northwest portfolio of Resident Owned Communities (ROC), preserving over 200 affordable homes. Bringing the grand total to 20 ROCs in Washington. A ROC is a housing cooperative business comprised of resident members that own their homes. Collectively they democratically manage the business using lot fees to cover the cost of maintaining the property. In total an estimated 450 people, including adults and children, will benefit from these acquisitions.
· Royal Coachman Homeowners Cooperative, in Royal City, closed on June 8 preserving 59 total units.
· Quail Run Homeowners Cooperative, in Moses Lake, closed on June 9 preserving 66 total units.
· Selah Hills Homeowners Cooperative, in Selah, closed on June 30 preserving 104 total units.
Residents of Royal Coachman Homeowners Cooperative have been fighting for their community since 2015 when they filed a class action lawsuit with support from Colombia Legal Services. Residents were dealing with unfair housing practices and the City was close to turning off community water due to an outstanding debt owed by the community owner. After several years they won their battle in court, requiring the community to be managed by a bankruptcy trustee. After nearly a year of dispute and several last-minute funding challenges, the Homeowners Cooperative was able to finally purchase their community.
“This didn’t feel possible,” said Francisco Jaimes, Royal Coachman Homeowners Cooperative, Interim Board of Directors President. “We can now live in peace and know that our children can live here for as long as they need.”
Quail Run Homeowners Cooperative and Selah Hills Homeowners Cooperative were acquired from the same investor owner as part of a portfolio purchase. The residents of these communities are committed to resident ownership and are eager to make critical improvements to deferred system maintenance.
“Preserving affordable housing in Central Washington helps set the standard for all of Washington,” said Diane Gasaway, Executive Director, Northwest Cooperative Development Center. “The ROC USA model allows us to work with residents and empower them to form a sustainable housing cooperative, taking control over their communities.”
The mission of the ROC Northwest program of Northwest Cooperative Development Center in Olympia is to purchase communities and convert investor-owned manufactured housing communities to resident owned housing cooperatives. According to National Low Income Housing Coalition, 68% of extremely low income Washingtonians renters are extremely cost burdened. On average investor-owned communities annually increase lot rent 3 percent more compared to ROCs. For example, if rent is $475 dollars at the time of conversion. After 15 years rent would be about $840 in an investor-owned community compared to about $540, saving that homeowner over $22,000 during that period.
Inslee announces eviction moratorium “bridge”
June 24, 2021Story Gov. Jay Inslee announced a “bridge” proclamation today between the eviction moratorium and the housing stability programs put in place by the Legislature. The bridge is effective July 1 through September 30.
More than $650 million of federal relief dollars allocated to assist renters is predicted to be available beginning in July. This is in addition to the $500 million dollars previously released by the Department of Commerce to local governments for rental assistance and will help more than 80,000 landlords and renters.
“As we all know, COVID has had a significant economic impact on our state and a lot of Washingtonians are still experiencing financial hardships. That is why I put an eviction moratorium in place last year,” Inslee said during a press conference Thursday. “These are all reasonable steps and will help ensure that renters and landlords have the opportunity to receive support and resources that are available to them.”
The eviction moratorium bridge will allow for a transition to the tenant protections established in SB 5160, including the Eviction Resolution pilot programs and the Right to Counsel program for indigent tenants.
The bridge is not an extension of the existing eviction moratorium, first declared in March 2020. Under the new order, new provisions will support renters and landlords until resources and programs become available.
For past rent due from Feb. 29, 2020 through July 31, 2021, landlords are prohibited from evicting a tenant until there is an operational rental assistance program and eviction resolution program in place in their county. Additionally, landlords are prohibited from treating past unpaid rent or other charges as an enforceable debt until the landlord and tenant have been provided with an opportunity to resolve nonpayment through an eviction resolution pilot program.
Beginning August 1, renters are expected to pay full rent, reduced rent negotiated with landlord, or actively seek rental assistance funding. Landlords may only evict a tenant if none of those actions are being taken but must offer the tenant a reasonable re-payment plan before beginning the eviction process. Tenants must also be provided, in writing, the services and support available.
Hotels and motels, Airbnbs, long-term care facilities and other non-traditional housing are exempt from the order.
The full proclamation and details will be available in the coming days.
GIVING TUESDAY is a global generosity movement, and it is launching a global day of giving and unity on May 5, 2020, as an emergency response to the unprecedented need caused by COVID-19. This day is designed to drive an influx of generosity including citizen engagement with communities and non-profits.
We may need to stop shaking hands, but we can still reach out in meaningful ways. We each have the power to create and spread ideas of how to help, heal, and find ways to build new kinds of connections and community. It’s not about size; we all have something to give and every act of human consideration and kindness matters. We can combat the feelings of fear, isolation and loneliness that we all share by reaching out to a neighbor and calling a relative, seniors or veterans.
Give to the organizations that we love the most – no amount is too little and our nonprofit needs your support.
Please remember, the Association of Manufactured Home Owners (AMHO) is a 501 (C)(3) non-profit organization who survives solely on your memberships, donations and volunteerism to spread the word regarding home owners’ rights, to help communities set up their home owners’ associations (HOAs) and to work on Legislation.
Governor Inslee’s April 16th moratorium on evictions specifically includes RCW59.20 (the Mobile Home Landlord Tenant Act). This moratorium prevents a landlord from assessing late fees, serving a notice to vacate, or evicting manufactured home owners (except for significant and immediate risk to the health and safety) effective until June 4, 2020. Read the details here.
If you are an AMHO member please consider a donation. If you are not an AMHO member please consider joining. If you can afford to sponsor a friend or a neighbor’s $15.00 membership fee, please do so. You can donate online at this website or send your check to AMHO, P.O. Box 30273, Spokane, WA 99223. Thank you!
Sincerely, Anne Sadler, President, AMHO.
AMHO is a not-for-profit Washington State Corporation with an IRS status as a 501(c)(3) organization. Our stated purpose is to promote, represent, preserve and enhance the rights and interests of manufactured Home Owners in the state of Washington through communication, education, negotiation and preservation of our communities.
Our major focus has been the education of elected officials and manufactured home owners in communities, to support the production of more affordable housing, and to strengthen the bargaining power of manufactured home owners living in these communities.
The future of Manufactured/Mobile Home Communities, (MHC’s), does not lie in the hands of Corporations, Private Owners and Park Managers, it is fundamentally in the hands of Manufactured Home Owners, (MHO’s) and in their ability to organize.
It is especially important for 55+ MHC’s to stay informed about their rights as Home Owners and be informed regarding the various avenues for Landlord/Tenant conversation, conflict mitigation and dispute resolution, if that becomes necessary.
Those who live in MHC’s have the best insight as to what needs to be changed and often, just need some guidance as to how to proceed.
Those who are directly affected by unfair regulations and arbitrary, subjective and unreasonable Park rules will find that AMHO is designed and committed to offering critical guidance in these areas.
AMHO does not give legal advice but guidance and direction to various services and entities that can help in serving Manufactured Home Owners living in privately owned Parks and Communities.
Welcome to the official blog for all AMHO-related goings-on, legislative developments, meeting announcements, and other developments. Bookmark this page and check back often for the latest news.
Association of Manufactured Home Owners of Washington State - AMHO
For all those who live in Manufactured/Mobile Home Communities and Parks, Please come and join with us at AMHO, An Association of Manufactured Home Owners.
Alone we suffer, however, together we can accomplish great things.