This is Part 2 of WGLT’s weeklong series about the business practices at Oak Wood, a company that now owns five manufactured home parks in Bloomington-Normal. You can also read Part 1, about what’s changed for residents since Oak Wood bought their parks.
Amanda Hodel and Kelly Abrahamson of Bloomington are neighbors. They both have dogs. They both struggle to make ends meet. And they’re both trapped.
Hodel and Abrahamson live in Grandview Estates in southwest Bloomington. In the two years since Texas-based Oak Wood bought their manufactured home park, Hodel and Abrahamson have seen their lot rent jump by 30%, as the threat of another 36% increase ($195 per month) looms. Hodel was recently hit with a $100 fine for allegedly not tidying up her yard – chosen from a two-page menu of violations that her neighbors say Oak Wood is used to squeeze every nickel and dime from them.
Abrahamson recently had back surgery and isn’t working, leaving her fiancé as the sole provider. Hodel is on disability, meaning she gets just $643 a month.
“The $195 will break us,” Abrahamson said. “We’re good tenants. We pay our rent on time. We’ve never had any trouble until now. It’s a constant $100 here, $100 there, that they’re asking for. Who has all this extra money laying around?”
They can’t afford to move. And they can’t afford to stay. This is life for many when private equity buys the land out from under you.
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Who is Oak Wood?
Oak Wood bought Grandview Estates and four other manufactured home parks (aka mobile home parks) in Bloomington-Normal two years ago for $86 million, property records show. It’s part of a nationwide trend toward consolidation in manufactured home park ownership, often led by private equity acquisitions. Oak Wood even got help from Freddie Mac, a government entity that is supposed to help make housing more, not less, affordable.
For wealthy private investors, manufactured home parks are a smart move. There’s a lot of demand for housing and not enough supply. And your often vulnerable, low-income residents are a captive market – unable to move even if they can’t afford the rising rent.
“There’s a lot of money in running a manufactured home park, especially if you raise rents as high as you possibly can and perform minimal maintenance to the property,” said Chad Reed, who has studied manufactured housing and works at the nonprofit Ivory Innovations.
Oak Wood bought the Twin City parks from the Moore family, records show. At the time Jim Moore’s portfolio of 46 parks across six states – including the five in Bloomington-Normal – was “one of the last remaining in the space of this scale owned by a private individual,” according to those who worked on the deal. Lender JLL Capital Markets arranged over $300 million in financing for the sale.
Oak Wood is a relatively young real estate investment firm, founded in 2018 by Clayton Carter. The company appears to operate from a modest two-story building next to a gas station in Dallas – at least that’s where its property-tax bills are sent – though it’s growing fast. They acquired their 100th property in June, with parks all over the country.
In response to questions from WGLT – including about the role of private equity in the manufactured home industry – a Dallas PR firm hired by Oak Wood replied with a statement:
“We’re proud of the ongoing improvements we continue to make in our communities and of the relationships we’ve built with our residents. While others may wish to discuss broader industry trends, Oak Wood is focused solely on creating high-quality, affordable neighborhoods and providing safe, well-managed communities that residents are proud to call home,” Oak Wood’s statement said.
There is an “inherent power imbalance” when housing is a basic need for tenants and an investment opportunity for its owners, said Erin Duncan, supervising attorney at Bloomington-based Prairie State Legal Services, which has taken legal action against Oak Wood on behalf of clients.
“That’s particularly true for mobile home tenants, who stand not only to lose their housing, but their own investment and equity if they own the mobile home and rent the land underneath it,” said Duncan.
Getting government help
Oak Wood apparently needed the government’s help to buy its Bloomington-Normal parks. Freddie Mac, the government-controlled company, helped finance the transaction, Oak Wood confirmed to WGLT. Records show their mortgages were re-assigned to Freddie Mac as the 2023 deals closed.
“As part of that process, additional resident protections are in place to ensure long-term housing stability and compliance with federal standards,” Oak Wood said. “We recognize that change can be challenging, and our team works to support residents through each step of the process.”
Freddie Mac’s involvement means the buyers are likely getting loans at lower interest rates than they would’ve otherwise, said Jordan Ash, housing director at the private equity watchdog Private Equity Stakeholder Project.
“They have a mission which is supposed to be to promote and preserve affordable housing, and lending on manufactured home parks ... they count that towards fulfilling that mission. However, when they make loans to private equity firms, they are actually destroying affordable housing. They are removing affordable housing from the market,” said Ash.
Freddie Mac did not respond to WGLT's request for comment.
Private equity’s move into manufactured homes is similar to what it’s done to other industries, said Reed, the researcher. You finance a deal with a bunch of debt, increase its value, and then try to sell it off for a profit.
“If there aren't enough state protections, if there aren’t enough regulatory protections, that model absolutely works in manufactured housing. The problem is that the commodity that you're trading is people’s homes and their livelihoods,” said Reed.
It’s not hard to squeeze money out of manufactured home residents. They often own their trailer but rent the pad underneath it from the park’s owner, such as Oak Wood. If they can’t afford rent increases, they don’t have many options. It can cost thousands of dollars to move a trailer from one park to another. And you might not be able to find savings anyway, since Oak Wood owns about half the lots in McLean County, according to a WGLT tally. Selling your trailer can be tricky too, as buyers typically can’t get traditional loan financing.
“They're called mobile homes, but they're not very mobile,” said Ash. “People are kind of stuck. There's nowhere else to move. They can’t move their home, so they have to find a way to pay the rent, or if they end up having to walk away or be evicted, then the park owner basically gets the home for free.”
Since the 1990s, more manufactured home parks have closed than opened, limiting options and empowering park owners to increase rent as much as possible, said Dave Anderson, executive director of the National Manufactured Home Owners Association.
“In almost every market, there's nothing that keeps you from doing that. Maximize your profits. If you want to close down [park] amenities or reduce the amount of reinvestment you put into the property, there's almost nothing that holds your feet to the fire,” he said.
Fines and fees
There’s also been an “explosion of tack-on fees” that are nickel-and-diming residents across the country, Anderson said. That’s what Amanda Hodel and Kelly Abrahamson say they’ve begun to experience at Oak Wood’s Grandview Estates in Bloomington.
Hodel and other residents provided WGLT with a two-page list of violations that Oak Wood claims its residents are subject to, including:
- $100 for expired license plates
- $50 for hanging items outside overnight
- $50 for illegally storing trash bags outside
- $100 for failing to clean up pet poop
- $150 for failing to supervise children
- $50 for a missed required power washing
Hodel and Abrahamson said their extra money hasn’t led to any improvements at Grandview Estates. They are frustrated by the park’s slow response to maintenance requests and other communications.
That’s typical of the private equity model, Ash said.
“We found that in addition to charging more, making people pay more, that they actually get less for their money, that they neglect maintenance, they cut staff. The model is to increase profits in the short term through rent increases. But for many of them, their goal is not to hold on to that park for the long term. It's to increase the value of the park in order to sell it for profit,” Ash said.
Oak Wood is not alone. Mobile home parks are an attractive investment vehicle across the country. A group called Mobile Home University [MHU] coaches investors on how to get into the business and make money. On its website, MHU explicitly says that the “barriers to moving out” are one reason why these parks are a good investment.
“It costs around $5,000 to move a mobile home, so virtually no tenants can ever afford to move. As a result, the revenues of mobile home parks are unbelievably stable,” MHU brags.
As more individual owners like the Moores sell, institutional investors like Oak Wood are buying. They represented about 20% of all park sales as of 2020-21, said Ash, and that’s probably even higher today.
“So this is occurring not just in Illinois. This is occurring not just in the Midwest. This is occurring across the country with marked regularity: increases in lot rents when communities are transferred to corporate or private institutional investment,” said Esther Sullivan, an associate professor of sociology at the University of Colorado, Denver, who wrote a book about manufactured homes.
Coming Tuesday: Part 3 of the series looks at the legal rights of manufactured home residents and how individuals and groups are starting to advocate for themselves.
