Elaine Therriault has heard horror stories about mismanagement and rent hikes beleaguering the Maine mobile home parks bought by out-of-state investors.
“It’s insane, the lot rents they’re asking,” Therriault, a resident of West Village park in Monmouth, said. “And houses are out of reach for people just making a middle income.”
Once Therriault’s 40-lot park went up for sale last November, she said it was a no-brainer for her and the other residents to make an offer. A state law passed in 2023 — intended to curb increased investor activity in parks — mandated they get that opportunity.
Maine, like every other New England state, requires that park owners give residents and the state’s housing authority notice of an impending sale and allow residents to make an offer instead. Proponents say it’s been hugely successful in preserving affordable housing and leveling the playing field for residents who want to own not just their homes, but the land they sit on.
“It’s made a lot of people’s housing much more secure,” said Erik Jorgensen, director of government relations at MaineHousing, the state’s housing authority.
Two years on, there are calls for the law to be strengthened. Some want residents to be given more power in these transactions, so park owners are incentivized to sell to them over a corporate buyer. Others want the law to be tweaked so that good faith corporate buyers aren’t shut out of the industry entirely.
“If the intent of the law is to make property less attractive to private buyers, then I guess it’s working,” said Chris Howard, president of Flintstone Properties, who was outbid by residents for a Bangor park earlier this year.
In both Bangor and New Hampshire, Howard said he made reasonable offers on parks in the last year that were outbid by residents in the final hours before closing. He lost thousands of dollars in legal fees, he said, and as a smaller operator doesn’t feel incentivized to bid again so long as residents hold the trump card.
“It’s going to be [resident co-ops] and/or some shady, nefarious operators — that’s who’s going to continue bidding on properties. The high quality landlords … are probably going to be shut out of the market,” he said.
The smaller, more monied pool of park buyers that will emerge from that dynamic will mean sellers price their parks even higher than the millions they go for now, Howard said.
“I’m going, well, if these tenant groups will pay any price for something, then let’s see how far we can push it,” said Howard, whose company owns nine parks nationwide and sold all its Maine holdings in 2020 to corporate giant Sun Communities.
The fact that Maine’s law does not require a bidder to identify themselves or announce their intentions with the park when they make an offer may hinder residents from considering buyers like Howard. In about half of these sales, residents don’t know who they’re up against, according to the Cooperative Development Institute, the Massachusetts-based nonprofit that has been helping Maine residents buy their parks.
That has essentially forced the hand of residents. It makes sense to try and purchase their park on the off-chance that the undisclosed buyer is a private equity firm or investor looking to gouge them. Residents of Linnhaven, a 277-lot park in Brunswick, didn’t know who they were trying to outbid when they inked a $26.3 million deal last fall to buy their community. West Village residents also do not know who the interested buyer they’re raising $1.2 million to outbid right now is, either.
Maine law should require some kind of disclosure from all bidders, said Charles Becker, an economist at Duke University. As it’s written, the law “automatically puts tenants at a disadvantage,” he said.
“I don’t care who the owner is, but I would require information about their plans, their commitments, what they’re going to do to the park. Otherwise, as a community, all you can do is bid,” Becker said, adding that most corporate buyers don’t look to gouge tenants.
Local buyers usually disclose their identity, though that’s “not always the case,” Nora Gosselin, director of the Cooperative Development Institute’s parks acquisitions program, said.
Maine could try to follow Massachusett’s lead, Gosselin suggested. There, a bidder must disclose if they’re purchasing a park to shut it down. But really, residents should be motivated to assume ownership because they want to, not because they’re trying to shut a certain buyer out, she said.
Lawmakers have seen far more cases of residents losing their parks to corporate buyers than they have cases like Howard’s, even since the law went into effect. Of the nine resident groups that have tried to buy their parks since then, only three have been accepted, Gosselin said, even when residents matched or exceeded the seller’s price.
Because of that, most proposed tweaks to Maine’s law seek to strengthen the purchasing power of resident co-ops, but finding ways to fund these deals in a strained budget environment won’t be easy.
The 2023 law created a complementary $5 million fund to help residents buy their parks, but two sales later, $4.3 million of that fund has been depleted. Maine Gov. Janet Mills has earmarked $3 million to replenish that fund in her proposed budget, and Sen. Joe Baldacci, D-Bangor, has submitted a bill that would add a further $3.5 million to that.
Another proposal coming before the Legislature this session from Sen. Cameron Reny, D-Lincoln, would create a tax deduction of up to $750,000 on capital gains for the sale or transfer of a park to residents.
Any investments the state can make in resident purchases will be worth it, the 2023 law’s sponsor, Rep. Traci Gere, D-Kennebunkport, said. The Bangor and Brunswick sales alone led to the preservation of more than 400 units of affordable housing, eviction prevention for many tenants there living on fixed or low incomes, and the potential to develop more housing on those parks’ empty lots, Gere said.
“I see this as a relatively modest subsidy to help preserve affordability,” agreed Jorgensen. “If you’re building a building, you’re putting a lot more per unit in than these investments that are helping to support these co-ops.”
For Therriault, the benefit is more than economic. The sense of community and empowerment that’s come from this process has been so incredible, Therriault thinks she would have taken advantage of Maine’s law no matter who the other bidder on the park turns out to be or what their plans were.
“Whoever’s buying it, we’re not going to have that say as residents,” Therriault said. “We just want to live our life.”
