Protecting the rights of manufactured home owners

-by Representative Keith Ellison

Frank Adelmann was bereft when he received an eviction notice from Lowry Grove mobile home park. At 59, he had no resources to move and could not afford another home. The day before the park was to close, Frank ended his life. He was one of ninety-five families who lost their homes. Kids, parents, veterans, and even seniors, some in their eighties, were evicted. Parents struggled, and mostly failed, to find a home they could afford in the same St. Anthony’s school district. And dozens who thought Lowry Grove would be the last home they lived in, suddenly had nowhere to go.

In Minnesota, ten mobile home communities have closed in the past twenty-five years, and no new ones have opened. This uncertainty affects nearly 3 million Americans who are residents in the nation’s 50,000 manufactured housing communities. While most of these people own their homes, they rent the land, which leaves them vulnerable to dramatic rent increases, arbitrary rules, and even eviction.

No one should have to fall asleep wondering if they’ll have a home in the morning. Not in this country. Since I was elected in 2006, I’ve been working in Congress to protect tenants and homeowners. I’ve introduced nearly a dozen bills related to housing, including a few specifically to help owners of manufactured homes. My bills would enable residents in manufactured housing communities to cooperatively purchase and manage the land their homes sit on and provide resources for owners of outdated mobile homes to upgrade to ENERGY STAR manufactured homes. I’ve also worked to protect buyers of manufactured homes from being steered to high-cost loans.

Provide incentives for manufactured housing community cooperatives

Federal policies provide an incentive for homeownership by offering a tax deduction on interest paid on a mortgage. This provision applies to all types of homes, including ones that are cooperatively owned. However, due to a quirk in the tax code, only cooperatively-owned building owners qualify; but when a cooperative owns just the land, the deduction does not apply. Nationwide, there are more than 1,000 manufactured home communities that are cooperatively owned by their residents.

The Fair Tax Treatment for Manufactured Housing Community Cooperatives (H.R. 3399) ensures that cooperatively-purchased land gets the same treatment as cooperatively purchased buildings. Giving manufactured homeowners a small tax incentive to band together and control their destinies is a good first step, but we need to do more to encourage more resident-owned cooperatives in the first place.

When community owners sell, they frequently owe capital gains taxes. Too many times, they choose to delay the sale until their deaths at which time their heirs can claim the property tax free. The Frank Adelmann Manufactured Housing Community Sustainability Act (H.R. 3296) encourages property owners to sell their part of the community to residents, or a nonprofit, to preserve the housing and avoid eviction for hundreds of families.

While a few states require owners offer a right-of-first refusal to tenants, those rules are not always respected. Even when they are, the land costs can be out of reach for families who earn an average of $28,000 a year. My bill gives owners a 75 percent federal tax credit on the sale of the property if they sell to the residents. The math is simple. If the owner sells the land to the residents and earns a profit of $1 million, he would owe $150,000 (15 percent) in capital gains tax. If this bill were to pass, the owner would only pay $37,500 on the sale.

For some owners, these savings would incent them to preserve the property as a manufactured housing community, rather than selling it off to an investor for development.

Replace outdated mobile homes with ENERGY STAR homes

Of the millions of manufactured homes in America, more than 2 million are outdated, meaning they were built before 1994. Some of these homes have energy costs of literally thousands of dollars a year. Yet some families cannot qualify for loans to replace their homes with more energy efficient options.

The Energy Efficient Manufactured Home Act (H.R. 515) creates a federal program to offer grants and loans to help low-income families replace their outdated homes with newer ENERGY STAR homes. My bill builds on current efforts, led by Next Step that help households cut utility expenses, make a commitment to environmental sustainability and improve their health and financial situation.

Eliminating High Cost Loans

Lastly, we must continue to support the work of the Consumer Finance Protection Bureau in its efforts to protect buyers of manufactured homes from unfair treatment and high-cost loans. I opposed a number of Republican-led bills that allow employees of manufactured housing dealerships to steer borrowers to high-cost lenders. Bills like the Financial Choice Act (H.R. 10) and the misnamed Preserving Access to Manufactured Housing (H.R. 1699) would exempt manufactured housing sales people from the Consumer Bureau’s licensing requirements that apply to all mortgage and loan originators.

In September, I offered an amendment to strike language stopping the Consumer Bureau from its prohibition on steering by dealers. My amendment (roll call vote 522) was defeated 163-245. One Republican voted to protect manufactured home buyers, and all but 23 Democrats. Without the Consumer Bureau’s regulation, nothing would stop them from steering homebuyers to bad deals. In addition, these bills also make it easier to charge manufactured home buyers higher interest rates without requiring counseling.

Manufactured housing issues matter to all housing advocates and all Americans. It is the largest source of unsubsidized affordable rental housing in the nation. More than 17 million people live in manufactured homes. If manufactured homes were removed, the homeownership rate would decline by five percent.

By introducing the three bills above, and fighting against efforts to gut the Consumer Bureau and its protections for manufactured homebuyers, I hope to put the power of the federal government behind strengthening the resilience and security of owners of manufactured homes and the communities in which they live and can thrive.

Ellison

Rep. Ellison has represented the Fifth Congressional District of Minnesota in the U.S. House of Representatives since taking office on January 4, 2007. Rep. Ellison’s philosophy is one of “generosity and inclusiveness.”

How power dynamics can lead to housing instability

– by Eric Hauge, Director of Organizing and Public Policy at HOME Line

“The 1968 Civil Rights Act made housing discrimination illegal, but subtler forms prevailed…equal treatment in an unequal society could still foster inequality.” -Evicted

“It was not that low-income renters didn’t know their rights. They just knew those rights would cost them.” -Evicted

A critical piece of Matthew Desmond’s research was the unique combination of housing court analysis, surveying, and in-person interviews that demonstrated the power dynamics of tenant/landlord relationships, the disproportionate influence of evictions on communities of color, and an emphasis on threats to housing instability beyond the formal court eviction process. While describing the uphill battle tenants face in court, Desmond reiterates that “for every eviction executed through the judicial system, there are two others executed beyond the purview of the court, without any form of due process.”

Locally, we’ve worked to reproduce aspects of Desmond’s analysis around formal, measurable court cases. A 2016 report identified that nearly half of renter households in North Minneapolis experienced an eviction filing in the past 3 years. Further, it showed that eviction filings resulted in tenant displacement in two-thirds of cases; either a result of a court order or a part of a settlement, and in the vast majority of cases renters did not have an attorney. It is clear that eviction filings are harmful to families: not only do they directly contribute to displacement, they also have long-term consequences on access to future housing, especially at a time when aggressive tenant screening practices are the standard.

Meanwhile, we know that renters face other risks outside of the judicial system. Those who are advised on HOME Line’s free legal tenant hotline–around 15,000 each year from throughout the state–are commonly facing issues directly influencing their ability to remain in their homes. Far too often, they are relying on “fragile leases:” those that renew on a monthly basis and can be terminated with minimal notice. Despite other legal protections that might be in place, those lease terms can lead a family to homelessness at a moment’s notice.

Frequent advice provided on our tenant hotline is around repairs of poor housing conditions, infestations, formal eviction cases and informal notices to vacate. While informed legal advice can help in some cases, in many others it unfortunately boils down to the power dynamic that led to those fragile lease terms. Couple that with the anxiety of facing retaliatory actions by a landlord; especially when tenants assert their rights to improve their home. Is it worth placing your family in a risky and adversarial situation with your housing provider, in an intimidating court system, with an eviction filing and a poor housing reference hanging over your head?

To address this housing instability, creating and preserving affordable housing is essential. However, important protections and interventions must also occur within tenant/landlord relations and the court system to level the playing field. This includes stronger tenant protections around displacement without cause, incentives for mediation and diversion programs outside of eviction court, and key investments in resources similar to NYC’s recently enacted “Civil Gideon” law, to ensure legal representation for all low-income renters experiencing eviction.

 

Eric

Eric Hauge is the Director of Organizing and Public Policy at HOME Line, an organization that provides free and low-cost legal, organizing, education, and advocacy services so that tenants throughout Minnesota can solve their own rental housing problems.

Keeping homes affordable: An interview between Richfield Councilmember Maria Regan Gonzalez and former Richfield resident, Lin

Conversation between former Richfield resident, Lin Soderstrom, who was displaced in the conversion of the low-income apartment complex of Crossroads at Penn to the luxury apartments, The Concierge; and Richfield City Councilmember, Maria Regan Gonzalez. Lin and Maria have been working hand-in-hand with other tenants and housing advocates to pass administrative and policy changes to provide safe, affordable and quality housing for Richfield families.

Lin and Maria
Councilmember Maria Regan Gonzalez and former Richfield resident, Lin working with affordable housing advocates to create Crossroads documentary, “Sold Out”

Maria: Lin, can you share your personal story of displacement when your former home, Crossroads at Penn was converted to the Concierge in 2015? I want to thank you for your strength, leadership and resilience in sharing your story and continuing to fight for fair and equitable housing for all. I look to you and your leadership in this new chapter in our community’s journey to affordable and dignified housing for all.

Lin: Thank you Maria. I’ve been thinking a lot about Desmond’s year-long residency in Milwaukee, Wisconsin, in its deeply impoverished communities who stream through Housing Court daily

Desmond presents this: Eviction is not a Result of poverty. Eviction is a CAUSE of poverty. I found this to be true most definitely. Every time I can manage to save anything towards future needs…. It ALL goes to relocating at the behest of landlords without conscience.

In 2015, a thirty day ‘drop dead’ notice befell upon 2300+ residents in 698 one-bedroom rental units in my home of Crossroads at Penn. When my home was converted to The Concierge with 30+ spa-like amenities by its new owner, rents increased over 70 percent. In addition to huge rent hikes, the immigration status, income, credit scores and familial status of existing tenants virtually left The Concierge inaccessible to us. People of color, folks with disabilities and young couples were left without a home. Section 8 was no longer accepted. You might say the “undesirables” were bulldozed. The emotional, physical and mental impact on our lives and families was and continues to be deeply traumatic for us.

Maria: What our families and community lost in the conversion of Crossroads to Concierge will never be regained. 145 Richfield school district students were directly impacted and thereare still an estimated 30 children homeless today as a direct impact. 

Lin: While our story at Crossroads is a dark chapter in our community’s history, I’m excited to be working alongside you, other tenants, and advocates to put long-term strategies in place to help ensure stable, quality and affordable housing for all Richfield residents.

Can you please share the story of the near displacement of residents living in Season’s Park and what strategies the City of Richfield is working on putting in place to ensure quality and stable housing for all?

Maria: In March of this year, a mere 18 months after the conversion of Crossroads at Penn, another Richfield apartment complex was in danger of experiencing the same fate. With 422 units, 800 residents, including an estimated 450 children, living in the Seasons Park apartments were on the verge of displacement with a near sale and conversion to luxury units, very much like the Concierge. Thanks to the quick work and collaboration that included the Richfield School District, residents from Crossroads and Seasons Park, the City of Richfield, housing advocates, Aeon, and even the Governor of Minnesota, we were able to celebrate the signing of a purchase agreement between the owner of Seasons Park and Aeon a mere 10 days after we learned the apartments were at risk of a sale and conversion.

To ensure another close call does not happen, we are working at the City level to codify practices and put policies in place that will protect our renters and address the challenges faced with our housing stock of naturally occurring affordable housing across the city and region. We are collaborating closely with our school district, residents and other cities to underscore the importance of such policies and practices, not just in our city, but across the region. We are simultaneously focused on creating strong policies at the City level and working with our peer cities to encourage them to do the same and pool resources and tools for a strong regional approach to Minnesota’s affordable housing crisis.

We can no longer turn our eyes away from the traumatic displacements that our friends, families and neighbors are facing. As Desmond says in his book, “All this suffering is shameful and unnecessary. Because it is unnecessary, there is hope. These problems are neither intractable nor internal. A different kind of society is possible, and powerful solutions are within our collective reach.” (p 299)

Fighting against eviction

— by Lael Robertson, Staff Attorney for Housing Justice Center

“Residential stability begets a kind of psychological stability, which allows people to invest in their home and social relationships.  It begets school stability, which increases the chances that children will excel and graduate.  And it begets community stability, which encourages neighbors to form strong bonds and take care of their block.  But poor families enjoy little of that because they are evicted at such high rates.  Instability is not inherent to poverty. . . Poor families move so much because they are forced to.”  Evicted, pg. 296

In my time as a legal aid attorney and in my current role at Housing Justice Center, I heard the stories of struggle told in “Evicted” over and over again—people barely scraping by, longing for stability, looking for a place to call home. Natalie had a landlord decide he didn’t want someone with a domestic violence history, so her lease was terminated; Maria’s building was bought and the rent was increased by 30%; when William’s building got new management, he couldn’t qualify under the new tenant standards, even though he had been paying rent for 10 years. Because those who rent, and particularly those who rent unsubsidized apartments, are at the mercy of outside forces—the landlord, the market, a desire for financial gain—they are one business decision away from being uprooted.

In 2015, the Minneapolis/St. Paul metro area had 28%, or over 320,000, cost burdened households, meaning those households were paying more than 30% of their income for rent, according to Minnesota Compass. Perhaps more startling, more than 78% of households earning less than $35,000 a year are cost burdened. Those who can least afford it are paying the most for housing.

At the same time, the vacancy rate in the metro is incredibly low and rents are increasing. The ability of low-income households to find affordable apartments is difficult; holding on to them can be close to impossible. According to a report by the Minneapolis Innovation Team, two months and less than $2,000 stands between tenants and eviction. Nonpayment cases accounted for 93% of eviction filings, most of which had no other reasons identified.¹

So what can we do?

We can advocate for our local officials to recognize the problem and take action. Several cities around the metro are considering policies like just cause eviction, protections for Section 8 voucher holders, and required notice to the city of unsubsidized apartment buildings that are going up for sale. But we can also educate our communities on who needs affordable housing—people who work, people with disabilities, people you know. They are teacher’s aides, grocery store clerks, fast food managers. They go to your church, they work at your coffee shop, and their child is your child’s best friend. And right now, they need their community to step up and help make change.

¹ Evictions in Minneapolis, Minneapolis Innovation Team 2016.

LaelR_cropped_small

Lael Robertson is a staff attorney at Housing Justice Center. Ms. Robertson focuses her work on enforcing fair housing laws on behalf of low income and on advocating for fair housing policy throughout the region.

Lisa’s story of losing and finding home

“Even in the most desolate areas of American cities, evictions used to be rare. They used to draw crowds. Eviction riots erupted during the Depression, even though the number of poor families who faced eviction each year was a fraction of what it is today…

…These days, there are sheriff squads whose full-time job is to carry out eviction and foreclosure orders…Low-income families have grown used to the rumble of moving trucks, the early-morning knocks at the door, the belongings lining the curb.

… Fewer and fewer families can afford a roof over their head. This is among the most urgent and pressing issues facing America today, and acknowledging the breadth and depth of the problem changes the way we look at poverty.”

– “Evicted: Poverty and Profit in the American City”

Matthew Desmond’s “Evicted” follows the lives of eight families in Milwaukee as they experience eviction. These eight families, unfortunately, are just a few of the thousands of individuals and children removed from their homes each year. And evictions don’t just occur in the cities with the highest rate of poverty. Individuals and families are being forced out of their homes right in our own community.

Join us over the next two months as we invite residents, community leaders and policymakers to discuss Matthew Desmond’s research and explore housing affordability in the Twin Cities.

First we’d like to share with you Lisa’s story of losing and finding home.

Lisa_cropped_small

At 33 years old, I was a single mother of two children. I was raised in an upper middle class, hardworking family, so working a full-time job to provide for my family was important to me. I had a job at a large health insurance company, but it wasn’t enough to afford nice housing for my children. Fortunately, I was able to get a Section 8 voucher that allowed my family to move into a beautiful two-bedroom home. Life was super busy while I was juggling work and shuffling my kids off to various activities, but it was also really good.

My life took a turn just a year later, after experiencing complications from a surgery.

I was in and out of the hospital, I lost my job and pretty soon my mental health started deteriorating. While I was fighting for my health, simple things like keeping up my home became unmanageable, and I started to fail the annual Section 8 inspections.

After being evicted from my home and getting kicked off of the Section 8 program, I struggled for years to find stable housing. My kids moved in with my parents and I hopped from place to place. For a while I rented a condo until it was foreclosed. I then moved into my friend’s basement, which was infested with mice and quickly became unbearable.

It wasn’t until my social worker told me about Aeon that I was able to find some stability. A lot of landlords wouldn’t give me a chance based on my very short history of being a “less-than-ideal” tenant, but Aeon accepted my rental history and allowed me to move into one of their affordable homes. I was ecstatic.

Having a home was crucial for me to pick up the pieces of my life, but so many others don’t get that chance. It’s time we rethink the system, and how we can do better to help people find stability.