"It's our money!": APAC proposes fixes to the state's Manufactured Home Relocation Trust Fund

St. Paul, MN—Park residents in the hundreds descended on the State Capitol in 2007 to pressure the Minnesota Legislature to establish the Manufactured Home Relocation Trust Fund, funded by a $12 annual home owner fee. As a result, there is now a statewide guarantee that all manufactured home owners receive relocation compensation if all or part of their park closes.

Eight years later, however, relocation benefits have fallen behind the actual cost of moving. Residents are back at the Capitol with a simple message, “It’s our money. It should cover our costs.” APAC has proposed legislation—identified as Senate File 1291 and House File 1340—sponsored by Sen. Melissa Wiklund (DFL-Bloomington) and Rep. Anna Wills (R-Apple Valley).

Background
The Relocation Trust Fund came as the result of an unprecedented level of cooperation between the homeowners, park owners, League of Minnesota Cities, and Minnesota Housing Finance Agency. “For too long, state law ignored the financial devastation experienced by hundreds of working families each year. With this program, manufactured homeowners finally have the same right to be compensated when new development forces them to abandon their homes,” said Bev Adrian, Bloomington resident.

Prior to its adoption, park residents were not guaranteed compensation for relocation costs unless their city passed a local ordinance. Since only 22 cities passed such ordinances, over 100,000 residents in 380 cities remained unprotected.

How Does it Work?
The program is funded by a $12 annual fee paid each year by home owners and a fee of up to $3,250 (single section) and $6,000 (multi-section) per home paid by the park owner at closing. Benefits are provided for either moving costs or a home buyout. There are two-tiers of benefits: 22 cities with previous ordinances that cover actual costs, and 380 other cities that provide a capped maximum benefit. (A list of cities with ordinances is available on APAC’s web site.)

If your home can be moved, you now receive up to $4,000 for a single section home and up to $8,000 for a multi-section home. If the home cannot be moved, you now receive up to $5,000 for a single section home and up to $9,000 for a multi-section home. The current maximum benefit levels are below average moving costs, which make the benefits meaningless for low-income residents who can’t cover the difference.

The Proposal
APAC reviewed cost estimates from previous park closures and found moving costs for single section homes ranged from $4,310 to $6,477 and for multi-section homes from $8,385 to $12,169. The proposed legislation increases the maximum moving benefits to $6,000 (single section) and $12,000 (multi-section).

For home buyout, the current maximum benefit levels may fall far below appraised values. Even at full value, it is often impossible for residents to find comparable replacement housing since manufactured homes are a depreciating asset. Nevertheless, this proposal asks that the benefit increase to $7,000 for a single section home and $14,000 for a multi-section.

Relocation Trust Fund Balance Cap
This proposal leaves one important issue unresolved. A $1 million cap was placed on the Relocation Trust Fund balance in 2011. The cap was added during the special session without a public hearing or any resident input. It prevented collections of the $12 fee from occurring in 2012, 2013, and 2014 which likely cost the fund as least $1,050,000 based on the collection rates in 2010 and 2011.

If funds are exhausted, there is no provision for forwarding funds from another source, or conducting an emergency collection from residents. In addition, both local government and residents are barred from seeking benefits elsewhere. In the future, APAC will look to increase the cap to $5 million.

In addition, the proposal requires that the Minnesota Housing Finance Agency conduct a study to identify possible alternatives to having the park owners collect the $12 annual homeowner fee.