Policy Report - Park Closing Ordinance

Manufactured home parks provide the largest source of unsubsidized affordable housing in the state. They serve those individuals who are very low-income and provide opportunities for home ownership. These parks, however, are increasingly at risk due to rising land values, deferred maintenance, and the desire to increase the local tax base. This risk is substantial because Minnesota has approximately 950 manufactured home parks, containing nearly 50,000 homes and housing approximately 150,000 residents. Moreover, many of these parks are experiencing increased development pressures and risks of closure. To the residents of manufactured home parks, park closures mean displacement from their homes and communities, loss of affordable housing, and oppressive out-of-pocket expenses.

Owners of traditional stick-built homes are fully compensated when new development forces them to abandon their homes, but residents of parks are not. Park residents face an unusual housing situation because they own their homes but rent the land. The closing of a park can be financially devastating as it often means the loss of homes since most manufactured homes cannot be moved due to their poor condition, moving costs, shortage of available lots, and/or parks barring homes over ten years old. The closure of a park also affects the greater community, since local shelters and transitional housing facilities are already unable to cope with the increasing numbers of people needing services.

State and local governments have a vital role in addressing this problem because they license and regulate parks, restrictively zone manufactured homes to parks, adopt goals to increase minority home ownership, have plans to end homelessness, and provide services to those in need. State and local governments have the ability to pass a park closing ordinance (also known as relocation compensation ordinance) which will protect residents from the financial losses of a park closing. These ordinances provide a guarantee that when a park is closed, the park owner and/or buyer pay the reasonable relocation costs to move each home within a 25-mile radius, or if the home cannot be moved, the owner/buyer buys out the home at its taxed market value or appraised market value. Twenty-one cities have adopted ordinances leaving 90% of manufactured home parks unprotected by a park closing ordinance. This means that approximately 135,000 residents, most of whom are low-income, would lose their homes and thousands of dollars if their park were closed.

This report looks at the importance of manufactured home parks, their demographics and other substantial statistics. It explains what has created the critical need for park closing ordinances, and how park closures and ordinances affect both the manufactured home park residents and the greater community.