Particle or Wave: On Esther Sullivan's "Manufactured Insecurity"

Esther Sullivan | Manufactured Insecurity: Mobile Home Parks and Americans’ Tenuous Right to Place | University of California Press | 2018 | 264 Pages

Look quickly at the sociologist Esther Sullivan’s monograph about the mobile home park industry, Manufactured Insecurity, and you will find quite a bit of jargon, some interesting conclusions about a new set of data, painstaking documentation of well-known facts, and a bunch of implied policy conclusions. Look closer, and you will find a meta-story of a young person who ventures into a foreign world seeking knowledge. The young person struggles and then comes back scarred but wiser, bearing something of value. In researching the book, Sullivan spent two years living in two mobile home parks, one in Florida and the other in Texas, both of which were slated to close shortly. She conducted an extensive literature survey and interviewed hundreds, if not thousands, of tenants, with many of whom she kept in touch after the field work was done. Sullivan began the process almost by accident, while she was casting about for a dissertation topic. She came away with a PhD, knowledge and sense-data from a world she had hardly known existed when she had begun, and a well-defined set of policy convictions.  

I could not help but compare Sullivan’s story with my own. Like her, I knew nothing about the mobile home park world until I immersed myself in it in 2013. Like her, I live, breathe, and touch that world every day now, and like her, I have received wisdom and some worldly goods from it. Unlike Sullivan, I immersed myself not by doing academic fieldwork, but by buying, owning, and operating mobile home parks. I threw myself into the deep end on the capital side of the pool, and she did so on the resident side. Neither of us is an impartial observer. The log in her eye is blue; the log in mine is large, multi-colored, opaque, and, sometimes, painful. Sullivan is to be commended for venturing into this world, and for producing important research. However, the reader should remember that it takes several blind men to accurately portray an elephant, and that the manufactured housing industry is infinitely more complex than a large mammal.

It’s Just Some Trailer Trash. Why Should We care?

Approximately twenty-two million, or six and a half percent, of all Americans live in manufactured homes. (1) Most of these homes sit on rented land in mobile home parks; Sullivan chose a topic that is both important and timely. 

America is facing a housing crisis. Mobile home park lot rents are cheap ($250 to $500, depending on region, location, and quality). A mobile home park is the only type of non-subsidized housing where a family of four can live comfortably on a minimum wage salary.  As such, mobile home parks are a powerful tool in the struggle against housing insecurity. A well-run park is not just cheap; it is also a good place to live. A mobile home is a better living environment than an apartment. Nobody bangs on the walls or dances on the floor above you. You can park your car at your door. Since you own your own home, you and your neighbors have pride of ownership. It is a working-man’s gated community. Mobile home parks are a cheap, livable, sustainable answer to a pressing need.

Despite its good side, the industry is not perfect. Power imbalances are baked into the business model. Most tenants own their homes but rent the land on which the home sits. Mobile homes may only be moved by a licensed mover, at significant expense (around $5,000 to tear down, move and install a singlewide; twice that for a doublewide). That is out of reach for a resident who struggles to pay lot rent of $350 a month. This means that residents cannot vote with their feet the way apartment tenants can if the park owner jacks up the rent too quickly or fails to fix the sewer lines. Absent proper regulation, bad actors can—and do—take advantage of this. 

To complicate things further, mobile home parks are a hot asset class now. During the past decade, REITs, private equity funds, and middle-class people looking to escape the corporate world have hoovered them up from small mom-and-pop owners. Because of this, the industry has seen significant consolidation of ownership and routinization of management. This change has professionalized and cleaned up the space; however, it has also generated push-back because it has, in certain cases, resulted in lot rent increases and stricter enforcement of quality-of-life park regulations.

Money, housing, property rights, a shrinking social safety net, residents squeezed by a gig economy, PE funds buying up arbitrage opportunities; that’s a mess that calls for nuanced solutions.  

Let’s explore the nuances.

Jargon Alert

First, a quibble about style. Sullivan’s narrative cuts, whiplash-like, between personal anecdotes from her field work and academo-babble-ridden prose. The personal stories are compelling, but the theoretical discussion is laden with gratuitous, dissonant, scholastiferous verbiation. For example:

Emplacing place – borrowing phenomenological understandings of place from the fields of philosophy and human geography – helps us understand places as sources of identity (Relph, 1976), as sources of security (Tuan 1977), and as sources of roots (Heidegger 1958); 

[T]he problem of manufactured insecurity is a double-sided dilemma. (2); 

In the reviled trailer park, territorial stigmatization and the moralization of place are flip sides of the same coin.; 

Much has been said about the social and semiotic processes that produce urban marginalization and its spatial expression, territorial stigmatization (Wacquant 2009; Slater forthcoming). [24-25]  

Even for a dissertation, that is a bit much. Set phasers to “jargon”, and proceed with caution.

Ethos, Pathos, Logos – The Rhetorical Uses of Salience 

Much of the book is dedicated to documenting the trauma caused by eviction. The stories that Sullivan tells are horrific. For example, here is Luanne, a resident of a park in Florida that is slated to close, describing the psychological effects of the process:

I couldn’t get out of my pajamas all day, I was just – just dust me as you are going by, okay? That’s how hard it was. It’s hard but, you know, there’s a lot of people in the park, there are a lot of them that are far worse off than I am. Their homes cannot be moved or they have no family. They will stay here till the end and then take something and never wake up, that’s what they’ve told me. [123-124]

Eviction is one of the most painful and humiliating experiences that an ordinary person can suffer. An evicted tenant is ripped from the security of their home. Their belongings are put out on the street. Standing amidst their belongings, they have to explain to their children what has happened and where they will sleep that night. The material evidence alone speaks to this. When my managers and I repossess the home of an evicted tenant, we might find sheets of elementary-school homework marked up in red pen, half-eaten birthday cakes, poetry and song lyrics scrawled on the walls, empty syringes. Each one of these objects tells a story. Regardless of what a resident did to occasion their eviction, they suffer when they are made homeless, and children and other innocent family members share in the trauma. The hybrid nature of mobile home ownership exacerbates the problem. When a mobile home park tenant is evicted, they often cannot afford to bring their home with them. Park owners can take advantage of this to purchase homes owned by evicted residents at fire-sale prices, either directly from the tenant or at abandoned-property auctions. Since a tenant’s home is usually their most valuable asset, this means that an eviction may serve to relieve a tenant of both their home and their life savings. 

But, while Sullivan’s depiction of this suffering is powerful, you don’t need a hundred twenty-five pages of jargon-heavy type to prove that water is wet. We all know that evictions are life-shattering. A long discussion might bring the trauma suffered by evicted residents to front of mind and make it salient; it does not teach us anything new.  

The term “salience”, as used here, is borrowed from behavioral economics and neuroscience. The salience of a perceived object or idea is a measure of the extent to which the applicable thing stands out from its peers. For example, a red dot in a field of white dots is more salient than the dots that it is surrounded by. A rattlesnake is more salient than the log that it is coiled around. To a survivor of a severe earthquake, an earthquake is a more salient potential cause of death than, say, French fries or high cholesterol. While salience can help us make good decisions in cases where fast thinking is required (a wailing siren, the crackle of small-arms fire, the sound of a rattlesnake shaking its tail, e.g.), the extent to which salient stimuli take up decision-making bandwidth can impede our ability to make good decisions when deliberative, top-down, memory-dependent or anticipatory thinking is needed. For example, when Judge Calabresi taught torts, he asked his students if they would approve a regulatory application for a device that would be a boon for commerce and increase convenience for a large portion of the population, but that would kill 1,000 Americans each month. Students, without exception, said “No”. Then, Calabresi would say, “Congratulations. You have just banned the automobile.” I believe that he told the story to show how regulatory sausage gets made. However, it is also a good illustration of how an undue focus on salient stimuli to the exclusion of less-salient but equally important factors can muck up the decision-making process.

Sullivan’s book focuses quite well on the salient stimulus of the trauma of eviction. It does not give equal weight to equally relevant but less salient factors. That limits the usefulness of the book. Decisions about land use and property management require deliberative, top-down thinking that goes beyond the merely salient. Readers looking for such guidance will have to look elsewhere.

None of this makes sense in the abstract, so let’s descend into the particular. Let’s say a resident of one of my parks owns a pitbull whose presence creates a risk for his neighbor’s toddlers. Let’s say another resident stops paying lot rent. A third shoots off fireworks in a way that prevents his neighbor, an old lady whose husband just died, from sleeping. All of these behaviors impinge on their neighbors’ health, safety, and ability to enjoy their property. As the owner of the park, I need to balance these interests. I cannot change the behavior of the non-complying tenants. I can’t make the pitbulls vaporize, force the non-payer to pay, or force the pyrotechnician to stop shooting off bottle rockets. The only thing that I can do under current law is to evict the non-compliers, or to threaten to do so unless they change their behavior. This is not to say that I should choose to evict in all of these cases, only that I should do so if the harm to non-evicted tenants of not enforcing the rules outweighs that suffered by the family that is evicted. I know that evictions are traumatic, and I wish I had more finely-crafted legal remedies at my disposal—but if I focus only on the trauma of eviction, I will let down the tenants who depend on me to provide them with clean, safe, and affordable housing. The salience of the interests represented is, and should be, irrelevant to the decision-making process.

A balancing of interests also needs to be done in cases where everyone in a park is eighty-sixed because of a change in land use, as in the parks where Sullivan did her fieldwork. For example, assume I sell one of my parks to a guy who wants to demolish the park and build a Home Depot on the site. Who benefits, who loses? The tenants suffer. Their trauma can be alleviated by notice and compensation laws, but the deracination can never be made painless or frictionless. My buyer and I both get a payday. The local community gets the convenience and economic boost of a Home Depot. Jobs are created and ancillary businesses get a bump; Home Depot Shareholders—most of whom are middle class people who hold HD shares in their IRAs, 401(k) plans, and Keoghs—benefit. The local government and the taxpayers of the town get revenue from the Home Depot. This boost in revenue may also be paired with a decrease in public spending. The local school district can now afford, say, more teachers with specialized training. What is the best way to balance the applicable interests?

There are three ways for a zoning board to do this. First, the board can prioritize the property rights of the owner and say that I should be able to do whatever I want with my asset without any restrictions regardless of consequences to other parties. The justification for this approach would be that, although there would only be one (or two, if you count my buyer) big winners in the individual case, property rights benefit everyone. Once you begin to chip away at them, you start down a slippery slope that ends in Maoism, or worse. Another approach would be a purely utilitarian method. This would require that the zoning board quantify and measure each util gained or lost by every party affected by the transaction. To the extent that the land-use change results in a net utility increase, it should be approved; to the extent that it decreases net utility, it should not be increased. A third approach is what I call “utilitarianism with a human face”. This approach recognizes that the losses caused by a park closure are few but deep, while gains are many but shallow. In the example above, maybe fifty families residing in the soon-to-be-closed park lose their homes; hundreds of students in the school district have access to the new teachers, thousands of residents of the town benefit from the presence of the new Home Depot, and hundreds of thousands of Home Depot shareholders earn a penny or so on their shares. Although the util count might appear to favor park closure at first glance, the loss to the park residents is not commensurate with the gain to the other parties because the loss of a home is the loss of a more deeply felt bottom-dollar asset, while the benefits to the other constituents give them only top-dollar, marginal utility. In order to make these effects commensurate with each other, a zoning board that adopts a utilitarianism-with-a-human-face approach will approve the land-use change, but give compensation to the dispossessed tenants, in order to lessen the blow to the party who suffers the deepest cut.

Many zoning boards use this approach or something like it, although laws vary from state to state. For example, Texas provides no compensation at all to tenants. In Texas, when a park shuts down, tenants are entitled to nothing more than a de facto one-month period of notice. By contrast, in Florida, land use changes must be approved by the local city council. If the city council decides to approve the park closure, residents are given a minimum of six months’ notice, as well as vouchers of $3,000 or $6,000 to offset the cost of moving a singlewide or a doublewide, respectively (or $1,500 in cash, if their home cannot be moved). This compensation is paid out of a state-run fund. New York State, where my parks are located, is still more generous to residents. Tenants are entitled to two years’ notice and up to $15,000 in moving fees, to be paid by the park owner, rather than by a state-funded entity. (3)  

Sullivan lived through the closure process alongside her informants in both of the parks where she did her fieldwork. She reports that the deracination caused by the evictions was deeply traumatic to the residents of the parks that were closed and that, since the park residents are stigmatized in the eyes of the stick-built community, their views were not given adequate weight during the public review process. She also reports that land-use regulators tend to interpret the “highest and best use” of a parcel of land as the highest and best use to the people who make the law.  

In other words, she found that poor people got screwed.  

As elsewhere, the observations are well-documented, clearly depicted, and not really news. A further weakness is that Sullivan does not make explicit the policy conclusions she would like readers to draw from her observations. Does she mean to say that the process is unjust and badly executed, or that no interests other than those of tenants should be taken into account in making land-use decisions? The first of these conclusions is not controversial—poor people’s voices are drowned out all the time, and “highest and best” is a slippery concept easily manipulated by the rule-makers. The second is a much stronger statement, and would be more difficult to defend. But by not making the argument explicitly, she injects it into the conversation while absolving herself of having to defend it.

One interesting observation that Sullivan recounts is that evicted residents in Texas seemed to suffer less trauma than those in Florida, despite the fact that Florida’s tenant protection laws are much stronger than those in Texas. She advances two potential explanations for this. One is that, since the eviction process in Texas is short and sharp, tenants had barely started the grieving process by the time it was over. The other is that, in Florida, the manner in which neighboring park owners offered to transport evicted tenants’ homes and set them in their parks in exchange for the tenants’ vouchers caused problems. For one thing, some of the receiving parks were farther from tenants’ workplaces, or had higher lot rent, than the shuttered parks. For another, the transportation and installation of a large number of mobile homes in a short period of time caused logistical inconveniences to the residents whose homes were moved. The first of the explanations that she suggests is quite interesting, and may be useful to inform future discussions of the psychological effects of evictions. Small-government advocates might use it as support for the position that tenant-protection laws actually hurt tenants. I am uncomfortable with that interpretation (my instinct is that the problem is not government support per se, but, rather, poorly crafted government regulation), but absent further data, I remain agnostic. I think that the proper response to Sullivan’s objections regarding the implementation of the Florida voucher program is that government actions often give rise to unintended consequences. That does not mean that the voucher system is fundamentally flawed, but rather that the Florida regulators should have tweaked rules after they have had a chance to observe their real-world effects.  Notwithstanding the foregoing, praise is due Sullivan for finding these data and drawing attention to them.

Follow the Money

The conundrum of privately-owned residential rental real estate is that, like light, it is two things at once. To a resident, a dwelling unit is home. It is where you lay your head at night, where you raise your children and where, when you have to go there, they have to take you in. By contrast, to an owner, a dwelling unit is an entry on a balance sheet. In the case of affordable housing, the tension is exacerbated by the decreasing marginal utility of wealth. Mobile home park tenants pay lot rent with their bottom dollars. Owners tend to have more of an equity cushion. This means that, in subjective terms, when owners and tenants face off against each other, tenants play for higher stakes than owners.

Is there a way to square this circle? I think the answer is yes. A robust publicly-funded rental insurance scheme would be a good place to start. Under a scheme of this type, each month, landlords and tenants would pay a small amount (say, two to five percent of monthly rent) into a common pool. In the event of a default, the pool administrator would make the landlord whole and collect what it can from the tenant. The scheme would benefit tenants because it would obviate the need for security deposits and remove the specter of eviction for non-payment. In exchange for loss of a small amount of revenue, landlords would receive a guarantee of their rental income. Another potentially useful solution would be an alternative dispute resolution mechanism that is cheaper, faster, more accessible and more efficient than the courts. Solutions like this would allow the law to both respect property rights of owners and to lessen potential trauma to residents.

In the final substantive chapter of the book (“Communities as Currency”), Sullivan dives into the world of mobile home parks as a business. She attends a “mobile home park bootcamp”, put on by an organization called Mobile Home University, for people who want to learn about investing in mobile home parks. (4) She describes the process by which loans backed by mobile homes are sold to special purpose vehicles, sliced, diced and issued as residential mortgage-backed securities (“RMBS”), and she writes about how large investors, like Warren Buffett and Sam Zell, have entered the space. Her description of this world shows that she is deeply, ontologically uncomfortable with the dual nature of residential rental property described above. A pervasive, implied “ick” underlies the discussion.

The problem is that “ick” is a reasonable reaction to an unpleasant fact, but it is not a policy proposal. It may cause cognitive dissonance to know that a loan secured by a 1996 Champion singlewide occupied by a family of four with an autistic child, a child with severe asthma, and a parent who has been laid off is owned by a Cayman Islands special purpose entity that issues RMBS to institutional investors, but the borrowers on the loan do not care where their payments go, so long as their monthly payment does not increase and each payment is applied to pay down principal. Similarly, it may make you uncomfortable to know that lot rents paid by that family go to a bank account owned by a private equity fund—but the family won’t care, so long as lot rent is reasonable and the fund manages the park well. Our task is to craft good outcomes for park residents. If we merely shrink from distasteful realities, we do our residents a grave disservice.

Sullivan also devotes space to the idea that park ownership is “rent seeking” behavior. (5) This discussion is deeply problematic. Rent-seeking behavior is an activity whereby investors make money without working or adding value, but rather by deploying capital. Operating residential real estate is not rent-seeking behavior. The tax law has long held that the ownership and operation of rental property, even if done through agents, constitutes an active trade or business, rather than a mere passive investment. (6) Courts and the IRS have taken this position because operating rental property is, well, work. Ditches need to be dug, water risers need to be replaced, old ladies who live alone need to be listened to patiently when you knock on their door. Someone has to answer the phone when a septic tank overflows in the middle of the night. This is quite different from owning stocks or bonds, speculating in cryptocurrency, or selling volatility. The fact that rents are collected in the course of the business of operating a mobile home park should not cause commentators to confuse that business with passive rent-seeking behavior.

The Large, Beneficent Elephant in the Room

Sullivan’s informants all agreed upon one thing: that none of them wanted to be displaced. This was, by and large, because they liked where they lived. For example, here is Lupe, a resident of the park in Texas where Sullivan lived, discussing life in the park from which she would shortly be evicted:

[The park was] just calm, I loved-loved this trailer park. I call it home. Whenever I go somewhere and I come back, I don’t know, I just feel it’s home, because I’ve been here so long I think. So I love living here and I have never seen gangbangers like in Chicago. It’s not as hectic as it was over there. (103)

Here’s Gloria, a resident in the same park, discussing her decision to move into another mobile home park instead of an apartment after the first park closed down:

I didn’t think about it [moving into an apartment] because it would be more expensive to live in an apartment because you have to pay all those bills and I only have to pay the $200 [lot rent] and if I had to rent an apartment I wouldn’t have enough to send to Mexico and to pay my bills here and also pay for food here. (115)

And here is Sullivan describing a conversation that she had with another resident of that park, the joy that she got from pride of ownership of her home which was moved to yet another park:

Señora Reyes expressed her deep sense of relief at returning home: ‘It was great to get back into my house, because it is my house. I wanted to be home already.’ On the couch next to us her daughter laughed and nodded in agreement: ‘She told me every day: Take me back, take me back.’ (144)

Lupe likes the sense of community that mobile home parks give their residents. Gloria likes the affordability. Señora Reyes likes owning an asset and taking pride in it. That doesn’t tell me that something is wrong with the current mobile home park business model; it tells me that something is right with it. Sullivan’s book appears to be intended as an indictment of the manufactured housing business—but the data that it presents support the opposite conclusion. The industry would benefit from more nuanced, well-crafted regulation than what we have today, but it would be a grave disservice to our residents to abolish it.

(1) Although many people refer to mobile home parks as “trailer parks” and to manufactured homes as “trailers”, it is wrong to do so. It is inaccurate because a mobile home is not a trailer. A trailer is a structure on wheels that can be attached to a four-wheeled car or a small truck. By contrast, a mobile home can only be moved using a full-sized tractor and special equipment operated by a licensed mobile home mover. It is offensive to refer to a mobile home park as a “trailer park” because the term connotes “trailer trash” and similar stereotypes. The proper, Hoyle-compliant term is “manufactured housing community”. I use the more common “mobile home park”.

(2) Query whether there could be a single- or triple-sided dilemma.

(3) For a discussion of tenant compensation laws in these three states, see Kaufmann, Texas, Florida, New York – Fuc*, Marry, Kill, https://dirtlease.com/texas-florida-new-york-fuc-marry-kill/

(4) Full disclosure: I attended a Mobile Home University bootcamp in 2017 and found it both informative and enjoyable.

(5) For a discussion of rent-seeking behavior and its harmful effects, see, e.g. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Harvard, 2017).

(6) De Amodio v. Commissioner, 299 F.2d 623 (3d Cir. 1962). In 2019, the Service issued guidance to the effect that all real estate other than real estate held under a triple net lease should be treated as an active trade or business for purposes of regulations under code section 199A. Notice 2019-07.