Communities Work with Residents Who Need Time, Help to Pay
While reports come in from various sectors of the housing market that up to a third of renters have yet to pay April rent, early feedback from the manufactured housing industry shows a more promising trend.
Much more inquiry is warranted and underway, but owners and operators who oversee tens of thousands of homesites in nine states report that more than 90 percent of residents in their communities paid April rent during the first week of the month.
Sam Landy is president and CEO of UMH Properties, one of the largest, and the longest-running manufactured home community portfolios in the industry.
“As of the end of the week 86.6% of April rent has been paid, and we’re allowing anyone who has lost their job because of the virus, they don’t have to pay their rent extending into May as needed,” Landy said. “Thereafter, when things get going again, we’re going to allow residents to pay the back rent through 25% installments each of the following months, as needed.
“We’re making it as solvable as we can for the resident and there won’t be any real receivable issues for us,” he said. “We’re pretty confident about that.”
UMH Properties owns more than 115 manufactured home communities in Indiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Tennessee. Those properties include residents who pay lot rent to UMH, as well as 18,000 residents who rent a home at an average cost of $700 per month.
Other segments of the rental market have reported nearly a third of tenants had yet to pay April rent.
A Positive Sign from Manufactured Housing Communities
Manufactured home owners historically have had a more difficult time than other buyers in obtaining home financing, because they generally have been considered a higher risk for those who extend and secure home loans.
“The fact that 82% paid today is a good illustration of what we’ve been saying all along,” Landy said. “This is a very stable housing stock with good customers who care about where they live.”
“You can do better in the short-term not looking for black swan events, but we’ve always been cautious in that way, which allows you to weather a time like this,” Landy said. “Clearly we have the staying power to get through this and maintain our dividend and perhaps be able to trade at a premium given the stable nature of our organization.”
Landy said sales have continued through the company website and UMH is conducting remote closings.
“So, it’s painful because we are concerned about our residents, and from operations, we’re a growth company and it’s hard to grow in this kind of limited environment, but we have no concerns about maintaining our value, paying the dividends, and getting back to normal business as soon as it makes sense.”
April Rent at Five California Communities
On the other side of the country, Newport Pacific’s Maria Horton manages four communities in Southern California. She said even among communities with the area’s most affordable rent, residents have paid April rent or have communicated when and how they would pay. Of 479 homesites in the parks she oversees, 448 residents — or 93.5% — had paid during the first week of April.
While April has seen unprecedented changes in the market, and produced a great amount of uncertainty for residents and owners, May rents could be more of a concern.
“We want people to pay as soon as they can, but right now residents can pay any time during the month without a fee,” Horton said.
“I have a park I manage where the owners sent a letter to residents to let them know they’d be eligible for a raffle of a $500 gift card if rent was paid prior to April 10,” she said. “They’re also providing $25 gift cards for those who successfully set up online payment for the first time. And these incentives likely will carry through to May.”
Social security recipients who receive checks at a later date in the month and notify the office of the date of receipt for payment of their rent also will be entered in the drawing if rent is paid in full, Horton said.
Outside of rent collection, business continues if not face-to-face. Horton is making remote appointments and conducting regular drive-throughs of the manufactured home communities she oversees.
“We are calling and checking in on people all the time to see if there’s anything they need,” Horton said. “People come out little by little to walk their dogs for instance, and they wear their masks. There’s less activity in the senior parks, but people seem to be doing well.”
Georgia Owner Expands Assistance Program
David Roden owns Mountainview Estates in Ross, Ga. He has 75 homesites occupied and said he’s given residents until the 15th of the month to pay in April. All but five residents were able to pay April rent, and the others have indicated when and how they will pay.
“We are very pleased with our residents and their willingness to work with us and communicate to us their needs and problems so we can work out a solution with them,” Roden said. “We expect more non-payments in May, but if the stimulus checks come in, I may be surprised.”
Roden and other southeast community owners involved in the annual SECO event have expanded a program that was initiated to help armed forces veterans in need of assistance. Roden said the Veterans Assistance Fund has been expanded to include health care workers who are on the front lines fighting coronavirus.
“We believe they are the real heroes at this time, the ones who have stepped up to save lives,” Roden said.
For additional reading on how coronavirus is impacting the manufactured housing industry, take a look at post on coronavirus-related manufactured housing news by state, as well as Four Protective Measures to Keep Residents Safe. Bookmark the MHInsider homepage and check back regularly for manufactured housing news!