LTE also addressed to Silver City Mayor and Councilors

Dear Editor: 

Dear Mayor and Councilors,

Opportunity to Purchase (OTP) ordinances are vital not only for homeowners in manufactured home lot-lease communities, but also for the towns they are situated in.

We are seeing why this matters right now at La Plata Mobile Manor. After the land beneath residents' homes was sold recently to out-of-state investors, residents faced an immediate 70% lot-rent increase, along with new fees, including $35 per month for each household pet—even pets that never leave the resident's property. For low-income families and retirees living on fixed incomes, this action puts hundreds of people at risk of experiencing homelessness even though their homes might be paid for.

These residents own their homes, maintain them, insure them, and pay property taxes on them. These homes often represent most of a person or family's accumulated wealth and their only realistic source of housing security.

The homes have personal value as well as property value. The Grant County Assessor lists the accumulated value of the homes at La Plata Mobile Manor to be greater than the assessed value of the land that was sold out from under them to the out-of-state investors who now determine the future of these Silver City residents, their property, and possibly their mental and physical well being.

Manufactured home communities (MHCs) provide affordable unsubsidized homeownership to households at or below 80% AMI, with many residents earning substantially less. Older homes may sell for $10,000 to $30,000, or less, while newer homes can cost $100,000, or more. This alone makes these communities valuable and their loss devastating. Nowhere else is there unsubsidized affordable housing and homeownership for truly low-income individuals and families.

When the land is sold and lot rents become unaffordable, homeowners cannot simply move. Their homes are effectively immobile. And they may not be able to sell, because few buyers will purchase a home burdened by unaffordable lot rent. A home worth $20,000 or $40,000 can rapidly lose much if not all its value.

While a $10,000 manufactured home may seem like a small loss compared to other homes, for a retiree living at 30-50% of the Area Median Income—and we have many in New Mexico—it can be the difference between homeownership and homelessness.

That vulnerability is precisely what makes these properties attractive to some investors. Frank Rolfe, a prominent promoter of manufactured-home-community investing, has described the advantage bluntly: "The customers are stuck there. They don't have the option. They can't afford to move the trailer. The only way they can object to your rent increase is to walk off and leave the trailer. In which case, it becomes abandoned property, so you can recycle it and put somebody else in it. You really hold all the cards."

OTP changes that equation. It does not prevent a landowner from selling. It does not require that they sell at a discount. It simply gives the homeowners whose homes sit on that land a meaningful opportunity to purchase the community land and preserve their homes and affordable housing community—something that benefits the homeowners and community at large.

But an opportunity is meaningful only if residents have enough time to use it.

The current draft gives residents just 15 calendar days to organize, obtain legal and financial assistance, review records, assess the property and infrastructure, develop a budget, locate financing partners, and submit a proposed purchase agreement. It then allows only 45 days for financing and closing.

These are not ordinary residential real estate transactions, although even they would be challenging with those deadlines. They are complex commercial real estate purchases involving dozens of homeowners, specialized financing, inspections, appraisals, legal review, and substantial due diligence. Fifteen days can expire before residents can even assemble the professionals they need.

Colorado provides an important lesson. Its 2020 OTP law initially allowed 90 days to make an offer and arrange financing, followed by 90 days to close. Two years later, Colorado expanded the initial period to 180 days, recognizing that resident purchases require adequate time. Since 2020, Colorado has added 19 resident-owned communities, preserving nearly 1,000 affordable homes.

Albuquerque provides the opposite lesson. Its ordinance gives residents only 15 calendar days, and it has yet to produce a resident-owned community. A right that expires before residents can organize, obtain advice, conduct due diligence, and assemble financing is not much of a right at all.

Affordable housing advocates are working to develop financing and technical assistance through Housing New Mexico MFA and other partners. But financing cannot help residents if the ordinance does not give them enough time to put it to use.

Silver City has an opportunity to learn from both the successes and shortcomings of other jurisdictions and enact an ordinance that actually works. I urge the Council to provide 90 days for residents to present a proposed purchase agreement, followed by 90 days for due diligence, financing, and closing.

Doing so will preserve stable, affordable homeownership, protect residents from displacement, help Silver City preserve its affordable housing stock, reduce pressure on social services, and keep local wealth circulating in the community rather than being extracted elsewhere.

Thank you for your consideration.

Joanne DeMichele