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Low-income people turning to RVs, while RV parks change with the times

By Andy Zipser
Two unrelated developments this past week affecting two RV parks, one in New Jersey and one in North Carolina, illustrate two trends on a collision course. And as with most trends that involve economic forces, those who get hurt the most are those who have the least.

The first trend is that of low-income people increasingly turning to RVs for permanent housing. Notwithstanding industry assertions about RVs not being built for year-round use, the country is studded with RV parks that cater largely or entirely to owners of travel trailers, fifth-wheels and the occasional motorhome who have nowhere else to live. In years past, this population would turn to trailer courts—and many still do. But as the number of trailer courts has diminished and their rents have soared, those squeezed out of conventional rental housing by that market’s price distortions have had to look elsewhere. RVs, comparatively small and under-insulated though they are, therefore have become the new housing of last resort.

Parks changing their ways

The second trend, alas, is that RV parks are now tracing the same inflationary curve as the trailer courts that preceded them. Some are shutting down, for a variety of reasons, and many more are either restricting or phasing out long-term campers altogether; almost all are increasing rents, in the most extreme cases doubling their previous rates. And as with the trailer courts, that means RV parks are pushing out those least able to keep up with rising costs, notably people on fixed incomes and low-wage workers.

In the first instance, a tenant of Surf and Stream Campground in Manchester, NJ, earlier this week filed a lawsuit against the campground’s owners and Ocean County, seeking to halt eviction proceedings and to get help for the residents to find new homes. The campground’s owners are selling the 20-acre property to the county for a nifty $7.45 million–or a whopping $372,500 an acre–to be preserved as open space. The 160 people who have made their homes there are just so much collateral damage. They include veterans with PTSD, single parents in financial distress, senior citizens and people with disabilities, all of whom will be hard-pressed to find a one-bedroom apartment for even double the $600 a month they were paying for their RV sites.

The owners of the RV park, it should be noted, deny that anyone lives at the campground year-round. The residents, of course, say otherwise—and shouldn’t have a hard time proving the point—which may not be enough to fend off evictions but may trigger assistance from the state’s Relocation Assistance Act. That’s not great, but at least requires the state and county to ensure that those who get displaced are able to find “comparable decent safe and sanitary housing” elsewhere.

The second example, still in its embryonic stage, comes to us in the form of an online real estate listing that popped up this week, offering to sell the Homestead RV Park in Maggie Valley, North Carolina, for a mere $1,650,000. Since the “park” is only 2 acres, that works out to $825,000 per, which makes the New Jersey deal look like a bargain. Crammed into that scant acreage are a modest “clubhouse” and 22 RV “lots,” which the seller earnestly informs us bring in an average monthly rent of $550.



Try to learn more about the Homestead RV Park and you’ll quickly find that it has never been reviewed and has no website, despite being located—as the real estate listing observes—“in the center of the famous vacation destination of Maggie Valley.” How can that be? Quite simply because the park is basically an RV retirement community, its year-round occupancy restricted to “responsible adults age 45 and up.”

Do the math and you’ll quickly figure out that the Homestead has an annual gross of $132,000. Because the seller volunteers that his annual operating expenses are $31,680, you may conclude that he has a net operating income just north of $100,000—which, at his asking price, yields a capitalization rate of 6%. Even in the best of times that’s an awfully low return—and these are not the best of times. Indeed, a buyer would be lucky to get a commercial loan at 6% right now, which means the park’s current cash flow wouldn’t be enough even to cover monthly loan payments.

So maybe that means this park will never sell at the asking price. Or maybe, just maybe, a potential buyer will decide that if current cash flow doesn’t cover expenses, well … increase the flow. With Maggie Valley a happening place, with limited room in the mountain valley for additional RV sites, and with the average local one-bedroom apartment renting for $1,400—when one can be found, that is—doubling site rates to $1,100 a month would maintain the same net operating income as is enjoyed by the current owner, even with an outsized mortgage.

Of course, there is that pesky collateral damage problem to consider. But surely a bunch of “responsible adults age 45 and up” should be able to figure out how to cover a doubling of their housing costs—right?

 PREVIOUSLY FROM ANDY. . . 

State park officials could teach the private sector a thing or two

By Andy Zipser
Last Sunday, RVtravel.com published a news story I had written about a Colorado audit of its state parks. The audit confirmed what many RVers already knew: that park RV sites were sitting empty despite growing demand, that the state was losing millions of dollars in lost campground fees, and that reservation software that could prevent some of these problems was being misused and even disabled. The causes of these problems, the audit concluded, included lack of training and lack of oversight, as well as inconsistent policy enforcement. Good news, right? Continue reading.

Andy Zipser is the author of Renting Dirt, the story of his family’s experiences owning and operating a Virginia RV park, and of Turning Dirt, a step-by-step guide for finding, buying and operating an RV park and campground. Both books are available through bookstores or at Amazon.com.

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Tom A B
30 days ago

While most of these comments are off-topic, they make some good points. On that note, people turn to RVs for permanent housing because they have no better alternative. The long-term solution to affordable housing is tiny houses. Many cities are not receptive to this yet, but there really is no better alternative.

Let me explain. Developers don’t want to build affordable housing. That’s not where the money is. This is why just building more housing won’t solve the affordable housing problem. If you wait for the private sector to fix the affordable housing problem, it will never get fixed. The cities must get directly involved. Also, in a lot of cities, you have fairly large homes in areas that were once upper-middle class that are now in lower-middle class areas and are not in great condition. Tear down one of these houses and you can put up four tiny houses on the lot. Now you’ve got a house that’s cheap enough that people who couldn’t afford even rent can afford a mortgage.

Tom A B
1 month ago

This article was an extremely well written counterpoint, and very convincing. It would have been easy to take the government-bashing route, but that is low-hanging fruit. Finding the positive in a negative is always harder. Well done.

Elee
1 month ago

There are some of us who choose not to have the govt. In our personal business, they want their money and if you’re living on YOUR property and not building a house they can’t get their money! Personally I’d fence my property, with trespassing law posted everywhere and a large lock on gate. Obviously foliage will block any sight into property, and if a drone showed up on property, would be shot down as trespassing and thrown over the gate for them to retrieve!!! We chose to move out of house, buy 36 foot toy hauler and turbo diesel truck pulled my Harley up into back door and took off to see the country. We found some awesome people who rent us a spot for 200.00 a month, we have septic, well water (but in NC they won’t turn the power on because it’s not a house) but no worries we have solar and generator. And we have never regretted it. We live deliberately, grow our own food etc etc. THOSE WHO MATTER DONT JUDGE AND THOSE WHO JUDGE DONT MATTER! Have a happy RV life y’all….

Kathy Nethercutt
1 month ago
Reply to  Elee

God bless you. I love the way you think.

Priscilla
1 month ago
Reply to  Elee

They always Say change Is good Sounds like a new adventure

Johnny Dupuis
1 month ago
Reply to  Elee

I agree 👍

Matt Addiego
1 month ago

What’s really crazy is when you do OWN YOUR OWN PROPERTY AND ARE FORCED OUT BY CODE COMPLIANCE!!! Just because you live in an RV… I’m not in medical, I don’t get cash aid or food stamps. I work every day and am doing the best I can with what I’ve earned however, my living situation somehow is affecting my neighbors in a way that gives the county the permission to kick me off my land. Apparently I’m not good enough for this club! It’s absurd! My neighbors by the way are acres from me and can’t even see my yard, which is planted with many flowers, fruit trees etc.

Heather Bireley
1 month ago
Reply to  Matt Addiego

Right now in Forest Ridge Neighborhood in Tarpon Springs Florida are attempting to make bylaw that you have only 6 hrs to have your boat, RV, any truck larger than 1ton, work vehicles, class B, and 5th wheelers to adhere to. So no picking your personal hobby on Friday to stock up for Saturday will break law, and returning Saturday evening for Sunday would be a 2nd overnight. It’s freaking out of line and out of control. They said they will put liens on our homes. We don’t mind if we have to store our RV, but now we have no turn around time to prep for cleaning and getting it stocked for a trip. Terrible and too restrictive.

Randy
1 month ago

It’s the same with my HOA. They sent me a letter to move my camper or they would put a lien on my house. A neighbor has a boat and an RV in his driveway all the time. No one is living in it. It’s just parked there! I asked him how he got away with it and he said he pasted a picture of a middle finger on the back of the HOA’s letter and sent it back to them. He said he hasn’t heard a word since. I did the same. I had no intention of leaving my RV there permanently. We just got delayed leaving and it was in the driveway for four whole days! There goes the neighborhood! They must have sent the letter the first day they saw my RV!

AdaLahdi
1 month ago

The higher the property taxes the higher the rent and overall costs. It is the burden of taxes. Poop rolls downhill.

Ian mcvey
1 month ago

Well they had a minimum of 45 years to figure their lives out….

Al LeFeusch
1 month ago
Reply to  Ian mcvey

That’s pretty harsh. I live in an RV full time when I’m in North America and don’t have financial issues, because I chose this life in retirement and have plenty of funds. But, I meet people who live in parks and their stories vary greatly. They didn’t all choose it and they didn’t all used to be in that situation. I met a lady with cancer who was a business exec but the cancer has eaten up her funds and made her unable to work. Why would you judge people like that?

Last edited 1 month ago by Al LeFeusch
cathy ahring
1 month ago

Nm is the same way.vacancies with no campers occupied

Tammie
1 month ago

My family(of 7) actually lives in an RV by choice. It started by accident(we were transferred 2k miles to CA on 2/27/20 & needed a way to ride out the pandemic), however we love it,my kids get upset if we talk about buying another house

My husband makes 220k/yr,however we enjoy traveling every 4wks or so & kids love having a huge pool, clubhouse, tennis & basketball courts, pickleball, and most of all, weekend activities(crafts, bingo,movies,DJ dance parties,luaus,magicians,hypnotists, etc…EVERY weekend)

We enjoy having extra money. I have MS, meds are quite expensive.Our middle daughter is an elite gymnast(gas & monthly fees are more than the average American mortgage).We can handle all of that,PLUS still max 401k contributions,AND save a little.Plus still afford to travel monthly&do things(x7) while traveling. We could not buy a house &manage all of that-life would be stressful.

We enjoy our minimal stress,maximum enjoyment life very much!

Marcus Price
1 month ago

If I you don’t own it, you have nothing to say about the rent or sale of it. Period. Housing is not a right. It is something that you pay the going rate for.

cathy ahring
1 month ago
Reply to  Marcus Price

Sounds like you are a landlord greedy

Prolifeconserv
1 month ago
Reply to  Marcus Price

I agree, if you don’t have property or a home it’s because you didn’t make wise choices. Everyone lives by the choices they made, your problems are not my responsibility. I have rental property, if you can’t pay my rate, you don’t live in my houses.

suzanne Ferris
1 month ago
Reply to  Prolifeconserv

The smug assumptions about what others don’t have any control over is so sad. Inheritances, good health, being in the right place at the right time. It is just not so simple as you didn’t try to earn more money or buy that particular house.

Tom
1 month ago
Reply to  Prolifeconserv

You seem like an {bleeped} landlord with that attitude, I would not rent from you anyways.

Judi
1 month ago
Reply to  Prolifeconserv

Wow…. Not always the case. Some people are just less fortunate. Im not playing victim here but life is different for everyone. Not by any bad choice they may have made. Sorry but just a rude ridiculous statement.

bill
1 month ago

I look in the mirror and ask the same question…

Bill Jones
1 month ago

RV parks and campgrounds are becoming trailer parks. The outer perimeters dedicated to semi-permanent campers with the center spots for us shorter term campers.

Admin
Chuck Woodbury(@chuck)
1 month ago
Reply to  Bill Jones

Bill, I agree with you. There are fewer spaces for those RVers who like to move around often and need a place while “passing through.”

Al LeFeusch
1 month ago
Reply to  Chuck Woodbury

There is *always* a place… 😁

Sharon B
1 month ago
Reply to  Bill Jones

So many questions so many answers so many opinions. My present opinion for me is I love living in my fifth wheel and having a 17’ travel trailer for travel. At this moment I would never own a house again nor could I actually afford one.
Are you kidding with the property taxes and the cost of homes these days I could buy a brand new dually truck to pull my 16,000 pound fifth wheel. Do I want white or silver. I have a silver Silverado so maybe I should get a white Silverado 3500. I guess I’ll just have to keep on dreaming ahhhhhh

Randy
1 month ago
Reply to  Sharon B

In 18 months, we are selling the house and moving into our RV. With the house paid off, we still pay $400 a month for real estate taxes and insurance. It’s like paying rent on property you own. We are moving to a semi-permanent RV site that costs $150 a month with full hook ups. Electricity is metered. This will make our retirement much more affordable and less stressful. The person who said, “The joy of home ownership” never actually owned a home. They’re money pits that require a lot of upkeep. Everything on our fifth wheel is plug and play. I’ve replaced a hot water heater in about an hour with no skills!

Dave
1 month ago

What’s the solution?

Andy
1 month ago
Reply to  Dave

From yesterday’s Wall Street Journal:

“The limited inventory of homes has pushed up housing costs for buyers and renters alike. Median home prices shot above $400,000 for the first time in May while sales activity slowed under pressure from higher mortgage costs. The national median rent in April rose more than 16% from a year earlier, according to rental website Apartment List.”

It follows that “the solution” requires a huge increase in the housing supply, and especially low-cost housing. How to achieve that, however, is a complex discussion beyond the scope of this teeny space. . . .

Tim
1 month ago
Reply to  Andy

Complex is right.
Google NJ Mt Laurel decision.

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