Trailer Parks: An Affordable Housing Solution? 2

Wednesday, September 14th, 2016
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Housing prices in the world’s most desirable cities are exploding, pricing out even relatively high-income people. Buying a house in Sydney requires a pre-tax income of more than $150,000, according to a study by broker Mortgage Choice. Other capital cities show similar statistics, leaving many residents as lifelong renters. Trailer parks, if developed properly, could address the affordability problem, perhaps more efficiently than any other solution.

Though they’re sometimes the object of ridicule and fear, especially in the US, trailer parks are actually an example of forward-thinking and adaptive zoning.

Providing thousands more housing units is often simply a matter of allowing far higher densities than the traditional suburban block, and mobile homes and manufactured housing can meet demand quickly and with great flexibility, while keeping costs surprisingly low.

Australia’s most densely populated urban areas contain some 8,800 residents per square kilometre, and those areas are some of the most expensive.

Trailer parks, in contrast, can accommodate a vastly higher number of residents in a given area, and in a pleasant way. They can be designed as villages that target retirees, Millennials, families, low-income people, and so on. Recreational vehicle parks that are designed mostly for transient use don’t provide the same “neighbourhood” environment, and should be considered separately.

As noted in the New World Economics blog, a development with very small plots, minimal setbacks, and narrow streets can accommodate a lot of people.

“If you had 70% home plots/15% roads/15% shared amenities like parks and squares, 1000sf plots, and 2.5 people per household, that works out to population density of 46,000 people per square mile — with one or two story construction! At this level of density, compared to about 9,000/mile for the denser Los Angeles suburb, you could easily have a lot of neat commercial stuff (bars, restaurants, shops, schools, etc.) within walking distance,” the blog stated.

Rather than a blight on a neighbourhood, thoughtfully designed trailer parks could benefit neighbourhoods by providing the density needed to support businesses at a walkable distance. Furthermore, in contrast to towers that are both expensive and environmentally destructive, trailer parks can be built in a manner similar to parks, with extensive green space, and minimal use of concrete.

This is a key point: trailer parks can be developed to any level of amenity, from basic to luxury, to house people of varying income levels. Because of their efficient use of land, though, they’re especially attractive for developments that target lower-income people. Very small lot sizes combined with very narrow streets enable tremendous cost savings in land and infrastructure compared to low-density apartments, traditional houses and towers.

City planners and government officials can aid the progress of trailer-park development by revising restrictive policies. As Nolan Gray wrote at Market Urbanism, “Many cities tightly restrict the location and size of trailer parks, effectively limiting the choices of low-income families and undermining access to affordable housing.”

Loosening those restrictions would enable greater opportunities for developers who want to build trailer parks.

Another solution, Gray wrote, is for planners to “extend the liberal land-use regulations common in trailer parks to site-built homes and apartments. Besides needlessly restricting the housing supply, conventional land-use restrictions undermine the traditional urban development.”

Building site-built homes at trailer-park density would greatly expand the housing supply, while creating “instant neighbourhoods” that could support new businesses.

Another way trailer parks can meet market needs is through temporary developments. Vacant properties and reclaimed industrial sites could accommodate mobile and manufactured homes until they’re developed for the long term. A minimal investment in fencing, landscaping, and very narrow streets would make a pleasant neighbourhood while providing low-cost housing and income for the property owner. This would also be an efficient way to provide housing for low-income workers in proximity to their jobs, such as manufacturing facilities.

In Australia, trailer parks have been used more for vacation accommodations, rather than as full-time homes. Rising home prices have increased interest in cheaper housing forms such as manufactured homes, though the lack of mortgage financing for homes on leased land limits the number of people who can buy such homes. Retirees have been one group leading the way from traditional homes to trailer parks as they sell their homes and use the proceeds to buy cheaper housing in trailer parks, without the need for a mortgage.

Manufacturers and investors are already planning on a surge of new trailers parks. Colliers has forecasted an increase from about 77,000 properties in 2011 to 108,000 by 2021 if demand increases at a moderate level. Ingenia Communities Group, an investor and developer, has been acquiring existing parks and greenfield sites for new development.

“The growth in the business is really though acquiring existing caravan parks and either converting them into affordable seniors accommodation or in certain cases like BIG4 Noosa we will also add a tourism component,” Ingenia chief executive Simon Owen told the Brisbane Courier-Mail.

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  1. David Chandler

    Steve, I am sure that trailer parks will be part of the mix to help create some achievable housing alternates. I am not sure if you have visited any of the Trailer parks or Home Parks as they are called here. I have. Unfortunately they do not seem to display the uncluttered set-up used in the image in your article. On my enquiries occupants would pay between $130 – $200 per week plus other outgoings to rent a lot. Looks like the lease term is circa 20 years, but I am not sure of the break clauses. The sites I have seen would appear to be long term warehouses for later higher density development. The occupant then has to buy a manufactured home normally about $250,000 to $300,000. This seems to need cash liberated from trading down from an owned home. As the houses go on rented lots it is not possible to get mortgage finance.
    Looking at a SMH article " Broke Aussies take over caravan parks" October 2014 GE Capital are quoted as saying -There is "tremendous opportunity in manufactured housing," said Jason Kougellis, managing director for Australia at GE Capital. They "provide an affordable solution for an ageing population in a country that has some of the most expensive real estate in the world." GE Capital, which has lent $US5 billion ($5.7 billion) to manufactured housing operators in the US and Canada, plans to start doing the same in Australia, Mr Kougellis said.
    There is an interesting article by the Seattle Times on Clayton Homes and Vandabilt Mortgage Finance. Its worth a read.
    Its possible that the cost of finance if it is available may be close to 10 percent. That would make the rent here plus finance about $650 per week. But its hard to get a clear picture.

  2. Branko Mladichek

    I have another perspective on this proposal.
    It is not just about the cost of housing and development densities but there are social consequences.
    Nearly 40 years ago when I was working in Housing Commission Victoria as QS it was developing estates for low cost (assisted) housing. The idea was that cost of construction could be reduced and to some extent it was but it led to the stigma of Commission Estates. The problem was that you had neighbourhoods of low income people concentrations and that leads to social problems. HCV then changed to a spot purchasing program where it would buy stock housing and disperse people in need so as to blend them in and avoid the stigma.
    The idea of trailer parks seems to me just a recycled old idea with exception of substitution of manufactured housing for in situ built. Even if as proposed there are affordability gains you will inevitably have estates with concentrations people with low affordability and a risk of creating new stigma estates. As for manufactured housing? As a builder I have spent much of my life in builder's sheds so I have no affinity for it.
    Excuse me for being sceptical, thanks but no thanks!
    It is a far better idea for people with affordability problems to move into country towns, try Tasmania.