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July|August 2005
City of Blight By Geoffrey Gagnon
The Fourth Man By Margot Sanger-Katz
A Place to Crash By Aaron Dalton
A Man's Home Is His Castle By Elizabeth Austin
Cases & Controversies
The Prudent Jurist By William H. Simon

A Man's Home Is His Castle

But a man's mobile home is his chattel.

By Elizabeth Austin

ON A BREEZY FLORIDA AFTERNOON, retired contractor Dick Fry stood outside a battered mobile home, trimming long slices of peach-colored siding with a power saw. In a white T-shirt and a pair of paint-spattered denim shorts, the gray-haired man paid no attention to the scenes of devastation and reconstruction that surrounded him in the storm-scoured trailer park.

The park, Windmill Village, was hit hard when Hurricane Charley blew through Punta Gorda last August. Less than a quarter of the park's more than 800 mobile homes were left standing. One of those flattened homes belonged to Fry and his wife, Linda. "We retired here four or five years ago," Fry said as he measured out another strip of siding. "We bought an old place and remodeled it inside and out." Then came Charley. Dick and Linda moved into a slightly damaged unit that belongs to a neighbor, helping out with his repairs while they await delivery of their brand-new double-wide mobile home.

Though their insurance paid for some of the new unit, the couple dipped into savings to make up the shortfall. Many of their neighbors weren't so lucky. "It's sad. Before this, at least 20 percent of our neighbors were in their 80s or older," Fry said. "There were lots of little old ladies living on Social Security." After Charley hit, however, those residents found that much of their investment in their mobile homes had gone with the wind. Residents who couldn't afford to buy a new unit outright—and who couldn't or wouldn't pay the interest rates that run 2 to 5 percent higher than for mortgages on houses—had to move elsewhere. "It's different than going to a bank for a conventional loan," Fry explained.

Fry's displaced neighbors may not have known it, but their financial future hung on a legal nicety—the distinction between real estate and personal property or, in legal terms, chattel. The legal definition of a mobile home means that Fry isn't afforded anywhere near the protection that local, state, and federal laws provide to his "dirt-bound" neighbors down the road.

About 19 million Americans live in "manufactured housing"—the term preferred by manufacturers, and many residents as well. That amounts to nearly 8 percent of America's housing stock. But they don't get much respect from those who live in conventional housing. Consider, for example, James Carville's legendary comment about Paula Jones: "Drag a hundred-dollar bill through a trailer park, and you'll never know what you'll find." Then imagine the public outcry if Carville had said "housing project" instead of "trailer park." That stigma remains potent today, as shown by the Oscar-winning Million Dollar Baby's depiction of its heroine's "trailer trash" family.

IN MANY STATES, A MOBILE HOME is legally the same as, say, Malibu Barbie's Dream House. Defining a mobile home as personal property made sense back in the 1920s, when vacationers and migrants hitched sleeper trailers behind their cars and hauled them down the highway. But over the years, mobile homes have become a multibillion-dollar industry, and the modern double-wide unit, once installed, can be moved only with great trouble and significant expense—about $1,500 to $5,000 to move from one park to another nearby.

The outdated legal definition doesn't just limit the owners' ability to get mortgages and home-equity loans. It also leaves them with little recourse if something goes wrong. State bankruptcy law may offer homestead protection to the owner of a site-built home, so that he keeps his castle even if he can't pay his bills, but it often does not offer the same to the owner of a similarly priced home in a trailer park. In 2000, for example, the United States Court of Appeals for the Fifth Circuit ruled that a mobile home owner in Mississippi who didn't own the land beneath her unit wasn't entitled to homestead protection.

According to the Ford Foundation, in 2000, about 78 percent of new manufactured homes were financed with chattel loans, just like cars, boats, and furniture. So if those owners fall behind on their payments, as the foundation reports up to 12 percent of them do, they're not protected by standard foreclosure laws—meaning the lender can simply send out the repo man. And if the home's resale value is less than the amount of the loan, as often happens, the borrower remains on the hook for the unpaid balance.

It's understandable why banks are reluctant to treat mobile homes like other real estate. While today's "mobile homes" are only marginally more portable than their site-built counterparts, today's trailer park may well be tomorrow's Wal-Mart. As the suburbs sprawl further and further, once-remote trailer parks are now sitting on prime real estate, which makes them tempting targets for real estate developers.

Because most state and local laws protecting tenants' rights don't extend to trailer park residents, park owners can sell their land to developers and exit with a wad of cash—and little or no legal obligation to their former tenants. The loss of a park is financially catastrophic to mobile home owners. Without a site that provides clean water, septic service, and electricity, the home's value plummets.

Even if a homeowner can cover moving costs, most parks won't accept a unit more than 10 years old, so the notice to vacate effectively erases the home's financial value. In Charlotte County, the owner of one hard-hit older park has invoked the "act of God" provision in the rental contract and given the remaining residents until December 31 of this year to remove their homes. So residents whose homes were insured and destroyed by the hurricane were left in far better financial shape than their neighbors whose homes were spared.

In Windmill Village this April, a few hard-up residents were still living in cramped trailers temporarily provided by the Federal Emergency Management Agency. Those owners were still hanging on to their lots (the park is owned jointly by the residents), but they had little hope of replacing their modest former homes with similar new ones. Instead, they're likely to follow their neighbors' example and reluctantly sell out to more affluent newcomers who are drawn by the park's marina and proximity to the Gulf of Mexico.

As Fry cut the vinyl siding, the parkland around him was bustling with construction teams pouring concrete and building solid new foundations. Already, a few new double-wide units sat half-opened, like plastic Easter eggs, their luxurious interiors shielded by plastic sheeting as they awaited final installation. "This area is going to change," Fry commented, shaking his gray head. Then he went back to work, while the whir of cement mixers filled the warm spring air.

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