From floods to slime: Mobile home residents say landlords make millions, neglect them

Five years ago, Mike Noel was newly retired from his manufacturing job in Rhode Island and had just gone through a rough divorce.

"I hooked up my boat and headed down here, without having a place to live," he recalls in the living room of his home near Vero Beach, Fla.

Noel used most of his modest retirement savings to buy the house at Heritage Plantation, a mobile home park 20 minutes from the ocean. The homes here look more like conventional houses than what you might think of as a mobile home. They're up on foundations and have yards and driveways.

"I thought I was moving to paradise – you know, beautiful weather and being able to fish 12 months a year."

His new place wasn't like the large house he owned in Rhode Island, and the floor needed repairs. But the price was affordable and it offered the promise of a new start.

And then it started to rain.

"I'm talking about those typical Florida thunderstorms you get, where you get a 15- to 20-minute downpour."

When those rains came, Noel found out the streets in the park flooded, for hours or sometimes days. At first he didn't worry too much about it. "But by the tenth time it flooded, I had started reaching my limits," he says, because at times the water was a foot deep, sometimes even two. "It was like, holy crap," he remembers, "this is not good!"

Floods and a slimy residue

Residents in the park say the streets have been flooding after normal rainfall for 20 years, due to an antiquated and broken stormwater drainage system.

They say the water has damaged their homes and is often deep enough that people get trapped in their houses. Some are elderly. They say emergency vehicles have refused to respond to calls due to the flooding.

"The people across the street are in their 90s," says Noel. "I know people that couldn't get to their chemotherapy appointments."

To make matters worse, residents say when the water eventually recedes it leaves behind a slimy residue that people slip and fall on.

"The slime never goes away," says Stanley Paxton, a 79-year-old resident who slipped on the street in 2018 and landed in the hospital for shoulder surgery. "I was just walking my dog," he says. "Next thing I know my left foot goes out from underneath me... and I hit the pavement with my shoulder."

Mobile homes are one of the last options for affordable home ownership

Residents say there have been other problems beyond the broken drainage system – electrical wiring issues, potholes, and bad lighting that’s caused people to trip and get hurt on the park’s dark roads at night.

A group of residents have now organized and filed a lawsuit detailing all these problems against the park's owner, a company called Equity Lifestyle Partners, or ELS. The group alleges that ELS has ignored their complaints over the years, and failed to fix the broken stormwater drainage system. ELS denies wrongdoing.

What these residents say they are dealing with may be part of a bigger problem that goes far beyond any one park or landlord.

Millions of Americans live in mobile home parks – one of the nation's last options for affordable homeownership.

But in recent years, big companies have been buying up mobile home parks. And critics say some are making hundreds of millions of dollars in profits collecting and raising rents on their typically lower-income residents, without spending enough money on even basic maintenance and upkeep.

Allegations from residents at parks around the country, owned by ELS or other companies, have ranged from persistent sewage backups to drinking water and power outages. Other claims include aggressive eviction policies and unfair business practices.

Mobile in name only: Once installed mobile homes are hard to move

"They're taking advantage of a group of people that really don't have the resources to fight against it," says Beth Fegan, an attorney representing the residents at the park in Vero Beach.

Feeling they were running out of options, residents started looking for a lawyer. They found Fegan.

She was known for fighting a different kind of battle – the harassment and assault cases that became the "Me too" movement.

Among her clients were victims of Hollywood movie mogul Harvey Weinstein.

But, she took the residents' case and sued ELS in federal court. Fegan says the company's failure to fix the stormwater system violates the promise it makes in the park's prospectus for residents. And she says the problems here go beyond this individual case.

"We're trying to right a wrong that we see that is systemic in an industry, and really use it as an example," she says, "To let the industry know we're going to come after them."

While buying a manufactured home offers the promise of home ownership, residents of mobile home parks don't have the same independence and economic power that owners of traditional homes do.

For one thing, the homes are mobile in name only. Once they're trucked in and assembled, it's difficult and expensive to move them. It can also be prohibitively expensive to find another place to live. Manufactured housing households had a median income of less than $35,000 in 2019, according to the American Housing Survey.

"The park knows that they cannot pick up their home and leave," Fegan says. "And so these complaints have really just gone ignored."

Since the homeowners don't own the lot the home sits on, that can leave them vulnerable to the decisions of their landlords when it comes to maintenance, rent increases and even eviction.

ELS says homeowners are free to sell their homes, and many do

Basically Fegan describes it as a classic David vs Goliath power imbalance. On the one side are lower-income residents, while their landlords are often big businesses.

ELS is a multi-billion dollar, publicly traded company that lists about 200 mobile home parks in its portfolio. It also owns RV parks and marinas. Its net income was about $263 million last year.

Fegan says if corporate landlords decide to squeeze out more profits by, as she sees it, neglecting their residents, they need to be held accountable.

"If they don't put the money in to maintain the infrastructure in these parks," she says, "we're willing to take on that fight."

The manager at the ELS park said she couldn't talk to NPR reporters. And no one from the company would agree to an interview. But ELS spokeswoman Jennifer Ludovice says in a statement to NPR that the lawsuit misrepresents conditions at the park and that the company, "invest[s] in the maintenance of the community to ensure it remains a desirable neighborhood."

Ludovice says homeowners are free to sell their homes if they want to and often do.

The company also says the suit, "involves only three out of approximately 650 residents in the community." But that's not really true.

Technically, there are three plaintiffs, but documents show 27 residents signed court papers in support of the lawsuit getting class action status. Fegan says more than 75 answered questionnaires to help her with the case.

There are, though, some residents who question the lawsuit.

Mixed views on the lawsuit

"I'm not an advocate, per se, for ELS," says Dick Bruce, a former head of the park's homeowners' association. "I'm just going to say that they're not as bad as what some folks will make it sound like."

Bruce and his wife, Jean, who are retired, worry that if they force the company to spend a lot of money fixing the flooding problems, it will raise their lot rents more than it otherwise would.

"I'm not saying I don't want the flooding fixed, but we need to be aware of what we are asking for and what we may get," Jean Bruce says, "We're on a fixed income, but we've seen our rent go up every year."

And the Bruces say ELS more recently has been making some major repairs to its stormwater system.

Company spokeswoman Ludovice says the company has spent more than $300,000 improving the stormwater system over the last three years and that three former homeowners association officers are on the record saying the system functions as it should.

But Fegan sent NPR photos of flooded streets which she says were taken recently, in July, after a hard rain.

Some residents say there's still a flooding problem and that it seemed to them that major repairs only started after the homeowners began organizing and meeting with lawyers.

Black mold, rotted beams and floorboards

Residents also say that over the years the flooding has caused a lot of damage.

"The ground here is very wet in this place, it's soaked, it never goes away," says Michael Frawley. His mother lived in a home in the park for 23 years. She just passed away a few months ago.

Frawley says he had to replace her floors twice, with pressure treated plywood, because they rotted out.

"The plywood, the beams, everything was eaten up from moisture," Frawley says. "And then there was black mold everywhere."

The cost of doing business

From an investor standpoint, choosing an industry where maintenance and overhead costs are relatively low, is, as they say, not a bug but a feature.

ELS says as much in its annual report. "Compared to other types of real estate companies, our business model is characterized by low maintenance costs and low customer turnover costs," the report says.

Former ELS board member and current shareholder Michael Torres agrees. "It's just basically resurfacing roads and having a shared community center. You don't own walls and roofs."

Residents have to fix their own roofs or floors, or pretty much anything else that needs repair in their homes because they own them. Torres says that's one of the things that makes investing in mobile home parks, "the gold standard of investing in property."

Torres manages more than $2 billion in investments through his company, Adelante Capital Management. Mostly, he invests in real estate investment trusts (REITs), like ELS. And he does not seem to have much sympathy for the homeowners at the park in Florida.

“Streets flood,” Torres says. “You chose that community - buyer beware. It’s like people that move next to a school and complain about the noise. To me there’s no story here.”

He goes further: "Unfortunately, it's called landlord for a reason," he says. "You're not told you have to live there."

With regard to the lawsuit against ELS, he says he doesn't know all the facts and he's not speaking on behalf of the company, but he's not concerned about it as an investor. "It's a nuisance," Torres says. "It's just part of the cost of doing business."

A smoking gun?

Heritage Plantation isn't the first ELS park to find itself in the crosshairs of a lawyer representing residents. The company has been the subject of numerous legal proceedings. Perhaps the most notable one began in 2009.

Then, California attorney Jim Allen sued the company over conditions at California Hawaiian Mobile Estates, a park in Salinas. He alleged that the electrical system was shot, power would go out to the homes regularly, sewage backed up in some houses.

"They had a lake and the lake basically stunk," Allen says. "It was putrid."

There were kids in that park, and he says the playground was dangerous. "It had sharp edges, it had a slide you couldn't use." he says.

Allen says there are so many mobile home parks neglecting residents that representing residents is now the heart of his law practice.

As the California ELS case played out, Allen says he uncovered what to him seemed to be a smoking-gun reason for the neglect.

He argued in the trial that ELS had an employee bonus structure that incentivized managers to squeeze out more profits by forgoing maintenance.

"So what happens is, you want to get your bonus, so you don't authorize repairs," says Allen.

An attorney for ELS during that trial said that staying within the maintenance budget was just one factor in determining a bonus.

After a legal fight that dragged on for years, a jury sided with the residents and awarded them $111 million. ELS successfully challenged the award and the case ended with a settlement of close to $10 million. The company maintains to this day that the suit was without merit and that the park was and remains a desirable community.

With regard to the bonus structure, ELS said in a statement that it encourages park managers to act in the best interest of the property and residents. Park budgets, "are not written in stone," ELS' Ludovice wrote to NPR. She says Heritage Plantation's manager received her full bonus last year despite the property being over budget.

Catfish swimming in the roads

Back in Florida, Ann, a former ELS manager at another of the company's mobile home parks, told NPR that her community also had a stormwater problem.

"We would have constant flooding," she says. "There were catfish swimming in the roads."

Ann says she worked at that ELS park for several years about 5 years ago. She says residents there would get trapped in their homes too because the water was too deep to drive through.

"They wouldn't be able to leave," she says.

She didn't want her full name used, fearing retribution from ELS or others in the industry.

Ann says she repeatedly asked ELS management to fix the flooding problem, but the company didn't. She says ELS did do some basic maintenance such as fixing potholes.

"They had a cap of how much they were willing to spend."

“Do the right thing”

At the Heritage Plantation park, the local government has gotten involved. Frustrated residents called officials with Indian River County, only to be told that they too, had limited power over ELS. The park, they noted, is private property.

But, county officials say that, in addition to the flooding, the stormwater system appeared to have another problem.

"Their storm water is going in our sewer system," says County Commissioner Joe Earman.

He says the county ordered ELS to fix that problem, but even after fining the company $100 a day for several years, it remains unfixed. As of mid July, the fines had reached $157,700.

"When they make no effort to contact us and (they) owe you $150,000 in code enforcement fines and don't ever reach out to us about it, that kind of sends a red flag up to us," Earman says.

ELS says it has in fact fixed that problem and is now in the process of resolving the issue with the county.

Still, Earman says it shouldn’t take 20 years for the flooding problems residents have been struggling with here to get fixed.

"It's frustrating to me as a county commissioner," Earman says. "How about you just do the right thing?" And that, Earman says, is for ELS to fix the flooding problems in the park. "I think they can afford it."

NPR researcher Julia Wohl contributed to this report.

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