Manufactured housing advocates skeptical of new development outside Belgrade

A new manufactured housing development outside Belgrade is calling itself an “affordable housing solution” for Bozeman. But manufactured home resident advocates worry prices are already high and could go up– a reported pattern the developer has done in other locations.

Cameron Crossing, a Three Pillar Development community, was unveiled Tuesday with new manufactured homes starting at $200,000. In a press release, the company said this development would serve as an “affordable housing solution for Bozeman.”

“At the heart of the grand opening event lies Cameron Crossing’s dedication to providing affordable homes tailored for Bozeman’s workforce,” the company said in the release. “Through this development, Cameron Crossing aims to strengthen employee retention and satisfaction while fostering a thriving community environment conducive to productivity and well-being.”

At first glance, this development could be seen as a solution. The median price of a new-build, single family home in Gallatin County in 2022 was $950,000, double the price recorded in 2019, according to the 2023 housing report from the Gallatin County Association of Realtors.

And median rents in the area– about $2,200– are not far from the monthly payments residents would be making, which start at $2,500. The community would add 260 homes to a region of the state that needs more housing options.

But housing advocates say corporations owning mobile home parks have a tendency to severely hike up prices with little notice, and Three Pillar Development has reportedly had a history of drastically raising prices for residents, sometimes doubling them. The company says it owns more than 70 communities in 13 states.

Montana is in the middle of a housing crisis, with limited supply and lack of workforce housing, especially in the Bozeman area. Local officials say they don’t have the tools to rein in prices. Commissioner Zach Brown says there’s a solution for affordable housing, but it’s not solely relying on market-rate housing.

County officials said this is the first manufactured home project in the area since the ‘90s, and the commission liked the idea of diversifying housing options.

The mobile home park model

In a mobile home park, residents own the structure they live in, but not the land the manufactured home rests upon. They pay a monthly “lot rent” to the park owner to keep their home there.

Lot rent for the property in Bozeman starts at $850 a month and the company says it will go up every year, but by the greater of either the consumer price index or 5%. The $850 and utilities are baked into the $2,500 estimated payment. A spokesperson for Three Pillar Development said the mortgage payment will vary based on factors such as the downpayment size and credit rating of the buyer and interest rates typically range between 8% to 12%, depending on the down payment and credit score. And insurance is factored into the overall monthly payment by the finance company, she said.

Homeowners will also own the title to their manufactured homes.

After a 5-year lease term, the company will have the option to reset the lot rent to what they charge new residents, or people can sell their property. The company confirmed through a spokesperson this language is included in the contract.

“Homeowners can rest assured that there will not be unexpected increases beyond what is outlined in the agreement,” she said.

But Three Pillar Development can have a say in who can buy the home, if a resident decides to leave. On its website, the company says prospective buyers have to apply for residency “to ensure they pass our background check and that they have the financial wherewithal to pay our monthly community fee.” The “community fee” is what is commonly called “lot rent.”

“We assess every applicant fairly, in compliance with federal Fair Housing guidelines,” the website reads. “Once your buyer is approved by Cameron Crossing, you are free to close the sale of your home to the buyer. At that point, the buyer will enter into a new land lease agreement with Cameron Crossing and will start paying the monthly Community Fee under this new agreement.”

Advocates with Manufactured Housing Action, a national organization which works to benefit mobile home park residents, said they were skeptical of the business model at Cameron Crossing.

Cindy Newman, who lives in a mobile home park in Great Falls that was bought by an out-of-state company in 2019, said fees have skyrocketed at the mobile home park she lives in. She said she paid $283 a month in 2020 and now they are charging new residents $750.

She said the business model for corporations running manufactured home parks “is well known for ‘add on fees’ for hiking the monthly rent.”

She said the “two-part mission” listed on the company’s website: “to deliver safe, reliable housing to our residents and safe, reliable returns to our investors,” is a “perfect oxymoron.”

Elizabeth Marum, who is affiliated with MH Action and was on the Belgrade Planning Board, voted to approve this project but “had misgivings.”

“How would a service worker or better be able to afford lot rent of $600+ and the cost of the home?” she said.

In an emailed statement, Dean Warhaft, Principal of Three Pillar Development said the Cameron Crossing manufactured home community provides access to homes tailored for working-class individuals or families with household incomes ranging from $90,000 to $150,000.

“The terms and conditions are clearly outlined in the agreements signed by both parties, reflecting our commitment to transparency. Homeowners are kept informed of any fee adjustments or changes,” Warhaft said.

“As homeowners approach the 5-year term, they can decide to sell at a profit or resign,” Warhaft said. “Unlike other housing communities today where fees may fluctuate unexpectedly and assessments may be made, our model ensures stability and predictability, with increases based on standard operational cost adjustments.

“It’s important to distinguish Cameron Crossing from other developments. Our focus on quality, affordability, and transparency sets us apart.”

Reported rate hikes in other Three Pillar Developments

But residents at other Three Pillar Development communities have reportedly seen drastic upticks in fees– sometimes double what they were paying.

CBS News reported in November residents in a mobile home park in Castro Valley near San Francisco struggled after the company doubled their fees, despite a local requirement limiting increases to 5%.

Three Pillar co-founder Daniel Weisfield told CBS the increase only applied to recreational vehicles, the rent increase still wasn’t “fair market value,” and the company offered assistance to those who struggled to pay. Some were vehicles, but CBS reported others looked more like a traditional home and were actually anchored to the ground for earthquake safety.

In recent years two other Three Pillar Development communities, one in Colorado and another in Petaluma, California, also spoke out about massive increases to their lot rent.

Attempts from the Legislature to add guard-rails failed

The Montana legislature passed House Bill 889, sponsored by Rep. Jonathan Karlen, D-Missoula, with bipartisan support during the last session, known as the “mobile home park Bill of Rights” which would have required mobile home parks give 60-days notice before making changes like lot rent spikes.

Proponent for the bill and mobile home park owner Rep. George Nikolakakos, R-Great Falls, said during a hearing on the bill it was important to highlight the power imbalance between owners and tenants.

“I could charge rents that were aggressive. I can make changes that were quickly implemented. And really these folks had nowhere to go because they didn’t have five or ten thousand dollars to move a home — or maybe this home couldn’t move,” he said.

But Gov. Greg Gianforte vetoed the bill, saying it was imposing on the rights of private property owners.

Looking towards the 2025 legislative session

Newman said the MH Action is advocating for a Manufactured Homeowners Oversight program, like what’s already in place in Colorado and Washington. In Colorado, the program conducts outreach and education on laws related to mobile home parks and helps facilitate resolutions between landlords and tenants, among other objectives.

“We are all aware of tactics like lost rent checks, unfair evictions, harassment and retaliation,” Newman said.

She said getting a lawyer is expensive and sets up a “David and Goliath” situation for residents.

What can counties do? They say not much.

Housing supply and affordability are top of mind in Montana and in Bozeman especially. But, county officials said they did not have any control over what the developer decided to charge.

Belgrade City Planning Director Jason Karp said the developer did not provide any assurances to the commission it would keep the property affordable, he said the county commission was interested in the development because the county hasn’t approved a manufactured home park in decades and they liked the diversity of housing options.

“It’s a market-based project, it’s not subsidized or anything, so they’re free to charge as much as, or as little as, they want,” Karp said.

He said the county only makes sure the developer meets the subdivision regulations.

“The ​word ‘affordable’ may have been used, but I think the real word to use in something like this may be ‘attainable,’” he said.

Karp said this project was a way for some people who don’t have the down payment or financing to afford a home to get housing, but there are strings attached, “and lot rent being one of them.”

“It’s not a solution for everybody, but this may be a way for some people to build up some equity,” he said.

County Commissioner Zach Brown said the commission was hopeful about the project at first, and gave the company feedback from the community that the proposed prices weren’t penciling out for them. He said, as Karp did, the county ultimately didn’t have control over pricing.

“In that subdivision review, we’re really a judge to say that they follow the rules,” he said.

He noted the Legislature banned inclusionary zoning- which gives local governments the ability to require developers to include units for low or moderate income residents in their project.

Brown said in his eyes the solution to affordable housing is to increase subsidized below-market housing. He said the deregulation efforts from the Legislature and Gianforte are great for providing more market-rate housing, which he said is also needed, but doesn’t solve the affordable housing problem.

“It’s not by itself going to change the housing market for people that already can’t afford to live here,” Brown said.