Trailer Park Economics: A System Failing the Tenants

30 September 2015 12:45PM

Due to increasing demand for affordable housing, about 20 million Americans live in mobile homes even though trailer park management might be anything but fair. Here’s how it works:

In a community like this, tenants typically own the manufactured structures that are their homes but not the land under it, and once they’re dropped off, mobile homes are not very mobile because it costs about $3,000 to relocate.

The low-to-moderate income tenants are often subjected to increasing monthly land rents after being lured in by the predatory sales practices, at which point they often can’t afford to relocate to another park (that could have exploitative rents anyway).

Professor Charles Becker studies the economics of trailer parks. He first became interested in the topic after witnessing a horrendous case of mismanagement first-hand. A relatively large trailer park changed hands shortly before the financial crisis. After suffering substantial losses and being barred from reselling, the new owner sought revenge by doubling rents, devastating the tenants. “It’s a tough story,” he said, “and also interesting to an economist… where else do you find people entrusting a valuable asset to someone else who might render it worthless?”

Before his obsession with trailer parks research, Charlie has consulted for The World Bank, advised the government of Kazakhstan on social security, and helped fix the higher education system in Ukraine by chairing the International Academic Board.

Stay tuned for Charlie’s forthcoming book with Caitlin Gorback (B.S. '11) and research with Ashley Yea (M.A. '14) on trailer park valuation and nearby apartment rents. In the meantime, check out why Charlie endorses President Obama’s plan of racially integrating neighborhoods and read up on his do’s and don’ts of purchasing a home.

This is an edited excerpt from senior YunChu Huang's post on the Duke Research Blog, a companion to the Duke Research news site that provides informal updates about Duke University’s research community. Read Huang's complete post on the Duke Research Blog.

Learn more about research at Duke Economics.