The nation’s largest owners of manufactured housing communities conspired to raise rent on low-income and elderly residents via an “unlawful price-fixing cartel,” according to a new lawsuit filed in federal court last week.
The 85-page complaint, filed in U.S. District for the Northern District of Illinois, names nine companies — including one based in Denver — that collectively own thousands of mobile home parks across the United States.
Attorneys for two Illinois residents named as plaintiffs called the lawsuit an unprecedented move to hold the companies accountable for jacking up rents on the poorest Americans.
“This case is a prime example of companies victimizing American citizens who can least protect and defend themselves,” said Adam Levitt, one of the attorneys spearheading the lawsuit.
The nine companies include Denver-based YES! Communities, which owns and operates more than 200 communities and 55,000 homes across the country. The company’s portfolio counts two Colorado parks: Antelope Ridge in Colorado Springs and Prairie Green in Frederick.
Several of the other companies named in the suit — Equity LifeStyle Properties, Hometown America Management LLC, Lakeshore Communities Inc., Sun Communities Inc., RHP Properties Inc., Inspire Communities LLC, Kingsley Management Corp. and Cal-Am Properties Inc. — also control parks in the Centennial State.
All told, 115 Colorado communities, encompassing 32,000 lots, suffered from the alleged scheme, the lawsuit stated. Attorneys estimated hundreds of thousands of mobile home residents across the country could be included as part of the proposed class action.
“The effect of defendants’ conspiracy has been devastating to manufactured home residents,” the attorneys contend in the suit.
The companies allegedly coordinated to artificially inflate manufactured home lot rents by using the same private information from Michigan-based Datacomp, the nation’s largest provider of manufactured and mobile home data
“The manufactured home community defendants could never have demanded these rental price increases unilaterally,” the lawsuit reads. “To implement the increases, they needed to conspire.”
Data included in the lawsuit shows manufactured home lot rental prices increased at a steady 2.3% per year between 2010 and 2018 — closely mirroring the rate of inflation. But between 2019 and 2021, during the alleged price-fixing scheme, rental rates shot up at 9.1% per year, according to the suit.
And the companies raked in profits.
Between 2009 and 2020, Sun Communities reported more than 4,000% in shareholder returns, the complaint states.
“These massive returns are attributable to the business model described in this complaint: acquire more manufactured home lots and raise lot rents,” the attorneys alleged.
Representatives from the manufactured housing companies could not immediately be reached for comment.
The allegations mirror a class-action lawsuit filed in December, accusing property management companies of conspiring to fix apartment rental prices across metro Denver.
Mobile home communities across the country have increasingly become targets for private equity and hedge funds. These purchases have consolidated ownership in fewer and fewer hands, leading to staggering rent increases for residents who can least afford it.
Colorado in recent has recognized this trend and passed numerous laws aimed at boosting protections for the hundreds of thousands of people here who call these parks home.
Get more real estate and business news by signing up for our weekly newsletter, On the Block.
