A bill to fund the cleanup of the state’s abandoned manufactured housing was ratified in the North Carolina General Assembly yesterday.  H1134, sponsored by Philip Haire, awaits a signature from Governor Easley.  It will become effective July 1, 2009 and run until 2023.

The bill authorizes the Department of Environment and Natural Resources to distribute up to $1 million per year to counties that clean up abandoned homes.  While an earlier version extended the bill’s coverage to include abandoned mobile homes that were utilized as classrooms, no explicit extension of that provision is included in the final version.  Counties must develop a plan to remove the homes in order to apply for funding dollars, although no county is required to participate in the program.  Tier One and Tier Two Counties can get extra dollars when removal costs exceed $1000 per unit.

It is hard to know how much of a difference this bill will make.  Certainly, North Carolina has stepped out to stamp the counties with the authority to clean up their spaces.  Nonetheless, some of the success or failure of this bill will depend upon the marketing efforts that occur going forward. If counties do not know about these funds, then it is unlikely that they develop a removal plan.  Funding of $1 million per year could soak up a considerable portion of the discretionary funds at DENR, too.

Sometimes I talk to local officials who are concerned about the housing crisis, but do not feel that they can do much to support their own neighborhoods. Next week, in fact, I’ll be traveling down to the southeastern corner of North Carolina to speak to county and city government staff about this very topic.

Their concerns are two fold. They want to do something to increase the supply of quality affordable housing. But they are also weary about all of the abandoned mobile homes in their backyards. It is hard to say which is a greater concern. If you talk to police or solid waste officers, it is definitely the latter. If you speak to someone in zoning or in community development, though, it might be either way.

The truth is that a County government can do a lot to make a difference.

Financing

Loan-to-value limits obstruct the ability of residents and non-profits to acquire mobile home parks. Providing financing for mobile home park acquisition is a very cost-efficient means for Counties to increase the supply of affordable housing in their environs.

Santa Cruz County, in California, is one example. Santa Cruz operates its own mobile home park purchase program. It provides financing to both resident-owned and non-profit owned groups that want to acquire mobile home parks. They can also provide financing for these groups after an acquisition, in the event that they want to invest in improvements to infrastructure in their park.

This financing is vital. In today’s market, as perhaps never before, it takes a substantial down payment in order to acquire a park. To the extent that mobile home park residents skew towards a population group with lower levels of wealth, then putting together 20 or 30 percent down is a significant obstacle. Even when a park is operating at almost 100 percent vacancy and producing significant cash flows, most banks will still want to limit the loan-to values to 80 percent.

Access to this kind of financing makes a different for non-profit groups, too. It is fine for a non-profit to put some capital into an acquisition. Nonetheless, it doesn’t help. When more capital must be allocated, the mission of a non-profit is necessarily constrained. It reduces the ability of that non-profit to do the next project.

Counties are also wise to provide financing support for infrastructure upgrades. Let’s not forget the likely inequality: most neighborhoods with single-family site built housing get their infrastructure through bond financing. It is really the least that a County can do.

Counties should seek a lien against the land when they make these loans. The results are impressive, though. Consider the cost-efficiency of a County that provides 20 percent of the acquisition funding for a $3 million park with 150 units. That is $4000 in debt per unit. With a lien against the land, the risk is far less.

Abandoned mobile homes

This is a problem that comes up over and over when I visit rural counties. Last week, I spoke to a planner in Vance County, North Carolina who needed a fix for an entire park that was full of abandoned homes. The park is next door to the County’s new development of affordable single family housing. It makes for quite an eyesore.

In North Carolina, we have passed a bill that provides about $300,000 in funding for counties to remove abandoned mobile homes. It is some money, but more is needed to clean up the 40,000 abandoned units that currently exist across the state.

The legal issues are tougher. It is one thing to condemn a property on land in the possession of the building’s owner. It is different when ownership is split. If the owner of the trailer is a finance company in New York, then even serving papers is beyond the ability of a County tax agent.

Legislation has passed unanimously in the California House that would allow mobile homes left on highways to be removed under the authority of the Vehicle Abatement Act. The bill was proposed by Assemblyman Paul Cook (R-Yucca Valley).

AB 1069, as it is known, now goes on to the Senate Transportation and Housing Committee.

This bill will serve a genuine need. What is remarkable is the depth of support demonstrated for an issue that rarely generates much public perception. This is a bread-and-butter good governance bill, and not something that is rooted in the politics of symbolic action.

This picture shows two abandoned mobile homes left by the side of the road in Riverside County, California.