Welcome back to the Deep Dive. I want you to,
just for a second, picture something. Something
I think is pretty much hardwired into the American
psyche. Okay. You're on a highway, you've just
passed the city limits, and, you know, the suburbs
are kind of thinning out, and then you see it.
A cluster of these long, rectangular homes. Sitting
on concrete blocks. Exactly. Maybe some of that
vinyl lattice stuff skirting the bottom. Perjuring
up. The trailer park. The trailer park. And,
you know, let's be honest. When that image pops
into our heads, it comes loaded with a whole
set of assumptions. Absolutely. You immediately
think about poverty, maybe transience. You think
of structures that look like they might not make
it through a really stiff breeze. It's become
this symbol for a certain rung on the socioeconomic
ladder that, you know, most people are trying
to get away from. It is a symbol for sure. But
what's so fascinating about symbols is how they
can stick around long after the reality on the
ground has completely changed. So while you might
be driving by and seeing this sort of last resort
for housing, there's another group of people
looking at that exact same piece of land. seeing
something well something entirely different and
that right there that's the hook for our deep
dive today yeah because while our culture is
busy looking down on these communities some of
the smartest money on the planet I'm talking
about global finance private equity firms the
people who actually move markets right they're
looking at them and they're not seeing trailer
trash. Yeah. They're seeing what might be one
of the single most resilient high yield asset
classes in real estate today. They see a goldmine.
They see a captive customer base, a barrier to
entry for competition that's almost impossible
to get over and a stream of revenue that, you
know, it outperformed almost every other real
estate sector during the last few recessions.
It's a jarring disconnect, isn't it? The gap
between the stigma and the actual balance sheet.
It really is. So that's our mission today. We
are going to try and bridge that gap. We need
to get into the mechanics of this, this corporate
gold rush, really understand why Wall Street
is suddenly obsessed with manufactured housing.
And then we need to look at the human side of
it all. The tenant trap, as some sources call
it, but also these retirement paradises and the
global picture. Because it turns out the way
we treat these so -called mobile homes. it says
an awful lot about how we view property rights,
class, and, you know, stability itself. And we
have a whole stack of sources to get through.
It's going to take us from, like, the boardrooms
of the Carlyle Group all the way to these punk
communes in Berlin called Wagenbergs. That is
a wide spectrum. It is. Okay, so let's start
with the basics. Terminology. I use trailer park.
A second ago, because, well, that's what everyone
calls them. But if I were a developer, I wouldn't
use that term, would I? Oh, no, you'd be corrected
very, very quickly. The industry standard, the
professional term is manufactured housing community
or maybe land lease community. Trailer is kind
of a dirty word. It's a relic. It really goes
back to the travel trailers of the 30s and 40s.
You picture Lucy and Desi in the long, long trailer,
literally hitching their house to the bumper
of a car and just. Driving off. But the homes
we're talking about today, the ones actually
sitting in these communities. Yeah. They're not
really going anywhere, are they? Statistically,
almost never. And that's maybe the first big
misconception we have to get out of the way.
OK. They're built on a steel chassis. And yes,
they have wheels to get them from the factory
to the site. But once that manufactured home
is set on its blocks, skirted and, you know,
hooked up to water, sewer, electric, it's effectively
permanent. It's too expensive to move. Incredibly
expensive. To move even a smaller single wide
home, you're looking at five, maybe $10 ,000.
A double wide. Forget about it. You're looking
at way more. And that's assuming the structure
can even survive the stress of being pulled apart
and put back on the road. It's often not possible.
So mobile home is a total misnomer. It's a home
that was mobile exactly one time. One time. On
its trip from the factory to the pad. That's
it. It's mobile in theory. but completely stationary
in practice. And that detail is actually the
key to the whole economic model, which I know
we'll get into. It's everything. But, you know,
despite the reality, the labels mobile and trailer
just stick. And with those labels comes this
really specific, really heavy stigma. Yeah, we
have to talk about the trailer trash slur. It
feels like one of those terms that's still kind
of socially acceptable to throw around in a way
that other class -based insults really aren't
anymore. It's an incredibly loaded term, isn't
it? It's not just about being poor. It combines
classism with a kind of moral judgment. It implies
that the people who live in these homes are not
just poor, but somehow lesser. You hear it grouped
with terms like white trash or ghetto to describe
people who supposedly lack social decorum or,
you know, civic pride. And it gets used at the
highest levels. There's that infamous quote from
James Carville, who was a top advisor to Bill
Clinton. It was during the Paula Jones scandal
back in the 90s. I know the one you mean. I mean,
he said, drag a hundred dollar bill through a
trailer park. There's no telling what you'll
find. It was just a savage thing to say. He was,
in essence, discrediting a witness by just associating
her with a trailer park. The implication was
so clear that people who live there have no integrity.
Right. That they're desperate, that they're venal,
that their testimony can be bought for a hundred
bucks. And that wasn't just some, you know, off
the cuff mistake. Yeah. It worked because it
tapped into this. really deep pre -existing cultural
bias. The idea that if you live in a stick -built
house, you're a proper citizen. If you live in
a manufactured home, you're a suspect. That's
a great way to put it. And that bias has very
real consequences. It gives local governments
cover to use zoning laws to keep these communities
out because we don't want that element here.
And it lets society as a whole kind of ignore
the predatory economics that can happen inside
the gates because, well. It's just a trailer
park. But as you said, while the culture was
busy sneering, the capital was circling. That's
right. Okay, let's get into the money. This is
the part of the research that honestly, it just
blew my mind. Because I think I grew up with
this image that these parks were owned by, I
don't know, some local guy named Earl who drives
a pickup and, you know, collects the rent in
cash every month. And for decades, that was basically
true. It was a mom and pop industry. You know,
somebody inherited a piece of land on the edge
of town. They poured some concrete pads, put
in a septic system and just generated a steady
passive income. The industry was very fragmented.
So when did the sharks show up? When did Wall
Street start paying attention? The big shift
really picked up steam in the late 2010s. You
have to remember the environment then. Interest
rates were at historic lows. So investors were
absolutely desperate for yield. Anything that
could generate a decent return. That money was
cheap. Exactly. And so they're looking around.
They look at shopping malls and they see Amazon
killing them. They look at office buildings and
that seems risky with remote work starting. And
then they look over at mobile home parks and
they don't see risk. They see a cash cow. Who
are we talking about here? This isn't Earl and
his pickup truck anymore. No, we are talking
about the absolute titans of private equity and
institutional capital. The Carlyle Group, Apollo
Global Management, TPG Capital, Stockbridge Capital
Group. These are household names in finance.
These are firms that manage, you know, hundreds
of billions of dollars. And for them, these parks
aren't communities. They're an alternative asset
class. And just to get a sense of the scale.
By 2019, how much of the market do they actually
control? The estimates I've seen suggest that
by 2019, well over 100 ,000 individual mobile
home sites in the U .S. were owned by these large
corporate firms. And that consolidation has only
accelerated since then. Wow. OK, so walk me through
the why. You said they're chasing yield. But
what is it about a trailer park that makes it
a better investment than, say, A big apartment
complex. It boils down to two things, really.
The operating expense ratio and a concept they
call the moat. The moat. Like a castle. Exactly.
Think about a normal apartment building. If a
tenant's toilet breaks, who has to fix it? The
landlord. If the roof starts leaking... Landlords
again? Right. But in a land lease community,
the resident owns the home. The investor just
owns the dirt underneath it and the utility lines.
So if the roof on your manufactured home leaks...
Well, that's your problem. So the owner's maintenance
costs are incredibly low compared to the rent
they're bringing in. They're minuscule. So the
profit margins are just, they're significantly
higher. But then you have the moat, the barrier
to exit. Let's say I'm your landlord in an apartment
and I raise your rent by $200 a month. What do
you do? I'd be angry. And I'd probably start
looking for a new apartment, hire a U -Haul for
a few hundred bucks and move out. Right. You
can leave. But now let's say I own the mobile
home park and I raise your lot rent by $200.
Can you leave? Well, no, not really. Like you
said, it would cost me $10 ,000 to move my house.
I'm stuck. You are economically trapped. That
is the captive market we talked about. The investors
know you can't afford to leave, so they can push
the rent right up to the absolute breaking point.
Well, that's a cynical business model. It's cynical,
but it's an incredibly accurate description of
the model. I mean, look at Stockbridge Capital
Group. They're a perfect case study. They bought
up a portfolio of around 200 parks. Between late
2016 and the end of 2017, so just over a year,
they saw a return on their investment and ROI
of more than 30%. Hold on. Say that again. 30%.
More than 30%. In one year. In real estate. I
always thought a fantastic year in real estate
was, I don't know, 8 or 10 percent. 10 percent
would be great. 30 percent is. It's astronomical.
That's the kind of return you normally only hear
about with like a high risk tech startup that
strikes gold or some venture capital bet. To
get that from a boring asset like affordable
housing is just it's unheard of. How much of
that is them just, you know, raising rents versus
some kind of financial wizardry? A lot of it
is driven by aggressive rent hikes, but there's
a huge component of financial engineering and
leverage, too. And this is where the story gets
either darker or more ironic, you know, depending
on how you look at it. A huge number of these
corporate buyouts are financed with government
backed loans. You don't mean Fannie Mae and Freddie
Mac? The very same. The government sponsored
enterprises. Their entire mission, their legal
mandate, is to promote liquidity and support
affordable housing in the market. Right. So because
mobile homes are, on paper, inherently affordable,
Fannie Mae provides billions of dollars in low
interest financing to these private equity firms
to go out and buy the parks. Wait, let me get
this straight. The United States government is
subsidizing private equity firms to buy up affordable
housing, which then allows those firms to jack
up the rents on residents to generate a 30 percent
return for their investors. That is the feedback
loop. Yes. In that Stockeridge deal we just mentioned,
Fannie Mae provided $1 .3 billion in financing.
They actually put out a press release labeling
it as a win for preserving affordable housing.
But for the person living there, it doesn't feel
like preservation. It feels like the new owner
is just there to squeeze them. That is the common
experience, yes. And the prices for the parks
themselves are just exploding. I saw a note in
the research. The Carlisle Group. paid $230 million
for just four parks in Mesa, Arizona. That was
a real watershed moment. That deal sent a signal
to the entire market that these weren't some
kind of junk asset anymore. These were prime
institutional grade real estate. But you have
to think. If a firm like Carwile pays that kind
of premium price, they have to get a premium
return for their investors. Of course. And where
does that money come from? It has to come from
the pockets of the people living there. The retirees,
the working class families. It's the only place
it can come from. And this really brings us to
what's called the tenant trap. The core vulnerability
of this whole housing model is that fundamental
separation of the house and the land. You own
the depreciating asset, the box, while you rent
the appreciating asset, the land. It completely
flips the idea of homeownership on its head.
I mean, you buy a home to build equity, to have
stability. But here, you buy the home, but you're
still basically a tenant. Massive rent hikes.
And it's worse than being an apartment tenant.
If you get evicted from an apartment, you lose
your place to live. If you get evicted from a
mobile home park, you don't just lose your spot,
you lose your house. You lose all your equity.
Because you can't move it. And if you can't afford
to move it, and most people can't, you often
have no choice but to abandon it or sell it to
the park owner for pennies on the dollar. So
the park owner gets the land back, ready for
the next person, and they get a home for next
to nothing that they can then turn around and
rent out or resell. It sounds almost predatory.
Many critics and residents would argue that predatory
is exactly the right word for it. The business
plans for these acquisitions often explicitly
state that the current rents are below market
and that there's an opportunity for aggressive
increases. But market rate doesn't mean anything
in a captive market. It just means whatever people
can possibly pay before they go completely broke.
That's the practical definition, yes. OK, but
are they at least putting some of that money
back into the parks? You know, if my lot rent
goes up 30 percent, am I getting a new playground
for the kids or, I don't know, better roads?
The anecdotal evidence and reports from residents
suggest often no. Because the residents can't
leave, there's no competitive pressure on the
owner to improve the amenities. In a normal rental
market, if the landlord across the street has
a nicer pool, you move there. Here, that incentive
for customer service is basically broken. The
profit model is about extraction, not about adding
value. That is a grim picture for the people
living there. But surely this isn't happening
in a vacuum. Is there any kind of pushback, any
new regulations to protect these people? There
is, but it's very much a David versus Goliath
kind of fight. The laws that govern these communities
are mostly at the state level, and many of them
haven't been seriously updated in decades. But
some states are trying. Some are. Colorado is
probably the best example right now. What's going
on in Colorado? They pass legislation that gives
residents what's called an opportunity to purchase.
So basically, if a park owner decides to sell,
say, to one of these big private equity firms,
they first have to give the residents official
notice. A chance to buy it themselves. A chance
to make a counteroffer, yes. They usually get
90 days. 90 days. That seems impossibly short.
Yeah. How are you supposed to organize, you know,
100 different families, get them all on the same
page and find financing for a multimillion dollar
property in three months? It is an incredible
sprint. It's so, so difficult, but it's not impossible.
It has happened. There are nonprofits like an
organization called ROC USA, that's resident
owned communities, that specialize in helping
these groups navigate the process and find financing.
And when it works? The whole dynamic must change.
It flicks completely. Because when the residents
own the park as a co -op, they're not trying
to squeeze out a 30 % profit for outside investors.
They just need to cover the mortgage and the
operating costs. So rents stabilize, sometimes
for years. That seems like the only real structural
solution, then. You have to reunite the ownership
of the home with the ownership of the land. It's
definitely the most effective fix. But it's a
tough battle. They're often competing against
all cash offers from huge firms that can close
a deal in like a week. And sometimes it's not
even about rent hikes. I read about a case in
San Antonio at the Mission Trails community.
That was about just. Erasing the park entirely.
That's the other existential risk. The highest
and best use risk. Mission Trails was a community
right on a beautiful river. A developer, a company
called White Conley, they looked at that land
and they didn't see a mobile home park. They
saw luxury waterfront condominiums. So they just
bought the land to bulldoze the whole community.
Exactly. The residents were all displaced. They
got some money for relocation. But for many of
them, the community they had spent decades building
was just... It just highlights that no matter
how long you've lived there, no matter if you've
paid your rent on time for 20 years, if the land
under your home becomes valuable enough, you're
just in the way. You're an obstacle to profit.
OK, I want to pivot a little bit here because
if we only focus on this exploitation narrative,
we're missing a huge and very different part
of the manufactured housing world. Right. We
have to talk about the places where people are
literally lining up. fighting to get in, not
trying to get out. The whole 55 and over phenomenon.
Yes. This is the complete flip side of the coin.
If you go places like Florida, Arizona, Palm
Springs, you'll find these manufactured housing
communities that, well, they look more like country
club resorts than what we think of as a trailer
park. And these are the communities that operate
under OPA. The Housing for Older Persons Act.
Correct. OTPIA is a federal law that creates
an exception to the Fair Housing Act, allowing
these communities to legally discriminate based
on age. So they can say no kids allowed. They
can. The rule is typically that at least one
resident in the home must be 55 or older, and
they can and do strictly prohibit anyone under
18 from living there. No screaming kids by the
pool. That is the number one selling point. It
creates this very controlled, very quiet, very
predictable environment that a lot of retirees
are looking for. And because these residents
are often retirees who have savings, who have
equity from a previous home, the whole power
dynamic is different. Tell me about the amenities.
We're not talking about a rusty swing set and
a patch of grass here. No, no. We are talking
about heated swimming pools, massive clubhouses
with... Commercial grade kitchens for events,
pickleball courts, shuffleboard, pudding greens.
Pickleball, of course. Of course. And, you know,
a full social calendar of events run by an on
-site manager who also makes sure the lawns are
perfectly manicured. And what about the homes
themselves? Are they different? They're often
much higher end. Many of them are ground set,
which means they're lowered into a shallow pit
so the floor is flush with the ground. No stairs
to climb. Inside, you'll find drywall, granite
countertops, two car garages. I mean, if you
didn't know it was a manufactured home, you wouldn't
know. But the legal structure is identical, right?
They're still renting the land. That's the great
irony of it all. Even in these luxurious million
-dollar parks, they are still land lease tenants.
They don't own the dirt. So why does it work
there? Because they have leverage. They have
the financial means to leave. They could sell
their home and go buy a condo or a traditional
house down the street. So the park owners have
to treat them like valued customers, not captives.
The note isn't poverty. It's lifestyle. Exactly.
They stay because they want to be there, because
they like the community and the amenities, not
because they're trapped. So the model itself
isn't inherently broken. It can work, but only
if the residents have enough economic power to
keep the landlord honest. That's it in a nutshell.
It's not the type of house that creates the misery.
The lack of leverage. Let's talk geography for
a minute. We've mentioned Florida and Arizona
for the 55 plus parks. But is this whole thing
mostly a sun built phenomenon or a deep south
thing? Culturally, yeah, we associate them with
the south and with rural areas. But the reality
is they're everywhere. Every state has them.
But there's this really strange paradox happening.
What was that? Even though the demand for affordable
housing in this country is just through the roof,
the number of new mobile home parks being built
is practically zero. Why is that? You'd think
if they're so profitable, developers would be
building them everywhere. Oh, it would be incredibly
profitable to build new ones. The problem is
you're literally not allowed to. It's pure NUBism.
Not in my backyard. The one and only. So towns
and cities just ban them. They don't usually
pass a law that says mobile home parks are banned.
They're more subtle. They just use zoning codes
to make it impossible. They'll require, you know,
minimum lot sizes that are too big or they won't
zone any land for that specific use. Or they'll
just pass a moratorium. Like what happened in
Maine. Exactly. Look at Dover -Foxcroft, Maine.
The town select board there had a serious debate
about putting a moratorium on any new mobile
homes being brought into town. What's the official
argument against them? Why do local governments
hate them so much? It comes down to two things.
The tax base and prejudice. A mobile home park
consumes municipal services schools for the kids,
police, fire, road maintenance, just like any
other neighborhood. Right. But because the homes
themselves are often taxed as personal property,
like a car, instead of as real estate, the town
collects far less in tax revenue compared to
a subdivision of, you know, big stick -built
houses. So the town accountant looks at it and
sees a net loss. They see a drain on the budget
and, frankly, a drag on the property values of
the surrounding homes. So they just zone them
out of existence. But here's the kicker. Go on.
This scarcity, this refusal to build new parks,
it actually helps the private equity firms. Oh,
basic supply and demand. If you can't build any
new supply, the existing supply becomes infinitely
more valuable. You got it. The nimby wise who
are trying to protect their property values are
accidentally making the private equity investors
even richer by creating a government enforced
monopoly. It's a perfect storm. I want to touch
on one more specific American stigma before we
go global. The weather. The whole tornado magnet
myth. Is there any real truth to that? Or is
it just that the TV news cameras only show up
at trailer parks after a big storm? It's a classic
mix of physics and confirmation bias. Historically,
yes, there was some truth to it. Older mobile
homes pre 1976 were lighter. They weren't well
anchored and they were just structurally weaker
than a site built home. The wind could get underneath
it and just flip it. It's basically a big wing
sitting on some blocks. Right. But after 1976,
and especially after Hurricane Andrew devastated
Florida in 1992, the federal HUD codes for construction
got much, much stricter. Modern manufactured
homes are built to specific wind zone standards
depending on where they'll be located. What does
that mean in practical terms? Are they just bolting
them to the ground? Essentially, yes. They use
things called hurricane straps, which are these
heavy -duty galvanized steel ties that anchor
the home's steel chassis directly into concrete
footings that are poured deep into the ground.
They're engineered to withstand very specific
wind loads. So a new modern home that's properly
installed isn't going to just blow away like
Dorothy's house in The Wizard of Oz. The data
is very clear. They perform extremely well in
high winds. But that image, that stereotype,
it just persists. And I think for a lot of us,
that image was permanently burned into our collective
memory in 2005. Hurricane Katrina. The FEMA trailers.
After Katrina wiped out New Orleans, FEMA rushed
in thousands and thousands of what were basically
travel trailers, not permanent manufactured homes,
but small, temporary travel trailers to house
all the displaced people. I remember those images.
Just endless fields of these little white boxes.
It was a necessary humanitarian response, but
it was an absolute public relations disaster
for the manufactured housing industry. Why? Because
those trailers were designed for weekend camping
trips, not for people to live in for months or
years. They were flimsy. They had major issues
with formaldehyde off gassing. But because the
media and the public just called them trailers,
everyone conflated them with actual legitimate
manufactured housing. So it reinforced this idea
that this type of house. is substandard or for
emergencies only. Exactly. It became this visual
shorthand for government failure and desperation
instead of being seen as a viable permanent housing
solution. OK, let's zoom out way out. We've been
very focused on the U .S. so far, but people
live in small prefabricated homes all over the
world. Does the trailer park, as we know it,
even exist in other countries? It does, but the
cultural meaning and the legal framework around
it can shift dramatically. The same physical
object can mean something completely different
when you cross an ocean. Okay, let's start down
under. Australia, they have a huge caravan culture,
right? They do. In Australia, the line between
what we'd call a trailer park and an RV park
is very blurry. They just call them all caravan
parks. And while they certainly have long -term
residents, there's also this massive cultural
phenomenon called the Grey Nomads. The Grey Nomads.
I love that name. Isn't it great? It refers to
retirees who sell their big family home in the
suburbs, buy a massive caravan or motorhome,
and then spend their golden years just endlessly
circling the continent. It's not seen as a step
down. It's seen as the ultimate adventure. It's
a version of the Australian dream. So living
in a caravan park in Australia can actually be
a badge of freedom, not poverty. To a large extent,
yes. Now, there are still parks that are primarily
for low income housing, but the overall stigma
is really diluted by this very popular, very
visible recreational culture. OK, let's jump
to the UK. I watch a lot of British TV and there's
always a crime scene at a static caravan park
on the coast. The static caravan. Yes, a true
British institution. In the UK, these are overwhelmingly
used as holiday homes. It's not where you live
full time. You buy one in a park, usually by
the seaside, and you go there for weekends or
for a few weeks in the summer. So it's kind of
like a vacation cottage for the working and middle
classes. That's historically been its role, yes.
Though some of them are getting incredibly fancy
now. But here's the really interesting legal
twist. Most of these holiday parks have a clause
in the contract that prohibits year -round occupancy.
What do you mean? You are legally required to
vacate the property for a few weeks a year, usually
in the dead of winter, like in January or February.
Why? It's a legal mechanism to prove it's not
your primary residence and to prevent you from
gaining permanent tenancy rights. That's a very
strange loophole. It is. But there is a second
category called park homes, and those are for
retirees, much more like the American 55 -plus
model. Manicured gardens, very quiet, very respectable.
In Britain... Moving to a park home is marketed
as a smart, sensible downsizing decision, not
a sign of failure. OK, let's cross the English
Channel to France. The French are famous for
their rules and bureaucracy. How do they deal
with mobile homes? With typical French rigor
and logic. In France, it is generally illegal
to live in a mobile home as your permanent residence,
full stop, even if you own the land it's sitting
on. Wait, really? So if I buy a beautiful field
in Provence, I can't just park a mobile home
on it and live there? No, you cannot. A mobile
home is legally defined as a leisure accommodation.
You are not allowed to stay in it for more than
three consecutive months. If you want to live
on that land permanently, the state requires
you to build a proper building. That's a fundamental
difference in the whole philosophy of what a
home is. It absolutely is. They place a much
higher value on the aesthetic and structural
permanence of the landscape of the village. The
American model of just permanent mobile living
is effectively zoned out of existence there.
All right, let's go to Germany. Our research
team found something here that is just fascinating.
The concept of the Wagenberg. Ah, yes. This might
be my favorite example of how the same physical
object can have a completely opposite cultural
meaning. In the U .S., as we've seen, the trailer
park is becoming a tool of hypercapitalism. In
Germany, the Wagenberg is a tool of anti -capitalism.
Okay, you have to explain that. So starting back
in the late 70s and 80s, alongside the punk and
squatter movements in cities like Berlin and
Hamburg, people started creating these communities
called wagonbergs, which translates to wagon
forts. Wagon forts. That sounds defensive. It
was meant to be. They would get old construction
trailers, a bow wagon or old circus wagons, anything
on wheels. They'd retrofit them with wood burning
stoves and insulation and then arrange them in
a circle on a piece of abandoned industrial land
or a vacant lot. So this wasn't about a corporation
providing affordable housing. This was a political
act. It was a radical political statement. It
was a total rejection of the mainstream rental
market, a rejection of bourgeois living standards.
They are almost always collective, self -governing
communities. Do they still exist today? They
do, though they are under constant threat from
gentrification as cities clean up those vacant
lots. But if you walk into a Wagenberg in Berlin
today, it's like entering another dimension.
It's vibrant. It's chaotic. art everywhere. It
is the absolute antithesis of a manicured, corporate
-owned retirement park in Florida. That is amazing.
The object is the same, a box on wheels. But
the entire ideology is flipped 180 degrees. It's
incredible. And then you go next door to the
Netherlands and you find a completely different
debate about camping versus living. Right. The
Dutch love their rules and order. Oh, absolutely.
Everything is planned. They have authorized caravan
parks, but the government is obsessed with the
distinction between recreation and residence.
There's this huge gray market of people who are
secretly living permanently on vacation campsites.
Why? Because the rent is dirt cheap. Maybe 1
,000 or 1 ,500 euros for an entire year. That's
nothing. It's incredibly cheap. And the government
kind of tolerates it up to a point, but then
periodically they'll crack it. down, because
if you're officially living at a campground,
you might not have a legal address, and that
messes up the whole population registry and can
make you fall out of the social safety net. We
can't really talk about mobile living in Europe
without addressing the most sensitive aspect
of it, the groups for whom mobility isn't a housing
choice, but a core part of their ethnic identity.
The travelers. Right. This is by far the most
complex and contentious part of this whole landscape,
especially in the UK and in Ireland. We're talking
about traditionally itinerant ethnic groups like
the Romani people and Irish travelers. And the
term they use for designated sites over there
is a halting site, correct? Yes. A halting site
is a government provided authorized area for
these groups to stop and live for a period of
time. And this just opens up a conflict that
goes back centuries, doesn't it? The fundamental
tension. between a settled landowning society
and a nomadic one. It's exactly what it is. Modern
property law, zoning, taxes, all of it is designed
for sedentary people. It has a very hard time
accommodating a culture that's based on movement.
So you have these authorized sites, which are
legal but often in short supply or poorly maintained,
and that leads to unauthorized encampments. That's
when a group pulls their caravans on too. like
a public park or a farmer's field. Yes. And this
is where you get massive social friction. The
local settled population complains about trespassing,
about a lack of sanitation, because these sites
obviously don't have sewage or waste disposal,
and often about crime or antisocial behavior.
And the police get stuck right in the middle.
They're caught in an impossible position. They're
trying to enforce private property rights evicting
trespassers while also trying to uphold human
rights legislation that... protects the traveler's
traditional way of life. It's a legal and cultural
minefield. But it really highlights that for
some people, living on wheels isn't an economic
decision or a political statement. It's just...
It's their identity. So we have covered a ton
of ground here from, you know, the private equity
boardrooms of Apollo Global Management all the
way to the punk squatter camps in Berlin. When
you take a step back and look at this whole sprawling
picture, what's the big takeaway? What's the
synthesis? For me, I think the central theme
that runs through all of this is the decoupling
of the home from the land. Expand on that a bit.
For most of human history, if you owned your
house, you owned the dirt it sat on. They were
a single unit. This model, the manufactured housing
land lease model, it breaks that link. And what
we are seeing in stark terms is that in a modern
capitalist system, the person who controls the
land holds all of the power. The house itself
is almost just a detail. It's the anchor that
keeps you paying rent on the land. It's exactly
that. It's the hook. It doesn't matter if you're
a retiree in a luxury park in Florida or a working
family in a struggling park in Ohio. If you do
not control the ground beneath your feet, your
sense of security is ultimately an illusion.
And the corporate consolidation we talked about
is just that dynamic playing out on an industrial
scale. It's the financialization of that insecurity.
Wall Street figured out that there is immense
profit to be made by becoming the landlord to
people who have no other options. Landlord of
last resort. And because land is finite and the
demand for affordable housing is basically infinite,
the value of that dirt is only going to go up.
The pressure on these communities is only going
to get more intense. It really fundamentally
challenges the whole American dream of homeownership,
doesn't it? We tell people, buy a home, build
wealth. But for millions of people in these homes,
they did the first part. They bought the home.
But they're not building wealth. They're just
building a revenue stream for a real estate investment
trust. They are capturing all of the depreciation
of the physical structure while the investor
captures all of the appreciation of the land.
It is a perfect economic trap. So here's the
thought I want to leave everyone with. We tend
to think of the trailer park. That's a kind of
relic, right? A throwback to a different time.
But given everything we've just discussed, the
housing affordability crisis, the massive influx
of private equity, this broader shift in our
economy towards a subscription model where you
rent everything from your music to your car.
Are we actually looking at the future? Exactly.
It's the model of the land lease community where
you might own the walls around you, but you will
never, ever own the place where you stand. Is
that actually the future of housing for more
and more of the working and middle class? If
the smartest money in the world is betting billions
of dollars that it is, the answer might be yes.
It's a pretty sobering thought. The next time
you drive past one of those communities, don't
just glance at the vinyl sighting. Think about
the land and ask yourself who really owns it.
Indeed. Thanks for diving deep with us. We'll
see you on the next one.