In the latest episode of "Last Week Tonight," Oliver took aim at PE firms and other investors for buying up mobile home parks and promptly hiking rents and other fees for residents, many of who live on fixed incomes and lack the financial resources to move or otherwise counter potentially predatory practices.
"Over 100,000 home sites traditionally run by mom-and-pop businesses are now owned or partly owned by private equity firms like these," Oliver said, as the logos of The Carlyle Group, TPG Capital and Blackstone flashed onto the screen. "The homes of some of the poorest people in America are getting snapped up by some of the richest people in America. And luckily, there have been no problems whatsoever. Except, I’m obviously kidding. It’s going terribly."
Specifically, Oliver took aim at Carlyle, billionaire investor Warren Buffet and Frank Rolfe, a private investor who reportedly controls more than 30,000 homes across 25 states. Oliver plays one clip showing an elderly resident of a Carlyle-owned mobile home community in Sunnyvale, CA, where Carlyle instituted an annual 8% rent hike shortly after its acquisition; the woman, who's identified only as Sandra, admits she might be not able to pay rent for the land on which her mobile home sits, even though she already owns the home itself.
"It's true. That woman may lose her home so The Carlyle Group, an investment firm with $216 billion in assets, can make more money for its shareholders," Oliver said.
Oliver's segment seemed to build off a Pension & Investments report published last week that investigates an increased appetite for mobile homes on behalf of real estate investors. Citing data from Real Capital Analytics, the report notes that institutional money managers were responsible for 17% of the $4 billion spent on mobile home transactions, or about $680 million. That's a steep hike from 2013, when they were the source of 9% of the $1.2 billion invested in the space, or about $108 million.
The P&I report also goes into greater detail on what seems to be the same Sunnyvale community noted by Oliver, which it identifies as Plaza Del Rey. P&I says Carlyle has been raising rates at the park 8% each year since its 2015 acquisition, compared to 3% annual increases under prior ownership; Carlyle claims the hiked rents were necessary to cover capital improvements.
That's one of the most common justifications investors offer to residents for rent hikes. And it's an argument Oliver, for one, isn't buying.
“If you asked ... why they got into private equity, I’m sure they'd say to you, 'Oh, to break even on investments into the beautification of affordable housing. Why else would we do this?'" Oliver quipped.
From the perspective of private equity firms and other investors, mobile home parks are attractive because they offer a consistent revenue stream, require less upkeep than other real estate investments and are in steady demand. While many residents own their mobile homes themselves, they pay rent to park owners for the land underneath their homes. And the costs of moving a mobile home can be prohibitive to residents, many of whom aren't exactly flush with disposable income.
Oliver's segment also draws attention to a seminar course for investing in mobile homes run by Rolfe, who's compared it to owning “a Waffle House where everyone is chained to the booths”; there's now a page on the website of Rolfe's Mobile Home University program with the header, "The Truth About My Notorious Waffle House Quote."
In addition to Carlyle's dealings, the P&I piece points to recent mobile home acquisitions by Blackstone and TPG as other evidence of PE's participation in the space, which likely explains the presence of their logos in Oliver's intro.
“Buying a mobile home and renting the land underneath it can be financially catastrophic," Oliver said. "And it is very important that anyone that considers doing that knows the risks involved."
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