Mobile Home Zoning Succeeds Elsewhere

GUEST COLUMN

Opinion post by Rick Su

On March 10, Chapel Hill Town Council Member Hongbin Gu petitioned the council to consider a zoning change that would restrict the use of certain land, including the mobile home park on 1200 MLK Jr. Blvd., to be used only for manufactured housing.

Gu argued that Chapter 160D, the legal land use law for North Carolina, allows council members to redesignate the land as they see fit.

Council did not accept the petition. Mayor Pam Hemminger later said it was not within council’s powers to force landowners to keep a mobile home park open.

In researching solutions to protect mobile home parks at risk for redevelopment in town, Gu spoke with Rick Su, a professor at UNC School of Law whose area of expertise is land use, property and real estate, and state and local government law. They discussed whether council has the power to pursue this rezoning option. The following is a recap of their conversation, edited for length and clarity.

Mayor Hemminger said that in North Carolina, local governments have no power to stay evictions or force landowners to keep a mobile home park open. Would you comment?

In terms of what can be done, I think there’s still some questions open, and certainly other communities have approached this differently.

The only area in which the state has come in to act isn’t in trying to protect more rights for mobile home parks but to deal with people trying to keep mobile home parks out. 160D makes it harder for a community to keep mobile home parks out. If a locality wants to welcome or preserve mobile home parks, and the state law is not in conflict with that, 160D is moving in the same direction, though obviously, it doesn’t go that far.

For any local government to act, there’s usually two questions: first, whether they have authority to act, and then whether they’re preempted [from acting] by state law. In North Carolina, the common perception is that unless the state gives you explicit authorization to do something, you don’t have the power to do it. State law in North Carolina has actually granted very broad police powers to local governments to regulate not only land use, but to regulate generally on behalf of the general welfare, health and safety of its residents. That provision of state law is quite broad, though I have found that localities in North Carolina are reluctant to use it.

The third thing is that there is a specific state law that prevents localities from [adopting] rent control, so municipalities wouldn’t necessarily be able to control rents. But that doesn’t mean necessarily that a locality can’t do things within their power that would either change the economic calculus or offer some other types of protections — and localities in other states have actually been on this for a while.

A lot of communities around the country have been implementing a particular zone for manufactured housing that largely restricts any use other than manufactured housing. Now, what that does is [signal] that it’s the community’s plan, regardless of the owner, to keep that particular use attached to that parcel of land.

The mayor is correct: Just applying the zoning ordinance to it doesn’t mean that the owner cannot evict. But the reason this has been effective in other communities is because that’s also a tremendous cost to the developer. If a particular parcel is zoned residential, sure, you could demolish the house and use it for nothing. But you’re just imposing costs on yourself. So, what usually happens in those communities is that if a developer wants to sell, they’re not going to evict, because this land can only be used for manufactured housing. It’s better to sell an intact community than to evict everyone and then sell it to someone who then would have to rebuild it up as manufactured housing. Economically, it has a similar effect, even if the city cannot directly come in.

Charlotte and Wake County have done this successfully. Did they apply an overlay to protect existing mobile home parks from displacement?

These weren’t just overlays. Not only does 160D allow [overlays for manufactured housing], but lots of communities have it. You can have residential development, and maybe even commercial development, and then we overlay manufactured housing on top of it as another permitted use — that’s actually extremely common. In Charlotte and Wake County, there weren’t a lot of uses permitted [already] and then we put manufactured housing on top. These zoning districts were almost exclusively for manufactured housing, so you can’t do something else. An overlay, or adding another use, is to say, “You can use it for residential or commercial, but you also have to allow, if a developer wants it, manufactured housing.” What I found in Wake County and Charlotte seems stronger: If the developer wants to do something else, the land use steers you back or restricts you to primarily manufactured housing.

The mayor said that the law in and of itself will not protect the residents of an existing mobile home park, that the law will allow the owner to shut it down. Whereas what you’re saying is that this zoning classification will not require the mobile home park to remain open; but it creates an incentive structure that makes it likely it will remain open.

Both are true. What zoning does is set out a plan and incentivizes actors to follow that plan. There’s no requirement they do. But given the effectiveness of zoning, the incentive structure of it works really well. On the other hand, the mayor is correct: It doesn’t guarantee anything. No regulation is a guarantee, but if you want to steer or incentivize within a set of established powers, which is land use zoning, then it’s certainly proved effective in the past. Most comply with zoning, and when people own that land, they use it [rather than] leave it vacant.

How long does it usually take to enact a mobile home park overlay?

It varies, and it depends on the type. Some have been done within a few months, some have taken longer. Usually, when zoning gets held up, it’s environmental impact studies, something like that, but those usually have to do with zoning that would change the underlying use. Here, there would be no change in the land use. Usually, these could be done a lot faster than zoning that tries to change the existing use.

If a manufactured home overlay was proposed, and it took a long time to go through the approval process, could the owner sell and evict tenants in the meantime?

Certainly, and that has happened in the past with other zoning decisions. But would the owner do that? Likely not, unless they can also sell and then redevelop all within that time span. If they evict and sell, people are going to know that they’re selling when there is a rezoning being considered for the property that would preserve it as a mobile home park, so any buyer would know, “I’m taking a risk here, because if that gets passed, I’m going to be restricted to mobile home park use.” Then at that point, they might say, “I’d rather buy a populated home park.”

Is it a guarantee? Do we know exactly what people are going to do? No. But in this situation, even if the rezoning takes a while, to try to develop something that would otherwise be prohibited would also take a while. I think any developer there would think, “What price am I going to get for land that’s about to be rezoned to a mobile home park?” The value is in complying with the zoning that exists, or the zoning that’s coming down the pipe.

Would this incentive structure actually work to prevent developers from selling and evicting their tenants?

There are no guarantees. But in this particular case [1200 MLK Jr. Blvd.], even if there was no rezoning done, there were still a lot of permitted uses of that mobile home park. It might not have been the exact permitted use that the developer wanted, but it would still have a higher return than a mobile home park. It changes what we call the default position. If [the land] was largely restricted to a mobile home park, it’s not like they can evict and then resell as some other development that would also have a high potential. It would still be zoned for a mobile home park.

But nonetheless, I would say cities act better in a regulatory, proactive, nonreactive position. They should be looking forward. That’s why land use is about comprehensive plans, and zoning with regard to that plan — you can’t guarantee, unless you build it yourself, that you’re going to get exactly that.

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Rick Su is a professor and teaches land use, real estate, and state and local government law at UNC School of Law.