Mobile-home park residents on P.E.I. wonder how nationwide sale will affect them

Residents of six mobile-home parks on P.E.I. are worried about how a large buyout of properties across the country will impact them — and a U.S. watchdog group says the change in ownership could mean higher fees.

Last month, the Canadian Apartment Properties Real Estate Investment Trust  — or CAPREIT — announced it was selling the six parks on the Island as part of a $740 million deal with TPG Real Estate, a private-equity company based in the U.S.

The sale involves 12,138 residential lots for manufactured mini-homes or mobile homes spread across 75 sites throughout Canada.

On P.E.I., the parks being sold are Chateau Estates, Meadowvale Community, Parkwood Estates, River Ridge Estates I and II, Riverview Estates and Woodridge Place.

Geraldine Rodd, who has lived at Chateau Estates for 15 years, said CAPREIT did not tell residents anything about the sale — and that has fuelled both surprise and speculation.

“I was quite shocked by it, for sure. Just worried about, what are they going to do? Are they going to kick us out or is everything going to go up? Is the rent going to go up? Is the lot fee going to go up? It’s just, it’s just a worry for everybody, for sure.”

In a statement to CBC News, TPG Real Estate said it has been a long-standing investor in the Canadian real estate sector.

TPG Real Estate said the newly purchased sites will be part of a new company with additional capital and resources to support affordable housing in Canadian communities.

We believe this acquisition will be good for residents of the communities in Prince Edward Island.— TPG Real Estate

“This acquisition is about investment into the communities, and we believe this acquisition will be good for residents of the communities in Prince Edward Island,” it said.

But Jordan Ash of the Private Equity Stakeholder Project, which he calls a non-profit watchdog organization that works to counter the harmful impacts of private-equity companies on communities, said he’s witnessed similar transactions in the U.S.

“They follow a pretty standard business model and it doesn’t vary, which is they come in, they raise the rents, they add on other fees, make residents responsible for things that they didn’t have to pay for before, and also cut back in terms of maintenance and upkeep of the park,” he said in an interview.

When private-equity businesses buy an asset such as a mobile-home park, Ash said they are rarely in it for the long term. Rather, he said, they are looking to increase the value of that park in order to sell it for a profit.

“It’s not because of the money that it’s making right now, it’s because the money that they think it can make. They view it as undervalued… They think they can, you know, squeeze even more money from it.”

Increasingly we’ve seen tenants on P.E.I. in precarious housing situations because of landlords selling off their properties — often to national or international companies.— Green MLA Peter Bevan-Baker

There is no evidence TPG Real Estate plans to do that on P.E.I., but the sale has raised concerns from Green Party MLA Peter Bevan-Baker.

“Increasingly we’ve seen tenants on P.E.I. in precarious housing situations because of landlords selling off their properties — often to national or international companies,” he said in a statement to CBC News.

“These are Islanders’ homes, and with a low vacancy rate across the Island, there may be nowhere else for people to go if they cannot afford to pay an increased rent because of this sale.”

Rodd said she has only a small mortgage left on her mini-home itself, but she pays a fee to lease the land on which it sits. She is on a fixed income, so if that fee goes up, she would have to consider moving.

It would be difficult to transport the home to another location, though, so she fears she may have to sell and move to seniors’ housing — if she could even get into such a complex given the low vacancy rate on P.E.I.

“I’m thinking about it a lot, for sure. Like, where am I going to go? Where am I going to go?”

Subject to conditions

The transaction is subject to being found to be in compliance with the Canada’s Competition Act, as well as other closing conditions.

Under P.E.I.’s Lands Protection Act, a non-resident person or a corporation is not allowed to hold land totalling more than five acres without permission to do so from the Lieutenant Governor in Council — meaning the provincial cabinet, with endorsement from the Island’s Lieutenant Governor.

“Therefore, if the aggregate land holding is in excess of five acres, it would require an application for land acquisitions by non-residents or corporations to the Island Regulatory and Appeals Commission, who would make the determination as to whether the applicant is a non-resident versus resident corporation,” the province said in a statement after being asked to comment on the TPG Real Estate deal.

“IRAC processes applications and forwards its recommendation to the department for consideration by executive council.”