Residents of Hermosa Mobile Home Village north of Durango can breathe a sigh of relief.
Their purchase of the property was finalized Wednesday, making them a full-fledged resident-owned community after a monthslong effort to secure funding and assemble all the necessary pieces.
“I am ecstatic that it is finally over and done with, and now we can move forward,” said Jan Wesley, who has lived at Hermosa Village for more than three decades and serves as president of the resident-owned community’s board.
After being informed of the owner’s intent to sell this summer, residents mobilized quickly to form a cooperative and pursue a resident-owned community, or ROC, with the help of Thistle ROC – a nonprofit organization that helps mobile homeowners secure financing to buy their land.
ROCs, manufactured housing neighborhoods where the land is collectively owned and managed by residents, offer one solution to the affordable housing dilemma. Collective ownership helps stabilize rents in a housing model often threatened by the prospect of a sale to a new property owner.
Hermosa Village, a community of 56 mobile home lots and two stick-built homes north of Durango, is occupied by 100 permanent residents and offers some of the area’s few affordable housing options.
Longtime residents had paid about $400 to $500 a month in rent, well below the local average, while newer tenants paid up to several hundred dollars more.
Under the cooperative model, monthly rent will be set at $868. That will mean an increase for some residents, like Wesley, who was paying in the $400 range. For newer residents paying more, it could mean a decrease.
“I look at it this way: I can't go anywhere else in this town for $868,” Wesley said. “… We own our own destiny.”
Residents will no longer be beholden to a corporate owner buying the park and raising rents for profit – a scenario some feared could price them out of Durango entirely.
Rents will increase in June, Wesley said, because a 60-day notice is required before the change becomes official.
It’s a success story, particularly because not all mobile home parks reach the finish line. Last year, Apache Mobile Home Park in Durango attempted but failed to generate enough momentum to overcome some of the several obstacles unique to it’s location.
Resident involvement is one of the key factors Thistle considers when determining whether a park is a viable loan candidate and likely long-term success story. For Thistle employee Ryan Hanuer, who worked closely with the community throughout the process, the residents’ involvement was the main contributor to their successful outcome.
“The No. 1 factor is definitely the residents,” Hanauer said. “They were engaged from the get go and were really determined to move forward in the process.”
Two additional pieces helped secure the deal: the owner’s support and backing from the community.
In December, the park’s former owner accepted the residents’ $5.45 million purchase offer over a larger bid from a competing buyer.
“Our previous owner, being considerate enough to sell to us to make sure that we are affordable housing, that was the biggie right there,” Wesley said. “If she hadn't been considerate enough to say she wanted us to own this, we wouldn’t have owned it.”
And community-rooted financing ultimately clinched the deal.
While the bulk of the financing was provided by ROC Capital, the co-op still needed roughly $800,000 to help offset rent increases tied to the repayment plan.
So three local organizations stepped in.
HomesFund, Region 9 Economic Development District and First Southwest Bank each provided financing to cover the additional sum, allowing the cooperative to purchase the park.
The three organizations provided a low-rate loan using revolved funds – loan capital that has been lent out, repaid and reinvested into community projects, according to a HomesFund news release announcing the signing. The “recycled dollars” and low-rate loan reduced the amount the park needed to borrow and lowered rents for residents.
“This transaction demonstrates the multiplying impact of local capital; when funds revolve within a community, they don’t just support one project – they create an ongoing cycle of reinvestment and local impact,” the release said.
HomesFund said the ROC model and Hermosa’s success is an affordable housing solution that should be replicated across the region.
Thistle will continue to be a support for the community as it navigates cooperative property ownership.
There will be a lot to figure out. The resident board will be responsible for budgeting to avoid any further rent increases.
“It's going to be an interesting experience,” Wesley said.
jbowman@durangoherald.com
An earlier version of this story erred in saying the Hermosa Mobile Home Village is west of Durango. The mobile home park is north of Durango.
