Residents of Hermosa Mobile Home Village, north of Durango, voted “yes” on Thursday to purchase the property on which their park sits and officially form a resident-owned community.
It’s a major step toward ensuring long-term housing stability for the community.
“Just the fact that we control our destiny is really the best thing about it,” said Brian Franks, who has lived in the park for six years. “An investment group is not going to come in and just start increasing our rent to where it's crazy now.”
Residents mobilized this summer after learning the property owner planned to sell the park. Concerned about rent hikes and displacement, they moved quickly to form a cooperative and pursue a resident-owned community, or ROC – a model in which residents collectively own and manage the land beneath their homes.
Thursdays vote finalized that decision, with 97.5% of residents voting in favor.
“It was basically our last out,” Franks said.
The vote formally approved financing packages and loan terms, along with an engineering report outlining capital improvement needs and how those projects will be funded over the next decade.
The final step is completing legal documents and closing on the sale, which Franks said is scheduled for March 3.
Resident-owned communities allow manufactured housing residents to control rent increases and park management, rather than leaving those decisions to for-profit owners.
The model – one solution to the affordable housing crisis – has gained more momentum in Colorado over the past several years, particularly in high-cost areas such as La Plata County, where housing prices have far outpaced wage growth.
“There’s no place to live in Durango that anybody can afford,” said Olivia Burkhart, who has lived at Hermosa Village for all three decades she has lived in Durango.
The process to form an ROC is complex and lengthy. Even with the help of Thistle ROC, the Colorado-based nonprofit that helps guide residents through the purchase and management of community-owned mobile home parks, there were still many parts to wrangle.
“I’m pretty happy about it all and I’m glad it’s almost over,” Franks said.
Securing financing was one of the biggest challenges, as residents worked to piece together multiple funding sources while keeping rents affordable.
What worked in favor for Hermosa Village was the unusually supportive owner.
“The previous owners’ willingness to sell it to us was really one of the more helpful things,” he said. “She turned down a higher bid, pretty much to make this happen for us. And I’m not sure a lot of people in America would do that.”
While the purchase will stabilize rents long-term, it does require rent increases.
Under the cooperative model, monthly rent will be set at $868, Franks said. That represents an increase for some longtime residents who were paying closer to $450 per month, while newer residents were already paying $700 or more.
“It’s going to be hard to handle. Obviously, I won’t be able to retire for a while,” Burkhart said. “But if I want to stay in Durango and La Plata County, that’s what I’m going to have to pay – because there’s no place cheaper.”
Initial rent projections were higher, driven in part by a remaining $800,000 loan balance carrying a 6.75% interest rate.
In December, the cooperative’s five-member, resident-led board sought philanthropic assistance to reduce costs – and received support from several local organizations and lenders.
“We got some really great local community support from HomesFund, Region 9 and First Southwest Bank,” Franks said. “We’re really happy about all that.”
jbowman@durangoherald.com
