ORMOND BEACH, Fla. – A class action lawsuit obtained by News 6 accuses nearly a dozen corporations of conspiring to raise prices at manufactured home parks.
In a lot of these parks, residents own the home, but lease the land underneath. Manufactured homes have long been an affordable housing option, but as News 6 has reported, many people are being priced out.
Ruth Koretsky, 77, moved to Shangri La, a manufactured home community in Ormond Beach, in 2019 because of the low lot rent.
“I knew what direction the mobile home parks were going in, that they were starting to increase rents and take away services,” Koretsky told News 6. “I assumed because this park was small and old that it would take a long time for that to happen here.”
Unfortunately for Koretsky, that was not the case. She told us she is currently paying nearly double what she did six years ago. Koretsky’s lot rent was about $350 when she moved in. Now, she said, she pays close to $700 because of rising rent and extra fees.
“I only lived here a year when a corporation bought this place and started raising the rent,” Koretsky said. She added that services previously included in the base rent were shifted to become additional charges: “All the things they used to pay for, they added it on to our bill.”
Shangri La is operated by Lakeshore Communities Inc., which owns and operates manufactured home communities across the United States.
Lakeshore is one of 10 defendants named in a class action lawsuit. The lawsuit, which was filed in Illinois, alleges that manufactured home park owners “coordinated with each other to increase manufactured home lot rents systemically and unlawfully by purchasing and using market reports” published by Datacomp Appraisal Systems Inc.
Datacomp, which calls itself the largest provider of manufactured home valuations, inspections and market data, is at the center of the court battle. The lawsuit claims sharing “non-public” and “competitively sensitive” information eliminated competition among park owners on price, services and quality.
“They do nothing for us. We have no amenities and they do less and less for us,” Koretsky said, describing what she sees as deteriorating service quality despite rising costs.
The lawsuit alleges the defendants violated Section 1 of the Sherman Act, a federal antitrust law.
According to The Federal Trade Commission, the Sherman Act bans any unfair contracts or conspiracies that restrain trade. This includes price-fixing, dividing markets or rigging bids.
The lawsuit details a striking shift in lot rental prices. According to the legal filing, from 2010 to 2018, lot rental prices increased by approximately 2.3% annually, closely tracking the average inflation rate of 1.8% during that period. However, the lawsuit stated, between 2019 and 2021, lot rental prices reportedly surged by about 9.1% each year, far outpacing the 3% inflation rate.
News 6 asked Lakeshore Communities, Inc., why it raised the lot rent, as well as its response to the lawsuit. The company has not yet responded to our calls and emails for comment.
News 6 also called Datacomp to get its response to the lawsuit. An individual, who identified herself as Ann on the phone, told us to send her an email, and she would send the message to the proper individuals. News 6 sent Ann multiple emails. We have not yet received a response.
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