A group of corporate managers for mobile home communities along with a mobile home market data provider are the target of a new lawsuit that was filed in the U.S. District Court for the Northern District of Illinois Eastern Division. The lawsuit accuses the defendants of conspiring to influence rental prices of mobile home communities. These communities largely serve lower-income residents and the elderly.
The proposed class action lawsuit was brought forward by two Illinois residents, Carla Hajek and Gregory Hammerlund. Their lawsuit names Datacomp Appraisal Systems along with nine other mobile home corporate managers who have interests in over 150 mobile home housing communities across the nation. Datacomp is the nation’s largest provider of data related to manufactured and mobile home data.
The lawsuit claims that Datacomp sold reports that detailed sensitive information related to lot rentals and home occupancy. Using that data, the corporate owners shared the information with one another in order to coordinate prices.
“Having access to this non-public, competitively sensitive information, and knowing that one’s competitors have access to and are using the same information, allows manufactured home community owners, including the Manufactured Home Community Defendants, to reduce or eliminate competition amongst themselves on price, services, and quality for manufactured home lots,” the lawsuit contends.
Over 20 million Americans live in manufactured homes. Manufactured or mobile homes are one of the most affordable housing options available to lower-income individuals and the elderly. These mobile homes are typically owned by the homeowner but sit on land that is zoned for residential developments like mobile home parks. Mobile homeowners typically do not own the land in a mobile home park but instead pay rent to keep their mobile home on it.
The lawsuit describes the importance of mobile home affordability, explaining, “These individuals—whose median annual household income is approximately $35,000—are being overcharged for what used to be affordable housing. The consequence is that two of society’s most vulnerable groups—the elderly and low-income earners—face considerable financial pressures. Some residents are facing evictions.”
The allegations of price fixing were the result of an investigation conducted by the plaintiff's attorneys at DiCello Levitt and Hausfeld. The legal team says that the class size is estimated at “hundreds of thousands” of potential members across the nation.
Their investigation yielded that between 2010 and 2018, lot price rentals increased by about 2.3%, an increase in line with the average inflation rate of 1.8% at the time.
Between 2019 and 2021, average mobile home rental prices increased by 9.1%, despite an inflation rate of only 3%. The lawsuit maintains that the defendants could not have increased rent prices unilaterally and that they needed to conspire in order to implement such a drastic increase.
The lawsuit is seeking to represent other members who have faced similar rent increases in association with their mobile home lots. Attorney Gregory Asciolla of DiCello Levitt defends the plaintiffs, arguing, "Given the number of Americans who reside in mobile home communities and the fact that the case is nationwide, damages will be substantial.”
Similar cases of real estate price gouging have been brought up in the past couple of years. Most recently, a Tennessee court consolidated over 20 lawsuits in April accusing a technology company, RealPage Inc., of conspiring with property managers and real estate firms of multifamily residential units in order to drive rental costs up. That case is still pending in litigation.
The 85-page lawsuit filed by the Illinois plaintiffs is seeking to stop the mobile home operators from coordinating together to raise rates. The lawsuit is also seeking treble damages and other remedies.
