A New Orleans developer of hip hotels is buying mobile home parks. Can he be a good landlord?

New Orleans developer Zach Kupperman has built a reputation for turning down-at-heel properties into the kind of stylish venues raved about by well-heeled visitors and luxe magazines.

He and his team remade an hourly rate motel on Tulane Avenue into the hipster paradise known as The Drifter, and carved the Hotel St. Vincent, now a prime Magazine Street spot for luxury travelers, from a dormant former guesthouse.

Now, Kupperman and his partner, Alex Ramirez, have taken on a very different kind of real estate project. Through their company, Lucky Communities, they are buying up mobile home parks across the Gulf South.

With financial backing from wealthy private investors, they have acquired 10 mobile home parks containing some 550 individual homesites near Lafayette, Baton Rouge, in the greater New Orleans area and in Alabama. Lucky Communities plans to own at least 10,000 homesites by the end of 2025, which would place it among the 20 largest investor-owned mobile home firms nationally.

Reputations on the line

The mobile home industry is a world away from the business partners' previous ventures, which have been praised by the likes of Architectural Digest and Condé Nast Traveler. Also, Kupperman and Ramirez are well aware of the nefarious reputation that investor-owned parks have acquired in the last decade or so, through stories of ravenous rent increases and strong-arm tactics used against people with modest incomes. They say they plan to do better.

Ramirez said his mother's first home in the U.S. after emigrating from Colombia was in a mobile home park, so he wants to see their communities improve and thrive.

"One of our core tenets is to provide value to our residents in everything we do, focus on service, and make a concerted effort to be on the complete opposite side of the spectrum from the bad actors," Kupperman said.

Everybody wants one

One of Lucky Communities' first acquisitions was Shady Pines in the Slidell area, which is reached by turning off Gause Boulevard and driving down Shady Lane past Lee's Hamburgers and Skater's Paradise into a wooded area. The mobile court with 35 homesites — also known as pads — dates to 1956; some of the units still onsite weren't built much later.

Brothers David "Jay" Gomez, Juan Delgado and Melvin Alonzo are the third generation to live in the unit they now occupy. Originally a double-wide, the home, like others in the park, has had several additions affixed to it over the years. Their grandmother lived there over 20 years ago, and their father gave it to the boys when he moved into the unit next door.

Many of the park's residents recently immigrated to the U.S. and work in the construction trades, the three brothers said.

Gomez and Delgado, who both work for a carpenters' union in Metairie, said their rent hardly moved for years under the previous owner, who did little to nothing in terms of maintenance. When Lucky Communities took over in spring 2021, the rent increased by 13%, to $390 per month.

"We were kind of shocked at first because it had been pretty much the same for years," said Gomez.

Bob Graham, an electrician who lives in a nearby unit, said he had feared the rent increase would be far bigger.

"You hear horror stories," he said. "I really thought it would have been a little bit more, but hopefully this isn't a bi-yearly thing."

The Shady Pines residents said they've noticed some improvements under Lucky Communities, as new rules were enforced for upkeep and some landscaping was done by the new owners. But Gomez said there are still some longstanding problems.

"They could fix that big-ass pothole at the front," he said, pointing to a divot at the entrance which has been there for years and is big enough to swallow a truck if not avoided. He said drainage also badly needs improvement so there aren't large pools of standing water after every heavy rain.

Kupperman said he knows there is more to do at Shady Pines, but points to progress.

"You should have seen it when we purchased it," he said. "It looked like a war zone and a bomb had gone off. When we bought it, there were two burned-out and abandoned trailers that we removed and cleaned up. It takes time."

An investment boom

Mobile homes have provided housing for Americans with lower incomes since the parks sprouted across the U.S. in the years after World War II. According to the Manufactured Housing Institute, a trade body, there are about 21 million people living in 43,000 mobile home communities around the country, with average household incomes of about $35,000 a year.

In Louisiana, there are about 620 parks, according to MH Village, another industry tracker.

Historically, the parks have been small, family-run operations, where owners pay a monthly fee for their plot and expect minimal service. Though they are often assumed to be seedy and downtrodden, the conditions of the parks vary widely. Some are vibrant retirement communities, some "hippie" villages. Others serve as lodging for workers at nearby industries, like construction or oil and gas.

In recent years, however, big real estate investors, like Gary Shiffman's Sun Communities and Sam Zell's Equity LifeStyle Propertes, recognized their potential value and bought up tens of thousands of sites across the country. Ever since, the industry has been dogged by countless tales of stratospheric rent increases, sudden new regulations and aggressive eviction policies.

Kupperman has heard the stories and vowed that Lucky Communities won't behave like the industry's miscreants. In an email, he ticked off improvements they plan to make at Lucky parks, detailed a series of steps the company takes to communicate with residents and promised relatively modest rent hikes to bring them up to "market" level.

"The few bad actors we have run across do not speak or respond to their tenants, make no park upgrades, will raise rents 150% on what seems like a whim, and are generally very unforgiving," he said.

Fixing the holes that the rain sits in

At another property acquired by Lucky Communities, the Messer Community off Highway 3081 in Pearl River, residents are hoping to see long overdue improvements under the new owner but are wary of rent increases and the pace of progress so far.

Dawn Nelson, who works as a custodian for the local school board, said she's happy that new rules have forced out some of the "riff raff." But she said there have been rumblings from residents in the 65-unit park about rent increases: "This is low-income people here and they're not too happy."

Since Lucky bought the park two years ago, pad rent has increased by 20% to $390 per month.

Nelson and another resident, Kelly Crawford, who works as a house cleaner and looks after her elderly mother, said a big problem is the park's mile-long gravel road, which is pockmarked with deep potholes.

Crawford pointed to a pothole that exposed a broken drainage pipe running under several of the homes.

"I've written to them several times and even sent a video," she said.

Other options

Residents unhappy with their mobile park operators have a few options to change their situation, but none are easy or cheap.

At some parks, residents have formed cooperatives and purchased the park themselves. There are advantages to that model, according to Mark Bullard, spokesperson for ROC USA, a New Hampshire-based nonprofit that has 321 parks under its cooperative umbrella. 

"When you own the land cooperatively, the profit margin is removed from the homeowner's rent and it goes to pay off the mortgage, fund operations for the community and save for capital improvements down the road," Bullard said.

Still, he acknowledged that many residents don't have the wherewithal or desire to go through the process. While the number of cooperatives has grown sharply over the last decade to about 1,200, it is still dwarfed by the number of investor-owned parks.

Dawn Nelson said she couldn't imagine her community going the cooperative route.

"Really, who would want the problems here?" she said.

Moving the home to another site is an option, but it too is often expensive.

Kupperman said he and Ramirez want residents to choose to stay. He promises to keep annual pad rent increases below 10% as they bring them up to market level, which he pegged at $450 a month for the St. Tammany area. He said the improvements are on the way.

"We've spent hundreds of thousands of dollars improving both parks already," but it's a "balancing act" between making the required investments and capping rent increases, he said.

Crawford at the Pearl River park said she just wants Lucky Communities to understand that driving her mother up the rutted road after hospital visits causes her pain. She had a simple request of the new owners she hoped they would abide by.

"Treat us like human beings," she asked, "and not just an investment."