The Regulatory Landscape Is Shifting
Manufactured housing communities have attracted record institutional capital over the past three years. That visibility has also attracted legislative attention. Multiple states have introduced or expanded tenant protection laws targeting mobile home parks, and the pace of new proposals is accelerating in 2026.
For MHP investors, understanding these regulations is not optional. It directly affects how you underwrite acquisitions, project revenue growth, and structure operations.
What Is Changing
Three categories of regulation are gaining momentum across state legislatures.
First, rent increase limitations. Several states are proposing caps on annual lot rent increases, often tied to CPI or a fixed percentage. While outright rent control remains rare in manufactured housing, the trend toward notice requirements and justification mandates is growing. Operators in affected states may need to provide 60 to 90 days written notice and document the basis for any increase above a threshold.
Second, right-of-first-refusal (ROFR) proposals. These laws would require park owners to notify residents or their associations before selling the community, and give them a window (typically 45 to 90 days) to match the purchase offer. ROFR laws add complexity and timeline to dispositions, which affects how investors underwrite exit timing and pricing.
Third, utility billing restrictions. As discussed in our recent coverage of MHP utility submetering, Ratio Utility Billing Systems (RUBS) face direct legislative challenges in multiple states. Operators relying on RUBS for cost recovery should treat submetering as an urgent capital project, not a future consideration.
Why This Is Happening Now
The combination of rising lot rents, high-profile park sales leading to resident displacement, and growing institutional ownership has created a political environment where tenant advocacy groups have significant leverage. National occupancy rates above 95% mean residents have limited alternatives if they are priced out. A manufactured home on a rented lot is not easily relocated, as moving costs alone can run $5,000 to $15,000, and many older homes cannot survive the move.
Legislators are responding to constituent pressure, and the manufactured housing sector is increasingly in the crosshairs.
How Smart Operators Are Adapting
The investors who will outperform in this environment are those who build regulatory compliance into their operating model rather than treating it as an afterthought.
On rent increases, the best practice is to implement consistent, moderate annual increases (3% to 5%) rather than large catch-up increases that attract attention and complaints. Document every increase with market comparables and capital improvement justifications. This creates a defensible record if rent cap legislation passes in your state.
On ROFR, build potential delays into your hold period assumptions. If you plan to sell in year five, underwrite the exit as if it takes six to nine months longer than a standard sale. This protects your IRR projections from legislative friction.
On utilities, convert to submetering now. The ROI is strong regardless of regulation, and it eliminates the risk of losing RUBS revenue overnight if your state passes a ban.
Impact on Valuations
Markets are beginning to price regulatory risk into MHP transactions. Parks in states with established tenant protections may trade at 25 to 50 basis points higher cap rates than identical assets in more landlord-friendly jurisdictions. Conversely, parks in states with minimal regulation and strong demographic growth continue to trade at premium valuations, with institutional buyers paying 4% to 5% cap rates for Class A communities.
The takeaway for investors is clear: factor state-level regulatory risk into your acquisition underwriting. A park with below-market rents in a state that restricts rent increases has a very different value-add thesis than the same park in a deregulated market.
Staying Ahead
Requity Group monitors manufactured housing regulation across every state where it operates. Acquisition underwriting accounts for current and proposed tenant protections, ensuring investors are not surprised by legislative changes. Learn more about the investment approach or contact the team to discuss the regulatory landscape in your target markets.