Why Manufactured Housing Is an Investor Favorite in 2026: An Operator's Take

Multi-Housing News recently published a clear-eyed outlook on the manufactured housing community (MHC) sector titled "Why Manufactured Housing Is an Investor Favorite in 2026." It captures what we are seeing on the ground as an operator: institutional capital is re-engaging, the federal regulatory posture is finally moving in the right direction, and the headwinds — rent control and insurance — are real and underwriteable. Here is our operator's read on the piece.

Affordability is the thesis, not a talking point

MHN cites Jon Shay of CBRE noting that with median household income near $85,000 and average single-family home prices above $400,000, "manufactured housing is generally the only unsubsidized affordable housing solution remaining." The Housing Affordability Institute data MHN references is striking: only 38% of U.S. households currently earn enough to afford a home, down from 57% in Q3 2020.

That is the demand backdrop behind national MHC occupancy holding above 95% — figures consistent with what we observe in our own portfolio and the broader operator community. The affordability gap is not narrowing; it is widening. As we wrote in The Manufactured Housing Supply Crisis, MHCs absorb households the rest of the housing stack has priced out.

Capital is moving back to offense

MHN reports that Drake Real Estate Partners closed its fifth flagship fund at more than $515M with MHC exposure, and that GMF Group raised roughly $250M for Fund II targeting manufactured housing nationwide. Shay puts it plainly: "We're already beginning to see REITs and large funds move back to offense."

Our read: the transaction logjam of 2023–2024 is breaking. MHN quotes Shay describing the bid-ask spread as having gone from "a canyon" to "a small creek." HARRI5, the brokerage cited in the article, closed roughly $800M across 27 transactions in 2025 after entering the year with a $95.8M pipeline. That is consistent with the deal flow we see across our own acquisition pipeline — sellers who held through the rate shock are coming to market, and well-capitalized buyers are meeting them at clearable prices.

Policy tailwinds: HUD code reform finally arrives

The most consequential item in the MHN piece is easy to miss. Lesli Gooch, CEO of the Manufactured Housing Institute, told MHN that HUD is expected to propose an update to the federal building code that removes the permanent chassis requirement for manufactured homes. As Gooch put it: "The value of the federal building code is that you get the affordability because of the regulatory efficiency that is paired with factory efficiency."

The chassis requirement is a vestige of when these homes actually moved. Eliminating it should expand the universe of buildable lots where a manufactured home can serve as the affordable solution, and over time, broaden the financing options available to homeowners. For operators, it is incrementally bullish: more homes available to fill vacant pads, more financing choices for residents, and a federal posture that increasingly treats manufactured housing as part of the answer rather than the problem.

The easy alpha is gone — operating discipline is the new edge

MHN quotes Shay's blunt assessment that "99 percent of the low hanging fruit has been harvested." We agree. The era of acquiring a mom-and-pop community at a 9 cap, raising lot rents 40% over two years, and refinancing at a 5 cap is largely over. What replaces it is unglamorous: yield preservation, careful testing of lot-rent affordability against household incomes, sub-metering utilities, infilling vacant pads with quality homes, and running collections and rules enforcement with discipline.

That shift favors operators over financial engineers. As we lay out in our pillar Mobile Home Park Investing Guide, return drivers in this cycle look more like a real-operating business and less like a multiple-arbitrage trade.

The headwinds investors must underwrite

MHN does not soft-pedal the risks, and neither do we. Two stand out:

• Rent control — including the threat of it. MHN notes that even the possibility of rent control in states such as Washington and Colorado has widened cap rates by roughly 50 basis points, per Shay. Regulatory risk has to be priced alongside market and asset risk. Our diligence increasingly weights state and municipal political posture as heavily as physical infrastructure.
• Insurance is eating NOI. Shay tells MHN that "creeping insurance rates are eating into NOI growth that operators expected." In wildfire, wind, and hail-exposed geographies, premiums have repriced enough to shift acquisition strategy at the margin. Underwriting needs to model trended insurance, not last year's premium.

Property taxes and utilities are also climbing. Where lot-rent growth cannot keep pace, the temptation is to defer maintenance — which is exactly the operator behavior that damages communities, residents, and the sector's reputation over time. We would rather pass on a deal than buy one that only works if maintenance gets cut.

Resilience is still the through-line

MHN's closing argument is the right one: despite the headwinds, MHCs remain among the most compelling defensive real-asset investments today. Lower-cost housing, high resident retention, predictable rent rolls, and federal recognition expanding visibility for the asset class. Greysteel's Cody Cannon notes in the article that getting a high-quality manufactured home onsite is "80 percent quicker" than a single-family development — a structural advantage that matters as policymakers actually try to solve the affordability crisis.

With nearly half of renters nationwide considered rent-burdened, the demand floor under MHCs is, if anything, getting more solid. As we wrote in Why Manufactured Housing Is Recession-Resistant, this is the kind of cash-flow profile that historically holds up through cycles.

What it means for accredited LPs

For accredited investors evaluating the sector in 2026, three things follow from the MHN piece:

• Sponsor selection matters more than ever. With easy value-add gone, the spread between top-quartile and median operators will widen, not narrow.
• Underwrite the regulatory map. A great deal in a fragile jurisdiction can become an average deal — or worse — with one ballot measure.
• Insurance and tax assumptions need pressure-testing. Ask sponsors what their pro forma assumes and what the last three years of actuals say.

If you want to go deeper, our complete guide to mobile home park investing walks through returns, risks, and operator evaluation. Accredited investors can request our LP Investment Overview to see how Trailstead is positioned across the cycle.

Source

Valean, Laura. "Why Manufactured Housing Is an Investor Favorite in 2026." Multi-Housing News, February 20, 2026. Quoted commentary attributed to Jon Shay (CBRE), Lesli Gooch (Manufactured Housing Institute), Derek Harris (HARRI5), and Cody Cannon (Greysteel) is drawn from that article.