The Patriot Deal Room: IT WAS THE BEST OF RENTS, IT WAS THE WORST OF RENTS

The gap was real. The permission wasn’t.

By Jeremiah Boucher | Founder & CEO, Patriot Holdings

On a mobile home park, a typical business plan is one sentence: lot rents are below market, we bring them to market.

But in certain parts of the US, the first question isn't what market rent is. It's who has to approve it.

Seven parks, one seller, western Massachusetts and southern Vermont. Roughly 290 lots, about 230 occupied, an ask right around $8M. We spent three weeks on it, a lot of internal man hours, and a tax consultant to pressure-test the reassessment exposure — and passed, without ordering any of the roughly $120K of third-party reports seven properties in two states would have required.

The rent gap was real. Portfolio average lot rent was $340. Comparable parks within a few miles were quoting $447, $510, $523 and $605. That's $150 to $250 per lot per month sitting on the table across 230 occupied lots.

We just couldn't reach it. Here's why.

The Free Check That Found It

Ask for the date of the last rent increase at every park. Not the rent. The date.

	Last increase
Vermont park A	Raised 2025. Raised again 2026.
Vermont park B	Raised 2025. Raised again 2026.
Vermont park C	Raised 2026. Raised again 2026.
Mass. park D	2018
Mass. park E	2019
Mass. park F	2019
Mass. park G	2020

Same owner. Same management. Same seven years. Three parks raised every year like clockwork. Four haven't seen an increase since the last decade.

That's not an owner who forgot. That's a state line, drawn in his own rent roll, for free.

So we went and read both sets of rules.

Vermont: A Threshold, Not a Cap

Vermont's mobile home park law sits in Chapter 153 of Title 10. It does not cap lot rent. What it does is set a mediation threshold — a percentage above which your residents get rights they don't otherwise have.

The Department of Housing and Community Development sets it every year at the housing component of CPI, plus one percentage point. It was 5.4% for 2025. It's 5.0% for 2026.

Under the threshold

You file the state's official rent increase form with the Commissioner and with every leaseholder, at least 60 days before the effective date. The increase takes effect. Nobody can challenge it.

Two traps, both administrative rather than political. Miss the notice requirement and the increase is ineffective and unenforceable — not delayed, void. And most parks are limited to one increase per year, so you can't stack two small ones.

Over the threshold

Now your leaseholders can act. A majority of affected leaseholders must file a petition — with the park owner and with the Commissioner — within 15 business days of receiving the notice, naming a representative.

If they do, the Commissioner sends both sides a list of qualified mediators. You and the residents' representative agree on one within five business days. Sessions have to conclude at least ten days before your increase would take effect. Five days before the first session, you hand over every document supporting the increase — to the mediator and to your own tenants.

And you carry the burden of showing the increase is reasonable.

Why it has no teeth

Mediation is not arbitration. The mediator issues a report that is not admissible in any later proceeding, and the mediator cannot be called to testify. There is no ruling. If you and the residents don't reach agreement, your increase takes effect anyway.

The state even pays the mediator.

So crossing the Vermont threshold costs you roughly 60 days of calendar, full financial disclosure to your residents, and whatever the local paper does with it. It does not cost you the rent.

The market reflects exactly that. In 2024, 153 Vermont parks raised lot rent by an average of 5.77%. Only 15 of them went over the threshold. Owners price just underneath it and move on.

A posted speed limit with nobody out enforcing it. Annoying. Survivable. Underwritable.

Then There's S.34

S.34 would rewrite a single sentence of that statute.

Today it reads: "If the percentage of a proposed lot rent increase is more than one percentage point above" the CPI, residents may petition for mediation.

S.34 strikes that and substitutes: "A mobile home park owner shall not propose a lot rent increase of more than one percentage point above" the CPI.

Same number. Completely different instrument.

The trigger becomes a ceiling. There is no mediation to win or lose, because there is nothing left to mediate — you simply cannot ask. At the 2026 threshold that's a hard 5.0% cap, every year, with no mechanism to exceed it for capital spend, tax reassessment, or a utility bill that went up 30%.

I won't overstate where it stands. S.34 was introduced on January 30, 2025 by three senators. The Senate Economic Development, Housing and General Affairs Committee walked through it in February and took testimony from park owners, residents and the housing department through that April. It has not moved since. It is not law. It may never be.

Massachusetts: You Don't Give Notice, You Ask Permission

Massachusetts is a different animal entirely.

The state abolished rent control by ballot initiative in 1994, effective January 1995. Manufactured housing communities were specifically carved out of that repeal. Municipalities kept the authority to regulate lot rents, and a long list of them still do.

In a town with a manufactured housing rent control board, you do not notice a rent increase. You petition for one. Until the board approves it, the existing rent is the legal maximum. Full stop.

The process:

1. You file a petition with the board, supported by financials for that community alone. You cannot blend a portfolio to show thin margins at one park.
2. The board holds a public hearing under the open meeting law. Your residents are entitled to attend and testify, and in western Massachusetts there are tenant advocacy organizations that help them organize for exactly this.
3. The board votes and issues a written decision.
4. Either side can appeal into housing court.

Two months is fast. Some petitions have taken most of a year.

What the decisions actually look like

In western Massachusetts in the last two years alone, one board denied a 230% increase request outright. Another approved a 142% increase — and the residents immediately appealed it into housing court. A third spent months deliberating a 43% request.

Look at what those numbers tell you. Nobody is asking for 5%. They're asking for triple digits, because rents sat frozen for a decade and the owner is trying to catch up in one swing.

That is precisely the position this seller was in. And precisely the kind of petition that draws a denial.

And you can't exit the problem

If the board says no, you can't just shut the park down instead. The Attorney General's rules flag any closure notice filed within six months of a denied rent increase, on the assumption you're retaliating against the residents.

Meanwhile the trend runs one direction. Massachusetts has a pending bill to rewrite the rent control board statute and tie rent determinations to a chained CPI measure. Towns that don't have boards are holding hearings on whether to create them — one held exactly that hearing a few weeks ago.

What This Did to Our Model

Our underwriting needed portfolio lot rent at $420 in year one — a 23% step — and $491 by year five. That's what carried the return.

In Vermont, the ceiling wasn't the problem. The pace was. A 23% year-one increase is roughly four and a half times the mediation threshold. It's legal today, but it guarantees mediation at all three parks, and it's exactly what S.34 would make unaskable. Underwrite Vermont honestly — 5% a year, inside the threshold, no fights — and you still get to roughly $490 a lot. It just takes you five years to do what the model did in one.

That sounds survivable until you look at where the return lives. Year-one yield on cost was 1.7%. The model didn't clear 7% until year five. Nearly the entire return sat in the terminal sale. Push the rent ramp right by three or four years and you don't trim the IRR — you gut it.

In Massachusetts, the ceiling was the problem. Those four parks needed to go from $325, $350, $290 and $260 to $390, $500, $348 and $312. Four petitions. Four towns. Four volunteer boards. Asking 20%, 20%, 20% and 43% — in a market where the one comparable request at that scale had been denied.

And the expense fix ran through the same door. This portfolio carried an 88% expense ratio, because the owner paid water, sewer, trash and gas and billed none of it back. Water and sewer alone ran about $285K against roughly $860K of lot rent. The obvious fix is submetering and passing utilities through to residents. In Massachusetts, that pass-through is itself regulated. Same boards, same hearings, same answer.

So both halves of the business plan — raise the revenue, recover the expenses — required permission from the same people, in the same rooms, with the same track record.

Why I Passed

Patriot's edge is operations. We buy where operational skill moves NOI, because that's the part we can actually execute.

Here, the single largest driver of value wasn't an operating decision. It was a permission — granted by a board of the people who'd be paying the increase, in a market with a documented record of saying no.

I'll take lease-up risk, deferred maintenance, tax reassessment and tenant credit all day long. I can underwrite those and I can work them.

I cannot underwrite a public hearing.

The Closing Lesson

Find out who has to approve the rent increase before you find out anything else. Not whether rents are below market — every park is below market. The question is whether that gap is yours to take, and how fast.

Three free checks, in this order:

1. The state statute, and the municipal bylaw on top of it. They are not the same thing, and the municipal one is usually worse.
2. Any pending legislation. On a seven-year hold you're underwriting the direction of travel, not just today's rule.
3. How the last few applications in that market actually went. A statute is theory. A denied petition is a comp.

All three are free, and all three were available in week one. The $120K of reports would have told us nothing that mattered.

This is the same sequence we run on every asset in every fund — Fund VI, which is open now, and the dedicated mobile home park fund we plan to raise down the road. The asset class changes. The order doesn't: free checks first, the documents already sitting in the data room second, paid reports last.

It's how we vet a deal properly without burning capital finding out it doesn't work.

A pass in week three beats a termination in month three. And both beat a closing.

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Jeremiah Boucher · Patriot Holdings