Founder & Managing Partner of Cornell Communities

Firstly, on the supply side. You cannot build a new manufactured housing community in most markets. Zoning restrictions, NIMBY opposition, and permitting friction have made greenfield development essentially impossible in any market with real demand.

That means the existing stock of roughly 43,000 communities is the entire market, with no new supply coming. When you combine a fixed supply ceiling with growing affordability pressure, the math becomes hard to argue with.

Then there is the land-lease structure itself. The community owner holds the land; the resident owns their home. That structure matters for a reason people outside the industry rarely appreciate: manufactured housing residents are homeowners, not renters. They have built equity in their home and, in most cases, built real community with their neighbors. Resident tenure in well-operated communities is long, not because leaving is impossible, but because the lifestyle and affordability work for them. From an underwriting standpoint, that translates to stable, predictable cash flows that hold up through economic downturns in a way that conventional rental housing does not.


For a long time, institutional players ignored this asset class because the portfolio construction was difficult. The communities are small, geographically scattered, and operationally intensive. Aggregating 500 pads means buying 10 to 20 separate assets, not one. What changed is the emergence of professional operating platforms that can absorb that complexity while also bringing real capital investment to communities that were chronically underfunded under previous ownership. Once institutional buyers could pair scale with operating infrastructure, the risk-adjusted return profile started looking extremely attractive relative to multifamily or industrial, where cap rates compressed to the point of making the math painful.


The policy environment has also shifted in the sector's favor. The 21st Century ROAD to Housing Act explicitly carves manufactured housing out of its institutional investor restrictions while simultaneously reducing regulatory barriers to manufactured home production, including removing the permanent chassis requirement that had constrained design and siting options for decades. Institutional and private equity players accounted for roughly half of total transaction volume in the sector in 2025, a meaningful increase from 2021 and 2022 when private individual investors dominated at more than 70 percent of total commitments. Brookfield's pending acquisition of Yes Communities, valued at over $10 billion, would be the 4th largest real estate transaction in US history and puts a concrete number on how seriously institutional capital is taking this asset class.


The last piece is mission alignment. Manufactured housing represents roughly 20 percent of unsubsidized affordable housing in the U.S. Institutional LPs operating under ESG or impact mandates can underwrite this asset class without the reputational friction that other value-add strategies carry. The investment thesis and the social purpose point in the same direction, which is unusual in private real estate.

The difference between a portfolio that compounds and one that drains capital almost always comes down to two things: operational infrastructure and an honest assessment of property condition at acquisition.

On the operational side, most communities we acquire are running on informal systems that do not scale. Collections tracked in spreadsheets, maintenance requests going to a personal cell phone, lease documents that vary from resident to resident.

When something goes wrong, there is no accountability mechanism. Professional management means having the right systems in place from day one: a platform that tracks work orders through completion, consistent lease documentation that residents can actually rely on, and a collections process that is clear and applied consistently.


That level of organization improves the resident experience as much as it protects the operator. Home sales and lease-up of vacant lots also require a real process. Operators who treat these as ad hoc transactions leave significant revenue on the table and slow the community's recovery from deferred vacancy.

Property condition is the other major separator. Most manufactured housing communities are acquired at below replacement cost, and most are older assets with deferred maintenance baked in. That is fine as long as you know what you are walking into.

Operators who underestimate the capital reserves needed to maintain and improve the physical community over time will find themselves running assets that decline. Roads, common areas, lighting, and water and sewer infrastructure all require planned capital investment on a timeline that has to be determined before you close, not improvised after the fact. The communities that fall apart are almost always the ones where reserves were treated as an afterthought.

Utility infrastructure specifically deserves its own attention during due diligence.

Private water and sewer systems are the most common source of unbudgeted capital expenditure in this asset class.

Old pipe materials, polybutylene and galvanized in particular, fail without warning and the remediation costs are significant.

You have to physically walk the property and understand the utility setup before you are in a position to underwrite the asset properly.

Manufactured housing is a specific case within this broader failure worth calling out directly.

HUD-code manufactured homes can be produced at a price point that site-built construction simply cannot match. But getting a new manufactured housing community approved in most municipalities is close to impossible.

The zoning opposition is intense, and the development economics are uniquely challenging: lot rents are low by design, which means the revenue base cannot support the land and infrastructure cost of building a new community from scratch. So new communities cannot be built, and the older ones gradually disappear. Communities that reach the end of their physical life due to deferred maintenance get shut down, and that supply is not replaced anywhere. The net trajectory in manufactured housing is a shrinking stock of affordable housing in a category that millions of American families depend on.

The U.S. has not failed to solve this problem for lack of ideas. It has failed because the incentive structures are stacked against the solution.

The fundamental problem is local zoning. Housing supply decisions are made at the municipal level, and local elected officials are primarily accountable to existing homeowners.

More housing supply compresses prices, and compressed prices reduce the wealth of the existing homeowner base. The political incentive is to restrict supply, and that is exactly what happens in the markets where affordability pressure is most severe.

The families who would benefit from more housing supply have very little leverage in the municipal process that determines whether it gets built.


For developers willing to try anyway, the math has deteriorated badly. Labor costs, materials inflation, and the elevated interest rate environment have driven the all-in cost of new construction to a level where affordable rents are not reachable without meaningful subsidy. When you layer in the time cost of entitlement, easily two to three years in a contested market, the only way a project pencils without subsidy is to target the highest-rent tier. You build luxury, the project works financially, and you wait for the natural aging of existing inventory to eventually push supply into lower price tiers. That is a 20-year solution to a current crisis.

The biggest thing PE taught me is that discipline is not a personality trait. It is a process you build before you need it.

Working on acquisitions at a $4.5 billion fund, the underwriting culture was built around a simple premise: your assumptions are your risk. If you cannot back an assumption with real data, you either go get the data or you stress the assumption until the deal fails and see if it still makes sense. You build the bear case first.

You model what happens if occupancy is 15 percent lower than projected, if infrastructure repair costs come in at twice the estimate, if the debt market moves against you at refinance. If the deal works under those conditions, you have a deal. If it requires everything to go right, you pass.

That orientation does not come naturally in smaller-scale real estate investing, where the culture trends optimistic and the underwriting tends to reflect the story the seller is telling. The deals that blow up are rarely the ones that looked bad on paper. They are the ones that looked great and had one or two assumptions baked in that nobody pressed on hard enough.

The second thing PE instilled is knowing when not to act. As a GP, our carried interest comes after investors are made whole. That alignment is intentional, and it shapes how we evaluate every deal. Taking on a distressed asset with unclear infrastructure problems and thin margins does not just create financial risk. It creates operational drag that pulls resources away from the rest of the portfolio. Sometimes the best capital allocation decision is to pass and wait. That takes real patience when you are in deal mode, but the cost of impatience in this business is high and slow to reveal itself.


The practical translation is staying active in the market whether or not we are in active acquisition mode. Keep underwriting. Maintain broker relationships. Create deal flow rather than depending entirely on what is being broadly marketed. The deals worth doing are rarely the ones that come to you first.

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