DST.EDU Part 4: Manufactured Housing Communities (MHC) Asset Classification

July 3, 2026

By Al DiNi­co­la, AIF®

Pri­vate Fund Advi­sor

DST 1031 Spe­cial­ist

Fidu­cia­ry Cap­i­tal Man­age­ment, LLC

Secu­ri­ties offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC

Editor’s Note: This is Part Four of a Ten-Part Series on the Var­i­ous Asset Types Found in Delaware Statu­to­ry Trust (DST) Offer­ings. This is a 2026 update from a series post­ed in 2022.

Introduction

Few real estate asset class­es have under­gone a trans­for­ma­tion as dra­mat­ic as Man­u­fac­tured Hous­ing Com­mu­ni­ties (MHCs). Once viewed as a niche seg­ment of the hous­ing mar­ket, MHCs have become one of the most sought-after real estate sec­tors among insti­tu­tion­al investors, REITs, pri­vate equi­ty firms, and Delaware Statu­to­ry Trust (DST) spon­sors.

“Man­u­fac­tured hous­ing has evolved from an over­looked asset class into one of the most resilient seg­ments of real estate,” says Al DiNi­co­la. “Investors are increas­ing­ly rec­og­niz­ing the com­bi­na­tion of afford­able hous­ing demand, lim­it­ed new sup­ply, and sta­ble occu­pan­cy.”

As hous­ing afford­abil­i­ty con­tin­ues to chal­lenge mil­lions of Amer­i­cans, man­u­fac­tured hous­ing com­mu­ni­ties have emerged as an impor­tant part of the solu­tion.

Understanding Manufactured Housing Communities

Many peo­ple still asso­ciate man­u­fac­tured hous­ing with the old stereo­type of the “trail­er park.” How­ev­er, today’s pro­fes­sion­al­ly man­aged man­u­fac­tured hous­ing com­mu­ni­ties are sig­nif­i­cant­ly dif­fer­ent from those per­cep­tions.

“The man­u­fac­tured hous­ing com­mu­ni­ties being devel­oped and acquired today bear lit­tle resem­blance to the trail­er parks many peo­ple remem­ber from decades ago,” explains DiNi­co­la.

Mod­ern com­mu­ni­ties fre­quent­ly fea­ture:

• Club­hous­es
• Swim­ming pools
• Fit­ness cen­ters
• Walk­ing trails
• Pick­le­ball courts
• Com­mu­ni­ty gath­er­ing spaces
• Gat­ed access
• Pro­fes­sion­al man­age­ment

The homes them­selves have also evolved dra­mat­i­cal­ly.

Today’s man­u­fac­tured homes often include:

• Open floor plans
• Ener­gy-effi­cient con­struc­tion
• Attached garages
• Mod­ern kitchens
• Lux­u­ry fin­ish­es
• Smart-home tech­nol­o­gy

Many buy­ers would have dif­fi­cul­ty dis­tin­guish­ing new­er man­u­fac­tured homes from tra­di­tion­al site-built hous­ing.

Why Investors Are Paying Attention

Man­u­fac­tured hous­ing com­mu­ni­ties pos­sess sev­er­al unique char­ac­ter­is­tics that make them attrac­tive invest­ments. Unlike apart­ment com­mu­ni­ties where the land­lord owns both the land and struc­tures, MHC oper­a­tors typ­i­cal­ly own the land while res­i­dents own their homes.

“The land-lease mod­el cre­ates a very unique invest­ment dynam­ic,” says DiNi­co­la. “Res­i­dents own the home and there­fore have a strong incen­tive to remain in place, while the com­mu­ni­ty own­er receives recur­ring lot rental income.”

This struc­ture cre­ates sev­er­al advan­tages:

• Low­er turnover rates
• Reduced main­te­nance respon­si­bil­i­ties
• Low­er oper­at­ing expens­es
• Sta­ble cash flow
• High­er occu­pan­cy lev­els

Because relo­cat­ing a man­u­fac­tured home can be cost­ly and dif­fi­cult, res­i­dents often remain in com­mu­ni­ties for many years.

Demographics Continue to Drive Demand

The man­u­fac­tured hous­ing sec­tor serves a broad demo­graph­ic base.

Res­i­dents include:

• Retirees
• Work­ing fam­i­lies
• First-time home­buy­ers
• Fixed-income house­holds
• Sea­son­al res­i­dents
• Work­force hous­ing ten­ants

“One of the strengths of the MHC sec­tor is that it appeals to mul­ti­ple demo­graph­ic groups,” notes DiNi­co­la. The afford­able hous­ing short­age con­tin­ues to sup­port demand nation­wide. In many mar­kets, man­u­fac­tured hous­ing rep­re­sents the low­est-cost path to home­own­er­ship with­out gov­ern­ment sub­si­dies.

The Affordable Housing Crisis

Hous­ing afford­abil­i­ty remains one of the most sig­nif­i­cant eco­nom­ic chal­lenges fac­ing the Unit­ed States. High mort­gage rates, ele­vat­ed home prices, ris­ing con­struc­tion costs, and lim­it­ed hous­ing inven­to­ry have increased demand for afford­able alter­na­tives.

“Man­u­fac­tured hous­ing may be one of the most prac­ti­cal solu­tions to the nation’s hous­ing short­age,” says DiNi­co­la.

The cost per square foot of man­u­fac­tured hous­ing is often sub­stan­tial­ly low­er than tra­di­tion­al site-built homes while still pro­vid­ing:

• Home­own­er­ship
• Pri­vate out­door space
• Com­mu­ni­ty ameni­ties
• Neigh­bor­hood sta­bil­i­ty

For many house­holds, man­u­fac­tured hous­ing offers an attain­able hous­ing option when con­ven­tion­al home­own­er­ship is out of reach.

Supply Constraints Favor Existing Communities

One of the most com­pelling invest­ment char­ac­ter­is­tics of MHCs is the lim­it­ed abil­i­ty to cre­ate new sup­ply. Munic­i­pal zon­ing restric­tions, enti­tle­ment chal­lenges, and neigh­bor­hood oppo­si­tion often make new com­mu­ni­ty devel­op­ment dif­fi­cult.

“Local gov­ern­ments fre­quent­ly acknowl­edge the need for afford­able hous­ing while simul­ta­ne­ous­ly restrict­ing new man­u­fac­tured hous­ing devel­op­ment,” says DiNi­co­la.

As a result:

• Exist­ing com­mu­ni­ties become more valu­able
• Occu­pan­cy remains high
• Lot rents con­tin­ue to increase
• Com­pe­ti­tion for acqui­si­tions inten­si­fies

This sup­ply imbal­ance has become one of the pri­ma­ry dri­vers of investor inter­est.

Age-Restricted Communities

One spe­cial­ized seg­ment of man­u­fac­tured hous­ing involves age-restrict­ed com­mu­ni­ties, often referred to as 55+ com­mu­ni­ties.

These prop­er­ties are par­tic­u­lar­ly pop­u­lar through­out Sun Belt mar­kets includ­ing:

• Flori­da
• Ari­zona
• Texas
• South Car­oli­na
• North Car­oli­na

Demo­graph­ic trends remain favor­able.

More than 11,000 Amer­i­cans reach age 65 every day, cre­at­ing con­tin­ued demand for retire­ment-ori­ent­ed hous­ing. “Many retirees are seek­ing afford­abil­i­ty, com­mu­ni­ty, and lifestyle ameni­ties,” explains DiNi­co­la. “Man­u­fac­tured hous­ing com­mu­ni­ties often deliv­er all three.”

Many age-restrict­ed com­mu­ni­ties offer:

• Orga­nized social activ­i­ties
• Club­hous­es
• Golf access
• Pick­le­ball facil­i­ties
• Recre­ation­al ameni­ties

These fea­tures help sup­port res­i­dent reten­tion and com­mu­ni­ty engage­ment.

The Sun Belt Migration Effect

Pop­u­la­tion migra­tion con­tin­ues to ben­e­fit many man­u­fac­tured hous­ing mar­kets.

States such as Flori­da, Texas, Ten­nessee, Ari­zona, and the Car­oli­nas con­tin­ue attract­ing res­i­dents seek­ing:

• Low­er tax­es
• Warmer cli­mates
• Low­er hous­ing costs
• Retire­ment des­ti­na­tions

Many DST spon­sors active­ly tar­get com­mu­ni­ties locat­ed with­in these high-growth regions.

“We con­tin­ue to see strong investor inter­est in Sun Belt com­mu­ni­ties where pop­u­la­tion growth sup­ports long-term occu­pan­cy and rent growth,” says DiNi­co­la.

Institutional Capital and DST Growth

Per­haps the strongest endorse­ment of the man­u­fac­tured hous­ing sec­tor is the amount of insti­tu­tion­al cap­i­tal enter­ing the space. Major REITs, pen­sion funds, pri­vate equi­ty firms, and DST spon­sors have sig­nif­i­cant­ly increased allo­ca­tions to MHC invest­ments.

Large pub­lic oper­a­tors con­tin­ue to expand through acqui­si­tions, rede­vel­op­ment projects, and infill expan­sion oppor­tu­ni­ties. “Man­u­fac­tured hous­ing is no longer viewed as an alter­na­tive asset class,” notes DiNi­co­la. “Today it is firm­ly estab­lished with­in insti­tu­tion­al real estate port­fo­lios.”

DST spon­sors have increas­ing­ly added MHC offer­ings as investors seek diver­si­fi­ca­tion beyond tra­di­tion­al mul­ti­fam­i­ly, office, and retail assets.

Key Risks and Considerations

As with any real estate invest­ment, man­u­fac­tured hous­ing com­mu­ni­ties are not with­out risks.

Investors should eval­u­ate:

Community Age

Old­er com­mu­ni­ties may require:

• Road improve­ments
• Util­i­ty upgrades
• Infra­struc­ture repairs
• Ameni­ty mod­ern­iza­tion

Regulatory Environment

Cer­tain munic­i­pal­i­ties may impose rent con­trols or oth­er reg­u­la­tions that could impact future growth.

Resident Affordability

While demand remains strong, oper­a­tors must bal­ance rent growth with res­i­dent afford­abil­i­ty. “Suc­cess­ful own­er­ship requires main­tain­ing a sus­tain­able bal­ance between investor returns and res­i­dent sat­is­fac­tion,” says DiNi­co­la.

Sponsor Experience

The sponsor’s abil­i­ty to man­age, improve, and oper­ate the com­mu­ni­ty remains a crit­i­cal fac­tor.

Why MHCs Continue to Attract DST Investors

For many 1031 exchange investors, man­u­fac­tured hous­ing com­mu­ni­ties offer an appeal­ing com­bi­na­tion of:

• Pas­sive own­er­ship
• Strong occu­pan­cy
• Lim­it­ed new sup­ply
• Afford­able hous­ing demand
• Poten­tial infla­tion pro­tec­tion
• Long-term demo­graph­ic sup­port

The land-lease mod­el cre­ates recur­ring income while reduc­ing many of the oper­a­tional chal­lenges asso­ci­at­ed with tra­di­tion­al mul­ti­fam­i­ly prop­er­ties.

Conclusion

Man­u­fac­tured Hous­ing Com­mu­ni­ties have become one of the strongest-per­form­ing sec­tors in com­mer­cial real estate. Sup­port­ed by favor­able demo­graph­ics, lim­it­ed new sup­ply, and increas­ing demand for afford­able hous­ing, MHCs con­tin­ue attract­ing both insti­tu­tion­al and indi­vid­ual investors.

“The afford­able hous­ing chal­lenge isn’t dis­ap­pear­ing any­time soon,” con­cludes DiNi­co­la. “Man­u­fac­tured hous­ing com­mu­ni­ties occu­py a unique posi­tion where they can pro­vide an essen­tial hous­ing solu­tion while poten­tial­ly deliv­er­ing attrac­tive long-term invest­ment char­ac­ter­is­tics.”

As DST spon­sors con­tin­ue expand­ing their offer­ings with­in the sec­tor, Man­u­fac­tured Hous­ing Com­mu­ni­ties are like­ly to remain an impor­tant asset class for investors seek­ing income, diver­si­fi­ca­tion, and expo­sure to one of the nation’s most durable hous­ing trends.

In the next install­ment of this series, we will exam­ine Senior Hous­ing, anoth­er demo­graph­ic-dri­ven asset class ben­e­fit­ing from America’s aging pop­u­la­tion.

Delaware Statu­to­ry Trusts (DSTs) have become a notable part of com­mer­cial real estate invest­ing. As Al DiNi­co­la empha­sizes, a DST is a struc­ture, not an asset class, the focus should remain on the qual­i­ty of the under­ly­ing prop­er­ty and how it fits your goals.  DSTs are for accred­it­ed investors and car­ry risks, i.e. illiq­uid­i­ty, real estate mar­ket fluc­tu­a­tions, and spon­sor deci­sions. Con­sult your advis­er about suit­abil­i­ty, espe­cial­ly for §1031 exchanges. For more details, please con­tact:

• Al DiNi­co­la adnicola@fiduciarycm.com  
• Direct: 239 691 8098
• Sched­ule Appoint­ment

Advi­so­ry ser­vices are offered through Fidu­cia­ry CM, an SEC-reg­is­tered advis­er. Invest­ments involve risk and are not guar­an­teed. Always refer to offer­ing doc­u­ments for full risk dis­clo­sures. Delaware Statu­to­ry Trust (DST) invest­ments involve risks asso­ci­at­ed with com­mer­cial real estate own­er­ship and are not suit­able for all investors. These risks may include, but are not lim­it­ed to, loss of prin­ci­pal, illiq­uid­i­ty, ten­ant vacan­cy, financ­ing risk, inter­est rate fluc­tu­a­tions, prop­er­ty val­ue declines, eco­nom­ic and mar­ket con­di­tions, and risks asso­ci­at­ed with spon­sor and prop­er­ty man­age­ment deci­sions. Please refer to the applic­a­ble Prop­er­ty Pri­vate Place­ment Mem­o­ran­dum (PPM) for a com­plete dis­cus­sion of the risks and con­sid­er­a­tions spe­cif­ic to that offer­ing. For addi­tion­al infor­ma­tion regard­ing gen­er­al DST invest­ment risks, please click here. Past per­for­mance is not indica­tive of future results. Nei­ther the Reg­is­tered Rep­re­sen­ta­tive nor the Bro­ker-Deal­er can con­trol or guar­an­tee future deci­sions made by the DST spon­sor, asset man­ag­er, prop­er­ty man­ag­er, ten­ants, lenders, or oth­er third par­ties involved in the oper­a­tion of the prop­er­ty. Past per­for­mance is not indica­tive of future results. Secu­ri­ties may be offered through MSC-BD, LLC, a mem­ber of FINRA/ SIPC.