Lakeway Estates: Rising Rents and the effect on values

Lakeway Estates, a manufactured home community in Bellingham at 1200 Lincoln, was purchased for $41 million in 2024, and shortly after, the new owner raised rents significantly. Based on NWMLS for-sale listings, some tenants are now paying as much as $1,695 per month. This may have been due to their desire to get ahead of the recently implemented law that limits annual rent increases to 5% per year. One can understand the desire to increase rents to market rent before this law was passed, but did they bring rents to market or above market?

As the rent history chart shows, space rents at Lakeway Estates have risen sharply in the last two years.

Compared to other manufactured home parks in Bellingham, these rates are substantially higher. This suggests that the recent increases in rent don't bring the Park to market, but above market, and above the affordability of some residents.

For tenants, this presents a unique hardship. Unlike apartment renters, residents own their manufactured homes. Moving requires relocating the structure itself, which is an expensive and often impractical option, especially for older units.

The sales data confirms this relationship. Since 2023, the price per square foot of homes in Lakeway Estates has declined, while citywide manufactured home values have remained more stable, decreasing only about 3.8% in the same timeframe. Current listings within the park reflect lower asking prices, as higher carrying costs make these homes less attractive to buyers.

Residents of Lakeway Estates have faced substantial rent increases over the past 18 months, and their frustration is understandable. Pad rents are now significantly higher than in any other manufactured home parks in the area, and at the same time, the value of their homes has been declining. Normally, supply and demand would result in tenants vacating and paying market rent at another dwelling, but in this case, due to the difficulty in moving, many tenants may pay above market rents due to it being the 'less bad' option.