SANTA MARIA — Given a choice between buying the land under a manufactured house and leasing it for 20 years with assignability and protection against large rent increases, most prospective buyers would quickly opt for the latter.
That is what the developers of Quail Meadows, a master-planned manufactured home development in this city of 50,000, an hour north of Santa Barbara, have discovered.
Originally, the developers thought that most buyers would prefer to own their own lots, but the reverse has been the case there, as in other sections of the state.
Two- and three-bedroom houses on leased lots have sold far more quickly than identical ones on fee-simple lots, said Pat Loomis, project manager.
Twenty-year assignable leases with annual rent increases pegged to the cost of living index are featured in Quail Meadows and account for the success of the leased-lot phase of the development, according to developer Roger McGee.
Long-term leases with protection for the buyer offer many advantages over paying $32,000 or so for the land under the unit in the fee-simple segment of Quail Meadows, Loomis said.
"A buyer--particularly an older one--can invest the money that would otherwise be spent for the lot and do very well indeed," Loomis said.
Unfortunately, the only product he has available is in the fee-simple segment of Quail Meadows. Most of the buyers in that segment, the second phase of the development, are younger than those in the leased-lot first phase.
Why don't the developers just convert the second phase to leased lots and sell the project out? It's not that easy--it never is in realty developments.
Under the original development agreement with Santa Barbara County, the subdivision project had already been approved for fee-simple lots. The agreement precludes leasing the lots. In a future development in Santa Maria--Hidden Pines--all the lots will be leased, McGee said.
He added that more than 70% of the buyers are retirees from the Los Angeles area, many of them former aerospace workers. They invested a significant portion of the proceeds of the sales of their homes--in Van Nuys, Lakewood, Downey and similar communities--in Quail Meadows units selling for $65,950 to $89,950. The monthly land lease rate is $279.
Both phases of the 355-unit Quail Meadows, at 3900 Santa Maria Way, are walled with security gates that are closed at night.
"The people who buy here want security above all," explained Don Byron, a Quail Meadows investor. "We also have a special secured area for storing the recreational vehicles that many residents own."
Designed to Quail Meadows specifications and built by Hallmark Southwest Corp. in Loma Linda, the houses are offered in six different floor plans with 1,184 to 1,908 square feet of living area, not counting the site-built two-car garage that comes with each unit, Loomis said.
Both he and Byron live in the fee-simple segment of the development; McGee, who also developed the 394-unit Casa Grande manufactured-housing subdivision in northern Santa Maria, lives on the Palos Verdes Peninsula.
All houses have cathedral ceilings in every room, drywall interiors and kitchens with all appliances included, even refrigerators, he added. The units are bolted to their foundations and meet all federal housing standards, including those of the Federal Housing Administration, the Veterans Administration, the Federal National Mortgage Assn. and the Federal Home Loan Mortgage Corp.