George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

May 23, 2010

MHI’s 3 Point Plan; CONSPIRACY vs. Suicide; & Overlooked Opportunities!

Filed under: Uncategorized — George Allen @ 5:12 am

MHI’s Three Point Plan; CONSPIRACY vs. Suicide, & Overlooked Opportunities!

I

No one was more pleased than this blogger, to read Manufactured Housing Institute’s ‘Three Point Plan to Move the Manufactured Housing Industry Forward’! It appears, around the same time I was penning the blog: ‘Recent MHCC Meeting Presents Unique Opportunity to Juxtapose MHARR & MHI Views on Critical & Timely MHIndustry Issues’, MHI execs were experiencing a dose of ‘MHReligion’ as well. Per Thayer Long’s column in the Journal, his epiphany occurred during the Manufactured Housing Congress in Las Vegas during April.

MHI’s Three Point Plan “…agenda includes improving (chattel) financing for our (home buying) customers, advocating for implementation of updates to the manufactured housing building code (per Manufactured Housing Improvement Act of 2000), and protecting preemption of the federal building code.” MHI @ 5/14/10. If you’d like to read about this in detail, contact Thayer Long via (703) 558-0678, or read his column in the Journal.

So, how or why is MHI’s Three Point Plan ‘major MHIndustry news’? On one hand, I don’t know anyone (OK, maybe there’s one industry exec.) who’d argue MHI hasn’t been on the forefront of ‘improving (chattel) financing for our customers’ these past 18 months re: “…FHA Title I improvements and GSE’s ‘duty to serve’…”. However, many would opine MHI has been far less than stalwart in pressing for full implementation of the Manufactured Housing Improvement Act of 2000; and, not out to ‘Protect (Federal) Preemption At All Costs’ – until now! From this industry observer’s perspective, those last two points have been the perennial, lonely mission of the Manufactured Housing Association for Regulatory Reform or MHARR. To revisit that reality in detail, reread the aforementioned blog, juxtaposing MHARR & MHI published views regarding the recent MHCC meeting, some now say debacle, in Oklahoma.

II

In mid February of this year, I posted a blog column titled, ‘ManuFractured housing, circa 2020 or before, by dint of a Grand CONSPIRACY or Near Perfect Storm?’ Therein I described, in general terms, the organizations, businesses, trends (e.g. consolidation), and circumstances (e.g. paucity of third party chattel financing), ganging up on the already struggling HUD Code manufactured housing industry. Bottom line? With little to no improvement in all four areas, expect the annual HUD Code shipment total to further plunge from its’ abysmal 49,789 ‘new homes shipped’ during 2009, down to a mere 250 homes by year 2020 or before! At that point the MHIndustry will be dead!

Yes, that blog posting prompted lively discussion for awhile; mostly positive, as ‘really concerned senior (manufacturing) executives’ began to talk about coming together for a third NSAC caucus type meeting*1, among themselves, and probably a few other ‘players’ willing to invest time and resources to ‘Save Our Industry’! But even that once hopeful talk has dissipated, as interest in ‘coming together’ has waned…Too bad.

Then along comes this thoughtful but troubling missal from Martin (‘Marty’) V. Lavin, esquire, out of Vermont, and quoted in part:

“…grasp the obvious…HUD Code housing has been committing suicide for over 20 years. It operates on a Failed Business Model. It started with the securitization and sale of terribly flawed bonds for the industry’s chattel loans through 2003, which caused huge investor losses, and has yet to see any industry response to allow rational, profitable lending by third party lenders.”

“And while very heavy buying demand for our product exists, it comes from (home) buyers infrequently qualified for the available, profitable lending. It therefore remains for the industry to either work on getting profitable lending in the ‘subprime’ tier of present demand, or increase demand from higher credit (home) buyers who can be successfully financed by traditional lenders. The other method of continuing the industry is ‘buy here, pay here’, which seems a poor solution as the primary source of industry financing….” (Parenthetically: ‘Why is this such a ‘poor solution’ Marty’?)

He ends thusly: “It is astounding to me, at this late date, there still continues to be confusion about some grand scheme to undo HUD Code housing. There is no need for a scheme, the industry has done a grand job on its own.”

Not everyone agrees with Marty’s suicide view. Following information was emailed to me, in response to a more recent blog posting – describing a chain of events otherwise unknown to most of us in the MHIndustry, It too supports the Grand CONSPIRACY or Near Perfect Storm that’s unfolding these days:

“They (a national association of homebuilders) were caught with their pants down at the International Code Council meeting, when the fire sprinkler industry paid for nearly 1000 fire fighters to attend (i.e. compensated airfare & meals) the national code change hearings, to vote ‘mandatory fire sprinklers’ into (housing’s) Model Code. Now, notwithstanding the best of (the national association of homebuilders) efforts, pleading, begging, and threatening, it is not gaining ground getting the sprinklers back out of the code! The fire sprinkler industry is also putting tremendous pressure on states desperately trying to remove (home) sprinkler requirements from codes being considered for adoption. (This body) is as impotent as MHI, and much less ‘engaging’ than MHARR. (It) is fighting to keep stick – built housing from dying, and this opponent has greater funding than HUD -– the very agency who should be using federal preemption to protect manufactured housing from this expensive, ‘killing’ regulatory incursion.

My response? Like many Big Picture events in life and business, the overarching reason is probably a combination of factors, as Marty describes them, along with considerations written into the aforementioned Grand CONSPIRACY or Near Perfect Storm blog. So, why don’t you go back and reread it yourself, ponder all points, and let me know your opinion on this matter. No matter what, we’ll soon be ‘dead’ as an industry if we don’t mobilize SOON to regain significant market share in the housing market!

III

Jerry Govan is a veteran California land developer in general, landlease (nee manufactured home) communities, in particular. Now living in Mesa, AZ., with his wife Donna, they’ve recently released a motivational book titled, Take the ‘E’ Out of Ego & Go! Just finished it and it’s an entertaining ‘read’. Order via www.EoutofEGO.com

Jerry recently wrote to share his thoughts regarding ‘Overlooked Opportunities in Today’s Housing Marketplace’. Here’s a brief digest of ideas from Jerry’s musings:

“The first overlooked opportunity, in my opinion, is buying finished (scattered or in subdivisions, fee simple) lots at bargain prices, and creating ‘land and home’ packages” thereon.

“The second part of the market being overlooked is defunct townhouse projects. These lots are not attractive to a stick builder. However these attached unit lots can be rezoned into smaller lots and filled with smaller homes” of the manufactured housing type. First time buyers or empty nesters, who desire to downsize, are a consistent market.”

Jerry goes on to explain, step by step, how he – and other developers, specializing in manufactured housing, go about this process in a routine fashion. If you’d like to learn more, contact him via (702) 498-1976 or jerrygovan@aol.com

IV

OK, here they are; the ‘Important Announcements in the Offing’, about which I hinted in last week’s (5/26/2010) blast email message heralding Blog # 86 re ‘Sam Zell’s “trailer park company” (morphing) into an “RV company”’. Both have to do with the upcoming (15 – 17 September 2010) 19th International Networking Roundtable in Phoenix, AZ, and involve the fielding of two rather historic but very timely panel presentations:

In the first instance, we’ve long needed a ‘joint presentation of views regarding the regulatory affairs governing the HUD Code manufactured housing industry’. This will happen as senior representative from MHI and MHARR ‘make their respective cases’ regarding this pithy topic. Then we’ll open the floor for questions and encourage discussion. This is the first time such a public forum has been held on this topic!

Just as important, and equally timely, is the panel ideally featuring representatives from the two home lending processes now common in landlease community environs: ‘buy here – pay here’ and ‘captive finance’. Here too, proponents of both views/procedures will ‘make their case’, followed by questions from the floor and open discussion.

And, of course, we’ll also have the ever popular, annual Real Estate Lenders/Brokers Panel, where we’ll learn what finance programs are presently available and ‘reasons’ why we should patronize various lenders and loan brokers.

To ensure your name, or that of your firm, is on the Invitation List to this ‘by invitation only’ annual, international event for landlease community owners/operators, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Attendance limited to 200!

V

Reading this blog each week is merely scratching the surface of what an informed executive and entrepreneur should be reading and absorbing about the manufactured housing industry and LLCommunity asset class. At the very least, he or she should also be digging into each issue of the Allen Letter professional journal! Nowhere else will you find the in depth news reporting, calendar of events, lagniappes, and challenging MH Ronin column, read by so many of your peers. Subscription is only $134.95/year (12 issues), accompanied by a FREE copy of the ALLEN REPORT (a.k.a. ‘Who’s Who Among Portfolio Owners/operators of LLCommunities Throughout North America!’) – otherwise costing $250.00 per copy! And then there’s the Allen CONFIDENTIAL! business newsletter read by most senior executives throughout the MHIndustry and LLCommunity asset class. News contained therein is generally unavailable anywhere else, and usually 30 – 60 days before it sees light of day elsewhere. $750.00/year to subscribers to Allen Letter professional journal, otherwise $950.00/year.

Bought your copy of the Manufactured Housing Finance Primer yet? Released at the MHCongress in Las Vegas, more than half the initial print run is gone! Don’t miss obtaining this ‘first ever’ 100 page collection on just about every aspect of chattel finance as it pertains to manufactured housing and landlease communities. $29.95 postpaid via MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.

VI

In closing, here’re two late – breaking news bites for you. Just saw the extensive list of article titles to be featured by Manufactured Home marketing Sales Management (ezine) @ www.MHMSM.com Check it out!

If like me, you didn’t know the RV/MH Heritage Foundation in Elkhart, IN., is struggling financially – like many of us, here’s an immediate opportunity to help! The foundation is in the midst of “…a ‘special fundraising effort’, looking for 100 supporters to give a gift of $1,000 apiece, to raise $100,000 to meet (their) operational needs for 2010.” To date they’ve collected $28,175 of that goal. Are you in a position to help? If so, phone (800) 378-8694 or (574) 293-2344. And while you’re on the line, ask them to send you information about the upcoming Hall of Fame Induction Banquet scheduled for 2 August, at their beautiful facility in Elkhart, IN. Hundreds of MHIndustry and RV Industry execs and their families will be present.

*****
End Note.

1. NSAC caucus type meeting. First occurring @ 2/27/08 in Tampa, FL., as 100+ LLCommunity owners/operators convened to discuss the future of the MHIndustry in general, and their real estate asset class in particular. Result? Identification of Five Action Areas that continue, to this day, to guide mid and long range planning among these businesses. Second NSAC caucus occurred @ 2/27/09 in Elkhart, IN., as 100+ HUD Code home manufacturers and LLCommunity portfolio owners/operators convened, for the first time in 50 years, to figure out how to work together to market and sell more new HUD Code homes into this unique income – producing property type. Result? In some local housing markets, as much as 50% of new home production is sited in LLCommunities!

*****

George Allen, Realtor®, CPM® Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 46247
(317) 346-7156

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