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

Blog Posting # 743, Copyright 25 May 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And lean lease communities, (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com; or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And, SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ years business career in MH and communities

George Allen, CPM®Emeritus, MHM® Master, Emeritus member of the Manufactured Housing Institute (‘MHI’), RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, and author/editor of 20 non-fiction books.

‘He Made a Difference’

            The late Sam Zell’s desired legacy, as stated on page # 206 of his autobiography ‘Am I Being Too Subtle?’ was simply: “He Made a Difference!” And a difference he certainly made! While there’s a lot that can be said about Sam’s long life and multifaceted career, I’ll simply share anecdotes germane to manufactured housing and land lease communities.*1

            One observation, so significant it risks being overlooked, is that during his lifetime Sam Zell amassed the largest real estate investment property portfolio of land lease communities in the entire world! By the time I retired in 2021, Sam’s public company, Equity Lifestyle, Inc., (‘ELS, Inc.’), a real estate investment trust (‘REIT’) owned nearly 400 such communities, comprised of almost 150,000 rental homesites nationwide!*2

            But what the real estate investment public does not generally know is, through the efforts of Sam’s top land lease community executive at the time, Randall (‘Randy’) Rowe – today founder/head of Green Courte Partners, Sam’s firm ELS, Inc. (then MHC, Inc.) was one of three firm’s ‘going public’ as REITs: ELS, Inc., Chateau Communities, Inc., and Sun Communities, Inc. A fourth firm, United Mobile Homes (‘UMH, Inc.’) – now UMH Properties, Inc., had been a REIT since the 1980s. All this occurred during 1994, six months to a year after 19 (then) manufactured home community owners/operators met in Indianapolis, IN., on 31 August 1993 to form an Industry Steering Committee (‘ISC’) – the first national advocate for the real estate asset class. Most of ISC’s efforts were directed toward Wall Street analysts, convincing them of the financial viability of this unique type real estate investment. Then, on 1 January 1996 ISC was rebranded as the Manufactured Housing Institute’s (‘MHI’) National Communities Council ‘NCC’), later designated a division of MHI. All this would not have happened if not for Sam Zell’s interest and support regarding better representation for land lease communities. For more about this truly historic chain of events, read the late Bruce Savage’s ‘The First 20 Years!’, published in 2013.*3

            An enduring personal and corporate heritage. Sam Zell, by authoring his autobiography ‘Am I Being Too Subtle?’ ensured himself an enduring place in manufactured housing history. While the majority of this book covers other aspects of Sam’s life story, he does give ‘more than a nod’ to land lease communities – though he refers to them in a different manner. He tells the reader, “Some of my most lucrative investments seemed counterintuitive – manufactured home communities.” Know what? To date, no other contemporary major portfolio owners/operators of land lease community REITs have followed Sam’s heritage example! Though, we do have autobiographies by Jim Clayton, Al Schrader, and Jim Scoular; and the late pioneers Kris Jensen, Sr., George Goldman, the Cohron twins, and Dr. Matthew Jenkins.*4

            How interesting can it be to ‘tell your story’ in memoir (i.e. ‘short story’) format or more? In Sam’s autobiography he relates this about his late friend and executive at ELS: “Howard Walker…once said he felt like he was walking into the inside of a Juicy Fruit wrapper when he visited (our offices), i.e. We invented business casual.” Now, wouldn’t you like to know more about what that remark means? Howard did not leave us his side of that tale. But I will tell you this, walking into Sam’s office was always an ‘antique road show – like experience’. One example; the large carved wood hand holding a scale-sized business card. Significance? Allegedly, if you pissed Sam off, he’d remove your business card from his file and mail it back to you!

            So, are you making a difference within your personal and corporate spheres of influence? I hope so. And if you are, then maybe now is time for you to contemplate the past and future and how you’ll be viewed and remembered years from now. Just as I used passages from Sam’s book to pen this valediction about him. Need some help to this end? Send me an email via gfa7156@aol.com, and when the new booklet ‘Who Will Preserve Your Legacy? Answer: You!’ is ready for distribution (soon), I’ll mail you one for FREE. Be sure to include your postal mailing address.  GFA

End Notes.

1. Sam Zell’s autobiography, ‘Am I Being Too Subtle?’ is available for purchase via amazon.com, and is also included in the Allen Collection of Land Lease Community Resources at the RV/MH Hall of Fame in Elkhart, IN. The RV/MH Hall of Fame library also houses all autobiographies mentioned in this blog posting.

• This information quoted from the 29^th annual ALLEN REPORT, included as Appendix I in the land lease community history text, ‘SWAN SONG’, available via www.educatemhc.com

• ‘The First 20 years’, by Bruce Savage, is available via www.educatemhc.com

• Watch this blog posting for the release of a new edition of ‘Who Will Preserve Your Legacy? Answer: You!’, and related information, in the Allen Legacy column in an upcoming edition of ‘MHInsider’ magazine.

SINCE WE’RE TALKING HERITAGE HERE

            And where will you be the Monday evening of 21 August 2023? I know I plan to be at the RV/MH Heritage Foundation’s Hall of Fame Induction Banquet in Elkhart, IN. Why? Because it’s the one time each year when hundreds of the crème’ de la crème’ of manufactured housing & recreational vehicle industry pioneers and notable individuals gather for an evening of socializing and honoring ten men and women being ushered into the prestigious Hall of Fame.

            Will you join me? Order event tickets via (574) 293-2344 or visit the RV/MH Hall of Fame website for more information. This year, Spencer Roane and I plan to host one or more tables at the banquet. Interested in joining us? When ordering and paying for your tickets, inform the Hall of Fame staff you would like to sit at one of the tables hosted by Spencer and me. Then let me know via email: gfa5156@aol.com, so we know to expect you. Trust me when I tell you it’s always a fun evening, seeing old friends, making new ones, and celebrating the rich history of these two industries. See you there!

            If you have not yet toured the new (in 2022) manufactured housing exhibit hall at the RV/MH Hall of Fame facility in Elkhart, plan to do so on the 21^st. Arrive early in the day, tour one or both exhibit halls (other one is for the RV industry), patronize the well-stocked store (i.e. books, clothing, souvenirs, and more), and then return to your hotel room to freshen up and dress for the evening festivities.

            While I haven’t made formal arrangements to this end yet, I am willing and able, on request, to spend an hour or two with anyone who’d like to learn more about researching and writing their personal and corporate memoirs (i.e. short stories), and how to maybe eventually compile them into a self-published autobiography. By that time, the aforementioned booklet: ‘Who Will Preserve Your Legacy? Answer: You!’ will be ready for distribution. Anyone who spends time with me on the 21^st will receive a FREE copy of the newly updated publication. Here too, let me know of your interest via email: gfa7156@aol.com

            And here’s yet another thought. Are you interested in being inducted into the RV/MH Hall of Fame – or to nominate a friend or business associate for this honor? I’ll make myself available to you, to that end as well, if you’ll arrange to do so ahead of time. Just let me know of your interest, again, via email.

INFAMOUS QUOTE OF THE WEEK

“No ordinary American cares about Constitutional Rights.” Joe Biden

LATE BREAKING NEWS…

From a Housing Alert from the Manufactured Housing Institute (‘MHI’): Today (5/19/2023) the Department of Energy (‘DOE) announced it will delay the compliance date for the Energy Conservation Standards for Manufactured Housing.” This is the result of a huge public outcry to the DOE from major housing manufacturers, state housing associations, and more than 500 campaign form letters motivated by MHI. There’s still work to be done!

MHARR’s Two-part ‘Issues & Perspectives’

In the first part, dated June 2023, the Manufactured Housing Association for Regulatory Reform (‘MHARR’) addresses “the negative impacts of zoning discrimination and inequity”, originally put forth in its’ July 2022 White Paper. The second part (still to come) will address “the failure to implement DTS (i.e. Duty to Serve) and resulting lack of fully-competitive consumer financing for HUD-Code manufactured homes.”

It’s no secret, the animosity between our (MH) industry’s two national advocacy groups headquartered in Washington, DC and Arlington, VA. After three long pages of verbiage on the first matter, there’s this thinly-veiled diatribe: “…the national association which collects dues payment from the industry’s post-production sector has failed to take aggressive action to demand an end to discriminatory zoning exclusion and inequity that harms both the industry and millions of Americans in need of affordable housing.”

How to comment on this accusation? The target here is also a national association, which – following the money, is and will likely always be, at the behest of who pays the most (Think HUD-Code housing manufacturers)! At the same time, the post-production sector certainly has an agenda of its’ own (e.g. end discriminatory zoning & inequity), and is perfectly capable of launching out on its’ own again (i.e. Recalling what happened on 8/31/ 1993 and ten years earlier) to make its’ displeasure known and begin corrective action. But this has not happened to date, and in my opinion, will not occur. Why? Because the elected powers that be, in one particular sector division, are high-salaried executives with large portfolio firms and evidently happy with the status quo they control*1

If you agree or disagree, let me know via gfa7156@aol.com

End Note.

1. 8/31/1993. Read about birth of the ISC cum NCC in ‘He Made a Difference’ story. And in mid-1980s, disgruntled members of MHI left to form the MHARR.

George Allen

Blog Posting # 742, Copyright 18 May 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EduateMHC, telephone (317) 881-3815; email: gfa7156@aol.com; or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And, SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes my combat adventures in Vietnam and 40+ years business career in MH and communities.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute, RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, and author/editor of 18 non-fiction texts.

Homeowners/site lessees Protest

In Montana, a major land lease community portfolio owner/operator recently won approval to develop nearly 300 new rental homesites in a city in that state. Who do you think spoke out against this proposal, and why? Homeowners/site lessees already living in the petitioning firm’s properties, fearing high rents for new move-ins! In my opinion, while the developer won this battle, the fact that homeowners/site lessees are now speaking out against land lease community owners/operators with reputations for apparently abusing residents, is not only an historic ‘first’ but a ‘telling’, albeit negative, happenstance for the realty asset class at large.

Another indicator that consumer sentiment has shifted from relative neutrality, where rental homesite rates are concerned, is the recent quip in a national online trade newsletter suggesting a major land lease community portfolio owner/operator’s nickname has morphed from ‘grave dancer’ to ‘grandma gouger’.  This is not the sort of publicity our unique income-property type needs at this time; which, in my mind, begs the question: ‘What is MHI’s National Communities Council division doing to ameliorate such matters these days? After all, they claim to represent community owners/operators nationwide. I’ve heard nothing to this end. Anyone else? If so, let me know via gfa7156@aol.com

SIX RIGHT ‘Ps’ OF MARKETING NEW HOMES INTO COMMUNITIES

First articulated in 2017, the ‘Six Right Ps of Marketing’ debuted as an integral part of ‘Four Steps to Selling & Financing New Homes On-site Within Land Lease communities’, i.e. Getting Ready, Buying Homes, Selling Homes, & Financing Homes. (If you’d like a FREE 3”X5” plastic wallet card containing the four steps and Six Right Ps, simply email gfa7156@aol.com and request it. Be sure, however, to include a postal mailing address with the request.

So, what are the Six Right Ps for Marketing New MHs into land lease communities? As follows:

Right Product: brand, model, home size & configuration, appearance, floor plan, features & amenities, e.g. Community Series Homes with durability enhancing features and a WOW factor!

Right Place or location within the property, and how oriented relative to the sun and wind, and with good drainage.

Right Price per type deal customer’s Annual Gross Income or AGI; local housing market’s Annual Median Income or AMI; & 30% Housing Expense Factor, & workable rental homesite rate.*1

Right Promotion per USPS (Unique Selling Proposition), e.g. Energy Star & front porch-loaded; using print & online advertising; signage off and on-site; and resident referrals.

Right People, based on anticipated sales volume and # of vacant rental sites to fill; then, capable, experienced, motivated, as well as trained/supervised sales & leasing professionals.

Right Process includes planning and procedures to ID and meet shelter needs/wants of the target audience and mix in a specific local housing market, usually defined by postal zip code.

End Note.

1. All these factors involve use of the Traditional 3:1 Rent Rule, where site rent is usually 1/3^rd that charged for a 3BR2B conventional apartment unit; and the ‘Ah Ha! & Uh Oh! Worksheet’ to calculate ‘affordable’ & ‘risky’ home loan and purchase amounts in any local housing market. This too available FREE for the asking, via gfa7156@aol.com

Infamous Quote of the Week

‘Gorsuch isn’t fit to serve (on the Supreme Court) because he uses law and not emotions.” Kamala Harris

Blog Posting # 741, Copyright 15 May 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And  SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes my combat adventures in Vietnam and 40+ years business career in MH and communities.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of MHI, RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, and author/editor of 18 non-fiction texts.

NOT EXACTLY WRITER’S BLOCK

741 weekly blog postings stretching back more than 14 years, and nary an instance where I didn’t have something newsworthy, interesting, controversial, or praise-worthy to write about. But this past week manufactured housing and land lease community ‘new news’ was hard to come by, both on the local and national scenes. So, here’s a quick ‘broad brush’ list of subjects I’m working on for here and in my Allen Legacy column in ‘MHInsider’ magazine.

Did you know? The average U.S. ‘asking rent’ for conventional apartment communities remained the same for a second consecutive month in February? It was $1,702/month. Know what that means? That applying the traditional Rule of 3, for land lease communities in any local housing market, average national site rent rate comes in around $567.00/month – assuming ancillary charges are handled alike in both income-producing property types.

Did you know? Come August 2023, it’ll have been two years since the final (of 31) annual Networking Roundtable was held in Nashville, TN. And you likely know there have been a couple short-lived efforts to launch a successor to this popular annual event for land lease community owners/operators nationwide. So far, the only viable alternative – and it’ll be 11 years old this year (10-13 September in Atlanta, GA), has been the growing SECO Conference. And just this past week, many of us received an email announcement from the Information Management Network (‘IMN’) in New York City, announcing their inaugural Manufactured Housing Forum, 28 & 29 September 2023 in Nashville, TN. Unfortunately, IMN is under the impression MH is experiencing ‘significant growth in recent years’. As you know, that’s not the case – and I’ve since advised IMN’s event coordinator of the true situation, and suggested they keynote this event with executives from the ‘Big – 3 C’ HUD-Code housing manufacturers. Suggested to her the topic might/should be: Marketing HUD-Code Manufactured Housing Brands to the National Home buying Market!

Do you read my Allen Legacy column in ‘MHInsider’ magazine? You should, and here’s why. Editorial guidance has me researching and penning this column with a dual focus in mind: what’s going on in and around the industry and realty asset class – with an historical perspective where/when possible. And it’s been fun balancing those two assignments. Here’s the most recent column, along with titles and information on the ones being written:

• Manufactured Housing Finance, a 70 Year Retrospective. This is in the March/April issue and, in my opinion, should be required reading by everyone in the manufactured housing industry. You know, history does repeat itself – especially in our industry.

• Dates, Groups & Books Narrate MH History.  Did you know the Urban Land Institute (‘ULI’) sponsored a MH ‘think tank’? Or that the professional property management text marketed by EducateMHC, first published in 1988, is in its’ 8^th edition?

• Is It Time to Tell Your Story? Visited this topic five years ago in the very first issue of the magazine. Being retold here, with addition of several autobiographies and more detailed guidelines for penning your memoirs and later autobiography.

• Vietnam Veterans in Manufactured Housing. In recognition of year 2023 commemorating the 50^th year since the end of that conflict, this column will profile many of the veterans who served in and during that period of time.

And here are a couple topics I’m continuing to research, to maybe pen later this year. ‘Sole Proprietor Land Lease Communities Soon Extinct?’ & ‘Eccentrics We Have Known Over the Years’.

If you’re not already a subscriber to MHInsider magazine, simply google the title and effect contact.

OUR UBIQUITOUS NATIONAL ANTHEM

Just before my great grandson Hunter’s final home lacrosse game as a high school student, I stood in anticipation of the playing of our national anthem. Llooked down to my left, and there, standing next to me, was our two year old great granddaughter Emerson (‘Emmie’), Hunter’s youngest sister. As I brought my right hand up to my forehead in a military salute, she did the same. And our daughter Susan, Emmie’s grandmother, standing behind us, snapped a phone photo of the two of us. As the anthem began, with the two of us saluting side by side, tears rolled down my cheeks.

Why? First, the playing and singing of the national anthem always evokes this emotional reaction, taking me back nearly 60 years to when, as a young Marine lieutenant in Vietnam, I experienced up close and profoundly, what it means to defend our nation and all it stands for – then and now. And now there’s this poignant and loving imitation of her great grandfather, by an innocent two year old, showing like respect for our flag and nation – one generation to the next!

The feeling of pride and encouragement I experienced during that tender moment was akin to similar feelings I realized when watching our grandson Travis (Emmie’s uncle) graduate from USMC boot camp in San Diego a few years ago. I thought at the time, ‘Yes, our nation is indeed in the good hands of this next generation.’

George Allen

Blog Posting # 740, Copyright 5 May 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven –describes my combat adventures in Vietnam & 40+ years business career in MH and communities.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of MHI, RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, and author/editor of 18 non-fiction texts.

SMALL BIG THINGS…

Many a time Press Releases, and other manufactured housing industry news stories, come across my desk that all but demand attention, but lack enough substance to be worth pursuing, in this blog and elsewhere. However, a recent announcement appeared, on LinkedIn, which begged commentary.

The divisional VP of one of the large land lease community portfolio owners/operators (i.e. hedge fund spawned) described how stellar it was to work at that firm, and how well they were treating their many homeowners/site lessees around the U.S… Well, that’s not the story I’ve been hearing – for a while now; so thought I’d ‘respond’ to his narrative. Guess what? For the first time, in my experience, the LinkedIn site (I’m certain, at the request of said CEO) refused me – or anyone else, opportunity to respond! Seriously. In my opinion, blocking two-way communication is flat out wrong. And for me, it underscores; and yes, lends credibility to the rumors (?) of exorbitant rent increases, adding of new fees, and other tenant abuses by firms such as this one.

OK, Are We in Free Fall Yet?

Once again, a storm warning of potential production disaster, relative to new manufactured homes, comes from the folk at the Manufactured Housing Association for Regulatory Reform:

“…HUD Code manufactured housing industry year-over-year production has declined again in March 2023. Just-released (i.e. from IBTS*) statistics indicate HUD Code manufacturers produced 7,646 homes in March 2023, a 32.2 percent decline from the 11,279 new HUD Code homes produced in March 2022.”

How does this 21,174 YTD 2023 production compare with past years? Well in 2022 the YTD figure was 29,670; in year 2021 = 21,479; in year 2021; in year 2020 = 25,311; in year 2019 = 22,359; in year 2018 = 25,531; in year 2017 = 23,384; in year 2016 = only 19,101. So, this year (2023) we’re producing, YTD, only 2,073 more new manufactured homes than we did seven years ago! Not wanting to be a doomsday naysayer; unless our market turns around quickly and greatly, we’re potentially looking at a 2023 yearend total unit production near 81, 136 new homes (That’s the official 2016 total) – way down from the 112,886 new HUD-Code homes shipped during all of year 2022. Keep in mind, all these YTD totals are based on data provided by the aforementioned IBTS, and no one else.

So, are we entering a free fall, once again, in the manufactured housing industry? Keep watching – and preparing for the worst. After all, and as we pointed out last week, what are the Big 3-C HUD-Code housing manufacturers doing to publicly promote our brands nationwide?

End Note.

1. IBTS = Institute for Business Technology & Safety – HUD’s scorekeeper for HUD-Code manufactured housing productions.

Our Blog Postings Get Responses

Responses to last week’s ‘Brilliance or Bull___?’ blog posting:

“Yes, I too wonder about manufacturers’ ambivalence about growth. It is like watching kids dig around in a sand box overlooking the ocean and beaches that stretch for miles, and wondering why they aren’t playing there.”

“Manufactured housing has so much to offer GenZ; yet not a word about it from anyone? Don’t get it.

“One thing is missing in your ‘challenge to the industry’: Support closing or increased regulation of ‘trailer parks’ run by rape-and-pillage operators that local housing market authorities point to when they refuse to allow new communities to be developed.” (Paraphrased GFA)

“I see two core issues holding us back George: Financing tools, and lack of dealerships.”

Quote of the Week…

Another gem from Senator Kennedy from Louisiana:

“I believe America was founded by geniuses but is now run by idiots.”